[Congressional Record Volume 144, Number 36 (Thursday, March 26, 1998)]
[Senate]
[Pages S2660-S2683]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Ms. MIKULSKI (for herself, Mrs. Murray and Mr. Wyden):
S. 1864. A bill to amend title XVIII of the Social Security Act to
exclude clinical social worker services from coverage under the
Medicare skilled nursing facility prospective payment system; to the
Committee on Finance.
THE MEDICARE SOCIAL WORK EQUITY ACT OF 1998
Ms. MIKULSKI. Mr. President, I rise today to introduce the ``Medicare
Social Work Equity Act of 1998''. I am proud to sponsor this
legislation which will amend section 4432 in the Balanced Budget Act of
1997 which prevents social workers from directly billing Medicare for
mental health services provided in skilled nursing facilities. I am
honored to be joined by my good friends Senator Murray and Senator
Wyden who care equally about correcting this inequity for social
workers.
Last year's Balanced Budget Act changed the payment method for
skilled nursing facility care. Under current law, reimbursement is made
after services have been delivered for the reasonable costs incurred.
However, this ``cost-based system'' was blamed for inordinate growth in
Medicare spending at skilled nursing facilities.
The Balanced Budget Act of 1997 phases in a prospective payment
system for skilled nursing facilities beginning July 1, 1998. Payments
for Part B services for skilled nursing facility residents will be
consolidated. This means that the provider of the services must bill
the facility instead of directly billing Medicare.
Congress was careful to not include psychologists and psychiatrists
in this new consolidated billing provision. Social workers were
included, I think by mistake. Clinical social workers are the primary
providers of mental health services to residents of nursing homes,
particularly in underserved urban and rural areas. Clinical social
workers are also the most cost effective mental health providers.
This legislation is important for three reasons: First, I am
concerned that section 4432 will inadvertently reduce mental health
services to nursing home residents. Second, I believe that the new
consolidated billing requirement will result in a shift from using
social workers to other mental health professionals who are reimbursed
at a higher cost. This will result in higher costs to Medicare.
Finally, I am concerned that clinical social workers will lose their
jobs in nursing homes or will be inadequately reimbursed.
I like this bill because it will correct an inequity for America's
social workers, it will assure quality of care for nursing home
residents, and will assure cost efficiency for Medicare. I look forward
to the Senate's support of this worthy legislation.
______
By Mr. BAUCUS:
S. 1865. A bill to amend title IV of the Social Security Act to
provide safeguards against the abuse of information reported to the
National Directory of New Hires; to the Committee on Finance.
[[Page S2661]]
the safeguard of new employee information act of 1998
Mr. BAUCUS. Mr. President, today I am introducing the Safeguard of
New Employee Information Act of 1998. This bill will ensure that the
mechanisms created in the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (PRWORA) to enhance our child support
enforcement system will not lead to a misuse of personal information. I
believe that my bill will assure that new employee information is kept
confidential without compromising the usefulness of the National
Directory of New Hires. The legislation provides clear safeguards
against the abuse of personal employee information, and makes sure that
the information is erased two years after entry.
As we all know, child support is a critical part of welfare reform. I
strongly support the measures in PRWORA that help states track and
crack down on parents who fail to pay court-ordered child support. In
response to the fact that over 30 percent of child support cases
involve parents who do not live in the same state as their children, a
National Directory of New Hires was created to assist states in
locating parents who reside in other states.
Thus far, the new data base has been very successful in enabling
states to locate delinquent parents, enforcing payment orders and
reducing the number of welfare families. However, many folks are
concerned about the confidentiality of the registry, and the fact that
this information is never deleted.
Last year, for example, the Montana State Legislature passed a child
support bill to comply with the new federal regulations. I must add,
this bill was passed in the final hours of the legislative session and
under the threat of losing $52 million a year in federal funds. At that
time, the legislature was hesitant to pass the bill because of concerns
regarding confidentiality.
Mr. President, the Safeguard of New Employee Information Act of 1998
makes needed changes to the National Directory to alleviate these fears
and ensure the registry's continuation. The bill provides penalties for
misuse of information by federal employees. Specifically, it
establishes a fine of $1,000 for each act of unauthorized access to,
disclosure, or use of information in the National Directory of New
Hires.
The bill also establishes a 24-month limit on retention of New Hire
data. This two year limit gives Child Support Enforcement agencies the
necessary time to determine paternity, establish a child support order
or enforce existing orders. A shorter period of data retention would
impede enforcement activities, and a longer period of retention
increases the potential for abuse.
Mr. President, in my state of Montana, 90 percent of families on
welfare are headed by single parents. That is why it is so important to
require that the absent mothers or fathers provide money to feed,
clothe and care for their children. The National Directory of New Hires
is a good idea--we just need to ensure new employee confidentiality. I
urge my colleagues to protect new hire confidentiality and support this
important legislation.
______
By Mr. DeWINE:
S. 1866. A bill to provide assistance to improve research regarding
the quality and effectiveness of health care for children, to improve
data collection regarding children's health, and to improve the
effectiveness of health care delivery systems for children; to the
Committee on Labor and Human Resources.
the child health care quality research improvement act
Mr. DeWINE. Mr. President, I rise today to introduce the Child Health
Care Quality Research Improvement Act. We have been hearing a great
deal recently about the quality of health care in this country. Most of
the debate, both here in Congress and back home in our States, has been
driven, at least in part, by a fear among consumers that efforts to
control costs and move people into managed care has compromised
quality. This fear has driven legislation such as the bill we passed
just last year to provide for 48-hour maternity stays. This year a
whole host of health care quality bills have been introduced in the
Congress. Even more such legislation has been moving forward at the
State level as well.
As I have learned more and more about the concerns about the quality
of health care, I have tried to focus particular attention on children,
how their health care is delivered and whether its quality has been
compromised. Frankly, I have learned something that I find very
interesting.
While the drive to improve quality and reduce cost has driven a great
deal of new research over the past several years, relatively little has
been done for children in this area. While we are getting better at
measuring quality of health care for adults, we have made little such
progress for our children.
Between 1993 and 1995, only some 5 percent of the health services
research study outcomes focused on our children. This is highly
alarming because I frankly cannot think of anything more critical to
our Nation's future than the quality of our children's health. Clearly
we need to correct this serious lack of good health care quality
measures.
I have spoken with experts in the field of pediatric research and
they agree with this assessment. They tell me that we have to do more
in this field if we expect to improve the care that our children
receive. Many times, frankly, we don't know exactly which treatments
are cost effective or best improve a child's quality of life. We don't
know how to manage children's complicated health problems in ways that
will allow them to lead normal lives
We can answer many of these questions if the patient is an adult, but
we have far fewer answers for our children. Here is one example. One
study recently found that children have three times greater chance of
dying after heart surgery at some hospitals than they have at other
hospitals--three times. We must fix this. That means we have to find
out why, why one hospital loses three times as many children as
another. As both a parent and a grandparent, I can speak from firsthand
experience about the stress and the uncertainty that goes along with
any childhood illness. To think that a parent's choice of a hospital
could actually be harmful to a child is certainly a very scary thought
for a parent.
Another example is asthma. Asthma is the most common chronic health
condition in children, affecting 5 million children in this country,
and that percentage, tragically, is rising. We are not sure why this
has been happening, but we do know that the quality of health care a
child receives can dramatically affect the severity of his or her
asthma. As a result, the better the quality of health care, the less
time that child spends in the hospital, the fewer visits to the
emergency room, and the less time a child has to miss from school. If
we do not even know what kinds of treatment work best for children or
that different treatments work better in different environments, we
cannot help. We certainly can't begin to debate how to improve quality
if we can't even define it or measure it. For that, we need to conduct
research in real world settings.
As a means of getting this research into real world settings and
improving the quality of health care that our children receive, I am
introducing a bill today entitled the Child Health Care Quality
Research Improvement Act. This legislation was developed with the help
of leaders in the pediatric community, child advocates, and health
services researchers. My bill takes a three-pronged approach to address
this issue: One, focusing on training; two, research; and three, data
collection for child health outcomes and effectiveness research.
Let me start with the first one.
In order for us to make advances in the study of pediatric health
outcomes, it is essential that we have researchers who have received
training in this field. This bill I am introducing today promotes
research training programs in child health services research at the
doctoral, post-doctoral, and junior faculty levels. By bringing
professionals into this very important field, we can ensure that issues
that affect the lives of children are receiving the attention they
deserve.
The second component of this bill establishes research centers and
networks. The goal of the centers and networks will be to foster
collaboration among experts in the field of pediatric health care
quality and effectiveness.
[[Page S2662]]
We envision that these centers and networks will bring together
pediatric specialists from children's hospitals, physicians in managed
care plans, statisticians from schools of public health, and other
experts in the field to work together on research projects and to
translate these findings into real-world settings where children are
receiving health care.
Third, and finally, this legislation contains a component that adds
supplements to existing national health surveys that are today
administered by the National Center for Health Statistics and the
Maternal and Child Health Bureau. In addition to not knowing how to
measure health care quality in children, other data, like that
measuring children's use of health care systems and health care
expenditures, are lacking. Adding supplements to existing surveys is a
very sensible measure. This bill does not require yet another survey to
be administered. Rather, it simply adds questions to existing surveys,
to allow us to collect valuable data on children. This is the type of
information that we need if we want to look at trends in children's
health and what we can do to improve their health.
Mr. President, we are all well aware that children have medical
conditions and health care needs that are different from those of
adults. It doesn't make sense to do health services research for adults
and hope that one size fits all--that the things we learn will make
sense for children. Federal support for child health quality and
effectiveness research is vital to ensure that children are receiving
appropriate health care. We owe it to our Nation's children to train
health professionals in this important filed, and to support these very
important research initiatives.
Mr. President, I ask unanimous consent that the bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1866
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 ``Child Health Care Quality
Research Improvement Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) There is increased emphasis on using evidence of
improved health care outcomes and cost effectiveness to
justify changes in our health care system.
(2) There is a growing movement to use health care quality
measures to ensure that health care services provided are
appropriate and likely to improve health.
(3) Few health care quality measures exist for children,
especially for the treatment of acute and chronic conditions.
(4) A significant number of children in the United States
have health problems, and the percentage of children with
special health care needs is increasing.
(5) Children in the health care marketplace have unique
health attributes, including a child's developmental
vulnerability, differential morbidity, and dependency on
adults, families, and communities.
(6) Children account for less than 15 percent of the
national health care spending, and do not command a large
amount of influence in the health care marketplace.
(7) The Federal government is the major payer of children's
health care in the United States.
(8) Numerous scientifically sound measures exist for
assessing quality of health care for adults, and similar
measures should be developed for assessing the quality of
health care for children.
(9) The delivery structures and systems that provide care
for children are necessarily different than systems caring
for adults, and therefore require appropriate types of
quality measurements and improvement systems.
(10) Improving quality measurement and monitoring will--
(A) assist health care providers in identifying ways to
improve health outcomes for common and rare childhood health
conditions;
(B) assist consumers and purchasers of health care in
determining the value of the health care products and
services they are receiving or buying; and
(C) assist providers in selecting effective treatments and
priorities for service delivery.
(11) Because of the prevalence and patterns of children's
medical conditions, research on improving care for relatively
rare or specific conditions must be conducted across multiple
institutions and practice settings in order to guarantee the
validity and generalizability of research results.
SEC. 3. DEFINITIONS.
In this Act:
(1) High priority areas.--the term ``high priority areas''
means areas of research that are of compelling scientific or
public policy significance, that include high priority areas
of research identified by the Conference on Improving Quality
of Health Care for Children: An Agenda for Research (May,
1997), and that--
(A) are consistent with areas of research as defined in
paragraphs (1)(A) and (2) of section 1142(a) of the Social
Security Act;
(B) are relevant to all children or to specific subgroups
of children; or
(C) are consistent with such other criteria as the
Secretary may require.
(2) Local community.--The term ``local community'' means
city, county, and regional governments, and research
institutes in conjunction with such cities, counties, or
regional governments.
(3) Pediatric quality of care and outcomes research.--The
term ``pediatric quality of care and outcomes research''
means research involving the process of health care delivery
and the outcomes of that delivery in order to improve the
care available for children, including health promotion and
disease prevention, diagnosis, treatment, and rehabilitation
services, including research to--
(A) develop and use better measures of health and
functional status in order to determine more precisely
baseline health status and health outcomes;
(B) evaluate the results of the health care process in
real-life settings, including variations in medical practices
and patterns, as well as functional status, clinical status,
and patient satisfaction;
(C) develop quality improvement tools and evaluate their
implementation in order to establish benchmarks for care for
specific childhood diseases, conditions, impairments, or
populations groups;
(D) develop specific measures of the quality of care to
determine whether a specific health service has been provided
in a technically appropriate and effective manner, that is
responsive to the clinical needs of the patient, and that is
evaluated in terms of the clinical and functional status of
the patient as well as the patient's satisfaction with the
care; or
(E) assess policies, procedures, and methods that can be
used to improve the process and outcomes of the delivery of
care.
(4) Provider-based research networks.--The term ``provider-
based research network'' refers to 1 of the following which
exist for the purpose of conducting research:
(A) A hospital-based research network that is comprised of
a sufficient number of children's hospitals or pediatric
departments of academic health centers.
(B) A physician practice-based research network that is
comprised of a sufficient number of groups of physicians
practices.
(C) A managed care-based research network that is comprised
of a sufficient number of pediatric programs of State-
licensed health maintenance organizations or other State
certified managed care plans.
(D) A combination provider-based research network that is
comprised of all or part of a hospital-based research
network, a physician practice-based research network, and a
managed care-based research network.
(5) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
SEC. 4. EXPANSION OF THE HEALTH SERVICES RESEARCH WORKFORCE.
(a) Grants.--The Secretary shall annually award not less
than 10 grants to eligible entities at geographically diverse
locations throughout the United States to enable such
entities to carry out research training programs that are
dedicated to child health services research training
initiatives at the doctoral, post-doctoral, and junior
faculty levels.
(b) Eligibility.--To be eligible to receive a grant under
subsection (a), an entity shall--
(1) be a public or nonprofit private entity; and
(2) prepare and submit to the Secretary an application, at
such time, in such manner, and containing such information as
the Secretary may require.
(c) Limitation.--A grant awarded under this section shall
be for an amount that does not exceed $500,000.
(d) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section, $5,000,000 for
each of the fiscal years 1999 through 2003.
SEC. 5. DEVELOPMENT OF CHILD HEALTH IMPROVEMENT RESEARCH
CENTERS AND PROVIDER-BASED RESEARCH NETWORKS.
(a) Grants.--In order to address the full continuum of
pediatric quality of care and outcomes research, to link
research to practice improvement, and to speed the
dissemination of research findings to community practice
settings, the Secretary shall award grants to eligible
entities for the establishment of--
(1) not less that 10 national centers for excellence in
child health improvement research at geographically diverse
locations throughout the United States; and
(2) not less than 5 national child health provider quality
improvement research networks at geographically diverse
locations throughout the United States, including at least 1
of each type of network as described in section 3(4).
(b) Eligibility.--To be eligible to receive a grant under
subsection (a), an entity shall--
(1) for purposes of--
(A) subsection (a)(1), be a public or nonprofit entity, or
group of entities, including universities, and where
applicable their
[[Page S2663]]
schools of Public Health, research institutions, or
children's hospitals, with multi-disciplinary expertise
including pediatric quality of care and outcomes research and
primary care research; or
(B) subsection (a)(2), be a public or nonprofit institution
that represents children's hospitals, pediatric departments
of academic health centers, physician practices, or managed
care plans; and
(2) prepare and submit to the Secretary an application, at
such time, in such manner, and containing such information as
the Secretary may require, including--
(A) in the case of an application for a grant under
subsection (a)(1), a demonstration that a research center
will conduct 2 or more research projects involving pediatric
quality of care and outcomes research in high priority areas;
or
(B) in the case of an application for a grant under
subsection (a)(2)--
(i) a demonstration that the applicant and its network will
conduct 2 or more projects involving pediatric quality of
care and outcomes research in high priority areas;
(ii) a demonstration of an effective and cost-efficient
data collection infrastructure;
(iii) a demonstration of matching funds equal to the amount
of the grant; and
(iv) a plan for sustaining the financing of the operation
of a provider-based network after the expiration of the 5-
year term of the grant.
(c) Limitations.--A grant awarded under subsection (a)(1)
shall not exceed $1,000,000 per year and be for a term of
more that 5 years and a grant awarded under subsection (a)(2)
shall not exceed $750,000 per year and be for a term of more
than 5 years.
(d) Authorization of Appropriations.--There are authorized
to be appropriated--
(1) to carry out subsection (a)(1), $10,000,000 for each of
the fiscal years 1999 through 2003; and
(2) to carry out subsection (a)(2), $3,750,000 for each of
the fiscal years 1999 through 2003.
SEC. 6. RESEARCH IN SPECIFIC HIGH PRIORITY AREAS.
(a) Additional Funds for Grants.--From amounts appropriated
under subsection (c), the Secretary shall provide support,
through grant programs authorized on the date of enactment of
this Act, to entities determined to have expertise in
pediatric quality of care and outcomes research. Such
additional funds shall be used to improve the quality of
children's health, especially in high priority areas, and
shall be subject to the same conditions and requirements that
apply to funds provided under the existing grant program
through which such additional funds are provided.
(b) Advisory Committee.--
(1) In general.--To evaluate progress made in pediatric
quality of care and outcomes research in high priority areas,
and to identify new high priority areas, the Secretary shall
establish an advisory committee which shall report annually
to the Secretary.
(2) Membership.--The Secretary shall ensure that the
advisory committee established under paragraph (1) includes
individuals who are--
(A) health care consumers;
(B) health care providers;
(C) purchasers of health care;
(D) representative of health plans involved in children's
health care services; and
(E) representatives of Federal agencies including--
(i) the Agency for Health Care Policy and Research;
(ii) the Centers for Disease Control and Prevention;
(iii) the Health Care Financing Administration;
(iv) the Maternal and Child Health Bureau;
(v) the National Institutes of Health; and
(vi) the Substance Abuse and Mental Health Services
Administration.
(3) Evaluation of research.--The advisory committee
established under paragraph (1) shall evaluate research in
high priority areas using criteria that include--
(1) the generation of research that includes both short and
long term studies;
(2) the ability to foster public and private partnerships;
and
(3) the likelihood that findings will be transmitted
rapidly into practice.
(c) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section, $12,000,000 for
each of the fiscal years 1999 through 2003.
SEC. 7. IMPROVING CHILD HEALTH DATA AND DEVELOPING BETTER
DATA COLLECTION SYSTEMS.
(a) Survey.--The Secretary shall provide assistance to
enable the appropriate Federal agencies to--
(1) conduct ongoing biennial supplements and initiate and
maintain a longitudinal study on children's health that is
linked to the appropriate existing national surveys
(including the National Health Interview Survey and the
Medical Expenditure Panel Survey) to--
(A) provide for reliable national estimates of health care
expenditures, cost, use, access, and satisfaction for
children, including uninsured children, poor and near-poor
children, and children with special health care needs;
(B) enhance the understanding of the determinants of health
outcomes and functional status among children with special
health care needs, as well as an understanding of these
changes over time and their relationship to health care
access and use; and
(C) monitor the overall national impact of Federal and
State policy changes on children's health care; and
(2) develop an ongoing 50-State survey to generate reliable
State estimates of health care expenditures, cost, use,
access, satisfaction, and quality for children, including
uninsured children, poor and near-poor children, and children
with special health care needs.
(b) Grants.--The Secretary shall award grants to public and
nonprofit entities to enable such entities to develop the
capacity of local communities to improve child health
monitoring at the community level.
(c) Eligibility.--To be eligible to receive a grant under
subsection (b), an entity shall--
(1) be a public or nonprofit entity; and
(2) prepare and submit to the Secretary an application, at
such time, in such manner, and containing such information as
the Secretary may require.
(d) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section, $14,000,000 for
each of the fiscal years 1999 through 2003, of which--
(1) $6,000,000 shall be made available in each fiscal year
for grants under subsection (a)(1);
(2) $4,000,000 shall be made available in each fiscal year
for grants under subsection (a)(2);
(3) $4,000,000 shall be made available in each fiscal year
for grants under subsection (b).
SEC. 8. OVERSIGHT.
Not later than ____ after the date of enactment of this
Act, The Secretary shall prepare and submit a report to
Congress on progress made in pediatric quality of care and
outcomes research, including the extent of ongoing research,
programs, and technical needs, and the Department of Health
and Human Services' priorities for funding pediatric quality
of care and outcomes research.
______
By Ms. COLLINS:
S. 1867. A bill to amend chapter 35 of title 44, United States Code,
for the purpose of facilitating compliance by small businesses with
certain Federal paperwork requirements, and to establish a task force
to examine the feasibility of streamlining paperwork requirements
applicable to small businesses; to the Committee on Governmental
Affairs.
the small business paperwork reduction act
Ms. COLLINS. Mr. President, today I am introducing the Small Business
Paperwork Reduction Act Amendments of 1998, a companion bill to
legislation pending in the House of Representatives.
This legislation has five components. First, it requires the Office
of Management and Budget to publish annually in the Federal Register
and on the Internet all of the Federal paperwork requirements imposed
on small business. This will not only serve as a valuable tool for
those who must comply with these mandates, but it will also make it far
easier for policy makers to monitor, and I would hope check, the growth
in the paperwork burden.
Second, under the bill, each agency will have to establish one point
of contact to act as a liaison with small businesses on paperwork
requirements. In an era when serving the customer has become recognized
by the private sector as critical, this is a modest step to ask of our
government.
Third, the legislation provides for the suspension of civil fines
imposed on small enterprises for first-time paperwork violations,
except under certain circumstances, such as when the violation causes
serious harm to the public or presents an imminent danger to the public
health or safety. In dealing with America's entrepreneurs, we need to
move away from a culture that seems to place a higher priority on
imposing punishment than on facilitating compliance.
Fourth, in addition to meeting the mandates of the Paperwork
Reduction Act, agencies will have to make further efforts to reduce the
burden on enterprises with fewer than 25 employees. There must be some
measure of proportionality between the size of a business and its costs
of complying with government regulation.
Fifth, a task force will be established to examine the feasibility of
requiring agencies to consolidate their paperwork mandates in a manner
that will allow small businesses to satisfy those mandates through a
single filing, in a single format, and on the same date. By reducing
the amount of time currently devoted to these tasks, our companies will
have more to spend on the activities for which they were formed.
Mr. President, all too often the relationship between the owners of
small businesses and government is an adversial one. That benefits no
one--not the owners of these enterprises, not the many Americans they
employ, not
[[Page S2664]]
the government they help to support, and not the public at large.
