Congressional Record, Volume 144 Issue 31 (Thursday, March 19, 1998)

[Congressional Record Volume 144, Number 31 (Thursday, March 19, 1998)]
[Senate]
[Pages S2296-S2308]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. CAMPBELL:
S. 1797. A bill to reduce tobacco use by Native Americans and to make
the proposed tobacco settlement applicable to tobacco-related
activities on Indian lands; to the Committee on Indian Affairs.

the reduction in tobacco use and regulation of tobacco products in
indian country act of 1998

Mr. CAMPBELL. Mr. President, I am pleased today to introduce the
``Reduction in Tobacco Use and Regulation of Tobacco Products in Indian
Country Act of 1998''.
After many hard months of negotiations between the states Attorneys
General, class action plaintiffs, and the tobacco representatives, in
June, 1997, a proposed settlement was agreed to.
The proposed agreement tries to accomplish a number of goals:
avoiding costly and lengthy lawsuits that will enrich the trial
lawyers; creating a multi-billion pot of money to be used by the states
and the tribes for tobacco-related health problems; and implementing a
comprehensive set of advertising limits that the companies would agree
to voluntarily.
In reviewing the proposed settlement agreement, the objective of the
Committee on Indian Affairs was to review the matters under its
jurisdiction and make recommendations on how to implement that
agreement on Indian lands.
After two Committee hearings I am confident that as to the Indian
issues, we have crafted a bill that addresses the concerns of both the
tribes and the parties that seek enactment of the proposed agreement.
In its hearings the Committee heard testimony on the use of tobacco
products by Native Americans and how the proposed tobacco settlement
would impact tobacco-related activities on Indian lands.
Even though smoking is on the decline in other segments of American
society, available statistics show that smoking and use of smokeless
tobacco in Native American communities is at crisis levels. The
percentage of Native American kids who use tobacco is breathtaking--in
some parts of the country 80% of Indian high school students use
tobacco products.
Further, the health problems Native Americans face such as alcoholism
and diabetes are compounded by the use of tobacco products. Vigorous
efforts need to be made at the federal and tribal levels to prohibit
access to tobacco and reduce youth smoking in Native communities.
After hearing the concerns and recommendations regarding the proposed
settlement by Indian tribal leaders, state Attorneys General, federal
health and legal experts, and Indian legal scholars, a bill was crafted
which addresses the major issues involved in tobacco regulation on
Indian lands.
The legislation I am introducing today includes legal protections for
traditional and ceremonial uses of tobacco by tribal members; respects
tribal sovereignty and authority to make and enforce laws on Indian
lands; includes a commitment to provide the necessary licensing and
enforcement funding to tribal governments that is consistent with
allocations the states will receive; and a commitment to ensure
sufficient funding to treat tobacco-related illnesses and reduce the
epidemic of tobacco abuse in Indian country.
I am hopeful that if a comprehensive agreement is enacted, the
principles and provisions contained in this bill are included to make
the agreement applicable to tobacco-related activities on Indian lands,
to protect the traditional use of tobacco by Native Americans, and
preserve tribal authority to make and enforce laws to govern
themselves.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1797

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Reduction in Tobacco Use and
Regulation of Tobacco Products in Indian Country Act of
1998''.

SEC. 2. FINDINGS AND PURPOSES.

(a) Findings.--Congress finds that--
(1) Native Americans have used tobacco products for
recreational, ceremonial, and traditional purposes for
centuries;
(2) the sale, distribution, marketing, advertising, and use
of tobacco products are activities substantially affecting
commerce among the States and the Indian tribes and, as such,
have a substantial effect on the economy of the United
States;
(3) the sale, distribution, marketing, advertising, and use
of tobacco products are activities substantially affecting
commerce by virtue of the health care-related and other costs
that Federal, State, and tribal governmental authorities have
incurred because of the usage of tobacco products;
(4) the sale, distribution, marketing, advertising, and use
of tobacco products on Indian lands are activities which
materially and substantially affect the health and welfare of
members of Indian tribes and tribal organizations;
(5) the use of tobacco products is a serious ad growing
public health problem, with impacts on the health and well-
being of Native Americans;
(6) the use of tobacco products in Native communities is
particularly serious with staggering rates of smoking in
Native American communities;
(7) enhancing existing legal mechanisms for the protection
of public health are inadequate to deal effectively with the
use of tobacco products; and
(8) enhancing prevention, research, and treatment resources
with respect to tobacco will allow Indian tribes to address
more effectively the problems associated with the use of
tobacco products.
(b) Purposes.--It is the purpose of this Act to--
(1) provide for the implementation of any national tobacco
legislation with respect to the regulation of tobacco
products and other tobacco-related activities on Indian
lands;

[[Page S2297]]

(2) recognize the historic Native American traditional and
ceremonial use of tobacco products, and to preserve and
protect the cultural, religious, and ceremonial uses of
tobacco by members of Indian tribes;
(3) recognize and respect Indian tribal sovereignty and
tribal authority to make and enforce laws regarding the
regulation of tobacco distributors and tobacco products on
Indian lands;
(4) ensure that the necessary funding is made available to
tribal governments for licensing and enforcement of tobacco
distributors and tobacco products on Indian lands;
(5) ensure that the necessary funding is made available to
tribal governments to treat tobacco-related illnesses and
alleviate the epidemic of tobacco abuse by Native Americans;
(6) reduce the marketing of tobacco products to, and reduce
the rate of smoking by, young Native Americans; and
(7) decrease tobacco use by Native Americans by encouraging
public education and smoking cessation programs.

SEC. 3. DEFINITIONS.

In this Act:
(1) Commerce.--The term ``commerce'' means--
(A) commerce between any State, Indian tribe, or tribal
organization, the District of Columbia, the Commonwealth of
Puerto Rico, the Virgin Islands, American Samoa, the Mariana
Islands, or any territory or possession of the United States;
(B) commerce between points in any State, Indian tribe, or
tribal organization, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, America
Samoa, the Mariana Islands, or any territory or possession of
the United States; and
(C) commerce wholly within the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, American
Samoa, the Mariana Islands, or any territory or possession of
the United States.
(2) Consent decree.--The term ``consent decree'' means a
consent decree executed by a 1 or more participating
manufacturers and a State or an Indian tribe or tribal
organization pursuant to the provisions of any Act enacted in
order to give effect to the national tobacco settlement
agreement of June 20, 1997.
(3) Court.--The term ``court'' means any judicial or agency
court, forum, or tribunal within the United States, including
any Federal, State, or tribal court.
(4) Distributor.--The term ``distributor'' means any person
who furthers the distribution of tobacco or tobacco products,
whether domestic or imported, at any point from the original
place of manufacture to the person who sells or distributes
the product to individuals for second consumption. Such term
shall not include common carriers.
(5) Indian lands.--The term ``Indian lands'' has the
meaning given the term ``Indian country'' by section 1151 of
title 18, United States Code, and includes lands under the
jurisdiction of an Indian tribe or tribal organization.
(6) Indian tribe.--The term ``Indian tribe'' has the
meaning given such term in section 4(e) of the Indian Self
Determination and Education Assistance Act (25 U.S.C.
450b(e)).
(7) Manufacturer.--
(A) In general.--The term ``manufacturer'' means--
(i) a person who directly (not through a subsidiary or
affiliate) manufactures tobacco products for sale in the
United States;
(ii) a successor or assign of a person described in
subparagraph (A);
(iii) an entity established by a person described in
subparagraph (A);
(iv) an entity to which a person described in subparagraph
(A) directly or indirectly makes a fraudulent conveyance
after the date of enactment of this Act, or any Act to amend
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321 et
seq.) in order to give effect to the national tobacco
settlement agreement of June 20, 1997, or a transfer that
would otherwise be voidable under chapter 7 of title 11,
United States Code, but only to the extent of the interest or
obligation transferred.
(B) Limitation.--The term ``manufacturer'' shall not
include a parent or affiliate of a person who manufactures
tobacco products unless such parent or affiliate itself is a
person described in subparagraphs (A).
(8) Person.--The term ``person'' means an individual,
partnership, corporation, or any other business or legal
entity.
(9) Point of sale.--The term ``point of sale'' means any
location at which an individual can purchase or otherwise
obtain tobacco products for personal, non-traditional
consumption.
(10) Retailer.--The term ``retailer'' means any person who
sells tobacco products to individuals for personal
consumption, or who operates a facility where vending
machines or self-service displays are permitted.
(11) Sale.--The term ``sale'' includes the selling,
providing samples of, or otherwise making tobacco products
available for personal consumption in any place or location
as permitted under law.
(12) Secretary.--Unless otherwise provided, the term
``Secretary'' means the Secretary of Health and Human
Services.
(13) State.--The term ``State'' includes the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, America Samoa, the Mariana Islands,
or any territory or possession of the United States. Such
term also includes any political subdivision of any State.
(14) Tobacco.--The term ``tobacco'' means tobacco in its
unmanufactured form.
(15) Tobacco product.--The term ``tobacco product'' means
cigarettes, cigarette tobacco, and smokeless tobacco.
(16) Tobacco trust fund.--The term ``tobacco trust fund''
means any national tobacco settlement trust fund established
under any Act enacted in order to give effect to the national
tobacco settlement agreement of June 20, 1997.
(17) Tribal organization.--The term ``tribal organization''
has the meaning given such term in section 4(e) of the Indian
Self Determination and Education Assistance Act (25 U.S.C.
45Ob(e)).
(18) Voluntary cooperative agreement.--The term ``voluntary
cooperative agreement'' means any agreement, contract,
compact, memorandum of understanding, or similar agreement.

SEC. 4. APPLICATION OF TOBACCO-RELATED PROVISIONS TO NATIVE
AMERICANS.

