[Congressional Record Volume 144, Number 85 (Thursday, June 25, 1998)]
[Senate]
[Pages S7190-S7200]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             THE MEDICARE+CHOICE PAYMENT EQUITY ACT OF 1998

 Mr. WYDEN. Mr. President, last year's balanced budget 
agreement contained provisions to make Medicare more efficient by 
moving away from wasteful practices that the private sector long ago 
consigned to history, while offering seniors in Oregon and other states 
more and better choices for their health care service. The bipartisan 
bill Senator Smith and I are introducing today will make sure that 
those provisions are implemented in a way that will indeed bring about 
the full potential of these reforms.
  The Medicare+Choice Payment Equity Act of 1998 will finish what we 
started with the Balanced Budget Act of 1997 by creating payment equity 
under Medicare's formula for paying for managed care services . Without 
equity in payment, beneficiaries in Oregon could be penalized because 
they may never get the same kinds of services in their Medicare managed 
care package that are available in other areas of the country with less 
efficient health care systems.
  For states like Oregon with cost efficient health care systems, the 
Medicare formula resulted in lower payment. While we made progress in 
correcting this inequity through the Balanced Budget Act, changes made 
at the last minute in the legislation will actually prevent efficient 
states from ever gaining full equity in payment under Medicare managed 
care plans.
  This legislation corrects that by requiring full funding of what is 
known as the ``blend'' portion of the formula. With managed care taking 
a larger role in Medicare it is more important now to assure equity in 
the payment formula. This legislation is supported by the Fairness 
Coalition and the American Hospital Association.
  I ask unanimous consent that a copy of the bill be printed for the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2227

       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 ``Medicare+Choice Payment 
     Equity Act of 1998''.

     SEC. 2. ELIMINATION OF BUDGET NEUTRALITY ADJUSTMENT FACTOR IN 
                   CALCULATING THE BLENDED CAPITATION RATE FOR 
                   MEDICARE+CHOICE ORGANIZATIONS.

       (a) In General.--Section 1853(c) of the Social Security Act 
     (42 U.S.C. 1395w-23(c)) is amended--
       (1) in paragraph (1)(A), by striking the comma at the end 
     of clause (ii) and all that follows before the period at the 
     end; and
       (2) by striking paragraph (5) and redesignating paragraphs 
     (6) and (7) as paragraphs (5) and (6) respectively.
       (b) Conforming Amendments.--Part C of the Social Security 
     Act (42 U.S.C. 1395w-21 et seq.) is amended--
       (1) in section 1853(c)--
       (A) in the matter preceding subparagraph (A) of paragraph 
     (1), by striking ``(6)(C) and (7)'' and inserting ``(5)(C) 
     and (6)''; and
       (B) in paragraphs (1)(B)(ii) and (3)(A)(i), by striking 
     ``(6)(A)'' and inserting ``(5)(A)''; and
       (2) in subsections (b)(3)(B)(ii) and (c)(3) of section 
     1859, by striking ``1853(c)(6)'' and inserting 
     ``1853(c)(5)''.
       (c) Submission To Congress.--Not later than 20 days after 
     the date of enactment of this Act, the Secretary of Health 
     and Human Services shall submit to Congress a legislative 
     proposal that provides for aggregate decreases in Federal 
     expenditures under the medicare program under title XVIII of 
     the Social Security Act (42 U.S.C. 1395 et seq.) as are equal 
     to the aggregate increases in such expenditures under such 
     program resulting from the amendments made by subsections (a) 
     and (b).
       (d) Effective Date.--The amendments made by this section 
     shall apply to payments made under contracts entered into on 
     or after January 1, 1999.

 Mr. SMITH of Oregon. Mr. President, today with my colleague, 
Senator Wyden, I introduce legislation to restore equity in the 
Medicare payment rate otherwise known as the Average Adjusted Per 
Capita Cost (AAPCC) formula under Medicare. This formula, which is 
implemented by the Health Care Financing Administration, determines the 
payment rates made to health maintenance organizations (HMOs) that 
offer coverage to Medicare beneficiaries.
  Mr. President, prior to the passage of the Balanced Budget Act of 
1997, AAPCC rates were determined by calculating the five-year average 
of per-capita Medicare fee-for-service spending by county, as well as 
the graduate medical education (GME) and disproportionate share (DSH) 
payments. Since Medicare utilization rates, GME and DSH rates vary from 
county to county throughout the United States, those areas that have 
low Medicare utilization rates subsequently receive a lower payment 
than other areas where Medicare utilization rates are much higher. In 
1997, those rates varied from $286 in Gilliam County, Oregon to $748 in 
Dade County, Florida.
  The result of such disproportionate levels in payments to HMOs is a 
disproportionate amount of benefits provided to Medicare beneficiaries. 
For example, HMOs that provide coverage for Medicare beneficiaries 
living in Los Angeles, California or Dade County, Florida receive a 
significantly higher payment; therefore, they can afford to provide 
additional benefits such as prescription drugs, eye glasses, and dental

[[Page S7191]]

coverage. Meanwhile, HMOs that provide coverage to beneficiaries in 
Portland, Oregon receive a lower payment rate and cannot afford to 
provide such additional benefits. Mr. President, this is blatantly 
unfair, and unacceptable. Medicare beneficiaries deserve the same 
access to the same benefits, regardless of where they live in this 
country.
  To address this discrepancy, the Balanced Budget Act of 1997 included 
three main provisions to change the calculation of the AAPCC payment 
rates. First, a minimum ``floor'' payment of $367 was implemented to 
provide assistance to those rural counties with low Medicare 
utilization rates. Second, a blended rate was established to benefit 
low and mid-level payment counties to slowly bring them up to a more 
equitable level. Third, a minimum two percent ``hold-harmless'' was 
established so that all counties, even those at a higher payment level, 
are guaranteed at least a two percent increase in their current payment 
rates.
  As a member of the Senate Committee on the Budget, I was proud to 
support these provisions; however, the only component of this proposal 
that has been implemented, is the guaranteed two percent increase for 
all counties due to budget neutrality restrictions. While the two 
percent increase is a good start in restoring some equity to the 
payment system, beneficiaries living in rural counties in Oregon and 
throughout the country will not have access to Medicare+Choice options 
if we cannot find a way to provide funding for the blend component. 
This was the original intent of Congress, and I believe we have a 
responsibility to implement all three of these provisions in order to 
restore equity to the Medicare system.
  The legislation that Senator Wyden and I are proposing today would 
remove the budget neutrality provision used in calculating the blended 
capitation rate for Medicare+Choice organizations. To put this simply, 
we propose to fund the blend. Under this legislation, the Secretary of 
Health and Human Services would submit to Congress a legislative 
proposal outlining ways in which to restructure federal Medicare 
expenditures in order to implement the blend. We believe this is a fair 
and fiscally responsible way to address this matter and look forward to 
the Finance Committee's consideration of this issue in the year ahead.
  Mr. President, I would like to commend my colleague, Senator Wyden, 
for drafting this legislation and for the work of Stephanie Kennan of 
his staff on this bill. He has been a strong proponent of Medicare 
reform both as a member of the House of Representatives and as a member 
of the Senate Committee on the Budget. I thank him for this opportunity 
to join him in this effort.
                                 ______
                                 
      By Mr. THOMPSON (for himself, Mr. Glenn, Mr. Cochran, Mr. Levin, 
        Mr. Brownback and Mr. Lieberman):
  S. 2228. A bill to amend the Federal Advisory Committee Act (5 U.S.C. 
App.) to modify termination and reauthorization requirements for 
advisory committees, and for other purposes; to the Committee on 
Governmental Affairs.


