[Congressional Record Volume 144, Number 41 (Thursday, April 2, 1998)]
[Senate]
[Pages S3120-S3155]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. DASCHLE:
S. 1905. A bill to provide for equitable compensation for the
Cheyenne River Sioux Tribe, and for other purposes; to the Committee on
Indian Affairs.
the cheyenne river sioux tribe equitable compensation act
Mr. DASCHLE. Mr. President, today I am introducing legislation to
compensate the Cheyenne River Sioux Tribe for losses the tribe suffered
when the Oahe dam was constructed in central South Dakota and over
100,000 acres of tribal land was flooded. Its passage will help the
tribe rebuild their infrastructure and their economy, which was
seriously crippled by the Oahe project during the 1950s. It is
extraordinary that it has taken four decades to reach this point. The
importance of passing this long-overdue legislation as soon as possible
cannot be stated too strongly.
This legislation was developed with the assistance of Chairman Gregg
Bourland and Council Member Louis Dubray of the Cheyenne River Sioux
Tribe. Both men have worked tirelessly to bring us to this point and I
am grateful for their assistance. This legislation represents one
element of their progressive vision for providing the members of the
Cheyenne River Sioux Tribe with greater opportunities for economic
development and to fulfill the debts owed to the tribe by the federal
government.
The Cheyenne River Sioux Infrastructure Development Trust Fund Act is
the companion bill to the Lower Brule Sioux Tribe Infrastructure
Development Trust Fund Act, which passed by unanimous consent in
November of 1997, and the Crow Creek Sioux Tribe Infrastructure
Development Trust Fund Act of 1996, which passed the Congress
unanimously in 1996.
The bill is based on an extensive analysis of the impact of the Pick-
Sloan Dam Projects on the Cheyenne River Sioux Tribe, which was
performed by the Robert McLaughlin Company. The McLaughlin report was
reviewed by the General Accounting Office, which found that the losses
suffered by the tribe justify the establishment of a $290 million trust
fund,
[[Page S3121]]
which is the amount called for in this legislation.
It represents an important step in our continuing effort to fairly
compensate the tribes of South Dakota for the sacrifices they made
decades ago for the construction of the dams along the Missouri River
and will further the goal of improving the lives of Native Americans
living on those reservations.
To fully appreciate the need for this legislation, it is important
for the committee to understand the historic events that are prologue
to its development. The Oahe dam was constructed in South Dakota
pursuant to the Flood Control Act (58 Stat. 887) of 1944. That
legislation authorized implementation of the Missouri River Basin Pick-
Sloan Plan for water development and flood control for downstream
states.
The Oahe dam flooded 104,000 acres of tribal land, forcing the
relocation of roughly 30 percent of the tribe's population, including
four entire communities. Equally as important, the tribe lost 80
percent of its fertile river bottom lands--lands that represented the
basis for the tribal economy. Prior to the flooding, the tribe relied
on these lands for firewood and building material, game, wild fruits
and berries, as well as cover from the severe storms that characterize
winters in South Dakota and shelter from the heat of the prairie
summer. Indian ranchers no longer had places to shelter their cattle in
the wintertime, causing a significant loss in the value of their
operations.
The loss of these important river bottom lands can be felt today.
Last year, during the extreme winter of 1996-1997, the tribe lost
roughly 30,000 head of livestock, including 25,000 head of cattle.
Without adequate natural shelter, the remaining Indian ranchers along
this stretch of river can expect to continue to have difficulty
scratching out a living in future years when the winter turns
particularly hard.
Mr. President, the damage caused by the Pick-Sloan projects touched
every aspect of life on the Cheyenne River reservation. Ninety percent
of the timber on the reservation was wiped out, causing shortages of
building material and firewood. Wildlife, once abundant in the river
bottom, became more scarce. The entire lifestyle of the tribe changed
as it was forced to relocate much of its people from the lush river
bottom lands to the windswept prairie.
Most Americans, if not all, are familiar with the many broken
promises of the United States Government to Native Americans during the
1800's. For Indian tribes located along the Missouri River in the State
of South Dakota, the United States Government still has not met its
responsibilities for compensation for losses suffered as a result of
the construction of the Pick-Sloan dams. This proposed legislation is
intended to correct that situation as it applies to the Cheyenne River
Sioux Tribe.
We cannot, of course, remake the lost lands and return the tribe to
its former existence. We can, however, help provide the resources
necessary to the tribe to improve the infrastructure on the Cheyenne
River reservation. This, in turn, will enhance opportunities for
economic development which will benefit all members of the tribe.
Perhaps most importantly, it will fulfill part of our commitment to
improve the lives of Native Americans--in this case the Cheyenne River
Sioux.
I strongly urge my colleagues to approve this legislation this year.
Providing compensation to the Cheyenne River Sioux Tribe for past harm
inflicted by the federal government is long-overdue and any further
delay only compounds that harm. I ask unanimous consent that the entire
text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1905
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
(a) Short Title.--This Act may be cited as the ``Cheyenne
River Sioux Tribe Equitable Compensation Act''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) Congress approved the Pick-Sloan Missouri River Basin
program by passing the Act of December 22, 1944, commonly
known as the ``Flood Control Act of 1944'' (58 Stat. 887,
chapter 665; 33 U.S.C. 701-1 et seq.)--
(A) to promote the general economic development of the
United States;
(B) to provide for irrigation above Sioux City, Iowa;
(C) to protect urban and rural areas from devastating
floods of the Missouri River; and
(D) for other purposes;
(2) the Oahe Dam and Reservoir project is a major component
of the Pick-Sloan program, and contributes to the economy of
the United States by generating a substantial amount of
hydropower and impounding a substantial quantity of water;
(3) notwithstanding the contributions referred to in
paragraph (1), the Oahe Dam and Reservoir project has
contributed little to the economy of the Tribe;
(4) the Oahe Dam and Reservoir project overlies the eastern
boundary of the Crow Creek Indian Reservation;
(5) the Oahe Dam and Reservoir project has--
(A) inundated the fertile, wooded bottom lands of the Tribe
along the Missouri River that constituted the most productive
agricultural and pastoral lands of the Tribe and the homeland
of the members of the Tribe; and
(B) as a result of that inundation, severely damaged the
economy of the Tribe and the members of the Tribe;
(6) the Secretary appointed a Joint Tribal Advisory
Committee that examined the Oahe Dam and Reservoir project
and that advisory committee correctly concluded that--
(A) the Federal Government did not justify, or fairly
compensate the Tribe for, the Oahe Dam and Reservoir project
when the Federal Government acquired 104,492 acres of land of
the Tribe for that project; and
(B) the Tribe should be adequately compensated for the
taking described in subparagraph (A); and
(7) after applying the same method of analysis used for the
compensation of similarly situated Indian tribes, the
Comptroller General of the United States determined the
amount of compensation for the taking described in paragraph
(6) and determined that the appropriate amount of
compensation to pay the Tribe for the taking would be
$290,722,958;
(8) the Tribe is entitled to receiving additional financial
compensation for the taking described in paragraph (6)(A) in
a manner consistent with the determination of the Comptroller
General under paragraph (7); and
(9) the establishment of a dual cash account with the
amounts made available to the Tribe under this Act is
consistent with the principles of self-governance and self-
determination.
(b) Purposes.--The purposes of this Act are as follows:
(1) To provide for additional financial compensation to the
Tribe for the taking of 104,402 acres of land of the Tribe
for the Oahe Dam and Reservoir project in a manner consistent
with the determination of the Comptroller General of the
United States described in subsection (a)(7).
(2) To provide for the establishment of the Cheyenne River
Sioux Recovery Account, a dual cash account to be managed by
the Office in order to make payments to the Tribe to carry
out projects under a plan prepared by the Tribe.
SEC. 3. DEFINITIONS.
In this Act:
(1) Account.--The term ``account'' means the Cheyenne River
Sioux Recovery Account established under section 4.
(2) Cheyenne river sioux tribe; tribe.--The term ``Cheyenne
River Sioux Tribe'' or ``Tribe'' means the Itazipco, Siha
Sapa, Minnicoujou, and Oohenumpa bands of the Great Sioux
Nation that reside on the Cheyenne Reservation, located in
central South Dakota.
(3) Fund account.--The term ``Fund Account'' means a
consolidated account for tribal trust funds in the Treasury
of the United States that--
(A) is managed by the Secretary, through the Office, in
accordance with applicable law; and
(B) as of the date of enactment of this Act, is numbered
14X8365.
(4) Office.--The term ``Office'' means the Office of Trust
Fund Management within the Department of the Interior.
(5) Program.--The term ``Program'' means the power program
of the Pick-Sloan Missouri River Basin program, administered
by the Western Area Power Administration.
(6) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 4. CHEYENNE RIVER SIOUX TRIBAL RECOVERY ACCOUNT.
(a) Cheyenne River Sioux Tribal Recovery Account.--The
Secretary of the Treasury shall establish in the Fund Account
a dual cash account to be known as the ``Cheyenne River Sioux
Tribal Recovery Account''. The dual cash account shall have a
principal component and an interest component. The interest
component of the account shall be used to make payments to
the Tribe in accordance with this Act. The principal
component of the account may not be expended. The corpus and
the income of the account may be invested in accordance with
applicable law.
(b) Funding.--
(1) In general.--Subject to paragraphs (2) and (3),
beginning with fiscal year 1999, and for each fiscal year
thereafter, until such time as the aggregate of the amounts
deposited is $290,722,958, the Secretary of the Treasury
shall deposit into the fund an amount equal to 10 percent of
the receipts
[[Page S3122]]
from the deposits to the Treasury of the United States for
the preceding fiscal year from the Program.
(2) Percentage amount.--Beginning with fiscal year 2004, if
no other law provides for the compensation to parties in
conjunction with an applicable plan for the Program, the
Secretary of the Treasury shall deposit into the fund an
amount equal to 25 percent of the receipts from the deposits
to the Treasury of the United States for the preceding fiscal
year from the Program, until such time as the aggregate of
the amounts deposited into the fund from such receipts and
receipts deposited under paragraph (1) equals the amount
specified in paragraph (1).
(3) Additional interest.--If, by the date that is 60 days
after the end of a fiscal year, the Secretary of the Treasury
fails to deposit into the fund an amount determined under
paragraph (1) or (2), the Secretary of the Treasury shall
deposit, in addition the applicable amount required to be
deposited under paragraph (1) or (2), interest on the amount
required to be deposited, determined for the period beginning
on the day after the termination of that 60-day period and
ending on the date on which the amount determined under
paragraph (1) or (2) is deposited, and based on a rate of
interest that is commonly referred to as the Treasury
overnight rate.
(c) Withdrawal.--
(1) In general.--Subject to paragraph (2), in accordance
with section 202 of the American Indian Trust Fund Management
Reform Act of 1994 (25 U.S.C. 4022), the Tribe may, in
accordance with that Act, voluntarily withdraw some or all of
the funds held in trust for the Tribe by the United States
and managed by the Secretary through the Office.
(2) Limitation.--No amount of principal withdrawn under
this subsection may be expended by the Tribe. The Tribe may
withdraw funds under this subsection on the condition that
the Tribe may expend only the interest earned on the
principal.
(e) Payment of Interest to Tribe.--In accordance with this
Act, the Secretary, acting through the Office, and in a
manner consistent with the first section of the Act of June
24, 1938 (52 Stat. 1037 et seq., chapter 648; 25 U.S.C. 162a)
shall make payments to the Tribe from the interest credited
to the interest component of the account, beginning at the
end of the first fiscal year during which interest is
credited to the account. The Tribe shall use the payments
made under this subsection only for carrying out projects and
programs pursuant to the plan prepared under subsection (f).
(f) Plan.--
(1) In general.--The governing body of the Tribe shall, not
later than 18 months after the date of enactment of this Act,
prepare a plan for the use of the payments made to the Tribe
under subsection (e).
(2) Contents of plan.--The plan developed under this
subsection shall provide for the manner in which the Tribe
will expend the payments referred to in paragraph (1) to
promote--
(A) economic development;
(B) infrastructure development;
(C) the educational, health, recreational, and social
welfare objectives of the Tribe and its members; or
(D) any combination of the activities referred to in
subparagraphs (A) through (C).
(3) Plan review and revision.--The Tribal Council of the
Tribe shall make available for review and comment by the
members of the Tribe a copy of the plan before the plan
becomes final, in accordance with procedures established by
the Tribal Council. The Tribal Council may, on an annual
basis, update the plan by revising the plan in a manner that
provides the members of the Tribe to review and comment on
any proposed revision.
(4) Audit.--The activities of the Tribe in carrying out the
plan under this subsection shall be audited as part of an
annual audit conducted for the Tribe. The auditors that
conduct the audit shall include in the written findings of
that audit a determination whether the funds received by the
Tribe under this section were expended in a manner consistent
with this section to carry out the plan under this
subsection.
(g) Transfers; Limitations.--
(1) Withdrawal and transfer of funds.--In a manner
consistent with the requirements of this Act, upon request of
the Secretary of the Interior, the Secretary of the Treasury
shall withdraw amounts in the interest component of the
account and transfer such amounts to the Secretary of the
Interior for use in accordance with paragraph (2). The
Secretary of the Treasury may only withdraw funds from the
account for the purpose specificed in paragraph (2).
(2) Payments to tribe.--The Secretary of the Interior shall
use the amounts transferred under paragraph (1) only for the
purpose of making annual payments to the Tribe.
(4) Prohibition on per capita payments.--No portion of any
payment made under this subsection may be distributed to any
member of the Tribe on a per capita basis.
SEC. 5. ELIGIBILITY OF TRIBE FOR CERTAIN PROGRAMS AND
SERVICES.
(a) In General.--No payment made to the Tribe pursuant to
this Act shall result in the reduction or denial of any
service or program to which, pursuant to Federal law--
(1) the Tribe is otherwise entitled because of the status
of the Tribe as a federally recognized Indian tribe; or
(2) any individual who is a member of the Tribe is entitled
because of the status of the individual as a member of the
Tribe.
(b) Exemptions from Taxation.--No payment made pursuant to
this Act shall be subject to any Federal or State income tax.
(c) Power Rates.--No payment made pursuant to this Act
shall affect Pick-Sloan Missouri River Basin power rates.
SEC. 6. SALE OF WESTERN AREA POWER AUTHORITY.
(a) In General.--If, before the amount specified in section
4(b)(1) is deposited into the Fund, the United States sells
or otherwise transfers title to the assets and income of the
Western Area Power Authority to an entity other than the
United States--
(1) an amount of the proceeds from that sale equal to the
difference between the amount specified in section 4(b)(1)
and the aggregate amount that, as of the sale of power
authority, had been paid into the Fund, shall be deposited in
the Fund; or
(2) the purchaser may assume responsibility for making
payments to the Treasury of the United States for deposit in
the Fund in amounts determined under section 4(b)(1).
(b) Security.--If a purchaser assumes the responsibility
for making the payments and shall provide the Tribe with
appropriate security to secure those payments.
______
By Mr. LEAHY:
S. 1906. A bill to require the Senate to remain in session to act on
judicial nominations in certain circumstances; to the Committee on
Rules and Administration.
the judicial emergency responsibility act of 1998
Mr. LEAHY. Mr. President, last week, faced with five continuing
vacancies on a 13-member Court, Chief Judge Winter of the United States
Court of Appeals for the Second Circuit certified the judicial
emergency caused by these continuing vacancies, began canceling
hearings and took the unprecedented step in the Second Circuit of
authorizing 3-judge panels to be composed of two visiting judges and
only one Second Circuit Judge.
The Judiciary Committee has reported to the Senate the nomination of
Judge Sotomayor to the Second Circuit, but her nomination continues to
sit on the Senate calendar. Her nomination was received back in June
1997. She was favorably reported by a Committee vote of 16 to 2, once
the Committee finally considered her nomination. She is strongly
supported by both New York Senators, yet the nomination continues to
languish without consideration.
Three additional outstanding Second Circuit nominees are pending
before the Judiciary Committee and await their confirmation hearings.
Judge Rosemary Pooler was nominated back on November 6, 1997, as was
Robert Sack, a partner in the law firm of Gibson Dunn & Crutcher. The
final pending nomination to the Second Circuit was received two months
ago, back on February 11, when the President nominated Chester J.
Straub, a partner in the law firm of Wilkie Farr & Gallagher.
I have been urging action on the nominees to the Second Circuit for
many months. The Senate is failing in its obligations to the people of
the Second Circuit, to the people of New York, Connecticut and Vermont.
We should call an end to this stall and take action.
Last Friday I urged consideration of the nomination of Judge
Sotomayor without further delay and requested that the Judiciary
Committee proceed to hold the necessary hearings on the three other
Second Circuit nominees this week so that they, too, might be confirmed
before the upcoming recess.
I do not believe that the Senate should be leaving for two weeks'
recess and leaving the Second Circuit with vacancies for which it has
qualified nominations pending. This is too reminiscent of the
government shutdown only a couple of years ago and the numerous times
of late when the Republican congressional leadership has recessed
without completing work on emergency supplemental and disaster relief
legislation.
In his most recent Report on the Judiciary the Chief Justice of the
United States Supreme Court warned that persisting vacancies would harm
the administration of justice. The Chief Justice of the United States
Supreme Court pointedly declared: ``Vacancies cannot remain at such
high levels indefinitely without eroding the quality of justice that
traditionally has been associated with the federal judiciary.''
The people and businesses in the Second Circuit need additional
federal judges confirmed by the Senate. Indeed, the Judicial Conference
of the United States recommends that in addition to the 5 vacancies,
the Second
[[Page S3123]]
Circuit be allocated an additional 2 judgeships to handle its workload.
The Second Circuit is suffering harm from Senate inaction. That is why
the Chief Judge of the Second Circuit had to declare the Circuit in a
state of emergency.
Must we wait for the administration of justice to disintegrate
further before the Senate will take this crisis seriously and act on
the nominees pending before it? I hope not.
As part of my efforts to encourage the Senate to do its job, I am
today introducing the Judicial Emergency Responsibility Act. The
purpose of this bill is to supplement the law by which Chief Justice
Winter certified the emergency and to require the Senate to do its duty
and to act on judicial nominations before it recesses for significant
stretches of time when a Circuit Court is suffering from a vacancy
emergency.
I urge prompt action on the bill and immediate action on the
nomination of Judge Sonia Sotomayor to the Second Circuit.
______
By Mr. DASCHLE:
S. 1907. A bill to amend the Internal Revenue Code of 1986 to allow a
refundable tax credit for wetland restoration and conservation
expenses; to the Committee on Finance.
wetlands restoration and conservation legislation
Mr. DASCHLE. Mr. President, today I am introducing legislation to
provide a refundable tax credit to farmers for the restoration and
conservation of wetlands.
We have learned over the years the extraordinary value that wetlands
can provide as habitat for plants and waterfowl, as a filter for water
and as a buffer against flooding. At the same time, anyone who has ever
owned a farm in South Dakota with what we call prairie potholes can
appreciate the frustration wetlands can generate, making it
logistically difficult to till the field efficiently and, of course,
impossible to grow crops on lands that are flooded.
To add insult to injury, farmers often need to pay property taxes on
these wetlands, even though they provide no financial return.
As a nation, we have recognized the dilemma this presents and have
taken steps in the past to provide farmers with a means of obtaining
some value for their efforts to protect wetlands. For years the
Department of Agriculture has allowed farmers to enroll wetlands into
the Wetland Reserve Program, while the U.S. Fish and Wildlife Service
has worked with conservation groups to provide farmers with long-term
easement options. Recently, Congress enacted legislation I sponsored to
allow farmers to enroll wetlands in the Conservation Reserve Program.
Unfortunately, due to the funding caps, many farmers cannot enroll
their wetlands into the CRP while others are reluctant to use the WRP
or U.S. Fish and Wildlife easements. Consequently, despite these
efforts, many wetlands throughout this country continue to present
farmers with a challenge: ensuring their protection without any
compensation.
In addition, over the last century, many wetlands have been drained,
filled or otherwise degraded. These areas represent a vast reservoir of
potentially important wetlands that could provide useful environmental
functions if fully restored. The time has come for Congress to
establish a more comprehensive set of incentives to both restore
degraded wetlands and ensure their long-term protection.
Under the legislation I am introducing today, owners of wetlands,
farmed wetlands and prior-converted croplands that are surrounded by or
immediately adjacent to actively farmed cropland in the same ownership
are eligible for a tax credit. To take advantage of this credit,
farmers must restore to fully functioning condition their farmed
wetlands or prior converted croplands condition according to a
restoration plan approved by the Natural Resources Conservation
Service. A tax credit equal to the restoration costs will be available
under this bill. To protect the water quality of wildlife values, a
maximum of three associated acres of non-wetland may be eligible for
the credit for every acre of wetland. To ensure that the federal
government does not pay twice to protect the same wetlands, those
enrolled in CRP or WRP are not eligible for this credit.
The bill provides a tax credit equal to 50% to 70% of the soil-
specific Conservation Reserve Program (CRP) rental rate for eligible
wetland and associated non-wetland acres, plus any certification fee.
This may be taken in each year of the conservation agreement in which
the eligible land is not used for agricultural production or drained,
dredged, filled, leveled, or otherwise manipulated for that purpose.
A farmer who enters into an agreement to conserve the eligible
wetland and associated non-wetland acres for a period of not less than
10 years will receive 50% of the annual CRP rental rate; a farmer who
agrees to conserve the wetland for not less than 20 years will receive
60% of the annual CRP rental rate; and a farmer who agrees to conserve
the wetland for 30 years will receive 70% of the annual CRP rental
rate. Certification of compliance with the agreement must be made at
least every 5 years.
As a long-term alternative to the conservation credit, farmers may
opt for an easement credit, which would be equal to the fair market
value of the land in agricultural use, as determined by a certified
appraisal. This would be based on the charitable donation by the
landowner of a deed restriction, granted in perpetuity on the use which
may be made of the eligible land to a qualified conservation
organization, exclusively for conservation purposes. The full credit
may be taken in the year in which the deed restriction is recorded.
Mr. President, Americans increasingly are becoming aware of the
tremendous environmental benefits that wetlands provide. From critical
waterfowl habitat to reducing the severity of flooding, wetlands are a
critical component of our landscape. What may not be as widely
appreciated is the nature of the farmer's role in protecting this
resource.
The time has come for us to both acknowledge the contributions made
by farmers to the conservation of wetlands and provide them with
appropriate incentive to preserve them. Farmers should not be penalized
for doing the right thing. This legislation will take a giant step
toward making available fair and reasonable compensation for their
efforts in this regard.
I urge my colleagues to join me in supporting this legislation. It
represents an idea that is popular with conservation organizations as
well as producers, and I am hopeful that Congress will enact it in the
very near future. I ask unanimous consent that the full text of the
bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1907
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. REFUNDABLE CREDIT FOR WETLAND RESTORATION AND
CONSERVATION EXPENSES.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable credits) is amended by redesignating section 35 as
section 36 and by inserting after section 34 the following
new section:
``SEC. 35. WETLAND RESTORATION AND CONSERVATION EXPENSES.
``(a) Allowance of Credit.--In the case of an eligible
taxpayer, there shall be allowed as a credit against the tax
imposed by this subtitle for the taxable year in an amount
equal to the sum of--
``(1) the wetland restoration credit, plus
``(2) the wetland conservation credit, plus
``(3) the wetland easement credit.
``(b) Wetland Restoration Credit.--
``(1) In general.--The wetland restoration credit for any
taxable year is an amount equal to the wetland restoration
expenditures paid or incurred by the eligible taxpayer for
such taxable year.
``(2) Wetland restoration expenditures.--For purposes of
this subsection, the term `wetland restoration expenditure'
means an expenditure for the restoration of farmed wetland or
prior converted wetland to fully functioning wetland
condition--
``(A) pursuant to a restoration plan approved by the
Natural Resources Conservation Service of the Department of
Agriculture, and
``(B) paid or incurred during the first 5 years of the
qualified conservation agreement or qualified conservation
easement relating to such farmed wetland or prior converted
wetland.
Such term shall not include any expenditure which is required
to be made pursuant to any Federal or State law.
[[Page S3124]]
``(c) Wetland Conservation Credit.--
``(1) In general.--The wetland conservation credit for any
taxable year is an amount equal to the sum of--
``(A) the applicable percentage of the soil-specific
Conservation Reserve Program rental rate applicable to the
eligible taxpayer's qualified wetland for such taxable year
under title XII of the Food Security Act of 1985, plus
``(B) any fee for certification of compliance paid or
incurred by the eligible taxpayer in such taxable year with
respect to the qualified conservation agreement relating to
such qualified wetland.
``(2) Applicable percentage.--For purposes of paragraph
(1)(A), the applicable percentage is equal to, in the case of
an eligible taxpayer who has entered into a qualified
conservation agreement with a term of--
``(A) at least 10 years, but less than 20 years, 50
percent,
``(B) at least 20 years, but less than 30 years, 60
percent, and
``(C) 30 years, 70 percent.
``(3) Denial of credit if wetland easement credit is
elected.--With respect to any qualified wetland with respect
to which the taxpayer makes an election under subsection (d)
for any taxable year, the wetland conservation credit with
respect to such qualified wetland for such taxable year is
zero.
``(d) Wetland Easement Credit.--
``(1) In general.--At the election of the eligible
taxpayer, the wetland easement credit for any taxable year is
an amount equal to the fair market value of any qualified
wetland of the taxpayer subject to a qualified conservation
easement.
``(2) Determination of value.--For purposes of paragraph
(1), the value of such qualified wetland is the fair market
value of such qualified wetland in agricultural use (as
determined by a certified appraisal) during the taxable year
(determined as of the date of the grant of the easement).
``(3) Election.--An election under this subsection shall
apply to the taxable year for which made.
``(e) Definitions.--For purposes of this section--
``(1) Eligible taxpayer.--The term `eligible taxpayer'
means a taxpayer who--
``(A) owns property which consists of--
``(i) wetlands, farmed wetlands, or prior converted
wetlands, and
``(ii) the surrounding or immediately adjacent actively
farmed cropland, and
``(B) with respect to such property, has entered into a
qualified conservation agreement or a qualified conservation
easement.
``(2) Qualified wetland.--
``(A) In general.--The term `qualified wetland' means--
``(i) wetland, including farmed wetland or prior converted
wetland, which through the use of wetland restoration
expenditures is being converted to fully functioning wetland
condition, plus
``(ii) as determined under a qualified conservation
agreement or a qualified conservation easement, such
surrounding or immediately adjacent nonwetland as is
appropriate to buffer the water quality or wildlife habitat
values associated with the wetland, but only to the extent
the nonwetland acreage is not more than 3 times greater than
the wetland acreage.
``(B) Certain property excluded.--Such term shall not
include any acre of land with respect to which contract or
easement payments are received in the taxable year from the
Conservation Reserve Program or the Wetlands Reserve Program
under title XII of the Food Security Act of 1985.
``(3) Wetland, farmed wetland, and prior converted
wetland.--The terms `wetland', `farmed wetland', and `prior
converted wetland' shall have the meanings given such terms
by title XII of the Food Security Act of 1985.
``(4) Qualified conservation agreement.--
``(A) In general.--The term `qualified conservation
agreement' means an agreement by the eligible taxpayer--
``(i) with a governmental unit referred to in section
170(c)(1),
``(ii) for a term of not less than 10 years and not more
than 30 years,
``(iii) under which the taxpayer agrees to comply with the
conservation requirements of subparagraph (B) with respect to
the qualified wetland, and
``(iv) under which the taxpayer agrees to obtain a
certification of compliance not less than every 5 years
during the period of the agreement.
``(B) Conservation requirements.--An eligible taxpayer
complies with the conservation requirements of this
subparagraph if--
``(i) the taxpayer does not use the qualified wetland for
agricultural production, and
``(ii) the taxpayer does not drain, dredge, fill, level, or
otherwise manipulate the qualified wetland (including the
removal of woody vegetation, or any activity which results in
impairing or reducing the flow, circulation, or reach of
water) for the purpose, or that has the effect, of making
production of an agricultural commodity or development of
built structures on such wetland possible.
``(5) Qualified conservation easement.--The term `qualified
conservation easement' means an easement granted in
perpetuity by the eligible taxpayer restricting the use which
may be made of the qualified wetland to a qualified
organization exclusively for conservation purposes (as
defined in section 170(h)).
``(f) Special Rules.--
``(1) Denial of double benefit.--
``(A) In general.--No credit shall be allowed under
subsection (a) for any expense for which a deduction or
credit is allowed under any other provision of this chapter.
``(B) Grants.--No credit shall be allowed under subsection
(a) for any expense to the extent that funds for such expense
are received under any Federal, State, or local program.
``(2) Married Couples Must File Joint Returns.--If the
taxpayer is a married individual (within the meaning of
section 7703), this section shall apply only if the taxpayer
and the taxpayer's spouse file a joint return for the taxable
year.''
(b) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``, or
from section 35 of such Code''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by striking the last item and inserting the
following:
``Sec. 35. Wetland restoration and conservation expenses.
``Sec. 36. Overpayments of tax.''
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1998.
______
By Mr. MOYNIHAN (for himself and Mr. D'Amato):
S. 1908. A bill to amend title XVIII of the Social Security Act to
carve out form payments to Medicare+Choice organizations amounts
attributable to disproportionate share hospital payments and pay such
amounts directly to those disproportionate share hospitals in which
their enrollees receive care; to the Committee on Finance.
THE MANAGED CARE FAIR PAYMENT ACT OF 1998
Mr. MOYNIHAN, Mr. President, I rise today to introduce with my
colleague Senator D'Amato, the ``Managed Care Fair Payment Act of
1998,'' a companion to H.R. 2701 which was introduced in the House of
Representatives last year by my colleague and friend, Representative
Rangel.
In the Balanced Budget Act of 1997 (BBA), Congress and the President
agreed to ``carve out'' the payment made to Medicare HMOs attributed to
the cost for graduate medical education (GME), and instead make the
payment for GME directly to teaching hospitals. The BBA did not
contain, however, a provision passed by the Senate to ``carve out''
payments to disproportionate share hospitals--often called DSH
payments.
Medicare DSH payments are paid to almost 2000 hospitals that serve a
``disproportionate share'' of low-income--often uninsured--patients.
The DSH adjustment for each hospital is determined by a complex set of
formulas relating to a hospital's location, size and percentage of low-
income patients.
Until 1998, Medicare's payments to private health plans were based on
the average payments made on behalf of Medicare beneficiaries in the
fee-for-service program. Under the BBA, Medicare+Choice payment rates
are no longer directly linked to local fee-for-service spending.
Instead, they blend average spending locally and nationally. Because
the DSH payment was not carved out in the BBA, the DSH payment will
continue to be made with the expectation that HMOs will, when
negotiating rates with hospitals, ``pass on'' the DSH payment to
hospitals that serve a large number of low-income, uninsured
individuals. Unfortunately, as was the case before the BBA was enacted,
DSH payments to managed care plans will likely not be passed on to
hospitals. This bill seeks to correct this problem by ``carving out''
the DSH payment from the Medicare+Choice payments to managed care plans
and giving the payments directly to hospitals.
This issue is particularly important to New York state. Hospitals in
New York currently receive approximately $700 million per year in DSH
payments. The number of New York Medicare beneficiaries enrolled in
HMOs and other managed care plans has grown by nearly 86 percent to
more than 300,000 since 1995. At this level of penetration, a DSH carve
out would redirect $150 million each year to New York's 127 DSH
hospitals.
To preserve the viability of hospitals that provide the bulk of the
care to low-income--often uninsured--patients, it is imperative, as
managed care enrollment grows, that Medicare DSH payments be carved out
from HMO payments. The bill I am introducing today does just that--it
would carve out 100 percent of the DSH funds
[[Page S3125]]
from the managed care payment rate, beginning in January 1999 and pay
these funds directly to hospitals. These payments must go directly to
hospitals that serve the poor. I urge my colleagues to join me in
supporting the Managed Care Fair Payment Act of 1998.