(a) In General.--The provisions of any Act enacted in order
to give effect to the national tobacco settlement agreement
of June 20, 1997 shall apply to the manufacture,
distribution, or sale of tobacco or tobacco products within
the exterior boundaries of Indian reservations or on lands
within the jurisdiction of an Indian tribe or tribal
organization.
(b) Traditional Use Exception.--
(1) In general.--In recognition of the religious,
ceremonial, and traditional uses of tobacco and tobacco
products by Indian tribes and the members of such tribes,
nothing in this Act (or any Act enacted to give effect to the
national tobacco settlement agreement of June 20, 1997) shall
be construed to infringe upon the right of such tribes or
members of such tribes to acquire, possess, use, or transfer
any tobacco or tobacco products for such purposes.
(2) Application of provisions.--Paragraph (1) shall apply
only to those quantities of tobacco or tobacco products
necessary to fulfill the religious, ceremonial, or
traditional purposes of an Indian tribe or the members of
such tribe, and shall not be construed to permit the general
marketing of tobacco or tobacco products in a manner that is
not in compliance with chapter IX of the Federal Food, Drug,
and Cosmetic Act.
(3) Limitation.--Nothing in this Act (or any Act enacted to
give effect to the national tobacco settlement agreement of
June 20, 1997) shall be construed to permit an Indian tribe
or member of such a tribe to acquire, possess, use, or
transfer any tobacco or tobacco product in violation of
section 2341 of title 18, United States Code, with respect to
the transportation of contraband cigarettes.
(c) Payments to Tobacco Trust Fund.--Any Indian tribe or
tribal organization that engages in the manufacture of
tobacco products shall be subject to liability for any fee
payments that are levied on other manufacturers for purposes
of any tobacco trust fund. Any Indian tribe or tribal
organization that does not pay such fees shall be considered
a nonparticipating manufacturer and shall be subject to
surcharges made applicable to such nonparticipating
manufacturers under any Act enacted to give effect to the
national tobacco settlement agreement of June 20, 1997).
(d) Application of Federal Food, Drug, and Cosmetic Act
Requirements.--
(1) In general.--The Secretary, in consultation with the
Secretary of Interior, shall promulgate regulations to
provide for the waiver of any requirement of the Food, Drug,
and Cosmetic Act (21 U.S.C. 321 et seq.) with respect to
tobacco products manufactured, distributed, or sold within
the exterior boundaries of Indian reservations or on lands
within the jurisdiction of an Indian tribe as appropriate to
comply with this section.
(2) Jurisdiction.--With respect to tobacco-related
activities that take place within the exterior boundaries of
Indian reservations or on lands within the jurisdiction of an
Indian tribe, the responsibility for enforcing the
regulations promulgated pursuant to paragraph (1) shall be
vested in--
(A) the Indian tribe or the tribal organization involved;
(B) the State within which the lands of the Indian tribe or
tribal organization are located, pursuant to a voluntary
cooperative agreement entered into by the State and the
Indian tribe or tribal organization; or
(C) the Secretary.
(3) Eligibility for assistance.--Under the regulations
promulgated under paragraph (1), the Secretary, in
consultation with the Secretary of the Interior, shall
provide assistance to an Indian tribe or tribal organization
in meeting and enforcing the requirements under such
regulations if--
(A) the tribe or tribal organization has a governing body
that has powers and carries out duties that are similar to
the powers and duties of State or local governments;
(B) the functions to be exercised through the use of such
assistance relate to activities conducted within the exterior
boundaries of Indian reservations or on lands within the
jurisdiction of the tribe or tribal organization involved;
and
(C) the tribe or tribal organization is reasonably expected
to be capable of carrying out the functions required by the
Secretary.
(4) Determinations.--Not later than 60 days after the date
on which an Indian tribe or tribal organization submits an
application for assistance under paragraph (3), the Secretary
shall make a determination concerning the eligibility of such
tribe or organization for such assistance.

[[Page S2298]]

(5) Implementation by the secretary.--If the Secretary
determines that the Indian tribe or tribal organization is
not willing or not qualified to administer the requirements
of the regulations promulgated under this subsection, the
Secretary, in consultation with the Secretary of the
Interior, shall implement and enforce such regulations on
behalf of the tribe or tribal organization.
(6) Deficient applications; opportunity to cure.--If the
Secretary determines under paragraph (4) that a tribe is not
eligible for assistance under this subsection, the Secretary
shall--
(A) submit to such tribe or organization, in writing, a
statement of the reasons for such determination; and
(B) shall assist such tribe in overcoming any deficiencies
that resulted in the determination of ineligibility.

After an opportunity to review and cure such deficiencies,
the tribe or organization may re-apply to the Secretary for
assistance under this subsection.
(e) Retail Licensing Requirements.--
(1) In general.--The requirements of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 321 et seq.), or any Act
enacted in order to give effect to the national tobacco
settlement agreement of June 20, 1997, with respect to the
licensing of tobacco retailers shall apply to retailers that
sell tobacco or tobacco products within the exterior
boundaries of Indian reservations or on lands within the
jurisdiction of an Indian tribe or tribal organization.
(2) Minimum federal standards.--
(A) In general.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall promulgate
regulations to authorize an Indian tribe or tribal
organization to implement a tribal tobacco product licensing
program within Indian reservations or on lands within the
jurisdiction of an Indian tribe or tribal organization.
(B) Model state law.--The terms, conditions, and standards
contained in the model State law contained in any Act enacted
to give effect to the national tobacco settlement agreement
of June 20, 1997 shall constitute the minimum Federal
regulations that an Indian tribe or tribal organization must
enact in order to assume responsibility for the licensing and
regulation or tobacco-related activities conducted within the
exterior boundaries of Indian reservations or on lands within
the jurisdiction of an Indian tribe or tribal organization.
(C) Waiver.--An Indian tribe or tribal organization shall
have the same right to apply for waiver and modification of
the law described in subparagraph (B) as a State pursuant to
the Act involved.
(3) Implementation by the secretary.--If the Secretary, in
consultation with the Secretary of the Interior, determines
that the Indian tribe or tribal organization is not qualified
to administer the relevant requirements of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 321 et seq.) or any Act
enacted in order to give effect to the national tobacco
settlement agreement of June 20, 1997, the Secretary, in
consultation with the Secretary of the Interior, shall
implement such requirements on behalf of the Indian tribe or
tribal organization.
(f) Eligibility for Public Health Payments.--
(1) Grant.--
(A) In general.--For each fiscal year the Secretary shall
award a grant to each Indian tribe or tribal organization
that has an approved anti-smoking plan for the fiscal year
involved under paragraph (2) in an amount equal to the amount
determined under paragraph (3).
(B) Reduction in state amounts.--With respect to any State
in which the service area or areas of an Indian tribe or
tribal organization that receives a grant under subparagraph
(A) are located, the Secretary shall reduce the amount
otherwise payable to such State, under any Act enacted in
order to give effect to the national tobacco settlement
agreement of June 20, 1997, by the amount of such grant.
(2) Tribal plans.--To be eligible to receive a grant under
paragraph (1), an Indian tribe or tribal organization shall
prepare and submit to the Secretary an anti-smoking plan and
shall otherwise meet the requirements of subsection (e). The
Secretary shall promulgate regulations providing for the form
and content of anti-smoking plans to be submitted under this
paragraph.
(3) Amount determined.--Except as provided in this
subsection, the amount of any grant for which an Indian tribe
or tribal organization is eligible under paragraph (1) shall
be determined by the Secretary based on the product of--
(A) the ratio of the total number of individual residing on
or in such tribe's or tribal organization's reservation,
jurisdictional lands, or the active user population, relative
to the total population of the State involved; and
(B) the amount allocated to the State for such public
health purposes.
(4) Use.--Amounts provided to a tribe or tribal
organization under this subsection shall be used to reimburse
the tribe for smoking-related health expenditures, to further
the purposes of this Act or any Act enacted in order to give
effect to the national tobacco settlement agreement of June
20, 1997, and in accordance with a tribal anti-smoking plan
approved by the Secretary. Indian tribes and tribal
organizations shall have the flexibility to utilize such
amounts to meet the unique health care needs of persons
within their service populations within the context of tribal
health programs if such programs meet the fundamental Federal
goals and purposes of Federal Indian health care law and
policy.
(5) Reallotment.--Amounts set aside and not expended under
this subsection shall be reallotted among other eligible
Indian tribes and tribal organizations.
(g) Obligations of Manufacturers.--Manufacturers
participating in, or covered under this Act or any Act
enacted in order to give effect to the national tobacco
settlement agreement of June 20, 1997 shall not engage in any
activity on lands within the jurisdiction of an Indian tribe
or tribal organization that is prohibited by this Act or such
other Act.
(h) Use of Trust Fund Payments.--Amounts made available
from the tobacco trust fund pursuant to any Indian health
provisions of any Act enacted in order to give effect to the
national tobacco settlement agreement of June 20, 1997 shall
be provided to the Indian Health Service and, through the
provisions of the Indian Self Determination and Education
Assistance Act (25 U.S.C. 450b et seq.) to Indian tribes or
tribal organizations to be used to reduce tobacco
consumption, promote smoking cessation, and to fund related
activities including--
(1) clinic and facility design, construction, repair,
renovation, maintenance, and improvement;
(2) health care provider services and equipment;
(3) domestic and community sanitation associated with
clinic and facility construction and improvement;
(4) inpatient and outpatient services; and
(5) other programs and services which have as their goal
raising the health status of Indians.
(i) Preemption.--
(1) In general.--Except as otherwise provided in this
section, nothing in this Act of any Act enacted in order to
give effect to the national tobacco settlement agreement of
June 20, 1997, shall be construed to prohibit an Indian tribe
or tribal organization from imposing requirements,
prohibitions, penalties, or other measures to further the
purposes of this Act that are in addition to the
requirements, prohibitions, or penalties required by this Act
or such other Act.
(2) Public exposure to smoke.--Nothing in this Act shall be
construed to preempt or otherwise affect any Indian tribe or
tribal organization rule or practice that provides greater
protections from the health hazards of environmental tobacco
smoke.
(3) Native americans.--A State may not impose obligations
or requirements relating to the application of this Act or
any other Act enacted in order to give effect to the national
tobacco settlement agreement of June 20, 1997, to Indian
tribes and tribal organizations.
______

By Mrs. FEINSTEIN:
S. 1798. A bill to provide for an alternative penalty procedure for
States that fail to meet Federal child support data processing
requirements; to the Committee on Finance.

THE CHILD SUPPORT PENALTY FAIRNESS ACT OF 1998

Mrs. FEINSTEIN. Mr. President, I am introducing today, the Child
Support Penalty Fairness Act of 1998. Similar to the House passed Child
Support Performance and Incentive Act, this legislation decreases
penalties for states who didn't make the October 1997 child support
enforcement system deadline but this legislation provides exemptions
for those counties, such as Los Angeles county, that made the deadline
even if the state didn't.

This legislation decreases the overall penalties to 4% of the child
support administrative funds in the first year, and doubles the
percentage of penalties each year, capping it at 20% by the fourth
year. Additionally, if the state becomes certified during the year, 75%
of the penalties would be forgiven for that fiscal year. The penalty
structure in this legislation is the same as Clay Shaw's bill, HR3130,
which passed the House of Representatives two weeks ago and awaits
consideration in the Senate Finance Committee.
The current penalties for not having the child support enforcement
system up and running are enormous. States would be penalized all their
TANF (AFDC) funding and their child support administration funds for
the year.
The total loss in TANF funds and child support administrative funds
from the 14 states amount to over $8 billion annually and for
California, the penalty would be $3.7 billion in TANF funds and $300
million in child support administrative funds annually.
What is unique about this legislation is that in addition to lowering
penalties, it exempts from the penalties those counties who had their
own certifiable systems prior to October 31, 1997.
All of us agree that for states who did not make the deadline, they
should be held accountable. But for those

[[Page S2299]]

states who have county based child support systems where individual
counties could have been certified by HHS independently, it is unfair
to penalize the counties with the state.
For California, 25% or $75 million of the penalty will be borne by LA
County, the largest county in the nation serving 550,000 families and
whose program is larger than 42 other states. Despite the fact that LA
County completed its system by the October 1997 deadline and could be
certified as recognized by HHS in its March 2, 1998 proposed rules, LA
County will be penalized along with the rest of California.
This is unfair and wrong. As I propose in my legislation, when
counties have met the system requirement by building their own system
with separate HHS funding, their portion should be exempted from the
total penalties imposed on a state.
Mr. President, I know there is bi-partisan support for my proposal
which is similar to Clay Shaw's bill which passed the House. My
proposal differs from Shaw's bill in that it exempts penalties for
those counties who met all the requirements and completed their child
support enforcement system before the October 1997 deadline. This
provision is critical for many states whose counties have done their
job but will suffer enormous penalties because the state as a whole
have failed.
I urge all my colleagues to support this legislation, and I ask
unanimous consent that the text of the bill, the memorandum of
understanding, and excerpts from 42 CFR Part 307 be printed into the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 1798

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION. 1. ALTERNATIVE PENALTY PROCEDURE FOR CHILD SUPPORT
DATA PROCESSING REQUIREMENTS.