    THE ADVISORY COMMITTEE TERMINATION AND STREAMLINING ACT OF 1998

 Mr. THOMPSON. Mr. President, our democracy depends not just on 
our citizens exercising the franchise at every election. It also 
depends on the active participation of citizens in the operations of 
the government. To that end, the federal government has sought input 
and advice from citizens on a wide variety of issues by creating 
advisory committees. To solicit this input, however, costs the 
government around $180 million a year, and results in an accretion of 
advisory committees that continue long after their useful purpose is 
satisfied.
  The operations of advisory committees are governed by the Federal 
Advisory Committee Act of 1972, commonly called ``FACA.'' This law was 
enacted out of a concern that federal advisory committees were 
proliferating without adequate review, oversight, or accountability. In 
adopting the FACA, Congress intended that the number of advisory 
committees be kept to the minimum necessary and that all advisory 
committees operate openly under uniform standards and procedures.
  Although the FACA was not enacted until 1972, agencies of the federal 
government had been using advisory committees for many years. For 
example, the Board of Visitors of the Naval Academy was established by 
Congress in 1879. There are four types of advisory committees used by 
federal agencies: committees mandated by Congress; committees 
authorized, but not mandated, by Congress; committees mandated by 
executive order of the President; and, finally, committees established 
by agencies under their organic statutes. Over the years, the number of 
advisory committees grew. In enacting the FACA, Congress mandated that 
all then-existing advisory committees terminate within two years but 
did not apply this mandate to advisory committees established directly 
by Congress, only to those created by agencies themselves. Despite this 
termination mandate, the number of advisory committees continued to 
increase after enactment of the FACA. Many of the advisory committees 
terminated two years after the FACA's enactment were simply 
reestablished, and many new committees have since come into existence.
  While allowing public participation in government, advisory 
committees cost the federal government money. According to the General 
Services Administration, the 968 federal advisory committees used by 
federal agencies cost the government $178 million in fiscal year 1997 
and consumed 1254 full-time equivalent positions. Advisory committees 
are expected to cost the government $183 million this year. Even though 
the number of advisory committees has fallen from 1305 in 1993, their 
costs have continued to increase, even in constant dollars. In 1988, 
the cost to operate advisory committees was $93 million. The cost to 
operate fewer advisory committees in 1997 was about $136 million in 
1988 dollars.
  The costs associated with advisory committees would be even higher 
were it not for initiatives taken to reduce the number of advisory 
committees created by executive branch agencies. The number of these 
``discretionary'' committees, those created not at the direction of 
Congress or the President, is limited to 534. The GSA also conducts an 
annual review of advisory committees that no longer serve a useful 
purpose. Through this review, GSA has identified 61 advisory committees 
mandated by law that should be eliminated. The termination of these 
committees would save $8.4 million this year.
  The time has come for Congress to step up and do its part to achieve 
further cuts in current advisory committees. Unless Congress acts, the 
cost of advisory committees will continue to increase, as new 
committees are created and old, useless committees continue with no 
legitimate purpose.
  Today, joined by a bipartisan group of my colleagues on the Committee 
on Governmental Affairs, I am introducing the Advisory Committee 
Termination and Streamlining Act of 1998. I am pleased to be joined by 
the ranking member of the Committee, Senator Glenn, who has a long 
history of involvement with the FACA; Senator Cochran; Senator Levin, 
who formerly chaired the Subcommittee with oversight responsibility for 
the FACA; Senator Brownback, Chairman of the Subcommittee on Oversight 
of Government Management and Restructuring; and Senator Lieberman, the 
ranking member on the Government Management and Restructuring 
Subcommittee. This bill has been developed with the assistance of the 
Administration, which proposed many of its provisions.
  Let me briefly lay out what this legislation would accomplish. The 
focus of the legislation is to force the reappraisal of the need for 
all current advisory committees. To achieve this goal, the bill would 
terminate all advisory committees within three years of the bill's 
enactment. This three-year window applies to all advisory committees, 
whether established by congressional or presidential mandate, 
congressional authorization, or agency decision. Any advisory committee 
established by presidential order or agency decision will be subject to 
continuation if an affirmative decision is made that the committee's 
continuation is warranted. Similarly, three years will allow Congress 
enough time to review

[[Page S7192]]

the advisory committees it has mandated, determine which of these 
continue to serve useful functions, and reauthorize such committees. 
This provision will clear away many advisory committees that continue 
to exist from inertia but no longer serve a useful function.
  The bill excludes two categories of advisory committees. Advisory 
committees that provide peer review of grant applications, such as 
those used by the National Institutes of Health, will continue, whether 
or not they are reauthorized, as the termination provision does not 
apply to them. The second category exempt from the termination 
provision covers those committees that provide advice relating to the 
academic certification of federal institutions. This category includes 
the Boards of Visitors of the service academies. Finally, the bill 
exempts from the termination provision all advisory committees that 
``address critical needs relating to health, safety, national security, 
or other concerns as the President may certify.'' This exemption allows 
sufficient flexibility to preserve those advisory committees that 
continue to serve useful purposes in areas deemed important by the 
President.
  The other provisions of the bill can be quickly summarized. First, 
the bill allows the GSA to issue binding regulations and not just 
administrative guidelines. This change, proposed by the Administration, 
is needed to promote consistent, uniform application of the FACA's 
requirements throughout the executive branch. Second, the bill changes 
the date on which the Administration's annual report on advisory 
committees must be submitted to Congress from December 31 to March 15. 
The GSA has consistently failed to meet the December 31 deadline, due 
largely to its inability to collect the necessary information from 
other agencies in a timely manner. This change will provide a more 
realistic date for submission of the report, and the GSA has assured us 
that it will be able to meet the new March 15 deadline. Finally, the 
bill will allow the GSA to promulgate regulations authorizing notice of 
advisory committee meetings through means other than publication in the 
Federal Register. Many who have an interest in the work of specific 
advisory committees do not read the Federal Register, and the 
Administration is interested in experimenting with providing notice of 
meetings through the Internet or other electronic formats in order to 
determine whether other forms of notice are more effective at reaching 
large numbers of interested persons.
  Mr. President, this bill would streamline the government and save us 
money. It will have the additional benefit of requiring Congress and 
the Administration to work jointly to revisit the charters of all 
advisory committees and evaluate the need for their continuation. I 
thank the Administration for working with us to develop this bill and 
my cosponsors for working towards a consensus on this matter.
  I ask unanimous consent that the bill and a copy of a June 22, 1998 
article from the Gannett News Service entitled ``Committees Dwindle--
but Costs Don't,'' which details some of these facts, be inserted in 
the Record.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                S. 2228

       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 ``Advisory Committee 
     Termination and Streamlining Act of 1998''.

     SEC. 2. TERMINATION OF ADVISORY COMMITTEES.

       Section 14 of the Federal Advisory Committee Act (5. U.S.C. 
     App.) is amended by adding at the end the following:
       ``(d)(1) Notwithstanding any other provision of law 
     (including section 4(a) of this Act and this section) and 
     except as provided under paragraph (2), each advisory 
     committee established, authorized, or reauthorized by statute 
     shall terminate 3 years after the date of enactment of the 
     Advisory Committee Termination and Streamlining Act of 1998.
       ``(2) This subsection shall not apply to any advisory 
     committee the purpose of which is to--
       ``(A) provide for peer review of Federal grant or research 
     applications or similar activities;
       ``(B) provide advice and recommendations relating to 
     academic certification of Federal institutions; or
       ``(C) address critical needs relating to health, safety, 
     national security, or other concerns as the President may 
     certify.
       ``(3) Nothing in this subsection shall be construed to 
     reauthorize the continuation of any advisory committee 
     covered under paragraph (1) beyond the termination date 
     specified in the original authorization or any 
     reauthorization for the committee.''.

     SEC. 3. REGULATIONS.

       Section 7(c) of the Federal Advisory Committee Act (5 
     U.S.C. App.) is amended in the first sentence by striking: 
     ``administrative guidelines'' and inserting ``regulations''.

     SEC. 4. ANNUAL REPORT.

       Section 6(c) of the Federal Advisory Committee Act (5 
     U.S.C. App.) is amended by striking the first sentence and 
     inserting: ``Not later than March 15 of each year, the 
     President shall submit an annual report to Congress on the 
     activities, status, and changes in the composition of 
     advisory committees in existence during the preceding fiscal 
     year.''.

     SEC. 5. ADVISORY COMMITTEE PROCEDURES.

       Section 10(a)(2) of the Federal Advisory Committee Act (5 
     U.S.C. App.) is amended to read as follows:
       ``(2) Except when the President determines otherwise for 
     reasons of national security, timely notice of each such 
     meeting shall be published in the Federal Register. The 
     Administrator shall prescribe regulations to provide for 
     other types of public notice in addition to, or in lieu of, 
     notices in the Federal Register to ensure that all interested 
     persons are notified of such meeting prior thereto.''.
                                  ____


                  Committees Dwindle--But Costs Don't

                           (By Chris Collins)

       Washington.--In early 1993, President Clinton vowed to 
     whack away at the tangled growth of hundreds of advisory 
     committees that he described as proliferating throughout the 
     federal government ``like kudzu,'' the notorious vine that 
     engulfs objects virtually overnight.
       Today, the number of such panels is down, as Clinton 
     promised: 963 in 1997, the most recent year for which numbers 
     are available, compared to 1,305 in 1993, when he issued an 
     executive order to pare the committees.
       But hold the applause. Both the number of committee members 
     on the remaining panels and their cost to taxpayers have 
     soared to all-time highs.
       In 1993, according to the General Accounting Office, 28,317 
     people served on advisory committees. By 1997, the number of 
     committee members had jumped to 36,586, although the number 
     of committees was way down.
       Costs were up, too: $178 million last year, compared to 
     $143.9 million in 1993. Even using constant 1988 dollars, the 
     cost to operate advisory committees has risen in the past 
     decade from $93 million in 1988 to about $136 million in 
     1997, GAO said.
       James L. Dean, director of the Committee Management 
     Secretariat at the General Services Administration, 
     attributes the bulk of the increase in committee members to 
     the National Institutes of Health's increasingly prevalent 
     practice of rapidly rotating memberships on some of its peer 
     review committees.
       NIH spokeswoman Laura Vazquez confirmed that 
     ``memberships'' on NIH's 141 committees appear to have 
     tripled in recent years as NIH pulled more experts onto its 
     committees for temporary, often one-meeting tenures. In 1997, 
     for example, NIH had 8,366 such short-term participants and 
     4,140 longer-term committee members.
       But the cost of the committees to taxpayers is not higher 
     simply because there are more members. The cost of caring for 
     each committee member has risen, too: From $90,816 per member 
     in 1988 to $184,868 in 1997, GAO said. Even in constant 1988 
     dollars, per-member expenses rose from $90,816 to $140,870 in 
     that period.
       Most of that money--$75.5 million last year--pays for 
     federal staff support for the committees, Dean said. Most 
     panelists are not paid for their time; only $10.4 million 
     went last year to compensate non-federal committee members, 
     said Dean, whose office had eight employees and a $645,000 
     budget in 1997 (up from $220,000 in 1988).
       None of this, however, shows up in the annual message the 
     president is required to send to Congress on the status of 
     federal advisory committees.
       Clinton's last message, sent in September, bragged about 
     how the number of committees has dropped during his tenure 
     and that $2.5 million was saved during the 1996 budget year 
     by cutting out additional panels. There wasn't a mention of 
     how much overall costs and overall membership had 
     risen.
                                 ______
                                 