I ask unanimous consent that the full text of the bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1908
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 ``Managed Care Fair Payment
Act of 1998''.
SEC. 2. CARVING OUT DSH PAYMENTS FROM PAYMENTS TO
MEDICARE+CHOICE ORGANIZATIONS AND PAYING THE
AMOUNTS DIRECTLY TO DSH HOSPITALS ENROLLING
MEDICARE+CHOICE ENROLLEES.
(a) In General.--Section 1853(c)(3) of the Social Security
Act (42 U.S.C. 1395w-23(c)(3)), as inserted by section 4001
of the Balanced Budget Act of 1997, is amended--
(1) in subparagraph (A), by striking ``subparagraph (B)''
and inserting ``subparagraphs (B) and (D)'',
(2) by redesignating subparagraph (D) as subparagraph (E),
and
(3) by inserting after subparagraph (C) the following:
``(D) Removal of payments attributable to disproportionate
share payments from calculation of adjusted average per
capita cost.--
``(i) In general.--In determining the area-specific
Medicare+Choice capitation rate under subparagraph (A) for a
year (beginning with 1999), the annual per capita rate of
payment for 1997 determined under section 1876(a)(1)(C) shall
be adjusted, subject to clause (ii), to exclude from the rate
the additional payments that the Secretary estimates were
payment during 1997 for additional payments described in
section 1886(d)(5)(F).
``(ii) Treatment of payments covered under state hospital
reimbursement system.--To the extent that the Secretary
estimates that an annual per capita rate of payment for 1997
described in clause (i) reflects payments to hospitals
reimbursed under section 1814(b)(3), the Secretary shall
estimate a payment adjustment that is comparable to the
payment adjustment that would have been made under clause (i)
if the hospitals had not been reimbursed under such
section.''.
(b) Additional Payments for Managed Care Enrollees.--
Section 1886(d)(5)(F) of the Social Security Act ((42 U.S.C.
1395ww(d)(5)(F)) is amended--
(1) in clause (ii), by striking ``clause (ix)'' and
inserting ``clauses (ix) and (x)'', and
(2) by adding at the end the following:
``(ix)(I) For portions of cost reporting periods occurring
on or after January 1, 1999, the Secretary shall provide for
an additional payment amount for each applicable discharge of
any subsection (d) hospital that is a disproportionate share
hospital (as described in clause (i)).
``(II) For purposes of this clause, the term `applicable
discharge' means the discharge of any individual who is
enrolled under a risk-sharing contract with an eligible
organization under section 1876 and who is entitled to
benefits under part A or any individual who is enrolled with
a Medicare+Choice organization under part C.
``(III) The amount of the payment under this clause with
respect to any applicable discharge shall be equal to the
estimated average per discharge amount that would otherwise
have been paid under this subparagraph if the individuals had
not been enrolled as described in subclause (II).
``(IV) The Secretary shall establish rules for an
additional payment amount, for any hospital reimbursed under
a reimbursement system authorized under section 1814(b)(3) if
such hospital would qualify as a disproportionate share
hospital under clause (i) were it not so reimbursed. Such
payment shall be determined in the same manner as the amount
of payment is determined under this clause for
disproportionate share hospitals.''.
______
By Mr. McCAIN:
S. 1909. A bill to repeal the telephone excise tax; to the Committee
on Finance.
the telephone excise tax repeal act of 1998
Mr. McCAIN. Mr. President, I rise to offer a bill to repeal the three
percent federal excise tax that all Americans pay every time they use a
telephone.
Under current law, the federal government taxes you three percent of
your monthly phone bill for the so-called ``privilege'' of using your
phone lines. This tax was first imposed one hundred years ago. To help
finance the Spanish-American War, the federal government taxed
telephone service, which in 1898 was a luxury service enjoyed by
relatively few. The tax reappeared as a means of raising revenue for
World War I, and continued as a revenue-raiser during the Great
Depression, World War II, the Korean and Vietnam Wars, and the chronic
federal budget deficits of the last twenty years.
Earlier this month, however, we received some long-overdue good news:
thanks to the Balanced Budget Act enacted by the Congress in 1997, the
Congressional Budget Office projected an $8 billion federal budget
surplus for 1998. Mr. President, that announcement should mean the end
of the federal phone excise tax.
Here's why. First of all, the telephone is a modern-day necessity,
not like alcohol, or furs, or jewelry, or other items of the sort that
the government taxes this way. The Congress specifically recognized the
need for all Americans to have affordable telephone service when it
enacted the 1996 Telecommunications Act. The universal service
provisions of the Act are intended to assure that all Americans,
regardless of where they live or how much money they make, have access
to affordable telephone service. The telephone excise tax, which bears
no relationship to any government service received by the consumer, is
flatly inconsistent with the goal of universal telephone service.
It's also a highly regressive and unfair tax that hurts low-income
and rural Americans even more than other Americans. Low-income families
spend a higher percentage of their income than medium- or high-income
families on telephone service, and that means the telephone tax hits
low-income families much harder. For that reason the Congressional
Budget Office has concluded that increases in the telephone tax would
have a greater impact on low-income families than tax increases on
alcohol or tobacco products. And a study by the American Agriculture
Movement concluded that excise taxes like the telephone tax impose a
disproportionately large tax burden on rural customers, too, who rely
on telephone service in isolated areas.
But, in addition to being unfair and unnecessary, there is another
reason why we should eliminate the telephone excise tax. Implementation
of the Telecom Act of 1996 requires all telecommunications carriers--
local, long-distance, and wireless--to incur new costs in order to
produce a new, more competitive market for telecommunications services
of all kinds.
Unfortunately, the cost increases are arriving far more quickly than
the new, more competitive market. The Telecom Act created a new subsidy
program for wiring schools and libraries to the Internet, and the cost
of funding that subsidy has already increased bills for business users
of long-distance telephone service and for consumers of wireless
services. Because of more universal service subsidy requirements and
other new Telecom Act mandates, more rate increases for all users will
occur later this year and next year.
Mr. President, the fact that the Telecom Act is imposing new charges
on consumers' bills makes it absolutely incumbent upon us to strip away
any unnecessary old charges. And that means the telephone excise tax.
Mr. President, the telephone excise tax isn't a harmless artifact
from bygone days. It collects money for wars that are already over, and
for budget deficits that no longer exist, from people who can least
afford to spend it now and from people who will have new bills to foot
as the 1996 Telecom Act gets implemented. That's unfair, that's wrong,
and that must be stopped.
San Juan Hill and Pork Chop Hill have now gone down in history, and
so should this tax.
Mr. President, I ask unanimous consent that the text of the bill
appear in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1909
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. REPEAL OF TELEPHONE EXCISE TAX.
(a) In General.--Effective with respect to amounts paid
pursuant to bills first rendered on or after January 1, 1999,
subchapter B of chapter 33 of the Internal Revenue Code of
1986 (26 U.S.C. 4251 et seq.) is repealed. For purposes of
the preceding sentence, in the case of communications
services rendered before December 1, 1998, for which a bill
has not been rendered before January 1, 1999, a bill shall be
treated as having been first rendered on December 31, 1998.
(b) Conforming Amendment.--Effective January 1, 1999, the
table of subchapters for
[[Page S3126]]
such chapter is amended by striking out the item relating to
subchapter B.
______
By Mr. D'AMATO:
S. 1911. A bill to amend the Internal Revenue Code of 1986 to provide
a $500 nonrefundable credit to individuals for the payment of real
estate taxes; to the Committee on Finance.
THE WORKING MIDDLE-CLASS TAX RELIEF ACT OF 1998
Mr. D'AMATO. Mr. President, last year, the Congress delivered some
long-overdue and much-deserved tax relief to the American people. The
Taxpayer Relief Act of 1997 provided the first middle-class tax cut in
16 years.
The tax cuts we passed last year are making a difference in the
monthly budgets of working middle-class families. But we can and we
must do more. These families still send too much of their hard-earned
money to Washington. And between federal, state, and local taxes, the
average American's tax bill is nearly 35 percent of their total income.
In fact, most Americans spend more time working to pay their tax bills
than they spend working to provide food, clothing, and shelter
combined. We absolutely must continue our efforts to reduce the tax
burden.
One area that escaped our tax-cutting efforts last year was the
enormous property tax bills paid by homeowners. Last year, hardworking
Americans paid about $209 billion in real-estate property taxes. This
was more than one-and-one-half times what individuals paid in state
income taxes.
In addition, property tax rates have increased almost twice as fast
as inflation. Property taxes are spiraling out of control, and the time
has come to give homeowners some real relief.
Homeownership is the American dream, but that dream now comes with a
tax bill that puts a heavy burden on working families. This property
tax bill also provides a disincentive to any young couple considering
purchasing a home. We in Washington should change that equation--we
should be doing everything we can to encourage and assist
homeownership.
Today, I am introducing the ``Working Middle-Class Tax Relief Act of
1998.'' This bill will allow homeowners to take a federal tax credit
for the first $500 of property taxes paid on their personal residence.
The Working Middle Class Tax Relief Act will provide real help to
working families who are struggling to make ends meet, and it will send
a strong message that homeownership can become a reality for all
Americans.
Here are a few examples of how my bill works. Under current law,
there are nearly 36 million taxpayers who do not get any savings on
property taxes because they don't file an itemized federal tax return.
Under my bill, every dollar of property tax that they pay, up to $500,
will come back to them in the form of federal tax savings.
Of course, millions of other Americans do itemize. Take, for example,
a typical family of four with a taxable income of $42,000, and a
property tax bill of $3,000. Under current law they receive a $450
federal tax benefit. By turning the first $500 of property taxes into a
tax credit, my legislation would give this typical family an additional
$425 savings, for a total tax benefit of $875.
This savings to homeowners could cut their property tax bill by one-
third or more, and in some cases wipe it out all together. This
legislation will let working families keep more of their money. That's
the way it should be. After all, the American people know how to manage
their own money much better than Washington does.
The Working Middle-Class Tax Relief Act is real savings for the 66
million Americans who have realized the dream of owning a home, and it
will help millions more achieve that dream.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1911
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 ``Working Middle Class Tax
Relief Act of 1998''.
SEC. 2. NONREFUNDABLE TAX CREDIT FOR REAL ESTATE TAXES ON
PRINCIPAL RESIDENCE.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
nonrefundable personal credits) is amended by inserting after
section 25A the following:
``SEC. 25B. REAL ESTATE TAXES ON PRINCIPAL RESIDENCE.
``(a) In General.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the lesser
of--
``(1) the applicable dollar amount, or
``(2) the amount allowable as a deduction under section 164
(determined without regard to subsection (c)(3) thereof) for
State, local, and foreign real property taxes paid or accrued
by the taxpayer on property for periods the property was
owned and used by the taxpayer as the taxpayer's principal
residence.
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Applicable dollar amount.--The applicable dollar
amount shall be determined in accordance with the following
table:
``For taxable years The dollar
beginning in: amount is:
1999........................................................$100 ....
2000........................................................ 200 ....
2001........................................................ 300 ....
2002........................................................ 400 ....
2003 and thereafter......................................... 500.....
``(2) Principal residence.--The term `principal residence'
has the meaning given such term by section 121, except that
the period for which a dwelling unit is treated as a
principal residence of the taxpayer shall include the 30-day
period ending on the first day on which it would (but for
this paragraph) be treated as the taxpayer's principal
residence.
``(3) Joint return required.--Rules similar to the rules of
paragraphs (2), (3), and (4) of section 21(e) shall apply.
``(4) Ownership and use.--Rules similar to the rules of
paragraphs (1), (2), (3), (4), and (7) of section 121(d)
shall apply.''
(b) Denial of Double Benefit.--Section 164(c) of the
Internal Revenue Code of 1986 (relating to deduction denied
in case of certain taxes) is amended by adding at the end the
following:
``(3) Taxes on real property to the extent of the amount of
the credit allowed under section 25B.''
(c) Conforming Amendment.--The table of sections for
subpart A of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after
the item relating to section 25A the following:
``Sec. 25B. Real estate taxes on principal residence.''
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1998.
______
By Mr. FORD (for himself and Mr. Bond):
S. 1912. A bill to amend title 10, United States Code, to exclude
additional reserve component general and flag officers from the
limitation on the number of general or flag officers who may serve on
active duty; to the Committee on Armed Services.
NATIONAL GUARD LEGISLATION
Mr. FORD. Mr. President, today I join Senator Bond, my fellow co-
chairman of the National Guard Caucus, in introducing legislation to
allow the Secretary of Defense to increase the number of National Guard
and reserve generals on active duty.
Deputy Secretary of Defense John Hamre brought it to our attention
that under current law, guard and reserve general officers brought on
active duty for more than 180 days count against the service's active
duty ceilings specified in 10 U.S.C. 526. Our proposed legislation
would exempt full-time active duty guard and reserve general officers
from the limit in title 10. But we only allow the exemption so it does
not exceed 3 percent of the current limit of 877 general officers.
This legislation will encourage the military services to assign
guard/reserve general officers to a wider variety of non-traditional
assignments allowing these general officers to gain a greater depth of
experience. The legislation will greatly enhance the total force idea,
by providing a more seamless integration of the reserve and active
component senior leadership. Senator Bond and I also believe this
legislation will foster a greater appreciation by the active duty
service leadership of the expertise available from the guard and
reserve community.
This legislation would eliminate the disincentive to expand guard and
reserve general officers assignments by easing the one-for-one reserve
component versus active component offset. There are currently 22 Guard
and Reserve general officers on full time active duty. All but three of
those officers are serving in assignment directly related to Guard and
Reserve matters. This legislation would exempt up to 25 Guard and
Reserve general officers
[[Page S3127]]
from counting against active duty general officer end strength.
Senator Bond and I would encourage the Senate Armed Services
Committee to include this legislation in the fiscal year 1999 defense
authorization bill.
I ask unanimous consent that the bill and section-by-section be
printed in the Record.
There being no objection, the items were ordered to be printed in the
Record, as follow:
S. 1912
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. EXCLUSION OF ADDITIONAL RESERVE COMPONENT GENERAL
AND FLAG OFFICERS FROM LIMITATION ON NUMBER OF
GENERAL AND FLAG OFFICERS WHO MAY SERVE ON
ACTIVE DUTY.
Section 526(d) of title 10, United States Code, is amended
to read as follows:
``(d) Exclusion of Certain Reserve Officers.--(1) Subject
to paragraph (2), the limitations of this section do not
apply to the following reserve component general or flag
officers:
``(A) A general or flag officer who is on active duty for
training.
``(B) A general or flag officer who is on active duty under
a call or order specifying a period of less than 180 days.
``(C) A general or flag officer who is on active duty under
a call or order specifying a period of more than 179 days.
``(2) The number of general or flag officers of an armed
force covered by paragraph (1)(C) at any one time may not
exceed the number equal to three percent of the number
specified for that armed force under subsection (a).''.
____
Authorized Strength: General and Flag Officers on Active Duty
section by section analysis
Section 526(a) limits the number of general and flag
officers on active duty in the Army (302), Navy (216), Air
Force (279) and Marine Corps (80). Section 526(d), title 10,
United States Code provides that these limits do not apply to
reserve general or flag officers who are on active duty for
training or who are on active duty under a call or order
specifying a period of less than 180 days.
The intent of the proposed language is to exempt Reserve
and National Guard general/flag officers from the limits in
Section 526(a), up to a maximum of 3% of the total number of
general and flag officers currently authorized for each
Service.
reserve/guard general/flag officer exemption justification
Currently, any Reserve or Guard general officer ordered to
active duty for a period of more than 179 days counts against
the Service's active duty general and flag officer limit.
Greater participation by Reserve and Guard senior
leadership in the day-to-day planning, decision-making and
execution will lead to a more seamless Total Force and will
immeasurably benefit both the Reserve and Active Components.
Reserve and Guard officers will gain greater depth of
experience from their full-time assignment and Active
Component will gain greater understanding of the assets the
Reserve and Guard community bring to the table.
This legislation will also encourage the Services to assign
Reserve and Guard general and flag officers to a wider
variety of non-traditional billets, to include joint
assignments.
This section amends Section 526 by adding a provision to
exempt a number of Reserve and Guard general and flag
officers serving on full-time active duty from the limits of
subsection (a).
______
By Mr. BAUCUS (for himself and Mr. Burns):
S. 1913. A bill to require the Secretary of the Interior to sell
leaseholds at the Canyon Ferry Reservoir in the State of Montana and to
establish a trust and fund for the conservation of fish and wildlife
and enhancement of public hunting and fishing opportunities in the
State; to the Committee on Environment and Public Works.
the montana fish and wildlife conservation act of 1998
Mr. BAUCUS. Mr. President, I rise today to announce the introduction
of ``The Montana Fish and Wildlife Conservation Act of 1998.'' I am
pleased to be joined on this bill by my Colleague from Montana, Senator
Burns. This bill will help protect important lands in Montana for the
use and enjoyment of all Americans. It will protect our hunting and
fishing heritage and ensure that our children and our grandchildren can
enjoy our great wild lands, just as we do today.
Canyon Ferry Reservoir sits just east of Helena, Montana. Along the
north shore of the reservoir, there are 265 cabin sites that have been
leased by the Bureau of Reclamation for over two decades. On these
sites, families have built cabins and houses, car ports and garages,
and planted lawns and gardens. Many families now live in these cabins
year-round.
These cabin sites have been a constant management problem for the
Bureau of Reclamation. In addition to managing the reservoir, the
Bureau of Reclamation has been forced to play landlord. Like all
landlords, the Bureau of Reclamation has often been at odds with the
cabin owners over rental payments and maintenance of the property. This
conflict has damaged public good will and created administrative
expenses for the government as appeals are filed to respond to the
conflict of the day.
The Montana Fish and Wildlife Conservation Act establishes an
equitable means of resolving these conflicts and, at the same time,
provide substantial benefit to the public. This Act proposes to sell
all 265 cabin sites through a sealed bid process with the minimum bid
set at fair market value determined in accordance with federal
appraisal standards. All existing lease arrangements would have to be
honored by the purchaser of the 265 cabin sites, and each cabin owner
would have to be given an option to purchase their cabin site from the
successful bidder. In this way, the Act ensures that the public will
receive a maximum return on the investment, while at the same time,
fully protecting the interests of the current leaseholders.
The Montana Fish and Wildlife Conservation Act of 1998 would use the
proceeds from this sale to establish two funds for the conservation of
fish and wildlife and would return 10% of the proceeds to the U.S.
Treasury.
The first fund established by this Act, the Canyon Ferry-Missouri
Trust, would be a perpetual endowment fund with 45% of the proceeds
from the sale of the cabin sites. It would be used for the public
acquisition of property at Canyon Ferry Reservoir and along the
Missouri River and its tributaries upstream to the confluence of the
Madison, Jefferson, and Gallatin Rivers.
This trust would be managed by a board consisting of representatives
of local and statewide sportsmens organizations and local landowners.
The Canyon Ferry-Missouri River Endowment would be used to purchase
public access to hunting and fishing sites and to acquire property and
conservation easements to enhance public hunting and fishing
opportunities at the reservoir and along the Missouri. All property
acquired by this trust would be purchased from willing sellers.
The second fund, Montana Hunter and Fisherman Access Fund would be a
state-wide fund established with another 45% of the proceeds from the
sale of the cabin sites. It would be used to acquire public access to
federal lands in Montana and to acquire property and conservation
easements to enhance public hunting and fishing opportunities across
the state. This fund would be managed by the Bureau of Land Management,
the Forest Service, and Fish and Wildlife Service. This fund could be
used to acquire property only from willing sellers.
The remaining 10% of the proceeds from the sale of the cabin sites
would be returned to the U.S. Treasury.
The Montana Fish and Wildlife Conservation Act of 1998 presents an
exciting opportunity for us to ensure that our children can enjoy
hunting and fishing just as we do. This bill will improve access to
public lands and will protect important fish and wildlife habitat for
the benefit of all Americans. It does so by selling cabin sites which
currently are providing very few benefits to the general public while
causing significant management conflicts and expenses for the Bureau of
Reclamation.
This is a fair bill that is widely supported by cabin owners, local
land owners, and sportsmen throughout Montana. There are a number of
issues that still need to be ironed out with this bill. In particular,
the Canyon Ferry Recreation Association (the association of cabin
owners) has expressed concern that they may not financially be able to
step into the role of landlord for those leasees who are unable to
purchase the cabin sites should be Association be the highest bidder.
We'll have to work through these and other issues as this bill moves
forward.
Nonetheless, Mr. President, I believe that this bill is a good start.
I look forward to working with my Colleague from Montana and with all
the members of the Senate to finalize and pass
[[Page S3128]]
this legislation for the benefit of America's fish and wildlife
heritage.
Mr. President, I urge my colleagues to join me in supporting this
important bill.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1913
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 ``Montana Fish and Wildlife
Conservation Act of 1998''.
SEC. 2. FINDINGS.
Congress finds that--
(1) it is in the interest of the United States for the
Secretary of the Interior to sell leaseholds at Canyon Ferry
Reservoir in the State of Montana for fair market value if
the proceeds from the sale are used--
(A) to establish a trust to provide a permanent source of
funding to acquire access or other property interests from
willing sellers to conserve fish and wildlife and to enhance
public hunting and fishing opportunities at the Reservoir and
along the Missouri River;
(B) to establish a fund to be used to acquire access or
other property interests from willing sellers to increase
public access to Federal land in the State of Montana and to
enhance hunting and fishing opportunities; and
(C) to reduce the Pick-Sloan project debt for the Canyon
Ferry Unit;
(2) existing trusts in the State of Montana, including the
Rock Creek Trust and the Montana Power Company Missouri-
Madison Trust, have provided substantial public benefits by
conserving fish and wildlife and by enhancing public hunting
and fishing opportunities in the State of Montana;
(3) many Federal lands in the State of Montana do not have
suitable public access, and establishing a fund to acquire
easements to those lands from willing sellers would enhance
public hunting and fishing opportunities in the State of
Montana;
(4) the sale of the leaseholds at the Reservoir will reduce
Federal payments in lieu of taxes and associated management
expenditures in connection with the ownership by the Federal
Government of the leaseholds while increasing local tax
revenues from the new owners of the leased lots; and
(5) the sale of the leaseholds at the Reservoir will reduce
expensive and contentious disputes between the Federal
Government and leaseholders, while ensuring that the Federal
Government receives full and fair value for the acquisition
of the property.
SEC. 3. DEFINITIONS.
In this Act:
(1) CFRA.--The term ``CFRA'' means the Canyon Ferry
Recreation Association, Incorporated, a Montana corporation.
(2) Fund.--The term ``Fund'' means the Montana Hunter and
Fisherman Access Fund established under section 6(a).
(3) Lessee.--The term ``lessee'' means the holder of a
leasehold described in section 4(b) as of the date of
enactment of this Act, and the holder's heirs, executors, and
assigns of the holder's leasehold interest.
(4) Purchaser.--The term ``Purchaser'' means the person or
entity that purchases the 265 leaseholds under section 4.
(5) Reservoir.--The term ``Reservoir'' means the Canyon
Ferry Reservoir in the State of Montana.
(6) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(7) Trust.--The term ``Trust'' means the Canyon Ferry-
Missouri River Trust established under section 5(a).
SEC. 4. SALE OF LEASEHOLDS.
(a) In General.--Subject to subsection (c) and
notwithstanding any other provision of law, the Secretary
shall sell at fair market value--
(1) all right, title, and interest of the United States in
and to all (but not fewer than all) of the leaseholds
described in subsection (b), subject to valid existing
rights; and
(2) easements for--
(A) vehicular access to each leasehold;
(B) access to and the use of 1 dock per leasehold; and
(C) access to and the use of all boathouses, ramps,
retaining walls, and other improvements for which access is
provided in the leases as of the date of this Act.
(b) Description of Leaseholds.--
(1) In general.--The leaseholds to be conveyed are--
(A) the 265 cabin sites of the Bureau of Reclamation
located along the northern portion of the Reservoir in
portions of sections 2, 11, 12, 13, 15, 22, 23, and 26,
Township 10 North, Range 1 West; plus
(B) any small parcels contiguous to the leaseholds (not
including shoreline property or property needed to provide
public access to the shoreline of the Reservoir) that the
Secretary determines should be conveyed in order to eliminate
inholdings and facilitate administration of surrounding land
remaining in Federal ownership.
(2) Acreage; legal description.--The acreage and legal
description of each property shall be agreed on by the
Secretary and the Purchaser.
(c) Purchase Process.--
(1) In general.--The Secretary shall--
(A) solicit sealed bids for all of the leaseholds; and
(B) subject to paragraph (2), sell the leaseholds to the
bidder that submits the highest bid above the minimum bid
determined under paragraph (2).
(2) Minimum bid.--Before accepting bids, the Secretary, in
consultation with interested bidders, shall establish a
minimum bid based on an appraisal of the fair market value of
the leaseholds, exclusive of the value of private
improvements made by the leaseholders before the date of the
conveyance, by means of an appraisal conducted in accordance
with the appraisal procedures used under Federal law,
including, to the extent practicable, the procedures
specified in sections 2201.3 through 2201.3-5 of title 43,
Code of Federal Regulations.
(3) Right of first refusal.--If the highest bidder is other
CFRA, CFRA shall have the right to match the highest bid and
purchase the leaseholds at a price equal to the amount of
that bid.
(d) Conditions.--
(1) Consideration.--As consideration for the conveyance
under subsection (a), the Purchaser shall--
(A) contribute to the Trust the amount that is equal to 45
percent of the purchase price of the leaseholds;
(B) contribute to the Fund the amount that is equal to 45
percent of the purchase price of the leaseholds; and
(C) pay the Secretary for deposit in the Treasury of the
United States an amount that is equal to 10 percent of the
purchase price of the leaseholds.
(2) No charitable deduction.--The Purchaser, any owner,
member, or other interest holder in the Purchaser, and any
leaseholder shall not be entitled to a charitable deduction
under the Internal Revenue Code of 1986 by reason of the
making of the contribution under subparagraph (A) or (B) of
paragraph (1).
(3) Option to purchase.--
(A) In general.--The Purchaser shall give each leaseholder
of record of a leasehold conveyed under this section an
option to purchase the leasehold at fair market value.
(B) Nonpurchasing lessees.--
(i) Right to continue lease.--A lessee that is unable or
unwilling to purchase a property shall be permitted to
continue to lease the property for fair market value rent
under the same terms and conditions as the existing leases,
including the right to renew the term of the existing lease
for 2 consecutive 5-year terms.
(ii) Compensation for improvements.--If a lessee declines
to purchase a leasehold, the Purchaser shall compensate the
lessee for the full market value of the improvements made to
the leasehold.
(4) Historical use.--The Purchaser shall honor the existing
property descriptions and historical use restrictions for the
leaseholds, as determined by the Bureau of Reclamation.
(e) Administrative Costs.--Any administrative cost incurred
by the Secretary incident to the conveyance under subsection
(a) shall be reimbursed by the Purchaser.
SEC. 5. CANYON FERRY-MISSOURI RIVER TRUST.
(a) Establishment.--The Secretary shall encourage
establishment of a nonprofit charitable permanent perpetual
trust, similar in structure and purpose to the existing
trusts referred to in section 1(2), to be known as the
``Canyon Ferry-Missouri River Trust'', to provide a permanent
source of funding to acquire land and interests in land from
willing sellers at fair market value to conserve fish and
wildlife, enhance public hunting and fishing opportunities,
and improve public access at the Reservoir and along the
Missouri River and its tributaries from the confluence of the
Madison River, Gallatin River, and Jefferson River downstream
to the Reservoir.
(b) Board of Trustees.--
(1) Membership.--The trust referred to in subsection shall
have a Board of Trustees consisting of 1 representative of
each of--
(A) local agricultural landowners;
(B) a local hunting organization;
(C) a statewide hunting organization;
(D) a fisheries conservation organization; and
(E) a nonprofit land trust or environmental organization.
(2) Consultation.--In managing the Trust, the Board of
Directors shall consult with representatives of--
(A) the Bureau of Reclamation;
(B) the Forest Service;
(C) the Bureau of Land Management;
(D) the United States Fish and Wildlife Service;
(E) the Montana Department of Fish, Wildlife, and Parks;
(F) the Montana Science Institute at Canyon Ferry, Montana;
and
(G) local governmental bodies (including the Lewis and
Clark and Broadwater County Commissioners).
(c) Use.--
(1) Principal.--The principal amount of the Trust shall be
inviolate.
(2) Earnings.--Earnings on amounts in the Trust shall be
used to carry out subsection (a) and to administer the Trust.
(d) Management.--Land and interests in land acquired under
this section shall be managed for the purposes described in
subsection (a).
SEC. 6. MONTANA HUNTER AND FISHERMAN ACCESS FUND.
(a) Establishment.--There is established in the Treasury of
the United States an interest-bearing account, to be known as
the
[[Page S3129]]
``Montana Hunter and Fisherman Access Fund'', for the purpose
of acquiring land and interests in land in the State of
Montana from willing sellers at fair market value to--
(1) improve public access to Federal land in the State of
Montana for hunting or fishing; and
(2) enhance public hunting and fishing opportunities in the
State of Montana through the conservation of fish and
wildlife.
(b) Use.--
(1) Principal.--The principal amount of the Fund shall be
inviolate.
(2) Earnings.--
(A) In general.--Earnings on amounts in the Fund shall be
used to carry out subsection (a).
(B) Administration.--The earnings shall be used at the
joint direction of--
(i) the Chief of the Forest Service;
(ii) the Director of the Bureau of Land Management; and
(iii) the Director of the United States Fish and Wildlife
Service.
(c) Management.--Land and interests in land acquired under
this section shall be managed for the purposes described in
subsection (a).
______
By Mr. GRASSLEY:
S. 1914. A bill to amend title 11, United States Code, provide for
business bankruptcy reform, and for other purposes; to the Committee on
the Judiciary.
the business bankruptcy reform act of 1998
Mr. GRASSLEY. Mr. President, today I am introducing ``The Business
Bankruptcy Reform Act of 1998.'' As Members of this body may remember,
the National Bankruptcy Review Commission submitted a list of
recommendations to Congress in October of last year. So far, the public
has tended to focus on the consumer bankruptcy recommendations, which
unfortunately would have made it easier to get into bankruptcy and
would have given consumers even more of an upper hand. I think that
these recommendations were fatally flawed, and that's why I introduced
the Consumer Bankruptcy Reform Act with Senator Durbin last year to
tighten up the bankruptcy system and provide new consumer protections
when creditors use abusive tactics.
The legislation I am introducing today will make many badly-needed
reforms to the business provisions of the bankruptcy code. This
legislation will provide--for the first time ever--new protections for
patients of hospitals and HMOs and nursing homes that declare
bankruptcy. Under current law, the bankruptcy process is oriented
toward protecting the interests of creditors and helping the debtor
corporation reorganize. And that is all we need most of the time.
But hospitals and HMOs and nursing homes are different. Patients are
uniquely vulnerable and Congress needs to take special care to ensure
that patients are protected during the bankruptcy process. For that
reason, this bill allows a bankruptcy judge to appoint a patient
ombudsman to make sure that the bankruptcy process is fair to patients.
If the ombudsman determines that the quality of patient care is
declining, he must notify the bankruptcy court so that corrective
action can be taken.
This legislation also requires that the bankruptcy trustee ensure
patients are transferred to other hospitals when a health care provider
is winding down. Under current bankruptcy law, there's no such
requirement. Under current law, patients could just be thrown out and
have nowhere to go. Congress can't let that happen.
Importantly, to the extent that there are some State laws which
already require a State agency to place patients when health care
providers go under, this legislation will allow those agencies to
recoup their expenses from the estate of the bankrupt health care
provider. Otherwise, the bankruptcy code forces State taxpayers to pay
for something which should be paid for by the defunct health care
provider.