(a) In General.--Section 455(a) of the Social Security Act
(42 U.S.C. 655(a)) is amended by adding at the end the
following:
``(4)(A) If--
``(i) the Secretary determines that a State plan under
section 454 would (in the absence of this paragraph) be
disapproved for the failure of the State to comply with
section 454(24)(A), and that the State has made and is
continuing to make a good faith effort to so comply; and
``(ii) the State has submitted to the Secretary a
corrective compliance plan that describes how, by when, and
at what cost the State will achieve such compliance, which
has been approved by the Secretary,

then the Secretary shall not disapprove the State plan under
section 454, and the Secretary shall reduce the amount
otherwise payable to the State under paragraph (1)(A) of this
subsection for the fiscal year by the penalty amount.
``(B) In this paragraph:
``(i) The term `penalty amount' means, with respect to a
failure of a State to comply with section 454(24)--
``(I) 4 percent of the penalty base, in the case of the 1st
fiscal year in which such a failure by the State occurs;
``(II) 8 percent of the penalty base, in the case of the
2nd such fiscal year;
``(III) 16 percent of the penalty base, in the case of the
3rd such fiscal year; or
``(IV) 20 percent of the penalty base, in the case of the
4th or any subsequent such fiscal year.
``(ii) The term `penalty base' means, with respect to a
failure of a State to comply with section 454(24) during a
fiscal year, the amount otherwise payable to the State under
paragraph (1)(A) of this subsection for the preceding fiscal
year, minus the applicable share of such amount which would
otherwise be payable to any county to which the Secretary
granted a waiver under the Family Support Act of 1988 (Public
Law 100-485; 102 Stat. 2343) for 90 percent enhanced Federal
funding to develop an automated data processing and
information retrieval system provided that such system was
implemented prior to October 1, 1997.
``(C)(i) The Secretary shall waive a penalty under this
paragraph for any failure of a State to comply with section
454(24)(A) during fiscal year 1998 if--
``(I) by December 31, 1997, the State has submitted to the
Secretary a request that the Secretary certify the State as
having met the requirements of such section;
``(II) the Secretary has provided the certification as a
result of a review conducted pursuant to the request; and
``(III) the State has not failed such a review.
``(ii) If a State with respect to which a reduction is made
under this paragraph for a fiscal year achieves compliance
with section 454(24)(A) by the beginning of the succeeding
fiscal year, the Secretary shall increase the amount
otherwise payable to the State under paragraph (1)(A) of this
subsection for the succeeding fiscal year by an amount equal
to 75 percent of the reduction for the fiscal year.
``(D) The preceding provisions of this paragraph (except
for subparagraph (C)(i)) shall apply, separately and
independently, to a failure to comply with section 454(24)(B)
in the same manner in which the preceding provisions apply to
a failure to comply with section 454(24)(A).''.
(b) Inapplicability of Penalty Under TANF Program.--Section
409(a)(8)(A)(i)(III) of such Act (42 U.S.C.
609(a)(8)(A)(i)(III)) is amended by inserting ``(other than
section 454(24))'' before the semicolon.

SEC. 2. AUTHORITY TO WAIVE SINGLE STATEWIDE AUTOMATED DATA
PROCESSING AND INFORMATION RETRIEVAL SYSTEM
REQUIREMENT.

(a) In General.--Section 452(d)(3) of the Social Security
Act (42 U.S.C. 652(d)(3)) is amended to read as follows:
``(3) The Secretary may waive any requirement of paragraph
(1) or any condition specified under section 454(16), and
shall waive the single statewide system requirement under
sections 454(16) and 454A, with respect to a State if--
``(A) the State demonstrates to the satisfaction of the
Secretary that the State has or can develop an alternative
system or systems that enable the State--
``(i) for purposes of section 409(a)(8), to achieve the
paternity establishment percentages (as defined in section
452(g)(2)) and other performance measures that may be
established by the Secretary;
``(ii) to submit data under section 454(15)(B) that is
complete and reliable;
``(iii) to substantially comply with the requirements of
this part; and
``(iv) in the case of a request to waive the single
statewide system requirement, to--
``(I) meet all functional requirements of sections 454(16)
and 454A;
``(II) ensure that the calculation of distribution of
collected support is according to the requirements of section
457;
``(III) ensure that there is only 1 point of contact in the
State for all interstate case processing and coordinated
intrastate case management;
``(IV) ensure that standardized data elements, forms, and
definitions are used throughout the State; and
``(V) complete the alternative system in no more time than
it would take to complete a single statewide system that
meets such requirement;
``(B)(i) the waiver meets the criteria of paragraphs (1),
(2), and (3) of section 1115(c); or
``(ii) the State provides assurances to the Secretary that
steps will be taken to otherwise improve the State's child
support enforcement program; and
``(C) in the case of a request to waive the single
statewide system requirement, the State has submitted to the
Secretary separate estimates of the total cost of a single
statewide system that meets such requirement, and of any such
alternative system or systems, which shall include estimates
of the cost of developing and completing the system and of
operating the system for 5 years, and the Secretary has
agreed with the estimates.''.
(b) Payments to States.--Section 455(a)(1) of such Act (42
U.S.C. 655(a)(1)) is amended--
(1) by striking ``and'' at the end of subparagraph (B);
(2) by striking the semicolon at the end of subparagraph
(C) and inserting ``, and''; and
(3) by inserting after subparagraph (C) the following:
``(D) equal to 66 percent of the sums expended by the State
during the quarter for an alternative statewide system for
which a waiver has been granted under section 452(d)(3), but
only to the extent that the total of the sums so expended by
the State on or after the date of the enactment of this
subparagraph does not exceed the least total cost estimate
submitted by the State pursuant to section 452(d)(3)(C) in
the request for the waiver.''.
____

Memorandum of Understanding

This agreement is entered into by Wayne A. Stanton,
Administrator, Family Support Administration (FSA),
Department of Health and Human Services, Ira Reiner, Los
Angeles County District Attorney, Richard B. Dixon, Los
Angeles County Chief Administrative Officer, and Dennis
Boyle, Deputy Director, State Department of Social Services,
to resolve certain issues relating to needed improvement in
the Los Angeles County child support enforcement program.
It is understood and agreed that there is a top level
management commitment to accomplish management standards to
performance and to develop an automated system that can
adequately support the program operations and to employ
sufficient staff to carry out the duties of the Child Support
Program.
It is further understood and agreed that the lack of an
automation system that can adequately support the program
operations and the present number of employees assigned to
carry out the duties of the family support program have
significantly contributed to the current level of child
support collections.
All concerned parties will work together to quickly
complete Requests For Proposals for the following areas
consistent with applicable County charter and ordinance
provisions which require findings of cost effectiveness or
feasibility:
1. To replace, enlarge, or modify Los Angeles County's
existing Automated Child Support Enforcement System;

[[Page S2300]]

2. Supplemental locate and collection services for hard-to-
find absent parents;
3. An automated billing system;
4. Process serving;
5. Banking/Court Trustee operations;
6. Blood testing;
7. Data preparation of case backlog in anticipation of
automation.
The District Attorney's Office will immediately begin
hiring within current budgetary authorizations the necessary
additional qualified employees to provide required child
support enforcement program services.
All concerned parties will work together to:
1. Develop and approve a six to ten page planning Advance
Planning Document (as detailed on the Attachment).
2. Revise Request For Proposals and Advance Planning
Document so as to require the use of existing hardware.
The FSA will advise the State that Los Angeles County, in
recognition of the size of its caseload, is eligible to
establish its own automated system which may be separate from
any other system(s) which may be required of other countries.
The State will request and FSA will consider in a timely
manner an 1115 waiver so as to provide Los Angeles County 90%
funding to replace, enlarge or modify Los Angeles County's
existing Automated Child Support Enforcement System and not
jeopardize 90% funding for other systems within the State.
This document expresses the will and commitment of the
Federal, State, and County Governments to expedite the
approval processes necessary to accomplish the goals set
forth herein.
Wayne A. Stanton,
Administator, Family Support Administration.
Gregory Thompson,
Chief, Deputy District Attorney, District Attorney's
Office.
Richard B. Dixon,
Chief Administrative Officer, Chief, Administrative Office.
Dennis Boyle,
Deputy Director, State Department of Social Services.
____

Excerpts From 45 CFR Part 307

Automated Data Processing Funding Limitation for Child Support
Enforcement Systems

Summary: The Federal share of funding available at an 80
percent matching rate for child support enforcement automated
systems changes resulting from the Personal Responsibility
and Work Opportunity Reconciliation Act is limited to a total
of $400,000,000 for fiscal years 1996 through 2001. This
proposed rule responds to the requirement that the Secretary
of Health and Human Services issue regulations which specify
a formula for allocating this sum among the States,
Territories and eligible systems.
PRWORA requires the Secretary of Health and Human Services
to issue regulations which specify a formula for allocating
the $400,000,000 available at 80 percent FFP among the States
and Territories. The Balanced Budget Act Amendments add
specified systems to the entities included in the formula.
The allocation formula must take into account the relative
size of State and systems IV-D (child support enforcement)
caseloads and the level of automation needed to meet title
IV-D automated data processing requirements. Accordingly, we
propose to revise 45 CFR Part 307 to include conforming
changes and to add Sec. 307.31.

Conditions That Must Be Met for 80 Percent Federal Financial
Participation

Pub. L. 104-193 provides enhanced funds to complete
development of child support enforcement systems which meet
the requirements of both the Family Support Act and PRWORA.
From this we conclude that no change in the conditions for
receipt of funds was anticipated by Congress. Thus, we
propose to retain in 45 CFR Part 307.31 the same conditions
for receipt funds at 80 percent FFP which appear at
Sec. 307.30 (a), (b), (c), and (d) and apply to claims for
FFP at the 90 percent rate.
Throughout this notice of proposed rulemaking we use
``State'' as the inclusive term for States, Territories and
approved systems as described in 42 U.S.C. 655(a)(3)(B)(iii)
(section 455(a)(3)(B)(iii) of the Act) as added to the Act by
section 5555 of the Balanced Budget Act of 1997 (Pub. L. 105-
33). The technical amendments to section 455(a)(3)(B) of the
Act changed the entities included in the allocation formula
by adding ``system'' to States and Territories. For purposes
of this proposed rule, a system eligible for enhanced funding
is a system approved by the Secretary to receive funding at
the 90 percent rate for the purpose of developing a system
that meets the requirements of section 454(16) of the Act (42
U.S.C. 654(16)) (as in effect on and after September 30,
1995) and section 454A of the Act (42 U.S.C. 654A), including
a system that received funding for this purpose pursuant to a
waiver under section 1115(a) of the Act (42 U.S.C. 1315(a)).