      By Mr. CHAFEE (for himself, Mr. Baucus, Mr. D'Amato, Mr. Hatch, 
        Ms. Mikulski, Mr. Jeffords, Mr. Rockefeller, and Mr. Conrad):
  S. 2230. A bill to amend the Internal Revenue Code of 1986 to extend 
the work opportunity tax credit for 3 additional years; to the 
Committee on Finance.


             the work opportunity tax credit extension act

 Mr. CHAFEE. Mr. President, on behalf of myself and Senators 
Baucus, Hatch, D'Amato, Conrad, Mikulski, Jeffords and Rockefeller. I 
am introducing legislation that extends the

[[Page S7193]]

current Work Opportunity Tax Credit (WOTC) program for three years. The 
program expires at the end of this month. While it is clear that the 
program will not be extended before we leave for the Fourth of July 
recess, I hope that Congress will act quickly upon its return to make 
sure that this very important program is reinstated and that no gap in 
the availability of the credit is created.
  The WOTC program is a public-private partnership which encourages 
businesses to hire individuals on public assistance or who otherwise 
have life situations that make them difficult to employ. Employers who 
hire these individuals receive an income tax credit of as much as forty 
percent of the first $6,000 in wages they pay.
  The WOTC program was established in 1996 as a replacement for the 
Targeted Jobs Tax Credit (TJTC). Last year, as part of the Taxpayer 
Relief Act Congress affirmed its strong support for this program by 
extending it for nine months along with the other so-called ``expiring 
provisions.'' Unfortunately, the tax credit will expire at the end of 
this month before Congress will have an opportunity to extend it.
  The legislation we are introducing today extends the program for 
three years. This extension is vital to the continued success of the 
WOTC program. In speaking with employers who utilize the program, their 
biggest concern is the on again, off again nature of the credit. 
Participation in the program requires significant resources and time 
commitments on the part of the employer. The uncertainty surrounding 
the continuation of this program makes it very difficult for employers 
to make that commitment. The loss of program certainty reduces the 
incentive to hire those currently on public assistance. During previous 
breaks employers have scaled back their programs, and some have even 
abandoned the program altogether.
  Individuals hired under the WOTC program often require substantial 
time and effort on the part of an employer. In many instances these 
individuals lack even the most basic skills necessary to hold a job. 
Without the WOTC program there would be a strong disincentive for 
employers to make any effort to hire these individuals. The tax credit 
levels the playing field and gives these individuals an opportunity to 
move off the welfare rolls and take control of their futures. Thus far, 
nearly 300,000 people--mostly single mothers--have been hired under 
this program.
  Those eligible for the WOTC are: members of families receiving AFDC 
benefits; qualified veterans who are members of families receiving food 
stamp benefits; 18-24 years olds who are members of families receiving 
food stamp benefits; 18-24 year olds who live in an empowerment zone or 
enterprise community; summer youth (16-17 year olds) who live in an 
empowerment zone or enterprise community who are hired during the 
summer months; SSI recipients; economically disadvantaged ex-felons; 
and individuals with physical or mental disabilities who have been 
referred to employers after or while receiving rehabilitative services 
under the Rehabilitation Act of 1973.
  As I mentioned earlier, an employer will receive an income tax credit 
of forty percent of the first $6,000 in wages paid to an employee who 
is a member of one of these groups. Therefore, the maximum credit 
available is $2,400. The only exception is summer youth employees where 
the maximum amount of wages used to calculate the credit is $3,000. An 
employer can only receive this maximum credit, however, if the employee 
is employed for at least 400 hours. While that may sound like a short 
period of time, for many of these individuals, that represent a 
significant period of employment, perhaps longer than any job they've 
ever held.
  A smaller credit equal to 25% of the first $6,000 of wages is 
available to an employer in those instances where the employee works 
less than 400 hours. No credit is available for any employee who works 
less than 120 hours.
  The Work Opportunity Tax Credit is an important component of our 
efforts to make welfare reform work over the long term. It provides 
transitional assistance to employers who are willing to hire and take 
the time to train individuals before they become long-term welfare 
recipients and young people at high risk of going on public assistance 
programs.
  I hope my colleagues will join me in supporting a long-term extension 
of the Work Opportunity Tax Credit.
 Mr. BAUCUS. Mr. President, I am pleased today to join my 
colleague Senator John Chafee in introducing legislation to extend the 
Work Opportunities Tax Credit (WOTC). This program was created after 
extensive consultations between the Congress and the Administration as 
a replacement for the Targeted Jobs Tax Credit. It was improved in the 
Taxpayer Relief Act of 1997 with changes designed to make the program 
more accessible to employers who identify, hire and train welfare 
recipients and equip them with basic job skills necessary for long-term 
employment.
  As the June 30, 1998 expiration date for the WOTC program approaches, 
we are introducing this bill as a statement of Congressional commitment 
to the future continuation of the credit. WOTC encourages employers to 
participate in the national goal of moving millions from welfare to 
work through a hiring tax incentive that helps to offset the costs of 
recruiting, hiring and training those with few basic job skills.
  Congress enacted welfare reform in 1996. Since that time, employers 
have utilized WOTC to hire nearly one in four of those coming off 
public assistance. The time limits that were implemented through the 
welfare reform legislation are now reaching many of the more difficult 
welfare cases, those with the fewest job skills that have had the most 
difficulty finding jobs. As these welfare recipients search for jobs, 
it is extremely important to continue providing an incentive which will 
help defray the extra costs experienced by companies hiring these 
workers.
  The legislation we are introducing today will extend WOTC for three 
years. The current practice of extending the credit on a year-to-year, 
or partial-year, basis makes it extremely difficult for employers to 
use the credit. Small businesses in particular require some time to set 
up and use the program. All employers need some level of certainty for 
tax planning, which is not available when the credit is extended on a 
short-term basis. A multi-year extension will provide that certainty, 
and will show that Congress is serious about making the program work.
  I thank Senators Conrad, D'Amato, Hatch, Jeffords, Mikulski and 
Rockefeller for joining Senator Chafee and myself as original 
cosponsors of this bill. I look forward to working with all of my 
colleagues to enact a multi-year extension of the Work Opportunities 
Tax Credit before the end of this legislative session.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Baucus, and Mr. Mack):
  S. 2231. A bill to amend the Internal Revenue Code of 1986 to 
simplify certain rules relating to the taxation of United States 
business operating abroad, and for other purposes; to the Committee on 
Finance.


   international tax simplification for american competitiveness act

 Mr. HATCH. Mr. President, today with my friend and colleague 
Senator Baucus I introduce the International Tax Simplification for 
American Competitiveness Act of 1998. This bill will provide much-
needed tax relief from complex and inconsistent tax laws that burden 
our American-owned companies which are attempting to compete in the 
world marketplace.
  Our foreign tax code is in desperate need of reform and 
simplification. The rules in this arena are way too complex and, often, 
their results are perverse.
  Mr. President, the economy of this country has entered into an 
environment like no other in our history. The American economy has 
experienced significant growth and prosperity. That success, however, 
is becoming more and more intertwined with the success of our 
businesses in the global marketplace. As the economic boundaries from 
country to country merge closer together, as technology blurs 
traditional geographical boundaries, and as competition continues to 
increase from previously lesser-developed nations, it is imperative 
that American-owned businesses be able to compete effectively.
  It seems to me that any rule, regulation, requirement, or tax that we 
can alleviate to enhance competitiveness will insure to the benefit of 
American companies, their employees, and shareholders.