Following a recommendation of the National Bankruptcy Review
Commission, this legislation provides an important new protection for
employee health care and pensions. Under current law, if money is
withheld from wages to pay for health care insurance or pension
contributions, but a company declares bankruptcy before the withheld
money is actually transferred, then the bankruptcy code prohibits the
company from transferring this money. In practical terms, this means
that workers lose their health insurance and forfeit pension
contributions. I think this is wrong. So, my legislation will create a
special carve out so that withheld money can go for its intended
purpose.
The Business Bankruptcy Reform Act also makes several changes to the
way securities transactions are treated under the bankruptcy code. Many
of these changes are supported by the administration. I would call my
colleagues' attention to one provision in particular. As we all know,
home mortgage rates are at an all time low, allowing many Americans to
purchase homes for the first time or to move into a larger home to
accommodate a growing family. One factor in keeping mortgage interest
rates very low is the existence of a robust secondary market where
mortgage lenders can spread the risk by issuing securities backed up by
home mortgages. With the risk spread by a securities market, mortgage
bankers can make loans at lower interest rates.
Unfortunately, a provision of the bankruptcy code threatens to
undermine the viability of this important secondary market. And if the
secondary market dries up, then lenders will have to raise interest
rates. Under current law, it isn't clear that the income stream going
to the purchaser of the mortgage-backed securities will continue if the
lender declares bankruptcy. In my bill, we expressly say that the
income stream belongs to the securities purchaser and not the bankrupt
lender. This change will help ensure that the secondary market stays
strong by providing much-needed certainty to purchasers of mortgage-
backed and other asset-backed securities.
On another topic, this legislation enacts the model law on
international bankruptcies. When I held a hearing on international
bankruptcies before my subcommittee last year, I learned that many
times bankruptcy proceedings in this county are hampered because
foreign countries won't cooperate with our bankruptcy courts. This
model law would provide for standard procedures for recognizing and
cooperating with foreign bankruptcy proceedings. If other countries--
especially our trading partners--follow our lead in enacting this model
law, then our bankruptcy proceedings will be treated fairly and
American creditors will be able to get a fair shake for the first time
when trying to collect from a foreign corporation which has declared
bankruptcy.
The development of bankruptcy systems is a critically important
factor in ensuring that international trade will continue to expand and
benefit the United States economy. Many international insolvency
specialists tell me that the lack of a good bankruptcy system in the
Asian countries is making the Asian financial crisis even worse. When
we finally get to consider the IMF funding bill, I intend to offer an
amendment which would require the IMF to push for meaningful bankruptcy
reforms when they provide loans to countries in economic trouble. I
hope that my colleagues will support me in this effort.
Finally, the legislation I'm introducing today will provide for
special fast-track procedures for businesses that declare bankruptcy
which have less than $5 million in debt. Right now, these cases often
languish for years in bankruptcy without a real hope of reorganizing. I
believe that the bankruptcy code should identify cases which have no
realistic chance of reorganizing and get them into chapter 7 as quickly
as possible. In this way, creditors will get more of what they are
owed. Most of these special fast-track proceedings were recommended by
the Bankruptcy Review Commission, although I've added some changes to
reduce the chances that clever bankruptcy lawyers will find a way to
keep a company in chapter 11 which should be liquidated. The Business
Bankruptcy Reform Act also contains special tax provisions so that
taxing authorities will receive effective notice of a bankruptcy.
Mr. President, I believe that this bill will do much good for
patients, for creditors and for all Americans whose lives are
increasingly affected by business bankruptcies. I hope that we can pass
this bill in this Congress.
______
By Mr. LEAHY:
S. 1915. A bill to amend the Clean Air Act to establish requirements
concerning the operation of fossil fuel-fired
[[Page S3130]]
electric utility steam generating units, commercial and industrial
boiler units, solid waste incineration units, medical waste
incinerators, hazardous waste combustors, chlor-alkali plants, and
Portland cement plants to reduce emissions of mercury to the
environment, and for other purposes; to the Committee on Environment
and Public Works.
Omnibus Mercury Emissions Reduction Act of 1998
Mr. LEAHY. Mr. President, today I am introducing the ``Omnibus
Mercury Emissions Reduction Act of 1998.'' As United States Senators,
we all have a responsibility to build a nation for our children. As a
recent grandfather, this commitment has never been more real for me. I
am introducing this comprehensive piece of legislation to eliminate
mercury--one of the last remaining poisons without a specific control
strategy--from our air, our waters and our forests. By eliminating
mercury from our natural resources, we will protect our nation's most
important resource--our children and grandchildren.
As we learned from the campaign to eliminate lead, our children are
at the greatest risk from these poisons. I often ask myself how many
Albert Einsteins have we lost in the last generation because of the
toxics they have been exposed to? Just as with lead, we know that
mercury has much graver effects on children at very low levels then it
does on adults. The level of lead pollution we and our children breathe
today is one-tenth what it was a decade ago. That figure by itself is a
tribute to the success of the original Clean Air Act. I want to achieve
the same results with mercury.
Mercury is toxic in every known form and of utterly no nutritional
value. At high enough levels it poisons its victims in terribly tragic
ways. In Japan, victims of mercury poisoning came to be known as
suffering from Minimata Disease, which took its name from the small
Minimata Bay in which they caught fish for their food.
For years, the Chisso Company discharged mercury contaminated
pollution in the Bay, which was taken into the flesh of fish and then
the people who ate them. Their disease was frightfully painful, causing
tremors and paralysis, and sometimes leading to death. Thankfully,
discharges of mercury like those in Minimata Bay have been eliminated.
But a torrent of air pollution still needlessly pours this heavy metal
into the air of North America, poisoning lakes and streams, forests and
fields and--most importantly--our children. Mercury control needs to be
a priority now because we know, without a doubt, of the neurological
damage it causes.
This is not to say that men, women and children are doubled over in
agony as they were three decades ago in Japan. But wildlife are being
killed--we know that endangered Florida panthers have been fatally
poisoned by mercury and that loons are endangered as well. In Lake
Champlain we now have fish advisories for walleye, trout and bass even
though we have relatively no mercury emissions within our own state
borders.
Instead, we Vermonters are exposed to mercury and other pollutants
that blow across Lake Champlain and the Green Mountains every day from
other regions of the country. The waste incinerators and coal-fired
power plants are not accountable to the people of Vermont and therefore
a federal role is needed to control the pollution.
That is part of the reason voters send us here. They expect Members
of the Congress to determine what is necessary to protect the public
health and the environment nationally, then require it. And in many
cases, perhaps most, we have done that. But not with respect to
mercury.
Mr. President, what I propose is that we put a stop to this poisoning
of America. It is unnecessary, and it is wrong. Mercury can be removed
from products, and it has been done. Mercury can be removed from coal-
fired powerplants, and it should be done. With states deregulating
their utility industries, this is the best opportunity to make sure
powerplants begin to internalize the cost of their pollution. We cannot
afford to give them a free ride into the next century at the expense of
our children's health.
So, too, should mercury be purged from chlor alkali plants, medical
waste incinerators, municipal combustion facilities, large industrial
boilers, landfills, lighting fixtures and other known sources.
My bill directs EPA to set mercury emission standards for the largest
sources of mercury emissions. The bill requires reducing emissions by
95 percent, but it also lets companies choose the best approach to meet
the standard at their facility whether through the use of better
technology, cleaner fuels, process changes, or product switching.
We will hear a lot of rhetoric about how much implementing this bill
will cost. In advance of those complaints I want to make two points.
First, when we were debating controls for acid rain we heard a lot
about the enormous cost of eliminating sulphur dioxide. But what we
learned from the acid rain program, is that when you give industry a
financial incentive to clean up their act they will find the cheapest
way. More often than not, assertions about the cost of controlling
pollution grossly overestimate and distort reality. If you look at
electricity prices of major utilities since the acid rain program was
implemented, their rates have remained below the national average and
some have actually decreased--even without adjusting for inflation.
Secondly, and most importantly, the bottom line here should not be
the cost of controlling mercury emissions, but the cost of NOT
controlling mercury. While we may not be able to calculate how many
Einstein's we have lost, if we lose one the price has been too high.
______
By Mr. DURBIN:
S. 1916. A bill for the relief of Marin Turcinovic, and his fiancee,
Corina DeChalup; to the Committee on the Judiciary.
private relief legislation
Mr. DURBIN. Mr. President, I rise today to introduce a private bill
for the relief of Marin Turcinovic of Croatia and his wife Corina
DeChalup of France. My bill would grant permanent resident status to
Marin and Corina, affording them the legal security they need to
rebuild their lives in this country.
Marin Turcinovic first arrived in the United States from Croatia in
January 1990. He was admitted on an H-1 visa as a member of the band
Libertas. On February 8, 1990, during the period of his authorized
stay, Marin was hit by a car in Fairview, New Jersey. Both his legs
were shattered. His spinal cord was severed, leaving him paralyzed
below the neck. He will probably never walk again. His then-fiancee,
Corina DeChalup of France, immediately came to the United States. Both
Marin and Corina have been in the United States since their initial
entries, and neither now has legal status.
Marin requires 24-hour medical care for his survival. An insurance
settlement from the car accident litigation provides Marin with
lifetime medical and rehabilitative care, in a specially modified house
located in the Beverly community of Chicago. According to Marin's
lawyers, the insurance settlement that provides for Marin's lifetime
shelter and medical care would not cover him at another location. A
medical malpractice suit against the doctors who initially provided
care to Marin is pending.
Corina and Marin married in February 1996, 6 years after his
accident. Corina is an essential part of Marin's life. She has been
with Marin throughout his ordeal and has been instrumental in
coordinating his medical care. She has directly provided care for
Marin, and he could never have reached the degree of recovery he now
enjoys without her support.
Before arriving in the U.S., Corina, a university graduate, worked as
a tour guide for a Yugoslavian tourist agency. Although her days are
primarily devoted to Marin, she has the skills and desire to find part-
time employment and would like to obtain authorization to work.
According to Marin and Corina's lawyer, Corina has no way to legally
gain permanent resident status in the U.S. Because she entered the U.S.
under the visa waiver pilot program, she was subject to an order of
deportation, without the right to an administrative hearing, once she
overstayed her 90-day authorized admission in February 1990. Since
1994, she has received a stay of deportation in 1-year increments. She
cannot currently travel to see her family in
[[Page S3131]]
France, and she has no assurance that her stay will be renewed from 1
year to the next.
Marin was placed in deportation proceedings in 1997 at his request.
This allowed him to seek a suspension of deportation, a legal remedy
that in the past has resulted in permanent resident status. Although
Marin's application was granted, the grant is conditional. If Marin's
grant does not fall within the annual quota set by the Illegal
Immigration Reform and Immigration Responsibility Act of 1996, it is
unclear to what status he will revert. There is a possibility that
Marin would be issued an order of voluntary departure.
Corina's status depends on Marin. If granted permanent resident
status, Marin will be able to petition for Corina, but she will face a
4- to 5-year wait before qualifying for resident status, herself.
Mr. President, 8 years ago, fate tragically changed forever the lives
Marin Turcinovic of Croatia and Corina DeChalup of France. A terrible
accident in the United States left Marin permanently injured, making
his return home impossible. Fortunately for Marin, he had the love and
support of Corina, without whom he may not have made it this far. Given
the tremendous adversity that Marin and Corina already face on a day-
to-day basis, I believe it appropriate for Congress to grant them
permanent resident status. Such status would clear up much of the
uncertainly that currently clouds their future, and would allow Marin
and Corina to rebuild their lives in our country with confidence.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1916
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PERMANENT RESIDENCE.
Notwithstanding any other provision of law, for purposes of
the Immigration and Nationality Act (8 U.S.C. 1101 et seq.),
Marin Turcinovic and his fiancee, Corina Dechalup, shall be
held and considered to have been lawfully admitted to the
United States for permanent residence as of the date of the
enactment of this Act upon payment of the required visa fees.
SEC. 2. REDUCTION OF NUMBER OF AVAILABLE VISAS.
Upon the granting of permanent residence to Marin
Turcinovic and his fiancee, Corina Dechalup, as provided in
this Act, the Secretary of State shall instruct the proper
officer to reduce by the appropriate number during the
current fiscal year the total number of immigrant visas
available to natives of the country of the aliens' birth
under section 203(a) of the Immigration and Nationality Act
(8 U.S.C. 1153(a)).
______
By Mr. DURBIN (for himself, Mr. Chafee, Mr. Reed, and Mrs.
Boxer):
S. 1917. A bill to prevent children from injuring themselves and
others with firearms; to the Committee on the Judiciary.
the child firearm access prevention act
Mr. DURBIN. Mr. President, I rise today with Senators Chaffee, Reed
and Boxer, to introduce the Child Firearm Access Prevention Act.
The tragedy which occurred in Jonesboro, AR, last week raises many
questions. Two come to mind immediately. Why do children kill? I do not
know the answer to that. I have heard a variety of opinions from people
who suggest that violent television and violent movies are somehow
contributing to this. There are others who say, if the children would
just pray in school, it would make all the difference in the world.
Some look to the families more than the schools; others think the
schools have a greater role to play.
We will debate this at length, and I am sure many of us will come up
with a lot of different explanations as to why children reach the point
in their young lives where they would take the life of another.
But the tragedy in Jonesboro raised another question which I think we
can address because it is a simpler question. How do children at that
young age come to possess lethal weapons? Think about it. An 11-year-
old and a 13-year-old with 10 firearms--rifles, shotguns, and handguns,
and 3,000 rounds of ammunition--went into the woods behind that middle
school, tricked the students out with a fake fire alarm, opened fire
and shot off somewhere in the range of 30 to 40 rounds before they were
finally stopped.
Four little girls were killed. A teacher, who deserves all of our
recognition and praise for her courage, stood in the line of fire to
protect one of those little girls and lost her own life. This teacher,
the mother of a 2-year-old, lost her life defending her students.
How do kids come into possession of firearms? They do not buy them.
In most States it is unthinkable that they would even approach a
counter and try. And yet, day after day in America there is further
evidence of children, younger and younger, being found with firearms.
The day after the Jonesboro, AR, tragedy, in Cleveland, OH, a 4-year-
old showed up at a day-care center with a loaded handgun.
In my home State of Illinois, in Marion, IL, a high school student
showed up at school the next day with a handgun.
In Daly City, CA, the day after Jonesboro, a 13-year-old was arrested
for attempting to murder his principal with a semiautomatic pistol.
There is something we can do about this. I am not sure that it will
solve the problem completely, but it can help. Fifteen States have
already recognized this problem and done something about it. These
States have passed a child access prevention law which is known as a
CAP law, saying to those who purchase and own handguns, it is not
enough for you to follow the law in purchasing them and to use those
guns safely; you have another responsibility. If you are going to own a
firearm in your home, you have to keep it safely and securely so that
children do not have access to it.
And these laws are effective. Florida was the first state to pass a
CAP law in 1989. The following year, unintentional shooting deaths of
children dropped by 50 percent. Moreover, a study published in the
Journal of the American Medical Association in October 1997 found that
there was a 23% decrease in unintentional firearm related deaths among
children younger than 15 in those states that had implemented CAP laws.
According to the Journal of the American Medical Association, if all 50
states had CAP laws during the period of 1990-1994, 216 children might
have lived.
Should we consider these state laws as a national model? I think the
obvious answer is yes, because the tragedy in Jonesboro, which we will
not forget for a long, long time, unfortunately, is not unique. Every
day in America 14 young people, ages 19 and under, are killed in gun
homicides, suicides and unintentional shootings, with many more
wounded.
The scourge of gun violence frequently attacks the most helpless
members of our society--our children.
Mr. President, what I propose today is Federal legislation that will
apply to every State, not just 15, but every State. And this is what it
says. If you want to own a handgun, a rifle or shotgun, and it is legal
to do so, you can; but if you own it, you have a responsibility to make
certain that it is kept securely and safely.
You may buy a trigger lock. Senator Herb Kohl of Wisconsin has a
proposal that all handguns be sold with trigger locks. I support it. I
am a cosponsor of it. It makes sense.
How many times do you read in the paper, how many times do you listen
on TV, to kids with their playmates and the gun goes off and someone is
killed? A trigger lock, as Senator Kohl has proposed, is sensible. It
should be required. It shouldn't even be debated. I think that
legislation will go a long way toward reducing gun violence.
But beyond that proposal, the legislation I propose today, says to
every gunowner, if it is not a trigger lock, put that gun in a place
where that child cannot get to it.
As to these two kids, 11 and 13 years old, God only knows what was
going through their minds when they were setting out to get the guns to
go out and start shooting. They first stopped at the parents of one of
the kids and wanted to pick up that parents' guns. That parent had the
guns under lock and key in a vault and they couldn't get to them. So
they thought about it and said, wait a minute, my grandfather has some,
too; let's go over to his place. And that is where they came up with
the weapons and the ammunition.
[[Page S3132]]
In one instance, one parent had taken the necessary steps to take the
guns and keep them away from kids. Sadly, it appears--and I just say
``appears'' because I do not know all the details--in another case that
did not happen.
Now a lot of people will say to me, ``There they go again, those
liberals on Capitol Hill. Another bill, another law to infringe on
second amendment rights.'' Oh, I know I will hear from the folks from
the National Rifle Association, all the other gun lobbies, screaming
bloody murder about the second amendment.
But look at the 15 States that have already passed these child access
prevention laws, to protect kids, to say to gun owners ``you have a
special responsibility.'' You will not find a list of the most liberal
States in America. The first State to pass this legislation in 1989 was
Florida. The list goes on: Connecticut, Iowa, California, Nevada, New
Jersey, Virginia, Wisconsin, Hawaii, Maryland, Minnesota, North
Carolina, Delaware, Rhode Island, and in 1995, the last State to pass a
child access prevention law, certainly no bleeding heart State by any
political definition, was Texas. The Texas law says it is ``unlawful to
store, transport or abandon an unsecured firearm in a place where
children are likely to be and can obtain access to it,'' and it is a
criminal misdemeanor if you do it.
I am going to ask my colleagues in the Senate to not only return home
during this recess and to not only witness those sad events on
television--the funerals in Jonesboro, the tributes--but to also
resolve to do something about it. That is what we are here for. That is
why we were elected to the Senate and the House, not just to be sad as
we should be, but to do something about it. Not to infringe on people's
right to own firearms, but to say ``Own them responsibly, put them
securely in your homes, keep them safely, keep them away from
children.''
Mark my words, my friends, and you know this from human experience,
no matter where you hide a gun or a Christmas gift, a kid is going to
find it. You can stick it in a drawer and say, ``Oh, they will never
look behind my socks, that is the last place in the world,'' or up on
some shelf in the closet and believe your child can't reach that, but
you know better. You know when you are gone and the house is empty
those kids are scurrying around and looking in those hiding places. So
I hope we can address this issue.
First, Senator Kohl's legislation for these child safety devices,
these trigger locks, will help. But then take the extra step, follow
these 15 States and enact a federal law.
But please, let this Senate and this House, before we leave this
year, do something to make certain that those troubled children cannot
get their hands on a firearm. I think every parent in America,
particularly those of children of school age, paused at least for a
moment after they heard about Jonesboro and thought, could it happen to
my son, my daughter, my grandson, my granddaughter? The sad reality of
life in modern America, is, yes, it could. There are so many weapons
being kept so carelessly that it could happen to any of us or any of
our children in virtually any school in America.
Mr. President, I know that the Senate has a very busy schedule and
limited opportunity this year, but I hope as part of our work we will
let the lesson of the tragedy of Jonesboro result in legislation that
will be designed to protect children and schoolteachers and innocent
people in the future.
Mr. President, I ask unanimous consent that a copy of the legislation
be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1917
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 Firearm Access
Prevention Act''.
SEC. 2. CHILDREN AND FIREARMS SAFETY.
(a) Secure Gun Storage or Safety Device.--Section 921(a) of
title 18, United States Code, is amended by adding at the end
the following:
``(34) The term `secure gun storage or safety device'
means--
``(A) a device that, when installed on a firearm, prevents
the firearm from being operated without first deactivating or
removing the device;
``(B) a device incorporated into the design of the firearm
that prevents the operation of the firearm by anyone not
having access to the device; or
``(C) a safe, gun safe, gun case, lock box, or other device
that is designed to be or can be used to store a firearm and
that can be unlocked only by means of a key, a combination,
or other similar means.''.
(b) Prohibition and Penalties.--Section 922 of title 18,
United States Code, is amended by adding at the end the
following:
``(y) Prohibition Against Giving Juveniles Access to
Certain Firearms.--
``(1) Definition of juvenile.--In this subsection, the term
`juvenile' means an individual who has not attained the age
of 18 years.
``(2) Prohibition.--Except as provided in paragraph (3),
any person that--
``(A) keeps a loaded firearm, or an unloaded firearm and
ammunition for the firearm, any of which has been shipped or
transported in interstate or foreign commerce or otherwise
substantially affects interstate or foreign commerce, within
any premise that is under the custody or control of that
person; and
``(B) knows, or reasonably should know, that a juvenile is
capable of gaining access to the firearm without the
permission of the parent or legal guardian of the juvenile;
shall, if a juvenile obtains access to the firearm and
thereby causes death or bodily injury to the juvenile or to
any other person, or exhibits the firearm either in a public
place, or in violation of subsection (q), be imprisoned not
more than 1 year, fined not more than $10,000, or both.
``(3) Exceptions.--Paragraph (2) does not apply if--
``(A) the person uses a secure gun storage or safety device
for the firearm;
``(B) the person is a peace officer, a member of the Armed
Forces, or a member of the National Guard, and the juvenile
obtains the firearm during, or incidental to, the performance
of the official duties of the person in that capacity;
``(C) the juvenile obtains, or obtains and discharges, the
firearm in a lawful act of self-defense or defense of 1 or
more other persons; or
``(D) the person has no reasonable expectation, based on
objective facts and circumstances, that a juvenile is likely
to be present on the premises on which the firearm is
kept.''.
(c) Role of Licensed Firearms Dealers.--Section 926 of
title 18, United States Code, is amended by adding at the end
the following:
``(d) The Secretary shall ensure that a copy of section
922(y) appears on the form required to be obtained by a
licensed dealer from a prospective transferee of a
firearm.''.
(d) No Effect on State Law.--Nothing in this section or the
amendments made by this section shall be construed to preempt
any provision of the law of any State, the purpose of which
is to prevent children from injuring themselves or others
with firearms.
______
By Mr. DORGAN (for himself, Mr. Daschle, Mr. Wellstone, Mr.
Johnson, Mr. Conrad, Mr. Harkin, and Mr. Baucus):
S. 1918. A bill to require the Secretary of Agriculture to make
available to producers of the 1998 and subsequent crops of wheat and
feed grains nonrecourse loans that provide a fair return to the
producers in relation to the cost of production; to the Committee on
Agriculture, Nutrition, and Forestry.
the cost of production safety net act of 1998
Mr. DORGAN. Mr. President, we now have had two crop years under the
1996 farm law and soon farmers across this country will be planting
their spring crops for the third year of this seven-year farm law. It
is time to take a serious look at how this new farm law, often called
the Freedom to Farm law, is working. Is it achieving the goals and
promises that were made? What is happening to our nation's system of
family farm agriculture under this law? Is it creating new hope and new
opportunities for a new generation of family farms on the land? Or is
it pushing more and more family farm operators off the land and further
depopulating rural America?
Launched during a period of high grain prices with a flurry of
optimism and hope, the Freedom to Farm law is taking family farmers
down a very rocky path and even more uncertain future. The initially
generous farm payments that fueled its passage are now giving way to
the harsher realities of not having a working safety net.
When poor crops, low prices, escalating production costs, and
abnormal weather all arrive at the same time, the current farm law,
with its capped commodity loan rates and declining transition payments,
is poorly suited to respond to the disastrous conditions facing many of
our farm families. During the debate of the 1996 farm bill, I said that
the time would come when
[[Page S3133]]
farm commodity prices would fall well below the costs of production and
we would need a working safety net for our nation's family farmers. In
fact, the failure to have a working safety net was the primary reason
that many of us could not support the 1996 farm bill.
The proponents of the Freedom to Farm law promised that a second look
would be taken if rural America ran into trouble under their farm bill.
As we begin the third crop year under this farm law, there is no
question that large portions of rural America are in serious trouble.
The economic crisis in the countryside is being demonstrated every week
by the hundreds of farm auction notices that appear in rural America's
newspapers, particularly our agricultural weeklies. The sheer volume of
these farm auctions demands that the farm bill debate be reopened, so
that we can make the needed mid-course corrections to this farm law.
Behind the escalating exodus of farmers this spring is the underlying
issue of farm commodity prices. The value of North Dakota's spring
wheat and barley crops this past year have each dropped by 41 percent
from the previous year. This is a combined total of $659 million less
than the year before. That's a tremendous drain of money out of farmers
pockets and North Dakota's farm economy. It is why our farms are not
cash flowing and our bankers are having more and more difficulty in
financing their borrowers for another year.
After talking with North Dakota farmers and the agricultural
community, I'm convinced the problem is not just the blizzards and
floods that we have experienced in the past few years, nor is it just
confined to North Dakota.
There are a number of underlying problems that must be addressed
within our nation's farm policies. We need increased agricultural
research to combat specific crop disease problems such as fusarium head
blight, which is also known as scab. This disease has had a devastating
effect on producers in many parts of North Dakota. We need to recognize
that the current Federal Crop Insurance program is not adequately
addressing disaster conditions, particularly in regions which have
suffered a succession of weather-related disasters. We need to address
a multitude of trade issues that are adversely affecting our foreign
agricultural markets, and unfairly interfering in our domestic markets.
Bottom line is farm prices
We can talk for hours about the variety of problems that are facing
farmers, but the bottom line is and always has been the commodity
prices that our farmers receive when they seek to sell their harvests
in the marketplace. The simple fact is that ever since the passage of
the 1996 farm law wheat prices have been on a downward slide, and there
is nothing in place to stop these prices from falling further.
Today, I am introducing legislation which would strengthen the farm
commodity loan safety net, by establishing a new targeted commodity
loan program geared to the actual costs of production. This is an
addition to the current commodity loan program. My bill would not take
anything away from producers, nor would it change any of the existing
programs in current law. The legislation I am introducing would
establish a new tier of marketing loans to provide a working safety net
targeted to our nation's family farms for wheat and feed grains.
We need to provide farmers, particularly our wheat producers, an
effective marketing tool so that they can hold off selling their
harvests until prices improve sufficiently to meet their production
costs. They need a functional loan program that allows orderly
marketing so that the supply they offer to the market demands a better
price.
When Congress told family farmers it was going to phase out price
supports and farmers would have to get their price from the
marketplace, Congress should have established a commodity loan program
to allow such orderly marketing. Without a decent commodity loan, too
many farmers are forced to sell grain when the market offers dirt cheap
prices.
To provide a working safety net, we need to increase the loan rate to
bring it more in line with the costs of production and give wheat
producers greater equity with other commodities. We also need a loan
that lasts at least 12 months and can be extended for another 6 months,
if needed.
The U.S. Department of Agriculture has determined that the most
recent five year average of the economic costs of production for wheat
is $5.00 per bushel. Under my plan, the loan rate would be pegged at a
minimum of 75% of those costs. That would mean a minimum wheat loan of
$3.75 per bushel, compared to the $2.58 maximum under the current farm
law.
I am greatly concerned that the current wheat loan lags significantly
behind other commodities in relationship to production costs. For
example, the current maximum loan rate under the 1996 farm law for corn
is 72% of its economic costs of production. The maximum loan rate under
current law for soybeans is set at 89% of its costs of production. Yet,
the maximum loan available for wheat under the current farm law is just
52% of the costs of production.
Equity among major farm commodities requires that Congress take a
close look at why there is such a great discrepancy among loan rates
for our major commodities in relationship to the costs of production of
these commodities. Based on the fact that current wheat loans are at
the lowest level in relationship to production costs, it is not
surprising that wheat country is in greater economic trouble than the
other sections of our nation's agriculture.
This legislation is a companion bill to S. 26, the Agricultural
Safety Net Act, introduced by Senator Daschle and cosponsored by myself
and others. Both bills seek to improve the underlying commodity loan
program and provide higher, more meaningful commodity loan rates for
our producers. S. 26 would remove the commodity loan caps in the
current farm law. As a result, commodity loan rates could actually be
set at 85 percent of the simple five-year Olympic average of prices
received by farmers. S. 26 provides an important cushioning effect for
farm prices and would help stabilize farm prices and thereby help
farmers meet the challenges of price volatility in the marketplace.
The bill I am introducing today would add a critically important
bottom line to ensure that farmers receive cost of production returns
on a basic level of production. It establishes that commodity loan
rates for wheat and corn must be at a minimum level of 75 percent of
the economic costs of production. Other feed grain loan rates would be
based on the historic relationship of using their feed equivalency
value to corn.
Targeting farm programs to family farmers
There is one more essential reform. My plan targets the benefits to
family farmers. My new loan program would be available on the first
20,000 bushels of wheat, and 30,000 bushels of corn, and similar
amounts for other feed grains for each farm. By setting a limit on the
amount of loans available to any farm, it not only ensures that the
primary benefits go to our family farmers, but it also means that
overproduction will be subject to the disciplines of market forces.
We cannot afford to cover every bushel produced in this country, so
we need to target them to the family farm. If somebody wants to farm
the entire township or even the entire county they can do so, but we do
not need to give them a safety net for everything they produce. If they
wish to take the risks of such endeavor, they should be free to do so.
But, they shouldn't have the government as their silent partner.
One of the major problems of past farm programs has been that they
were not targeted to an initial basic production level to family
farmers. The farm programs were basically open-ended programs. The more
you produced, the greater benefits you received. Thus the benefits of
the farm program tended to accumulate at the top, rather than spreading
out across the base of family farmers in rural America. Rather than
carrying out our nation's historic goal of maintaining a widely-
dispersed system of family farm agriculture, unfortunately the Freedom
to Farm law, continued the old farm program's top-loaded pattern in its
transition payment scheme.
My plan would target the benefits of a working safety net directly
related to the costs of production to the initial production of family
farmers in this
[[Page S3134]]
country. It is a true safety net designed to fit the typical family
farmer. The simple fact is that our family farmers are the ones that
have the greatest need for a safety net based on production costs. It
makes good sense and good public policy to target our farm program to
our family farmers. Such a safety net is particularly important to the
beginning farmer and other low-equity farmers because it provides an
assurance that they can more fully recover their costs during periods
of low prices. It provides the stability they need to build their farm
operation and it gives rural America the opportunity to reinvigorate
the family farm system.
My plan continues to let farmers plant whatever they want, based on
market signals. But it would also let them market their grain more
effectively in response to those same market signals. It provides a new
working safety net, and gives family farmers a tool they need as they
do business in a market filled with far more powerful interests and
forces, most of whom want lower, not higher, prices.
There are those who are fearful that if Congress reopens the farm
bill debate that somehow the nation would return to the production
controls and government involvement in planting decisions of past farm
programs. This is simply not the case. I don't know of anybody who
seriously wants to go back to such government involvement in
agricultural production decisions.
In fact, those who believe that is the framework of agricultural
policy choices, are not only misreading the current situation, but also
did not listen very closely to the debate in the 1996 farm law. The
debate was not about government production controls. The debate was
whether or not there should be a safety net for family farmers, and how
should that safety net be constructed. There were no bills offered in
the farm bill debate to return to production controls. The debate was
about whether to phase out farm programs in their entirety or to reform
our nation's farm laws so that family farmers have a working safety
net.
How do we construct a safety net that provides greater marketing
capabilities into the hands of our family farmers? That is the debate
we must have in this session of Congress. We cannot afford to wait
while thousands of family farmers are in the process of leaving their
homesteads and their chosen profession, and their dreams, and thousands
of others are at increased risk of being forced out of agriculture.