Allocation Formula

Section 344(b)(3)(C) of PRWORA requires the Secretary to
allocate by formula the $400,000,000 available at the 80
percent FFP rate. This section specifies that the formula
take into account the relative size of State IV-D caseloads
and the level of automation needed to meet applicable
automatic data processing requirements. The legislative
history does not elaborate on the meaning of these factors.
The allocation formula proposed in this section is the
product of consultation with a wide range of stakeholders. We
sought information from child support enforcement systems
experts, financial experts, economists, State IV-D directors,
and national associations. Before drafting regulations we
asked States to suggest approaches for allocating the
available Federal share of the funds. In a number of open
forums we sought suggestions for the allocation formula. An
internal working group considered the information from
States, reviewed the suggestions, then developed the proposed
allocation formula.
Simply stated, the proposed formula first allots a base
amount of $2,000,000 to each State to take into account the
level of automation needed to meet the automated data
processing requirements of title IV-D. The formula, then,
allots an additional amount to States based on both their
reported IV-D caseload and their potential caseload based on
Census data on children living with one parent.
As indicated earlier, we use ``State'' as the inclusive
term for States, Territories and systems described in 42
U.S.C. 655(a)(3)(B)(iii) (455(a)(3)(B)(iii) of the Act) as
amended by section 5555 of the Balanced Budget Act of 1997.
The technical amendments to section 455(a)(3)(B) of the Act
changed the entities included in the allocation formula by
adding ``system'' to States.
At this time caseload and census data are not available for
Los Angeles County. Therefore, the tables in appendix A show
a base amount allocated to Los Angeles County and blank cells
for the caseload factor and the census factor. With a base
amount assigned for Los Angeles County, we can calculate the
total remaining funds available for allocation among the
other States. California's caseload factor and census factor
represent the total for the State, including Los Angeles
County. The California IV-D agency and the Los Angeles County
IV-D agency have been asked to provide us with caseload and
census data, as described below, showing Los Angeles County's
share of the California total.
______

By Mr. McCAIN:
S. 1799. A bill to amend section 121 of the Internal Revenue Code of
1986 to provide that a member of the Armed Forces of the United States
shall be treated as using a principal residence while away from home on
extended active duty; to the Committee on Finance.

tax exclusion legislation

Mr. McCAIN. Mr. President, I am proud to sponsor this bill to amend
the Internal Revenue Code. This bill would modify the home ownership
test for Sales of Primary Residence so that members of our Armed
Forces, who are away on active duty, qualify for the existing tax
relief on the profit generated when they sell their main residence.
This amendment will not create a new tax benefit; it merely modifies
current law to include the time military personnel are away from home
on active duty when calculating the number of years the home owner has
lived in their primary residence. In short, this amendment is narrowly
tailored to remedy a specific dilemma.
The Taxpayer Relief Act of 1997 delivered sweeping tax relief to
millions of Americans through a wide variety of important tax changes
that affect individuals, families, investors and businesses. It is also
one of the most complex tax laws enacted in recent memory.
Mr. President, as with any complex legislation, there are winners and
losers. But in this instance, there is an unintended loser: military
personnel. The 1997 act gives taxpayers who sell their principal
residence a much-needed tax break when they sell their primary
residence. Under the old rule, taxpayers received a one-time exclusion
on the profit they made when they sold their principal residence, but
the taxpayer had to be at least 55 years old and live in the residence
for 2 of the 5 years preceding the sale. This provision primarily
benefited elderly taxpayers, while not providing any relief to younger
taxpayers and their families.
Fortunately, the 1997 act addressed this issue. Under the new law,
all taxpayers who sell their personal residence on or after May 7,
1997, are not taxed on the first $250,000 of profit from the sale.
Joint filers are not taxed on the first $500,000 of profit they made
from selling their principal residence.
Mr. President, I applaud the bi-partisan cooperation that resulted in
this much-needed form of tax relief. The home sales provision sounds
great, and it is. However, when we delve deeper

[[Page S2301]]

into this law, we note that the taxpayer must meet two requirements to
qualify for this tax relief. To qualify, the taxpayer must (1) own the
home for at least 2 of the 5 years preceding the sale, and (2) live in
the home as their MAIN home for at least 2 years of the last 5 years.
The second part of this test unintentionally prohibits many of our
women and men in the Armed Services from qualifying for this beneficial
tax relief. Constant travel across the U.S. and abroad is inherent to
military service. Nonetheless, some military personnel choose to
purchase a home in a certain locale, even though they will not live
there for much of the time. Under the new law, if you do not have a
spouse, and are also forced to travel, you will not qualify for the
full benefit of the new home sales provision, because no one ``lives''
in the home for the required period of time. The current law also hits
dual-military couples that are often away on active duty. They, would
not qualify for the home sales exclusion because neither spouse
``lives'' in the house for enough time to qualify for the exclusion.

Today, the United States has approximately 37,000 men and women
deployed to the Persian Gulf region, preparing to go into combat, if so
ordered. There are another 8,000 American troops deployed in Bosnia,
and another 70,000 U.S. military personnel deployed in support of other
commitments worldwide. That is a total of 108,000 women and men
deployed outside of the United States, away from their primary home.
These women and men are abroad protecting and furthering the freedoms
we Americans hold so dear.
It is fundamentally unfair to deny these men and women the same tax
relief as their civilian counterparts. The newly enacted current home
sale provision unintentionally discourages home ownership among
military personnel. Many of our troops simply do not qualify for the
homes sales tax relief because they are away from their home so much of
the time.
Discouraging home ownership among military personnel is unfair and
bad fiscal policy. Home ownership has numerous benefits for communities
and individual homeowners. Having a fixed home provides Americans with
a sense of community, and adds stability to our nation's neighborhoods.
Home ownership also generates valuable property taxes for our nation's
communities.
We are in a period of robust growth. Americans who are fortunate
enough to do so, reap the benefits of our country's growth by investing
in the stock market. Many of our nation's recent millionaires became
millionaires through the stock market. However, many middle- and lower-
income Americans don't hold vast amounts of stocks, bonds, mutual
funds, and the like. Therefore, how does the average American
participate in our nation's robust growth? Through home ownership.
Appreciation in the value of a home resulting from our country's
overall economic growth allows everyday Americans to participate in our
country's prosperity. Fortunately, the Taxpayer Relief Act of 1997
recognized this, and provided this break to lessen the amount of tax
most Americans will pay on the profit they make when they sell their
main homes.
This bill simply remedies an inequality in the new law. The bill
amends the Internal Revenue Code so that members of our Armed Forces
will be considered to be using their house as their main residence for
any period that they are away on extended active duty. In short,
military personnel will be deemed to be using their house as their main
home, even if they are stationed in Bosnia, the Persian Gulf, in the
``no man's land,'' commonly called the DMZ between North and South
Korea, or anywhere else on active duty orders.
We cannot afford to discourage Military service by penalizing
military personnel with higher taxes merely because they are doing
their job. Military service in itself entails sacrifice, such as long
periods of time away from friends and family, and the constant threat
of mobilization into hostile territory. We must not use the tax code to
heap additional burdens upon our women and men in uniform.
In my view, the way to decrease the likelihood of further inequities
such as the current Home Sales provision is to adopt a fairer, flatter
tax that is far less complicated than our current system. But, in the
meantime, we must insure that the tax code is fair and equitable.
The Taxpayers' relief Act of 1997 was designed to provide sweeping
tax relief to all Americans, including our women and men in uniform.
Yes, it is true that there are winners and losers in any tax code.
However, this inequity is unintended. We should enact this narrowly
tailored remedy to grant equal tax relief to the members of our Armed
Services.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1799

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. ARMED FORCES MEMBER TREATED AS USING PRINCIPAL
RESIDENCE WHILE AWAY FROM HOME ON ACTIVE DUTY.

(a) In General.--Section 121(d) of the Internal Revenue
Code of 1986 (relating to special rules) is amended by adding
at the end the following new paragraph:
``(9) Determination of use during periods of active duty
with armed forces.--
``(A) In general.--A taxpayer shall be treated as using
property as a principal residence during any period the
taxpayer (or the taxpayer's spouse) is serving on extended
active duty with the Armed Forces of the United States, but
only if the taxpayer used the property as a principal
residence for any period before the period of extended active
duty.
``(B) Extended active duty.--For purposes of this
paragraph, the term `extended active duty' means any period
of active duty pursuant to a call or order to such duty for a
period in excess of 90 days or for an indefinite period.''
(b) Effective Date.--The amendment made by this section
shall apply to sales or exchanges after May 6, 1997.
______

By Mr. GLENN (for himself and Mr. DeWine):
S. 1800. A bill to designate the Federal building and United States
courthouse located at 85 Marconi Boulevard in Columbus, Ohio, as the
``Joseph P. Kinneary United States Courthouse''; to the Committee on
Environment and Public Works.

joseph kinneary united states courthouse legislation

Mr. GLENN. Mr. President, I rise today to introduce a bill naming the
Federal Building and Courthouse at 85 Marconi Boulevard in Columbus,
Ohio after one of my home state's most highly esteemed members of the
federal bench, Judge Joseph P. Kinneary.
Judge Kinneary has served on the United States District Court of Ohio
for over 32 years. But Judge Kinneary's commitment to public service
goes much further beyond these past three decades. He has given a
lifetime to public service. In fact, that service continues even today
where, at age 92, Judge Kinneary continues to serve as a senior judge
carrying a docket of cases.
I'd like to take a few minutes of my colleagues' time to talk about
this amazing gentleman and what he's done for my home state of Ohio and
our entire nation.
Judge Kinneary graduated from the University of Cincinnati's College
of Law in 1935. After practicing law in both Columbus and Cincinnati
for two years, Judge Kinneary served as Assistant Attorney General of
Ohio until 1939.
But, as happened to many Americans in those days, World War II
changed Joseph Kinneary's career plans. He served in the Army from 1942
to 1946, and worked as the Chief of the Legal Branch for the Field
Headquarters of the Quartermaster Corps.
After his war service, Judge Kinneary returned to private practice.
In 1949, however, Judge Kinneary returned to public service and became
the First Assistant Attorney General of Ohio. And, in 1961, President
Kennedy appointed Judge Kinneary to United States Attorney for the
Southern District of Ohio where he served until 1966.
In 1966, President Johnson appointed Judge Kinneary to the District
Court for the Southern District of Ohio. Well-respected among his
colleagues, he served as Chief Judge from January 1973 to September
1975.
And, today, 32 years after his appointment to the bench, Judge
Kinneary still presides and draws a docket that is approximately 80
percent of an active judge. I find Judge Kinneary's dedication to the
people of

[[Page S2302]]

Ohio and America inspiring, as I'm sure many of my colleagues do on
hearing of his career.
I can think of no better way for the U.S. Senate, for the entire
country, to honor Judge Kinneary than to name one of Columbus, Ohio's,
most important federal buildings and courthouses in his honor. So, it
is with great thanks and a deep sense of honor that I introduce today a
bill to name the Columbus Courthouse after Judge Kinneary. I urge my
colleagues to give this legislation quick consideration and approval.
Mr. President, I ask unanimous consent that the full text of the bill
be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1800

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. DESIGNATION OF JOSEPH P. KINNEARY UNITED STATED
COURTHOUSE.