The problem often is not with the goals which underlie our
regulations, but rather in how we seek to achieve those goals. We
should not forget that we are dealing with Americans who make a great
contribution to the prosperity of our nation. In seeking to meet our
regulatory objectives, we should be reaching out to these entrepreneurs
with a helping hand and not a heavy hand. That, Mr. President, is the
purpose of this legislation.
______
By Mr. NICKLES (for himself, Mr. Mack, Mr. Lieberman, Mr.
Kempthorne, Mr. Craig, Mr. Hutchinson, and Mr. DeWine):
S. 1868. A bill to express United States foreign policy with respect
to, and to strengthen United States advocacy on behalf of, individuals
persecuted for their faith worldwide; to authorize United States
actions in response to religious persecution worldwide; to establish an
Ambassador at Large on International Religious Freedom within the
Department of State, a Commission on International Religious Freedom
within the Department of State, a Commission on International Religious
Persecution, and a Special Adviser on International Religious Freedom
within the National Security Council; and for other purposes; to the
Committee on Foreign Relations.
the international religious freedom act of 1998
Mr. NICKLES. Mr. President, today I am prompted to speak by both a
tragic reality, and also what I would think is a promising hope. The
tragic reality is that literally millions of religious believers around
the world live gripped by the incessant, terrifying prospect of
persecution, of being tortured, arrested, imprisoned or even killed for
simply practicing their faith. A promising hope, I believe, might
perhaps be found in the bill that I am introducing today with Senator
Lieberman, Senator Mack, Senator Kempthorne, Senator Craig, Senator
Hutchinson and Senator DeWine. It is called the International Religious
Freedom Act. The International Religious Freedom Act will establish a
process to ensure that on an ongoing basis the United States closely
monitors religious persecution worldwide.
It is wrong for a country to persecute, to prosecute, to imprison,
harass individuals for simply practicing their faith, whether that
faith is Jewish or Christian or Muslim or Hindu. It is absolutely wrong
for them to be persecuted for practicing their faith. This act requires
the U.S. Government to take action against all countries engaging in
religious persecution.
What kind of persecution am I talking about? First, three facts
command attention.
One reliable estimate indicates that more Christian martyrs have
perished in this century than all previous centuries combined. That is
a staggering, staggering statement.
A recent book reports that 200 million Christians around the world
live under daily fear and threat of persecution, including
interrogation, imprisonment, torture and in some cases death.
Finally, over half the world's population lives under regimes which
severely restrict if not prohibit their ability to believe in and
practice the religious faith of their choice and conviction.
Of course, religious persecution goes beyond facts and figures. It
happens to real people in real places. Let me point out just four
compelling examples.
At this very moment one of China's leading house church pastors,
Pastor Peter Xu, is languishing in a Chinese prison under a 3-year term
for the so-called ``crime'' of ``disturbing public order.'' Hundreds,
perhaps thousands of other believers in China currently suffer similar
treatment.
Again, at this very moment, 13 courageous Christians are imprisoned
by the Communist authorities in Laos. What was their ``crime''? Simply
that they organized an ``unauthorized'' Bible study in the privacy of a
home.
In Pakistan, just a few months ago, Pastor Noor Alam was brutally
stabbed to death by anti-Christian assailants. Shortly before that,
they had destroyed Pastor Alam's church building. Meanwhile, Christians
and other religious minorities in Pakistan continue to sufferer under
the notorius ``blasphemy laws.''
Or consider Russia, which, as many of my colleagues will remember,
just last summer passed a draconian law that will effectively shut down
the vast majority of independent churches and other religious
organizations and severly curtail the religious freedom of the Russian
people.
I could go on and on. However, I do want to share just a few
highlights of what we humbly but earnestly hope our bill can do to
begin to address the scourge of religious persecution worldwide.
I should also mention that, in 1996, I was honored to sponsor a
Senate resolution on religious persecution, which passed by unanimous
consent. In that resolution, the Senate made a strong recommendation
``that the President expand and invigorate the United States'
international advocacy on behalf of persecuted Christians, and initiate
a thorough examination of all United States' policies that affect
persecuted Christians.''
What was a mere resolution in 1996, I hope it will become a reality
in 1998. While then we acted with words, I hope that this year we can
act with deeds.
In short, this bill seeks to ensure that the U.S. Government
aggressively monitors religious oppression around the world and takes
decisive action against those regimes engaged in persecution, all the
while maintaining the integrity and credibility of the U.S. foreign
policy system.
The International Religious Freedom Act establishes an ``Ambassador-
at-Large for Religious Liberty'' at the State Department. The
Ambassador will be responsible for representing our Government in
vigorous diplomacy with nations guilty of religious persecution. In
addition, the Ambassador will oversee an annual report on religious
persecution which will specify the details on religious persecution
around the world. This report will name names. And those countries
named will be held accountable.
For any country cited in the report, the Act presents a menu of
diplomatic and economic options, and the President is required to
select from at least one of those actions. Silence or passivity are not
options. At the same time, the Act seeks to provide the President
maximum flexibility entailing the most appropriate, effective response
to that particular situation in a particular country. Furthermore,
because we desire good results to follow our good intentions, the Act
requires a consideration of how the action taken by America will affect
American economic and security interests and, most important, how it
will affect the very people that it purports to help.
The International Religious Freedom Act has other provisions--
improved reporting, improved training for immigration and foreign
service officials, a commission on international religious liberty to
provide more attention and expertise on the issue. I invite all my
colleagues, and certainly those who are deeply concerned about the
plight of persecuted religious believers, to join me in supporting this
bill. Not because it might be popular or expedient or convenient to
support this legislation, but because it is the right thing to do and
because I believe it will make a real difference in protecting the
lives of some of the most vulnerable people in the world, those people
who wish to express their religious beliefs and convictions.
Mr. President, I thank my cosponsors, particularly Senator Lieberman,
also Senator Mack, in addition to Senator Hutchinson and Senator Craig
and Senator Kempthorne, for helping us put this legislation together.
Mr. President, I ask unanimous consent that the text of the bill
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1868
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the
``International Religious Freedom Act of 1998''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings; policy.
Sec. 3. Definitions.
TITLE I--DEPARTMENT OF STATE ACTIVITIES
Sec. 101. Office on International Religious Freedom; Ambassador at
Large for International Religious Freedom.
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Sec. 102. Reports.
Sec. 103. Establishment of a religious freedom Internet site.
Sec. 104. Training for Foreign Service officers.
Sec. 105. High-level contacts with NGOs.
Sec. 106. Programs and allocations of funds by United States missions
abroad.
Sec. 107. Equal access to United States missions abroad for conducting
religious activities.
Sec. 108. Prisoner lists and issue briefs on religious persecution
concerns.
TITLE II--COMMISSION ON INTERNATIONAL RELIGIOUS PERSECUTION
Sec. 201. Establishment and composition.
Sec. 202. Duties of the Commission.
Sec. 203. Report of the Commission.
Sec. 204. Termination.
TITLE III--NATIONAL SECURITY COUNCIL
Sec. 301. Special Adviser on Religious Persecution.
TITLE IV--SANCTIONS
Subtitle I--Targeted Responses to Religious Persecution Abroad
Sec. 401. Executive measures and sanctions in response to findings made
in the Annual Report on Religious Persecution.
Sec. 402. Presidential determinations of gross violations of the right
to religious freedom.
Sec. 403. Consultations.
Sec. 404. Report to Congress.
Sec. 405. Description of Executive measures and sanctions.
Sec. 406. Contract sanctity.
Sec. 407. Presidential waiver.
Sec. 408. Publication in Federal Register.
Sec. 409. Congressional review.
Sec. 410. Termination of sanctions.
Subtitle II--Strengthening Existing Law
Sec. 421. United States assistance.
Sec. 422. Multilateral assistance.
Sec. 423. Exports of items relating to religious persecution.
TITLE V--PROMOTION OF RELIGIOUS FREEDOM
Sec. 501. Assistance for promoting religious freedom.
Sec. 502. International broadcasting.
Sec. 503. International exchanges.
Sec. 504. Foreign Service awards.
TITLE VI--REFUGEE, ASYLUM, AND CONSULAR MATTERS
Sec. 601. Use of Annual Report.
Sec. 602. Reform of refugee policy.
Sec. 603. Reform of asylum policy.
Sec. 604. Inadmissibility of foreign government officials who have
engaged in gross violations of the right to religious
freedom.
TITLE VII--MISCELLANEOUS PROVISIONS
Sec. 701. Business codes of conduct.
Sec. 702. International Criminal Court.
SEC. 2. FINDINGS; POLICY.
(a) Findings.--Congress makes the following findings:
(1) Freedom of religious belief and practice is a
fundamental human right articulated in numerous international
agreements and covenants, including the Universal Declaration
of Human Rights, the International Covenant on Civil and
Political Rights, the Helsinki Accords, the Declaration on
the Elimination of All Forms of Intolerance and
Discrimination Based on Religion or Belief, the United
Nations Charter, and the European Convention for the
Protection of Human Rights and Fundamental Freedoms.
(2) The right to freedom of religion undergirds the very
origin and existence of the United States. Many of our
Nation's founders fled religious persecution abroad,
cherishing in their hearts and minds the ideal of religious
freedom. They established in law, as a fundamental right and
as a pillar of our Nation, the right to freedom of religion.
From its birth to this day, the United States has prized this
legacy of religious freedom and honored this heritage by
standing for religious freedom and offering refuge to those
suffering religious persecution.
(3) Article 18 of the Universal Declaration of Human Rights
recognizes that ``Everyone has the right to freedom of
thought, conscience, and religion. This right includes
freedom to change his religion or belief, and freedom, either
alone or in community with others and in public or private,
to manifest his religion or belief in teaching, practice,
worship, and observance.''. Article 18(1) of the
International Covenant on Civil and Political Rights
recognizes that ``Everyone shall have the right to freedom of
thought, conscience, and religion. This right shall include
freedom to have or to adopt a religion or belief of his
choice, and freedom, either individually or in community with
others and in public or private, to manifest his religion or
belief in worship, observance, practice, and teaching''.
Governments have the responsibility to protect the
fundamental rights of their citizens and to pursue justice
for all. Religious freedom is a fundamental right of every
individual, regardless of race, country, creed, or
nationality, and should never be arbitrarily abridged by any
government.
(4) The right to freedom of religion is under renewed and,
in some cases, increasing assault in many countries around
the world. More than one-half of the world's population lives
under regimes that severely restrict or prohibit the freedom
of their citizens to study, believe, observe, and freely
practice the religious faith of their choice. Religious
believers and communities suffer both government-sponsored
and government-tolerated violations of their rights to
religious freedom. Among the many forms of such violations
are state-sponsored slander campaigns, confiscations of
property, surveillance by security police, including by
special divisions of ``religious police'', severe
prohibitions against construction and repair of places of
worship, denial of the right to assemble and relegation of
religious communities to illegal status through arbitrary
registration laws, prohibitions against the pursuit of
education or public office, and prohibitions against
publishing, distributing, or possessing religious literature
and materials.
(5) Even more abhorrent, religious believers in many
countries face such severe and violent forms of religious
persecution as detention, torture, beatings, forced marriage,
rape, imprisonment, enslavement, mass resettlement, and death
merely for the peaceful belief in, change of or practice of
their faith. In many countries, religious believers are
forced to meet secretly, and religious leaders are targeted
by national security forces and hostile mobs.
(6) Though not confined to a particular region or regime,
religious persecution is often particularly widespread,
systematic, and heinous under totalitarian governments and in
countries with militant, politicized religious majorities.
(7) Congress has recognized and denounced acts of religious
persecution through the adoption of the following
resolutions:
(A) House Resolution 515 (104th), expressing the sense of
the House of Representatives with respect to the persecution
of Christians worldwide.
(B) Senate Concurrent Resolution 71 (104th), expressing the
sense of the Senate regarding persecution of Christians
worldwide.
(C) House Concurrent Resolution 102, concerning the
emancipation of the Iranian Baha'i community.
(b) Policy.--It shall be the policy of the United States,
as follows:
(1) To condemn religious persecution, and to promote, and
to assist other governments in the promotion of, the
fundamental right to religious freedom.
(2) To seek to channel United States security and
development assistance to governments other than those found
to be engaged in gross violations of human rights, including
the right to religious freedom, as set forth in the Foreign
Assistance Act of 1961, in the International Financial
Institutions Act of 1977, and in other formulations of United
States human rights policy.
(3) To be vigorous and flexible, reflecting both the
unwavering commitment of the United States to religious
freedom and the desire of the United States for the most
effective and principled response, in light of the range of
violations of religious freedom by a variety of persecuting
regimes, and the status of the relations of the United States
with different nations.
(4) To work with foreign governments that affirm and
protect religious freedom, in order to develop multilateral
documents and initiatives to combat religious persecution and
promote the right to religious freedom abroad.
(5) Standing for liberty and standing with the persecuted,
to use and implement appropriate tools in the United States
foreign policy apparatus, including diplomatic, political,
commercial, charitable, educational, and cultural channels,
to promote respect for religious freedom by all governments
and peoples.
SEC. 3. DEFINITIONS.
In this Act:
(1) Ambassador at large.--The term ``Ambassador at Large''
means the Ambassador at Large on International Religious
Freedom appointed under section 101(b).
(2) Annual report on religious persecution.--The term
``Annual Report on Religious Persecution'' means the report
described in section 102(b).
(3) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the Committee
on Foreign Relations of the Senate and the Committee on
International Relations of the House of Representatives and,
in the case of any determination made with respect to the
imposition of a sanction under paragraphs (9) through (16) of
section 405, the term ``appropriate congressional
committees'' includes those committees, together with the
Committee on Ways and Means and the Committee on Banking and
Financial Services of the House of Representatives and the
Committee on Finance of the Senate.
(4) Commission.--The term ``Commission'' means the United
States Commission on International Religious Persecution
established in section 201(a).
(5) Government or foreign government.--The term
``government'' or ``foreign government'' includes any agency
or instrumentality of the government.
(6) Gross violations of the right to freedom of religion.--
The term ``gross violations of the right to freedom of
religion'' means a consistent pattern of gross violations of
the right to freedom of religion that include torture or
cruel, inhuman, or degrading treatment or punishment,
prolonged detention without charges, causing the
disappearance of persons by the abduction or clandestine
detention of those persons, or other flagrant denial of the
right to life, liberty, or the security of persons, within
the meaning of section 116(a) of the Foreign Assistance Act
of 1961 (22 U.S.C. 2151n(a)).
[[Page S2666]]
(7) Human rights reports.--The term ``Human Rights
Reports'' means the reports submitted by the Department of
State to Congress under sections 116 and 502B of the Foreign
Assistance Act of 1961.
(8) Office.--The term ``Office'' means the Office on
International Religious Freedom established in section
101(a).
(9) Religious persecution.--The term ``religious
persecution'' means any violation of the internationally
recognized right to freedom of religion, as defined in
Article 18 of the Universal Declaration of Human Rights and
Article 18 of the International Covenant on Civil and
Political Rights, including violations such as--
(A) arbitrary prohibitions on, restrictions of, or
punishment for--
(i) assembling for peaceful religious activities such as
worship, preaching, and prayer, including arbitrary
registration requirements,
(ii) speaking freely about one's religious beliefs,
(iii) changing one's religious beliefs and affiliation,
(iv) possession and distribution of religious literature,
including Bibles, or
(v) raising one's children in the religious teachings and
practices of one's choice,
as well as arbitrary prohibitions or restrictions on the
grounds of religion on holding public office, or pursuing
educational or professional opportunities; and
(B) any of the following acts if committed on account of an
individual's religious belief or practice: detention,
interrogation, harassment, imposition of an onerous financial
penalty, forced labor, forced mass resettlement,
imprisonment, beating, torture, mutilation, rape,
enslavement, murder, and execution.
(10) Special adviser.--The term ``Special Adviser'' means
the Special Adviser to the President on Religious Persecution
established in section 101(i) of the National Security Act of
1947, as added by section 301 of this Act.
TITLE I--DEPARTMENT OF STATE ACTIVITIES
SEC. 101. OFFICE ON INTERNATIONAL RELIGIOUS FREEDOM;
AMBASSADOR AT LARGE FOR INTERNATIONAL RELIGIOUS
FREEDOM.
(a) Establishment of Office.--There is established within
the Department of State an Office on International Religious
Freedom that shall be headed by the Ambassador at Large on
International Religious Freedom appointed under subsection
(b).
(b) Appointment.--The Ambassador at Large shall be
appointed by the President, by and with the advice and
consent of the Senate.
(c) Duties.--The Ambassador at Large shall have the
following responsibilities:
(1) In general.--The primary responsibility of the
Ambassador at Large shall be to advance the right to freedom
of religion abroad, to denounce the violation of that right,
and to recommend appropriate responses by the United States
Government when this right is violated.
(2) Advisory role.--The Ambassador at Large shall be the
principal adviser to the President and the Secretary of State
regarding matters affecting religious freedom abroad and,
with advice from the Commission on International Religious
Persecution, shall make recommendations regarding the
policies of the United States Government toward governments
that violate the freedom of religion or that fail to ensure
the individual's right to religious belief and practice.
(3) Diplomatic representation.--The Ambassador at Large is
authorized to represent the United States in matters and
cases relevant to religious persecution in--
(A) contacts with foreign governments, international
organizations, intergovernmental organizations, and
specialized agencies of the United Nations, the Organization
on Security and Cooperation in Europe, and other
organizations of which the United States is a member; and
(B) multilateral conferences and meetings relevant to
religious persecution.
(4) Reporting responsibilities.--The Ambassador at Large
shall have the reporting responsibilities described in
section 102.
(d) Funding.--The Secretary of State shall provide the
Ambassador at Large with such funds as may be necessary for
the hiring of staff for the Office, for the conduct of
investigations by the Office, and for necessary travel to
carry out the provisions of this section.
SEC. 102. REPORTS.
(a) Portions of Annual Human Rights Reports.--The
Ambassador at Large shall assist the Secretary of State in
preparing those portions of the Human Rights Reports that
relate to freedom of religion and discrimination based on
religion and those portions of other information provided
Congress under sections 116 and 502B of the Foreign
Assistance Act of 1961 (22 U.S.C. 2151m, 2304) that relate to
the right to religious freedom.
(b) Annual Report on Religious Persecution.--
(1) In general.--
(A) Deadline for submission.--Not later than May 1 of each
year, the Ambassador at Large shall submit to the appropriate
congressional committees an Annual Report on Religious
Persecution, expanding upon the most recent Human Rights
Reports. Each Annual Report on Religious Persecution shall
contain the following:
(i) An identification of each foreign country the
government of which engages in or tolerates acts of religious
persecution.
(ii) An assessment and description of the nature and extent
of religious persecution, including persecution of one
religious group by another religious group, religious
persecution by governmental and nongovernmental entities,
persecution targeted at individuals or particular
denominations or entire religions, and the existence of
government policies violating religious freedom.
(iii) A description of United States policies in support of
religious freedom, including a description of the measures
and policies implemented during the preceding 12 months by
the United States under title IV of this Act in opposition to
religious persecution and in support of religious freedom.
(iv) A description of any binding agreement with a foreign
government entered into by the United States under section
402(c).
(B) Classified addendum.--If the Ambassador determines that
it is in the national security interests of the United States
or is necessary for the safety of individuals to be
identified in the Annual Report, any information required by
subparagraph (A), including measures taken by the United
States, may be summarized in the Annual Report and submitted
in more detail in a classified addendum to the Annual Report.
(C) Designation of report.--Each report submitted under
this subsection may be referred to as the ``Annual Report on
Religious Persecution''.
(2) Foreign government input.--Prior to submission of each
report under this subsection, the Secretary of State may
offer the government of any country concerned an opportunity
to respond to the relevant portions of the report. If the
Secretary of State determines that doing so would further the
purposes of this Act, the Secretary shall request the
Ambassador at Large to include the country's response as an
addendum to the Annual Report on Religious Persecution.
(c) Preparation of Reports Regarding Religious
Persecution.--
(1) Standards and investigations.--The Secretary of State
shall ensure that United States missions abroad maintain a
consistent reporting standard and thoroughly investigate
reports of religious persecution.
(2) Contacts with ngos.--In compiling data and assessing
the respect of the right to religious freedom for the Human
Rights Reports and the Annual Report on Religious
Persecution, United States mission personnel shall seek out
and maintain contacts with religious and human rights
nongovernmental organizations, with the consent of those
organizations, including receiving reports and updates from
such organizations and, when appropriate, investigating such
reports.
(d) Amendments to the Foreign Assistance Act.--
(1) Content of human rights reports for countries receiving
economic assistance.--Section 116(d) of the Foreign
Assistance Act of 1961 (22 U.S.C. 2151n(d)) is amended--
(A) by striking ``and'' at the end of paragraph (4);
(B) by striking the period at the end of paragraph (5) and
inserting``; and ''; and
(C) by adding at the end the following:
``(6) wherever applicable, the practice of religious
persecution, including gross violations of the right to
religious freedom.''.
(2) Contents of human rights reports for countries
receiving security assistance.--Section 502B(b) of the
Foreign Assistance Act of 1961 (22 U.S.C. 2304(b)) is
amended--
(A) by inserting ``and with the assistance of the
Ambassador at Large for Religious Freedom'' after ``Labor'';
and
(B) by inserting after the second sentence the following
new sentence: ``Such report shall also include, wherever
applicable, information on religious persecution, including
gross violations of the right to religious freedom.''.
SEC. 103. ESTABLISHMENT OF A RELIGIOUS FREEDOM INTERNET SITE.
In order to facilitate access by nongovernmental
organizations (NGOs) and by the public around the world to
international documents on the protection of religious
freedom, the Ambassador at Large shall establish and maintain
an Internet site containing major international documents
relating to religious freedom, the Annual Report on Religious
Persecution, and any other documentation or references to
other sites as deemed appropriate or relevant by the
Ambassador at Large.
SEC. 104. TRAINING FOR FOREIGN SERVICE OFFICERS.
Chapter 2 of title I of the Foreign Service Act of 1980 is
amended by adding at the end the following new section:
``SEC. 708. TRAINING FOR FOREIGN SERVICE OFFICERS.
``The Secretary of State and the Ambassador at Large on
International Religious Freedom, appointed under section
101(b) of the International Religious Freedom Act of 1998,
acting jointly, shall establish as part of the standard
training for officers of the Service, including chiefs of
mission, instruction in the field of internationally
recognized human rights. Such instruction shall include--
``(1) standards for proficiency in the knowledge of
international documents and United States policy in human
rights, and shall be mandatory for all members of the Service
having reporting responsibilities relating to human rights,
and for chiefs of mission; and
``(2) instruction on the international right to freedom of
religion, the nature, activities,
[[Page S2667]]
and beliefs of different religions, and the various aspects
and manifestations of religious persecution.''.