Mr. President. During this past Christmas season, I received a copy
of a family holiday letter from a fourth generation family farm couple
that announced their decision to leave their chosen profession of
farming and ranching. George and Karen Saxowsky of Hebron are scheduled
to have their farm auction this spring. It is a powerful letter that
captures the challenges, frustrations, and dreams of those families who
have been struggling to make a livelihood in agriculture. They consider
themselves lucky, because they were not forced by the bank to make the
decision to leave farming. Yet, they have a host of loans and bills to
pay and are not sure of how they will get all of that done. I ask
unanimous consent that this letter be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Holiday Greetings to our Friends and Families:
It is early Sunday morning and while the house is still
quiet with everyone sleeping and the trees are so beautifully
frost covered, I thought I would dash off a quick line in
spite of my resolution not to send a letter this year--when I
bought the Christmas cards I really loved the message but
thought, that is enough reading for most people!
In April we had the worst blizzard ever--the city of Hebron
was without electricity for 48 hours, but we did have it most
of the time. A ``city'' friend and classmate of George's
called during the blizzard to say he just loves a good
blizzard--my perspective was different so as a gift to him I
started a chronicle of the storm, the events that went with
it, and the aftermath in a blow-by-blow account that took 15
typed pages; it was my way of coping and I handled everything
fine at the time but now I can't read it without crying.
Jason was off the farm during the whole thing but Glendon was
here and such wonderful help and such a trooper.
March had gone out like a lamb with 60 degree days. The
predictions were the storm would miss us; then changed to 3-5
inches of snow with wind and it would end Friday night. We
had just bought another large portable (can be moved with two
tractors) calf shelter, so now had two, and have lots of
corrals, wind breaks, protection, feed and hay on hand--so
felt pretty confident we were ready.
The storm actually raged all day Friday, Saturday, and on
into Sunday afternoon with gusts through the evening. We got
some outrageous amounts of snow--after twenty-four inches it
didn't matter anymore.
The cattle started running with the storm, the guys were
able to get them turned around and back to corrals but that
was just the beginning of the nightmare! We chased different
herds into protected areas (of course they don't want to go),
then we worked on getting 70 calves into the calf-shelter and
decided to haul those that were freezing from the corrals
into the barn (the pick-ups, tractors nor bobcat could get
through the snow) fighting 50 mph winds, George bought one
calf while I tried to help Glendon bring another--going up
hill and fighting the wind in thigh deep snow--I just
couldn't do it. We got those two to the barn, decided they
were in such bad shape if we were going to save them they
would have to go to the house so took them there, then
reassessed the situation. Glendon said, ``If we do another
trip I'll have to pull Mom and the calf, in the calf sled, up
hill, in the blizzard!'' And that was the truth of it.
The tractor bucket broke, but they couldn't get the tractor
to the shop to weld it so in the raging blizzard they brought
the welder, on a calf sled, from the shop to the house,
pulled my stove ahead to plug it in, drove the tractor up on
the porch and welded it in the kitchen doorway--twice. The
stories just go on and on (guess you had to be there)! Those
poor guys worked all day in the blizzard, came in exhausted,
took a quick nap and went back out. At 7:30 Saturday night
they were coming in for supper when they heard loud cracks in
the barn--the roof beams were cracking from the weight of the
snow! They stayed out and shoved off the roof until
11:30 (figured they moved about 3 tons of snow and ice),
then got up at five the next morning and worked all day
again.
As the storm abated Sunday evening I could hear Glendon
yelling and ran to see what was going on now, but couldn't
find him. Here, they had found a cow lying on its side
drowning in muck. Glendon was lying flat on his belly holding
the cows head out of the muck while George was trying
frantically to get the tractor down to him. I plowed through
four foot deep snow to help--the first tractor got wet and
quit. (All during the storm we had distributor caps in the
oven drying out!) He got the Bobcat--it quit; he got the next
tractor and we made it down there, tore a fence down, put
chains on the cow and pulled her out. She died; as did a calf
that had been buried in the snow someplace in the ten feet
where we had pulled the cow and we didn't even see, until the
snow melted enough, that it was under her; as did those two
calves in the basement; as did a calf that had followed its
mother to the water fountain, got stuck in the snow and froze
to death standing up--we must have walked by that calf fifty
times but with the blizzard didn't see it--they get snow
covered really fast; as did the cow in the corral with a roof
over her head with water and hay right beside her; as did . .
. well, you get the picture. It continued for fourteen days
after the storm, every day we lost at least one cow and/or
calf. We took them to the vets for autopsies and what-not but
it just seemed there was nothing we could do to save them.
One day we made it to 5:00 without any dying and thought the
curse was broken but by midnight we had lost a cow and a
calf. It was terrible, terrible time, but we lived through
it--but not alone. Friends were there for us. On the Friday
after the storm, one called to tell us to get out of the
house and come to town for a Fireman's Dance--we were just
too exhausted and depressed--but he was pushy (he did the
same thing for us after last year's cow incident on I-94. We
went, and visited with other farmer-ranchers who were in the
same boat--it really was so helpful and encouraging.
We were really dreading the first snow of this winter. Long
about October, George started talking about quitting
farming--I took it as a mid-life crisis; a one time slide.
But, he kept talking . . . and then started making plans. We
would put in a crop in '98 and quit in '99. I still thought
`this-too-shall-pass'' but he just got more serious. In
November I started getting calls asking if I would like a job
off the farm? I have to tell you, I was so flattered that
they even considered me capable of doing what they needed; I
had been self-employed for almost 25 years. I turned them
down, but it did start the wheels turning. Then, there was an
ad in the paper for a job in Hebron with benefits. We talked
about it and I applied; they offered me the job and I took
it. This was not easy, now we couldn't put a crop in this
spring as the job is 40 hours a week including every other
Saturday and George can't farm without me.
The bottom line is; a 47 year old, 4th generation farmer in
his 27th year of farming is quitting farming.
I started working at the Credit Union on December 1st. I
thought my world would fall apart--the week before I started
work everything just `went-to-hell-in-a-basket' and I almost
decided I couldn't do it! We sold a semi load of cattle,
checked the night before and the market was strong so loaded
them up early in the morning. At 10:00 the auctioneer called
and said the bottom had fallen out of
[[Page S3135]]
the market, a bunch of Canadian cattle had just hit the meat
packing plants and their buyers weren't buying. George was
gone so I had decided what to do; with paying to have them
hauled out, and back, then to sale again I said to let
them go, when George got home he agreed with me but at the
next sale the price was strong again--George and I said,
``That's why we're getting out of farming--there is no
predictability!!''
It was like the farm really needed both of us--as much for
moral support as the labor itself. The clincher almost came
on Sunday night (before my new job on Monday morning) when I
had planned a special ``last-supper'' of T-bones and had them
thawing on the counter while I was working on the computer--
the cats jumped up on the counter and ate them!! Monday
morning came and--I went to work. I was so surprised, but I
just love my job!! I don't know if it is the people I work
with, the people that come in, the feeling of accomplishment,
the challenge of balancing the books or what (there is life
after farming???) but, I am really happy that I followed
through!! In training the hardest part was the balancing out
and having everything in the main office by 3:00--one night
it was 5:15. Until we actually balance I am always so
grateful if I am ``long'' on the money side so at least then
they know I didn't take it!! I seem to have the hang of it
now, so it is less stressful, easier and even balancing is
fun! Everyone is so nice, and I really am trying hard--but
keep me in your prayers!
It sounds like we are having an auction sale in March on
the Saturday before Palm Sunday. We are planning on renting
out the land and selling the cattle but still living on the
farm. George will continue making hay to sell, doing custom
combining and has been working with the local electrician and
for elevator doing some carpentry stuff. I thought the deal
was if I took a job he would stay home until the cows were
gone but . . . I guess not!!
I have friend who just lost her 38 year old son-in-law to a
24 hour illness. Then, trying to come back home from her
daughter and grandchildren she was delayed three days as the
planes couldn't land due to fog. She was home three days when
her house caught on fire. The good news is we're small town.
We care about and support each other. We may have our little
squabbles and irritations but we get over it and move on!
Pastors sermon today was about helping each other cut the
tops off some of the ills we have to climb and walking with
them through the valley of grief for their upbuilding,
encouragement, and consolation. We thought of you, our
friends and family! With that thought in mind, we wish you
little knolls rather than mountains to climb, friends to
share the valleys with a sincere * * *.
Merry Christmas and a very Happy New Year!!
George and Karen Saxowsky, Hebron, North Dakota
Mr. DORGAN. Mr. President, in reading this letter, I am reminded of
the reasons why it is so important that our nation provide a national
agricultural policy framework that not only fosters a family farm
system of agriculture, but purposefully sets out to undergird that
system and provide the tools that are necessary for our family farmers
and ranchers to have the opportunity to be successful.
It is for this reason that I am introducing the Cost of Production
Safety Net Act. I am pleased to include Senators Daschle, Wellstone,
Johnson, Conrad, Harkin and Baucus as cosponsors to my bill. I
encourage others to join in this effort and look forward to having a
meaningful debate on our nation's agricultural future in the remaining
months of this session.
______
By Mr. MURKOWSKI (for himself, Mr. Nickles, Mrs. Hutchison, and
Mr. Domenici):
S. 1919. A bill to provide for the energy security of the Nation
through encouraging the production of domestic oil and gas resources
from stripper wells on federal lands, and for other purposes; to the
Committee on Energy and Natural Resources.
______
By Mr. MURKOWSKI (for himself, Mr. Nickles, and Mrs. Hutchison):
S. 1920. A bill to improve the administration of oil and gas leases
on Federal lands, and for other purposes; to the Committee on Energy
and Natural Resources.
the federal stripper well royalty reductions legislation
Mr. MURKOWSKI. Mr. President, I rise today to introduce two important
pieces of legislation relating to oil and gas production on federal
lands. The first is a bill to authorize and direct the Secretary of the
Interior to provide permanent regulatory authority to reduce the
royalty rate for stripper oil and gas wells on federal lands.
This legislation is necessary, Mr. President, because of the
depressed world oil price situation. With oil prices falling below $15
per barrel, it is more and more difficult for domestic energy companies
to produce oil at a reasonable price. While this is good news to U.S.
consumers because gasoline is at its lowest price ever when adjusted
for inflation, it is not welcome news to small and independent oil and
gas producers who will be especially hard hit.
Under ``normal'' circumstances, stripper wells are on the edge of
profitability. Low world oil prices threaten stripper wells and the
jobs associated with those wells. That, in turn, has ripple effects
elsewhere in the economy through loss of jobs in the industries that
supply goods and services to producers, and in the communities where
they operate.
Mr. President, according to the Interstate Oil and Gas Compact
Commission, there are approximately 430,000 stripper oil wells and
170,000 stripper gas wells in the U.S. A sizeable number of these,
perhaps as many as 30,000, are on federal lands.
What is absolutely astounding, Mr. President, is the fact that
stripper wells individually average a little more than 2 barrels of oil
and 16 thousand cubic feet of gas production per day, yet in 1996
collectively contributed 352 million barrels of oil (more than 11
percent of U.S. production, and 5 percent of U.S. consumption), and
almost 1 billion cubic feet of natural gas.
There are 38,000 jobs associated with stripper wells, and another
46,000 outside of the industry related to stripper wells. We cannot
afford to lose stripper well production and the vital role they play in
national energy security. Nor can we afford to lose the jobs associated
with them. That is why I am introducing today the Federal Oil and Gas
Stripper Well Preservation Act of 1998. I am pleased to be joined by
Senator Nickles and Senator Hutchison in sponsoring this important
legislation.
Mr. President, our bill is very simple: it authorizes and directs the
Secretary of the Interior to provide permanent regulatory authority to
reduce the royalty rate for stripper oil and gas wells on federal
lands. The Secretary already has limited authority to grant stripper
oil well royalty reductions. We want to ensure that there is permanent
authority to do so.
We also want to make sure that the Secretary has permanent authority
to grant royalty rate reductions for stripper gas wells, something that
the Secretary recently has declined to do.
Second, our bill requires the Secretary to suspend any minimum
royalty (if applicable) and per acre lease rental on stripper oil and
gas wells on federal lands during the time of any royalty rate
reduction. This will ensure that stripper well operators are afforded
the greatest leeway during hard times.
And finally, our bill requires the applicable lease rental and
minimum royalty to be reinstated once the Secretary terminates a
stripper well royalty rate reduction.
Mr. President, I believe this legislation will make a significant
contribution in stemming the tide of lost production from our Nation's
stripper oil and gas wells. Once plugged and abandoned, these wells--
and their vital contribution to national energy security--are more
likely than not permanently lost. We should not lose this valuable
national asset.
I invite my colleagues to join Senator Nickles, Senator Hutchison and
me in sponsoring the Federal Oil and Gas Stripper Well Preservation Act
of 1998.
Transfer of Certain Federal Oil and Gas Lease Management Functions
Mr. President, the second piece of legislation I introduce today
relating to federal oil and gas production addresses the performance of
oil and gas lease management activities on federal lands. We have been
hearing for some time now that States are very much interested in
assuming certain oil and gas lease management functions that are now
performed by the U.S. on federal oil and gas leases. We saw strong
interest from States in assuming certain royalty management functions
when we considered and ultimately enacted the Federal Oil and Gas
Royalty Simplification and Fairness Act in 1996. Devolution of federal
oil and gas regulatory functions to States is a concept whose time has
come.
[[Page S3136]]
The legislation I introduce today along with Senator Nickles and
Senator Hutchison would do the following: transfer the Bureau of Land
Management's (BLM) authority to perform certain oil and gas regulatory
duties to States; institute distinct and reasonable time frames for
leasing decisions and appeals; require responsible actions to increase
leasing; and reduce federal appeals delays by rejecting stay requests
from parties that have no standing.
We believe this legislation will generate savings to the Treasury by
increasing administrative efficiencies, eliminating duplication of
effort, decreasing time frames on leasing and appeals decisions, and
increasing certainty in leasing. We also believe the bill will increase
federal acreage available for exploration and development, improve the
domestic oil and gas resource base, and promote oil and gas production
on federal lands.
The key feature of the bill is the transfer from BLM to States
authority over such activities as: well drilling and production
operations; well testing and completion; conversion of a producing well
to a water well; well abandonment procedures; inspections; enforcement
activities; and site security. Many States already perform these
functions on federal leases, and are willing to do so on a permanent
basis. By transferring federal responsibility for these activities,
federal resources could be used for other purposes.
Our bill also requires BLM and the Forest Service to offer
competitive oil and gas leases 90 days after lands are ``nominated'' by
prospective lessees. The bill requires BLM and the Forest Service to
render final decisions on administrative appeals within two years.
These provisions will eliminate costly delays and litigation, allow
realization of lease revenues (bonuses, rents, royalties) sooner, and
provide stability and clarity to planning.
Mr. President, we believe the transfer of lease management functions
can be achieved with significant savings to States and the Treasury and
will not disrupt lease management functions or impair important
resource production. We urge our colleagues in the Senate to join in
supporting this important legislation.
______
By Mr. JEFFORDS (for himself and Mr. Dodd):
S. 1921. A bill to ensure confidentiality with respect to medical
records and health care-related information, and for other purposes; to
the Committee on Labor and Human Resources.
the health care pin act
Mr. JEFFORDS. Mr. President, today, I join with my good friend
Senator Christopher Dodd, in announcing the introduction of the Health
Care Personal Information Nondisclosure Act of 1998--The Health Care
PIN Act. This legislation will establish necessary national standards
to protect the confidentiality of each American's medical records.
Information technology presents our nation with the difficult
challenge of ensuring that we reap its benefits without sacrificing one
of our most important values: the right to individual privacy. In order
to maintain control over our personal medical information, Congress
must pass health care confidentiality legislation--as quickly as
possible.
The time is ripe for action. There have been major technological
advances in health care's administrative, delivery, and payment
systems. These advances have the potential to improve the quality of
patient care. For example, electronic pharmaceutical records make it
possible for pharmacists to identify potential drug interactions before
filling a prescription. However, we must also have guarantees that our
personal health care information is not being used inappropriately.
Congress has made repeated attempts to enact a comprehensive federal
privacy law but has, to date, been unsuccessful. The loose web of
protections at the federal and state levels that has evolved in the
absence of a comprehensive law leaves many aspects of health
information unprotected.
The Health Care PIN Act represents a synthesis of recommendations
from many sources. It draws heavily from the discussion draft that I
worked on with Senator Bennett and the ``Medical Information Privacy
and Security Act,'' introduced by Senator Leahy and Senator Kennedy.
The Labor and Human Resources Committee has held three hearings on the
confidentiality of health care information, and the testimony and
comments provided at each of those hearings has been invaluable--
especially, the administration's recommendations presented by Secretary
Shalala in September.
Under the terms of the Kassebaum/Kennedy legislation, if Congress
fails to enact federal privacy legislation by August 1999, the
Secretary of Health and Human Services is required to promulgate
regulations establishing electronic privacy standards in the year 2000.
This is too important a matter of public policy to be done outside of
the legislative process and it is another reason why I intend to make
this task one of the highest priorities of the Labor and Human
Resources Committee.
Other nations have taken steps to protect patient privacy. In 1995,
the European Union enacted the Data Privacy Directive. The EU Directive
requires that individuals have rights of consent, access, correction,
and remedies for failure to protect confidential personal information.
This Directive requires that by October 1998, if countries trading with
any of the 15 European Union member states do not introduce similar
rules, data cannot be transmitted between these countries. If we do not
act promptly, this initiative raises the concern that the European
Union could limit the flow of health care data between our countries
for research and restrict the ability of American companies to compete
overseas.
The Health Care PIN Act would preempt state laws relating to medical
records confidentiality--with the important exception of public health
issues and those areas having a history of discrimination, such as
mental health and HIV-AIDS. Since most health plans exchange health
care information over the borders of many states, we need one privacy
standard in this county--rather than 50 different ones--in order to
achieve the greatest benefits from information technology and also
ensure that all Americans have a uniform standard of privacy
protection.
The Act requires that individually identifiable health care
information not be released unless authorized by patient consent. With
very few exceptions, individually identifiable health care information
should be disclosed for health purposes only, which includes the
provision and payment of care and plan operations. Under the
legislation, patients would have the right to copy and correct their
medical records. In order to achieve accountability, the Health Care
PIN Act provides that civil and criminal penalties would be imposed on
individuals who use information improperly through unauthorized
disclosure.
Our individual right to privacy at times must be balanced against the
need to protect the health of others. The Health Care PIN Act allows
for the disclosure of health information without patient consent for
the release of information to public health authorities for disease
reporting. In addition, patient consent would not be required to
disclose information needed for legitimate law enforcement purposes,
including purposes required by state law such as the reporting of
gunshot victims. Quality care requires more than the free flow of
information between providers, payers, and other users of health
information. It requires trust between a patient and a care giver. For
our health care system to be effective, as well as efficient, patients
must feel comfortable sharing sensitive information with health
professionals. Technology has provided the tools to allow the ease of
access to health care information. Now, the Health Care PIN Act is
needed to ensure the confidentiality of this personal health
information.
It is my intent to work closely with the other members of the Labor
and Human Resources Committee, and Senators Bennett and Leahy, to enact
legislation this year that will establish national standards to protect
medical information and enhance quality of health care for all
Americans.
Mr. DODD. Mr. President, I am pleased to join the Chairman of the
Labor and Human Resources Committee, Senator Jeffords, in introducing
the Health Care Personal Information Nondisclosure (PIN) Act of 1998.
This legislation is designed to offer Americans the peace of mind that
comes with
[[Page S3137]]
knowing that their most personal and private medical information is
protected from misuse and exploitation.
Medicine has changed dramatically since the time Norman Rockwell
painted the scene of a doctor examining his young patient's doll. The
flow of medical information is no longer confined to doctor-patient
conversations and hospital charts. Recent technological advances have
introduced more efficient methods of organizing data that allow
information to be shared instantaneously--helping to contain costs--and
even save lives. The national database of medical information provides
a prime example of the benefits of these advances. Through the use of a
simple computer, emergency room doctors are now equipped with a quick
and inexpensive means of accessing the medical records needed to
properly treat unconscious patients.
Unfortunately, as we saw all too clearly just a few months ago, our
laws have not kept pace with technology. In February the Washington
Post exposed the activities of two pharmacies that were sharing
personal medical information about prescription drug use with
unauthorized third parties. And, most disturbingly, these actions were
perfectly legal. Clearly, the existing patchwork of state laws
protecting medical records are proving to be inadequate to address the
public's concerns.
These concerns are so strong that in some cases they threaten to
actually negate the benefits of advances in medicine and technology.
The fear of discrimination and exploitation has led some ethnic
communities with susceptibility to certain conditions to urge their
members to avoid genetic testing. The fear that sensitive medical
information might be released without authorization has led patients to
avoid full disclosure of mental health concerns to their physicians and
to unnecessarily forego opportunities for treatment.
I believe that the Health Care PIN Act offers the privacy protections
that the public demands. This legislation sets clear guidelines for the
use and disclosure of medical information by health care providers,
researchers, insurers, employers and others. The Health Care PIN Act
provides individuals with control over their most personal information,
yet promotes the efficient exchange of health data for the purposes of
treatment, payment, research and oversight. To ensure the
accountability of entities and individuals with access to personal
medical information, the legislation imposes stiff penalties for
unauthorized disclosures.
The Health Care PIN Act provides consumers with a strong, nationally
uniform set of privacy protections. However, in areas of privacy law in
which states have been the most active--namely in the confidentiality
of sensitive mental health and public health records--states could
continue to establish additional protections.
I would also like to indicate my intent to work with Senator Jeffords
to incorporate into this legislation protections against genetic
discrimination in both employment and health insurance. Although we
were unable to resolve this issue before introduction of this
legislation, I am confident that we can reach consensus on this
critical and timely issue.
This legislation represents common-sense middle ground in the range
of proposals that have been offered both this and the previous
Congress. I look forward to working with Senator Jeffords, as well as
with Senators Bennett, Leahy, and Kennedy, who have contributed so much
to this debate, to move forward quickly to enact comprehensive,
bipartisan legislation.
______
By Mr. CAMPBELL:
S. 1922. A bill to amend chapter 61 of title 5, United States Code,
to make election day a legal public holiday, with such holiday to be
known as ``Freedom and Democracy Day''; to the Committee on the
Judiciary.
freedom and democracy day legislation
Mr. CAMPBELL. Mr. President, as our nation approaches the Millennium,
it is an appropriate time to renew the appreciation and understanding
of the American people in the democratic heritage and principles which
make our country the greatest in the world. That is why I am
introducing legislation today to rename Election Day as Freedom and
Democracy Day and to renew civic responsibility.
The two main objectives of this legislation are first, to broaden and
increase voter turnout, and second, to restore appreciation for our
country's most fundamental expression of freedom and its democratic
underpinnings--the right to vote. As a nation, we must all be concerned
that voter apathy is so high, while voter participation is so low.
Voting, it seems, has become a neglected, if not cumbersome, privilege
of Americans. In the past 20 years, voter participation in presidential
election years has remained barely above 50 percent, and during midterm
congressional election years it has not been more than 50 percent.
I am alarmed at the unfortunate fact that voter participation has
declined to the point that it is now among the lowest of any democratic
nation. The rate of voter participation among younger Americans--the
future leaders, teachers, and business executives--has declined
significantly. It is our responsibility as elected officials, and, more
importantly, as American citizens, to support additional efforts to
strengthen the electoral process, to encourage civic awareness, and to
promote active participation in the exercise of liberty.
Therefore, the first goal of the bill is to renew civic spirit and
highlight the importance of Americans to fulfill their civic
responsibilities by making Election Day a legal public holiday, known
as Freedom and Democracy Day. This designation gives new meaning to the
importance of voting on the first Tuesday in November. We need to
stress the importance of self-government, encourage Americans to
exercise their freedom and liberty as citizens by voting, and encourage
Americans to reinvigorate their support for their civic duties.
Although my bill designates this day as a legal public holiday, I
want to emphasize that Freedom and Democracy Day will remain a regular
workday. The bill specifically does not reference statutes relating to
pay and leave of federal employees, and it does not affect the regular
operations of the federal government.
We as legislators and as citizens should do more to promote voter
turnout and increase understanding of the value and importance of the
right to vote. That is why the second objective of this bill is to
encourage communities, schools, civic organizations, charitable
organizations, companies, radio and television broadcasters, and public
officials at all levels of government to support and celebrate Freedom
and Democracy Day. The legislation encourages these key segments of
society to sponsor and publicize appropriate celebrations and events
which stress the importance of participation in self government. Their
programs and support will send a strong message that the legitimacy of
the democratic process is created from the consent of the governed, and
voiced in the full participation of an informed, aware and active
citizenry.
I believe my bill provides a starting point for a renewed spirit and
appreciation of freedom and democracy. It is my sincere hope that given
more incentive to vote, more Americans will seize and exercise this
expression of freedom. It is a small step in the overall effort to
encourage all American citizens to take pride and participate in their
representative system of government.
Much of the voter apathy reflects many citizens' lack of faith in all
levels of government. In America, power is supposed to be delegated
from the citizen and loaned to the government. The Founding Fathers,
who pledged their lives, their fortunes and their sacred honor for a
new country, knew that as a nation we must leave room for change and
growth and development. They knew the nation they left for us would
modernize, rethink, and restructure.
Let us be vigilant in remembering that the American idea of democracy
is a government ``of the people, by the people, for the people.'' This
is the idea of freedom and liberty; uniquely American. And, it is the
goal of this bill to strengthen the American people's right to freedom
and celebrate the spirit of democracy in the country which first
empowered citizens with ``certain unalienable rights.''
Mr. President, I ask unanimous consent that the bill be entered into
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
[[Page S3138]]
S. 1922
Be it enacted by the Senate and House of Representatives
of the United States of America in Congress assembled,
SECTION 1. FINDINGS.
The Congress finds that--
(1) democratic government derives its legitimacy from the
consent of the governed, as manifested in the full
participation of an informed and aware electorate;
(2) since 1960 the rate of voter participation in the
United States has declined and is now among the lowest of any
nation with a democratic form of government;
(3) since 1972 the rate of voter participation among young
people in the United States has declined significantly;
(4) the Federal Government should encourage personal
responsibility and the broader understanding of the value and
importance of the right to vote; and
(5) the establishment of a legal public holiday on election
day, the first Tuesday after the first Monday in November of
each even numbered year, could provide a substantial
incentive to increase voter participation by the American
public.
SEC. 2. SENSE OF THE CONGRESS.
It is the sense of the Congress that educators, civic and
charitable organizations, radio and television broadcasters,
and public officials at all levels of government should help
the people of the United States celebrate Freedom and
Democracy Day through appropriate celebrations and events
which stress the importance of self-government.
SEC. 3. DESIGNATION OF ELECTION DAY AS LEGAL PUBLIC HOLIDAY.
Section 6103 of title 5, United States Code, is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following:
``(d)(1) Subject to paragraph (2), the first Tuesday after
the first Monday in November in each even numbered year,
Election Day, shall be a legal public holiday, with such
holiday to be known as Freedom and Democracy Day.
``(2) Freedom and Democracy Day--
``(A) shall be a regular workday;
``(B) shall not be treated as a legal public holiday for
purposes of statutes relating to pay and leave of employees
as defined by section 2105 of this title; and
``(C) shall not affect the regular operations of the
Federal Government.''.
______
By Mr. COVERDELL (for himself, Mr. Breaux, and Mr. DeWine):
S. 1923. A bill to amend the Federal Water Pollution Control Act to
ensure compliance by Federal facilities with pollution control
requirements; to the Committee on Environment and Public Works.
The Federal Facilities Clean Water Compliance Act of 1999
Mr. COVERDELL. Mr. President, I rise today to introduce legislation
with the Senior Senator from Louisiana and the Junior Senator from
Ohio. This legislation--The Federal Facilities Clean Water Compliance
Act of 1998--will guarantee that the federal government is held to the
same full range of enforcement mechanisms available under the Clean
Water Act as private entities, states, and localities. Each federal
department, agency, and instrumentality will to be subject to and
comply with all Federal, State, and local requirements with respect to
the control and abatement of water pollution and management in the same
manner and extent as any person is subject to such requirements,
including the payment of reasonable service charges.
Last year marked the twenty-fifth anniversary of the Clean Water Act.
This Act has been an effective tool in improving the quality of our
nation's rivers, lakes, and streams. Over that period of time, however,
states have not had the ability to impose certain fines and penalties
against federal agencies for violations of the Clean Water Act. This is
a double standard that should not be continued.
In 1972, Congress included provisions on federal facility compliance
with our nation's water pollution laws in section 313 of the Clean
Water Act. Section 313 called for federal facilities to comply with all
federal, state, and local water pollution requirements. However, in
1992, the United States Supreme Court ruled in U.S. Dept. Of Energy v.
Ohio, that States could not impose certain fines and penalties against
federal agencies for violations of the Clean Water Act and the Resource
Conservation Recovery Act (RCRA). Because of this decision, the Federal
Facilities Compliance Act (H.R. 2194) was enacted to clarify that
Congress intended to waive sovereign immunity for agencies in violation
of RCRA. Federal agencies in violation of the RCRA are now subject to
State levied fines and penalties. However, this legislation did not
address the Supreme Court's decision with regard to the Clean Water
Act.
The Federal Facilities Clean Water Compliance Act of 1998 makes it
unequivocally clear that the federal government waives its claim to
sovereign immunity in the Clean Water Act. The federal government owns
hundreds of thousands of buildings, located on millions of acres of
land, none of which have to abide by the same standards as a private
entity does under the Clean Water Act. This legislation simply ensures
that the federal government lives by the same rules it imposes on
everyone else.
Mr. BREAUX. Mr. President, I am pleased to join Senator Coverdell
today in introducing the ``Federal Facilities Clean Water Compliance
Act of 1998''.
My primary reason for sponsoring the bill with the Senator from
Georgia is to make the federal Clean Water Act equitable by requiring
that it apply to and be enforced against the federal government.
Currently, states, local governments and the private sector do not
have immunity from the act's enforcement. By the same principle, the
federal government should not be granted such immunity from the clean
water statute and this bill provides that parity.
The bill also provides that the federal government would be subject
to all the same enforcement mechanisms that apply to states, local
governments and the private sector under the Clean Water Act.
Fairness, safety, public health and environmental protection all
dictate that Federal agencies should be held to the same standards for
water pollution prevention and control as apply to states, local
governments and the private sector.
Equity is ensured by the Coverdell-Breaux bill because all levels of
government and the private sector would be treated the same under the
Clean Water Act's enforcement programs. No one would be allowed
immunity.
To paraphrase a well-known adage, what's good for states, local
governments and the private sector in terms of clean water should be
good for the federal government.
In addition to the provisions stated previously, the Coverdell-Breaux
bill reflects the adage's fairness principle in another fashion.
The bill would hold the federal government accountable to comply not
only with its own clean water statute, but also with state and local
clean water laws. Again, equity would be upheld. And, safety, public
health and environmental protection would be strengthened.
Other provisions are contained as well in the legislation which
Senator Coverdell and I are introducing today. For example the EPA
administrator, the Secretary of the Army and the Secretary of
Transportation would be authorized to pursue administrative enforcement
actions under the Clean Water Act against any non-complying federal
agencies. It also includes provisions for federal employees' personal
liability under the act's civil and criminal penalty provisions and a
requirement that the federal government pay reasonable service charges
when complying with clean water laws.
Over the past 25 years, the United States has made dramatic advances
in protecting the environment as a result of the Clean Water Act. We
have all benefitted as a result.
Today, I encourage other Senators to join Senator Coverdell and I as
cosponsors of the bill to bring equity to the clean water program and
to make possible the expansion of its public and private benefits.
______
By Mr. MACK (for himself, Mr. Kerry, Mr. D'Amato, Mrs. Feinstein,
Mr. Bond, Ms. Moseley-Braun, Mr. Coverdell, Mrs. Boxer, Mr.
Gregg, Mr. Kennedy, Mr. Thurmond, Mr. Robb, Mr. Grams, Mr.
Bumpers, Mr. Coats, Mr. Dodd, Mr. Inhofe, Mr. Inouye, Mr.