The Federal building and United States courthouse located
at 85 Marconi Boulevard in Columbus, Ohio, shall be known and
designated as the ``Joseph P. Kinneary United States
Courthouse''.

SEC. 2. REFERENCES.

Any reference in a law, map, regulation, document, paper,
or other record of the United States to the Federal building
and United States courthouse referred to in section 1 shall
be deemed to be a reference to the ``Joseph P. Kinneary
United States Courthouse''.
______

By Mr. LAUTENBERG:
S. 1801. A bill to suspend until December 31, 2000, the duty on
Benzenepropanal, 4-(1, 1-Dimethylethyl)-Methyl-; to the Committee on
Finance.

DUTY SUSPENSION LEGISLATION

Mr. LAUTENBERG. Mr. President, I rise today to introduce legislation
to temporarily reduce the rate of duty imposed on a fragrance additive
with the chemical name of Benzenepropanal, 4-(1,1-Dimethylethyl)-
Methyl-. The chemical has a lily-like floral aroma and used in
fragrances.
My constituent who requested this duty reduction, Bush Boake Allen
Inc. of Montvale, New Jersey, knows of no opposition to this
legislation. The last United States manufacturer of this chemical,
Givaudan-Roure, will cease all production of this additive by June
1998. I have drafted this legislation to ensure that it will not go
into effect before July 15. Givaudan-Roure, which is also a
constituent, knows of this legislation and the effective date, and does
not oppose it.
I ask my colleagues to support this legislation. Reducing the duties
paid by American companies for products which have no American
manufacturer keep our companies from being placed at a competitive
disadvantage in the global marketplace. In addition, these lower duties
will benefit American consumers and business customers of Bush Boake
Allen Inc.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1801

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. REDUCTION OF DUTY ON BENZENEPROPANAL, 4-(1,1-
DIMETHYLETHYL)-METHYL-.

(a) In General.--Subchapter II of chapter 99 of the
Harmonized Tariff Schedule of the United States is amended by
inserting in numerical sequence the following new item:

`` 9902.29.57 Benzenepropanal,
4-(1,1-
Dimethylethyl)-
Methyl- (CAS
No. 80-54-6)
provided for in
subheading
2912.29.60).... 6% No change No change On or before 12/
31/2000
''
.

(b) Effective Date.--The amendment made by subsection (a)
applies with respect to goods entered, or withdrawn from
warehouse for consumption, on or after the later of--
(1) the 15th day after the date of enactment of this Act;
or
(2) July 15, 1998.
______

By Mr. McCAIN (for himself, Mr. Hollings, Mrs. Hutchison, Mr.
Inouye, Mr. Lott, and Mr. Ford):
S. 1802. A bill to authorize appropriations for the Surface
Transportation Board for fiscal years 1999, 2000, and 2001; to the
Committee on Commerce, Science, and Transportation.

the Surface Transportation Board Reauthorization Act of 1998

Mr. McCAIN. Mr. President, today I am introducing the Surface
Transportation Board (STB) Reauthorization Act of 1998. I am pleased to
be joined in sponsoring this measure by several members of the Senate
Committee on Commerce, Science, and Transportation, including Senator
Hollings, Ranking Member, Senators Hutchison and Inouye, Chair and
Ranking Member of the Surface Transportation and Merchant Marine
Subcommittee, as well as Senators Lott and Ford.
Mr. President, the introduction of this bill today is intended to
demonstrate our Committee's firm commitment to enact legislation
extending the authorization for the Surface Transportation Board during
this session of Congress. The bill we are introducing is simple. It
proposes to reauthorize the STB for three years and provide sufficient
resources to ensure the agency is able to continue to carry out its
serious responsibilities.
Mr. President, I want to stress to my colleagues that this is a
working piece of legislation. The Senate Commerce Committee intends to
fully explore the resource needs of the Board, along with proposals to
provide for any statutory changes as may be necessary. The Surface
Transportation and Merchant Marine Subcommittee has already scheduled a
hearing on the STB reauthorization for March 31st and I want to commend
Chairman Hutchison for her expeditious action on this important
reauthorization hearing.
During the reauthorization process, I further anticipate we will
continue our examination of rail service and rail shipper problems in
addition to the more general reauthorization issues. The Surface
Transportation and Merchant Marine Subcommittee has held two fields
hearings and a third hearing on rail service problems will be conducted
next month.
Rail service and rail shipper issues warrant serious consideration,
but I believe specific rail service and rail shipper problems and cases
are best resolved by the Board. The Congress established the STB as an
independent non-political authority to deal with these very exact
problems and I believe we must continue to assist the Board in
fulfilling its statutory duties responsibly and independently.
I look forward to working on this important transportation
legislation and hope my colleagues will agree to join with me and the
other sponsors in expeditiously moving this necessary transportation
reauthorization through the legislative process.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1802

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Surface Transportation Board
Reauthorization Act of 1998''.

SEC. 2. AUTHORIZATION LEVELS.

There are authorized to be appropriated to the Surface
Transportation Board $16,190,000 for fiscal year 1999,
$16,642,000 for fiscal year 2000, and $17,111,000 for fiscal
year 2001.

Mr. HOLLINGS. Mr. President, I am happy to cosponsor, along with
Senators McCain, Inouye, Hutchison, Lott, and Ford, this bill to
reauthorize appropriations for the Surface Transportation Board
(Board). The Board is the independent agency which oversees the
nation's rail transportation industry. The Board also has some
authority over the interstate bus system, pipeline system, and rail
labor-management disputes. It should be said that the Congress gave
this small agency, with less than 150 people, the job that had been
done by the old Interstate Commerce Commission with, at its peak, 1600
people. We demanded that

[[Page S2303]]

the Board do more with less and we demanded that it be evenhanded,
fair-minded, and tackle some very tough, contentious issues. I am happy
to report that the Board has done all of that and more.
Since its inception, the Board has had a pending caseload of between
400 and 500 adjudications related to all of its functions. The number
of rail cases pending at the Board remains relatively constant because,
even as cases are resolved, new cases are filed. Even with its
relatively meager resources the Board has met every rulemaking deadline
set by Congress in the Interstate Commerce Commission Termination Act.
It has resolved close to 200 motor carrier undercharge cases. It has
set and met deadlines and established simplified procedures for
handling pending cases. It has also dealt with the important and
difficult issue of rail carriers providing rates to shippers in the so-
called ``bottleneck'' cases. While this issue is now before the courts,
it is the Board that has tried to steer a course allowing the rail
carriers to earn a decent return on their investment while providing
shippers with needed transportation at reasonable rates.
In the area of rail regulation, the Board has worked on several
important rail restructuring cases, including several complex line
construction cases, the Union Pacific/Southern Pacific merger, and the
pending Conrail acquisition case (in which approximately 80 decisions
have already been issued). It has tackled the rail service emergency in
the West in many ways, including its issuance of an emergency service
order on October 31, 1997, which has been extended and expanded upon
twice and is in place through August 2, 1998. In addition, the Board is
holding two days of hearings on the rail service emergency in the
beginning of next month. We must applaud Linda Morgan, the Chairman of
the Board, on her leadership and the men and women of the Board on
their hard work and dedication and as we do so we must be mindful that
more, much more, will be expected of them. Two additional rail mergers
have been announced, both of critical importance to the nation. I have
every confidence in Chairman Morgan and the STB to meet and surmount
these latest challenges.
This bill represents my commitment to seeing that the Board is
reauthorized for a multi-year span and is given the resources it needs
to continue its vital work. Absent the Board, neither shippers nor rail
carriers would have an effective forum to adjudicate disputes and
ensure a first rate nationwide rail transportation system.
______

By Mr. ROBB:
S. 1803. A bill to reform agricultural credit programs of the
Department of Agriculture, and for other purposes; to the Committee on
Agriculture, Nutrition, and Forestry.

THE AGRICULTURAL CREDIT RESTORATION ACT

Mr. ROBB. Mr. President, every day small and minority farmers are
struggling to survive. They struggle in the field as they try to grow a
plentiful crop, they struggle with the ever unpredictable Mother
Nature, and they struggle to compete with large farm operations. They
have a very tough job, but they provide us, the consumers, with the
abundant food supply we take for granted. Historically, when credit is
unavailable from private sources, farmers have turned to USDA to
finance land, seed, equipment and fertilizer, or for funds to offset
disaster losses. USDA direct and guaranteed operating loan programs
allow small farmers to be self-sustaining, successful, contributing
members of their rural communities.
But Mr. President, a little, unknown provision in the 1996 Farm Bill
is prohibiting farmers and ranchers from receiving USDA loans if their
farm debt has been written off, or forgiven, by the Department in the
past for any reason. This provision constitutes a lifetime ban, is more
severe than private sector lending policies, and particularly
disadvantages small and minority farmers who often have difficulty
securing credit. It is a one strike you're out policy and Mr.
President, it is simply un-American.
I believe this provision that prohibits farmers who have had their
farm debt written-off or restructured from ever receiving a USDA loan
again was probably added to the 1996 Farm bill to protect the public
interest. However, it is actually forcing some small and minority
farmers into impoverished retirement.
That is why I rise today to introduce the Agricultural Credit
Restoration Act of 1998. While safeguarding the integrity of USDA
lending programs, this bill provides credit-worthy farmers and ranchers
a second opportunity to participate in lending programs. The
legislation, which was formulated by the USDA, eliminates the lifetime
ban. It limits eligibility to two write-downs and farmers and ranchers
are given a second opportunity to participate in USDA lending programs.
Secondly, an exemption from the ban is included for one write-down that
may result from a natural disaster or medical condition affecting
farmers or their immediate family, or where discrimination by USDA has
occurred. Thirdly, the bill gives the Secretary of Agriculture the
authority to give loan funds for socially disadvantaged farmers to
states where need is greatest.
In my state, Virginia, and throughout the South, farmers have been
denied or delayed loans by USDA local agents because of their race.
This has been confirmed by USDA and acknowledged by Agriculture
Secretary Dan Glickman and President Clinton. This discrimination has
forced farmers into bankruptcy and statistics show that the black
farmer is dwindling at three times the rate of other farmers in the
United States.
In the Dakotas, farmers were devastated by the great floods of 1997.
Due to a terrible act by Mother Nature, they lost everything and had to
declare bankruptcy.
Whether it is a man-mad or a natural disaster, conditions beyond a
farmer's control have left him or her in a desperate position. This
does not mean these are bad farmers with bad business sense. They have
simply experienced bad times, and USDA, the lender of last resort,
should not be forbidden from lending these farmers a helping hand.
Last year, responding to complaints by Virginia farmers, I added $50
million in direct operating loan funding to the 1997 Supplemental
Appropriations bill. Many deserving farmers were unable to access these
funds because of the lifetime ban included in the 1996 Farm bill.
Mr. President, it is time to repeal this unjust one strike you're out
provision. We need to do so now, before another planting season goes by
and farmers are denied the resources they need to get their corps in
the ground.
Small farmers are hardworking individuals with many daily struggles.
The Federal government should be there to offer them a chance to
survive, not forcing them to move out of the farming business.
Mr. President, I ask unanimous consent that the full text of my bill
be inserted in the Record, and I urge my fellow colleagues to support
small farmers and pass this legislation.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1803

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Agricultural Credit
Restoration Act''.