SEC. 105. HIGH-LEVEL CONTACTS WITH NGOS.
United States chiefs of mission shall seek out and contact
religious nongovernmental organizations to provide high-level
meetings with religious nongovernmental organizations where
appropriate and beneficial. United States chiefs of mission
and Foreign Service officers abroad shall seek to meet with
imprisoned religious leaders where appropriate and
beneficial.
SEC. 106. PROGRAMS AND ALLOCATIONS OF FUNDS BY UNITED STATES
MISSIONS ABROAD.
It is the sense of Congress that--
(1) United States diplomatic missions in countries the
governments of which engage in or tolerate religious
persecution should develop, as part of annual program
planning, a strategy to promote the respect of the
internationally recognized right to freedom of religion; and
(2) in allocating or recommending the allocation of funds
or the recommendation of candidates for programs and grants
funded by the United States Government, United States
diplomatic missions should give particular consideration to
those programs and candidates deemed to assist in the
promotion of the right to religious freedom.
SEC. 107. EQUAL ACCESS TO UNITED STATES MISSIONS ABROAD FOR
CONDUCTING RELIGIOUS ACTIVITIES.
(a) In General.--Subject to this section, the Secretary of
State shall permit, on terms no less favorable than that
accorded other nongovernmental activities, access to the
premises of any United States diplomatic mission or consular
post by any United States citizen seeking to conduct an
activity for religious purposes.
(b) Timing and Location.--The Secretary of State shall make
reasonable accommodations with respect to the timing and
location of such access in light of--
(1) the number of United States citizens requesting the
access (including any particular religious concerns regarding
the time of day, date, or physical setting for services);
(2) conflicts with official activities and other
nonofficial United States citizen requests;
(3) the availability of openly conducted, organized
religious services outside the premises of the mission or
post; and
(4) necessary security precautions.
(c) Discretionary Access for Foreign Nationals.--The
Secretary of State may permit access to the premises of a
United States diplomatic mission or consular post to foreign
nationals for the purpose of attending or participating in
religious activities conducted pursuant to this title.
SEC. 108. PRISONER LISTS AND ISSUE BRIEFS ON RELIGIOUS
PERSECUTION CONCERNS.
(a) Sense of Congress.--To encourage involvement with
religious persecution concerns at every possible opportunity
and by all appropriate representatives of the United States
Government, it is the sense of Congress that officials of the
executive branch of Government should promote increased
advocacy on such issues during meetings between executive
branch and congressional leaders and foreign dignitaries.
(b) Religious Persecution Prisoner Lists and Issue
Briefs.--The Secretary of State, in consultation with United
States chiefs of mission abroad, regional experts, the
Ambassador at Large, and nongovernmental human rights and
religious groups, shall prepare, and maintain issue briefs on
religious freedom, on a country-by-country basis, consisting
of lists of persons believed to be imprisoned for their
religious faith, together with brief evaluations and
critiques of policies of the respective country restricting
religious freedom. The Secretary of State shall exercise
appropriate discretion regarding the safety and security
concerns of prisoners in considering the inclusion of their
names on the lists.
(c) Availability of Information.--The Secretary shall
provide these religious freedom issue briefs to executive
branch and congressional officials and delegations in
anticipation of bilateral contacts with foreign leaders, both
in the United States and abroad.
TITLE II--COMMISSION ON INTERNATIONAL RELIGIOUS PERSECUTION
SEC. 201. ESTABLISHMENT AND COMPOSITION.
(a) Generally.--There is established the United States
Commission on International Religious Persecution.
(b) Membership.--
(1) Appointment.--The Commission shall be composed of--
(A) the Ambassador at Large, who shall serve as Chair; and
(B) 6 other members, who shall be appointed as follows:
(i) 2 members of the Commission shall be appointed by the
President.
(ii) 2 members of the Commission shall be appointed by the
President pro tempore of the Senate, upon the recommendations
of the Majority Leader and the Minority Leader.
(iii) 2 members of the Commission shall be appointed by the
Speaker of the House of Representatives upon the
recommendations of the Majority Leader and the Minority
Leader.
(2) Selection.--Members of the Commission shall be selected
among distinguished individuals noted for their knowledge and
experience in fields relevant to the issue of international
religious persecution, including foreign affairs, human
rights, and international law.
(3) Time of appointment.--The appointments required by
paragraph (1) shall be made not later than 120 days after the
date of enactment of this Act.
(c) Terms.--The term of office of each member of the
Commission shall be 2 years, except that an individual may
not serve more than 2 terms.
(d) Quorum.--Four members of the Commission constitute a
quorum of the Commission.
(e) Meetings.--No more than 15 days after the issuance of
the Annual Report on Religious Persecution, the Commission
shall convene.
(f) Administrative Support.--The Ambassador at Large shall
provide to the Commission such staff and administrative
services of the Office as may be necessary for the Commission
to perform its functions. The Secretary of State shall assist
the Ambassador at Large and the Commission by detailing staff
resources as needed and as appropriate.
(g) Funding.--
(1) Travel expenses.--Members of the Commission shall be
allowed travel expenses, including per diem in lieu of
subsistence at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the Commission.
(2) No compensation for government employees.--Any member
of the Commission who is an officer or employee of the United
States shall not be paid compensation for services performed
as a member of the Commission.
SEC. 202. DUTIES OF THE COMMISSION.
(a) In General.--The Commission shall have as its primary
responsibility the consideration of the facts and
circumstances of religious persecution presented in the
Annual Report on Religious Persecution, as well as
information from other sources as appropriate, and to make
appropriate policy recommendations to the President, the
Secretary of State, and Congress.
(b) Policy Review and Recommendations in Response to
Violations.--The Commission, in evaluating the United States
Government policies in response to religious persecution,
shall consider and recommend policy options, including
diplomatic inquiries, diplomatic protest, official public
protest, demarche of protest, condemnation within
multilateral fora, cancellation of cultural or scientific
exchanges, or both, cancellation of state visits, reduction
of certain assistance funds, termination of certain
assistance funds, imposition of targeted trade sanctions,
imposition of broad trade sanctions, and withdrawal of the
chief of mission.
(c) Policy Review and Recommendations in Response to
Progress.--The Commission, in evaluating the United States
Government policies with respect to countries found to be
taking deliberate steps and making significant improvement in
respect for religious freedom, shall consider and recommend
policy options, including private commendation, diplomatic
commendation, official public commendation, commendation
within multilateral fora, an increase in cultural or
scientific exchanges, or both, termination or reduction of
existing sanctions, an increase in certain assistance funds,
and invitations for official state visits.
(d) Effects on Religious Communities and Individuals.--
Together with specific policy recommendations provided under
subsections (b) and (c), the Commission shall also indicate
its evaluation of the potential effects of such policies, if
implemented, on the religious communities and individuals
whose rights are found to be violated in the country in
question.
(e) Monitoring.--The Commission shall, on an ongoing basis,
monitor facts and circumstances of religious persecution, in
consultation with independent human rights groups and
nongovernmental organizations, including churches and other
religious communities, and make such recommendations as may
be necessary to the appropriate officials and offices in the
United States Government.
SEC. 203. REPORT OF THE COMMISSION.
(a) In General.--Not later than August 1 of each year, the
Commission shall submit a report to the President and to
Congress setting forth its recommendations for changes in
United States policy based on its evaluations under section
202.
(b) Classified Form of Report.--The report may be submitted
in classified form, together with a public summary of
recommendations.
(c) Individual or Dissenting Views.--Each member of the
Commission may include the individual or dissenting views of
the member.
SEC. 204. TERMINATION.
The Commission shall terminate 4 years after the initial
appointment of Commissioners.
TITLE III--NATIONAL SECURITY COUNCIL
SEC. 301. SPECIAL ADVISER ON RELIGIOUS PERSECUTION.
Section 101 of the National Security Act of 1947 (50 U.S.C.
402) is amended by adding at the end the following new
subsection:
``(i) It is the sense of the Congress that there should be
within the staff of the National Security Council a Special
Adviser to the President on Religious Persecution, whose
position should be comparable to that of a director within
the Executive Office of
[[Page S2668]]
the President. The Special Adviser should serve as a resource
for executive branch officials, compiling and maintaining
information on the facts and circumstances of religious
persecution and violations of religious freedom, and making
policy recommendations. The Special Adviser should serve as
liaison with the Ambassador at Large on International
Religious Freedom, the United States Commission on
International Religious Persecution, Congress and, as
advisable, religious nongovernmental organizations.''.
TITLE IV--SANCTIONS
Subtitle I--Targeted Responses to Religious Persecution Abroad
SEC. 401. EXECUTIVE MEASURES AND SANCTIONS IN RESPONSE TO
FINDINGS MADE IN THE ANNUAL REPORT.
(a) In General.--For each foreign country the government of
which engages in or tolerates religious persecution, as
described in the Annual Report on Religious Persecution, the
President shall oppose such persecution and promote the right
to freedom of religion in that country through the actions
described in subsection (b).
(b) Presidential Actions.--As expeditiously as practicable,
but not later than one year after the date of submission of
each Annual Report on Religious Persecution, the President,
in consultation with the Ambassador at Large, the Special
Advisor, and the Commission, shall take one or more of the
actions described in paragraphs (1) through (16) of section
405(a) with respect to a foreign government described in
subsection (a).
(c) Executive Measures.--The President shall notify the
appropriate congressional committees and, as appropriate, the
Commission, of any measure or measures taken by the President
under paragraphs (1) through (8) of section 405(a).
(d) Sanctions.--Any measure imposed under paragraphs (9)
through (16) of section 405(a) may only be imposed in
accordance with the procedures set forth in section 409 after
the requirements of sections 403 and 404 have been satisfied.
(e) Implementation.--
(1) In general.--In carrying out subsection (b), the
President shall--
(A) take the action or actions that most appropriately
respond to the nature and severity of the religious
persecution;
(B) seek to the fullest extent possible to target action as
narrowly as practicable with respect to the agency or
instrumentality of the foreign government, or specific
officials thereof, that are responsible for such persecution;
and
(C) make every reasonable effort to conclude a binding
agreement concerning the cessation of such persecution.
(2) Guidelines for sanctions.--In addition to the
guidelines under paragraph (1), the President, in determining
whether to impose a sanction under paragraphs (9) through
(16) of section 405(a) or commensurate action under section
405(b), shall seek to minimize any adverse impact on--
(A) the population of the country whose government is
targeted by the sanction or sanctions; and
(B) the humanitarian activities of United States and
foreign nongovernmental organizations in such country.
SEC. 402. PRESIDENTIAL DETERMINATIONS OF GROSS VIOLATIONS OF
THE RIGHT TO RELIGIOUS FREEDOM.
(a) Determination of Gross Violations of the Right to
Religious Freedom.--Not more than 30 days after transmittal
of the Annual Report on Religious Persecution to the
appropriate congressional committees, the President, in
consultation with the Ambassador at Large, the Special
Advisor, and the Commission shall determine whether any of
the governments of the countries described in the Annual
Report on Religious Persecution have engaged in a consistent
pattern of gross violations of the right to religious
freedom.
(b) Determination of Responsible Parties.--The President
shall at the same time as the determination under subsection
(a) identify, to the extent practicable for each foreign
government under that subsection, the responsible agency or
instrumentality thereof and specific officials thereof that
are responsible for such gross violations, in order to
appropriately target sanctions in response.
(c) Sanctions Against Governments Engaged in Gross
Violations of Religious Freedom.--
(1) In general.--Subject to paragraph (2) of this
subsection, in the case of a determination under subsection
(a) with respect to a foreign government, unless Congress
enacts a joint resolution of disapproval in accordance with
section 409, the President shall carry out one or more of the
following actions after the requirements of sections 403 and
404 have been satisfied:
(A) Sanctions.--One or more of the sanctions described in
paragraphs (9) through (16) of section 405(a), to be
determined by the President.
(B) Commensurate actions.--Commensurate action, as
described in section 405(b).
(2) Substitution of binding agreements.--In lieu of
carrying out action under paragraph (1), the President may
conclude a binding agreement with the respective foreign
government concerning the cessation of such violations. The
existence of a binding agreement under this paragraph with a
foreign government shall be considered by the President prior
to making any determination under section 401 or this
section.
SEC. 403. CONSULTATIONS.
(a) Duty To Consult With Foreign Governments Prior to
Imposition of Sanctions.--
(1) In general.--The President shall--
(A) as soon as practicable after a determination is made
under section 402(a) or a sanction is proposed to be taken
under section 401(d), request consultation with each
respective foreign government regarding the violations
determined under those sections; and
(B) if agreed to, enter into such consultations, privately
or publicly.
(2) Use of multilateral fora.--If the President determines
it to be appropriate, such consultations may be sought and
may occur in a multilateral forum.
(3) Election of nondisclosure of negotiations to public.--
If negotiations are undertaken or an agreement is reached
with a foreign government regarding steps to alter the
pattern of violations by that government, and if public
disclosure of such negotiations or agreement would jeopardize
the negotiations or the implementation of such agreement, as
the case may be, the President may refrain from disclosing
such negotiations and such agreement to the public, except
that the President shall inform the appropriate congressional
committees of the nature and extent of such negotiations and
any agreement reached.
(b) Duty To Consult With Humanitarian Organizations.--The
President shall consult with appropriate humanitarian and
religious organizations concerning the potential impact of
the intended sanctions.
(c) Duty To Consult With United States Interested
Parties.--The President shall consult with United States
interested parties as to the potential impact of the intended
sanctions on the economic or other interests of the United
States. The President shall provide the opportunity for
consultation with, and the submission of comments by, those
United States interested parties likely to be affected by
intended United States measures.
SEC. 404. REPORT TO CONGRESS.
(a) In General.--Subject to subsection (b), not later than
September 1 of any year in which a determination is made
under section 402(a) with respect to a foreign country, or
not later than 90 days after the President may determine to
take action under section 401(d) with respect to a foreign
country, as the case may be, the President shall submit a
report to Congress containing the following:
(1) Identification of sanctions.--An identification of the
sanction or sanctions described in paragraphs (9) through
(16) of section 405(a) proposed to be taken against the
foreign country.
(2) Description of violations.--A description of the
violations giving rise to the sanction or sanctions proposed
to be taken.
(3) Purposes of sanctions.--A description of the purpose of
the sanction.
(4) Evaluation.--An evaluation, in consultation with the
Ambassador at Large, the Commission, the Special Advisor, and
the parties described in section 403 (b) and (c) of (A) the
impact upon the foreign government, (B) the impact upon the
population of the country, and (C) the impact upon the United
States economy and other interested parties. The President
may withhold part or all of such evaluation from the public
but shall provide the entire evaluation to the appropriate
congressional committees.
(5) Exhaustion of policy options.--A statement that other
policy options designed to bring about alteration of the
gross violations of the right to religious freedom have
reasonably been exhausted, including the consultations
required in section 403.
(6) Description of multilateral negotiations.--A
description of multilateral negotiations sought or carried
out, if appropriate and applicable.
(b) Delay in Transmittal of Report for the Purpose of
Continuing Negotiations.--If, on or before the date that the
President would (but for this subsection) submit a proposal
under subsection (a) to Congress to impose any sanction under
paragraphs (9) through (16) of section 405(a) against a
foreign country--
(1) negotiations are still taking place with the government
of that country, and
(2) the President determines and certifies to Congress that
a single, additional period of time not to exceed 90 days is
necessary for such negotiations to continue,
then the President shall not be required to submit the
proposal to Congress until the expiration of that period of
time.
SEC. 405. DESCRIPTION OF EXECUTIVE MEASURES AND SANCTIONS.
(a) Description of Measures and Sanctions.--Except as
provided in subsection (d), the Executive measures and
sanctions referred to in this subsection are the following:
(1) A private demarche.
(2) An official public demarche.
(3) A public condemnation.
(4) A public condemnation within one or more multilateral
fora.
(5) The cancellation of one or more scientific exchanges.
(6) The cancellation of one or more cultural exchanges.
(7) The denial of one or more state visits.
(8) The cancellation of one or more state visits.
(9) The withdrawal, limitation, or suspension of United
States development assistance in accordance with the
provisions of section 116 of the Foreign Assistance Act of
1961.
[[Page S2669]]
(10) Directing the Export-Import Bank of the United States,
the Overseas Private Investment Corporation, or the Trade and
Development Agency not to approve the issuance of any (or a
specified number of) guarantees, insurance, extensions of
credit, or participations in the extension of credit with
respect to the specific government, agency, instrumentality,
or official determined by the President to be responsible for
gross violations of the right to religious freedom.
(11) The withdrawal, limitation, or suspension of United
States security assistance in accordance with the provisions
of section 502B of the Foreign Assistance Act of 1961.
(12) The withdrawal, limitation, or suspension of
preferential tariff treatment accorded under--
(A) title V of the Trade Act of 1974 (relating to the
Generalized System of Preferences);
(B) the Caribbean Basin Economic Recovery Act;
(C) the Andean Trade Preference Act; or
(D) any other law providing preferential tariff treatment.
(13) Consistent with section 701 of the International
Financial Institutions Act of 1977, directing the United
States executive directors of international financial
institutions to vote against loans primarily benefiting the
specific foreign government, agency, instrumentality, or
official determined by the President to be responsible for
such persecution.
(14) Ordering the heads of the appropriate United States
agencies not to issue any (or a specified number of) specific
licenses and not to grant any other specific authority (or a
specified number of authorities) to export any goods or
technology to the specific foreign government, agency,
instrumentality, or official determined by the President to
be responsible for such persecution under--
(A) the Export Administration Act of 1979;
(B) the Arms Export Control Act;
(C) the Atomic Energy Act of 1954; or
(D) any other statute that requires the prior review and
approval of the United States Government as a condition for
the export or reexport of goods or services.
(15) Prohibiting any United States financial institution
from making loans or providing credits totaling more than
$10,000,000 in any 12-month period to the specific foreign
government, agency, instrumentality, or official determined
by the President to be responsible for the violations.
(16) Prohibiting the United States Government from
procuring, or entering into any contract for the procurement
of, any goods or services from the foreign government,
entities, or officials determined by the President to be
responsible for the violations.
(b) Commensurate Action.--Except as provided in subsection
(d), the President may substitute any other action authorized
by law for any action described in paragraphs (1) through
(16) of subsection (a) if such action is commensurate in
effect to the action substituted and if the action would
further the policy of the United States set forth in section
2 of this Act. The President shall seek to take all
appropriate and feasible actions authorized by law to obtain
the cessation of the violations. In the case of the
development of commensurate action as a substitute for any
sanction described in paragraphs (9) through (16) of
subsection (a), the President shall conduct all consultations
described in section 403 prior to taking such action. If
commensurate action is taken, the President shall report such
action, together with an explanation for taking such action,
to the appropriate congressional committees.
(c) Binding Agreements.--The President may negotiate and
enter into a binding agreement with a foreign government that
obligates such government to cease, or take substantial steps
to address and phase out, the act, policy, or practice
constituting the religious persecution. The entry into force
of a binding agreement for the cessation of the violations
shall be a primary objective for the President in responding
to a foreign government that engages in a consistent pattern
of gross violations of the right to religious freedom.
(d) Exceptions.--Any action taken pursuant to subsection
(a) or (b) may not--
(1) prohibit or restrict the provision of medicine, medical
equipment or supplies, food, or other humanitarian
assistance; or
(2) impede any action taken by the United States Government
to enforce the right to maintain intellectual property
rights.
SEC. 406. CONTRACT SANCTITY.
The President shall not be required to apply or maintain
any sanction under this subtitle--
(1) in the case of procurement of defense articles or
defense services--
(A) under existing contracts or subcontracts, including the
exercise of options for production quantities to satisfy
requirements essential to the national security of the United
States;
(B) if the President determines in writing that the person
or other entity to which the sanction would otherwise be
applied is a sole source supplier of the defense articles or
services, that the defense articles or services are
essential, and that alternative sources are not readily or
reasonably available; or
(C) if the President determines in writing that such
articles or services are essential to the national security
under defense coproduction agreements; or
(2) to products or services provided under contracts
entered into before the date on which the President publishes
his intention to impose the sanction.
SEC. 407. PRESIDENTIAL WAIVER.
The President may waive the requirement to take an action
under this subtitle with respect to a country, if--
(1) the President determines and so reports to the
appropriate congressional committees that--
(A) the respective foreign government has ceased or taken
substantial steps to cease the violations giving rise to the
imposition of the measure or sanction;
(B) the exercise of such waiver authority would better
further the purposes of this Act; or
(C) the national security of the United States requires the
exercise of such waiver authority; and
(2) the requirements of congressional review under section
409 have been satisfied.
SEC. 408. PUBLICATION IN FEDERAL REGISTER.
The President shall cause to be published in the Federal
Register the following:
(1) Determinations of violator governments, officials, and
entities.--Consistent with section 654(c) of the Foreign
Assistance Act of 1961, any determination that a government
has engaged in gross violations of the right to religious
freedom, together with, when applicable and possible, the
officials or entities determined to be responsible for the
violations. Such a determination shall include a notification
to all interested parties to provide consultation and submit
comments concerning sanctions that may be taken by the United
States in response to the violations.
(2) Sanctions.--A description of any sanction that takes
effect pursuant to section 409, and the effective date of the
sanction. A description of the sanction may be withheld if
disclosure is deemed to jeopardize national security.
(3) Delays in transmittal of sanction reports.--Any delay
in transmittal of a sanction report, as described in section
404(b).
(4) Waivers.--Any waiver under section 407.
SEC. 409. CONGRESSIONAL REVIEW.
(a) In General.--
(1) Proposals subject to congressional review.--Each of the
following proposals shall take effect 30 session days of
Congress after the President transmits the proposal to
Congress unless, within such period, Congress enacts a joint
resolution disapproving the sanction, waiver, or termination
of a sanction, as the case may be, in accordance with
subsection (b):
(A) Any sanction proposed under section 404(a).
(B) Any waiver proposed under section 407(2).
(C) Any proposed termination of a sanction under section
410(2).
(2) Submission of revised proposals to congress.--In the
event that Congress enacts a joint resolution of disapproval
under paragraph (1), the President shall, within 30 days of
the date of any override of the President's veto of that
resolution, revise the proposed sanction, waiver, or
termination of sanction and submit the revised proposal to
Congress for consideration in accordance with subsection (b).
(b) Congressional Priority Procedures.--
(1) Joint resolution defined.--
(A) Disapproval resolutions for sanction proposals.--For
the purpose of subsection (a)(1)(A), the term ``joint
resolution'' means only a joint resolution introduced after
the date on which the report of the President under section
404 is received by Congress, the matter after the resolving
clause of which is as follows: ``That Congress disapproves
the sanction or sanctions proposed by the President in the
report transmitted under section 404(a) of the International
Religious Freedom Act of 1998 on ____.'', with the blank
filled in with the appropriate date.