Santorum, Mr. Durbin, Ms. Snowe, Mr. Wyden, and Mr. Hollings):
S. 1924. A bill to restore the standards used for determining whether
technical workers are not employees as in effect before the Tax Reform
Act of 1986; to the Committee on Finance.
[[Page S3139]]
the technical workers fairness act of 1998
Mr. MACK. Mr. President, today Senator Kerry and I introduce the
Technical Workers Fairness Act of 1998. This bill would repeal Section
1706 of the 1986 Tax Reform Act, something that is long overdue and is
now supported by a strong bipartisan consensus.
Section 1706 added a new subsection (d) to Section 530 of the Revenue
Act of 1978. For the class of businesses known as ``technical services
firms'' who provide technical services to their customers, Section 1706
removed the Section 530 employment tax safe harbors that otherwise
apply to all other types of businesses that use the services of
independent contractors. These Section 530 safe harbors were enacted by
Congress in 1978 to protect business taxpayers, especially small
businesses, from arbitrary IRS decisions interpreting the common law
employment test in employment tax audits.
Yet Section 1706 leaves one group of taxpayers back in the pre-
Section 530 days. As a result of Section 1706, if a technical services
firm hires, as an independent contractor, a computer programmer,
systems analyst, software engineer, or similarly-skilled worker who
will perform services for that firm's customers, then the technical
services firm--which is operating in a so-called ``three-party''
arrangement--must prove to the IRS that this worker is an independent
contractor under the centuries-old common law employment test that
Congress found so troublesome in 1978. Even if the firm can show that
it has a reasonable basis for treating the worker as an independent
contractor--for instance, if its past treatment of this worker as an
independent contractor was approved by the IRS in prior IRS audits, or
its treatment is consistent with industry practice or a relevant court
ruling, all of which constitute a ``safe harbor'' under Section 530--
none of these factors is relevant because of the enactment of Section
1706.
The harm caused to the technical services industry and its workers by
Section 1706 is more than theoretical. Technical services firms which
use independent contractors--even if they act in good faith--can be
severely penalized by the IRS and forced to pay ``unpaid'' employment
taxes even though the contractors have already paid these same taxes in
full. In fact, some IRS auditors have used Section 1706 to claim that
even incorporated independent contractors are not legitimate. Left with
only the common law employment test to demonstrate a worker's status to
the IRS, many technical services firms will not hire any independent
contractors in order to avoid tempting an IRS audit.
In 1991, the Treasury Department issued a 100-page study of Section
1706, as required by Congress. The Treasury Study found that tax
compliance is actually better-than-average among technical services
workers compared to other contractors in other industries. It also
found the scope of Section 1706 was ``difficult to justify on equity or
other policy considerations.'' Further, Section 1706 is the only
occasion since the enactment of Section 530 that Congress has ever cut
back on the safe harbor protections in Section 530. In fact, in
response to concerns that IRS decisions in independent contractor
audits were too often arbitrary and unpredictable, in the Small
Business Job Protection Act of 1996 Congress expanded the Section 530
protections and even shifted the burden of proof from the taxpayer to
the IRS. More recently, the Department of Labor's Bureau of Labor
Statistics found that many high-tech professionals are actually being
forced to work as employees when their preference is to be independent
contractors.
It is time to repeal Section 1706 and end the discrimination against
this one industry.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1924
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 ``Technical Workers Fairness
Act of 1998''.
SEC. 2. RESTORATION OF STANDARDS FOR DETERMINING WHETHER
TECHNICAL WORKERS ARE NOT EMPLOYEES.
(a) Repeal of Section 530(d) of the Revenue Act of 1978.--
Section 530(d) of the Revenue Act of 1978 (as added by
section 1706 of the Tax Reform Act of 1986) is repealed.
(b) Effective Date.--The amendment made by subsection (c)
shall apply to periods ending after the date of enactment of
this Act.
Mr. KERRY. Mr. President, I join Senator Mack in supporting his
legislation to repeal Section 1706 of the 1986 Tax Reform Act. We must
take this opportunity to repeal an unfair section of employment tax law
which singles out only the computer and high-technology industry and
makes it difficult for firms in that industry to retain the services of
self-employed contractors.
For many years, the common law test used to classify a worker as an
employee or an independent contractor for employment tax purposes
lacked precision and predictability. In 1978, in Section 530 of the
1978 Revenue Act, Congress acted to allow taxpayers, as an alternative
to the common law test, to use a ``reasonable basis'' safe haven test
to classify a worker. However, in 1986, Congress enacted Section 1706
which eliminated all Section 530 protections from only the technical
services industry, and only in so-called ``three party situations'' in
that industry in which a worker is paid by a technical service firm to
perform services for a customer.
I have heard from a number of computer consultants in Massachusetts
who believe this unfairly discriminates against the computer consulting
industry and seriously impairs the ability of legitimate self-employed
computer consultants to work effectively in the marketplace. Many firms
in Massachusetts will not use the services of valid self-employed
contractors because they believe doing so could attract an Internal
Revenue Service audit and potentially subject the companies to
penalties or back tax liabilities.
For many years, along with many of my colleagues in the Senate, I
have worked unsuccessfully to develop and enact a new definition of
``leased employee.'' The legislation introduced by Senator Mack today
is another effort to resolve this problem; it will repeal Section 1706
and thereby renew the ``reasonable basis'' safe haven test to classify
workers in the computer consultant industry. A 1991 Treasury Department
report stated that the tax compliance rates of computer consultants
were somewhat better than those of other workers who are classified as
independent contractors. That study also found that the treatment of
technical service workers as independent contractors actually
``increases tax revenue'' which ``tends to offset'' any revenue loss
that might result from any noncompliance by such individuals ``because
direct compensation to independent contractors is substituted for tax
favored employee fringe benefits.''
Repealing Section 1706 will allow companies to hire computer
consultants without fearing a negative ruling from the IRS. We should
take this step this year, and I look forward to working with Senator
Mack to gain Congressional passage of this legislation.
______
By Mr. CAMPBELL (for himself and Mr. Inouye):
S. 1925. A bill to make certain technical corrections in laws
relating to Native Americans, and for other purposes; to the Committee
on Indian Affairs.
technical corrections legislation
Mr. CAMPBELL. Mr. President, today I introduce legislation to make
certain technical corrections to a number of unrelated laws affecting
Indian tribes.
I am pleased to be joined in this effort by my friend and colleague
from Hawaii, Senator Inouye.
The bill will allow us to address a series of minor amendments to
Indian laws in one piece of legislation, without having to introduce
and legislate on a number of separate bills.
I conferred with the delegation of each state involved on each of
these amendments and the delegations generally support the respective
amendment affecting tribes in their states.
The bill contains a total of 14 amendments addressing a variety of
issues including: increasing the allowable lease terms of reservation
lands; reservation boundary adjustments; amendments to facilitate water
rights settlements; clarification of federal service areas for tribes;
and a number of others.
[[Page S3140]]
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1925
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. AUTHORIZATION FOR 99-YEAR LEASES.
The second sentence of subsection (a) of the first section
of the Act of August 9, 1955 (69 Stat. 539, chapter 615; 25
U.S.C. 415), is amended--
(1) by inserting ``lands held in trust for the Confederated
Tribes of the Grand Ronde Community of Oregon,'' after
``lands held in trust for the Cahuilla Band of Indians of
California,''; and
(2) by inserting ``the Cabazon Indian Reservation,'' after
``the Navajo Reservation,''.
SEC. 2. GRAND RONDE RESERVATION ACT.
Section 1(c) of the Act entitled ``An Act to establish a
reservation for the Confederated Tribes of the Grand Ronde
Community of Oregon, and for other purposes,'' approved
September 9, 1988 (102 Stat. 1594), is amended--
(1) by striking ``10,120.68 acres of land'' and inserting
``10,311.60 acres of land''; and
(2) in the table contained in that subsection, by striking
all after
``4 7 30 Lots 3, 4, SW\1/4\NE\1/4\, SE\1/ 240''
4\NW\1/4\, E\1/2\SW\1/4\;......
through the end of the table, and inserting the following:
``6 8 1 N\1/2\SW\1/4\................... 29.59
6 8 12 W\1/2\SW\1/4\NE\1/4\, SE\1/ 21.70
4\SW\1/4\NE\1/4\NW\1/4\, N\1/
2\SE\1/4\NW\1/4\, N\1/2\SW\1/
4\SW\1/4\SE\1/4\...............
6 8 13 W\1/2\E\1/2\NW\1/4\NW\1/4\...... 5.31
6 7 7 E\1/2\E\1/2\.................... 57.60
6 7 8 SW\1/4\SW\1/4\NW\1/4\, W\1/ 22.46
2\SW\1/4\......................
6 7 17 NW\1/4\NW\1/4\, N\1/2\SW\1/ 10.84
4\NW\1/4\......................
6 7 18 E\1/2\NE\1/4\................... 43.42
---------------
6 ...... ...... Total..................... 10,311.60''.
SEC. 3. SAN CARLOS APACHE WATER RIGHTS SETTLEMENT.
Section 3711(b) of the San Carlos Apache Tribe Water Rights
Settlement Act of 1992 (106 Stat. 4752) is amended by
striking ``subsections (c) and (d) of section 3704''
inserting ``section 3704(d)''.
SEC. 4. YUROK SETTLEMENT RECOGNITION.
Section 4 of Public Law 98-458 (25 U.S.C. 1407) is
amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by inserting ``or'' at the end; and
(3) by inserting after paragraph (3) the following:
``(4) are distributed pursuant to--
``(A) the judgment of the United States Claims Court (which
was subsequently reorganized as the United States Court of
Federal Claims) in Jesse Short et al. v. United States, 486
F2d. 561 (Ct. Cl. 1973); or
``(B) any other judgment of the United States Court of
Federal Claims in favor of 1 or more individual Indians,''.
SEC. 5. SELF-DETERMINATION CONTRACT CARRY-OVER EXPENDITURE
AUTHORIZATION.
Notwithstanding any other provision of law, any funds that
were provided to the Ponca Tribe of Nebraska for any of the
fiscal years 1992 through 1998 pursuant to a self-
determination contract with the Secretary of Health and Human
Services that the Ponca Tribe of Nebraska entered into under
section 102 of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450f) that were retained by the
Ponca Tribe of Nebraska to carry out programs and functions
of the Indian Health Service may be used by the Ponca Tribe
of Nebraska to purchase or build facilities for the health
services programs of the Ponca Tribe of Nebraska.
SEC. 6. NAVAJO-HOPI LAND DISPUTE SETTLEMENT ACT.
Section 12 of the Navajo-Hopi Land Dispute Settlement Act
(Public Law 104-301; 110 Stat. 3653) is amended--
(1) in subsection (a)(1)(C), in the first sentence, by
inserting ``of surface water'' after ``on such lands''; and
(2) in subsection (b), striking ``subsection (a)(3)'' both
places it appears and inserting ``subsection (a)(1)(C)''.
SEC. 7. TREATMENT OF CERTAIN DEMONSTRATION PROJECTS.
(a) In General.--The Secretary of the Interior shall take
such action as may be necessary to extend the terms of the
projects referred to in section 512 of the Indian Health Care
Improvement Act (25 U.S.C. 1660b) so that the term of each
such project expires on October 1, 2002.
(b) Amendment to Indian Health Care Improvement Act.--
Section 512 of the Indian Health Care Improvement Act (25
U.S.C. 1660b) is amended by adding at the end the following:
``(c) In addition to the amounts made available under
section 514 to carry out this section through fiscal year
2000, there are authorized to be appropriated such sums as
may be necessary to carry out this section for each of fiscal
years 2001 and 2002.''.
SEC. 8. CONFEDERATED TRIBES OF COOS, LOWER UMPQUA, AND
SIUSLAW INDIANS RESERVATION ACT.
Section 7(b) of the Coos, Lower Umpqua, and Siuslaw
Restoration Act (Public Law 98-481, 98 Stat. 2253) is amended
by adding at the end the following:
``(4) In Lane County, Oregon, a parcel described as
beginning at the common corner to sections 23, 24, 25, and 26
township 18 south, range 12 west, Willamette Meridian; then
west 25 links; then north 2 chains and 50 links; then east 25
links to a point on the section line between sections 23 and
24; then south 2 chains and 50 links to the place of origin,
and containing .062 of an acre, more or less, situated and
lying in section 23, township 18 south, range 12 west, of
Willamette Meridian.''.
SEC. 9. HOOPA VALLEY RESERVATION BOUNDARY ADJUSTMENT.
Section 2(b) of the Hoopa Valley Reservation South Boundary
Adjustment Act (25 U.S.C. 1300i-1 note) is amended--
(1) by striking ``north 72 degrees 30 minutes east'' and
inserting ``north 73 degrees 50 minutes east''; and
(2) by striking ``south 15 degrees 59 minutes east'' and
inserting ``south 14 degrees 36 minutes east''.
SEC. 10. CLARIFICATION OF SERVICE AREA FOR CONFEDERATED
TRIBES OF SILETZ INDIANS OF OREGON.
Section 2 of the Act entitled ``An Act to establish a
reservation for the Confederated Tribes of Siletz Indians of
Oregon'', approved September 4, 1980 (94 Stat. 1073 and
1074), is amended--
(1) in the first sentence, by striking ``The Secretary''
and inserting ``(a) The Secretary''; and
(2) by adding at the end the following:
``(b) Subject to the express limitations under sections 4
and 5, for purposes of determining eligibility for Federal
assistance programs, the service area of the Confederated
Tribes of the Siletz Indians of Oregon shall include Benton,
Clackamas, Lane, Lincoln, Linn, Marion, Multnomah, Polk,
Tillamook, Washington, and Yamhill Counties in Oregon.''.
SEC. 11. MICHIGAN INDIAN LAND CLAIMS SETTLEMENT.
Section 111 of the Michigan Indian Land Claims Settlement
Act (111 Stat. 2665) is amended--
(1) by striking ``The eligibility'' and inserting the
following:
``(b) Treatment of Funds for Purposes of Certain Federal
Programs and Benefits.--The eligibility''; and
(2) by inserting before subsection (b), as designated by
paragraph (1) of this section, the following:
``(a) Treatment of Funds for Purposes of Income Taxes.--
None of the funds distributed pursuant to this Act, or
pursuant to
[[Page S3141]]
any plan approved in accordance with this Act, shall be
subject to Federal or State income taxes.''.
SEC. 12. MISCELLANEOUS TECHNICAL CORRECTIONS.
(a) Authorization.--Section 711(h) of the Indian Health
Care Improvement Act (25 U.S.C. 1665j(h)) is amended by
striking ``for each'' and all that follows through ``2000,''
and inserting ``for each of fiscal years 1996 through
2000,''.
(b) Reference.--Section 4(12)(B) of the Native American
Housing Assistance and Self-Determination Act of 1996 (25
U.S.C. 4103(12)(B)) is amended by striking ``Indian Self-
Determination and Education Assistance Act of 1975'' and
inserting ``Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450 et seq.)''.
SEC. 13. TRANSFER OF WATER RIGHTS.
The Jicarilla Apache Tribe Water Rights Settlement Act (106
Stat. 2237 et seq.) is amended by adding at the end the
following:
``SEC. 12. TRANSFER OF WATER RIGHTS.
``(a) In General.--In accordance with the requirements of
section 2116 of the Revised Statutes (25 U.S.C. 177), the
transfer of water rights set forth in paragraph (5) of the
stipulation and settlement agreement between the Jicarilla
Apache Tribe and other parties to the case referred to in
section 8(e)(1)(B)(ii), that was executed on October 7, 1997,
is approved.
``(b) Effective Date.--The approval under subsection (a)
shall become effective on the date of entry of a partial
final decree by the court for the case referred to in that
subsection that quantifies the reserved water rights claims
of the Jicarilla Apache Tribe.''.
SEC. 14. NATIVE HAWAIIAN HEALTH SCHOLARSHIP PROGRAM.
(a) Eligibility.--Section 10(a)(1) of the Native Hawaiian
Health Care Act of 1988 (42 U.S.C. 11709(a)(1)) is amended by
striking ``meet the requirements of section 338A of the
Public Health Service Act (42 U.S.C. 2541)'' and inserting
``meet the requirements of paragraphs (1), (3), and (4) of
section 338A(b) of the Public Health Service Act (42 U.S.C.
254l(b))''.
(b) Terms and Conditions.--Section 10(b)(1) of the Native
Hawaiian Health Care Act of 1988 (42 U.S.C. 11709(b)(1)) is
amended--
(1) in subparagraph (A), by inserting ``identified in the
Native Hawaiian comprehensive health care master plan
implemented under section 4'' after ``health care
professional'';
(2) by redesignating subparagraphs (B) through (D) as
subparagraphs (C) through (E), respectively;
(3) by inserting after subparagraph (A) the following:
``(B) the primary health services covered under the
scholarship assistance program under this section shall be
the services included under the definition of that term under
section 12(8),'';
(4) by striking subparagraph (D), as redesignated, and
inserting the following:
``(D) the obligated service requirement for each
scholarship recipient shall be fulfilled through the full-
time clinical or nonclinical practice of the health
profession of scholarship recipient, in an order of priority
that would provide for practice--
``(i) first, in any 1 of the 5 Native Hawaiian health care
systems, and
``(ii) second, in--
``(I) a health professional shortage area or medically
underserved area located in the State of Hawaii, or
``(II) geographic area or facility that is--
``(aa) located in the State of Hawaii, and
``(bb) has a designation that is similar to a designation
described in subclause (I) made by the Secretary, acting
through the Public Health Service,'';
(5) in subparagraph (E), as redesignated, by striking the
period and inserting a comma; and
(6) by adding at the end the following:
``(F) the obligated service of a scholarship recipient
shall not be performed by the recipient through membership in
the National Health Service Corps, and
``(G) the requirements of sections 331 through 338 of the
Public Health Service Act (42 U.S.C. 254d through 254k),
section 338C of that Act (42 U.S.C. 254m), other than
subsection (b)(5) of that section, and section 338D of that
Act (42 U.S.C. 254n) applicable to scholarship assistance
provided under section 338A of that Act (42 U.S.C. 254l)
shall not apply to the scholarship assistance provided under
subsection (a) of this section.''.
______
By Mr. GRASSLEY:
S. 1926. A bill for the relief of Regine Beatie Edwards; to the
Committee on the Judiciary.
private relief legislation
Mr. GRASSLEY. Mr. President, today I am proposing a private relief
bill, under the Immigration and Nationality Act, that would classify
Regine Beatie Edwards as a child, and therefore, allow her to become a
citizen of the United States.
This bill originates from a request of Mr. Stan Edwards, a United
States citizen and Regine's adopted father, concerning his daughter's
naturalization application. Regine Beatie Edwards was born on August 3,
1980 in Germany and arrived in the United States with her mother on
October 16, 1994. In 1997, Mr. Edwards, on several occasions, contacted
the Immigration and Naturalization Service to obtain the proper form to
apply for his daughter's naturalization. In response, the INS sent Mr.
Edwards the form N-643, Application for Certificate in Behalf of an
Adopted Child, and notified him that the adoption must be completed and
that the application must be submitted by his daughter's 18th birthday.
On January 13, 1997, Regine was legally adopted by Mr. Edwards. At this
time, Regine was 16\1/2\ years old. After the completion of the
adoption, Mr. Edwards delivered his daughter's application, in person,
to the INS office in Omaha, Nebraska on March 27, 1997.
Over the following months, Mr. Edwards became concerned about the
amount of time that had passed since the submission of the application
to the INS. In January of 1998, the INS reported that Regine Edwards'
application was to be denied because the adoption had not been
completed by the child's 16th birthday and that the form N-643 was the
incorrect form for application. This new information contradicted what
the INS had previously told Mr. Edwards that Regine had to be adopted
by her 18th birthday. The INS indicated that Mr. Edwards' daughter had
met three of the four qualifications to qualify for citizenship. As a
result of this misinformation, Regine did not meet the qualification of
an adoption by a citizen parent before the child had reached the age of
sixteen. In response to the incorrect information given in this case,
the INS refunded the money for the N-643 application to Mr. Edwards.
I feel that Regine Edwards should not be denied citizenship due to
the wrong information provided by the Immigration and Naturalization
Service. The Edwards family fulfilled the qualifications that they were
originally told by the INS were necessary. Unfortunately, Mr. Edwards
was misinformed which has cost his daughter the opportunity for
citizenship at this time. Mr. President, I ask you and my fellow
colleagues to support this young woman by allowing her to fulfill her
wish to become a United States citizen and not deprive her of this
opportunity.
______
By Ms. MOSELEY-BRAUN:
S. 1927. A bill to amend section 2007 of the Social Security Act to
provide grant funding for 20 additional Empowerment Zones, and for
other purposes; to the Committee on Finance.
the empowerment zone enhancement act of 1998
Ms. MOSELEY-BRAUN. Mr. President, it gives me great pleasure to
introduce the Empowerment Zone Enhancement Act of 1998. This
legislation, I believe, will build on the economic success we have
built over the last several years.
We have worked to make this the strongest economy in a generation--by
balancing the budget, investing in education and training, and opening
up new markets for American products around the world. But we have also
worked to make this the most inclusive economy in history, so everyone
has a chance to participate, and no one is left behind. Further, we
have stressed Community Empowerment. A strategy that gives people the
tools--and acts as a catalyst for community collaboration--then
communities can tap the ingenuity and enthusiasm of every citizen, and
restore our downtowns and distressed areas to a level even our
grandparents would be proud of.
I believe that we are beginning to see results in this Community
Empowerment Philosophy. The Empowerment Zone Initiative is the
cornerstone program to ensure that all Americans benefit from the
strong economy. The purpose of the EZ/EC Initiative is to assist
distressed urban and rural communities to develop and implement
holistic revitalization programs. In the first round of the Initiative,
105 urban and rural EZ's and EC's were designated.
This Initiative has not only produced the intended benefits of
creating economic opportunity, broad-based community partnerships and
sustainable community development, but has also had far-reaching spin-
off benefits in bringing together all segments of the EZ/ECs around the
goal of community revitalization.
Over $4 Billion in private investment has been leveraged in the EZ
and EC's. Nearly 20,000 jobs have been created that have been filled by
people who have previously not had access to economic opportunity.
Entrepreneurship
[[Page S3142]]
opportunities have been created for people with a dream and the
economic opportunity to see that dream realized. Job training and
education opportunities have been created for nearly 45,000 residents.
More than 12,000 Housing units have been constructed or rehabilitated.
Communities have addressed public safety, infrastructure and
environmental clean-up needs through more than 350 programs. More than
52,000 children, youth and adults have been provided with services to
help overcome challenges and contribute to their communities growth. In
short, the EZ/EC Initiative has proven to be a successful holistic
approach to community revitalization and economic development.
The Taxpayer Relief Act of 1997 authorized designation of 20
additional Empowerment Zones (15 urban and 5 rural), and provided for
tax incentives for these new zones. However, that Act did not provide
the flexible grant funding critical to the core concept and mission of
the EZ/EC Initiative. This bill provides for $1.7 billion in grant
funds over a 10-year period, $1.5 billion for the urban zones and $0.2
billion for the rural zones. The application process for the second
round of Empowerment Zones will begin in a few weeks. Communities will
have several months to put together a comprehensive strategic plan that
leverages private investment and provides for economic opportunity.
We can rebuild even our poorest areas--if all the people in the
community get together and decide to do it, and then find the tools
they need to get it done. That's why we are so committed to our
approach. We believe in government as a catalyst--helping to bring
communities together to plan their future, and giving them the tools
they need to reach that future. And it's working. For the first time in
30 years, we're seeing success.
From the South Bronx to areas of the Mississippi Delta to South
Central LA to North Kenwood in Chicago--there is a growing American
renaissance that is turning abandoned buildings, empty lots, and crime-
ridden street corners into new homes, new hope and new opportunity for
the millions of Americans. This success makes us more and more
convinced we're on the right track to reverse decades of decay, and to
remake America's distressed areas into sources of pride and prosperity.
The hardest part is getting started, and we've got it started now all
across the country. Now it's just a matter of moving up the momentum by
expanding the number of zones. With communities working from the
inside, the federal government helping draw investment from the
outside--I know this is a battle we're going to win.
I urge all of my colleagues to join me in supporting quick passage of
this legislation. I ask unanimous consent that the full text of the
bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1927
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That this
Act may be cited as the ``Empowerment Zone Enhancement Act of
1998''.
SEC. 2. FUNDING ENTITLEMENT FOR ADDITIONAL ENTERPRISE ZONES.
(a) Entitlement.--Section 2007(a)(1) of the Social Security
Act (42 U.S.C. 1397f(a)) is amended--
(1) in subparagraph (A), by striking ``in the State; and''
and inserting ``in the State designated pursuant to section
1391(b) of the Internal Revenue Code of 1986;'';
(2) in subparagraph (B), by striking the period at the end
and inserting ``; and''; and
(3) by adding after subparagraph (B) the following new
subparagraph:
``(C) 10 grants under this section for each qualified
empowerment zone in the State designated pursuant to section
1391(g) of such Code.''.
(b) Amount of Grants.--Section 2007(a)(2) of that Act (42
U.S.C. 1397f(a)(2)) is amended--
(1) in the heading of subparagraph (A), by inserting
``original'' before ``empowerment'';
(2) in subparagraph (A), in the matter preceding clause
(i), by inserting ``described in paragraph (1)(A)'' after
``empowerment zone'';
(3) by redesignating subparagraph (C) as subparagraph (D);
and
(4) by inserting after subparagraph (B) the following new
subparagraph:
``(C) Additional empowerment grants.--The amount of each
grant to a State under this section for a qualified
empowerment zone described in paragraph (1)(C) shall be--
``(i) if the zone is designated in an urban areas,
$10,000,000, or
``(ii) if the zone is designated in a rural area,
$4,000,000,
multiplied by the proportion of the population of the zone
that resides in the State.''.
(c) Timing of Grants.--Section 2007(a)(3) of that Act (42
U.S.C. 1397f(a)(3)) is amended--
(1) in the heading of subparagraph (A), by inserting
``original'' before ``qualified'';
(2) in subparagraph (A), in the matter preceding clause
(i), by inserting ``described in paragraph (1)(A)'' after
``empowerment zone''; and
(3) by adding after subparagraph (B) the following new
subparagraph:
``(C) Additional qualified empowerment zones.--With respect
to each qualified empowerment zone described in paragraph
(1)(C), the Secretary shall make--
``(i) 1 grant under this subsection to the State in which
the zone lies, on the date of the designation of the zone
under such part I; and
``(ii) 1 grant under this subsection to such State, on the
first day of each of the nine fiscal years that begin after
the date of the designation.''.
(d) Funding.--Section 2007(a)(4) of that Act (42 U.S.C.
1397f(a)(4)) is amended--
(1) by relocating and redesignating the matter following
the caption as subparagraph (A);
(2) by inserting ``Original grants.--'' after the
subparagraph designation ``(A)'';
(3) in subparagraph (A), as so redesignated, by inserting
before the period ``for empowerment zones and enterprise
communities described in subparagraphs (A) and (B) of
paragraph (1)''; and
(4) by adding after subparagraph (A), as so redesignated,
the following new subparagraph:
``(B) Additional grants.--$1,700,000,000 shall be made
available to the Secretary for grants under this section for
empowerment zones described in paragraph (1)(C).''.
SEC. 3. USE OF GRANTS FOR LOAN FUNDS AND SIMILAR
ARRANGEMENTS.
Section 2007(b) of the Social Security Act (42 U.S.C.
1397f(b)) is amended by adding at the end the following new
paragraph:
``(5)(A) In order to assist disadvantaged adults and youth
in achieving and maintaining economic self-support, a State
may use amounts paid under this section to fund revolving
loan funds or similar arrangements for the purpose of making
loans, loan guarantees, financial services, or related
activities more accessible to residents, institutions,
organizations, or businesses.
``(B) Interest earned by, and repayments of principal and
interest on loans made from, revolving funds or similar
arrangements described in subparagraph (A) shall be credited
to such funds.
``(C) The funding of, or holding of funds in, a revolving
loan fund or similar arrangement in accordance with
subparagraph (A), in amounts reasonably necessary to carry
out the purposes of such subparagraph (A), shall be deemed to
comply with any requirement to minimize the time elapsing
between transfer of funds from the United States Treasury and
the issuance of payments for program purposes.''.
SEC. 4. RESPONSIBILITY FOR ENVIRONMENTAL REVIEW.
Section 2007 of the Social Security Act (42 U.S.C. 1397f)
is amended--
(1) by redesignating subsection (f) as subsection (h); and
(2) by inserting after subsection (e) the following new
subsection:
``(f) Environmental Review.--
``(1) Execution of responsibility by the secretary of
housing and urban development and the secretary of
agriculture.--
``(A) Applicability.--This subsection shall apply to grants
under this section in connection with empowerment zones and
enterprise communities designated under section 1391(a) of
the Internal Revenue Code of 1986 and empowerment zones
designated under section 1391(g) of such Code--
``(i) by the Secretary of Housing and Urban Development in
the case of those located in urban areas; and
``(ii) by the Secretary of Agriculture in the case of those
located in rural areas.
``(B) Execution of responsibility.--With respect to grants
described in subparagraph (A), the Secretary of Housing and
Urban Development and the Secretary of Agriculture, as
appropriate, shall execute the responsibilities under the
National Environmental Policy Act of 1969 and other
provisions of law which further the purposes of such Act (as
specified in under this section if the State, unit of general
local government, or Indian tribe, as designated by the
Secretary in accordance with regulations issued by the
Secretary under paragraph (2)(B), assumes all of the
responsibilities for environmental review, decisionmaking,
and action pursuant to such Act, and such other provisions of
law as the regulations of the Secretary specify, that would
otherwise apply to the Secretary were the Secretary to
undertake such projects as Federal projects.
``(B) Implementation.--The Secretary of Housing and Urban
Development and the Secretary of Agriculture shall each issue
regulations to carry out this subsection only after
consultation with the Council on Environmental Quality. Such
regulations shall--
``(i) specify any other provisions of law which further the
purposes of the National Environmental Policy Act of 1969 and
to which the assumption of responsibility as provided in this
subsection applies;
[[Page S3143]]
``(ii) provide eligibility criteria and procedures for the
designation of a State, unit of general local government, or
Indian tribe to assume all of the responsibilities in this
section;
``(iii) specify the purposes for which funds may be
committed without regard to the procedure established under
paragraph (3);
``(iv) provide for monitoring of the performance of
environmental reviews under this subsection;
``(v) in the discretion of the Secretary, provide for the
provision or facilitation of training for such performance;
and
``(vi) subject to the discretion of the Secretary, provide
for suspension or termination by the Secretary of the
assumption under subparagraph (A).
``(C) Responsibilities of state, unit of general local
government, or indian tribe.--The Secretary's duty under
subparagraph (B) shall not be construed to limit any
responsibility assumed by a State, unit of general local
government, or Indian tribe with respect to any particular
release of funds under subparagraph (A).
``(3) Procedure.--The Secretary shall approve the release
of funds for projects subject to the procedures authorized by
this subsection only if, not less than 15 days prior to such
approval and prior to any commitment of funds to such
projects (except for such purposes specified in the
regulations issued under paragraph (2)(B)), the recipient
submits to the Secretary a request for such release
accompanied by a certification of the State, unit of general
local government, or Indian tribe which meets the
requirements of paragraph (4). The approval by the Secretary
of any such certification shall be deemed to satisfy the
Secretary's responsibilities pursuant to paragraph (1) under
the National Environmental Policy Act of 1969 and such other
provisions of law as the regulations of the Secretary specify
insofar as those responsibilities relate to the releases of
funds for projects to be carried out pursuant thereto which
are covered by such certification.