SEC. 2. AMENDMENTS TO THE CONSOLIDATED FARM AND RURAL
DEVELOPMENT ACT.

(a) Section 343(a)(12)(B) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1991(a)(12)(B)) is amended to
read as follows:
``(B) Exception.--The term `debt forgiveness' does not
include--
``(i) consolidation, rescheduling, reamortization, or
deferral of a loan;
``(ii) 1 debt forgiveness in the form of a restructuring,
write-down, or net recovery buy-out during the lifetime of
the borrower that is due to a financial problem of the
borrower relating to a natural disaster or a medical
condition of the borrower or of a member of the immediate
family of the borrower (or, in the case of a borrower that is
an entity, a principal owner of the borrower or a member of
the immediate family of such an owner); and
``(iii) any restructuring, write-down, or net recovery buy-
out provided as a part of a resolution of a discrimination
complaint against the Secretary.''.
(b) Section 353(m) of such Act (7 U.S.C. 2001(m)) is
amended by striking all that precedes paragraph (2) and
inserting the following:
``(m) Limitation on Number of Write-Downs and Net Recovery
But-Outs Per Borrower.--

[[Page S2304]]

``(1) In general.--The Secretary may provide a write-down
or net recovery but-out under this section or not more than 2
occasions per borrower with respect to loans made after
January 6, 1988.''.
(c) Section 353 of such Act (7 U.S.C. 2001) is amended by
striking subsection (o).
(d) Section 355(c)(2) of such Act (7 U.S.C. 2003(c)(2)) is
amended to read as follows:
``(2) Reservation and allocation.--
``(A) In general.--The Secretary shall, to the greatest
extent practicable, reserve and allocate the proportion of
each State's loan funds made available under subtitle B that
is equal to that State's target participation rate for use by
the socially disadvantaged farmers or ranchers in that State.
The Secretary shall, to the extent practicable, distribute
the total so derived on a county by county basis according to
the number of socially disadvantaged farmers or ranchers in
the county.
``(B) Reallocation of unused funds.--The Secretary may pool
any funds reserved and allocated under this paragraph with
respect to a State that are not used as described in
subparagraph (A) in a State in the first 10 months of a
fiscal year with the funds similarly not so used in other
States, and may reallocate such pooled funds in the
discretion of the Secretary for use by socially disadvantaged
farmers and ranchers in other States.''.
(e) Section 373(b)(1) of such Act (7 U.S.C. 2008h(b)(1)) is
amended to read as follows:
``(1) In general.--Except as provided in paragraph (2), the
Secretary may not make or guarantee a loan under subtitle A
or B to a borrower who on, 2 or more occasions, received debt
forgiveness on a loan made or guaranteed under this title.''.
(f) Section 373(c) of such Act (7 U.S.C. 2008h(c)) is
amended to read as follows:
``(c) No More Than 2 Debt Forgivenesses Per Borrower on
Direct Loans.--The Secretary may not, on 2 or more occasions,
provide debt forgiveness to a borrower on a direct loan made
under this title.''.

SEC. 2. REGULATIONS.

Not later than 90 days after the date of the enactment of
this Act, the Secretary of Agriculture shall promulgate
regulations necessary to carry out the amendments made by
this Act, without regard to--
(1) the notice and comment provisions of section 553 of
title 5, United States Code; and
(2) the statement of policy of the Secretary of Agriculture
relating to notices of proposed rulemaking and public
participation in rulemaking that became effective on July 24,
1971 (36 Fed. Reg. 13804).
______

By Mr. KENNEDY:
S. 1804. A bill to amend title XXVII of the Public Health Service Act
to limit the amount of any increase in the payments required by health
insurance issuers for health insurance coverage provided to individuals
who are guaranteed an offer of enrollment under individual health
insurance coverage relative to other individuals who purchase health
insurance coverage; to the Committee on Labor and Human Resources.

affordable health INSURANCE AcT of 1998

Mr. KENNEDY. Mr. President, a recent GAO report makes clear that
significant insurance company abuses are undercutting the effectiveness
of one of the key parts of the Kassebaum-Kennedy health insurance
reforms enacted in 1996. The legislation that I am introducing today
will stop these unconscionable practices.

The 1996 legislation was enacted in response to several serious
problems. Large numbers of Americans felt locked into their jobs
because of pre-existing health conditions that would have subjected
them to exclusions coverage if they changed jobs.
Many more who did change jobs found themselves and members of their
families exposed to devastating financial risks because of exclusions
for such conditions. Other families faced the same problems if their
employers changed insurance plans. Still others were unable to buy
individual coverage because of health problems if they left their job
or lost their job and did not have access to employer-based coverage.
The legislation addressed each of these problems. It banned
exclusions for pre-existing conditions for people who maintained
coverage, even if they changed jobs or changed insurers. It required
insurance companies to sell insurance policies to small businesses and
individuals losing group coverage, regardless of their health status.
It banned higher charges for those in poor health in employment-based
groups.
A GAO study in 1995 had found that 25 million Americans faced one or
more of these problems and would be helped by the Kassebaum-Kennedy
proposal. For the vast majority of these Americans, the legislation is
working well. They can change jobs without fear of new exclusions for
pre-existing conditions, denial of coverage, or insurance company
gouging.
But as the GAO study released last week makes clear, many of the two
million people a year who lose employer-based group coverage are
vulnerable to flagrant industry price-gouging if they try to purchase
individual coverage. Under the Kassebaum-Kennedy legislation,
individuals who leave their jobs and want to buy coverage in the
individual market are guaranteed access to coverage without regard to
their health status and without being subject to pre-existing condition
exclusions. But there is no clear limit in the Federal law on how much
they can be charged for that coverage--and some unscrupulous companies
are taking advantage of that loophole to effectively deny coverage to
those in poor health by requiring them to pay exorbitant premiums.
We recognized that potential problem in 1996, but Republican
opposition blocked clear, strict federal limits to prevent such abuse,
on the ground that state regulation would be an adequate remedy. At
least in some states, as the GAO report makes clear, state regulation
is no match for insurance industry price-gouging.
The legislation that I am introducing today is a straightforward
response to that problem. It will limit insurance company charges to
eligible individuals, so that they will have to pay no more than 150%
of the rate charged to those in good health. That is well within the
range that the American Academy of Actuaries said would have negligible
impact on the premiums of those who already have coverage, but it will
end the worst of the current price-gouging. This approach of limiting
premium increases based on health conditions has worked and worked well
in the small group market for many years. It should have been included
in the 1996 bill, and Congress should act on it promptly this year.
The verdict of experience is in. The GAO report makes clear that some
insurance firms are guilty of abuse beyond a reasonable doubt, and
Congress has to act.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1804

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Affordable Health Insurance
Act of 1998''.

SEC. 2. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

(a) Premium Limitations With Respect to Individual
Coverage.--Section 2741 of the Public Health Service Act (42
U.S.C. 300gg-41) is amended--
(1) by redesignating the second subsection (e) and
subsection (f) as subsection (f) and (g) respectively; and
(2) by adding at the end thereof the following:
``(h) Premium Limitations.--
``(1) In general.--With respect to an eligible individual
desiring to enroll in, or renew, individual health insurance
coverage under this section, the health insurance issuer that
offers such coverage shall not charge such individual a
premium rate for such coverage that is higher than a rate
equal to 150 percent of the average standard risk rate (as
determined under paragraph (2)) of the issuer for individual
health insurance offered in the State or applicable marketing
or service area (as determined pursuant to regulations).
``(2) Average standard risk rate.--As used in paragraph
(1), the term `average standard risk rate' means the
following:
``(A) Guaranteed issue of all policies.--In the case of a
health insurance issuer that meets the requirements of this
section with respect to individual health insurance coverage
by meeting the requirements of subsection (a)(1), the
standard risk rate for the policy in which the eligible
individual is enrolled or desires to enroll.
``(B) Guaranteed issue of two most popular policies.--In
the case of a health insurance issuer that meets the
requirements of this section with respect to individual
health insurance coverage through a mechanism described in
subsection (c)(2), the standard risk rate for the policy in
which the eligible individual is enrolled or desires to
enroll.
``(C) Guaranteed issue of two policy forms with
representative coverage.--In the case of a health insurance
issuer that meets the requirements of this section with
respect to individual health insurance coverage through a
mechanism described in subsection (c)(3), the average of the
standard risk rates for the most common policy forms offered
by the issuer in the State or applicable marketing or service
area (as determined pursuant to regulations), established
using reasonable actuarial techniques to adjust for the
difference in actuarial values among

[[Page S2305]]

such policy forms, subject to review and approval or
disapproval of the applicable regulatory authority.
(b) State Flexibility.--Section 2744(c) of the Public
Health Service Act (42 U.S.C. 300gg-44(c)) is amended--
(1) in paragraph (1), by inserting before the period the
following: ``, except that in applying any such model act, an
eligible individual shall not be charged a premium rate that
is higher than a rate equal to 150 percent of the standard
risk rate of the issuer'';
(2) in paragraph (2)(B), by inserting before the period the
following: ``, except that an eligible individual shall not
be charged a premium rate that is higher than a rate equal to
150 percent of the standard risk rate as determined under the
Model Plan''; and
(3) by adding at the end the following:
``(4) Limitation.--
``(A) In general.--In the case of a mechanism described in
subparagraph (A) or (B) of paragraph (3), a State shall not
be considered to be implementing an acceptable alternative
mechanism unless the mechanism limits the amount of premium
rates that may be charged to eligible individuals to not more
than 150 percent of the standard risk rate.
``(B) Standard risk rate.--For purposes of subparagraph
(A), the term `standard risk rate' means--
``(i) in the case of a mechanism under paragraph (3)(A),
and as determined by the Secretary to be appropriate with
respect to the State mechanism involved--
``(I) the rate determined under section 2741(h)(2)(A);
``(II) the rate determined pursuant to the standards
included in the Model Plan described in paragraph (2)(B); or
``(III) the rate determined pursuant to such other method
of calculation as is determined by the State and approved by
the Secretary as appropriate to achieve the goal of this
subsection; and
``(ii) in the case of a mechanism under paragraph (3)(B),
the rate determined under section 2741(h)(2)(A).''.