[[Page S7194]]

  There are many barriers that the U.S. economy must overcome in order 
to remain competitive that Congress cannot hurdle by itself. All around 
the world, we have international trade negotiators working hard to 
remove the barriers to foreign markets that discourage and hamper U.S. 
trade. This is very important to the future economic growth of the U.S. 
economy. However, this effort has largely ignored the largest source of 
artificial and unnecessary trade barriers experienced by U.S. companies 
operating abroad--the complexities and inconsistencies contained in our 
own tax code.
  We cannot continue the status quo--we must work to remove the 
barriers in our own back yard as diligently as we attack those imposed 
by other countries. The failure to do so will even jeopardize our own 
domestic economy as American companies are lured to other countries 
with simple, more favorable tax treatment.
  The business world is changing at an increasingly rapid pace. Tax 
laws have failed to keep pace with the rapid changes in the world 
technology and economy. We enacted some foreign tax simplification in 
last year's Taxpayer Relief Act, but these changes are not enough. Too 
many of the international provisions in the Internal Revenue Code have 
not been substantially debated and revised in over a decade. Since that 
time, existing international markets have changed significantly and we 
have seen new markets created. The U.S. tax code needs to adapt to the 
changing times as well. The continued use of a confusing and archaic 
tax code only results in a mismatch with commercial reality.
  If we close American companies out of the international arena due to 
complex and burdensome tax rules on exports and foreign production, 
then we are denying them the ability to compete and dooming the, and 
ourselves, to anemic economic growth and all its adverse subsidiary 
effects.
  The bill we are introducing today is not a comprehensive solution, 
neither is it a set of bold new initiatives. Instead, this bill 
contains a set of important intermediate steps which will take us a 
long way toward simplifying the rules and making some sense of the 
international tax regime. The bill contains provisions to simplify and 
update the tax treatment of controlled foreign corporations, fix some 
of the rules relating to the foreign tax credit, and make other changes 
to international tax law.
  Some of these changes are in areas that are in dire need of repair, 
and others are changes that take into consideration the changes we have 
seen in international business practices and environments during the 
last decade. The provisions in this bill are necessary to facilitate 
the American economy's ability to remain the driving economic force in 
the world of the future.
  One example of the need for updating our laws to more adequately 
represent rapid changes that have occurred in the last few years is the 
financial service industry. This industry has seen technological and 
global changes that have changed the very nature of the way these 
corporations do business both here and abroad. This bill contains 
several provisions to help adapt the foreign tax regime to keep up with 
these changes.
  In particular, I want to highlight the provision regarding a Subpart 
F Exception for active financial services income. This provision is 
based in large part on the one-year rule embodied in H.R. 2513, the 
House-passed bill that resulted from lengthy negotiations between the 
Treasury Department and the financial services industry. The bill's 
provisions are not intended to replace H.R. 2513. Rather, this bill 
goes further and provides additional options to facilitate discussion 
regarding the parameters of a permanent rule that would effectively 
level the playing field with respect to our foreign competition. This 
discussion is even more important in view of the Supreme Court's ruling 
on the line-item veto this morning.
  The bill also allows deferral for cross-border income received by 
controlled foreign corporations engaged in the active conduct of a 
banking, financing, or similar business under narrowly defined 
circumstances. This provision is designed to preclude opportunities for 
excessive ``mobility'' of income. The first safeguard is the 
requirement that income eligible for deferral must be derived from a 
transaction with a ``customer.'' The definition of a customer would not 
permit a related-party transaction to qualify if one of the principal 
purposes for such transaction was to satisfy the underlying provision. 
Second, the requirement that employees meet a ``material 
participation'' test will reinforce the active nature of the covered 
activities. Thus, corporations holding passive investments would be 
precluded from relying on the rule.

  There are many areas of the international tax regime not covered by 
this bill. This legislation represents a pragmatic collection of 
proposals, not an exhaustive one. One area I think needs to be explored 
is the foreign tax rules as they apply to foreign corporations with 
U.S. operations and subsidiaries. These companies are helping the U.S. 
economy grow. They buy and sell U.S. products, and they employ U.S. 
workers. We need to examine the international tax law and any barriers 
it creates for these companies. We must ensure that the U.S. tax law is 
written and enforced fairly for all companies operating in the U.S. I 
hope that we can include provisions in this area in future versions of 
this legislation.
  This bill is not the end of the international tax debate. if we were 
to pass every provision it contains, we would still not have a simple 
tax code. We would need to make more reforms yet. We cannot limit this 
debate to only the intermediate changes such as those in this bill. We 
must not lose sight of the long term. I intend to continue this debate 
with an eye to the future and propel the discussion to broader, more 
sweeping areas in need of reform such as interest allocation, the 
international tax treatment of partnerships, issues raised by the 
European Union, and a broader debate of Subpart F itself. I believe 
that we must address these concerns in the next few years if we are to 
put U.S. corporations and the U.S. economy in a position to maintain 
economic position in the global economy of tomorrow.
  This bill is important to the future of every American citizen. 
Without these changes, American businesses will see their ability to 
compete diminished, and the U.S. will have an uphill battle to remain 
the preeminent economic force in a changing world. This credible 
package of international tax reforms will help to keep our businesses 
and our economy competitive and a driving force in the world economic 
picture. I urge my colleagues to support this legislation.
 Mr. BAUCUS. Mr. President, I am very pleased today to join 
with my colleague, Senator Hatch, to introduce another in our series of 
international simplification bills. The International Simplification 
for American Competitiveness Act of 1998 will provide much-needed 
relief to American-owned companies that are struggling to compete in 
the world marketplace by simplifying our overly complicated 
international tax rules.
  America's economy, and economies of our individual States, are 
increasingly interlinked with the success of our businesses in the 
international economy. As the economies of previously less-developed 
countries around the world begin to expand, and the economic boundaries 
between our countries become more blurred, it is increasingly important 
for our businesses to be able to operate abroad from their most 
competitive position. Restraining American companies through redundant 
and unnecessary complexity in our own tax code dampens their ability to 
compete for foreign business. This only hurts our own economy.
  I have worked through the Trade Subcommittee to lower barriers to 
foreign markets and encourage agreements to keep trade free and fair. I 
have sought to open foreign markets for many Montana products, from 
beef to wheat, because of the positive impact on Montana's economy, and 
on the economy of our country. While we have made much progress on the 
trade front in opening barriers, our tax code remains mired in 
antiquated provisions that have not kept pace with the rapidly 
expanding global economic frontier. We must simplify our code, remove 
duplicative or outmoded provisions, and provide incentives for trade 
whenever possible, if we are to ensure continued U.S. success in the 
world

[[Page S7195]]

economy. If we miss this opportunity, we risk the erosion of U.S. 
international competitiveness as countries with simple, favorable tax 
treatment of businesses lure away our foreign customers.
  There is a strong correlation between American corporate 
competitiveness overseas and the ability of those companies to continue 
providing jobs at home. According to a report prepared by the 
accounting firm of Price Waterhouse, United States exports in 1996 
totaled over $600 billion and supported almost 7 million direct and 
indirect jobs. Exports alone account for over 11% of our Gross Domestic 
Product, and when combined with imports, total about 17% of GDP. Even 
in Montana, a state which is struggling to expand its foreign markets, 
exports totaled almost one-half billion dollars and supported 58,000 
jobs in 1996.
  This bill does not by any means cure all of the problems in the 
international tax arena. But it is a good starting point which 
simplifies existing law, reduces the cost of compliance, and begins to 
rationalize the rules that need to be drafted with the competitiveness 
of U.S. businesses in mind. There are a lot of important international 
issues that this bill does not deal with. The problems associated with 
the interest allocation rules, for example. But Senator Hatch and I 
feel that these are larger issues that need more time to resolve, so 
they have not been included in this bill. I look forward to working 
with him, the Treasury Department and industry groups in an effort to 
find solutions to these bigger-picture issues over the next months.
  We live in a global economy. And we must help make American companies 
competitive in this economy, while fairly taxing their profits, if we 
are to keep this unprecedented period of economic expansion going. The 
``International Tax Simplification for American Competitiveness Act of 
1998'' is a major step in that direction, and I look forward to working 
with Senator Hatch and my other colleagues on the Finance Committee to 
have its provisions enacted into law.
                                 ______
                                 
      By Mr. BUMPERS (for himself and Mr. HUTCHINSON):
  S. 2232. A bill to establish the Little Rock Central High School 
National Historic Site in the State of Arkansas, and for other 
purposes; to the Committee on Energy and Natural Resources.