``(4) Certification.--A certification under the procedures
authorized by this subsection shall--
``(A) be in a form acceptable to the Secretary;
``(B) be executed by the chief executive officer or other
officer of the State, unit of general local government, or
Indian tribe who qualifies under regulations of the
Secretary:
``(C) specify that the State, unit of general local
government, or Indian tribe under this subsection has fully
carried out its responsibilities as described under paragraph
(2); and
``(D) specify that the certifying officer--
``(i) consents to assume the status of a responsible
Federal official under the National Environmental Policy Act
of 1969 and each provision of law specified in regulations
issued by the Secretary insofar as the provisions of such Act
or other such provision of law apply pursuant to paragraph
(2); and
``(ii) is authorized and consents on behalf of the State,
unit of general local government, or Indian tribe and himself
or herself to accept the jurisdiction of the Federal courts
for the purpose of enforcement of the responsibilities as
such an official.
``(5) Approval by states.--In cases in which a unit of
general local government carries out the responsibilities
described in paragraph (2), the Secretary may permit the
State to perform those actions of the Secretary described in
paragraph (3). The performance of such actions by the State,
where permitted, shall be deemed to satisfy the
responsibilities referred to in the second sentence of
paragraph (3).''.
SEC. 5. PERFORMANCE MEASUREMENT AND EVALUATION; GRANT
ADJUSTMENTS.
Section 2007 of the Social Security Act (42 U.S.C. 1397f),
as amended by section 4, in further amended by adding after
subsection (f) the following subsection:
``(g) Performance Measurement System, Reports, and
Evaluations, Grant Adjustments, and Related Matters.--
``(1) Applicability.--The requirements of this subsection--
``(A) apply to all grants made by a State, from grants to
the State under subsection (a)(2)(C), to lead implementing
entities (as defined in paragraph (7)) for empowerment zones
designated pursuant to section 1391(g) of the Internal
Revenue Code of 1986 (26 U.S.C. 1391(g)); and
``(B) are in addition to the annual report and biennial
audit requirements applicable to States under section 2006.
``(2) Performance measurement system.--The lead
implementing entity for an empowerment zone shall establish a
performance measurement system acceptable to the Secretary to
assist in assessing the extent to which its strategic plan is
being implemented and funds made available under subsection
(a)(2)(C) are being used effectively.
``(3) Performance report.--Each lead implementing entity
shall submit to the Secretary (and make available to the
public upon request), at such time and in such manner as the
Secretary shall prescribe, a report including an assessment
of the progress the empowerment zone has made toward
implementing its strategic plan, and such other information
as the Secretary shall prescribe. To the extent practicable,
the report shall also include information available to the
lead implementing entity with respect to the use of tax
incentives available to empowerment zones designated pursuant
to section 1391(g) of the Internal Revenue Code of 1986.
``(4) Performance evaluations, adjustments, and
recordkeeping.--
``(A) Performance evaluations.--The Secretary shall
regularly evaluate the progress of the lead implementing
entity for the empowerment zone in implementing the strategic
plan for the zone, on the basis of performance reviews and
any other information that the Secretary may require.
``(B) Adjustments.--On the basis of the Secretary's
evaluation under subparagraph (A), the Secretary may direct
the Secretary of Health and Human Services to adjust, reduce,
or cancel the grant to a State under subsection (a)(2)(C) for
the current or any future fiscal year or years, except that
amounts already properly expended by a lead implementing
entity on eligible activities under this Act shall not be
recaptured or deducted from future grants to the State.
``(5) Retention of records.--Each lead implementing entity
shall keep such records relating to funds received from
grants to the State under subsection (a)(2)(C), including the
amounts and disposition of such funds and the types of
activities funded, as the Secretary determines to be
necessary to enable the Secretary to evaluate the performance
of the lead implementing agency and to determine compliance
with the requirements of this subsection.
``(6) Secretary's access to documents.--The Secretary shall
have access, for the purpose of evaluations and examinations
pursuant to paragraph (4)(A), to any books, documents,
papers, and records of any grantee or other entity or person
that are pertinent to grant amounts received in connection
with this section.
``(7) Definitions.--For purposes of this subsection--
``(A) The term `lead implementing entity' means the local
government or governments, the governance body of an
empowerment zone as specified in the strategic plan, or any
non-profit entity that is principal administrator of an
empowerment zone.
``(B) The term `Secretary' means the Secretary of Housing
and Urban Development for purposes of grants under this
section with respect to urban areas and means the Secretary
of Agriculture for purposes of grants under this section with
respect to rural areas, except as the context otherwise
indicates.
SEC. 6. TECHNICAL AMENDMENTS.
Section 2007(b) of the Social Security Act is amended--
(1) in paragraph (2), in the matter preceding subparagraph
(A), by striking ``to prevent''; and
(2) in paragraph (4), in the matter preceding subparagraph
(A), by striking ``maintain'' and inserting ``maintaining''.
______
By Mr. LEAHY:
S. 1928. A bill to protect consumers from overcollections for the use
of pay telephones, to provide consumers with information to make
informed decisions about the use of pay telephones, and for other
purposes; to the Committee on Commerce, Science, and Transportation.
the consumer pay telephone protection act
Mr. LEAHY. Mr. President, I have voiced my great disappointment many
times with how the Telecommunications Act of 1966 is costing consumers
millions of dollars.
I complained about this at the time that Act passed, and continue to
be concerned that Vermonters are being taken to the cleaners.
I was one of five Senators to vote against that bill. I thought it
was clear then, and it should be clear by now to everyone, that the
Telecommunications bill means higher costs for consumers.
As other hi-tech industries, such as computer technology, offer lower
and lower prices over time--the telephone and cable TV industries are
presenting consumers with higher and higher charges.
For example, I am mad as heck that pay phone charges in Vermont went
up to 35 cents--from 10 cents.
But what annoys me more is that if I do not have exact change--if I
use two quarters--the change the phone company keeps is more than the
ten cents the call used to cost.
I have been know to say ``keep the change'' in restaurants, or when I
buy a newspaper.
But I do not like phone companies taking my change. I am fed up with
pay phone service providers nickel and diming consumers.
This bill will make phone companies provide change to consumers at
the pay phone--or provide a credit in the amount of the lost change to
the consumer or to states to be used to help consumers.
My bill will also give the FCC broad powers to give states authority
to control pay phone rates, if necessary.
The bill permits pay phone providers in Vermont to issue a credit
when
[[Page S3144]]
change is not provided to the consumer which would go to Vermont. This
means that Vermont could provide better pay phone service for public
safety or health reasons.
For example, this fund could be used by states to provide better pay
phone service to those with disabilities, or those living in nursing
homes. It would provide funding for pay phones to be placed in remote
areas in case of emergencies.
I would rather this change go directly to the consumer, and believe
when this bill is fully implemented that most consumers will not be
overcharged for calls.
In the meantime, however, I would rather have the change used to
benefit Vermonters than go to the phone companies.
There are over 2 million pay phones in the United States. The
Washington Post explained on Monday that if 75 percent of those pay
phones charge 35 cents for a local call and if just one person a day
overpays 15 cents at each of those phones, companies would get more
than $230,000 extra a day, or about $7 million a month.
My guess is that this hugely underestimates the size of this
windfall.
Keep in mind this windfall, in Vermont, is on top of the raise from
10 cents to 35 cents. I have also noticed fewer and fewer phone booths
except at places such as airports or train stations where consumers are
in a hurry and may not have time to track down change.
My bill goes beyond just keeping phone companies from getting
windfall profits. It calls for a national investigation of monopoly
pricing and price gouging in the pay telephone markets.
It goes further than that--it then gives the Federal Communications
Commission the tough new authority to deal with this problem. It allows
them to give states the right to establish rates for local calls if
necessary to stop this overcharging. Remember, when Vermont was in
charge before the Telecommunications Act passed the pay phone rates
were a dime.
My bill will also encourage the development of new technologies so
that consumers are not overcharged for local phone calls to begin with.
My bill also provides funding--and the money comes from telephone
companies not consumers--for public interest pay phones. These are
phones which the FCC has determined each state should provide to its
citizens in areas where there otherwise might not be a phone. They did
this in a decision issued on October 7, 1996.
This was a good idea--but there is no federal funding to implement
the decision.
In addition, it is uneconomic for a phone company to provide a pay
phone in remote areas of Vermont. But in a roadside emergency these
phones could be vital. My bill would provide for this program using
money that now just goes out of your pockets to the phone companies.
Also, public interest pay phones could be placed in nursing homes,
emergency homeless shelters, emergency rooms in hospitals, and other
similar places.
Emergency 911 calls would be free from these phones, and other calls
would cost but at least there would be a phone in a location where
there otherwise might not be one.
What is best about this approach is that Vermont would decide how to
use this funding that now goes directly into the coffers of phone
companies.
I have also designed the bill in a way that prevents phone companies
from trying to take advantage of this situation.
The bill gives the FCC board powers to ensure that the pay phone
providers ``do not pass any costs relating to such compliance to
consumers.''
It also mandates that the FCC monitor this situation and ensure that
implementation does not result in any reduction in pay phone service.
The bill requires that pay phone companies which charge more than 10
cents for local phone calls provide either cash change or other
alternatives to consumers, or credits to states equal to the value of
the unpaid change.
These credits to states would be used by states for
telecommunications activities that promote the public interest, such as
safety, health, emergency services, or education and promote public
interest pay phones in hospitals, schools, emergency homeless shelters,
facilities for the disabled, and at similar types of locations.
The bill directs the FCC, within one year of the bill's enactment, to
issue proposed rules that apply to pay phone providers that charge more
than 10 cents for local pay phone calls. Companies would have to
provide for cash change or automatically credit the appropriate public
service agency in the respective states to account for instances in
which change is not provided at the pay phone.
The bill requires that the FCC ensure that pay phone providers do not
pass any costs of compliance with this bill on to consumers and that
pay phone providers in no way reduce or limit service based on this
anti-windfall requirement.
The FCC is given major new powers to take action to prevent any price
gouging including giving states back the authority to regulate the
price of local calls.
The bill requires that small stickers or other notice be posted on
pay phones for the purpose of advising consumers when cash change will
not be provided.
The bill directs the FCC to reconsider its rules under which the FCC
removed authority from states to regulate the charge for local calls
made over pay phones. The FCC would reexamine the need for states to
have greater decision making roles where local competition between pay
phone providers is not present.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1928
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 ``Consumer Pay Telephone
Protection Act of 1998''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress makes the following findings:
(1) Some payphone service providers have increased the
charge for the use of a coin-operated pay telephone for a
local call to 35 cents but have not put into place a system
for providing change to users of such telephones for amounts
deposited in such telephones in excess of such charge.
(2) Payphone service providers should charge pay telephone
users only for the actual time of use of pay telephones.
(3) Most consumers, if given a choice, would prefer that
any amount of such excess deposits that are not refunded to
consumers be used for pay telephones for public health,
safety, and welfare purposes rather than have such excess
deposits accrue to the financial benefit of payphone service
providers.
(4) There are approximately 2,000,000 pay telephones in the
United States, and payphone service providers accrue
substantial revenue at the expense of Americans who do not
have the exact amount of the charge for their use.
(5) A decision of the Federal Communications Commission to
deregulate the provision of payphone service was premature
and did not address adequately the need for local competition
that would benefit users of pay telephones.
(6) The decision of the Commission does not promote the
widespread deployment of affordable payphone service that
would benefit the general public, nor does the decision
promote the widespread deployment of public interest
telephones.
(7) The use of coin-operated pay telephones represents an
increasing commercial activity that substantially affects
interstate commerce.
(8) Public interest telephones should be maintained in each
State and should be provided to promote the public safety,
health, and welfare.
(b) Purpose.--The purpose of this Act is--
(1) to require payphone service providers--
(A) to provide cash change to pay telephone users who
deposit amounts for local telephone calls in excess of the
amounts charged for such calls; or
(B) in the event that such providers do not provide such
change, to transfer amounts equal to such change to
appropriate State entities for public interest purposes
related to telephone service;
(2) to encourage such changes in pay telephone technology
as are needed to assure that payphone service providers--
(A) do not overcharge pay telephone users who do not have
the exact amount of the charge for local pay telephone calls;
and
(B) do not charge pay telephone users for any time in which
pay telephones are not actually in use; and
(3) to require the Federal Trade Commission to determine--
(A) whether dysfunctions exist in the market for payphone
service including locational monopolies in which the size of
the market concerned results in the availability of payphone
service from a single provider; and
[[Page S3145]]
(B) whether rates for coin-operated pay telephones for
local telephone calls are market based.
SEC. 3. PUBLIC INTEREST PAY TELEPHONES.
Section 276(b)(2) of the Communications Act of 1934 (47
U.S.C. 276(b)(2)) is amended to read as follows:
``(2) Public interest pay telephones.--
``(A) Sense of congress.--It is the sense of Congress
that--
``(i) in the interest of the public health, safety, and
welfare, public interest pay telephones should be available
and maintained in locations where there would not otherwise
likely be a pay telephone; and
``(ii) such public interest pay telephones should be fairly
and equitably supported.
``(B) Use of funds.--In accordance with such regulations as
the Commission shall prescribe, each State agency that
receives amounts under subsection (c)(2)(A) shall use such
amounts to promote or otherwise support the installation,
maintenance, and use of public interest pay telephones,
including specially designed payphones for the disabled and
the provision of payphone service in remote locations,
nursing homes, emergency homeless shelters, hospitals,
facilities that assist the disabled, schools, and other
appropriate locations determined by the State agency
concerned.''.
SEC. 4. REQUIREMENT FOR CHANGE AT PAY TELEPHONES.
(a) Requirement.--Section 276 of the Communications Act of
1934 (47 U.S.C. 276), as amended by section 3 of this Act, is
further amended--
(1) by redesignating subsections (c) and (d) as subsections
(d) and (e), respectively; and
(2) by inserting after subsection (b) the following new
subsection (c):
``(c) Change at Pay Telephones.--
``(1) Requirement.--
``(A) In general.--Except as provided in paragraph (2), a
payphone service provider shall provide any individual using
a pay telephone of such provider to make a telephone call
described in subparagraph (B) an amount of cash change equal
to the amount (if any) by which the amount deposited by the
individual for the call exceeds the charge for the call.
``(B) Covered telephone calls.--Subparagraph (A) applies to
any local telephone call the charge for which exceeds 10
cents.
``(2) Alternative use of excess collections.--
``(A) Transfer.--In accordance with such regulations as the
Commission shall prescribe, a payphone service provider may,
in lieu of providing cash change under paragraph (1)--
``(i) transfer any excess amounts collected by the provider
at pay telephones to the State agency in the State in which
the telephones are located that is responsible for the
support of public interest pay telephones under subsection
(b)(2); or
``(ii) if the State has no such agency by reason of a
determination under subparagraph (B), transfer such excess
amounts to the Commission for use under subparagraph (D).
``(B) State option.--
``(i) State option.--The chief executive officer of each
State may determine whether or not to permit the transfer of
funds to an agency of such State under subparagraph (A).
``(ii) Revocation.--The chief executive officer of a State
may revoke any previous decision with respect to the State
under this subparagraph.
``(iii) Notice.--The chief executive officer of a State
shall notify the Commission, in writing, of any determination
or revocation of a determination under this subparagraph.
``(C) Use by states.--
``(i) In general.--A State agency receiving amounts under
subparagraph (A) shall utilize such amounts for purposes of
promoting and supporting public interest pay telephones in
the State under subsection (b)(2).
``(ii) Additional use.--In the event that amounts received
by a State agency under subparagraph (A) exceed the amounts
determined by the agency to be required to properly promote
and support public interest pay telephones in the State, the
agency shall utilize the excess amounts for purposes relating
to providing universal service or improving telephone service
in the State under section 254.
``(D) Use by commission.--
``(i) Deposit.--The Commission shall deposit any amounts
received by the Commission under subparagraph (A) in an
account in the Treasury established for that purpose.
``(ii) Availability.--Under such regulations as the
Commission shall prescribe, the Commission shall utilize
amounts in the account under clause (i) to assist States that
receive amounts under subparagraph (A) with additional
assistance to promote and support public interest pay
telephones under subsection (b)(2).
``(E) Notice to consumers.--
``(i) In general.--In the event a payphone service provider
decides to transfer excess amounts deposited at any given pay
telephone under subparagraph (A) for purposes of supporting
public interest pay telephones under subsection (b)(2), the
provider shall post at such pay telephone a notice informing
potential users of such pay telephone that any such excess
amount shall not be returned as cash change or credit but
shall be utilized for such purposes.
``(ii) Additional notice.--Nothing in clause (i) shall be
interpreted to limit a State from requiring additional
notices with respect to the matters set forth in that clause.
``(3) Regulations.--
``(A) Requirement.--Not later than one year after the date
of enactment of the Consumer Pay Telephone Protection Act of
1998, the Commission shall prescribe the regulations required
under this subsection.
``(B) Additional elements.--The regulations shall--
``(i) provide for the monitoring of the compliance of
payphone service providers with the provisions of this
subsection;
``(ii) ensure that such providers do not pass any costs
relating to such compliance to consumers; and
``(iii) ensure that the implementation of such provisions
do not result in any reduction in payphone service, including
the imposition of time limits on local telephone calls or
other reductions or limitations in such service.
``(C) Effective date.--The regulations shall provide that
the provisions of the regulations take effect not earlier
than 6 months after the date of the final issuance of the
regulations and not later than 12 months after that date.''.
(b) Study of Alternative Technologies.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, the Federal Communications Commission
shall submit to Congress a report on the availability of
technologies or systems that permit persons who do not have
exact change to utilize pay telephones for local telephone
calls without being overcharged for such calls.
(2) Elements.--The report shall address the use of tokens,
cash debit cards, systems for crediting the monthly telephone
bills of individuals who use pay telephones, and such other
technologies and systems as the Commission considers
appropriate.
SEC. 5. STUDY OF COMPETITIVENESS OF PAY TELEPHONE MARKET.
(a) Study.--
(1) In general.--The Federal Trade Commission shall, in
consultation with the Federal Communications Commission,
carry out a study of competition in the market for intrastate
payphone service, including--
(A) whether or not locational monopolies in such service
exist by reason of the size of particular markets for such
service;
(B) whether or not potential users of such service are
effectively barred from choice in such service in particular
markets by reason of difficulties in identifying a variety of
payphone service providers in such markets;
(C) whether or not rates for local pay telephone calls are
market-based; and
(D) whether or not there is evidence of monopoly pricing in
such service.
(2) Scope of comment.--In carrying out the study, the
Federal Trade Commission shall seek comment from a variety of
sources, including State and local public entities, consumers
and consumer representatives, and payphone service providers
and their representatives.
(b) Report.--Not later than one year after the date of
enactment of this Act, the Federal Trade Commission shall
submit to Congress a report on the results of the study
carried out under subsection (a). The report shall include
the findings of the Commission with respect to the matters
set forth under paragraph (1) of that subsection.
(c) Federal Communications Commission Action.--
Notwithstanding any provision of the Communications Act of
1934 (47 U.S.C. 151 et seq.), the Federal Communications
Commission may, as a result of the study under subsection
(a), conduct a rule-making proceeding in order to accomplish
any of the following:
(1) To set limitations on rates for local pay telephone
calls.
(2) To permit the States to establish rates for such calls
on a cost basis.
(3) To set limitations on the commissions that payphone
service providers may pay to persons who lease space to such
providers for pay telephones.
(4) To prohibit payphone service providers from entering
into exclusive contracts with persons who lease space to such
providers for pay telephones which contracts cover multiple
locations.
______
By Mrs. HUTCHISON (for herself, Mr. Murkowski, Mr. Nickles, and
Mr. Domenici):
S. 1929. A bill to amend the Internal Revenue Code of 1986 to provide
tax incentives to encourage production of oil and gas within the United
States, and for other purposes; to the Committee on Finance.
the u.s. ENERGY EcOnOmIc GRowTH aCT
Mrs. HUTCHISON. Mr. President, a healthy domestic energy industry is
critical to our nation's security and our economic well-being. That is
why I am pleased today to introduce the U.S. Energy Economic Growth
Act. My legislation provides much needed tax relief for the domestic
oil and gas industry. It is a part of the omnibus Domestic Oil and Gas
Security Enhancement Plan that I've developed with Senator Murkowski
and Senator Nickles. Together, our comprehensive legislation represents
the most sweeping tax and regulatory relief since before the Gulf War.
Our package could not come at a more critical time. The price of
crude
[[Page S3146]]
oil recently dipped to its lowest level since April 1994. This downturn
in world oil prices has exposed America's independent producers to
great risk. If current market conditions persist, as is expected,
thousands of wells could become uneconomic and be shut-in or plugged.
It is time we acted to ensure this does not happen, and my bill is the
first step in that direction.
The U.S. Energy Economic Growth Act will do three things.
marGINAL weLL taX RELief
First, this bill provides tax relief for producers who operate
marginal oil and gas wells. A marginal oil well is one that produces
less than 15 barrels per day or produces heavy oil. A marginal gas well
is one that produces less than 90 thousand cubic feet a day. Those who
operate marginal wells are most at risk in times of lower oil prices.
The National Petroleum Council (NPC) reported that America has over
500,000 marginal wells that collectively produce nearly 700 million
barrels of oil equivalent each year. Texas alone has over 100,000
marginal wells. These wells contribute nearly 80,000 jobs and generate
close to $14 billion each year in economic activity.
In 1996, abandonment or plugging of these marginal wells led to a
loss of more than 3,600 high-quality jobs and a loss of $84.1 million
in earnings in 1996. States and federal governments lost $18.5 million
in severance taxes and an equal amount of ad valorem taxes from wells
plugged during 1996.
Many domestic oil and gas businesses rely on these marginal wells as
the backbone of their operations. However, as global market factors
cause commodity prices to fluctuate, the economic viability of these
wells is precarious. Marginal wells provide countless jobs, energy
security and federal tax and royalty revenues. The tax credits in my
bill will help keep these marginal wells in production and Americans
employed. My bill provides for a maximum $3 per barrel tax credit for
the first 3 barrels of daily production from an existing oil well. In
addition, marginal gas well will receive $0.50 per mcf for the first 18
mcf of daily natural gas production.
In addition, this tax credit would only occur when prices are low.
This credit is phased out when prices for oil and natural gas increase.
inactive well tax relief
The second plank of my bill creates an incentive for independent oil
and gas producers to recover abandoned wells and put them back into
production. This provision allows producers to exclude income
attributable to oil and natural gas from a recovered inactive well. In
order to qualify, the oil or gas well must have been abandoned for at
least two years prior to the date of enactment. In addition, this
incentive would only apply to wells that are brought back on line
within 5 years of the date of enactment.
This economic incentive has a proven track record. In Texas, a
similar law resulted in returning over 6,000 wells to production. The
estimated annual production from these wells is worth $565 million at
the wellhead, and approximately $1.65 billion to the economy of Texas
each year. The wealth from this incentive provides over 10,000 direct
and indirect jobs each year. The Texas legislature receives an
estimated $22 million in additional annual tax revenues, over ten
thousand jobs have been created, and $1.65 billion a year in wealth is
generated. Over 90,000 idle wells remain in Texas. This incentive
package would help return them to production and allow them to
contribute to a strong economy in America.
Thirteen states have inactive well recovery programs, including
Alaska, Arkansas, California, Florida, Kansas, Louisiana, Mississippi,
Montana, New Mexico, North Dakota, Oklahoma, Texas, Wyoming. This
federal program would allow the benefits experienced by Texas and other
states to continue to grow and to be shared by the rest of the country.
Importantly, this provision increases the stream of revenue going
into the federal government in two ways. First, royalty owners will pay
federal taxes on income generated from the recovered well. Currently,
no taxes are paid on these wells because they are inactive. Returning
them to production will increase the royalties paid to the federal
government. Secondly, the new jobs created will add significantly to
the taxes paid on wages and earnings.
This one-time shot-in-the-arm for the industry will provide countless
jobs and considerable economic benefit to our communities.
other incentives
The third provision of my bill makes changes to the tax code that
makes it easier for producers to take full advantage of already
existing tax credits. Under these provisions, both geological and
geophysical expenditures on domestic production and delay rental
payments would be allowed to be expensed at the time incurred rather
than capitalized over the length of the well. This election would allow
producers more control over their income stream without changing the
amount of tax.
In addition, two relatively new types of drilling methods are
included as a qualified enhanced oil recovery method for purposes of
the Enhanced Oil Recovery Tax Credit. These two drilling methods,
hydro-injection and horizontal drilling, would be included on the list
of qualified methods. They provide us with some of the most innovative
means of drilling and we should encourage producers to utilize these
and other productive methods.
Mr. President, my legislation provides incentives for the most
threatened parts of the oil and gas industry. Relief for marginal and
inactive wells encourages full utilization of existing wells, clearly
provides jobs and helps the local economy grow. I encourage my
colleagues to support this legislation and their local communities by
making marginal and inactive wells productive contributors to the local
economy. Our energy security depends upon it.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1929
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 ``United States Energy
Economic Growth Act''.
TITLE I--PRODUCTION FROM MARGINAL AND INACTIVE WELLS
SEC. 101. TAX CREDIT FOR MARGINAL DOMESTIC OIL AND NATURAL
GAS WELL PRODUCTION.
(a) Credit for Producing Oil and Gas From Marginal Wells.--
Subpart D of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to business credits)
is amended by adding at the end the following new section:
``SEC. 45D. CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL
WELLS.
``(a) General Rule.--For purposes of section 38, the
marginal well production credit for any taxable year is an
amount equal to the product of--
``(1) the credit amount, and
``(2) the qualified crude oil production and the qualified
natural gas production which is attributable to the taxpayer.
``(b) Credit Amount.--For purposes of this section--
``(1) In general.--The credit amount is--
``(A) $3 per barrel of qualified crude oil production, and
``(B) 50 cents per 1,000 cubic feet of qualified natural
gas production.
``(2) Reduction as oil and gas prices increase.--
``(A) In general.--The $3 and 50 cents amounts under
paragraph (1) shall each be reduced (but not below zero) by
an amount which bears the same ratio to such amount
(determined without regard to this paragraph) as--
``(i) the excess (if any) of the applicable reference price
over $14 ($1.40 for qualified natural gas production), bears
to
``(ii) $4 ($0.40 for qualified natural gas production).
The applicable reference price for a taxable year is the
reference price for the calendar year preceding the calendar
year in which the taxable year begins.
``(B) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 1999, each of the
dollar amounts contained in subparagraph (A) shall be
increased to an amount equal to such dollar amount multiplied
by the inflation adjustment factor for such calendar year
(determined under section 43(b)(3)(B) by substituting `1998'
for `1990').
``(C) Reference price.--For purposes of this paragraph, the
term `reference price' means, with respect to any calendar
year--
``(i) in the case of qualified crude oil production, the
reference price determined under section 29(d)(2)(C), and
``(ii) in the case of qualified natural gas production, the
Secretary's estimate of the annual average wellhead price per
1,000 cubic feet for all domestic natural gas.
``(c) Qualified Crude Oil and Natural Gas Production.--For
purposes of this section--
[[Page S3147]]
``(1) In general.--The terms `qualified crude oil
production' and `qualified natural gas production' mean
domestic crude oil or natural gas which is produced from a
marginal well.
``(2) Limitation on amount of production which may
qualify.--
``(A) In general.--Crude oil or natural gas produced during
any taxable year from any well shall not be treated as
qualified crude oil production or qualified natural gas
production to the extent production from the well during the
taxable year exceeds 1,095 barrels or barrel equivalents.
``(B) Proportionate reductions.--
``(i) Short taxable years.--In the case of a short taxable
year, the limitations under this paragraph shall be
proportionately reduced to reflect the ratio which the number
of days in such taxable year bears to 365.
``(ii) Wells not in production entire year.--In the case of
a well which is not capable of production during each day of
a taxable year, the limitations under this paragraph
applicable to the well shall be proportionately reduced to
reflect the ratio which the number of days of production
bears to the total number of days in the taxable year.
``(3) Definitions.--
``(A) Marginal well.--The term `marginal well' means a
domestic well which during the taxable year has marginal
production (as defined in section 613A(c)(6)).
``(B) Crude oil, etc.--The terms `crude oil', `natural
gas', `domestic', and `barrel' have the meanings given such
terms by section 613A(e).
``(C) Barrel equivalent.--The term `barrel equivalent'
means, with respect to natural gas, a conversion ratio of
6,000 cubic feet of natural gas to 1 barrel of crude oil.
``(d) Other Rules.--
``(1) Production attributable to the taxpayer.--In the case
of a marginal well in which there is more than one owner of
operating interests in the well and the crude oil or natural
gas production exceeds the limitation under subsection
(c)(2), qualifying crude oil production or qualifying natural
gas production attributable to the taxpayer shall be
determined on the basis of the ratio which taxpayer's revenue
interest in the production bears to the aggregate of the
revenue interests of all operating interest owners in the
production.
``(2) Operating interest required.--Any credit under this
section may be claimed only on production which is
attributable to the holder of an operating interest.
``(3) Production from nonconventional sources excluded.--In
the case of production from a marginal well which is eligible
for the credit allowed under section 29 for the taxable year,
no credit shall be allowable under this section unless the
taxpayer elects not to claim the credit under section 29 with
respect to the well.''.
(b) Credit Treated as Business Credit.--Section 38(b) of
such Code is amended by striking ``plus'' at the end of
paragraph (11), by striking the period at the end of
paragraph (12) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(13) the marginal oil and gas well production credit
determined under section 45D(a).''.
(c) Credit Allowed Against Regular and Minimum Tax.--
(1) In general.--Subsection (c) of section 38 of such Code
(relating to limitation based on amount of tax) is amended by
redesignating paragraph (3) as paragraph (4) and by inserting
after paragraph (2) the following new paragraph:
``(3) Special rules for marginal oil and gas well
production credit.--
``(A) In general.--In the case of the marginal oil and gas
well production credit--
``(i) this section and section 39 shall be applied
separately with respect to the credit, and
``(ii) in applying paragraph (1) to the credit--
``(I) subparagraphs (A) and (B) thereof shall not apply,
and
``(II) the limitation under paragraph (1) (as modified by
subclause (I)) shall be reduced by the credit allowed under
subsection (a) for the taxable year (other than the marginal
oil and gas well production credit).
``(B) Marginal oil and gas well production credit.--For
purposes of this subsection, the term `marginal oil and gas
well production credit' means the credit allowable under
subsection (a) by reason of section 45D(a).''.
(2) Conforming amendment.--Subclause (II) of section
38(c)(2)(A)(ii) of such Code is amended by inserting ``or the
marginal oil and gas well production credit'' after
``employment credit''.
(d) Carryback.--Subsection (a) of section 39 of such Code
(relating to carryback and carryforward of unused credits
generally) is amended by adding at the end the following new
paragraph:
``(3) 10-year carryback for marginal oil and gas well
production credit.--In the case of the marginal oil and gas
well production credit--
``(A) this section shall be applied separately from the
business credit (other than the marginal oil and gas well
production credit),
``(B) paragraph (1) shall be applied by substituting `10
taxable years' for `1 taxable years' in subparagraph (A)
thereof, and
``(C) paragraph (2) shall be applied--
``(i) by substituting `31 taxable years' for `22 taxable
years' in subparagraph (A) thereof, and
``(ii) by substituting `30 taxable years' for `21 taxable
years'.''.
(e) Coordination With Section 29.--Section 29(a) of such
Code is amended by striking ``There'' and inserting ``At the
election of the taxpayer, there''.
(f) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of such Code is
amended by adding at the end the following item:
``45D. Credit for producing oil and gas from marginal wells.''
(g) Effective Date.--The amendments made by this section
shall apply to production after the date of the enactment of
this Act.
SEC. 102. EXCLUSION OF CERTAIN AMOUNTS RECEIVED FROM
RECOVERED INACTIVE WELLS.
(a) In General.--Part III of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to items
specifically excluded from gross income) is amended by
redesignating section 139 as section 140 and by inserting
after section 138 the following new section:
``SEC. 139. OIL OR GAS PRODUCED FROM A RECOVERED INACTIVE
WELL.
``(a) In General.--Gross income does not include income
attributable to independent producer oil from a recovered
inactive well.