SEC. 3. EFFECTIVE DATE.

The amendments made by--
(1) section 2(a) shall apply to health insurance coverage
offered, sold, issued, renewed, in effect, or operated in the
individual market on the date that is 6 months after the date
of enactment of this Act; and
(2) section 2(b) shall apply with respect to a State that
adopted an alternative mechanism under section 2744 of the
Public Health Service Act (42 U.S.C. 300gg-44) on the date
that is 1 year after the date of enactment of this Act.
______

By Mr. KENNEDY (for himself, Mr. Dodd, Mr. Daschle, Mr. Inouye,
Mr. Bumpers, Mr. Leahy, Mr. Moynihan, Mr. Sarbanes, Mr. Levin,
Mr. Lautenberg, Mr. Harkin, Mr. Kerry, Mr. Rockefeller, Ms.
Mikulski, Mr. Wellstone, Mrs. Boxer, Mr. Feingold, Mrs.
Feinstein, Ms. Moseley-Braun, Mr. Durbin, Mr. Reed, and Mr.
Torricelli):
S. 1805. A bill to amend the Fair Labor Standards Act of 1938 to
increase the Federal minimum wage; to the Committee on Labor and Human
Resources.

the fair minimum wage act of 1998

Mr. KENNEDY. Mr. President, it is an honor to join with Senator
Daschle and other Democratic Senators to introduce the Fair Minimum
Wage Act of 1998. This proposal is strongly supported by President
Clinton, and is also being introduced today in the House of
Representatives by Congressman David Bonior, Democratic Leader Richard
Gephardt, and many of their colleagues.
The federal minimum wage is now $5.15 an hour. Our bill will raise it
by $1.00 over the next two years--a 50 cent increase on January 1,
1999, and another 50 cent increase on January 1, 2000, so that the
minimum wage will reach the level of $6.15 at the turn of the century.
These modest increases will help 20 million workers and their
families. Twelve million Americans earning less than $6.15 an hour
today will see a direct increase in their pay, and another 8 million
Americans earning between $6.15 and $7.15 an hour are also likely to
benefit from the increase.
The nation's economy is the best it has been in decades. Under the
leadership of President Clinton, the country as a whole is enjoying a
remarkable period of growth and prosperity. Enterprise and
entrepreneurship are flourishing--generating an extraordinary
expansion, with remarkable efficiencies and job creation. The stock
market is soaring. Inflation is low, unemployment is low, and interest
rates are low.
In the past 30 years, the stock market, adjusted for inflation, has
gone up by 115%. In 1997, the average compensation of a Wall Street
executive was $280,000--a stunning $120,000 increase over 1996. These
lavish salaries contrast starkly with the 30% decline in the value of
the minimum wage over the past three decades. To have the purchasing
power it had in 1968, the minimum wage would have to be $7.38 an hour
today, instead of $5.15.
But the benefits of this prosperity have not flowed fairly to minimum
wage earners. Working 40 hours a week, 52 weeks a year, they earn
$10,712 a year--$2,600 below the poverty line for a family of three.
According to the Department of Labor, 60% of minimum wage earners are
women. Nearly three-fourths are adults. Three-fifths are the sole
breadwinners in their families. More than half work full time. These
families need help, and they deserve this increase in the minimum wage.
Increasing the minimum wage can make all the difference to these
workers and their families. They will be able to survive without food
stamps or other social services to supplement their incomes. They can
fix up their homes and invest in their neighborhoods. They can spend
more at the local grocery store. They can work two jobs rather than
three, and spend more time with their families. Their utilities won't
be cut off. They can pay the medical bills they accumulated from not
having health benefits at their jobs. As one minimum wage earner told
me earlier this year, ``The best welfare reform is an increase in the
minimum wage.''
Opponents typically claim that, if the minimum wage goes up, the sky
will fall--small businesses will collapse and jobs will be lost. This
hasn't happened in the past, and it won't happen in the future. In
fact, in the time that has passed since the most recent increases in
the federal minimum wage--a 50-cent increase on October 1, 1996 and a
40-cent increase on September 1, 1997--employment has increased in all
sectors of the population.
Since September 1996, 700,000 new retail jobs have been added in the
economy, including 200,000 new restaurant jobs. Overall employment is
at an all-time high. Overall unemployment is at an historically low
rate--4.6 %. The teenage unemployment rate has declined by 1.3
percentage points. The unemployment rate for African-Americans has
declined by 1 percentage point over the same period.
Seventeen renowned economists--including Nobel Prize winner Lawrence
R. Klein and former Secretary of Labor Ray Marshall--recently wrote to
President Clinton, supporting an increase in the minimum wage.
According to these experts, ``the 1996 and 1997 increases had a
beneficial effect, not only on those whose earnings were increased by
90 cents an hour, but also on the economy as a whole. Billions in added
consumer demand helped fuel our expanding economy in those years. . . .
Given the nation's low unemployment rate and strong economy without
inflation, now is the time to deepen our public commitment to a decent
minimum wage.''
The American people understand that you can't raise a family on $5.15
an hour. We intend to do all we can to see that the minimum wage is
increased this year. No one who works for a living should have to live
in poverty.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1805

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This act may be cited as the ``Fair Minimum Wage Act of
1998''.

SEC. 2. MINIMUM WAGE INCREASE.

(a) Wage.--Paragraph (1) of section 6(a) of the Fair Labor
Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended to
read as follows:
``(1) except as otherwise provided in this section, not
less than--
``(A) $5.65 an hour during the year beginning on January 1,
1999; and
``(B) $6.15 an hour during the year beginning on January 1,
2000.''.
(b) Effective Date.--The amendment made by subsection (a)
takes effect on January 1, 1999.
______

By Mr. COCHRAN (for himself and Mr. Inouye):
S. 1806. A bill to state the policy of the United States regarding
the deployment of a missile defense system

[[Page S2306]]

capable of defending the territory of the United States against limited
ballistic missile attack; to the Committee on Armed Services.

the american missile protection act of 1998

Mr. COCHRAN. Mr. President, I am introducing today a bill to make it
the policy of the United States to deploy a national missile defense
system as soon as technology permits. I am pleased that the
distinguished Senator from Hawaii, Mr. Inouye, is joining me as
cosponsor of this legislation, the American Missile Protection Act of
1998.
A new type of ballistic missile threat is emerging in the world
today, one that derives not from a cold war strategic balance but from
the increasing proliferation of ballistic missile technology, from the
stated desire of some nation states to acquire such delivery systems,
and from their evident progress in doing so. Last year, the
Governmental Affairs Subcommittee on International Security,
Proliferation, and Federal Services held a series of 11 hearings
examining proliferation-related issues. The evidence from those
hearings forms the basis for the findings in this bill.
First, we found, and this bill recites, that the threat of weapons of
mass destruction delivered by long-range ballistic missiles is among
the most serious security issues facing the United States. There is
widespread agreement on this. For the last 4 years, the President has
annually declared that the proliferation of nuclear, biological, and
chemical weapons, and the means of delivering such weapons, constitute
``an unusual and extraordinary threat to the national security, foreign
policy, and economy of the United States.'' And the Senate said in
legislation in 1996 that ``it is in the supreme interest of the United
States to defend itself from the threat of limited ballistic missile
attack, whatever the source.''
The second finding in the bill is that the long-range ballistic
missile threat to the United States is increasing. The leaders of
several rogue states have stated their belief that missiles capable of
striking our territory would enable them to coerce or deter the United
States, and they have declared their desire and intent to acquire these
delivery systems. Ballistic missiles are increasingly the weapon of
choice. They were used only once between World War II and 1980, but
thousands have been fired in at least six conflicts since 1980.
Furthermore, the clear trend is toward missiles with greater range. For
example, since the early 1980s, North Korea has progressed from having
to purchase 300-kilometer-range Scud missiles to developing its own
6,000-kilometer-range ballistic missile, which the intelligence
community says may be capable of striking Alaska and Hawaii in less
than 15 years. Iran's progress in developing extended range missiles
has been dramatic and sudden, posing a new threat to U.S. forces in the
Middle East.

The technological advances of the information age have made vast
amounts of previously classified, arcane technical information
available to anyone with Internet access. Advances in commercial
aerospace have made once-exotic components and materials commonplace
and more easily obtainable, and the demand for space-based
telecommunications has vastly increased demand for space launch
vehicles. These developments mean that the technical information,
hardware, and other resources necessary to build ballistic missiles are
increasingly available and accessible worldwide.
So, too, is scientific and technical expertise from Russia and China,
which have been primary suppliers of equipment, materials, and
technology related to weapons of mass destruction. Efforts by the
administration to stop such assistance from these two countries have
not been successful.
America's well-known vulnerability serves to feed this growing
threat. As long as potential adversaries know we cannot defend
ourselves against these weapons, they have every incentive to acquire
or develop them.
The third finding in the bill is that the ability of the United
States to anticipate the rate of progress in rogue ballistic missile
programs is questionable. In the past, the United States has been
surprised by the technical innovation of other nations, particularly
with respect to ballistic missiles. There are many reasons for this,
including help from other nations and the willingness of some states to
field systems with lower accuracy requirements than would be acceptable
to the United States. In both cases, the result can be progress that is
more rapid than expected. Just 2 months ago, for example, the Director
of Central Intelligence stated, ``Iran's success in getting technology
and materials from Russian companies, combined with recent indigenous
Iranian advances means that it could have a medium-range missile much
sooner than I assessed last year.''
That year, last year, in 1997, Mr. Tenet testified that Iran could
have such a missile by 2007, the year 2007. While he didn't say how
much sooner than 2007 when he testified recently, State Department
officials have testified since then that Iran could develop this
missile this year, 9 years earlier than had been predicted only a year
ago.
Iran's rapid progress demonstrates how external assistance can affect
the pace of missile programs. And, of course, predicting the amount of
outside assistance any nation will receive is nearly impossible. The
CIA has recognized this difficulty, stating recently to the Senate
that, ``gaps and uncertainties preclude a good projection of exactly
when `rest of the world' countries will deploy ICBMs.''
This bill's fourth finding is that the failure to prepare a defense
against ballistic missiles could have grave security and foreign policy
consequences for the United States. An attack on the United States by a
ballistic missile equipped with a weapon of mass destruction would be
catastrophic, inflicting death and injury to potentially thousands of
American citizens. Even the threat of such an attack could constrain
American options in dealing with regional challenges to our interests,
deter us from taking action, or prompt allies to question America's
security guarantees. All of this would have serious consequences for
the United States and international stability.