(B) Disapproval resolutions for presidential waivers.--For
the purpose of subsection (a)(1)(B), the term ``joint
resolution'' means only a joint resolution introduced after
the date on which the report of the President under section
407(1) is received by Congress, the matter after the
resolving clause of which is as follows: ``That Congress
disapproves the waiver proposed by the President in the
report transmitted under section 407(1) of the International
Religious Freedom Act of 1998 on ____.'', with the blank
filled in with the appropriate date.
(C) Disapproval resolutions for proposals to terminate
sanctions.--For the purpose of subsection (a)(1)(C), the term
``joint resolution'' means only a joint resolution introduced
after the date on which the certification of the President
under section 410(2) is received by Congress, the matter
after the resolving clause of which is as follows: ``That
Congress disapproves the termination of sanction or sanctions
proposed by the President in the certification transmitted
under section 410(2) of the International Religious Freedom
Act of 1998 on ____.'', with the blank filled in with the
appropriate date.
(2) Definition.--In this section, the term ``session day''
means a day on which either House of Congress is in session.
(3) Referral to committee.--A resolution described in
paragraph (1) introduced in the House of Representatives
shall be referred to the Committee on International Relations
of the House of Representatives. A resolution described in
paragraph (1) introduced in the
[[Page S2670]]
Senate shall be referred to the Committee on Foreign
Relations of the Senate. Such a resolution may not be
reported before the eighth day after its introduction.
(4) Discharge from committee.--If the committee to which is
referred a resolution described in paragraph (1) has not
reported such resolution (or an identical resolution) at the
end of fifteen calendar days after its introduction, such
committee shall be discharged from further consideration of
such resolution and such resolution shall be placed on the
appropriate calendar of the House involved.
(5) Floor consideration.--
(A) Motion to proceed.--When the committee to which a
resolution is referred has reported, or has been deemed to be
discharged (under paragraph (4)) from further consideration
of, a resolution described in paragraph (1), notwithstanding
any rule or precedent of the Senate, including Rule 22, it is
at any time thereafter in order (even though a previous
motion to the same effect has been disagreed to) for any
Member of the respective House to move to proceed to the
consideration of the resolution, and all points of order
against the resolution (and against consideration of the
resolution) are waived. The motion is highly privileged in
the House of Representatives and is privileged in the Senate
and is not debatable. The motion is not subject to amendment,
or to a motion to postpone, or to a motion to proceed to the
consideration of other business. A motion to reconsider the
vote by which the motion is agreed to or disagreed to shall
not be in order. If a motion to proceed to the consideration
of the resolution is agreed to, the resolution shall remain
the unfinished business of the respective House until
disposed of.
(B) Debate on the resolution.--Debate on the resolution,
and on all debatable motions and appeals in connection
therewith, shall be limited to not more than ten hours, which
shall be divided equally between those favoring and those
opposing the resolution. A motion further to limit debate is
in order and not debatable. An amendment to, or a motion to
postpone, or a motion to proceed to the consideration of
other business, or a motion to recommit the resolution is not
in order. A motion to reconsider the vote by which the
resolution is agreed to or disagreed to is not in order.
(C) Vote on final passage.--Immediately following the
conclusion of the debate on a resolution described in
paragraph (1), and a single quorum call at the conclusion of
the debate if requested in accordance with the rules of the
appropriate House, the vote on final passage of the
resolution shall occur.
(D) Appeals of rulings.--Appeals from the decisions of the
Chair relating to the application of the rules of the Senate
or the House of Representatives, as the case may be, to the
procedure relating to a resolution described in paragraph (1)
shall be decided without debate.
(6) Treatment of other house's resolution.--If, before the
passage by one House of Congress of a resolution of that
House described in paragraph (1), that House receives from
the other House a resolution described in paragraph (1), then
the following procedures shall apply:
(A) Referral of resolutions of sending house.--The
resolution of the sending House shall not be referred to a
committee in the receiving House.
(B) Procedures in receiving house.--With respect to a
resolution of the House receiving the resolution--
(i) the procedure in that House shall be the same as if no
resolution had been received from the sending House; but
(ii) the vote on final passage shall be on the resolution
of the sending House.
(C) Disposition of resolutions of receiving house.--Upon
disposition of the resolution received from the other House,
it shall no longer be in order to consider the resolution
originated in the receiving House.
(7) Procedures after action by both the house and senate.--
If the House receiving a resolution from the other House
after the receiving House has disposed of a resolution
originated in that House, the action of the receiving House
with regard to the disposition of the resolution originated
in that House shall be deemed to be the action of the
receiving House with regard to the resolution originated in
the other House.
(8) Rules of the Senate and the House.--This subsection is
enacted by Congress--
(A) as an exercise of the rulemaking power of the Senate
and House of Representatives, respectively, and as such it is
deemed a part of the rules of each House, respectively, but
applicable only with respect to the procedure to be followed
in that House in the case of a resolution described in
paragraph (1), and it supersedes other rules only to the
extent that it is inconsistent with such rules; and
(B) with full recognition of the constitutional right of
either House to change the rules (so far as relating to the
procedure of that House) at any time, in the same manner and
to the same extent as in the case of any other rule of that
House.
SEC. 410. TERMINATION OF SANCTIONS.
Any sanction imposed under section 409 with respect to a
foreign country shall terminate on the earlier of the
following dates:
(1) Termination date.--Within 2 years of the effective date
of the sanction unless expressly reauthorized by law.
(2) Foreign government actions.--Upon the determination by
the President and certification to Congress that the foreign
government has ceased or taken substantial steps to cease the
gross violations of religious freedom, subject to the
congressional review procedures described in section 409.
Subtitle II--Strengthening Existing Law
SEC. 421. UNITED STATES ASSISTANCE.
(a) Implementation of Prohibition on Economic Assistance.--
Section 116(c) of the Foreign Assistance Act of 1961 (22
U.S.C. 2151n(c)) is amended--
(1) in the text above paragraph (1), by inserting ``and in
consultation with the Ambassador at Large for Religious
Freedom'' after ``Labor''.
(2) by striking ``and'' at the end of paragraph (1);
(3) by striking the period at the end of paragraph (2) and
inserting ``; and''; and
(4) by adding at the end the following new paragraph:
``(3) whether the government--
``(A) has engaged in gross violations of the right to
freedom of religion; or
``(B) has failed to undertake serious and sustained efforts
to combat gross violations of the right to freedom of
religion, when such efforts could have been reasonably
undertaken.''.
(b) Implementation of Prohibition on Military Assistance.--
Section 502B(a) of the Foreign Assistance Act of 1961 (22
U.S.C. 2304(a)) is amended by adding at the end the following
new paragraph:
``(4) In determining whether the government of a country
engages in a consistent pattern of gross violations of
internationally recognized rights, the President shall give
particular consideration to whether the government--
``(A) has engaged in gross violations of the right to
freedom of religion; or
``(B) has failed to undertake serious and sustained efforts
to combat gross violations of the right to freedom of
religion, when such efforts could have been reasonably
undertaken.''.
SEC. 422. MULTILATERAL ASSISTANCE.
Section 701 of the International Financial Institutions Act
(22 U.S.C. 262d) is amended by adding at the end the
following new subsection:
``(g) In determining whether a country is in gross
violation of internationally recognized human rights
standards, as described in subsection (a), the President, in
consultation with the Ambassador at Large, shall give
particular consideration to whether a foreign government--
``(1) has engaged in gross violations of the right to
freedom of religion; or
``(2) has failed to undertake serious and sustained efforts
to combat gross violations of the right to freedom of
religion, when such efforts could have been reasonably
undertaken.''.
SEC. 423. EXPORTS OF ITEMS RELATING TO RELIGIOUS PERSECUTION.
(a) Mandatory Licensing.--Notwithstanding any other
provision of law, the Secretary of Commerce, with the
concurrence of the Secretary of State, the Ambassador at
Large, and the Special Adviser, shall include on the list of
crime control and detection instruments or equipment
controlled for export and reexport under section 6(n) of the
Export Administration Act of 1979 (22 U.S.C. App. 2405(n)),
or under any other provision of law, items that the Secretary
of State, in consultation with the Ambassador at Large and
the Special Adviser, determines are being used or are
intended for use directly and in significant measure to carry
out gross violations of the right to freedom of religion.
(b) Licensing Ban.--The prohibition on the issuance of a
license for export of crime control and detection instruments
or equipment under section 502B(a)(2) of the Foreign
Assistance Act of 1961 (22 U.S.C. 2304(a)(2)) shall apply to
the export and reexport of any item included pursuant to
subsection (a) on the list of crime control instruments.
TITLE V--PROMOTION OF RELIGIOUS FREEDOM
SEC. 501. ASSISTANCE FOR PROMOTING RELIGIOUS FREEDOM.
(a) Findings.--Congress makes the following findings:
(1) In many nations where severe violations of religious
freedom occur, there is not sufficient statutory legal
protection for religious minorities or there is not
sufficient cultural and social understanding of international
norms of religious freedom.
(2) Accordingly, in its foreign assistance already being
disbursed, the United States should make a priority of
promoting and developing legal protections and cultural
respect for religious freedom.
(b) Allocation of Funds for Increased Promotion of
Religious Freedoms.--Section 116(e) of the Foreign Assistance
Act of 1961 is amended by inserting ``and the right to free
religious belief and practice'' after ``adherence to civil
and political rights''.
SEC. 502. INTERNATIONAL BROADCASTING.
(a) Section 302(1) of the International Broadcasting Act of
1994 is amended by inserting ``and of conscience (including
freedom of religion)'' after ``freedom of opinion and
expression''.
(b) Section 303(a) of the International Broadcasting Act of
1994 is amended--
(1) by striking ``and'' at the end of paragraph (6);
(2) by striking the period at the end of paragraph (7) and
inserting ``; and''; and
(3) by adding at the end the following:
``(8) promote respect for human rights, including freedom
of religion.''.
[[Page S2671]]
SEC. 503. INTERNATIONAL EXCHANGES.
Section 102(b) of the Mutual Educational and Cultural
Exchange Act of 1961 is amended--
(1) by striking ``and'' after paragraph (10);
(2) by striking the period at the end of paragraph (11) and
inserting ``; and''; and
(3) by adding at the end the following:
``(12) promoting respect for and guarantees of religious
freedom abroad by interchanges and visits between the United
States and other nations of religious leaders, scholars, and
religious and legal experts in the field of religious
freedom.''.
SEC. 504. FOREIGN SERVICE AWARDS.
(a) Performance Pay.--Section 405(d) of the Foreign Service
Act of 1980 is amended by inserting after the first sentence
the following: ``Such service in the promotion of
internationally recognized human rights, including the right
to religious freedom, shall serve as a basis for granting
awards under this section.''.
(b) Foreign Service Awards.--Section 614 of the Foreign
Service Act of 1980 is amended by adding at the end the
following new sentence: ``Distinguished, meritorious service
in the promotion of internationally recognized human rights,
including the right to religious freedom, shall serve as a
basis for granting awards under this section.''.
TITLE VI--REFUGEE, ASYLUM, AND CONSULAR MATTERS
SEC. 601. USE OF ANNUAL REPORT.
(a) Description of Training.--The Annual Report on
Religious Persecution shall include a description of training
described in subsection (b) on religious persecution provided
to immigration judges, consular, refugee, and asylum
officers.
(b) Use of the Annual Report.--The Annual Report on
Religious Persecution, together with other relevant
documentation, shall serve as a resource for immigration
judges and consular, refugee, and asylum officers in cases
involving claims of persecution on the grounds of religion.
Absence of reference by the Annual Report on Religious
Persecution to conditions described by the alien shall not
constitute sole grounds for a denial of the alien's claim.
SEC. 602. REFORM OF REFUGEE POLICY.
(a) Training.--
(1) In general.--The Attorney General, in consultation with
the Secretary of State, shall provide all United States
officials adjudicating refugee cases with the same training
as that provided to officers adjudicating asylum cases.
(2) Content of training.--Such training shall include
country-specific conditions, instruction on the right to
religious freedom, methods of religious persecution, and
applicable distinctions within a country between the nature
of and treatment of various religious practices and
believers.
(b) Training for Consular Officers.--(1) Section 708 of the
Foreign Service Act of 1980, as added by section 104 of this
Act, is further amended--
(A) by inserting ``(a)'' before ``The Secretary of State'';
and
(B) by adding at the end the following:
``(b) The Secretary of State shall provide sessions on
refugee law and adjudications and on religious persecution,
to each individual seeking a commission as a United States
consular officer.''.
(2) Section 312(a) of the Foreign Service Act of 1980 is
amended by inserting after the first sentence the following:
``In order to receive such a consular commission, a member of
the Service shall complete the training required under
section 708.''.
(c) Guidelines for Refugee-Processing Posts.--
(1) Guidelines for addressing hostile biases.--The Attorney
General and the Secretary of State shall develop and
implement guidelines that address potential hostile biases in
personnel of the Immigration and Naturalization Service that
are hired abroad and involved with duties which could
constitute an effective barrier to a refugee claim if such
personnel carries a hostile bias toward the claimant on the
grounds of religion, race, nationality, membership in a
particular social group or political opinion.
(2) Guidelines for refugee-processing posts in establishing
agreements with joint voluntary agencies.--The Attorney
General and the Secretary of State shall develop guidelines
to ensure uniform procedures to the extent possible with
Joint Voluntary Agencies, and to ensure that the Joint
Voluntary Agencies process is enhanced and faulty preparation
of claims does not result in the failure of a genuine claim
to refugee status.
(d) Annual Consultation.--In carrying out the
responsibilities of the Department of State under the
appropriate consultation requirement of section 207(e) of the
Immigration and Nationality Act (8 U.S.C. 1157(e)), the
Secretary of State shall specifically address religious
persecution in the report provided by the Department of
State, and by providing testimony by the Ambassador at Large.
The Secretary of State shall also provide religious
nongovernmental organizations and human rights
nongovernmental organizations the opportunity to testify.
SEC. 603. REFORM OF ASYLUM POLICY.
(a) Guidelines.--The Attorney General and the Secretary of
State shall develop guidelines to ensure that interpreters
with hostile biases, including personnel of airlines owned by
governments known to be involved in practices which would
meet the definition of persecution under international
refugee law, shall not in any manner be used to interpret
conversations between aliens and inspection or asylum
officers.
(b) Training for Asylum Officers.--The Attorney General, in
consultation with the Ambassador-at-Large, shall provide
training to all officers adjudicating asylum cases on the
nature of religious persecution abroad, including country-
specific conditions, instruction on the right to religious
freedom, methods of religious persecution, and applicable
distinctions within a country in the treatment of various
religious practices and believers.
(c) Training for Immigration Judges.--The Executive Office
of Immigration Review of the Department of Justice shall
incorporate into its initial and ongoing training of
immigration judges training on the extent and nature of
religious persecution internationally, including country-
specific conditions, and including use of the Annual Report
on Religious Persecution. Such training shall include
governmental and nongovernmental methods of persecution
employed, and differences in the treatment of religious
groups by such persecuting entities.
SEC. 604. INADMISSIBILITY OF FOREIGN GOVERNMENT OFFICIALS WHO
HAVE ENGAGED IN GROSS VIOLATIONS OF THE RIGHT
TO RELIGIOUS FREEDOM.
(a) Ineligibility for Visas or Admission.--Section
212(a)(2) of the Immigration and Nationality Act (8 U.S.C.
1182(a)(2)) is amended by adding at the end the following new
subparagraph:
``(G) Foreign government officials who have engaged in
gross violations of the right to religious freedom.--
``(i) In general.--Any alien who, while serving as a
foreign government official, directly engaged in gross
violations of the right to religious freedom, as defined in
section 3 of the International Religious Freedom Act of 1998,
and the spouse and children, if any, of the alien, are
inadmissible.
``(ii) Waiver.--
``(I) In general.--The Secretary of State may waive the
application of clause (i) if the Secretary determines that
the exclusion of the alien would jeopardize a compelling
United States foreign policy interest.
``(II) Nondelegation of authority.--The Secretary of State
may not delegate the authority to make a determination under
subclause (I).''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to aliens seeking to enter the United States on
or after the date of enactment of this Act.
TITLE VII--MISCELLANEOUS PROVISIONS
SEC. 701. BUSINESS CODES OF CONDUCT.
(a) Congressional Finding.--Congress recognizes the
increasing importance of transnational corporations as global
actors, and their potential for providing positive leadership
in their host countries in the area of human rights.
(b) Sense of Congress.--It is the sense of Congress that
transnational corporations operating in countries the
governments of which engage in gross violations of the right
to religious freedom, as identified in the Annual Report on
Religious Persecution, should adopt codes of conduct--
(1) upholding the right to religious freedom of their
employees; and
(2) ensuring that a worker's religious views and peaceful
practices of belief in no way affect, or be allowed to
affect, the status or terms of his or her employment.
SEC. 702. INTERNATIONAL CRIMINAL COURT.
It is the sense of Congress that in negotiating the
definitions of crimes to be included in the subject matter
jurisdiction of the International Criminal Court, the
President should pursue the inclusion in such jurisdiction of
gross violations of the right to religious freedom to the
extent such violations fall within the meaning in
international law of crimes against humanity or genocide.
Mr. LIEBERMAN. Mr. President, I rise to join my distinguished
colleague, Senator Nickles, the assistant majority leader, and my
esteemed colleagues Senators Kempthorne, Mack, Hutchinson, Craig, and
DeWine as a co-sponsor of The International Religious Freedom Act of
1998.
Freedom of religion is a bedrock principle for the American people, a
cherished right that lies at the very foundation of our country. It is
appropriate, and it is right, that we as Americans express our concern
about abuses of that freedom as a cornerstone of our foreign policy.
This is not a concern that is unique to Americans, for the freedom of
religion is explicitly recognized by the Universal Declaration of Human
Rights. Sadly, and tragically, that recognition has not served to
prevent the assault on believers of a variety of religions simply for
seeking to follow their faith.
We must not be silent. The International Religious Freedom Act of
1998 is a serious, thoughtful, and comprehensive approach to the
problem of religious persecution. This bill employs a broad range of
tools within the United States foreign policy apparatus for the most
flexible, appropriate, and enduring response to violations of religious
liberty.
The bill is carefully crafted to do the following: promote religious
freedom through both incentives and sanctions,
[[Page S2672]]
with the long-term goal of alleviating religious persecution rather
than merely punishing governments; build on principles contained in
U.S. and international human rights law, on negotiating principles of
U.S. Trade law, and on ideas advocated by religious and human rights
leaders; dispel the option of silence, with its Annual Report publicly
addressing all forms of religious persecution; promote the conclusion
of binding agreements with offending governments to cease the
violations, allowing for reasonable negotiation to achieve this goal;
and sanction gross violators, through an annual review and sanctions
process.
The issue of religious persecution is one that we must be concerned
about, one that we must take action on. The International Religious
freedom Act of 1998 is an effective means of doing so and I am honored
to be an original co-sponsor of it. There are other excellent
approaches to this critical international problem, including the
legislation cosponsored by Congressman Wolf and Senator Spector. In the
weeks ahead we will look forward to working with all of our colleagues
on this issue, inviting and welcoming a collective approach that will
result in our bringing the most effective legislation to pass.
______
By Mr. CAMPBELL:
S. 1870. A bill to amend the Indian Gaming Regulatory Act, and for
other purposes; to the Committee on Indian Affairs.
the indian gaming regulatory act amendments of 1998
Mr. CAMPBELL. Mr. President, today I am pleased to introduce the
Indian Gaming Regulatory Act Amendments of 1998 to reform the federal
components of Indian gaming regulation.
I wish to begin by acknowledging the work in this area by the two
distinguished individuals who preceded me as the chairman of the Senate
Indian Affairs Committee, Senators McCain and Inouye. This legislation
builds upon their extraordinary efforts to listen to all sides of this
debate and broker a fair and equitable compromise. I seek to continue
this tradition by providing a starting point for negotiations among all
of those with an interest in Indian gaming, and by addressing those
areas that are most in need of immediate reform.
This bill will revitalize the National Indian Gaming Commission, by
ensuring that it has the authority to develop and impose a series of
minimum federal standards on all Indian gaming operations. It will
reform and restore the compact negotiation process by providing an
alternative compact negotiation process in those instances where a
state wishes to exercise its 11th Amendment immunity from lawsuits and
its 10th Amendment right to decide for itself whether it wishes to
regulate on-reservation gaming. Finally, this bill addresses the two
issues that in my opinion are most in need of immediate reform. First,
the bill applies the standard post-employment restrictions for former
federal officials who are employed by any tribe that stood to benefit
from any gaming-related decisions the officials made while they were
federal employees. Second, the bill will prohibit the acquisition of
off-reservation lands for gaming activities unless the tribe and the
state agree to do so.
Ten years ago the Congress enacted the Indian gaming legislation that
many will agree needs to be updated. In 1988 most Indian gaming
consisted of high stakes bingo and similar types of games. Since then,
it has grown to become a billion dollar activity and has provided many
tribes and surrounding communities with much-needed capital and
employment opportunities.
For those tribes lucky enough to be well situated geographically,
gaming has proven successful. Where welfare rolls once bulged, tribes
are employing thousands of people--both Indian as well as non-Indian.
Once entirely reliant on federal transfer payments, many tribes are
beginning to diversify their economies and provide jobs and hope to
their members.
For most tribes, however, gaming is not a viable development
alternative. Indeed, only one-third of all federally-recognized tribes
have any form of gaming and most of that is more like charitable bingo
than Las Vegas or Atlantic City. On-line gaming, as well as competition
from local and international operations, has created a very tight
market. In Washington State, for example, as well as in other parts of
the country, market saturation is leading some tribes to close their
operations for good.
Over the past ten years, the statute has only been significantly
amended one time--in 1997 I introduced a measure to provide the federal
National Indian Gaming Commission with the resources it needs to
monitor and regulate certain Indian gaming operations. Today, a
strengthened commission is beginning to fulfill its obligations under
the statute and help maintain the integrity of Indian gaming
nationwide.
The lack of uniform standard operating procedures for Indian gaming
continues to cause anxiety for many of those inside and outside of
Indian country. Many Indian tribes, in cooperation with the states
where gaming is located, have developed sophisticated gaming regulatory
procedures and standards. Many tribes have put in place standards
regarding the rules of play for their games, as well as financial and
accounting standards governing those games. Not all tribal-state gaming
compacts mandate such sophisticated regulatory frameworks.