``(b) Definitions.--For purposes of this section--
``(1) Independent producer oil.--The term `independent
producer oil' means crude oil or natural gas in which the
economic interest of the independent producer is attributable
to an operating mineral interest (within the meaning of
section 614(d)), overriding royalty interest, production
payment, net profits interest, or similar interest.
``(2) Crude oil and natural gas.--The terms `crude oil' and
`natural gas' have the meanings given such terms by section
613A(e).
``(3) Recovered inactive well.--The term `recovered
inactive well' means a well if--
``(A) throughout the 2-year period ending on the date of
the enactment of this section, such well is inactive or has
been plugged and abandoned, as determined by the agency of
the State in which such well is located that is responsible
for regulating such wells, and
``(B) during the 5-year period beginning on the date of the
enactment of this section, such well resumes producing crude
oil or natural gas.
``(4) Independent producer.--The term `independent
producer' means a producer of crude oil or natural gas whose
allowance for depletion is determined under section 613A(c).
``(c) Deductions.--No deductions directly connected with
amounts excluded from gross income by subsection (a) shall be
allowed.
``(d) Election.--
``(1) In general.--This section shall apply for any taxable
year only at the election of the taxpayer.
``(2) Manner.--Such election shall be made, in accordance
with regulations prescribed by the Secretary, not later than
the time prescribed for filing the return (including
extensions thereof) and shall be made annually on a property-
by-property basis.''
(b) Minimum Tax.--Section 56(g)(4)(B) of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new clause:
``(iii) Inactive wells.--In the case of income attributable
to independent producers of oil recovered from an inactive
well, clause (i) shall not apply to any amount allowable as
an exclusion under section 139.''
(c) Clerical Amendment.--The table of sections for part III
of subchapter B of chapter 1 of such Code is amended by
striking the item relating to section 139 and inserting the
following:
``Sec. 139. Oil or gas produced from a recovered inactive well.
``Sec. 140. Cross references to other Acts.''
(d) Effective Date.--The amendments made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.
TITLE II--OTHER INCENTIVES
SEC. 201. ELECTION TO EXPENSE GEOLOGICAL AND GEOPHYSICAL
EXPENDITURES.
(a) In General.--Section 263 of the Internal Revenue Code
of 1986 (relating to capital expenditures) is amended by
adding at the end the following new subsection:
``(j) Geological and Geophysical Expenditures for Domestic
Oil and Gas Wells.--Notwithstanding subsection (a), a
taxpayer may elect to treat geological and geophysical
expenses incurred in connection with the exploration for, or
development of, oil or gas within the United States (as
defined in section 638) as expenses which are not chargeable
to capital account. Any expenses so treated shall be allowed
as a deduction in the taxable year in which paid or
incurred.''
(b) Conforming Amendment.--Section 263A(c)(3) of the
Internal Revenue Code of 1986 is amended by inserting
``263(j),'' after ``263(i),''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to expenses paid or incurred after the date of
enactment of this Act.
(2) Transition rule.--In the case of any expenses described
in section 263(j) of the Internal Revenue Code of 1986, as
added by this section, which were paid or incurred on or
before the date of enactment of this Act, the
[[Page S3148]]
taxpayer may elect, at such time and in such manner as the
Secretary of the Treasury may prescribe, to amortize the
unamortized portion of such expenses over the 36-month period
beginning with the month in which the date of enactment of
this Act occurs. For purposes of this paragraph, the
unamortized portion of any expense is the amount remaining
unamortized as of the first day of the 36-month period.
SEC. 202. ELECTION TO EXPENSE DELAY RENTAL PAYMENTS.
(a) In General.--Section 263 of the Internal Revenue Code
of 1986 (relating to capital expenditures), as amended by
section 201(a), is amended by adding at the end the following
new subsection:
``(k) Delay Rental Payments for Domestic Oil and Gas
Wells.--
``(1) In general.--Notwithstanding subsection (a), a
taxpayer may elect to treat delay rental payments incurred in
connection with the development of oil or gas within the
United States (as defined in section 638) as payments which
are not chargeable to capital account. Any payments so
treated shall be allowed as a deduction in the taxable year
in which paid or incurred.
``(2) Delay rental payments.--For purposes of paragraph
(1), the term `delay rental payment' means an amount paid for
the privilege of deferring development of an oil or gas
well.''
(b) Conforming Amendment.--Section 263A(c)(3) of the
Internal Revenue Code of 1986, as amended by section 201(b),
is amended by inserting ``263(k),'' after ``263(j),''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to payments made or incurred after the date of
enactment of this Act.
(2) Transition rule.--In the case of any payments described
in section 263(k) of the Internal Revenue Code of 1986, as
added by this section, which were made or incurred on or
before the date of enactment of this Act, the taxpayer may
elect, at such time and in such manner as the Secretary of
the Treasury may prescribe, to amortize the unamortized
portion of such payments over the 36-month period beginning
with the month in which the date of enactment of this Act
occurs. For purposes of this paragraph, the unamortized
portion of any payment is the amount remaining unamortized as
of the first day of the 36-month period.
SEC. 203. EXTENSION OF SPUDDING RULE.
(a) In General.--Section 461(i)(2)(A) of the Internal
Revenue Code of 1986 (relating to special rule for spudding
of oil or gas wells) is amended by striking ``90th day'' and
inserting ``180th day''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
1997.
SEC. 204. ENHANCED OIL RECOVERY CREDIT EXTENDED TO CERTAIN
NONTERTIARY RECOVERY METHODS.
(a) In General.--Clause (i) of section 43(c)(2)(A) of the
Internal Revenue Code of 1986 (defining qualified enhanced
oil recovery project) is amended to read as follows:
``(i) which involves the application (in accordance with
sound engineering principles) of--
``(I) one or more tertiary recovery methods (as defined in
section 193(b)(3)) which can reasonably be expected to result
in more than an insignificant increase in the amount of crude
oil which will ultimately be recovered, or
``(II) one or more nontertiary recovery methods which are
required to recover oil with traditionally immobile
characteristics or from formations which have proven to be
uneconomical or noncommercial under conventional recovery
methods.''
(b) Qualified Nontertiary Recovery Methods.--Section
43(c)(2) of the Internal Revenue Code of 1986 is amended by
adding at the end the following new subparagraphs:
``(C) Qualified nontertiary recovery method.--For the
purposes of this paragraph--
``(i) In general.--The term `qualified nontertiary recovery
method' means any recovery method described in clause (ii),
(iii), or (iv), or any combination thereof.
``(ii) Enhanced gravity drainage (egd) methods.--The
methods described in this clause are as follows:
``(I) Horizontal drilling.--The drilling of horizontal,
rather than vertical, wells to penetrate any hydrocarbon-
bearing formation which has an average in situ calculated
permeability to fluid flow of less than or equal to 12 or
less millidarcies and which has been demonstrated by use of a
vertical wellbore to be uneconomical unless drilled with
lateral horizontal lengths in excess of 1,000 feet.
``(II) Gravity drainage.--The production of oil by gravity
flow from drainholes that are drilled from a shaft or tunnel
dug within or below the oil-bearing zone.
``(iii) Marginally economic reservoir repressurization
(merr) methods.--The methods described in this clause are as
follows, except that this clause shall only apply to the
first 1,000,000 barrels produced in any project:
``(I) Cyclic gas injection.--The increase or maintenance of
pressure by injection of hydrocarbon gas into the reservoir
from which it was originally produced.
``(II) Flooding.--The injection of water into an oil
reservoir to displace oil from the reservoir rock and into
the bore of a producing well.
``(iv) Other methods.--Any method used to recover oil
having an average laboratory measured air permeability less
than or equal to 100 millidarcies when averaged over the
productive interval being completed, or an in situ calculated
permeability to fluid flow less than or equal to 12
millidarcies or oil defined by the Department of Energy as
being immobile.
``(D) Authority to add other nontertiary recovery
methods.--The Secretary shall provide procedures under
which--
``(i) the Secretary may treat methods not described in
clause (ii), (iii), or (iv) of subparagraph (C) as qualified
nontertiary recovery methods, and
``(ii) a taxpayer may request the Secretary to treat any
method not so described as a qualified nontertiary recovery
method.
The Secretary may only specify methods as qualified
nontertiary recovery methods under this subparagraph if the
Secretary determines that such specification is consistent
with the purposes of subparagraph (C) and will result in
greater production of oil and natural gas.''
(c) Conforming Amendment.--Clause (iii) of section
43(c)(2)(A) of the Internal Revenue Code of 1986 is amended
to read as follows:
``(iii) with respect to which--
``(I) in the case of a tertiary recovery method, the first
injection of liquids, gases, or other matter commences after
December 31, 1990, and
``(II) in the case of a qualified nontertiary recovery
method, the implementation of the method begins after
December 31, 1997.''
(d) Effective Date.--The amendments made by this section
shall apply to taxable years ending after December 31, 1997.
______
By Mr. NICKLES (for himself, Mr. Domenici, Mr. Murkowski, Mrs.
Hutchison, Mr. Breaux, and Mr. Craig):
S. 1930. A bill to provide certainty for, reduce administrative and
compliance burdens associated with, and streamline and improve the
collection of royalties from Federal and outer continental shelf oil
and gas leases, and for other purposes; to the Committee on Energy and
Natural Resources.
The Royalty Enhancement Act of 1998
Mr. NICKLES. Mr. President, once again, our domestic oil and gas
producers are facing devastating losses due to a significant drop in
oil prices. This crisis creates a dangerous situation for the industry
and for our national security. Unfortunately, the policies and
practices of the Administration have exacerbated the problem, not
helped. If we are to maintain a viable domestic petroleum industry, we
must reverse these practices. An important step towards this end is
reforming the Department of Interior's erratic, ever-changing royalty
valuation practices. The Royalty Enhancement Act, that I am introducing
today, will reduce regulatory costs and promote development of federal
oil and gas resources vital to our national security. It will also
significantly reduce the administrative costs associated with the
federal royalty payment system.
Minerals Management Service (MMS), the agency within the Department
of Interior given responsibility for administering royalties from
federal leases, has imposed on oil and gas producers a bureaucratic
labyrinth of rules and regulations. One of the most fundamental
concepts of our society is the ability of any citizen, in particular,
citizens who are parties to contracts with the federal government to be
assured that the Federal government will not overreach and unilaterally
interpret those contracts. Such a situation is what we have today with
oil and gas producers who have contracted with the Federal government
to expend their capital and resources to explore for, drill and produce
valuable oil and gas reserves in the United States and offshore.
In the past few years oil and gas producers, both independent and
major, have become increasingly frustrated with the unwillingness by
MMS to produce a simplified and certain valuation method that
accurately captures the value of oil or gas at the lease. This is the
value that a federal oil and gas lessee owes and the American taxpayer
deserves to be paid.
Recently, the MMS has proposed a new oil valuation rule which is the
most administratively burdensome and complex method, available to the
government. This new rule looks like the Clinton health care plan and
makes the IRS code look simple. In short, the current MMS valuation
system is badly broken and their outstanding oil proposal will only
make it worth.
In 1995, I introduced the Federal Oil and Gas Royalty Simplification
and Fairness Act because of the importance of federal royalty revenues
to the United States Treasury and States.
[[Page S3149]]
The purpose of that legislation was to streamline and simplify the
royalty management program for the over 20,000 federal lessees who are
required to file over 3,000,000 reports annually. Despite the
bipartisan support for my bill, MMS resisted this much needed reform
during the entire legislative process. Fortunately, Congress saw the
wisdom and need for the law and sent it to the President and it became
effective in August, 1996.
Why is Congressional action needed, Mr. President? Despite the
obvious importance of the oil and gas industry to our national economy
and global stability, the MMS has failed to get the message we sent
them in 1996 that the American people can no longer tolerate their
ineffective and inefficient bureaucracy. The MMS valuation rules
contain complicated formulas that can be both confusing and inaccurate.
These ambiguous rules lead inevitably to expensive disputes and
litigation that unnecessarily drain resources of the federal government
and the lessees.
To ensure that the American people receive their full and fair value
of production royalties from oil and gas produced on federal lands, we
need to create a royalty valuation system that provides certainty,
simplicity and fairness to the federal government, States, oil and gas
producers and the American taxpayers. Only by doing this will companies
want to take the risk of spending their capital to develop and produce
federal oil and gas for our nation's use and benefit. It is important
that we maintain the viability of existing production on federal lands
and encourage development of the new frontiers of production in the
deep waters off our coastlines.
Mr. President, my colleagues from New Mexico, Alaska, Texas and
Louisiana, Senators Domenici, Murkowski, Hutchison and Breaux, join me
today in introducing the Royalty Enhancement Act which is the Senate
companion of H.R. 3334, a bill introduced this session by Congressman
Thornberry. This bill cuts through the horrendously complicated and
ambiguous current rules and provides certainty, simplicity and fairness
to both the taxpayers and the companies who enter into oil and gas
leases with the federal government.
This legislation will replace the current complicated and complex
system of royalty valuation with a much clearer, simpler method of
royalty payment that would avoid valuation disputes. This method will
allow companies to pay the federal government its royalty share in
actual barrels of oil or cubic feet of natural gas.
The bill contains a comprehensive well-designed royalty payment
method that will streamline auditing and accounting systems for both
the government and the producers and will reduce administrative costs.
Reduced costs will help keep production economic for a longer period,
extending the life of producing wells and thus providing more royalties
from this continued production. The best way to be absolutely certain
that the government receives fair market value at the lease is for the
government to take production in-kind and have it marketed and sold by
qualified private sector marketers who possess the expertise and
experience to receive the best value for the United States.
Mr. President, it is not fair to subject companies who produce oil
and gas on federal lands to the whim of the MMS with their record of
retroactive second-guessing of valuation years after oil and gas has
been produced and sold. It is fundamentally unfair to the American
people for the agency's uncertain and ambiguous rules and practices to
create delay in receipt of royalty revenues to the Treasury and to bear
the expense of the government's bureaucracy. For these reasons, I am
introducing the Royalty Enhancement Act of 1998.
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. 1930
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 ``Royalty
Enhancement 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. Definitions.
Sec. 3. Rights, obligations, and responsibilities.
Sec. 4. Costs responsibility.
Sec. 5. Transporter charges.
Sec. 6. Imbalances.
Sec. 7. Royalty-in-kind for trucked, tankered, or barged oil or gas.
Sec. 8. Limitations on application.
Sec. 9. Reporting.
Sec. 10. Audit.
Sec. 11. Lease terms not affected.
Sec. 12. Eligible and small refiners.
Sec. 13. Applicable laws.
Sec. 14. Indian lands.
Sec. 15. Effective date; regulations.
SEC. 2. DEFINITIONS.
In this Act:
(1) Affiliate; affiliated.--
(A) The term ``affiliate'' or ``affiliated'' means that a
person controls, is controlled by, or is under common control
with another person. Affiliation shall be determined on a
lease-by-lease and asset-by-asset basis.
(B) For the purposes of this Act, based on the instruments
of ownership--
(i) Ownership in excess of 50 percent constitutes control.
(ii) Ownership of at least 10 percent and not more than 50
percent creates a rebuttable presumption of control only if
each owner has a separate and independent right to control or
utilize the capacity of the asset.
(iii) Ownership of less than 10 percent does not constitute
control.
(2) Compensatory royalty.--The term ``compensatory
royalty'' means a payment made to a royalty owner as
compensation for loss of income that it may suffer due to a
lease being drained of oil and gas by wells drilled on lands
adjacent to the lands subject to the lease.
(3) Compression.--The term ``compression'' means the
process of raising the pressure of gas.
(4) Condensate.--The term ``condensate'' means liquid
hydrocarbons (normally exceeding 40 degrees of API gravity)
recovered at the surface without resorting to processing.
Condensate is that stabilized mixture of liquid hydrocarbons
at atmospheric pressure that results from condensation of
petroleum hydrocarbons existing initially in a gaseous phase
in an underground reservoir.
(5) Delivery point.--The term ``delivery point'' means--
(A) for a lease premise for which a production measurement
meter is approved in accordance with applicable laws before
the date of enactment of this Act--
(i) subject to clause (ii), the existing approved meter
location, or
(ii) a delivery point requested by a lessee and approved in
accordance with subparagraph (B); or
(B) for a lease premise for which no production measurement
meter is approved before the date of the enactment of this
Act, that point on or near the lease premises, approved by
the appropriate agency in accordance with applicable laws and
regulations, where lease production can be measured and
reported in a manner that is practical, economical, and
verifiable, except that such point may be at a location off
the lease premises where, if necessary, production can be
allocated back to the lease premises.
(6) Eligible small refiner.--The term ``eligible small
refiner'' means a refiner that--
(A) has applied to the Secretary for certification as an
eligible small refiner;
(B) has a total crude oil and condensate refining capacity
(including the refining capacity of any person who controls,
is controlled by, or is under common control with such
refiner) not exceeding 100,000 barrels per day;
(C) is a corporation, company, partnership, trust or estate
organized under the laws of the United States or of any
State, territory, or municipality thereof, or is a person who
is a United States citizen; and
(D) has continuously operated a refinery in the United
States for no less than 6 months immediately preceding the
date of application for certification as an eligible small
refiner.
(7) Eligible small refiner portion.--The term ``eligible
small refiner portion'' means the portion of all royalty oil
volumes required to be offered for sale to eligible small
refiners. The eligible small refiner portion shall be 40
percent of all royalty oil volumes, unless the Secretary
determines that a greater share is in the public interest.
(8) FERC.--The term ``FERC'' means the Federal Energy
Regulatory Commission.
(9) Field.--The term ``field'' means a geographic region
situated over one or more subsurface oil or gas reservoirs
that encompass at least the outermost boundaries of all oil
and gas accumulations known to be within those reservoirs
vertically projected to the land service.
(10) Force majeure.--The term ``force majeure'' means
foreseen and unforeseen acts of God, strikes, lockouts, or
other industrial disturbances, acts of the public enemy,
wars, blockades, insurrections, riots, epidemics, landslides,
lightning, hurricanes or storms, hurricane or storm warnings
which, in the judgment of the party affected by such event,
require the precautionary shutdown or evacuation of
Production facilities, earthquakes, fires, floods, washouts,
disturbances, explosions, accidental breakage to lines of
pipe, machine breakage, freezing of wells or lines of pipe,
partial or entire failure of wells, and any other cause of a
similar nature beyond the reasonable control
[[Page S3150]]
of the party affected which renders that party unable to
carry out its obligations under this Act. Force majeure as
used in this Act shall not include market conditions.
(11) Gas.--The term ``gas'' means any fluid, whether
combustible, noncombustible, hydrocarbon, or nonhydrocarbon,
that--
(A) is extracted from a reservoir;
(B) has neither independent shape nor volume;
(C) tends to expand indefinitely; and
(D) exists in a gaseous or rarefied state under standard
temperature and pressure conditions.
(12) Gathering.--The term ``gathering'' means the movement
of unseparated, unidentifiable lease production upstream of
the delivery point to a central accumulation point on or
immediately adjacent to the lease premises, unit, or
communitized area.
(13) GISB.--The term ``GISB'' means the Gas Industry
Standards Board, as incorporated in the State of Delaware on
September 26, 1994.
(14) Lease operator; operator.--Each of the terms ``lease
operator'' and ``operator'' means any person, including a
lessee, who has control of or who manages operations on lease
premises, according to the terms of the joint operating
agreement or any other agreement or method by which an
operator is designated, on Federal onshore lands or who has
been designated as an operator on the outer continental shelf
by applicable law.
(15) Lease premises.--The term ``lease premises'' means all
land and interests in land owned by the United States that
are subject to an oil and gas lease issued under the mineral
leasing laws, including mineral resources of mineral estates
reserved to the United States in the conveyance of a surface
or non-mineral estate.
(16) Lease production.--The term ``lease production'' means
any produced oil or gas that is attributable to, originating
from, or allocated to a Federal onshore or an outer
continental shelf lease premises.
(17) Lessee.--The term ``lessee'' means any person to whom
the United States issues an oil and gas lease, or any person
to whom operating rights under an oil and gas lease have been
assigned.
(18) Merchantable condition; marketable condition.--Each of
the terms ``merchantable condition'' and ``marketable
condition'' means the condition of oil or gas that is
sufficiently free of impurities to meet the requirements of
or is accepted by the first transporter of royalty oil and
royalty gas from that lease premises either prior to or at
the delivery point. Whether or not lease production is in
merchantable condition shall not affect the responsibility
for the bearing of costs of gathering or transportation, as
provided by this Act.
(19) Minimum royalty.--The term ``minimum royalty'' means
that minimum amount of annual royalty that a lessee must pay,
as specified in the lease or in applicable leasing
regulations.
(20) Net profit share lease royalty prior to payout.--The
term ``net profit share lease royalty prior to payout'' means
the specified share of the net profit from production of oil
and gas as provided in the lease.
(21) Oil.--The term ``oil''--
(A) means a mixture of hydrocarbons that exists in the
liquid phase in natural underground reservoirs and remains
liquid at atmospheric pressure after passing through surface
separating facilities; and
(B) includes condensate.
(22) Oil and gas lease; lease.--Each of the terms ``oil and
gas lease'' and ``lease'' means any contract, profit-share
arrangement, or other agreement issued or maintained in
accordance with the Outer Continental Shelf Lands Act (43
U.S.C. 1301 et seq.) or the Mineral Land Leasing Act (30
U.S.C. 181 et seq.) and issued or approved by the United
States that authorizes exploration for, extraction of, or
removal of oil or gas.
(23) Operating rights.--The term ``operating rights'' means
the interest created by a lease or derived therefrom
authorizing the holder of that interest to enter upon the
lease premises to conduct drilling and related operations,
including production of oil or gas from such lands in
accordance with the terms of the lease. A record title owner
is the owner of operating rights under a lease except to the
extent that the operating rights or a portion thereof have
been transferred from record title.
(24) Person.--The term ``person'' means an individual
natural person, proprietorship, firm (private or public),
corporation, business, limited liability company,
unincorporated association, association, partnership, trust,
consortium, joint venture, joint stock company.
(25) Processing; Process.--Each of the terms ``processing''
and ``process''--
(A) means any process designed to remove elements or
compounds (hydrocarbon and nonhydrocarbon) from oil or gas;
(B) includes absorption, adsorption, or refrigeration; and
(C) does not include lease or field processes, such as
natural pressure reduction, mechanical separation, heating,
cooling, dehydration, and compression on the upstream side of
the delivery point.
(26) Producing; produced; production.--The term
``producing'', ``produced'', or ``production'' means the act
of bringing hydrocarbons to the surface.
(27) Qualified marketing agent.--The term ``qualified
marketing agent'' means a person with whom the Secretary has
contracted to receive, handle, transport, deliver, market,
process, dispose of, broker, or sell, or any combination
thereof, royalty oil or royalty gas taken in kind by the
United States from, or that is attributable to, an oil and
gas lease.
(28) Regulated pipeline; regulated facility.--Each of the
terms ``regulated pipeline'' and ``regulated facility''--
(A) means a pipeline, truck, tanker, barge, or other
modality of carriage for oil or gas, the operation of which
is subject to regulation by a State governmental authority or
Federal governmental authority (or both) with respect to the
rates that may be charged shippers for transportation
service; and
(B) includes, but is not limited to--
(i) a pipeline performing the interstate movement of gas
subject to regulation by the Federal Energy Regulatory
Commission under the Natural Gas Act (15 U.S.C. 717 et seq.);
(ii) a pipeline whose movements of oil are subject to
regulation by the Federal Energy Regulatory Commission under
the Interstate Commerce Act (49 U.S.C. 1 et seq.); and
(iii) any pipeline, truck, tanker, barge or other modality
of carriage for Oil or Gas whose rates for carriage are
regulated by a governmental authority under State law.
(29) Royalty gas.--The term ``royalty gas'' means that
fraction or percentage of gas produced from or attributable
to lease premises, that the United States as lessor is
entitled to take in kind under the terms of an oil and gas
lease.
(30) Royalty oil.--The term ``royalty oil'' means that
fraction or percentage of oil produced from or attributable
to lease premises, that the United States as lessor is
entitled to take in kind under the terms of an oil and gas
lease.
(31) Royalty share.--The term ``royalty share'' means that
fraction or percentage of royalty oil or royalty gas (or
both) produced from or attributable to lease premises, that
the United States as lessor is entitled to take in kind under
the terms of an oil and gas lease.
(32) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(33) Tender.--The term ``tender'' means the act by which a
lessee makes royalty oil or royalty gas produced from lease
premises available to the United States for receipt.
(34) Transportation; transport.--Each of the terms
``transportation'' and ``transporting'' means any movement
(including associated or related activities to facilitate
movement such as compression and dehydration), upstream or
downstream of the delivery point of royalty oil or royalty
gas that is not gathering as defined herein including
movement described as transportation in this paragraph. Such
transportation shall include but not limited to--
(A) the movement of unseparated, unidentifiable lease
production to a point not on or immediately adjacent to the
lease premises, unit, or communitized area; and
(B) any movement of separated, identifiable lease
production regardless of whether such movement is on or off
the lease premises, unit or communitized area.
(35) Transporter.--The term ``transporter'' means a person
or entity who is transporting or providing transportation.
(36) United States.--The term ``United States'' means the
United States of America and any agency, department, or
instrumentality thereof.
SEC. 3. RIGHTS, OBLIGATIONS, AND RESPONSIBILITIES.
(a) Rights, Obligations, and Responsibilities of the United
States.--
(1) General rule.--Except as otherwise provided in section
8 of this Act, all royalty oil and royalty gas accruing to
the United States under any oil and gas lease shall be taken
in kind by the United States at the applicable delivery point
for each lease premises.
(2) Ownership and receipt by united states.--Ownership of
all right, title and interest in royalty oil and royalty gas
produced from oil and gas lease premises governed by this Act
shall remain in the United States until sale or other
disposition by the United States. Nothing in this Act shall
limit the right of the United States to have royalty oil or
royalty gas stored after its production in such tanks or
other surface facilities as the lessee may be expressly
obligated to furnish under any applicable lease term. The
United States shall not delay or defer the receipt of lease
production, delay receipt of new production, or physically
segregate the royalty share prior to receipt by the United
States. The United States shall have custody, possession, and
responsibility attendant thereto for royalty oil and royalty
gas at and beyond the delivery point.
(3) Selection of and contracts with a qualified marketing
agency.--(A) Except as provided in subsection (b), the
Secretary shall, for each lease premises, contract with a
person to act as a qualified marketing agent to market and
dispose of royalty oil and royalty gas. Each qualified
marketing agent shall be authorized to advise and consult
with the Secretary on the sale and disposition of the royalty
oil and royalty gas and to directly sell and broker the
royalty oil and royalty gas.
(B) To be eligible for a contract under this paragraph to
act as a qualified marketing agent, a person must have the
expertise necessary to receive, handle, transport, deliver,
market, process, dispose, broker, or sell royalty oil and
royalty gas in accordance with
[[Page S3151]]
this Act. Under rules promulgated by the Secretary, the
Secretary may designate any person as ineligible or place
other requirements on a person to act as a qualified
marketing agent for a particular lease premises under this
paragraph by reason of such person being affiliated with
persons engaged in the, transporting, processing, or
purchasing of oil or gas for that lease premises.
(C) The Secretary shall contract with not more than one
qualified marketing agent for each lease premises for royalty
oil and not more than one qualified marketing agent for each
lease premises for royalty gas.
(D) The Secretary shall solicit competitive bids for
contracts for qualified marketing agents. The Secretary shall
promulgate final rules within 12 months after the date of the
enactment of this Act regarding the competitive manner in
which qualified marketing agents shall be selected.
(E) The compensation of each qualified marketing agent--
(i) shall be determined and made by the Secretary without
further appropriation based on the services to be performed
by the qualified marketing agent; and
(ii) shall be established in the contract between the
qualified marketing agent and the United States.
(F) Except as otherwise provided in subsection (b), the
Secretary shall be solely responsible for obtaining and
contracting with qualified marketing agents and shall be
authorized to pay qualified marketing agents from proceeds
derived from the sale of royalty oil and royalty gas without
further appropriation.
(G) Each contract shall--
(i) require the qualified marketing agent to dispose of and
sell royalty oil and royalty gas in an open,
nondiscriminatory, and competitive manner; and
(ii) prohibit the qualified marketing agent from precluding
any person from competing for the handling, gathering,
transporting, marketing, processing, or purchasing of royalty
oil and royalty gas solely by reason of the person being a
lessee or person affiliated with a lessee, qualified
marketing agent; gatherer, royalty payor, transporter,
processor, or purchaser.
(8) To further the purposes of this Act the Secretary shall
be provided the greatest latitude in contracting with
qualified marketing agents to market and dispose of royalty
oil or royalty gas, contracts with qualified marketing agents
under this Act shall be exempted from otherwise applicable
federal procurement and property disposition laws, including
but not limited to the Armed Services Procurement Act of
1947, 10 U.S.C. 2304, et seq. or the Federal Property
Administration Services Act, 41 U.S.C. 253, et seq., or their
implementing regulations.
(4) Transportation Cost.--Each contract under paragraph (3)
shall require the Secretary to bear the costs of any
transportation of royalty oil and royalty gas without further
appropriation as specified by this Act incurred prior to the
sale or other disposition of the royalty oil and royalty gas
by the qualified marketing agent.
(5) Processing.--The qualified marketing agent under
paragraph (3) shall--
(A) have the right to process royalty oil and royalty gas,
after receipt at the delivery point for the recovery and sale
of valuable products; and
(B) require the Secretary to bear any applicable costs of
exercising such right without further appropriation.
(6) Compliance with standards.--In taking in kind,
processing, and shipping royalty oil and royalty gas, the
United States and its qualified marketing agent shall comply
with all procedures which are customary or required of
processors and shippers, including but not limited to the
applicable FERC-approved GISB standards, nominations of
volumes, scheduling of deliveries, and the movement of oil or
gas in or through the facilities of the initial transporter
and any subsequent transporter. The United States and its
qualified marketing agent shall separately contract with
transporters, purchasers, and processors. The Secretary and
his qualified marketing agent shall assume responsibility and
any liability associated with such duties.
(7) Fair market value requirements.--The net proceeds
received by the United States from the sale of royalty oil
and royalty gas shall satisfy in full the Secretary's
responsibility to receive fair market value as defined by any
applicable statute or lease provision.
(b) Rights, Obligations and Responsibilities of States.--
(1) Selection of qualified marketing agents.--At its option
and for the mutual benefit of the United States and the
State, a State entitled to revenues under the provisions of
section 35 of the Mineral Leasing Act (30 U.S.C. 191) or
section 8(g) of the Outer Continental Shelf Lands Act (43
U.S.C. 1353) may elect to act on behalf of the Secretary in
selecting qualified marketing agents to sell or dispose of
royalty oil or royalty gas produced from lease premises with
the State or from section 8(g) lease premises adjacent to the
State, whichever is applicable. If it makes such an election,
the State shall enjoy all the rights and assume all
obligations that the United States would otherwise have
under this Act. If a State selects a qualified marketing
agent that has contracted to market production from State
leases, the contract with the qualified marketing agent
shall be on terms no less favorable to the interests of
the United States than the contract with the State. A
State may make such an election from time to time in
accordance with paragraph (4).
(2) Compliance with requirements.--A State that elects to
act under this section shall--
(A) exercise such rights in accordance with the
requirements established by this Act governing royalty in
kind; and
(B) be subject to the rights, responsibilities, and
obligations of the United States under this Act, as may be
applicable, including those set forth in subsection (a) and
in no event shall regulations be applicable to a State which
do not apply in substance to the United States to the extent
required by applicable law.
(3) Notice; effective period of election.--A State may
elect to act under this section after giving the Secretary 90
days notice. The election is effective 90 days after the date
the Secretary receives notice of the election. The election
shall remain in effect for a period of not less than 3 years.
After the initial term, a State must give sufficient notice
to the United States, but in no event less than 180 days, to
terminate an election period.