The fifth finding is that it is imperative for the United States to
be prepared for rogue nations acquiring long-range ballistic missiles
armed with weapons of mass destruction. The Senate, in its resolution
of ratification for the START II treaty, declared that ``. . . because
deterrence may be inadequate to protect the United States against long-
range ballistic missile threats, missile defenses are a necessary part
of new deterrent strategies.'' Former Defense Secretary Perry said in
1994 that we have an opportunity to move from ``mutual assured
destruction'' to ``mutual assured safety.'' And in 1997, the Under
Secretary of Defense for Policy testified in the Senate that we ``are
quite willing to acknowledge that if we saw a rogue state, a potential
proliferant, beginning to develop a long-range ICBM capable of reaching
the United States, we would have to give very, very serious attention
to deploying a limited national missile defense.'' Mr. President, our
Nation's interests will be served better being prepared 1 year too soon
rather than 1 year too late.
This bill's sixth and final finding acknowledges the United States
has no defenses deployed against weapons of mass destruction delivered
by long-range ballistic missiles and no policy to deploy such a
national missile defense system. We have only a policy to wait and see.
The bill in its final paragraph provides, ``It is the policy of the
United States to deploy as soon as technologically possible, a National
Missile Defense system capable of defending the territory of the United
States against limited ballistic missile attack (whether accidental,
unauthorized, or deliberate).''
This policy statement accomplishes two things. It sends a clear
message to any rogue state seeking ballistic missile delivery systems
that America will not be vulnerable to these weapons indefinitely. And,
second, it affirms that the United States will take the steps necessary
to protect its citizens from missile attack. That is what the bill is.
That is what it says.
Now, let me briefly say what it is not. It is not a referendum on the
ABM Treaty. It does not prescribe a specific system architecture. It
does not mandate a deployment date, only that we deploy as soon as the
technology is ready. It is not a directive to negotiate or cooperate on
missile defense programs. It does not initiate studies or

[[Page S2307]]

reports. Nor is it a declaration that the only weapon of mass
destruction threat to the United States is from weapons delivered by
long-range ballistic missiles--other delivery methods are also of
concern but we have programs in place to defend against those threats.
This bill is designed to deal only with the accelerating proliferation
threat.
In his State of the Union Address President Clinton said, ``preparing
for a far off storm that may reach our shores is far wiser than
ignoring the thunder 'til the clouds are just overhead.'' He wasn't
talking about national missile defense, but his words do apply
precisely to this dilemma. We are hearing the thunder now, and the time
has come to declare to our citizens and to the world and to demonstrate
by our actions that the United States will not remain defenseless
against ballistic missiles. That should be our policy and this bill
states that it is our policy.
A letter to all Senators is going out inviting cosponsors to join us
when we reintroduce the bill within the next 2 weeks. I ask unanimous
consent a copy of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1806

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited at the ``American Missile Protection
Act of 1998''.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) The threat of weapons of mass destruction delivered by
long-range ballistic missiles is among the most serious
security issues facing the United States.
(A) In a 1994 Executive Order, President Clinton certified,
that ``I . . . find that the proliferation of nuclear,
biological, and chemical weapons (`weapons of mass
destruction') and the means of delivering such weapons,
constitute an unusual and extraordinary threat to the
national security, foreign policy, and economy of the United
States, and hereby declare a national emergency to deal with
that threat.'' This state of emergency was reaffirmed in
1995, 1996, and 1997.
(B) In 1994 the President stated, that ``there is nothing
more important to our security and the world's stability than
preventing the spread of nuclear weapons and ballistic
missiles''.
(C) Several countries hostile to the United States have
been particularly determined to acquire missiles and weapons
of mass destruction. President Clinton observed in January of
1998, for example, that ``Saddam Hussein has spent the better
part of this decade, and much of his nation's wealth, not on
providing for the Iraqi people, but on developing nuclear,
chemical and biological weapons and the missiles to deliver
them''.
(D) In 1996, the Senate affirmed that, ``it is in the
supreme interest of the United States to defend itself from
the threat of limited ballistic missile attack, whatever the
source.''
(2) The long-range ballistic missile threat to the United
States is increasing.
(A) Several adversaries of the United States have stated
their intention to acquire intercontinental ballistic
missiles capable of attacking the United States.
(i) Libyan leader Muammar Qaddafi has stated, ``If they
know that you have a deterrent force capable of hitting the
United States, they would not be able to hit you. If we had
possessed a deterrent--missiles that could reach New York--we
would have hit it at the same moment. Consequently, we should
build this force so that they and others will no longer think
about an attack.''
(ii) Abu Abbas, the head of the Palestine Liberation Front,
has stated, ``I would love to be able to reach the American
shore, but this is very difficult. Someday an Arab country
will have ballistic missiles. Someday an Arab country will
have a nuclear bomb. It is better for the United States and
for Israel to reach peace with the Palestinians before that
day.''
(iii) Saddam Hussein has stated, ``Our missiles cannot
reach Washington. If we could reach Washington, we would
strike if the need arose.''
(iv) Iranian actions speak for themselves. Iran's
aggressive pursuit of medium-range ballistic missiles capable
of striking Central Europe--aided by the continuing
collaboration of outside agents--demonstrates Tehran's intent
to acquire ballistic missiles of ever-increasing range.
(B) Over 30 non-NATO countries possess ballistic missiles,
with at least 10 of those countries developing over 20 new
types of ballistic missiles.
(C) From the end of World War II until 1980, ballistic
missiles were used in one conflict. Since 1980, thousands of
ballistic missiles have been fired in at least six different
conflicts.
(D) The clear trend among countries hostile to the United
States is toward having ballistic missiles of greater range.
(i) North Korea first acquired 300-kilometer range Scud Bs,
then developed and deployed 500-kilometer range Scud Cs, is
currently deploying the 1000-kilometer range No-Dong, and is
developing the 2000-kilometer range Taepo-Dong 1 and 6000-
kilometer range Taepo-Dong 2, which would be capable of
striking Alaska and Hawaii.
(ii) Iran acquired 150-kilometer range CSS-8s, progressed
through the Scud B and Scud C, and is developing the 1300-
kilometer range Shahab-3 and 2000-kilometer range Shahab-4,
which would allow Iran to strike Central Europe.
(iii) Iraq, in a two-year crash program, produced a new
missile, the Al-Hussein, with twice the range of its Scud Bs.
(iv) Experience gained from extending the range of short-
and medium-range ballistic missiles facilitates the
development of intercontinental ballistic missiles.
(E) The technical information, hardware, and other
resources necessary to build ballistic missiles are
increasingly available and accessible worldwide.
(i) Due to advances in information technology, a vast
amount of technical information relating to ballistic missile
design, much of it formerly classified, has become widely
available and is increasingly accessible through the Internet
and other distribution avenues.
(ii) Components, tools, and materials to support ballistic
missile development are increasingly available in the
commercial aerospace industry.
(iii) Increasing demand for satellite-based
telecommunications is adding to the demand for commercial
Space Launch Vehicles, which employ technology that is
essentially identical to that of intercontinental ballistic
missiles. As this increasing demand is met, the technology
and expertise associated with space launch vehicles also
proliferate.
(F) Russia and China have provided significant technical
assistance to rogue nation ballistic missile programs,
accelerating the pace of those efforts. In June of 1997, the
Director of Central Intelligence, reporting to Congress on
weapons of mass destruction-related equipment, materials, and
technology, stated that ``China and Russia continued to be
the primary suppliers, and are key to any future efforts to
stem the flow of dual-use goods and modern weapons to
countries of concern.''
(G) Russia and China continue to engage in missile
proliferation.
(i) Despite numerous Russian assurances not to assist Iran
with its ballistic missile program, the Deputy Assistant
Secretary of State for Nonproliferation testified to the
Senate, that ``the problem is this: there is a disconnect
between those reassurances, which we welcome, and what we
believe is actually occurring.''
(ii) Regarding China's actions to demonstrate the sincerity
of its commitment to nonproliferation, the Director of
Central Intelligence testified to the Senate on January 28,
1998, that, ``the jury is still out on whether the recent
changes are broad enough in scope and whether they will hold
over the longer term. As such, Chinese activities in this
area will require continued close watching.''
(H) The inability of the United States to defend itself
against weapons of mass destruction delivered by long-range
ballistic missile provides additional incentive for hostile
nations to develop long-range ballistic missiles with which
to threaten the United States. Missiles are widely viewed as
valuable tools for deterring and coercing a vulnerable United
States.
(3) The ability of the United States to anticipate future
ballistic missile threats is questionable.
(A) The Intelligence Community has failed to anticipate
many past technical innovations (for example, Iraq's
extended-range Al-Hussein missiles and its development of a
space launch vehicle) and outside assistance enables rogue
states to surmount traditional technological obstacles to
obtaining or developing ballistic missiles of increasing
range.
(B) In June of 1997, the Director of Central Intelligence
reported to Congress that ``many Third World countries--with
Iran being the most prominent example--are responding to
Western counter-proliferation efforts by relying more on
legitimate commercial firms as procurement fronts and by
developing more convoluted procurement networks.''
(C) In June of 1997, the Director of Central Intelligence
stated to Congress that ``gaps and uncertainties preclude a
good projection of exactly when `rest of the world' countries
will deploy ICBMs.''
(D) In 1997, the Director of Central Intelligence testified
that Iran would have a medium-range missile by 2007. One year
later the Director stated, ``since I testified, Iran's
success in getting technology and materials from Russian
companies, combined with recent indigenous Iranian advances,
means that it could have a medium-range missile much sooner
than I assessed last year.'' Department of State officials
have testified that Iran could be prepared to deploy such a
missile as early as late 1998, nine years earlier than had
been predicted one year before by the Director of Central
Intelligence.
(4) The failure to prepare adequately for long-range
ballistic missile threats could have severe national security
and foreign policy consequences for the United States.
(A) An attack on the United States by a ballistic missile
equipped with a weapon of mass destruction could inflict
catastrophic death or injury to citizens of the United States
and severe damage to their property.

[[Page S2308]]

(B) A rogue state's ability to threaten the United States
with an intercontinental ballistic missile may constrain the
United States' options in dealing with regional threats to
its interests, deter the United States from taking
appropriate action, or prompt allies to question United
States security guarantees, thereby weakening alliances of
the United States and the United States' world leadership
position.
(5) The United States must be prepared for rogue nations
acquiring long-range ballistic missiles armed with weapons of
mass destruction.
(A) In its resolution of ratification for the START II
Treaty, the United States Senate declared that ``because
deterrence may be inadequate to protect the United States
against long-range ballistic missile threats, missile
defenses are a necessary part of new deterrent strategies.''
(B) In September of 1994, Secretary of Defense Perry stated
that in the post-Cold War era, ``we now have opportunity to
create a new relationship based not on MAD, not on Mutual
Assured Destruction, but rather on another acronym, MAS, or
Mutual Assured Safety.''
(C) On February 12, 1997, the Under Secretary of Defense
for Policy testified to the Senate that ``I and the
administration are quite willing to acknowledge that if we
saw a rogue state, a potential proliferant, beginning to
develop a long-range ICBM capable of reaching the United
States, we would have to give very, very serious attention to
deploying a limited national missile defense.''
(6) The United States has no defense deployed against
weapons of mass destruction delivered by long-range ballistic
missiles and no policy to deploy such a national missile
defense system.

SEC. 3. NATIONAL MISSILE DEFENSE POLICY.

It is the policy of the United States to deploy as soon as
is technologically possible a National Missile Defense system
capable of defending the territory of the United States
against limited ballistic missile attack (whether accidental,
unauthorized, or deliberate).

____________________