By setting threshold standards at the federal level, this bill will
mean that Indian gaming customers throughout the nation can be assured
that every Indian gaming establishment must comply with a federally
established level of regulation, operation, and management, just as
they are already assured that gaming proceeds may only be spent for
certain purposes set out in the Act.
When the Congress enacted the IGRA in 1988, states were invited, for
the first time ever, to play a significant role in the regulation of
activities that take place on Indian lands. The statute required tribes
to seek to negotiate a gaming compact with a state before commencing
any casino-style gaming. Though there were bumps along the way, this
was a major concession by Indian tribes and one that worked reasonably
well for 8 years, and which will continue to be available if it is
chosen by both a state and a tribe.
Under IGRA, before a tribe may commence casino-style gaming, it must
seek to negotiate a gaming compact with the state where the gaming will
occur. Up until 1996, if a federal court determined that the state was
negotiating in bad faith or if the state decided simply not to
negotiate, the tribe had the option of filing a lawsuit to bring about
good faith negotiations.
In 1996, the Supreme Court turned this process upside down when it
handed down its decision in Seminole Tribe of Indians v. State of
Florida. This decision said that a state may assert its Eleventh
Amendment immunity from lawsuits to preclude tribes from suing it in
order to conclude a gaming agreement. Also, some states have asserted
that the IGRA may force them to regulate reservation-based gaming in
violation of their 10th Amendment rights. My bill will allow tribes and
states to continue to use the existing process to negotiate compacts if
that is their desire.
As I believe the Act should respect each state's sovereign right to
absent itself from this process if it chooses to, we must also respect
the Supreme Court's decision that Indian tribes have the sovereign
right to offer gaming activities that do not violate the public policy
of the state where those activities are offered. This approach is
consistent with what the Congress intended in 1988.
Finally, there are ongoing Congressional investigations of the so-
called ``Hudson Dog Track'' matter involving whether the Interior
Department denied an application by certain Indian tribes to acquire
off-reservation lands for gaming purposes because of campaign
contributions by a rival group of tribes. Even before these allegations
surfaced, I expressed strong concerns about the acquisition of off-
reservation lands for gaming purposes.
The IGRA requires the Interior Secretary to consult with local
officials, local communities, and nearby tribes in evaluating the
tribe's application to take lands into trust. The Act also provides
State governors with an absolute veto over such applications. In my
opinion, federal laws and regulations already make it very difficult
for the Secretary to take land into trust for a
[[Page S2673]]
tribe if it is located away from a tribe's reservation or previous
homeland. As a result, few tribes apply to have off-reservation lands
taken into trust, and even fewer are successful.
The IGRA imposes additional requirements on such acquisitions if
there is any possibility that the lands will be used for gaming
purposes. As a result of these requirements, I am aware of only two or
three such acquisitions. Yet the opposition to Indian gaming that
results from the mere possibility of such acquisitions is significant.
This opposition far exceeds that speculative possibility that the
Secretary, a local community, and a state's governor will all concur
with such an acquisition. Thus, my bill will preclude off-reservation
acquisitions unless the tribe and the state reach agreement to allow
those lands to be used for gaming purposes. This provision will
therefore encourage tribal-state cooperation rather than tribal-state
conflict when it comes to gaming matters.
My bill will also remove the argument that those Indian groups that
are laboring to achieve federal recognition as tribes are doing so only
to develop gaming. Achieving federal recognition is difficult enough, I
do not believe it should be further complicated by squabbles over
gaming.
My bill will eliminate any appearance that federal officials and
employees who are responsible for making decisions about Indian gaming
are ``cashing in'' on their activities when they leave government
service. By closing an existing loophole, my bill will establish that
those federal employees who have made decisions concerning a tribe's
gaming activities are bound by the same policies, procedures, and
criminal laws that prevent other federal employees from profiting from
decisions they made when working for the government. But it also
preserves those provisions in the Indian Self-Determination and
Education Assistance Act, which have dramatically reduced the number of
federal employees by encouraging their employment by the tribes that
contract to provide federal services under self-governance compacts and
self-determination act contracts.
I believe this bill addresses the most pressing concerns raised by
states, local governments, and Indian tribes. Like all attempts at
compromise, few parties will be completely satisfied. The legislation I
am introducing will both please and disappoint the states as well as
the tribes. Nonetheless, as Chairman of the Committee on Indian
Affairs, demonstrating a willingness to serve as an honest broker will,
in my opinion, do more to foster genuine and lasting reform than simply
becoming an advocate for one side or one point of view. Let there be no
question of my commitment to ensure that Indian gaming be operated
fairly and consistently with all relevant laws, and that the goals and
objectives of the IGRA are fully achieved.
As I have indicated, the Committee will address these and related
issues in the coming weeks. By introducing this legislation, it is my
hope that those with concerns with the regulation of Indian gaming work
with me in the Committee to fully and fairly debate the issues before
any actions are taken to amend the Act.
Mr. President, I ask unanimous consent that the bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
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 ``Indian Gaming Regulatory
Improvement Act of 1998''.
SEC. 2. AMENDMENTS TO THE INDIAN GAMING REGULATORY ACT.
The Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.)
is amended--
(1) by striking the first section and inserting the
following new section:
``SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
``(a) Short Title.--This Act may be cited as the `Indian
Gaming Regulatory Act'.
``(b) Table of Contents.--The table of contents for this
Act is as follows:
``Sec. 1. Short title; table of contents.
``Sec. 2. Congressional findings.
``Sec. 3. Purposes.
``Sec. 4. Definitions.
``Sec. 5. National Indian Gaming Commission.
``Sec. 6. Powers and authority of the National Indian Gaming Commission
and Chairman.
``Sec. 7. Regulatory framework.
``Sec. 8. Negotiated rulemaking.
``Sec. 9. Requirements for the conduct of class I and class II gaming
on Indian lands.
``Sec. 10. Class III gaming on Indian lands.
``Sec. 11. Review of contracts.
``Sec. 12. Civil penalties.
``Sec. 13. Judicial review.
``Sec. 14. Commission funding.
``Sec. 15. Authorization of appropriations.
``Sec. 16. Application of Internal Revenue Code of 1986; access to
information by States and tribal governments.
``Sec. 17. Gaming proscribed on lands acquired in trust after the date
of enactment of this Act.
``Sec. 18. Dissemination of information.
``Sec. 19. Severability.
``Sec. 20. Criminal penalties.
``Sec. 21. Conforming amendment.'';
``Sec. 22. Commission staffing.''
(2) by striking sections 2 and 3 and inserting the
following;
``SEC. 2. CONGRESSIONAL FINDINGS.
``The Congress finds that--
``(1) Indian tribes are--
``(A) engaged in the operation of gaming activities on
Indian lands as a means of generating tribal governmental
revenue; and
``(B) licensing those activities;
``(2) because of the unique political and legal
relationship between the United States and Indian tribes,
Congress has the responsibility of protecting tribal
resources and ensuring the continued viability of Indian
gaming activities conducted on Indian lands;
``(3) clear Federal standards and regulations for the
conduct of gaming on Indian lands will assist tribal
governments in assuring the integrity of gaming activities
conducted on Indian lands;
``(4) a principal goal of Federal Indian policy is to
promote tribal economic development, tribal self-sufficiency,
and strong Indian tribal governments;
``(5) Indian tribes have the exclusive right to regulate
gaming activity on Indian lands, if the gaming activity--
``(A) is not specifically prohibited by Federal law; and
``(B) is conducted within a State that does not, as a
matter of public policy, prohibit that gaming activity;
``(6) Congress has the authority to regulate the privilege
of doing business with Indian tribes in Indian country (as
defined in section 1151 of title 18, United States Code);
``(7) systems for the regulation of gaming activities on
Indian lands should meet or exceed federally established
minimum regulatory requirements;
``(8) the operation of gaming activities on Indian lands
has had a significant impact on commerce with foreign
nations, and among the several States, and with the Indian
tribes; and
``(9) the Constitution vests the Congress with the powers
to regulate commerce with foreign nations, and among the
several States, and with the Indian tribes, and this Act is
enacted in the exercise of those powers.
``SEC. 3. PURPOSES.
``The purposes of this Act are--
``(1) to ensure the right of Indian tribes to conduct
gaming activities on Indian lands in a manner consistent
with--
``(A) the inherent sovereign rights of Indian tribes; and
``(B) the decision of the Supreme Court in California et
al. v. Cabazon Band of Mission Indians et al. (480 U.S.C.
202, 107 S. Ct. 1083, 94 L. Ed. 2d 244 (1987)), involving the
Cabazon and Morongo bands of Mission Indians;
``(2) to provide a statutory basis for the conduct of
gaming activities on Indian lands as a means of promoting
tribal economic development, tribal self-sufficiency, and
strong Indian tribal governments;
``(3) to provide a statutory basis for the regulation of
gaming activities on Indian lands by an Indian tribe that is
adequate to shield those activities from organized crime and
other corrupting influences, to ensure that an Indian tribal
government is the primary beneficiary of the operation of
gaming activities, and to ensure that gaming is conducted
fairly and honestly by both the operator and players; and
``(4) to provide States with the opportunity to participate
in the regulation of certain gaming activities conducted on
Indian lands without compelling any action by a State with
respect to the regulation of that gaming.'';
(3) in section 4--
(A) by redesignating paragraphs (7) and (8) as paragraphs
(5) and (6), respectively;
(B) by striking paragraphs (1) through (6) and inserting
the following new paragraphs:
``(1) Applicant.--The term `applicant' means any person who
applies for a license pursuant to this Act, including any
person who applies for a renewal of a license.
``(2) Attorney general.--The term `Attorney General' means
the Attorney General of the United States.
``(3) Chairman.--The term `Chairman' means the Chairman of
the Commission.
``(4) Class i gaming.--The term `class I gaming' means
social games played solely for prizes of minimal value or
traditional forms of Indian gaming engaged in by individuals
as a part of, or in connection with, tribal ceremonies or
celebrations.'';
(C) by striking paragraphs (9) and (10); and
(D) by adding after paragraph (6) (as redesignated by
subparagraph (A) of this paragraph) the following new
paragraphs:
[[Page S2674]]
``(7) Commission.--The term `Commission' means the National
Indian Gaming Regulatory Commission established under section
5.
``(8) Compact.--The term `compact' means an agreement
relating to the operation of class III gaming on Indian lands
that is entered into by an Indian tribe and a State and that
is approved by the Secretary.
``(9) Gaming operation.--The term `gaming operation' means
an entity that conducts class II or class III gaming on
Indian lands.
``(10) Indian lands.--The term `Indian lands' means--
``(A) all lands within the limits of any Indian
reservation; and
``(B) any lands the title to which is held in trust by the
United States for the benefit of any Indian tribe or
individual or held by any Indian tribe or individual subject
to restriction by the United States against alienation and
over which an Indian tribe exercises governmental power.
``(11) Indian tribe.--The term `Indian tribe' means any
Indian tribe, band, nation, or other organized group or
community of Indians that--
``(A) is recognized as eligible by the Secretary for the
special programs and services provided by the United States
to Indians because of their status as Indians; and
``(B) is recognized as possessing powers of self-
government.
``(12) Management contract.--The term `management contract'
means any contract or collateral agreement between an Indian
tribe and a contractor, if that contract or agreement
provides for the management of all or part of a gaming
operation.
``(13) Management contractor.--The term `management
contractor' means any person entering into a management
contract with an Indian tribe or an agent of the Indian tribe
for the management of a gaming operation, including any
person with a financial interest in that contract.
``(14) Net revenues.--With respect to a gaming activity,
net revenues shall constitute--
``(A) the annual amount of money wagered; reduced by
``(B)(i) any amounts paid out during the year involved for
prizes awarded;
``(ii) the total operating expenses for the year involved
(excluding any management fees) associated with the gaming
activity; and
``(iii) an allowance for amortization of capital expenses
for structures.
``(15) Person.--The term `person' means--
``(A) an individual; or
``(B) a firm, corporation, association, organization,
partnership, trust, consortium, joint venture, or other
nongovernmental entity.
``(16) Secretary.--The term `Secretary' means the Secretary
of the Interior.'';
(4) in section 5(b)(3), by striking ``At least two members
of the Commission shall be enrolled members of any Indian
tribe.'' and inserting ``No fewer than 2 members of the
Commission shall be individuals who--
``(A) are each enrolled as a member of an Indian tribe; and
``(B) have extensive experience or expertise in tribal
government.'';
(5) by striking sections 6 & 7 and 9 through 16, and
redesignating section 8 as section 22 and inserting the
following:
``SEC. 6. POWERS AND AUTHORITY OF THE NATIONAL INDIAN GAMING
COMMISSION AND CHAIRMAN.
``(a) General Powers of Commission.--
``(1) In general.--The Commission shall have the power--
``(A) to approve the annual budget of the Commission;
``(B) to promulgate regulations to carry out the duties of
the Commission under this Act in the same manner as an
independent establishment (as that term is used in section
104 of title 5, United States Code);
``(C) to establish a rate of fees and assessments, as
provided in section 14;
``(D) to conduct investigations, including background
investigations;
``(E) to issue a temporary order closing the operation of
gaming activities;
``(F) after a hearing, to make permanent a temporary order
closing the operation of gaming activities, as provided in
section 12;
``(G) to grant, deny, limit, condition, restrict, revoke,
or suspend any license issued under any licensing authority
conferred upon the Commission pursuant to this Act or fine
any person licensed pursuant to this Act for violation of any
of the conditions of licensure under this Act;
``(H) to inspect and examine all premises in which class II
or class III gaming is conducted on Indian lands;
``(I) to demand access to and inspect, examine, photocopy,
and audit all papers, books, and records of class II and
class III gaming activities conducted on Indian lands and any
other matters necessary to carry out the duties of the
Commission under this Act;
``(J) to use the United States mails in the same manner and
under the same conditions as any department or agency of the
United States;
``(K) to procure supplies, services, and property by
contract in accordance with applicable Federal laws;
``(L) to enter into contracts with Federal, State, tribal,
and private entities for activities necessary to the
discharge of the duties of the Commission;
``(M) to serve, or cause to be served, process or notices
of the Commission in a manner provided for by the Commission
or in a manner provided for the service of process and notice
in civil actions in accordance with the applicable rules of a
Federal, State, or tribal court;
``(N) to propound written interrogatories and appoint
hearing examiners, to whom may be delegated the power and
authority to administer oaths, issue subpoenas, propound
written interrogatories, and require testimony under oath;
``(O) to conduct all administrative hearings pertaining to
civil violations of this Act (including any civil violation
of a regulation promulgated under this Act);
``(P) to collect all fees and assessments authorized by
this Act and the regulations promulgated pursuant to this
Act;
``(Q) to assess penalties for violations of the provisions
of this Act and the regulations promulgated pursuant to this
Act;
``(R) to provide training and technical assistance to
Indian tribes with respect to all aspects of the conduct and
regulation of gaming activities;
``(S) to monitor and, as specifically authorized by this
Act, regulate class II and class III gaming;
``(T) to approve all management contracts and gaming-
related contracts; and
``(U) in addition to the authorities otherwise specified in
this Act, to delegate, by published order or rule, any of the
functions of the Commission (including functions with respect
to hearing, determining, ordering, certifying, reporting, or
otherwise acting on the part of the Commission concerning any
work, business, or matter) to a division of the Commission,
an individual member of the Commission, an administrative law
judge, or an employee of the Commission.
``(2) Statutory construction.--Nothing in this section may
be construed to authorize the delegation of the function of
rulemaking, as described in subchapter II of chapter 5 of
title 5, United States Code, with respect to general rules
(as distinguished from rules of particular applicability), or
the promulgation of any other rule.
``(b) Right To Review Delegated Functions.--
``(1) In general.--With respect to the delegation of any of
the functions of the Commission, the Commission shall retain
a discretionary right to review the action of any division of
the Commission, individual member of the Commission,
administrative law judge, or employee of the Commission, upon
the initiative of the Commission.
``(2) Vote needed for review.--The vote of 1 member of the
Commission shall be sufficient to bring an action referred to
in paragraph (1) before the Commission for review, and the
Commission shall ratify, revise, or reject the action under
review not later than the last day of the applicable period
specified in regulations promulgated by the Commission.
``(3) Failure to conduct review.--If the Commission
declines to exercise the right to that review or fails to
exercise that right within the applicable period specified in
regulations promulgated by the Commission, the action of any
such division of the Commission, individual member of the
Commission, administrative law judge, or employee shall, for
all purposes, including any appeal or review of that action,
be deemed an action of the Commission.
``(c) Minimum Requirements.--The Commission shall advise
the Secretary, as provided in section 8(a), with respect to
the establishment of minimum Federal standards--
``(1) for background investigations, licensing of persons,
and licensing of gaming operations associated with the
conduct or regulation of class II and class III gaming on
Indian lands by tribal governments; and
``(2) for the operation of class II and class III gaming
activities on Indian lands, including--
``(A) surveillance and security personnel and systems
capable of monitoring all gaming activities, including the
conduct of games, cashiers' cages, change booths, count
rooms, movements of cash and chips, entrances and exits to
gaming facilities, and other critical areas of any gaming
facility;
``(B) procedures for the protection of the integrity of the
rules for the play of games and controls related to those
rules;
``(C) credit and debit collection controls;
``(D) controls over gambling devices and equipment; and
``(E) accounting and auditing.
``(d) Commission Access to Information.--
``(1) In general.--The Commission may secure from any
department or agency of the United States information
necessary to enable the Commission to carry out this Act.
Unless otherwise prohibited by law, upon request of the
Chairman, the head of that department or agency shall furnish
that information to the Commission.
``(2) Information transfer.--The Commission may secure from
any law enforcement agency or gaming regulatory agency of any
State, Indian tribe, or foreign nation information necessary
to enable the Commission to carry out this Act. Unless
otherwise prohibited by law, upon request of the Chairman,
the head of any State or tribal law enforcement agency shall
furnish that information to the Commission.
``(3) Privileged information.--Notwithstanding sections 552
and 552a of title 5, United States Code, the Commission shall
protect from disclosure information provided by Federal,
State, tribal, or international law enforcement or gaming
regulatory agencies.
[[Page S2675]]
``(4) Law enforcement agency.--For purposes of this
subsection, the Commission shall be considered to be a law
enforcement agency.
``(e) Investigations and Actions.--
``(1) In general.--
``(A) Possible violations.--The Commission may, as
specifically authorized by this Act, conduct such
investigations as the Commission considers necessary to
determine whether any person has violated, is violating, or
is conspiring to violate any provision of this Act (including
any rule or regulation promulgated under this Act). The
Commission may require or permit any person to file with the
Commission a statement in writing, under oath, or otherwise,
as the Commission may determine, concerning all relevant
facts and circumstances regarding the matter under
investigation by the Commission pursuant to this subsection.
``(B) Administrative investigations.--The Commission may,
as specifically authorized by this Act, investigate such
facts, conditions, practices, or matters as the Commission
considers necessary or proper to aid in--
``(i) the enforcement of any provision of this Act;
``(ii) issuing rules and regulations under this Act; or
``(iii) securing information to serve as a basis for
recommending further legislation concerning the matters to
which this Act relates.
``(2) Administrative authorities.--
``(A) In general.--
``(i) Administration of certain duties.--For the purpose of
any investigation or any other proceeding conducted under
this Act, an individual described in clause (ii) is empowered
to administer oaths and affirmations, subpoena witnesses,
compel their attendance, take evidence, and require the
production of any books, papers, correspondence, memoranda,
or other records that the Commission considers relevant or
material to the inquiry. The attendance of those witnesses
and the production of any such records may be required from
any place in the United States at any designated place of
hearing.
``(ii) Individuals described.--An individual described in
this clause is--
``(I) any member of the Commission who is designated by the
Commission to carry out duties specified in clause (i); or
``(II) any other officer of the Commission who is
designated by the Commission to carry out duties specified in
clause (i).
``(B) Requiring appearances or testimony.--In case of
contumacy by, or refusal to obey any subpoena issued to, any
person, the Commission may invoke the jurisdiction of any
court of the United States within the jurisdiction of which
an investigation or proceeding is carried on, or where that
person resides or carries on business, in requiring the
attendance and testimony of witnesses and the production of
books, papers, correspondence, memoranda, and other records.
``(C) Court orders.--Any court described in subparagraph
(B) may issue an order requiring that person to appear before
the Commission, a member of the Commission, or an officer
designated by the Commission, there to produce records, if so
ordered, or to give testimony touching the matter under
investigation or in question, and any failure to obey that
order of the court may be punished by that court as a
contempt of that court.
``(3) Enforcement.--
``(A) In general.--If the Commission determines that any
person is engaged, has engaged, or is conspiring to engage in
any act or practice constituting a violation of any provision
of this Act (including any rule or regulation promulgated
under this Act), the Commission may--
``(i) bring an action in the appropriate district court of
the United States or the United States District Court for the
District of Columbia to enjoin that act or practice, and upon
a proper showing, the court shall grant, without bond, a
permanent or temporary injunction or restraining order; or
``(ii) transmit such evidence as may be available
concerning that act or practice as may constitute a violation
of any Federal criminal law to the Attorney General, who may
institute the necessary criminal or civil proceedings.
``(B) Statutory construction.--
``(i) In general.--The authority of the Commission to
conduct investigations and take actions under subparagraph
(A) may not be construed to affect in any way the authority
of any other agency or department of the United States to
carry out statutory responsibilities of that agency or
department.
``(ii) Effect of transmittal by the commission.--The
transmittal by the Commission pursuant to subparagraph
(A)(ii) may not be construed to constitute a condition
precedent with respect to any action taken by any department
or agency referred to in clause (i).
``(4) Writs, injunctions, and orders.--Upon application of
the Commission, each district court of the United States
shall have jurisdiction to issue writs of mandamus,
injunctions, and orders commanding any person to comply with
the provisions of this Act (including any rule or regulation
promulgated under this Act).
``(f) Powers of the Chairperson.--The Chairman shall have
such powers as may be delegated to the Chairman by the
Commission.
``SEC. 7. REGULATORY FRAMEWORK.
``(a) Class II Gaming.--For class II gaming, Indian tribes
shall retain the right of those tribes, in a manner that
meets or exceeds minimum Federal standards described in
section 6(c) (that are established by the Secretary under
section 8)--
``(1) to monitor and regulate that gaming;
``(2) to conduct background investigations; and
``(3) to establish and regulate internal control systems.
``(b) Class III Gaming Conducted Under a Compact.--For
class III gaming conducted under the authority of a compact
entered into pursuant to section 10, an Indian tribe or a
State, or both, as provided in a compact or by tribal
ordinance or resolution, shall, in a manner that meets or
exceeds minimum Federal standards described in section 6(c)
(that are established by the Secretary under section 8)--
``(1) monitor and regulate gaming;
``(2) conduct background investigations; and
``(3) establish and regulate internal control systems.