(4) Covered oil and gas.--A State's election under this
subsection shall apply to all royalty oil and royalty gas
within the State and section 8(g) lands adjacent to the
State, as applicable.
(5) Existing contracts.--If a contract between a qualified
marketing agent and the United States exists that has not
expired, the State's election shall be subject to that
existing contract.
(6) Limitation on deductions from state share of
receipts.--If a State makes an election under this section,
payment of the State's share of receipts for the sale of
royalty oil and royalty gas shall be made without deductions
for costs applicable to the services provided by the State
under the net receipts sharing provisions of the Mineral
Leasing Act.
(c) Rights, Obligations, and Responsibilities of the
Lessee.--
(1) Effect of tender by lessee.--A lessee shall tender
royalty oil and royalty gas to the United States at the
delivery point for each lease premises, except as provided in
section 6. Upon such tender for any lease premises, all
royalty obligations of the lessee shall be considered
fulfilled and fully satisfied for the amount tendered,
including any express or implied obligation or duty to
market, except as provided in section 6. If the United States
fails to take in kind the entire volume tendered, the
lessee's obligation or duty shall nonetheless be fully
satisfied.
(2) Measurement of lease production.--A lessee shall
measure or cause to be measured lease production, including
royalty oil and royalty gas, at the delivery point in
accordance with any applicable laws and lease terms.
(3) Termination of responsibilities of lessee.--A lessee
shall have no responsibility or obligation for royalty oil or
royalty gas after tendering it in accordance with paragraph
(1) and shall not be liable for any costs or liability
downstream of the delivery point associated with the royalty
oil or royalty gas.
(4) Reporting and recordkeeping.--With respect to royalty
oil and royalty gas taken in kind by the United States, a
lessee shall not be subject to the reporting and RECORD
KEEPING requirements of the Federal Oil and Gas Royalty
Management Act (30 U.S.C. 1701 et seq.) or other applicable
laws for any lease, other than records or reports necessary
to verify the quantity of royalty oil or royalty gas produced
from a lease premises.
(d) Rights, Obligations, and Responsibilities of Qualified
Marketing Agents.--
(1) In general.--In accordance with the terms of its
contract with the United States, a qualified marketing agent
shall--
(A) advise and consult with the United States regarding the
terms and conditions of sales to purchasers;
(B) arrange for the receipt, handling, transporting,
delivery, marketing, processing, disposition, brokering and
sale of royalty oil and royalty gas; and
(C) be authorized to enter into sales contracts on behalf
of the United States.
(2) Movement of royalty oil and royalty gas.--A qualified
marketing agent shall be authorized to make any arrangements
necessary to move royalty oil and royalty gas downstream of
the applicable delivery point, and shall be authorized to
enter into transportation and processing contracts on behalf
of the United States.
(3) Requirement to take.--A qualified marketing agent shall
be required to take 100 percent of the royalty share tendered
by the lessee from each lease premises on a daily basis.
(4) Enhancement of revenues to united states.--In handling,
marketing, and disposing of royalty oil and royalty gas, a
qualified marketing agent shall utilize its experience and
expertise to seek opportunities to enhance revenues to the
United States, including opportunities for the sale of
royalty oil and royalty gas at or away from the lease
premises, depending on the facts and circumstances relevant
to receiving, handling, transporting, delivering, marketing,
processing, disposition, brokering, and sale of the royalty
oil or royalty gas.
(5) Affiliate transactions.--Qualified marketing agent
sales to itself or an affiliate shall be made in accordance
with the following standards:
(A) When selling royalty oil and royalty gas to an
affiliate, a qualified marketing
[[Page S3152]]
agent shall not give preference to an affiliate, including
but not limited to, favoring the affiliate with lower sales
prices, rights of first refusal or more favorable terms than
those offered to nonaffiliated purchasers of royalty oil and
royalty gas.
(B) The managing employee of the qualified marketing agent
shall periodically certify that it has complied with these
provisions. The civil penalty provisions of section 109(d) of
the Federal Oil and Gas Royalty Management Act of 1982 (30
U.S.C. 1719(d)) shall apply to any qualified marketing agent
who violates subparagraph (A).
SEC. 4. COSTS RESPONSIBILITY.
(a) Merchantable Condition.--The lessee shall bear the
costs of placing royalty oil and royalty gas in merchantable
condition at the delivery point, if not produced in such
condition at the well: Provided, however, That gathering and
transportation costs under this Act shall be governed solely
by section 4(b) and section 5, and responsibility for such
costs shall not be dependent upon whether the royalty oil or
royalty gas is in merchantable condition at the time of
gathering or transportation.
(b) Gathering and Transportation of Royalty Oil and Royalty
Gas.--
(1) Gathering.--The lessee shall bear the costs of
gathering royalty oil and royalty gas.
(2) Transportation.--The United States shall bear the costs
of transporting royalty oil and royalty gas to and beyond the
delivery point until disposition or sale by the United
States. Transportation costs shall include associated or
related activities to facilitate movement, such as the costs
of compression and dehydration associated with
transportation. The movement of unseparated, unidentifiable
lease production to a point not on or immediately adjacent to
the lease premises, unit or communitized area and the
movement of separated, identifiable lease production
regardless of whether such movement on or off the lease
premises, unit or communitized area shall be considered
transportation. Transportation costs shall be governed solely
by the definitions and provisions in this Act relating to
transportation and responsibility for the payment of such
costs shall not be dependent upon whether the royalty oil and
royalty gas is in merchantable condition at the time of
transportation.
(c) Limitation on Lessee's Responsibility for Costs.--With
respect to all royalty oil and royalty gas taken in kind by
the United States, the lessee shall bear no costs other than
those specifically identified in this section. After the
royalty share is taken in kind, the United States shall
dispose of and market its royalty oil and royalty gas and the
lessee shall have no obligation to dispose of or market the
United States royalty share of production.
(d) Reimbursement of Costs.--In bearing the cost of
transporting royalty oil and royalty gas, the United States
shall reimburse the lessee for transportation costs without
further appropriation in accordance with the provisions of
subsection (b) of this section and section 5.
SEC. 5 TRANSPORTER CHARGES.
(a) Determination.--The lessee or its affiliate shall
determine and calculate, where applicable, the transportation
charges governed by this Act in accordance with subsections
(b) and (c).
(b) Reimbursement for Transportation Costs Prior to the
Delivery Point.--
(1) Transport by regulated pipeline or facility.--
Reimbursement to a lessee for costs of transporting royalty
oil and royalty gas produced by the lessee and subsequently
transported through a regulated pipeline or facility before
the delivery point shall be--
(A) for nonaffiliated transactions, the actual rate paid
under the tariff by the lessee, or
(B) for affiliated transactions, the lower of the tariff
rate or the actual rate paid under the tariff.
(2) Transport by shipment-by-shipment tariff jurisdiction
pipeline or facility.--Reimbursement to a lessee for
transportation costs incurred to transport royalty oil
through a pipeline or facility for which jurisdiction for
purposes of a tariff is determined on a shipment-by-shipment
basis, shall be the tariff rate for all shipments by the
lessee through the same pipeline or facility if there is a
shipment through the pipeline or facility to which a tariff
applies.
(3) Transport by unregulated pipeline or facility.--(A)
Reimbursement to a lessee for transportation costs incurred
to transport royalty oil or royalty gas through an
unregulated pipeline or facility before the delivery point
shall be--
(i) for nonaffiliated transactions, the actual costs
incurred by the lessee; or
(ii) for affiliated transactions--
(I) if third party oil or gas is being transported through
the pipeline or facility, the weighted average (by volume)
third party charge; or
(II) if no third party oil or gas is being transported
through the pipeline or facility, not to exceed the pipeline
or facility owner's or its affiliate's costs of operating the
pipeline or facility, including a return on undepreciated
capital investment, subject to paragraph (4).
(B) For purposes of subparagraph (A)(ii)(II) the term
``costs of operating'' means the sum of the following:
(i) Direct operating, maintenance, and repair costs and
expenses.
(ii) Indirect costs (including but not limited to costs
such as information systems, business services and technical
services) allocated to the pipeline or facility, in an amount
not exceeding 15 percent of the amount of direct costs that
applies under clause (I).
(iii) An allowance for capital investment calculated on the
basis of either of the following, as may be, elected by the
lessee:
(I) depreciation, plus a return on the undepreciated
capital, or
(II) a return on depreciable capital investment.
Return under subclauses (I) and (II) shall be at a rate equal
to twice the rate payable for bonds with a Standard and
Poor's industrial BBB bond rating.
(4) Allowance of higher transportation costs.--If the
amount specified in paragraph (3)(A)(ii) does not adequately
reflect the costs of the transportation services provided by
a lessee or its affiliate, the lessee may request a different
transportation reimbursement from the Secretary. For
pipelines in more than 200 meters of water, the Secretary may
allow a higher rate of return, sufficient for an investment
in the fabricating, installing, operating, and maintaining
such pipelines as compared to pipelines in waters of less
than 200 meters.
(5) Restriction on disclosure.--The United States and its
qualified marketing agent shall keep confidential and shall
not disclose the transportation charge or any facts or
information related thereto used by a lessee or its affiliate
for reimbursement under this subsection.
(c) Charges for Transportation Costs Beyond the Delivery
Point.--
(1) In general.--Charges by the lessee or its affiliate for
transportation of royalty oil or royalty gas through an
unregulated pipeline or facility beyond the delivery point
shall be a negotiated rate, that--
(A) shall not exceed the highest rate charged for
transportation provided to a third party, if third party oil
or gas is being transported through the pipeline or facility;
or
(B) shall be the fair commercial value of the
transportation services provided by the lessee or its
affiliate if no third party oil or gas is being transported
through the pipeline or facility.
(2) Determination of commercial value.--The standard to be
used to determine the commercial value for purposes of
paragraph (1)(B) shall be based upon the transportation
services provided and not on the ownership of the pipeline or
facility by the lessee or its affiliate.
(d) Arbitration.--
(1) In general.--If negotiations between a qualified
marketing agent and an entity owning the pipeline or facility
do not result in a mutually agreeable negotiated charge for
transportation under subsection (c), then the qualified
marketing agent on behalf of the Secretary or the entity
owning the pipeline or facility may, at any time during the
negotiation, require that such matter be submitted to
arbitration in accordance with this subsection.
(2) Selection of arbitrators.--Any dispute regarding a
charge for transportation that is not resolved by agreement
shall be determined by a panel of 3 arbitrators upon written
notice given by either party to the other, which notice shall
also name one arbitrator. The party receiving such notice
shall, within 10 business days thereafter, by written notice
to the other party, name the second arbitrator, or failing to
do so, the first party who gave notice shall name the second
arbitrator. The two arbitrators so appointed shall name the
third, or failing to do so within 5 business days then upon
the request of either party, the third arbitrator shall be a
certified arbitrator appointed by a professional arbitrator
association. Whether appointed by the two party-named
arbitrators or by a professional arbitration association, the
third arbitrator shall be knowledgeable about and experienced
in the transportation of oil or gas or both, as applicable.
(3) Hearing.--An arbitration hearing shall be held within
20 calendar days following the selection of the third
arbitrator. At the hearing, each party shall submit a
proposed transportation rate and evidence to support such
rate as it sees fit.
(4) Decision.--The panel of arbitrators shall determine
which of the rates submitted by the parties shall be the
transportation charge used. The arbitrators shall render a
written decision within 10 calendar days after the hearing
under paragraph (3) based on a majority vote of the 3
arbitrators. Such decision shall be final and binding on the
United States, the qualified marketing agent, and the lessee
and its affiliate, and shall be enforceable in any court
having jurisdiction.
(5) Expenses.--Each party shall bear its expenses of
prosecuting its own case in any arbitration, and the parties
shall share equally any other expenses of the arbitration,
including compensation for the third arbitrator at a rate
that is fair and reasonable to the United States.
(6) Use of employee of party as arbitrator.--(A) Any
arbitrator named by the parties may be permanent or temporary
officer or employee of the Federal or State Government, or an
employee of any party to the dispute, if all parties agree
that the person may serve.
(B) In implementing this paragraph, the qualified marketing
agent on behalf of the Secretary may use the services of one
or more employees of other agencies to serve as arbitrators
to be named by the qualified
[[Page S3153]]
marketing agent. The Secretary may enter into an interagency
agreement that provides for the reimbursement by the user
agency or the parties of the full or partial costs of the
services of such an employee.
(7) Limitation on disclosure.--Any party (including the
United States and its qualified marketing agent) to an
arbitration proceeding shall keep confidential and shall not
disclose the results of the arbitration or any facts,
evidence, or information related thereto provided in
confidence to the arbitrators.
(8) Interim rate.--(A) The royalty oil and royalty gas
shall be transported at the dispute rate during the interim
period, subject to an obligation to refund if the rate is
later reduced as a result of arbitration.
(B) Any refund under subparagraph (A) shall be made with
interest at the average short-term rate as specified in
section 6621 of the Internal Revenue Code of 1986.
(9) Delay or curtailment of production prohibited.--At no
time during such arbitration or dispute shall lease
production be delayed or curtailed.
SEC. 6. IMBALANCES.
(a) Requirement To Resolve Imbalances.--
(1) In general.--If the amount of royalty oil or royalty
gas production taken by the United States from a lease
premises during a calendar month differs from the amount of
royalty oil or royalty gas production attributable to that
lease premises for that calendar month, and the difference
results from the circumstances described in paragraph (2),
the difference (in this section referred to as a ``royalty
share imbalance'') shall be resolved in accordance with this
section.
(2) Circumstances.--The circumstances referred to in
paragraph (1) are the following:
(A) A force majeure event at the delivery point that
prevents the United States transporter from receiving royalty
oil or royalty gas;
(B) A failure by the United States or its qualified
marketing agent to receive, transport, and market its royalty
oil or royalty gas tendered for a one-time occurrence of not
more than 3 consecutive days in any calendar quarter; or
(C) A difference between the amount made available to the
United States at the delivery point by the lease operator on
behalf of the lessee and the United States royalty share of
total production.
(b) Imbalance Accounts.--
(1) Maintenance of information.--Each lease operator shall
maintain information on the quantity of royalty oil and
royalty gas produced from or attributable to each lease
premises and the amount of royalty oil or royalty gas
production taken by the United States from each lease
premises. The information shall include--
(A) the quantities of royalty oil and royalty gas taken in
kind by the United States at the delivery point;
(B) the quantities of royalty oil and royalty gas produced
from and attributed to the lease premises; and
(C) the current month and cumulative royalty share
imbalances.
(2) Report.--(A) Each lease operator shall--
(i) submit a royalty share imbalance report to the
qualified marketing agent for the United States with respect
to the lease no later than 60 days after the expiration of
each month of production from the lease; or
(ii) if all information for the report is not available by
such date, file or cause to be filed with the qualified
marketing agent a report that contains estimated quantities,
and file a revised final report showing actual quantities no
later than 60 days after information on all actual quantities
is received.
(B) The royalty share imbalance report submitted under
subparagraph (A) to the qualified marketing agent shall
constitute formal notice of a royalty share imbalance, which
shall be remedied in accordance with subsection (c).
(c) Managing Imbalances.--
(1) In general.--If a royalty share imbalance occurs during
any calendar month, the lease operator shall work with the
United States (through its qualified marketing agent) to
settle the royalty share imbalance in a manner consistent
with the existing production balancing agreements or
practices among operating rights owners.
(2) Royalty oil imbalance.--In the case of a royalty share
imbalance with respect to royalty oil, and in the absence of
multiple operating rights owners, additional quantities of
oil may be taken by either a lessee or the United States
through its qualified marketing agent to expeditiously settle
such royalty share imbalance as soon as is reasonably
practicable, as determined by the lease operator.
(3) Royalty gas imbalance.--(A) In the case of a royalty
share imbalance with respect to royalty gas during any
calendar month and in the absence of multiple operating
rights owners, the lease operator shall work with the United
States (through its qualified marketing agent) to arrange for
increased or decreased quantities of gas to be taken
beginning the month after receipt of such notice by qualified
marketing agent, to expeditiously settle such royalty share
imbalances as soon as is reasonably practicable.
(B) Additional quantities taken in a month by either a
lessee or the United States to reduce a royalty share
imbalance with respect to royalty gas shall not exceed 25
percent of that month's royalty gas.
(C) Until final settlement pursuant to subsection (d),
royalty share imbalances with respect to royalty gas shall be
reduced chronologically in the order in which they were
created.
(d) Final Imbalance Report and Final Settlement.--
(1) Final imbalance report.--Upon permanent cessation of
production from a lease, the lease operator shall file a
final imbalance report that--
(A) contains the information described in subsection (b);
and
(B) states that the lease premises has permanently ceased
production and that a royalty share imbalance exists.
(2) Final settlement.--The parties to a royalty share
imbalance shall settle such royalty share imbalance using the
same final settlement procedures as set forth in the existing
production balancing agreement between the operating rights
owners, if any. In the absence of such an agreement, within
60 days of the final imbalance report, each party that
received excess quantities shall, at its option, make
delivery of the excess quantities or make a cash payment, to
the parties who received insufficient quantities. The cash
payment shall be based on the net proceeds (in terms of
actual value received) from the sale of such excess
quantities for value at the lease premises or the lessee may
make delivery of the imbalance volume. No interest shall
accrue, prior to the date of any settlement, on any
imbalance.
SEC. 7. ROYALTY-IN-KIND FOR TRUCKED, TANKERED, OR BARGED OIL
OR GAS.
(a) Application.--This section shall apply to royalty oil
or royalty gas produced from onshore or offshore lease
premises for which there is no pipeline connection at the
well such that the royalty oil and royalty gas is transported
by truck, tanker, or barge from the lease premises.
(b) Selection of Transporter.--
(1) In general.--To further the efficient and cost-
effective taking of royalty oil or royalty gas in kind from
such lease premises, the qualified marketing agent shall
select and utilize a transporter who is transporting oil or
gas for a lessee from the lease premises, or for the operator
of the lease premises.
(2) Exception.--Royalty oil or royalty gas taken in kind
may be transported in any other manner agreed to by the
qualified marketing agent and the lessee or lease operator.
(c) Relationship to Other Laws.--
(1) Laws regarding oil or gas transportation.--This section
shall not alter or abridge any State or Federal law
regulating the transportation of oil or gas by truck, tanker,
or barge.
(2) Federal royalty prepayment provisions.--Nothing in this
Act shall modify, abridge, or alter the provisions of section
7(b) of the Federal Oil and Gas Royalty Simplification and
Fairness Act (30 U.S.C. 1726) with respect to the prepayment
of royalty.
SEC. 8. LIMITATIONS ON APPLICATION.
(a) Lease Royalty Clauses and Royalty Payments.--This Act
does not apply to royalty payments of the following types:
(1) Compensatory royalties.
(2) Minimum royalties.
(3) Net profit share lease royalties prior to payout.
(b) Prior Royalty Rate Reduction Determinations.--This Act
shall not modify or alter any royalty rate reduction
determination made by the Secretary before or after the date
of enactment of this Act. The amount of royalty oil and
royalty gas taken in kind by the Secretary shall be the
amount calculated by such reduced royalty rate.
(c) Audit of Eligible Small Refiner.--The Secretary shall
have the right to audit the reports of eligible small
refiners related to the volume of royalty oil received as are
required under the provisions of this Act during normal
business hours, at reasonable times, to verify the accuracy
of such reports.
SEC. 9. REPORTING.
(a) Reporting by Lease Operator.--A lease operator on
behalf of the lessee shall provide or cause to be provided
all volume reports required under the oil and gas lease to
the United States, but shall be relieved of the obligation of
providing any royalty related and all royalty-in-value
reports for any royalty oil or royalty gas taken in kind by
the United States required pursuant to the oil and gas lease
terms or applicable statutes. A lease operator on behalf of
the lessee shall make available or cause to be made available
such information as is customarily provided to third party
sellers of lease production on a timely basis.
(b) Reporting by Qualified Marketing Agent.--A qualified
marketing agent shall provide or cause to be provided to the
United States any valuation or related royalty reports
required by the Secretary.
SEC. 10. AUDIT.
(a) Audit of Lease Operator.--The Secretary shall have the
right to audit the reports the Lease Operator files on behalf
of lessees related to the volume of oil and gas produced as
are required under this Act during normal business hours, at
reasonable times to verify the accuracy of such reports.
(b) Audit of Qualified Marketing Agent.--The Secretary
shall have the right to audit the reports of qualified
marketing agents required under this Act during normal
business hours, at reasonable times, to verify the accuracy
of such reports. Any information and records regarding sales
of royalty oil and royalty gas shall be obtained, where
necessary, from a qualified marketing agent.
[[Page S3154]]
SEC. 11. LEASE TERMS NOT AFFECTED.
In accordance with the terms of oil and gas leases issued
by the Secretary, the Secretary shall exercise the right to
be paid oil and gas royalties in amount pursuant to this Act
and lessee shall pay such oil and gas royalties in amount
pursuant to provisions of this Act. Nothing in this Act shall
alter or abridge the rights of a lessees under an oil and gas
lease, including the right to explore for, operate, drill
for, or produce oil and gas or to otherwise operate the
lease. The rights, duties, or obligations that exist between
the United States and a lessee which arise under an oil and
gas lease with respect to oil or gas used on the lease
premises or gas unavoidably lost prior to the delivery point
shall not be affected, abridged, or altered by this Act. When
oil or gas is used on, or for the benefit of, a lease
premises at a facility handling production from more than one
lease premise, or at a facility handling unitized or
communitized production, the proportionate share of each
lease's production (actual or allocated) necessary to operate
the facility may be used royalty-free.
SEC. 12. ELIGIBLE AND SMALL REFINERS.
(a) Sale of Royalty Oil to Eligible Small Refiners.--(1)
The Secretary shall direct qualified marketing agents to
offer for sale to eligible small refiners the eligible small
refiner portion in accordance with the provisions set forth
in this section.
(2) The sale of royalty oil from the eligible small refiner
portion to an eligible small refiner is intended for
processing, or trading for equivalent barrels for processing,
in the eligible small refiner's refineries located in the
United States and not for resale in-kind or value.
(3) The Secretary shall annually review and recertify or
withdraw the continuing eligibility of previously certified
eligible small refiners.
(4) The eligible small refiner portion shall be offered to
eligible small refiners from royalty oil volumes to be sold
by each qualified marketing agent. The Secretary shall
maintain a current list of all Eligible Small Refiners. Upon
the selection of a Qualified Marketing Agent by the
Secretary, the Secretary shall promptly notify all Eligible
Small Refiners of the selection of the Qualified Marketing
Agent. The notification shall contain the name and address of
the Qualified Marketing Agent as well as a brief description
of the federal leases and lease products to be marketed by
that Qualified Marketing Agent. Within 15 days after notice
by the Secretary, any Eligible Small Refiner who is
interested in receiving Royalty Oil from the leases of the
Qualified Marketing Agent, shall submit a Notice of Interest
to the Qualified Marketing Agent. The Notice shall generally
state the volumes location and quality of Royalty Oil desired
by the Small Refiner. When marketing Royalty Oil, the
Qualified Marketing Agent shall contact the Small Refiner(s)
who has (have) submitted a Note of Interest and shall offer
to sell the 40% portion to the Small Refiner(s) who submitted
a Notice. The Small Refiner shall purchase such Royalty Oil
at the weighted average price for the remaining volumes of
like quality at the same location sold by the Qualified
Marketing Agent.
(5) Nothing in this section shall preclude any eligible
small refiner from participating in any open and advertised
or negotiated sale by qualified marketing agents. Royalty oil
volumes obtained by any eligible small refiner in any open
and advertised or negotiated sale shall not be included in
calculating limitations on eligibility as defined in
subsection (b).
(b) Limitations on Eligibility.--No eligible small refiner
may purchase royalty oil from the eligible small refiner
portion for delivery at a rate that exceeds 60 percent of the
combined crude oil and condensate distillation capacity of
that eligible small refiner's currently operating refineries
located in the United States unless the Secretary determines
that it is in the public interest to allow all eligible small
refiners to purchase royalty oil at a greater rate. The
Secretary shall promulgate rules and regulations to determine
an eligible small refiner's current operating capacity.
(c) Fees, Creditworthiness, and Surety Requirements.--(1)
The purchase of royalty oil from the eligible small refiner
portion pursuant to this section shall not be subject to any
fees or charges not required of all purchasers of royalty
oil.
(2) The Secretary shall establish conditions for each
eligible small refiner's creditworthiness at the time of
determining and reviewing eligibility.
(3) Creditworthiness requirements for eligible small
refiners shall not exceed standard industry requirements
governing non-Federal crude oil purchasers, and the Secretary
may not require surety in excess of the estimated value of 60
days anticipated deliveries of royalty oil from the eligible
small refiner portion to individual eligible small refiners.
(d) Eligible Small Refiner Advisory Panel.--The Secretary
shall convene an eligible small refiner advisory panel to
assist in developing policies and procedures to implement the
provisions of this Act. The eligible small refiner advisory
panel shall be comprised of representatives from 3 small
refiners, 3 qualified marketing agents and 3 lesses who have
participated in the small refiner program established
pursuant to section 36 of the Mineral leasing Act (30 U.S.C.
192) or section 1353 of the Outer Continental Shelf Lands Act
(43 U.S.C. 1353).
(e) Pursuant to the recommendations of the Small Refiner's
Advisory Group, the Secretary shall develop and implement
procedures to ensure a fair and equitable opportunity for
interested eligible small refiners to purchase royalty oil
from the eligible small refiner portion.
(f) Reports on RIK.--The Secretary may require any eligible
small refiner to submit a report demonstrating the eligible
small refiner's compliance with subsection (a)(2).
(g) Repeal of Existing Royalty-in-Kind Authority.--Section
36 of the Mineral Leasing Act (30 U.S.C. 192) and section
1353 of the Outer Continental Shelf Lands Act (43 U.S.C.
1353) are repealed.
SEC. 13. APPLICABLE LAWS.
(a) Movement, Disposition, and Sale of Royalty Oil and
Royalty Gas.--In arranging for the movement, disposition and
sale of royalty oil and royalty gas, the United States and
its qualified marketing agents shall be subject to all laws
that apply to the movement, disposition, and sale of oil and
gas.
(b) No Additional Priority of Service or Movement.--In any
pipeline, truck, barge, railroad, or other carrier downstream
of the delivery point, royalty oil and royalty gas shall not
be afforded a priority of service or movement, nor assigned a
capacity right which is superior to that identified in--
(1) the contract for carriage of royalty oil and royalty
gas entered into by the transporter with the United States or
the qualified marketing agent, or
(2) the tariff applicable to such carrier, if any.
(c) Meaning of Terms Used.--The meaning of the terms used
in this Act shall be supplemented by reference to generally
accepted accounting principles and prevailing industry
practices and procedures.
(d) Laws Applicable to Stripper or Marginal Production Not
Affected.--Nothing in this Act shall modify, abridge or alter
the provisions of the Deep Water Royalty Relief Act of 1995
(43 U.S.C. 1337), or any other Federal law applicable to
stripper or marginal production.
SEC. 14. INDIAN LANDS.
This Act shall not apply with respect to Indian lands.
SEC. 15. EFFECTIVE DATE; REGULATIONS.
(a) In General.--Except as provided in subsection (b), this
Act shall become no later than effective 18 months after the
date of enactment of this Act, and shall apply with respect
to the production of oil and gas on or after the first day of
the month following the effective date of this Act.
(b) Regulations.--The Secretary shall issue all regulations
required for implementation of this Act within one year after
the date of enactment of this Act.
Mr. DOMENICI. Mr. President, the current royalty system is an
elaborate after-the-fact game of ``Gotch ya.''
Producers are put in the unenviable position of being second-guessed,
some times years later, by the Minerals Management Service (MMS). This
current system is unfair to oil and gas producers. It is expensive and
inefficient for the federal government.
Under the current system, only the lawyers benefit. It results in a
lot of law suits and big legal bills.
The MMS tried to fix the system by proposing a ``producer is always
the loser rule.''
Under the proposed rules, (now abandoned) the producers would have
always lost. The MMS tried a rule tying the fair market value to the
NYMEX.
If producers sold their production for less than the NYMEX price,
they would have had to pay the royalty on the ``phantom'' income i.e.
the difference between the price they actually received and the NYMEX
price. If, on the other hand, they sold their production for more than
the NYMEX, they would have had to pay the royalty on the amount they
actually received. This would have been a very unsatisfactory approach.
Fortunately, most independent producers don't have to use that
approach. However, the existing valuation formula for calculating fair
market value is complicated, fraught with exceptions, and hard to
administer.
The question: What is fair market value for oil is not as simple as
it sounds.
Some of the variable factors include the quality or refinery value of
crude oil; the transportation costs necessary to move that oil to a
refiner; relative access to various refineries or markets which may
value a particular type of crude oil differently; the supply, vis-a-
vis, the demand for certain types of oil or alternative supplies, and
whether the contract is a long-term or short-term commitment made by
either the refiner or the producer.
Other factors that influence value include: the volume of the crude
oil produced at the lease. This could affect the unit logistical costs;
seasonality; and service requirements of the producer.
[[Page S3155]]
Another question more complicated than it sounds is this: What are
the appropriate, allowable, deductible expenses?
Under the current system it costs the MMS about $60 million annually
to debate this question and to administer our royalty collection
program. It takes several hundred employees, many of them auditors, to
oversee the current royalty program. In contrast, royalty-in-kind
programs in Canada need only 33 employees to administer their approach.
With a royalty-in-kind system, the producer would give some of its
production from the federal lands as a royalty-in-kind payment.
A royalty-in-kind program is an accurate way to determine a fair
market value. The federal government would sell its share of the oil on
an open and competitive market. What you can sell it for is, per se,
fair market value. That is the essence of what the ``Royalty-in-Kind''
Program, along with the use of the Qualified Marketing Agents
(``QMA''), would allow.
The goal should be treating the producers fairly, maximizing revenues
for the federal government, and distributing an accurate amount of
royalties to the states.
The bill being introduced today by Senator Nickles, Murkowski,
Hutchinson and I would provide a better way for the federal government
and the Minerals Management Service (MMS) to collect, with certainly, a
fair value for its crude oil.
provisions of the bill
The federal government would take its royalty ``in kind'' at the
applicable delivery point for each federal onshore and offshore lease.
Title of the royalty share taken in-kind would be in the name of the
federal government.
The U.S. would contract with qualified marketing agents (QMAs).
The federal government would select a QMA for each lease on a
competitive bid basis.
States entitled to revenues under the net receipts sharing provisions
of the Mineral Leasing Act or Section 8(g) of the Outer Continental
Shelf Lands Act would be allowed to elect to select the QMA.
In selecting a QMA, the State would act for the mutual benefit of the
State and the federal government. The payment from the federal
government to any State for its share of royalty taken in-kind from
federal leases within a State's boundary would not be subject to cost
deductions under the net receipts sharing provisions of the applicable
statutes.
The lessee must tender the royalty share at the delivery point. This
would completely satisfy the lessee's royalty obligation.
The lessee would bear the costs of place royalty oil and royalty gas
in a merchantable condition at the delivery point. The lessee would be
responsible for gathering costs. Transportation costs would be borne by
the federal government.
Mr. President, this is an excellent approach. My only concern is that
the final legislative product adequately address the problem of the
marginal well that produces a few barrels a day and is in an isolated
area. The legislation needs to make sure that there is a workable
mechanism for these isolated wells.
I also note that some, including the New Mexico state lands
commissioner, have suggested a multi-state pilot program prior to
moving to the nation-wide royalty-in-kind program. I respect those
views.
I hope, that as we move through the hearing process the Committee can
take testimony on whether to proceed with a multi-state pilot program
or whether existing pilots have provided sufficient information for us
to implement a national program.
I want to recognize Senator Nickles for his leadership on this issue
and look forward to working with him, Senator Murkowski and Senator
Hutchison on moving this legislation through the process so that we can
start a royalty-in-kind program in the near future.
____________________