         Little Rock Central High School National Historic Site

 Mr. BUMPERS. Mr. President, today I am introducing legislation 
to designate Central High School in Little Rock, Arkansas, as a 
National Historic Site. Central High School is perhaps the most well-
known school in the nation, as a result of the high profile and pivotal 
role it played in the desegregation of public schools in America. I am 
pleased to be joined by Senator Hutchinson in sponsoring this 
legislation.
  In 1954, the U.S. Supreme Court issued its landmark decision, Brown 
versus Board of Education, which held that the segregation of public 
schools was unconstitutional. The following year, in its Brown II 
decision, the Court ruled that integration of the public schools was 
the responsibility of local school districts, to be carried out ``with 
all deliberate speed.'' This set the stage for the eventual 
confrontation in Little Rock.
  Prior to the Brown decision, Central High was attended only by white 
students. Following the Court's decision, the Little Rock School Board 
initially made plans to comply with the decision in phases to be 
carried out over six years. However, by the time the district began to 
implement the decision in the fall of 1957, the political controversy 
had increased to the extent that only 9 black students decided to 
enroll at Central High, with approximately 1,900 white students. Those 
nine students later became known as the ``Little Rock Nine,'' and are 
an inspiration to America.
  Mr. President, earlier this Congress, Senator Mosely-Braun and I 
introduced legislation, S. 1283, to award the Congressional Gold Medal 
to those nine extraordinary individuals--Jean Brown Trickey, Carlotta 
Walls LaNier, Melba Patillo Beals, Terrance Roberts, Gloria Ray 
Karlmark, Thelma Mothershed Wair, Ernest Green, Elizabeth Eckford, and 
Jefferson Thomas. It is my strong desire that both S. 1283 and this 
legislation will be enacted into law in the remaining months of this 
Congress. These nine sons and daughters of Little Rock are proud 
symbols of the progress we have made and a solemn reminder of the 
progress we have yet to make.
  By the time the Little Rock Nine attempted to enter Central High in 
September of 1957, the issue of desegregation had polarized not only 
Little Rock, but the entire nation. The Governor of Arkansas, Orville 
Faubus, ordered the Arkansas National Guard to prevent the 
desegregation of Central High. Following several days of unrest, a 
Federal District Court in Little Rock issued an order preventing the 
National Guard from further obstructing desegregation efforts in Little 
Rock. Amid this period of intense feelings and acrimony, President 
Eisenhower issued an Executive Order which federalized the National 
Guard and deployed Federal troops to enforce the district court's 
order. Although several events of the following days were tense and 
often ugly, the eventual peaceful resolution that followed helped to 
ensure the successful implementation of the Brown decision, not only in 
Little Rock, but throughout the South.
  Last fall, on the 40th anniversary of the 1957 events, the attention 
of the nation was once again focused on Central High, and the Little 
Rock Nine once again entered through the school's main doors. However, 
this time those doors were held open by the President of the United 
States and the Governor of Arkansas.
  Establishment of the Little Rock Central High School National 
Historic Site will, for the first time, provide the National Park 
Service with the ability to interpret for all Americans the complete 
history of the desegregation of our public schools, certainly one of 
the most important social events in the history of our country. Let me 
hasten to add, Mr. President, that Central High will continue to be a 
functioning high school, managed by the Little Rock School District. 
Designation of the school as a National Historic Site will also 
complement the very successful interpretive activities already 
undertaken by the Central High Museum and Visitor Center.
  There is no question as to the national significance of Central High 
School. The school is included on the National Register of Historic 
Places, and was designated in 1982 as a National Historic Landmark by 
the Secretary of the Interior.
  There is strong support for this bill, both in Little Rock and with 
the entire Arkansas Congressional delegation. The City of Little Rock, 
the Little Rock School District, Central High Museum, Inc., area 
residents, and many other organizations and individuals in Little Rock 
have expressed support for this proposal. It is my hope to have a 
hearing scheduled for this bill in the very near future, with passage 
by the Senate shortly thereafter.
  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. 2232

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

     SECTION 1. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds that--
       (1) the 1954 U.S. Supreme Court decision of Brown v. Board 
     of Education, which mandated an end to the segregation of 
     public schools, was one of the most significant Court 
     decisions in the history of the United States;
       (2) the admission of nine African-American students, known 
     as the ``Little Rock Nine'', to Little Rock's Central High 
     School as a result of the Brown decision, was the most 
     prominent national example of the implementation of the Brown 
     decision, and served as a catalyst for the integration of 
     other, previously segregated public schools in the United 
     States;
       (3) 1997 marked the 70th anniversary of the construction of 
     Central High School, which has been named by the American 
     Institute of Architects as ``the most beautiful high school 
     building in America'';
       (4) Central High School was included on the National 
     Register of Historic Places in 1977 and designated by the 
     Secretary of the Interior as a National Historic Landmark in 
     1982 in recognition of its national significance in the 
     development of the Civil Rights movement in the United 
     States; and
       (5) the designation of Little Rock Central High School as a 
     unit of the National Park System will recognize the 
     significant role the school played in the desegregation of 
     public schools in the South and will interpret for future 
     generations the events associated with early desegregation of 
     southern schools.
       (b) Purpose.--The purpose of this Act is to preserve, 
     protect, and interpret for the benefit, education, and 
     inspiration of present and

[[Page S7196]]

     future generations, Central High School in Little Rock, 
     Arkansas, and its role in the integration of public schools 
     and the development of the Civil Rights movement in the 
     United States.

     SEC. 2. ESTABLISHMENT OF CENTRAL HIGH SCHOOL NATIONAL 
                   HISTORIC SITE.

       (a) Establishment.--The Little Rock Central High School 
     National Historic Site in the State of Arkansas (hereinafter 
     referred to as the ``historic site'') is hereby established 
     as a unit of the National Park System. The historic site 
     shall consist of lands and interests therein comprising the 
     Central High School campus in Little Rock, Arkansas, as 
     generally depicted on a map entitled ________________ and 
     dated June, 1998. Such map shall be on file and available for 
     public inspection in the appropriate offices of the National 
     Park Service.
       (b) Administration of Historic Site.--The Secretary of the 
     Interior (hereinafter referred to as the ``Secretary'') shall 
     administer the historic site in accordance with this Act and 
     the laws generally applicable to units of the National Park 
     System, including the Act of August 25, 1916 (16 U.S.C. 1, 2-
     4) and the Act of August 21, 1935 (16 U.S.C. 461-467): 
     Provided, That nothing in this Act shall affect the authority 
     of the Little Rock School District to administer Little Rock 
     Central High School.
       (c) Cooperative Agreements.--(1) The Secretary may enter 
     into cooperative agreements with appropriate public and 
     private agencies, organizations, and institutions (including, 
     but not limited to, the State of Arkansas, the City of Little 
     Rock, the Little Rock School District, Central High Museum, 
     Inc., Central High Neighborhood, Inc., or the University of 
     Arkansas) in furtherance of the purposes of this Act.
       (2) The Secretary shall coordinate visitor interpretation 
     of the historic site with the Little Rock School District and 
     the Central High School Museum, Inc.
       (d) General Management Plan.--Within two years after the 
     date funds are made available, the Secretary shall prepare a 
     general management plan for the historic site.
       (e) Continuing Educational Use.--The Secretary shall 
     consult and coordinate with the Little Rock School District 
     in the development of the general management plan and in 
     the administration of the historic site so as to not 
     interfere with the continuing use of Central High School 
     as an educational institution.
       (f) Acquisition of Property.--The Secretary is authorized 
     to acquire by purchase with donated or appropriated funds, by 
     exchange, or donation the lands and interested therein 
     located within the boundaries of the historic site: Provided, 
     That the Secretary may only acquire lands or interests 
     therein within the consent of the owner thereof: Provided 
     further, That lands or interests therein owned by the State 
     of Arkansas or a political subdivision thereof, may only be 
     acquired by donation or exchange.

     SEC. 3. DESEGREGATION IN PUBLIC EDUCATION THEME STUDY.

       (a) Theme Study.--Within two years after the date fund are 
     made available, the Secretary shall prepare an transmit to 
     the Committee on Energy and Natural Resources of the Senate 
     and the Committee on Resources of the House of 
     Representatives a National Historic Landmark Theme Study 
     (hereinafter referred to as the ``theme study'') on the 
     history of desegregation in public education. The purpose of 
     the theme study shall be to identify sites, districts, 
     buildings, structures, and landscapes that best illustrate or 
     commemorate key events or decisions in the historical 
     movement to provide for racial desegregation in public 
     education. On the basis of the theme study, the Secretary 
     shall identify possible new national historic landmarks 
     appropriate to this theme and prepare a list in order of 
     importance or merit of the most appropriate sites for 
     national historic landmark designation.
       (b) Opportunities for Education and Research.--The theme 
     study shall identify appropriate means to establish linkages 
     between sites identified in subsection (a) and between those 
     sites and the Central High School National Historic Site 
     established in section 2, and with other existing units of 
     the National Park System to maximize opportunities for public 
     education and scholarly research on desegregation in public 
     education. The theme study also shall recommend opportunities 
     for cooperative arrangements with State and local 
     governments, educational institutions, local historical 
     organizations, and other appropriate entities to preserve and 
     interpret key sites in the history of desegregation in public 
     education.
       (c) Cooperative Agreements.--The Secretary may enter into 
     cooperative agreements with one or more major educational 
     institutions, public history organizations, or civil rights 
     organizations knowledgeable about desegregation in public 
     education to prepare the theme study and to ensure that the 
     theme study meets scholarly standards.
       (d) Theme Study Coordination with General Management 
     Plan.--The theme study shall be prepared as part of the 
     preparation and development of the general management plan 
     for the Little Rock Central High School National Historic 
     Site established in section 2.

     SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated such sums as may be 
     necessary to carry out this Act.
                                 ______
                                 
      By Mr. CONRAD (for himself and Mr. Hatch):
  S. 2233. A bill to amend section 29 of the Internal Revenue Code of 
1986 to extend the placed in service date for biomass and coal 
facilities; to the Committee on Finance.


               Biomass and Coal Facilities Extension Act

  Mr. CONRAD. Mr. President, today I am pleased to join with my friend 
from Utah, Senator Hatch, in the introduction of the Biomass and Coal 
Facilities Extension Act. This legislation would extend by eight months 
the placed-in-service date under section 29 of the Internal Revenue 
Code.
  This change is necessary in order to alleviate the hardship suffered 
by taxpayers who relied on action Congress took almost two years ago, 
and made substantial commitments of resources to develop alternative 
fuel technology projects. These commitments were made in good faith 
pursuant to the 1996 Small Business Protection Act, in which Congress 
amended section 29 for synthetic coal and biomass by extending the 
``binding contract'' provision for 12 months to December 31, 1996 and 
extending the ``placed-in-service'' provision for 18 months to June 30, 
1998.
  That should have settled the matter. However, when the 
Administration's fiscal year 1998 budget was submitted in February 
1997, it contained a proposal to shorten by a full year the placed-in-
service date for facilities producing gas from biomass and synthetic 
fuel from coal. The Administration was concerned about what it 
characterized as rapid growth in the section 29 credit. Congress 
considered that argument and concluded that any concern about the 
growth in the credit had been dealt with adequately in the 1996 Act.
  In the tax legislative arena, even a mere proposal can have 
consequences, as the Administration's proposal to shorten the placed-
in-service date illustrates. The Joint Committee on Taxation's analysis 
of the proposal, made in March 1997, warned Congress about just such a 
consequence as it noted that ``[b]ecause the binding contract date has 
already passed * * * the proposal might place an unfair financial 
burden on those taxpayers who are bound to contracts entered into prior 
to the Administration's announcement.''
  Mr. President, that is exactly what happened--taxpayers in that 
situation lost their sources of financing because financial 
institutions had to treat the Administration proposal as a real 
possibility. Because the tax credit plays a significant role in the 
overall financial situation that lenders have to consider, its 
potential loss made securing necessary financing impossible for 
taxpayers who were proceeding under binding contracts made in good 
faith reliance on the Small Business Protection Act of 1996.
  The bill we offer today would simply restore some of the lost time 
that taxpayers endured as a result of the unintended consequences 
stemming from Congressional consideration of the Administration's 1997 
budget proposal. It would extend the placed-in-service date from June 
30, 1998 to a date eight months from the date of the bill's enactment.
  Taxpayers took Congress at its word in 1996 when it said that the 
development of environmentally friendly fuels from domestic biomass and 
coal resources was worth supporting. Their subsequent investment of 
large amounts of time, effort, and money should be allowed to fulfill 
its objectives rather than simply be forfeited as a result of 
circumstances over which these taxpayers had no control.
  This is a modest proposal; it would not disturb the ``binding 
contract'' date of the 1996 Act. Thus, no new projects would qualify 
because of its enactment. It seeks only to allow taxpayers who began 
projects under the 1996 Act to proceed in an orderly manner--an option 
that was effectively denied them as a result of the uncertainty created 
during consideration of the fiscal year 1998 budget.
  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. 2233

       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 ``Biomass and Coal Facilities 
     Extension Act''.

[[Page S7197]]

     SEC. 2 EXTENSION OF PLACED IN SERVICE DATE FOR BIOMASS AND 
                   COAL FACILITIES.

       (a) In General.--Section 29(g)(1)(A) of the Internal 
     Revenue Code of 1986 (relating to extension for certain 
     facilities) is amended by striking ``July 1, 1998'' and 
     inserting ``the date which is 8 months after the date of the 
     enactment of the Biomass and Coal Facilities Extension Act''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this 
     Act.

 Mr. HATCH. Mr. President, today with my colleague, Senator 
Conrad, I introduce the Biomass and Coal Facilities Extension Act. This 
legislation would extend the ``placed in service'' date under section 
29 for facilities that produce alternative fuels by 8 months.
  Section 29 was originally created to encourage the development of 
alternative fuels to reduce our dependence on imports and to reduce the 
environmental impacts of certain fuels. With the enormous reserves of 
low rank coals and lignite in the United States and around the world, 
and with the potential for use of biomass and other alternatives, it is 
particularly important to the American economy and the world's 
environment that new, more environmentally friendly fuels are brought 
to market here and in developing nations.
  Bringing new technologies to market is financially risky. In 
particular, finding investors to take a new technology from a 
laboratory table to the market is difficult because working the bugs 
out of a first-of-a-kind, full-sized plant is a costly undertaking. 
Incentives to bring new, clean energy technologies to the market in the 
U.S. are a worthwhile use of the code.
  The 1996 Small Business Protection Act provided sufficient incentives 
to make the development of alternative fuels a viable pursuit. In 
particular, it extended the section 29 ``placed in service'' date for 
facilities designed to produce energy from biomass or processed coals 
to July 1, 1998, provided that those facilities were constructed 
pursuant to a binding contract entered into before January 1, 1997.
  However, the Administration's budget proposal, released in February 
1997, effectively nullified the extension granted by Congress in the 
1996 Small Business Protection Act. The Administration proposed that 
the placed in service date be moved up one year, to July 1, 1997, 
which, for many of these projects, was an impossible deadline to meet.
  Without the assurance of the section 29 tax credit, financing for 
these projects dried up, stranding taxpayers in contracts, some of 
which contained significant liquidated damages clauses, already entered 
into in reliance on the Small Business Protection Act of 1996. As a 
result of the Administration's proposal, taxpayers essentially lost 8 
months of the extension given them in 1996.
  Mr. President, the bill before us would give these lost months back 
to companies with contracts signed by January 1, 1997. This bill does 
not extend the contract deadline, allow more projects to be initiated, 
or change the 2008 deadline for receiving the section 29 tax credit. 
This bill simply restores the time taxpayers lost in their efforts to 
develop environmentally friendly fuels under section 29.
  Bringing new alternative fuel technologies to the market is an 
important part of our commitment to a cleaner environment and a secure 
economy. We reflected that commitment in our efforts to mitigate some 
of the financial risk involved in developing this much needed 
technology in the Small Business Protection Act of 1996. This bill 
maintains that commitment. I urge my colleagues to support this 
legislation.
                                 ______
                                 
      By Mr. CAMPBELL (for himself and Mr. Jeffords):
  S. 2235. A bill to amend part Q of the Omnibus Crime Control and Safe 
Streets Act of 1968 to encourage the use of school resource officers; 
to the Committee on the Judiciary.


       THE SCHOOL RESOURCE OFFICERS PARTNERSHIP GRANT ACT OF 1998

  Mr. CAMPBELL. Mr. President, today I introduce the School Resource 
Officers Partnership Grant Act of 1998, a bill which will be an 
important step in our efforts to end crime in our nation's schools. 
This bill will help build thousands of deep, meaningful and lasting 
partnerships between America's local school systems, school children, 
and local law enforcement agencies. I am joined in introducing this 
legislation by my friend and colleague from Vermont, Senator Jim 
Jeffords, as an original cosponsor.
  The need for this bill is clear. Violence in schools is both serious 
and deadly. Violence is disrupting our children's opportunity and 
ability to learn. No child anywhere in America should have to go to 
school with fear on their mind, rather than learning. The recent 
school-related shootings stand as stark and horrific examples of just 
how urgent the situation has become. These recent school shootings have 
occurred in suburbs, small towns, and major metropolitan areas all 
across our nation. They have shattered the myth that school violence is 
a problem solely confined to the inner cities. Events now clearly show 
that the potential for serious and deadly school violence is 
everywhere. Something must be done to ensure that our schools provide a 
safe place for our children to learn and grow.
  Under this bill, schools in partnerships with local law enforcement 
agencies would be eligible to receive federal funding to hire ``School 
Resource Officers'' (SROs). A SRO would be a career law enforcement 
officer, with sworn authority, deployed in community oriented policing, 
and assigned by the employing police department or agency to work in 
collaboration with schools and community-based organizations. The SROs 
would be able to assist in several primary activities. First, SROs 
would address crime and disorder problems with a special focus on 
gangs, drug-related activities, and other crimes occurring in or around 
our schools. Second, SROs would develop or expand crime prevention 
efforts in cooperation with students. Third, SROs would help educate 
potential school-age victims in crime prevention and personal safety 
awareness. Fourth, SROs would develop or expand community justice 
initiatives. Fifth, and clearly increasingly more important in light of 
the recent school shootings, is that the SROs would train students in 
conflict resolution and teach students how to resolve their differences 
without feeling the need to resort to violence. Where childhood 
schoolyard hard feelings used to occasionally result in a scuffle, we 
now live in a time where they are resolved with firearms and lead to 
serious wounds and even death. This simply must end. Sixth, SROs would 
help identify changes in the school environment, like new graffiti or 
other indications of gang activity, that provide vital indicators. And 
finally, SROs would assist with the development of anti-crime, school 
policy and procedural changes.
  According to the National School Safety Center, 25 students have been 
killed in U.S. schools since January 1, 1998. This is the same number 
of students that were killed for the full 1996 school year, but in half 
the time. At this rate, we are on track to a doubling of the schoolyard 
murder rate in just two short years.
  The current school-based partnership grant program, which is 
administered by the Justice Department's Office of Community Oriented 
Policing Services (COPS), is not defined by statute, nor is the 
description of the qualifications and responsibilities of SROs. This 
legislation would ensure that SROs are career law enforcement officers, 
deployed in community-oriented policing assignments and directed by 
their agencies to work in collaboration with schools and other 
community-based organizations to address crime problems and assist 
school authorities in educating students about crime and violence 
prevention.
  This legislation complements the existing school-based partnership 
research grant program administered by the COPS office. The existing 
demonstration program provides funds to specific, and relatively small 
scale, youth crime prevention programs. My legislation would build on 
this solid foundation, and allow the COPS program resources to be freed 
up for widespread and comprehensive partnerships between our nation's 
schools and law enforcement agencies, with the SROs providing the vital 
link between the two.
  In addition, my bill is a companion to H.R. 4009, which our colleague 
in the House of Representatives, Congressman