``(c) Violations of Minimum Federal Standards.--
``(1) Class ii gaming.--In any case in which an Indian
tribe that regulates or conducts class II gaming on Indian
lands substantially fails to meet minimum Federal standards
for that gaming, after providing the Indian tribe notice and
reasonable opportunity to cure violations and to be heard,
and after the exhaustion of other authorized remedies and
sanctions, the Commission shall have the authority to conduct
background investigations, issue licenses, and establish and
regulate internal control systems relating to class II gaming
conducted by the Indian tribe. That authority of the
Commission may be exclusive until such time as the regulatory
and internal control systems of the Indian tribe meet or
exceed the minimum Federal standards concerning regulatory,
licensing, or internal control requirements established by
the Secretary, in consultation with the Commission, for that
gaming.
``(2) Class iii gaming.--In any case in which an Indian
tribe or a State (or both) that regulates class III gaming on
Indian lands fails to meet or enforce minimum Federal
standards for class III gaming, after providing notice and
reasonable opportunity to cure violations and be heard, and
after the exhaustion of other authorized remedies and
sanctions, the Commission shall have the authority to conduct
background investigations, issue licenses, and establish and
regulate internal control systems relating to class III
gaming conducted by the Indian tribe. That authority of the
Commission may be exclusive until such time as the regulatory
or internal control systems of the Indian tribe or the State
(or both) meet or exceed the minimum Federal regulatory,
licensing, or internal control requirements established by
the Secretary, in consultation with the Commission, for that
gaming.
``SEC. 8. NEGOTIATED RULEMAKING.
``(a) In General.--Subject to subsection (b), not later
than 180 days after the date of enactment of the Indian
Gaming Regulatory Improvement Act of 1998, the Secretary
shall, in cooperation with Indian tribes, and in accordance
with the negotiated rulemaking procedures under subchapter
III of chapter 5 of title 5, United States Code, promulgate
minimum Federal standards relating to background
investigations, internal control systems, and licensing
standards (as described in section 6(c)).
``(b) Negotiated Rulemaking Committee.--The negotiated
rulemaking committee established under subchapter III of
chapter 5 of title 5, United States Code, to carry out
subsection (a) shall be established by the Secretary, in
consultation with the Attorney General and the Commission.
``(c) Factors for Consideration.--While the minimum Federal
standards established pursuant to this section may be
developed with due regard for existing industry standards,
the Secretary and the negotiated rulemaking committee
established under subsection (b), in promulgating standards
pursuant to this section, shall also consider--
``(1) the unique nature of tribal gaming as compared to
commercial gaming, other governmental gaming, and charitable
gaming;
``(2) the broad variations in the scope and size of tribal
gaming activity;
``(3) the inherent sovereign rights of Indian tribes with
respect to regulating their own affairs;
``(4) the findings and purposes set forth in sections 2 and
3;
``(5) the effectiveness and efficiency of a national
licensing program for vendors or management contractors; and
``(6) other matters that are not inconsistent with the
purposes of this Act.
``SEC. 9. REQUIREMENTS FOR THE CONDUCT OF CLASS I AND CLASS
II GAMING ON INDIAN LANDS.
``(a) Class I Gaming.--Class I gaming on Indian lands shall
be within the exclusive jurisdiction of the Indian tribes and
shall not be subject to the provisions of this Act.
``(b) Class II Gaming.--
``(1) In general.--Any class II gaming on Indian lands
shall be within the jurisdiction of the Indian tribes, but
shall be subject to the provisions of this Act.
``(2) Legal activities.--An Indian tribe may engage in, and
license and regulate, class II gaming on Indian lands within
the jurisdiction of that Indian tribe, if--
``(A) such Indian gaming is located within a State that
permits such gaming for any
[[Page S2676]]
purpose by any person, organization, or entity (and such
gaming is not otherwise specifically prohibited on Indian
lands by Federal law); and
``(B) such Indian gaming meets or exceeds the requirements
of this section and the standards described in section 6(c)
(that are established by the Secretary under section 8).
``(3) Requirements for class ii gaming operations.--
``(A) In general.--The Commission shall ensure that, with
regard to any class II gaming operation on Indian lands--
``(i) a separate license is issued by the Indian tribe for
each place, facility, or location on Indian lands at which
that Indian gaming is conducted;
``(ii) the Indian tribe has or will have the sole
proprietary interest and responsibility for the conduct of
any class II gaming, unless the conditions of clause (ix)
apply;
``(iii) the net revenues from any class II gaming activity
are used only--
``(I) to fund tribal government operations or programs;
``(II) to provide for the general welfare of the Indian
tribe and the members of the Indian tribe;
``(III) to promote tribal economic development;
``(IV) to donate to charitable organizations;
``(V) to help fund operations of local government agencies;
``(VI) to comply with the provisions of section 14; or
``(VII) to make per capita payments to members of the
Indian tribe pursuant to clause (viii);
``(iv) the Indian tribe provides to the Commission annual
outside audit reports of the class II gaming operation of the
Indian tribe, which may be encompassed within existing
independent tribal audit systems;
``(v) each contract for supplies, services, or concessions
for a contract amount equal to more than $100,000 per year,
other than a contract for professional legal or accounting
services, relating to that gaming is subject to those
independent audit reports and any audit conducted by the
Commission;
``(vi) the construction and maintenance of a class II
gaming facility and the operation of class II gaming are
conducted in a manner that adequately protects the
environment and public health and safety;
``(vii) there is instituted an adequate system that--
``(I) ensures that--
``(aa) background investigations are conducted on primary
management officials, key employees, and persons having
material control, either directly or indirectly, in a
licensed class II gaming operation, and gaming-related
contractors associated with a licensed class II gaming
operation; and
``(bb) oversight of those officials and the management by
those officials is conducted on an ongoing basis; and
``(II) includes--
``(aa) tribal licenses for persons involved in class II
gaming operations, issued in accordance with the standards
described in section 6(c) (that are established by the
Secretary under section 8);
``(bb) a standard under which any person whose prior
activities, criminal record, if any, or reputation, habits,
and associations pose a threat to the public interest or to
the effective regulation of gaming, or create or enhance the
dangers of unsuitable, unfair, or illegal practices and
methods and activities in the conduct of gaming shall not be
eligible for employment or licensure; and
``(cc) notification by the Indian tribe to the Commission
of the results of that background investigation before the
issuance of any such license;
``(viii) net revenues from any class II gaming activities
conducted or licensed by any Indian tribal government are
used to make per capita payments to members of the Indian
tribe only if--
``(I) the Indian tribe has prepared a plan to allocate
revenues to uses authorized by clause (iii);
``(II) the Secretary determines that the plan is adequate,
particularly with respect to uses described in subclause (I)
or (III) of clause (iii);
``(III) the interests of minors and other legally
incompetent persons who are entitled to receive any of the
per capita payments are protected and preserved;
``(IV) the per capita payments to minors and other legally
incompetent persons are disbursed to the parents or legal
guardians of those minors or legally incompetent persons in
such amounts as may be necessary for the health, education,
or welfare of each such minor or legally incompetent person
under a plan approved by the Secretary and the governing body
of the Indian tribe; and
``(V) the per capita payments are subject to Federal income
taxation for individuals and Indian tribes withhold those
taxes when those payments are made;
``(ix) a separate license is issued by the Indian tribe for
any class II gaming operation owned by any person or entity
other than the Indian tribe and conducted on Indian lands,
that includes--
``(I) requirements set forth in clauses (v) through (vii)
(other than the requirements of clauses (vii)(II)(cc) and
(x)); and
``(II) requirements that are at least as restrictive as
those established by State law governing similar gaming
within the jurisdiction of the State within which those
Indian lands are located; and
``(x) no person or entity, other than the Indian tribe, is
eligible to receive a tribal license for a class II gaming
operation conducted on Indian lands within the jurisdiction
of the Indian tribe if that person or entity would not be
eligible to receive a State license to conduct the same
activity within the jurisdiction of the State.
``(B) Transition.--
``(i) In general.--Clauses (ii), (iii), and (ix) of
subparagraph (A) shall not bar the continued operation of a
class II gaming operation described in clause (ix) of that
subparagraph that was operating on September 1, 1986, if--
``(I) that gaming operation is licensed and regulated by an
Indian tribe;
``(II) income to the Indian tribe from that gaming is used
only for the purposes described in subparagraph (A)(iii);
``(III) not less than 60 percent of the net revenues from
that gaming operation is income to the licensing Indian
tribe; and
``(IV) the owner of that gaming operation pays an
appropriate assessment to the Commission pursuant to section
14 for the regulation of that gaming.
``(ii) Limitations on exemption.--The exemption from
application provided under clause (i) may not be transferred
to any person or entity and shall remain in effect only
during such period as the gaming operation remains within the
same nature and scope as that gaming operation was actually
operated on October 17, 1988.
``(C) List.--The Commission shall--
``(i) maintain a list of each gaming operation that is
subject to subparagraph (B); and
``(ii) publish that list in the Federal Register.
``(c) Petition for Certificate of Self-Regulation.--
``(1) In general.--Any Indian tribe that operates, directly
or with a management contract, a class II gaming activity may
petition the Commission for a certificate of self-regulation
if that Indian tribe--
``(A) has continuously conducted that gaming activity for a
period of not less than 3 years, including a period of not
less than 1 year that begins after the date of enactment of
the Indian Gaming Regulatory Improvement Act of 1998; and
``(B) has otherwise complied with the provisions of this
Act.
``(2) Issuance of certificate of self-regulation.--The
Commission shall issue a certificate of self-regulation under
this subsection if the Commission determines, on the basis of
available information, and after a hearing if requested by
the Indian tribe, that the Indian tribe has--
``(A) conducted its gaming activity in a manner that has--
``(i) resulted in an effective and honest accounting of all
revenues;
``(ii) resulted in a reputation for safe, fair, and honest
operation of the activity; and
``(iii) been generally free of evidence of criminal
activity;
``(B) adopted and implemented adequate systems for--
``(i) accounting for all revenues from the gaming activity;
``(ii) investigation, licensing, and monitoring of all
employees of the gaming activity; and
``(iii) investigation, enforcement, and prosecution of
violations of its gaming ordinance and regulations;
``(C) conducted the operation on a fiscally and
economically sound basis; and
``(D) paid all fees and assessments that the Indian tribe
is required to pay to the Commission under this Act.
``(3) Effect of certificate of self-regulation.--During the
period in which a certificate of self-regulation issued under
this subsection is in effect with respect to a gaming
activity conducted by an Indian tribe--
``(A) the Indian tribe shall--
``(i) submit an annual independent audit report as required
by subsection (b)(3)(A)(iv); and
``(ii) submit to the Commission a complete resume of each
employee hired and licensed by the Indian tribe subsequent to
the issuance of a certificate of self-regulation; and
``(B) the Commission may not assess a fee under section 15
on gaming operated by the Indian tribe pursuant to paragraph
(1) in excess of 0.25 percent of the net revenue from that
class II gaming activity.
``(4) Rescission.--The Commission may, for just cause and
after a reasonable opportunity for a hearing, rescind a
certificate of self-regulation issued under this subsection
by majority vote of the members of the Commission.
``(d) License Revocation.--If, after the issuance of any
license by an Indian tribe under this section, the Indian
tribe receives reliable information from the Commission
indicating that a licensee does not meet any standard
described in section 6(c) (that is established by the
Secretary under section 8), or any other applicable
regulation promulgated under this Act, the Indian tribe--
``(1) shall immediately suspend that license; and
``(2) after providing notice, holding a hearing, and making
findings of fact under procedures established pursuant to
applicable tribal law, may revoke that license.
``SEC. 10. CLASS III GAMING ON INDIAN LANDS.
``(a) Requirements for the Conduct of Class III Gaming on
Indian Lands.--
``(1) In general.--Class III gaming activities shall be
lawful on Indian lands only if those activities are--
[[Page S2677]]
``(A) authorized by a compact that--
``(i) is approved pursuant to tribal law by the governing
body of the Indian tribe having jurisdiction over those
lands;
``(ii) meets the requirements of this section 9(b)(3) for
the conduct of class II gaming activities; and
``(iii) is approved by the Secretary;
``(B) located in a State that permits such gaming for any
purpose by any person, organization or entity; and
``(C) conducted in conformance with a compact that--
``(i) is in effect; and
``(ii) is--
``(I) entered into by an Indian tribe and a State and
approved by the Secretary under paragraph (2); or
``(II) issued by the Secretary under paragraph (2).
``(2) Compact negotiations; approval.--
``(A) In general.--
``(i) Compact negotiations.--Any Indian tribe having
jurisdiction over the lands upon which a class III gaming
activity is to be conducted may request the State in which
those lands are located to enter into negotiations for the
purpose of entering into a compact with that State governing
the conduct of class III gaming activities.
``(ii) Requirements for request for negotiations.--A
request for negotiations under clause (i) shall be in writing
and shall specify each gaming activity that the Indian tribe
proposes for inclusion in the compact. Not later than 30 days
after receipt of that written request, the State shall
respond to the Indian tribe.
``(iii) Commencement of compact negotiations.--Compact
negotiations conducted under this paragraph shall commence
not later than 30 days after the date on which a response by
a State is due to the Indian tribe, and shall be completed
not later than 120 days after the initiation of compact
negotiations, unless the State and the Indian tribe agree to
a different period of time for the completion of compact
negotiations.
``(B) Negotiations.--
``(i) In general.--The Secretary shall, upon the request of
an Indian tribe described in subparagraph (A)(i) that has not
reached an agreement with a State concerning a compact
referred to in that subparagraph (or with respect to an
Indian tribe described in clause (ii)(I)(bb) a compact)
during the applicable period under clause (ii) of this
subparagraph, initiate a mediation process to--
``(I) conclude a compact referred to in subparagraph
(A)(i); or
``(II) if necessary, provide for the issuance of procedures
by the Secretary to govern the conduct of the gaming referred
to in that subparagraph.
``(ii) Applicable period.--
``(I) In general.--Subject to subclause (II), the
applicable period described in this paragraph is--
``(aa) in the case of an Indian tribe that makes a request
for compact negotiations under subparagraph (A), the 180-day
period beginning on the date on which that Indian tribe makes
the request; and
``(bb) in the case of an Indian tribe that makes a request
to renew a compact to govern class III gaming activity on
Indian lands of that Indian tribe within the State that the
Indian tribe entered into prior to the date of enactment of
the Indian Gaming Regulatory Improvement Act of 1998, during
the 60-day period beginning on the date of that request.
``(II) Extension.--An Indian tribe and a State may agree to
extend an applicable period under this paragraph beyond the
applicable termination date specified in item (aa) or (bb) of
subclause (I).
``(iii) Mediation.--
``(I) In general.--The Secretary shall initiate mediation
to conclude a compact governing the conduct of class III
gaming activities on Indian lands upon a showing by an Indian
tribe that, within the applicable period specified in clause
(ii), a State has failed--
``(aa) to respond to a request by an Indian tribe for
negotiations under this subparagraph; or
``(bb) to negotiate in good faith.
``(II) Effect of declining negotiations.--The Secretary
shall initiate mediation immediately after a State declines
to enter into negotiations under this subparagraph, without
regard to whether the otherwise applicable period specified
in clause (ii) has expired.
``(III) Copy of request.--An Indian tribe that requests
mediation under this clause shall provide the State that is
the subject of the mediation request a copy of the mediation
request submitted to the Secretary.
``(IV) Panel.--The Secretary, in consultation with the
Indian tribes and States, shall establish a list of
independent mediators, that the Secretary, in consultation
with the Indian tribes and the States, shall periodically
update.
``(V) Notification by state.--Not later than 10 days after
an Indian tribe makes a request to the Secretary for
mediation under subclause (I), the State that is the subject
of the mediation request shall notify the Secretary whether
the State elects to participate in the mediation process. If
the State elects to participate in the mediation, the
mediation shall be conducted in accordance with subclause
(VI). If the State declines to participate in the mediation
process, the Secretary shall issue procedures under clause
(iv).
``(VI) Mediation process.--
``(aa) In general.--Not later than 20 days after a State
elects under subclause (V) to participate in a mediation, the
Secretary shall submit to the Indian tribe and the State the
names of 3 mediators randomly selected by the Secretary from
the list of mediators established under subclause (IV).
``(bb) Selection of mediator.--Not later than 10 days after
the Secretary submits the mediators referred to in item (aa),
the Indian tribe and the State may elect to have the
Secretary remove a mediator from the mediators submitted. If
the parties referred to in the preceding sentences fail to
remove 2 mediators, the Secretary shall remove such names as
may be necessary to result in the removal of 2 mediators. The
remaining mediator shall conduct the mediation.
``(cc) Initial period of mediation.--The mediator shall,
during the 60-day period beginning on the date on which the
mediator is selected under item (bb) (or a longer period on
the agreement of the parties referred to in that item for an
extension of the period) attempt to achieve a compact.
``(dd) Last-best-offer.--If by the termination of the
period specified in item (cc), no agreement for concluding a
compact is achieved by the parties to the mediation, each
such party may, not later than 10 days after that date,
submit to the mediator an offer that represents the best
offer that the party intends to make for achieving an
agreement for concluding a compact (referred to in this item
as a `last-best-offer'). The mediator shall review a last-
best-offer received under this item not later than 30 days
after the date of submission of the offer.
``(ee) Report by mediator.--Not later than the date
specified for the completion of a review of a last-best-offer
under item (dd), or in any case in which either party in a
mediation fails to make such an offer, the date that is 10
days after the termination of the initial period of mediation
under item (cc), the mediator shall prepare and submit to the
Secretary a report that includes the contentions of the
parties, the conclusions of the mediator concerning the
permissible scope of gaming on the Indian lands involved, and
recommendations for the operation and regulation of gaming on
the Indian lands in accordance with this Act.
``(ff) Final determinations.--Not later than 60 days after
receiving a report from a mediator under item (ee), the
Secretary shall make a final determination concerning the
operation and regulation of the class III gaming that is the
subject of the mediation.
``(iv) Procedures.--Subject to clause (v), the Secretary
shall issue procedures for the operation and regulation of
the class III gaming described in that item by the date that
is 180 days after the date specified in clause (iii)(V) or
upon the determination described in clause (iii)(iv)(ff).
``(v) Prohibition.--No compact negotiated, or procedures
issued, under this subparagraph shall require that a State
undertake any regulation of gaming on Indian lands unless--
``(I) the State affirmatively consents to regulate that
gaming; and
``(II) applicable State laws permit that regulatory
function.
``(C) Mandatory disapproval.--Notwithstanding any other
provision of this Act, the Secretary may not approve a
compact if the compact requires State regulation of Indian
gaming absent the consent of the State or the Indian tribe.
``(D) Effective date of compact of procedures.--Any compact
negotiated, or procedures issued, under this subsection shall
become effective upon the publication of the compact or
procedures in the Federal Register by the Secretary.
``(E) Effect of publication of compact.--Except for an
appeal conducted under subchapter II of chapter 5 of title 5,
United States Code, by an Indian tribe or a State associated
with the compact, the publication of a compact pursuant to
subparagraph (B) shall, for the purposes of this Act, be
conclusive evidence that the class III gaming subject to the
compact is an activity subject to negotiations under the laws
of the State where the gaming is to be conducted, in any
matter under consideration by the Commission or a Federal
court.
``(F) Duties of commission.--Consistent with the
requirements of the standards described in section 6(c) (that
are established by the Secretary under section 8) and the
requirements of section 7, the Commission shall monitor and,
if specifically authorized by those standards and section 7,
regulate and license class III gaming with respect to any
compact that is approved by the Secretary under this
subsection and published in the Federal Register.
``(3) Provisions of compacts.--
``(A) In general.--A compact negotiated under this
subsection may only include provisions relating to--
``(i) the application of the criminal and civil laws
(including regulations) of the Indian tribe or the State that
are directly related to, and necessary for, the licensing and
regulation of that gaming activity in a manner consistent
with the requirements of the standards described in section
6(c) (that are established by the Secretary under section 8)
and section 7;
``(ii) the allocation of criminal and civil jurisdiction
between the State and the Indian tribe necessary for the
enforcement of those laws (including regulations);
``(iii) the assessment by the State of the costs associated
with those activities in such amounts as are necessary to
defray the costs of regulating that activity;
[[Page S2678]]
``(iv) taxation by the Indian tribe of that activity in
amounts comparable to amounts assessed by the State for
comparable activities;
``(v) remedies for breach of compact provisions;
``(vi) standards for the operation of that activity and
maintenance of the gaming facility, including licensing, in a
manner consistent with the requirements of the standards
described in section 6(c) (that are established by the
Secretary under section 8) and section 7; and
``(vii) any other subject that is directly related to the
operation of gaming activities.
``(B) Statutory construction with respect to assessments;
prohibition.--
``(i) Statutory construction.--Except for any assessments
for services agreed to by an Indian tribe in compact
negotiations, nothing in this section may be construed as
conferring upon a State, or any political subdivision
thereof, the authority to impose any tax, fee, charge, or
other assessment upon an Indian tribe, an Indian gaming
operation or the value generated by the gaming operation, or
any person or entity authorized by an Indian tribe to engage
in a class III gaming activity in conformance with this Act.
``(ii) Assessment by states.--A State may assess the
assessments agreed to by an Indian tribe referred to in
clause (i) in a manner consistent with that clause.
``(4) Statutory construction with respect to certain rights
of indian tribes.--Nothing in this subsection impairs the
right of an Indian tribe to regulate class III gaming on the
Indian lands of the Indian tribe concurrently with a State
and the Commission, except to the extent that such regulation
is inconsistent with, or less stringent than, this Act or any
laws (including regulations) made applicable by any compact
entered into by the Indian tribe under this subsection that
is in effect.
``(5) Exemption.--The provisions of section 2 of the Act of
January 2, 1951 (commonly referred to as the `Gambling
Devices Transportation Act') (64 Stat. 1134, chapter 1194; 15
U.S.C. 1175) shall not apply to any class II gaming activity
or any gaming activity conducted pursuant to a compact
entered into after the date of enactment of this Act, but in
no event shall this paragraph be construed as invalidating
any exemption from the provisions of such section 2 for any
compact entered into prior to the date of enactment of this
Act.
``(b) Jurisdiction of United States District Court for the
District of Columbia.--The United States District Court for
the District of Columbia shall have jurisdiction over any
action initiated by the Secretary, the Commission, a State,
or an Indian tribe to enforce any provision of a compact
entered into under subsection (a) or to enjoin a class III
gaming activity located on Indian lands and conducted in
violation of any compact that is in effect and that was
entered into under subsection (a).
``(c) Approval of Compacts.--
``(1) In general.--The Secretary may approve any compact
between an Indian tribe and a State governing the conduct of
class III gaming on Indian lands of that Indian tribe entered
into under subsection (a).
``(2) Reasons for disapproval by secretary.--The Secretary
may disapprove a compact entered into under subsection (a)
only if that compact violates any--
``(A) provision of this Act or any regulation promulgated
by the Commission pursuant to this Act;
``(B) other provision of Federal law; or
``(C) trust obligation of the United States to Indians.
``(3) Effect of failure to act on compact.--If the
Secretary fails to approve or disapprove a compact entered
into under subsection (a) before the date that is 45 days
after the date on which the compact is submitted to the
Secretary for approval, the compact shall be considered to
have been approved by the Secretary, but only to the extent
the compact is consistent with the provisions of this Act and
the regulations promulgated by the Commission pursuant to
this Act.
``(4) Notification.--The Secretary shall publish in the
Federal Register notice of any compact that is approved, or
considered to have been approved, under this subsection.
``(d) Revocation of Ordinance.--
``(1) In general.--The governing body of an Indian tribe,
in its sole discretion, may adopt an ordinance or resolution
revoking any prior ordinance or resolution that authorized
class III gaming on the Indian lands of the Indian tribe.
That revocation shall render class III gaming illegal on the
Indian lands of that Indian tribe.
``(2) Publication of revocation.--An Indian tribe shall
submit any revocation ordinance or resolution described in
paragraph (1) to the Commission. The Commission shall publish
that ordinance or resolution in the Federal Register. The
revocation provided by that ordinance or resolution shall
take effect on the date of that publication.
``(3) Conditional operation.--Notwithstanding any other
provision of this subsection--
``(A) any person or entity operating a class III gaming
activity pursuant to this Act on the date on which an
ordinance or resolution described in paragraph (1) that
revokes authorization for that class III gaming activity is
published in the Federal Register may, during the 1-year
period beginning on the date on which that revocation,
ordinance, or resolution is published under paragraph (2),
continue to operate that activity in conformance with an
applicable compact entered into under subsection (a) that is
in effect; and
``(B) any civil action that arises before, and any crime
that is committed before, the termination of that 1-year
period shall not be affected by that revocation ordinance, or
resolution.
``(e) Certain Class III Gaming Activities.--
``(1) Compacts entered into before the date of enactment of
the indian gaming regulatory improvement act of 1998.--Class
III gaming activities that are authorized under a compact
approved or issued by the Secretary under the authority of
this Act prior to the date of enactment of the Indian Gaming
Regulatory Improvement Act of 1998 shall, during such period
as the compact is in effect, remain lawful for the purposes
of this Act, notwithstanding the Indian Gaming Regulatory
Improvement Act of 1998 and the amendments made by that Act
or any change in State law, other than a change in State law
that constitutes a change in the public policy of the State
with respect to permitting or prohibiting class III gaming in
the State.
``(2) Compact entered into after the date of enactment of
the indian gaming regulatory improvement act of 1998.--Any
compact entered into under subsection (a) after the date
specified in paragraph (1) shall remain lawful for the
purposes of this Act, notwithstanding any change in State
law, other than a change in State law that constitutes a
change in the public policy of the State with respect to with
respect to permitting or prohibiting class III gaming in the
State.
``SEC. 11. REVIEW OF CONTRACTS.
``(a) Contracts Included.--The Commission shall, in
accordance with this section, review and approve or
disapprove any management contract for the operation and
management of any gaming activity that an Indian tribe may
engage in under this Act.
``(b) Management Contract Requirements.--The Commission
shall approve any management contract between an Indian tribe
and a person licensed by an Indian tribe or the Commission
that is entered into pursuant to this Act only if the
Commission determines that the contract provides for--
``(1) adequate accounting procedures that are maintained,
and verifiable financial reports that are prepared, by or for
the governing body of the Indian tribe on a monthly basis;
``(2) access to the daily gaming operations by appropriate
officials of the Indian tribe who shall have the right to
verify the daily gross revenues and income derived from any
gaming activity;
``(3) a minimum guaranteed payment to the Indian tribe that
has preference over the retirement of any development and
construction costs;
``(4) an agreed upon ceiling for the repayment of any
development and construction costs;
``(5) a contract term of not to exceed 5 years, except
that, upon the request of an Indian tribe, the Commission may
authorize a contract term that exceeds 5 years but does not
exceed 7 years if the Commission is satisfied that the
capital investment required, and the income projections for,
the particular gaming activity require the additional time;
and
``(6) grounds and mechanisms for the termination of the
contract, but any such termination shall not require the
approval of the Commission.
``(c) Management Fee Based on Percentage of Net Revenues.--
``(1) Percentage fee.--The Commission may approve a
management contract that provides for a fee that is based on
a percentage of the net revenues of a tribal gaming activity
if the Commission determines that such percentage fee is
reasonable, taking into consideration surrounding
circumstances.
``(2) Fee amount.--Except as provided in paragraph (3), a
fee described in paragraph (1) shall not exceed an amount
equal to 30 percent of the net revenues described in that
paragraph.
``(3) Exception.--Upon the request of an Indian tribe, if
the Commission is satisfied that the capital investment
required, and income projections for, a tribal gaming
activity, necessitate a fee in excess of the amount specified
in paragraph (2), the Commission may approve a management
contract that provides for a fee described in paragraph (1)
in an amount in excess of the amount specified in paragraph
(2), but not to exceed 40 percent of the net revenues
described in paragraph (1).
``(d) Time Period for Review.--
``(1) In general.--Except as provided in paragraph (2), not
later than 90 days after the date on which a management
contract is submitted to the Commission for approval, the
Commission shall approve or disapprove that contract on the
merits of the contract.
``(2) Extension.--The Commission may extend the 90-day
period for an additional period of not more than 45 days if
the Commission notifies the Indian tribe in writing of the
reason for the extension of the period.
``(3) Action.--The Indian tribe may bring an action in the
United States District Court for the District of Columbia to
compel action by the Commission if a contract has not been
approved or disapproved by the termination date of an
applicable period under this subsection.
[[Page S2679]]
``(e) Contract Modifications and Void Contracts.--The
Commission, after providing notice and a hearing on the
record--
``(1) shall have the authority to require appropriate
contract modifications to ensure compliance with the
provisions of this Act; and
``(2) may declare invalid any contract regulated by the
Commission under this Act if the Commission determines that
any provision of this Act has been violated by the terms of
the contract.
``(f) Interests in Real Property.--No contract regulated by
this Act may transfer or, in any other manner, convey any
interest in land or other real property, unless--
``(1) specific statutory authority exists;
``(2) all necessary approvals for the transfer or
conveyance have been obtained; and
``(3) the transfer or conveyance is clearly specified in
the contract.
``(g) Authority of the Secretary.--The authority of the
Secretary under section 2103 of the Revised Statutes (25
U.S.C. 81) shall not extend to any contract or agreement that
is regulated pursuant to this Act.
``(h) Disapproval of Contracts.--The Commission may not
approve a management contract or other gaming-related
contract if the Commission determines that--
``(1) any person having a direct financial interest in, or
management responsibility for, that contract, and, in the
case of a corporation, any individual who serves on the board
of directors of that corporation, and any of the stockholders
who hold (directly or indirectly) 10 percent or more of its
issued and outstanding stock--
``(A) is an elected member of the governing body of the
Indian tribe that is a party to the contract;
``(B) has been convicted of any felony or gaming offense;
``(C) has knowingly and willfully provided materially
important false statements or information to the Commission
or the Indian tribe pursuant to this Act or has refused to
respond to questions propounded by the Commission; or
``(D) has been determined to be a person whose prior
activities, criminal record, if any, or reputation, habits,
and associations pose a threat to the public interest or to
the effective regulation and control of gaming, or create or
enhance the dangers of unsuitable, unfair, or illegal
practices, methods, and activities in the conduct of gaming
or the carrying on of the business and financial arrangements
incidental thereto;
``(2) the contractor--
``(A) has unduly interfered or influenced for its gain or
advantage any decision or process of tribal government
relating to the gaming activity; or
``(B) has attempted to interfere or influence a decision
pursuant to subparagraph (A);
``(3) the contractor has deliberately or substantially
failed to comply with the terms of the contract; or
``(4) a trustee, exercising the skill and diligence that a
trustee is commonly held to, would not approve the contract.
``SEC. 12. CIVIL PENALTIES.
``(a) Amount.--Any person who commits any act or causes to
be done any act that violates any provision of this Act or
any rule or regulation promulgated under this Act, or who
fails to carry out any act or causes the failure to carry out
any act that is required by any such provision of law shall
be subject to a civil penalty in an amount equal to not more
than $25,000 per day for each such violation.
``(b) Assessment and Collection.--
``(1) In general.--Each civil penalty assessed under this
section shall be assessed by the Commission and collected in
a civil action brought by the Attorney General on behalf of
the United States. Before the Commission refers civil penalty
claims to the Attorney General, the Commission may compromise
the civil penalty after affording the person charged with a
violation referred to in subsection (a), an opportunity to
present views and evidence in support of that action by the
Commission to establish that the alleged violation did not
occur.
``(2) Penalty amount.--In determining the amount of a civil
penalty assessed under this section, the Commission shall
take into account--
``(A) the nature, circumstances, extent, and gravity of the
violation committed;
``(B) with respect to the person found to have committed
that violation, the degree of culpability, any history of
prior violations, ability to pay, and the effect on ability
to continue to do business; and
``(C) such other matters as justice may require.
``(c) Temporary Closures.--
``(1) In general.--The Commission may order the temporary
closure of all or part of an Indian gaming operation for a
substantial violation of any provision of law referred to in
subsection (a).
``(2) Hearing on order of temporary closure.--
``(A) In general.--Not later than 10 days after the
issuance of an order of temporary closure, the Indian tribe
or the individual owner of a gaming operation shall have the
right to request a hearing on the record before the
Commission to determine whether that order should be made
permanent or dissolved.
``(B) Deadlines relating to hearing.--Not later than 30
days after a request for a hearing is made under subparagraph
(A), the Commission shall conduct that hearing. Not later
than 30 days after the termination of the hearing, the
Commission shall render a final decision on the closure.
``SEC. 13. JUDICIAL REVIEW.
``A decision made by the Commission pursuant to section 6,
7, 11, or 12 shall constitute a final agency decision for
purposes of appeal to the United States District Court for
the District of Columbia pursuant to chapter 7 of title 5,
United States Code.'';
(6) by redesignating sections 18 and 19 as sections 14 and
15, respectively;
(7) in section 14, as redesignated--
(A) in subsection (a)--
(i) by striking paragraphs (3) through (6);
(ii) by redesignating paragraph (2) as paragraph (3);
(iii) by striking ``(a)(1) The Commission'' and inserting
the following:
``(2) Minimum fees.--The Commission'';
(iv) by inserting before paragraph (2) the following:
``(a) Annual Fees.--
``(1) Minimum regulatory fees.--In addition to assessing
fees pursuant to a schedule established under paragraph (2),
the Commission shall require each gaming operation that
conducts a class II or class III gaming activity that is
regulated by this Act to pay to the Commission, on a
quarterly basis, a minimum fee in an amount equal to $250.'';
and
(v) in paragraph (3), as redesignated, by striking
subparagraphs (B) and (C) and inserting the following:
``(B) Graduated fee limitation.--
``(i) In general.--The aggregate amount of fees collected
under this paragraph shall not exceed--
``(I) $8,000,000 for fiscal year 1999;
``(II) $9,000,000 for fiscal year 2000; and
``(III) $11,000,000 for fiscal year 2001, and for each
fiscal year thereafter.
``(C) Factors for consideration.--
``(i) In general.--The aggregate amount of fees assessed
under this section shall be reasonably related to the costs
of services provided by the Commission to Indian tribes under
this Act (including the cost of issuing regulations necessary
to carry out this Act). In assessing and collecting fees
under this section, the Commission shall take into account
all of the duties of, and services provided by, the
Commission under this Act.
``(ii) Factors for consideration.--In determining the
amount of fees to be assessed against class II or class III
gaming activities regulated by this Act, the Commission shall
consider the extent of regulation of gaming activities by
States and Indian tribes and shall, if appropriate, reduce or
eliminate the fees authorized by this section.
``(iii) Consultation.--In establishing any schedule of fees
under this subsection, the Commission shall consult with
Indian tribes.
``(4) Trust fund.--
``(A) Establishment.--There is established in the Treasury
of the United States a fund to be known as the Indian Gaming
Trust Fund (referred to in this paragraph as the `Trust
Fund'), consisting of--
``(i) such amounts as are--
``(I) transferred to the Trust Fund under subparagraph
(B)(i); or
``(II) appropriated to the Trust Fund; and
``(ii) any interest earned on the investment of amounts in
the Trust Fund under subparagraph (C).
``(B) Transfer of amounts equivalent to fees.--
``(i) In general.--The Secretary of the Treasury shall
transfer to the Trust Fund an amount equal to the aggregate
amount of fees collected under this subsection.
``(ii) Transfers based on estimates.--The amounts required
to be transferred to the Trust Fund under clause (i) shall be
transferred at least quarterly from the general fund of the
Treasury to the Trust Fund on the basis of estimates made by
the Secretary of the Treasury. Proper adjustment shall be
made in amounts subsequently transferred to the extent prior
estimates were in excess of or less than the amounts required
to be transferred.
``(C) Investments.--
``(i) In general.--It shall be the duty of the Secretary of
the Treasury to invest such portion of the Trust Fund as is
not, in the judgment of the Secretary of the Treasury,
required to meet current withdrawals. The Secretary of the
Treasury shall invest the amounts deposited under
subparagraph (A) only in interest-bearing obligations of the
United States or in obligations guaranteed as to both
principal and interest by the United States.
``(ii) Sale of obligations.--Any obligation acquired by the
Trust Fund, except special obligations issued exclusively to
the Trust Fund, may be sold by the Secretary of the Treasury
at the market price, and such special obligations may be
redeemed at par plus accrued interest.
``(iii) Credits to trust fund.--The interest on, and
proceeds from, the sale or redemption of, any obligations
held in the Trust Fund shall be credited to and form a part
of the Trust Fund.
``(D) Expenditures from trust fund.--
``(i) In general.--Amounts in the Trust Fund shall be
available, as provided in appropriations Acts, to the
Commission for carrying out the duties of the Commission
under this Act.
``(ii) Withdrawal and transfer of funds.--Upon request of
the Commission, the Secretary of the Treasury shall withdraw
amounts from the Trust Fund and transfer such amounts to the
Commission for use in accordance with clause (i).
[[Page S2680]]
``(E) Limitation on transfers and withdrawals.--Except as
provided in subparagraph (D)(ii), the Secretary of the
Treasury may not transfer or withdraw any amount deposited
under subparagraph (A).
``(5) Consequences of failure to pay fees.--Failure to pay
the fees imposed under the schedule established under
paragraph (2) shall, subject to regulations promulgated by
the Commission, be grounds for revocation of the approval of
the Commission of any license required under this Act for the
operation of gaming activities.
``(6) Credit.--To the extent that revenue derived from fees
imposed under the schedule established under paragraph (2)
are not expended or committed at the close of any fiscal
year, those surplus funds shall be credited to each gaming
activity on a pro rata basis against the fees imposed under
that schedule for the succeeding fiscal year.
``(7) Gross revenues.--For purposes of this section, gross
revenues shall constitute the annual total amount of money
wagered, reduced by--
``(A) any amounts paid out as prizes or paid for prizes
awarded; and
``(B) allowance for amortization of capital expenditures
for structures.''; and
(B) by striking subsection (b) and inserting the following:
``(b) Reimbursement of Costs.--
``(1) Contents of budget.--For fiscal year 1999, and for
each fiscal year thereafter, the budget of the Commission may
include a request for appropriations, as authorized by
section 15, in an amount equal to the sum of--
``(A)(i) for fiscal year 1999, an estimate (determined by
the Commission) of the amount of funds to be derived from the
fees collected under subsection (a) for that fiscal year; or
``(ii) for each fiscal year thereafter, the amount of funds
derived from the fees collected under subsection (a) for the
fiscal year preceding the fiscal year for which the
appropriation request is made; and
``(B) $1,000,000.
``(2) Budget request of the department of the interior.--
Each request for appropriations made under paragraph (1)
shall--
``(A) be subject to the approval of the Secretary; and
``(B) be part of a request made by the Secretary to the
President for inclusion in the annual budget request
submitted by the President to Congress under section 1105(a)
of title 31, United States Code.'';
(8) in section 15, as redesignated, by striking ``section
18'' each place it appears and inserting ``section 14'';
(9) by striking section 17 and inserting the following:
``SEC. 16. APPLICATION OF INTERNAL REVENUE CODE OF 1986;
ACCESS TO INFORMATION BY STATES AND TRIBAL
GOVERNMENTS.
``(a) Application of the Internal Revenue Code of 1986.--
``(1) In general.--The provisions of the Internal Revenue
Code of 1986 (including sections 1441, 3402(q), and 6041, and
chapter 35 of such Code) concerning the reporting and
withholding of taxes with respect to the winnings from gaming
or wagering operations shall apply to Indian gaming
operations conducted pursuant to this Act, or under a compact
entered into under section 10 that is in effect, in the same
manner as those provisions apply to State gaming and wagering
operations. Any exemptions to States with respect to taxation
of those gaming or wagering operations shall be allowed to
Indian tribes.
``(2) Exemption.--The provisions of section 6050I of the
Internal Revenue Code of 1986 shall apply to an Indian gaming
establishment that is not designated by the Secretary of the
Treasury as a financial institution pursuant to chapter 53 of
title 31, United States Code.
``(3) Statutory construction.--This subsection shall apply
notwithstanding any other provision of law enacted before the
date of enactment of this Act unless that other provision of
law specifically cites this subsection.
``(b) Access to Information by State and Tribal
Governments.--Subject to section 6(d), upon the request of a
State or the governing body of an Indian tribe, the
Commission shall make available any law enforcement
information that it has obtained pursuant to such section,
unless otherwise prohibited by law, in order to enable the
State or the Indian tribe to carry out its responsibilities
under this Act or any compact approved by the Secretary.
``SEC. 17. GAMING PROSCRIBED ON LANDS ACQUIRED IN TRUST AFTER
THE DATE OF ENACTMENT OF THIS ACT.
``(a) In General.--Except as provided in subsection (b),
gaming regulated by this Act shall not be conducted on lands
acquired by the Secretary in trust for the benefit of an
Indian tribe after the date of enactment of this Act,
unless--
``(1) those lands are located within or contiguous to the
boundaries of the reservation of the Indian tribe on the date
of enactment of this Act; or
``(2) the Indian tribe has no reservation on the date of
enactment of this Act and those lands are located in the
State of Oklahoma and--
``(A) are within the boundaries of the former reservation
of the Indian tribe, as defined by the Secretary; or
``(B) are contiguous to other land held in trust or
restricted status by the United States for the Indian tribe
in the State of Oklahoma.
``(b) Exemption.--Subsection (a) shall not apply to--
``(1) any lands involved in the trust petition of the St.
Croix Chippewa Indians of Wisconsin that is the subject of
the action filed in the United States District Court for the
District of Columbia entitled St. Croix Chippewa Indians of
Wisconsin v. United States, Civ. No. 86-2278; or
``(2) the interests of the Miccosukee Tribe of Indians of
Florida in approximately 25 contiguous acres of land, more or
less, in Dade County, Florida, located within 1 mile of the
intersection of State road numbered 27 (also known as Krome
Avenue) and the Tamiami Trail.'';
``or:
(3) where the use of such lands for gaming purposes is
provided for in a tribal-state compact described in section
10(a)(1)(C)(ii)(I) or a tribal-state agreement specifically
providing for the use of such lands for gaming purposes.''
(10) by striking section 20;
(11) by redesignating sections 21 through 23 as sections 18
through 20, respectively; and
(12) by redesignating section 24 as section 21.
SEC. 3. LIMITATION ON LOBBYING.
Section 104 of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450i) is amended by inserting after
subsection (j) the following:
``(k) Lobbying Limitation.--Notwithstanding subsection (j),
except as otherwise provided in sections 205 and 207 of title
18, United States Code, a former Federal officer or employee
of the United States shall not act as an agent or attorney
for, or appear on behalf of, a client in connection with any
specific matter or decision involving the Indian Gaming
Regulatory Act (25 U.S.C. 2701 et seq.) in any matter in
which the officer or employee of the United States had
personal and substantial involvement while an officer of the
United States.''.
SEC. 4. DEFINITION OF FINANCIAL INSTITUTIONS.
Section 5312(a)(2) of title 31, United States Code, is
amended--
(1) by redesignating subparagraphs (Y) and (Z) as
subparagraphs (Z) and (AA), respectively; and
(2) by inserting after subparagraph (X) the following new
subparagraph:
``(Y) an Indian gaming establishment;''.
SEC. 5. CONFORMING AMENDMENTS.
(a) Title 10.--Section 2323a(e)(1) of title 10, United
States Code, is amended by striking ``section 4(4) of the
Indian Gaming Regulatory Act (102 Stat. 2468; 25 U.S.C.
2703(4))'' and inserting ``section 4(12) of the Indian Gaming
Regulatory Act''.
(b) Title 18.--Title 18, United States Code, is amended--
(1) in section 1166--
(A) in subsection (c)(2), by striking ``a Tribal-State
compact approved by the Secretary of the Interior under
section 11(d)(8) of the Indian Gaming Regulatory Act that is
in effect'' and inserting ``a compact approved by the
Secretary of the Interior under section 10(c) of the Indian
Gaming Regulatory Act that is in effect or pursuant to
procedures issued by the Secretary of the Interior under
section 10(a)(2)(B)(iv) of such Act''; and
(B) in subsection (d), by striking ``a Tribal-State compact
approved by the Secretary of the Interior under section
11(d)(8) of the Indian Gaming Regulatory Act'' and inserting
``a compact approved by the Secretary of the Interior under
section 10(c) of the Indian Gaming Regulatory Act or pursuant
to procedures issued by the Secretary of the Interior under
section 10(a)(2)(B)(iv) of such Act,'';
(2) in section 1167, by striking ``pursuant to an ordinance
or resolution approved by the National Indian Gaming
Commission'' and inserting ``pursuant to an ordinance or
resolution that meets the applicable requirements under the
Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.)''; and
(3) in section 1168, by striking ``pursuant to an ordinance
or resolution approved by the National Indian Gaming
Commission'' and inserting ``pursuant to an ordinance or
resolution that meets the applicable requirements under the
Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.)''.