[[Page S7198]]

Jim Maloney of Connecticut, introduced on June 5, 1998. This bill has 
received the endorsement of a number of education and law enforcement 
groups including the National Education Association, the International 
Brotherhood of Police, the Fraternal Order of Police. I believe that 
this powerful combination of endorsements clearly reflects the strength 
of, and compelling need for, this legislation.
  On June 23rd , Senator Judd Gregg, Chairman of the Senate 
Appropriations Subcommittee on Commerce, Justice, State and the 
Judiciary, unveiled a $210 million Safe Schools Initiative. Largely 
thanks to Senator Gregg, the funding needed to combat school violence 
is on track to be made available in a few short months, on October 1st, 
1998, the start of Fiscal Year 1999.
  Together, these initiatives will target important funding and 
resources to where it is most urgently needed, in our nation's schools. 
I urge my colleagues to support passage of this legislation.
  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. 2235

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

     SECTION 1. SCHOOL RESOURCE OFFICERS.

       Part Q of title I of the Omnibus Crime Control and Safe 
     Streets Act of 1968 (42 U.S.C. 3796dd et seq.) is amended--
       (1) in section 1701(d)--
       (A) by redesignating paragraphs (8) through (10) as 
     paragraphs (9) through (11), respectively; and
       (B) by inserting after paragraph (7) the following:
       ``(8) establish school-based partnerships between local law 
     enforcement agencies and local school systems by using school 
     resource officers who operate in and around elementary and 
     secondary schools to combat school-related crime and disorder 
     problems, gangs, and drug activities;''; and
       (2) in section 1709--
       (A) by redesignating the first 3 undesignated paragraphs as 
     paragraphs (1) through (3), respectively; and
       (B) by adding at the end the following:
       ``(4) `school resource officer' means a career law 
     enforcement officer, with sworn authority, deployed in 
     community-oriented policing, and assigned by the employing 
     police department or agency to work in collaboration with 
     schools and community-based organizations--
       ``(A) to address crime and disorder problems, gangs, and 
     drug activities affecting or occurring in or around an 
     elementary or secondary school;
       ``(B) to develop or expand crime prevention efforts for 
     students;
       ``(C) to educate likely school-age victims in crime 
     prevention and safety;
       ``(D) to develop or expand community justice initiatives 
     for students;
       ``(E) to train students in conflict resolution, restorative 
     justice, and crime awareness;
       ``(F) to assist in the identification of physical changes 
     in the environment that may reduce crime in or around the 
     school; and
       ``(G) to assist in developing school policy that addresses 
     crime and to recommend procedural changes.''.
                                 ______
                                 
      By Mr. LOTT (for himself, Mr. Lieberman, Mr. Helms, Mr. Kyl, Mr. 
        Brownback, Mr. Shelby, and Mr. McCain):
  S.J. Res. 54. A joint resolution finding the Government of Iraq in 
unacceptable and material breach of its international obligations; to 
the Committee on Foreign Relations.


             iraqi violations of international obligations

  Mr. LOTT. Mr. President, I am pleased to introduce today S.J. Res. 54 
concerning Iraq's violations of the cease-fire agreement that ended 
Operation Desert Storm in 1991.
  Yesterday, the Chairman of the United Nations Special Commission 
(UNSCOM) presented clear and compelling evidence to the U.N. Security 
Council that Iraq has lied about a critical aspect of its weapons of 
mass destruction programs.
  UNSCOM has uncovered proof that Iraq has turned the deadly nerve 
agent known as VX into missile warheads. Iraq still denies the truth 
today, but no one should be fooled. The proof is certain.
  And no one should be surprised. Iraq has consistently lied to UNSCOM 
for 8 years. It denied having any biological weapons. Iraq concealed 
the number of missiles it possessed. Iraq has refused to account for 
its chemical weapons programs. Iraq has refused to provide access to 
sites or documents necessary for UNSCOM to complete its work.
  In the past, under both this administration and the previous 
administration, Iraq's violations led to action on the part of the U.S. 
Iraq has been found to be in material breach on many occasions which 
are spelled out in this resolution. Military action has been threatened 
and even employed to force compliance.
  But now there is a different tune from the Clinton Administration. 
Now the Clinton Administration is on the defensive. Just keeping U.N. 
sanctions on seems to be enough--even though a U.S. veto would keep 
sanctions in place regardless of Russian or French pressure. I cannot 
understand why the Administration has been so passive in the face of 
the smoking fun demonstrating Iraq's deception to the world.
  Earlier this year, President Clinton came close to using military 
force in response to Iraq's violations. Instead, U.N. Secretary General 
Annan went to Baghdad and made a deal with Saddam Hussein. Hussein 
promised to do what he has been obligated to do since 1991. In return, 
a new ``Special Envoy'' for Iraq was created. Special procedures of 
certain UNSCOM inspections were laid out.
  If the goal was to avoid the difficult decision to use force, the 
Clinton Administration was successful. If the goal was to achieve Iraqi 
compliance with its international obligations, the Clinton 
Administration has failed.
  In recent months there are a number of signs that the Clinton 
Administration is abandoning a serious policy toward Iraq. First, U.S. 
military deployments in the Persian Gulf have been reduced. There has 
been no change in Iraqi behavior. Congress fully funded the deployments 
through the fiscal year. Yet the force without which diplomacy is empty 
has been significantly and unilaterally reduced.

  Second, the Administration refuses to support effective opposition to 
Saddam Hussein. The Congress provided $5 million in support for the 
Iraqi democratic opposition and required the Administration to submit 
its plan to Congress for using the money in 30 days. Today, almost 60 
days later, we have received no report.
  The Administration has refused to provide direct support to the Iraqi 
National Congress--the opposition group most effective in challenging 
Saddam Hussein in the past. Instead, they provided a list of dozens of 
so-called opposition groups that included fronts for Syrian 
intelligence, groups compromised by Iraq, groups linked to Iran, and a 
number of cultural and religious groups with no history in political 
opposition. This list--and the absence of a report--make it seem the 
Administration has no interest in an effective policy of supporting the 
Iraqi opposition.
  Third, the Administration is acting in a very bizarre way in the case 
of Iraqis detained by the Immigration and Naturalization Service in 
California. Six Iraqis involved in efforts to overthrow Saddam 
Hussein--part of more than 6,000 evacuated after Saddam invaded 
northern Iraq--are now subject to secret deportation proceedings. 
former CIA Director Woosley is representing them free of charge, but 
even he has been denied an opportunity to see the alleged ``evidence'' 
gathered by INS. Something very suspicious is going on here. The 
Congress will look at why the executive branch is trying to send Iraqis 
who supported our goals in Iraq back to certain death at the hands of 
Saddam Hussein.
  Fourth, the U.S. acquiesced in a dramatic expansion of Iraq's oil 
exports for the ostensible purpose of feeding Iraqis. The new program, 
approved just before Secretary General Annan left for Baghdad, allows 
Iraq to export more than $10 billion a year. This is not about feeding 
Iraqis--it is about repairing Iraq's oil infrastructure, building roads 
and otherwise helping Saddam Hussein provide the services he has been 
denied because of U.N. sanctions. It goes a long way to allowing Saddam 
Hussein to enjoy the benefits of ending sanctions while the U.S. has 
received no additional support for keeping sanctions on Iraq. It is a 
bad deal that seems to be getting worse--for our position.
  Finally, there is the mute response to evidence of the weaponization 
of VX by Saddam Hussein's regime. This is one of the most deadly 
substances know to man. A single drop can kill a person. Saddam Hussien 
had it in missile warheads. He denied it. UNSCOM caught him in his 
lies--again.