(c) Internal Revenue Code of 1986.--Section
168(j)(4)(A)(iv) of the Internal Revenue Code of 1986 is
amended by striking ``Indian Regulatory Act'' and inserting
``Indian Gaming Regulatory Act''.
(d) Title 28.--Title 28, United States Code, is amended--
(1) in section 3701(2)--
(A) by striking ``section 4(5) of the Indian Gaming
Regulatory Act (25 U.S.C. 2703(5))'' and inserting ``section
4(11) of the Indian Gaming Regulatory Act''; and
(B) by striking ``section 4(4) of such Act (25 U.S.C.
2703(4))'' and inserting ``section 4(10) of such Act''; and
(2) in section 3704(b), by striking ``section 4(4) of the
Indian Gaming Regulatory Act'' and inserting ``section 4(10)
of the Indian Gaming Regulatory Act''.
______
By Mr. ROTH (for himself and Mr. Moynihan):
S. 1871. A bill to provide that the exception for certain real estate
investment trusts from the treatment of stapled entities shall apply
only to existing property, and for other purposes; to the Committee on
Finance.
[[Page S2681]]
real estate investment trusts legislation
Mr. ROTH. Mr. President, Senator Moynihan and I introduce a bill to
limit the tax benefits of so-called ``stapled'' or ``paired-share''
Real Estate Investment Trusts (``stapled REITs''). Identical
legislation is being introduced in the House of Representatives by
Congressman Archer.
In the Deficit Reduction Act of 1984 (``1984 Act''), Congress
eliminated the tax benefits of the stapled REIT structure out of
concern that it could effectively result in one level of tax on active
corporate business income that would otherwise be subject to two levels
of tax. Congress also believed that allowing a corporate business to be
stapled to a REIT was inconsistent with the policy that led Congress to
create REITs.
As part of the 1984 Act provision, Congress provided grandfather
relief to the small number of stapled REITs that were already in
existence. Since 1984, however, almost all the grandfathered stapled
REITs have been acquired by new owners. Some have entered into new
lines of businesses, and most of the grandfathered REITs have used the
stapled structure to engage in large-scale acquisitions of assets. Such
unlimited relief from a general tax provision by a handful of taxpayers
raises new questions not only of fairness, but of unfair competition,
because the stapled REITs are in direct competition with other
companies that cannot use the benefits of the stapled structure.
This legislation, which is a refinement of the proposal contained in
the Clinton Administration's Revenue Proposals for fiscal year 1999,
takes a moderate and fair approach. The legislation essentially
subjects to the grandfathered stapled REITs to rules similar to the
1984 Act, but only to acquisitions of assets (or substantial
improvements of existing assets) occurring after today. The legislation
also provides transition relief for future acquisitions that are
pursuant to a binding written contract, as well as acquisitions that
already have been announced (or described in a filing with the SEC).
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1871
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. TERMINATION OF EXCEPTION FOR CERTAIN REAL ESTATE
INVESTMENT TRUSTS FROM THE TREATMENT OF STAPLED
ENTITIES.
(a) In General.--Notwithstanding paragraph (3) of section
136(c) of the Tax Reform Act of 1984 (relating to stapled
stock; stapled entities), the REIT gross income provisions
shall be applied by treating the activities and gross income
of members of the stapled REIT group properly allocable to
any nonqualified real property interest held by the exempt
REIT or any stapled entity which is a member of such group
(or treated under subsection (c) as held by such REIT or
stapled entity) as the activities and gross income of the
exempt REIT in the same manner as if the exempt REIT and such
group were 1 entity.
(b) Nonqualified Real Property Interest.--For purposes of
this section--
(1) In general.--The term ``nonqualified real property
interest'' means, with respect to any exempt REIT, any
interest in real property acquired after March 26, 1998, by
the exempt REIT or any stapled entity.
(2) Exception for binding contracts, etc.--Such term shall
not include any interest in real property acquired after
March 26, 1998, by the exempt REIT or any stapled entity if--
(A) the acquisition is pursuant to a written agreement
which was binding on such date and at all times thereafter on
such REIT or stapled entity, or
(B) the acquisition is described on or before such date in
a public announcement or in a filing with the Securities and
Exchange Commission.
(3) Improvements and leases.--
(A) In general.--Except as otherwise provided in this
paragraph, the term ``nonqualified real property interest''
shall not include--
(i) any improvement to land owned or leased by the exempt
REIT or any member of the stapled REIT group, and
(ii) any repair to, or improvement of, any improvement
owned or leased by the exempt REIT or any member of the
stapled REIT group,
if such ownership or leasehold interest is a qualified real
property interest.
(B) Leases.--Such term shall not include any lease of a
qualified real property interest.
(C) Termination where change in use.--
(i) In general.--Subparagraph (A) shall not apply to any
improvement placed in service after December 31, 1999, which
is part of a change in the use of the property to which such
improvement relates unless the cost of such improvement does
not exceed 200 percent of--
(I) the cost of such property, or
(II) if such property is substituted basis property (as
defined in section 7701(a)(42) of the Internal Revenue Code
of 1986), the fair market value of the property at the time
of acquisition.
(ii) Binding contracts.--For purposes of clause (i), an
improvement shall be treated as placed in service before
January 1, 2000, if such improvement is placed in service
before January 1, 2004, pursuant to a binding contract in
effect on December 31, 1999, and at all times thereafter.
(4) Treatment of entities which are not stapled, etc. on
march 26, 1998.--Notwithstanding any other provision of this
section, all interests in real property held by an exempt
REIT or any stapled entity with respect to such REIT (or
treated under subsection (c) as held by such REIT or stapled
entity) shall be treated as nonqualified real property
interests unless--
(A) such stapled entity was a stapled entity with respect
to such REIT as of March 26, 1998, and at all times
thereafter, and
(B) as of March 26, 1998, and at all times thereafter, such
REIT was a real estate investment trust.
(5) Qualified real property interest.--The term ``qualified
real property interest'' means any interest in real property
other than a nonqualified real property interest.
(c) Treatment of Property Held by 10-Percent
Subsidiaries.--For purposes of this section--
(1) In general.--Any exempt REIT and any stapled entity
shall be treated as holding their proportionate shares of
each interest in real property held by any 10-percent
subsidiary entity of the exempt REIT or stapled entity, as
the case may be.
(2) Property held by 10-percent subsidiaries treated as
nonqualified.--
(A) In general.--Except as provided in subparagraph (B),
any interest in real property held by a 10-percent subsidiary
entity of an exempt REIT or stapled entity shall be treated
as a nonqualified real property interest.
(B) Exception for interests in real property held on march
26, 1998, etc.--In the case of an entity which was a 10-
percent subsidiary entity of an exempt REIT or stapled entity
on March 26, 1998, and at all times thereafter, an interest
in real property held by such subsidiary entity shall be
treated as a qualified real property interest if such
interest would be so treated if held directly by the exempt
REIT or the stapled entity.
(3) Reduction in qualified real property interests if
increase in ownership of subsidiary.--If, after March 26,
1998, an exempt REIT or stapled entity increases its
ownership interest in a subsidiary entity to which paragraph
(2)(B) applies above its ownership interest in such
subsidiary entity as of such date, the additional portion of
each interest in real property which is treated as held by
the exempt REIT or stapled entity by reason of such increased
ownership shall be treated as a nonqualified real property
interest.
(4) Special rules for determining ownership.--For purposes
of this subsection--
(A) percentage ownership of an entity shall be determined
in accordance with subsection (e)(4),
(B) interests in the entity which are acquired by the
exempt REIT or stapled entity in any acquisition described in
an agreement, announcement, or filing described in subsection
(b)(2) shall be treated as acquired on March 26, 1998, and
(C) except as provided in guidance prescribed by the
Secretary, any change in proportionate ownership which is
attributable solely to fluctuations in the relative fair
market values of different classes of stock shall not be
taken into account.
(d) Treatment of Property Secured by Mortgage Held by
Exempt REIT or Member of Stapled REIT Group.--
(1) In general.--In the case of any nonqualified obligation
held by an exempt REIT or any member of the stapled REIT
group, the REIT gross income provisions shall be applied by
treating the exempt REIT as having impermissible tenant
service income equal to--
(A) the interest income from such obligation which is
properly allocable to the property described in paragraph
(2), and
(B) the income of any member of the stapled REIT group from
services described in paragraph (2) with respect to such
property.
If the income referred to in subparagraph (A) or (B) is of a
10-percent subsidiary entity, only the portion of such income
which is properly allocable to the exempt REIT's or the
stapled entity's interest in the subsidiary entity shall be
taken into account.
(2) Nonqualified obligation.--Except as otherwise provided
in this subsection, the term ``nonqualified obligation''
means any obligation secured by a mortgage on an interest in
real property if the income of any member of the stapled REIT
group for services furnished with respect to such property
would be impermissible tenant service income were such
property held by the exempt REIT and such services furnished
by the exempt REIT.
(3) Exception for certain market rate obligations.--Such
term shall not include any obligation--
[[Page S2682]]
(A) payments under which would be treated as interest if
received by a REIT, and
(B) the rate of interest on which does not exceed an arm's
length rate.
(4) Exception for existing obligations.--Such term shall
not include any obligation--
(A) which is secured on March 26, 1998, by an interest in
real property, and
(B) which is held on such date by the exempt REIT or any
entity which is a member of the stapled REIT group on such
date and at all times thereafter,
but only so long as such obligation is secured by such
interest. The preceding sentence shall not cease to apply by
reason of the refinancing of the obligation if (immediately
after the refinancing) the principal amount of the obligation
resulting from the refinancing does not exceed the principal
amount of the refinanced obligation (immediately before the
refinancing).
(5) Treatment of entities which are not stapled, etc. on
march 26, 1998.--A rule similar to the rule of subsection
(b)(4) shall apply for purposes of this subsection.
(6) Increase in amount of nonqualified obligations if
increase in ownership of subsidiary.--A rule similar to the
rule of subsection (c)(3) shall apply for purposes of this
subsection.
(7) Coordination with subsection (a).--This subsection
shall not apply to the portion of any interest in real
property that the exempt REIT or stapled entity holds or is
treated as holding under this section without regard to this
subsection.
(e) Definitions.--For purposes of this section--
(1) REIT gross income provisions.--The term ``REIT gross
income provisions'' means--
(A) paragraphs (2), (3), and (6) of section 856(c) of the
Internal Revenue Code of 1986, and
(B) section 857(b)(5) of such Code.
(2) Exempt reit.--The term ``exempt REIT'' means a real
estate investment trust to which section 269B of the Internal
Revenue Code of 1986 does not apply by reason of paragraph
(3) of section 136(c) of the Tax Reform Act of 1984.
(3) Stapled reit group.--The term ``stapled REIT group''
means, with respect to an exempt REIT, the group consisting
of--
(A) all entities which are stapled entities with respect to
the exempt REIT, and
(B) all entities which are 10-percent subsidiary entities
of the exempt REIT or any such stapled entity.
(4) 10-percent subsidiary entity.--
(A) In general.--The term ``10-percent subsidiary entity''
means, with respect to any exempt REIT or stapled entity, any
entity in which the exempt REIT or stapled entity (as the
case may be) directly or indirectly holds at least a 10-
percent interest.
(B) Exception for certain c corporation subsidiaries of
reits.--A corporation which would, but for this subparagraph,
be treated as a 10-percent subsidiary of an exempt REIT shall
not be so treated if such corporation is taxable under
section 11 of the Internal Revenue Code of 1986.
(C) 10-percent interest.--The term ``10-percent interest''
means--
(i) in the case of an interest in a corporation, ownership
of 10 percent (by vote or value) of the stock in such
corporation,
(ii) in the case of an interest in a partnership, ownership
of 10 percent of the assets or net profits interest in the
partnership, and
(iii) in any other case, ownership of 10 percent of the
beneficial interests in the entity.
(5) Other definitions.--Terms used in this section which
are used in section 269B or section 856 of such Code shall
have the respective meanings given such terms by such
section.
(f) Guidance.--The Secretary may prescribe such guidance as
may be necessary or appropriate to carry out the purposes of
this section, including guidance to prevent the avoidance of
such purposes and to prevent the double counting of income.
(g) Effective Date.--This section shall apply to taxable
years ending after March 26, 1998.
Technical Explanation
The tax benefits of the stapled real estate investment
trust (``REIT'') structure were curtailed for almost all
taxpayers by section 269B, which was enacted by the Deficit
Reduction Act of 1984 (``1984 Act''). The bill limits the tax
benefits of a few stapled REITs that continue to qualify
under the 1984 Act's grandfather rule.
A REIT is an entity that receives most of its income from
passive real-estate related investments and that essentially
receives pass-through treatment for income that is
distributed to shareholders. In general, a REIT must derive
its income from passive sources and not engage in any active
trade or business. In a stapled REIT structure, both the
shares of a REIT and a C corporation may be traded, and in
most cases publicly traded, but are subject to a provision
that they may not be sold separately. Thus, the REIT and the
C corporation have identical ownership at all times.
overview
Under the bill, rules similar to the rules of present law
treating a REIT and all stapled entities as a single entity
for purposes of determining REIT status (sec. 269B) would
apply to real property interests acquired after March 26,
1998, by the existing stapled REIT, or by a stapled entity,
or a subsidiary or partnership in which a 10-percent or
greater interest is owned by the existing stapled REIT or
stapled entity (together referred to as the ``REIT group''),
unless the real property is grandfathered under the rules
discussed below. Different rules would be applied to certain
mortgage interests acquired by the REIT group after March 26,
1998, where a member of the REIT group performs services with
respect to the property secured by the mortgage.
general rules
The bill treats certain activities and gross income of a
REIT group with respect to real property interests held by
any member of the REIT group (and not grandfathered under the
rules described below) as activities and income of the REIT
for certain purposes. This treatment would apply for purposes
of certain provisions of the REIT rules that depend on the
REIT's gross income, including the requirement that 95
percent of a REIT's gross income be from passive sources (the
``95-percent test'') and the requirement that 75 percent of a
REIT's gross income be from real estate sources (the ``75-
percent test''). Thus, for example, where a stapled entity
earns gross income from operating a non-grandfathered real
property held by a member of the REIT group, such gross
income would be treated as income of the REIT, with the
result that either the 75-percent or 95-percent test might
not be met and REIT status might be lost.
If a REIT or stapled entity owns, directly or indirectly, a
10-percent-or-greater interest in a subsidiary or partnership
that holds a real property interest, the above rules would
apply with respect to a proportionate part of the
subsidiary's or partnership's property, activities and gross
income. Thus, any real property acquired by such a subsidiary
or partnership that is not grandfathered under the rules
described below would be treated as held by the REIT in the
same proportion as the ownership interest in the entity. The
same proportion of the subsidiary's or partnership's gross
income from any real property interest (other than a
grandfathered property) held by it or another member of the
REIT group would be treated as income of the REIT. Similar
rules attributing the proportionate part of the
subsidiary's or partnership's real estate interests and
gross income would apply when a REIT or stapled entity
acquires a 10-percent-or-greater interest (or in the case
of a previously-owned entity, acquires an additional
interest) after March 26, 1998, with exceptions for
interests acquired pursuant to agreements or announcements
described below.
grandfathered properties
Under the bill, there is an exception to the treatment of
activities and gross income of a stapled entity as activities
and gross income of the REIT for certain grandfathered
properties. Grandfathered properties generally are those
properties that had been acquired by a member of the REIT
group on or before March 26, 1998. In addition, grandfathered
properties include properties acquired by a member of the
REIT group after March 26, 1998, pursuant to a written
agreement which was binding on March 26, 1998, and all times
thereafter. Grandfathered properties also include certain
properties, the acquisition of which were described in a
public announcement or in a filing with the Securities and
Exchange Commission on or before March 26, 1998.
In general, a property does not lose its status as a
grandfathered property by reason of a repair to, an
improvement of, or a lease of, a grandfathered property. On
the other hand, a property loses its status as a
grandfathered property under the bill to the extent that a
non-qualified expansion is made to an otherwise grandfathered
property. A non-qualified expansion is either (1) an
expansion beyond the boundaries of the land of the otherwise
grandfathered property or (2) an improvement of an otherwise
grandfathered property placed in service after December 31,
1999, which changes the use of the property and whose cost is
greater than 200 percent of (a) the undepreciated cost of the
property (prior to the improvement) or (b) in the case of
property acquired where there is a substituted basis, the
fair market value of the property on the date that the
property was acquired by the stapled entity or the REIT. A
non-qualified expansion could occur, for example, if a member
of the REIT group were to construct a building after December
31, 1999, on previously undeveloped raw land that had been
acquired on or before March 26, 1998. There is an exception
for improvements placed in service before January 1, 2004,
pursuant to a binding contract in effect on December 31,
1999, and at all times thereafter.
If a stapled REIT is not stapled as of March 26, 1998, or
if it fails to qualify as a REIT as of such date or any time
thereafter, no properties of any member of the REIT group
would be treated as grandfathered properties, and thus the
general provisions of the bill described above would apply to
all properties held by the group.
mortgage rules
Special rules would apply where a member of the REIT group
holds a mortgage (that is not an existing obligation under
the rules described below) that is secured by an interest in
real property, where a member of the REIT group engages in
certain activities with respect to that property. The
activities that would have this effect under the bill are
activities that would result in a type of income that is not
treated as counting toward the 75-percent and 95-percent
tests if they are performed by the REIT. In such cases, all
interest on the mortgage and all gross income received by a
member of the REIT
[[Page S2683]]
group from the activity would be treated as income of the
REIT that does not count toward the 75-percent or 95-percent
tests, with the result that REIT status might be lost. In the
case of a 10-percent partnership or subsidiary, a
proportionate part of the entity's mortgages, interest and
gross income from activities would be subject to the above
rules.
An exception to the above rules would be provided for
mortgages the interest on which does not exceed an arm's-
length rate and which would be treated as interest for
purposes of the REIT rules (e.g., the 75-percent and 95-
percent tests, above). An exception also would be available
for certain mortgages that are held on March 26, 1998, by an
entity that is a member of the REIT group. The exception for
existing mortgages would cease to apply if the mortgage is
refinanced and the principal amount is increased in such
refinancing.
other rules
For a corporate subsidiary owned by a stapled entity, the
10-percent ownership test would be met if a stapled entity
owns, directly or indirectly, 10 percent or more of the
corporation's stock, by either vote or value. (The bill would
not apply to stapled REIT's ownership of a corporate
subsidiary, although a stapled REIT would be subject to the
normal restrictions on a REIT's ownership of stock in a
corporation.) For interests in partnerships and other pass-
through entities, the ownership test would be met if either
the REIT or a stapled entity owns, directly or indirectly, a
10-percent or greater interest.
The Secretary of the Treasury would be given authority to
prescribe such guidance as may be necessary or appropriate to
carry out the purposes of the provision, including guidance
to prevent the double counting of income and to prevent
transactions that would avoid the purposes of the provision.
______
By Mr. NICKLES:
S. 1872. A bill to prohibit new welfare for politicians; to the
Committee on Commerce, Science, and Transportation.
the new welfare for politicians prohibition act
Mr. NICKLES. Mr. President, I rise today to introduce legislation
that would prohibit the Federal Communications Commission (FCC) from
establishing regulations that would compel broadcasters to offer free
or reduced cost air time to political candidates.
It is clear that this type of regulation would result in drastic
change to current communications and campaign finance law and thus,
exceed the regulatory authority of this agency. Absent a legislative
directive from Congress, the FCC lacks the authority to require
broadcasters to offer free or reduced-cost air time for political
candidates.
While in many areas of broadcast regulation, the FCC does possess
broad authority to change its regulation to reflect what is within the
public interest, that authority has always been specifically granted by
an act of Congress. This broad authority does NOT extend to the
regulation of political broadcasting.
The Communications Act clearly mandates, with respect to candidate
appearances on broadcasting stations, certain specific requirements for
FCC to enforce on broadcasters for political candidates. The law
requires broadcasters to provide candidates with equal opportunities,
ensure that there is no censorship of political messages, and provide
``reasonable access'' to federal candidates. As for media rates, the
Act specifically states that when candidates buy air time, they will be
accorded a stations' ``lowest unit charge'' for the same class and
amount of time.
It seems quite clear that Congress' inclusion of these specific
provisions indicates that in the area of political
broadcasting, especially for rates charged for advertising, the FCC
does not have the authority to rewrite the Communications Act and
impose a free political time requirement which is inconsistent with
Congress' specific statement on this issue.
Any attempt to affect campaign finance reform through overreaching
FCC regulations rather than through the legislative process, regardless
of good intentions, is wrong. Any changes or revisions to the campaign
finance or communication laws should be made by the people through
their elected representatives and not by non elected federal
bureaucrats. New regulations from the FCC would further involve the
government in protected political speech areas and create a patchwork
of agency regulations without any consistent overall reform.
Mr. President, during the 105th Congress this body has thoroughly
debated campaign reform and free air time for political candidates.
Clearly there is not enough support in this body to pass legislation
that includes the free air time provisions. This legislative defeat
does not give the FCC Chairman the authority, even with direction from
the President, to issue regulations giving candidates free time and
mandate or bribe the nation's broadcasters to abide by these
regulations. Again, if this type of reform is to be implemented, it
requires legislative action by Congress. It is not appropriate for a
federal agency to mandate this comprehensive reform by regulatory
action.
The Constitution is very clear. Article I, Section 1 of the
Constitution vests in Congress all power to ``make laws which shall be
used necessary and proper for carrying into Execution the foregoing
Powers * * *''. Nowhere in the Constitution is the Executive Branch
vested with the power to make the law. The framers of the Constitution
understood the threat to our freedom which could be posed by an all-
powerfull executive branch. This principle is as valid today as it was
when they drafted the Constitution. Any proposed regulations by the FCC
which would require broadcasters to give free or reduced-cost air time
to federal political candidates raises serious constitutional concerns.
This is not the first time that the Clinton administration has tried
to bypass Congress and legislate by Executive order. They have
attempted to do this on several occasions. And I think they have done
so knowing full well they could not get their desired objective through
Congress.
Let me remind the FCC, that if this type of regulatory action is
taken by this agency, I will lead the effort in the Senate to defeat
the regulation. The Congressional Review Act, gives Congress the
ability to disapprove regulations, when a simple majority believes that
the regulation is inappropriate.
Every member of this body, Democrats and Republicans, should reject
this approach. We should uphold and protect this institution, the
legislative branch, and the constitution.
And so, Mr. President, I have warned the White House that I am
willing to use any appropriate tools at our disposal to stop this
egregious abuse of power. I will do what I can to stop the proposed FCC
regulations on air time for political candidates. And I will do what I
can to block any other attempts by this administration to legislate by
executive action. It is my intention to use everything in my power to
protect this institution. I am hopeful that my colleagues will join me
in this effort.
____________________