[[Page S7199]]

  The Administration needs to do more than simply hear the evidence and 
say the sanctions should remain. They need to develop and implement a 
coherent policy that addresses the threat posed by Saddam Hussien's 
regime. The need to respond--as the U.S. and even the U.N.--has 
responded before to material breaches by Iraq. Instead they are, in 
effect, looking the other way and hoping the French and Russians are 
not too offended by UNSCOM.
  This resolution is intended to put pressure on the Administration to 
act on the information uncovered by UNSCOM. This is a material and 
unacceptable breach of Iraq's obligations. If the Administration 
refuses to act, Congress will be forced to step into the vacuum.
  I would like to thank the cosponsors of the resolution: Senators 
Lieberman, Helms, Kyl, Shelby, Brownback, and McCain. I look forward to 
continuing to work with them in supporting an effective policy toward 
Iraq.
  Mr. President, I ask unanimous consent that the text of the joint 
resolution be printed in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S.J. Res. 54

       Whereas hostilities in Operation Desert Storm ended on 
     February 28, 1991, and the conditions governing the cease-
     fire were specified in United Nations Security Council 
     Resolutions 686 (March 2, 1991) and 687 (April 3, 1991);
       Whereas United Nations Security Council Resolution 687 
     requires that international economic sanctions remain in 
     place until Iraq discloses and destroys its weapons of mass 
     destruction programs and capabilities and undertakes 
     unconditionally never to resume such activities;
       Whereas Resolution 687 established the United Nations 
     Special Commission on Iraq (UNSCOM) to uncover all aspects of 
     Iraq's weapons of mass destruction programs and tasked the 
     Director-General of the International Atomic Energy Agency to 
     locate and remove or destroy all nuclear weapons systems, 
     subsystems or material from Iraq;
       Whereas United Nations Security Council Resolution 715, 
     adopted on October 11, 1991, empowered UNSCOM to maintain a 
     long-term monitoring program to ensure Iraq's weapons of mass 
     destruction programs are dismantled and not restarted;
       Whereas Iraq has consistently fought to hide the full 
     extent of its weapons programs, and has systematically made 
     false declarations to the Security Council and to UNSCOM 
     regarding those programs, and has systematically obstructed 
     weapons inspections for seven years;
       Whereas In June 1991, Iraq forces fired on International 
     Atomic Energy Agency inspectors and otherwise obstructed and 
     misled UNSCOM inspectors, resulting in UN Security Council 
     Resolution 707 which found Iraq to be in ``material breach'' 
     of its obligations under United Nations Security Council 
     Resolution 687 for failing to allow UNSCOM inspectors access 
     to a site storing nuclear equipment;
       Whereas in January and February of 1992, Iraq rejected 
     plans to instal long-term monitoring equipment and cameras 
     called for in UN resolutions, resulting in a Security Council 
     Presidential Statement of February 19, 1992 which declared 
     that Iraq was in ``continuing material breach'' of its 
     obligations;
       Whereas in February of 1992, Iraq continued to obstruct the 
     installation of monitoring equipment, and failed to comply 
     with UNSCOM orders to allow destruction of missiles and other 
     proscribed weapons, resulting the Security Council 
     Presidential Statement of February 28, 1992 which reiterated 
     that Iraq was in ``continuing material breach'' and noted a 
     ``further material breach'' on account of Iraq's failure to 
     allow destruction of ballistic missile equipment;
       Whereas on July 5, 1992, Iraq denied UNSCOM inspectors 
     access to the Iraqi Ministry of Agriculture, resulting in a 
     Security Council Presidential Statement of July 6, 1992 which 
     declared that Iraq was in ``material and unacceptable 
     breach'' of its obligations under UN resolutions;
       Whereas in December of 1992 and January of 1993, Iraq 
     violated the southern no-fly zone, moved surface to air 
     missiles into the no-fly zone, raided a weapons depot in 
     internationally recognized Kuwaiti territory and denied 
     landing rights to a plane carrying UN weapons inspectors, 
     resulting in a Security Council Presidential Statement of 
     January 8, 1993 which declared that Iraq was in an 
     ``unacceptable and material breach'' of its obligations under 
     UN resolutions;
       Whereas in response to continued Iraqi defiance, a Security 
     Council Presidential Statement of January 11, 1993 reaffirmed 
     the previous finding of material breach, followed on January 
     13 and 18 by allied air raids, and on January 17 with an 
     allied missile attack on Iraqi targets;
       Whereas on June 10, 1993, Iraq prevented UNSCOM's 
     installation of cameras and monitoring equipment, resulting 
     in a Security Council Presidential Statement of June 18, 1993 
     declaring Iraq's refusal to comply to be a ``material and 
     unacceptable breach'';
       Whereas on October 6, 1994, Iraq threatened to end 
     cooperation with weapons inspectors if sanctions were not 
     ended, and one day later, massed 10,000 troops within 30 
     miles of the Kuwaiti border, resulting in United Nations 
     Security Council Resolution 949 demanding Iraq's withdrawal 
     from the Kuwaiti border area and renewal of compliance with 
     UNSCOM;
       Whereas on April 10, 1995, UNSCOM reported to the Security 
     Council that Iraq had concealed its biological weapons 
     program, and had failed to account for 17 tons of biological 
     weapons material resulting in the Security Council's renewal 
     of sanctions against Iraq;
       Whereas on July 1, 1995, Iraq admitted to a full scale 
     biological weapons program, but denied weaponization of 
     biological agents, and subsequently threatened to end 
     cooperation with UNSCOM resulting in the Security Council's 
     renewal of sanctions against Iraq;
       Whereas on March 8, 11, 14 and 15, 1996, Iraq again barred 
     UNSCOM inspectors from sites containing documents and 
     weapons, in response to which the Security Council issued a 
     Presidential Statement condemning ``clear violations by Iraq 
     of previous Resolutions 687, 707 and 715.'';
       Whereas from June 11-15, 1996, Iraq repeatedly barred 
     weapons inspectors from military sites, in response to which 
     the Security Council adopted United Nations Security Council 
     Resolution 1060, noting the ``clear violation on United 
     Nations Security Council Resolutions 687, 707 and 715'' and 
     in response to Iraq's continued violations, issued a 
     Presidential statement detailing Iraq's ``gross violation of 
     obligations'';
       Whereas in August 1996, Iraqi troops overran Irbil, in 
     Iraqi Kurdistan, employing more than 30,000 troops and 
     Republican Guards, in response to which the Security Council 
     briefly suspended implementation on United Nations Security 
     Council Resolution 986, the UN oil for food plan;
       Whereas in December 1996, Iraq prevented UNSCOM from 
     removing 130 Scud missile engines from Iraq for analysis, 
     resulting in a Security Council presidential statement which 
     ``deplore[d]'' Iraq's refusal to cooperate with UNSCOM;
       Whereas on April 9, 1997, Iraq violated the no-fly zone in 
     southern Iraq and United Nations Security Council Resolution 
     670, banning international flights, resulting in a Security 
     Council statement regretting Iraq's lack of ``specific 
     consultation'' with the Council;
       Whereas on June 4 and 5, 1997 Iraqi officials on board 
     UNSCOM aircraft interfered with the controls and inspections, 
     endangering inspectors and obstructing the UNSCOM mission, 
     resulting in a UN Security Council presidential statement 
     demanding Iraq end its interference and on June 21, 1997, 
     United Nations Security Council Resolution 1115 threatened 
     sanctions on Iraqi officials responsible for these 
     interferences;
       Whereas on September 13, 1997 during an inspection mission, 
     an Iraqi official attacked UNSCOM officials engaged in 
     photographing illegal Iraqi activities, resulting in the 
     October 23, 1997 adoption of United Nations Security Council 
     Resolution 1134 which threatened a travel ban on Iraqi 
     officials responsible for non-compliance with UN resolutions;
       Whereas on October 29, 1997, Iraq announced that it would 
     no longer allow American inspectors working with UNSCOM to 
     conduct inspections in Iraq, blocking UNSCOM teams containing 
     Americans to conduct inspections and threatening to shoot 
     down U.S. U-2 surveillance flights in support of UNSCOM, 
     resulting in a United Nations Security Council Resolution 
     1137 on November 12, 1997 which imposed the travel ban on 
     Iraqi officials and threatened unspecified ``further 
     measures.''
       Whereas on November 13, 1997, Iraq expelled U.S. inspectors 
     from Iraq, leading to UNSCOM's decision to pull out its 
     remaining inspectors and resulting in a United Nations 
     Security Council presidential statement demanding Iraq revoke 
     the expulsion;
       Whereas on January 16, 1998, an UNSCOM team led by American 
     Scott Ritter was withdrawn from Iraq after being barred for 
     three days by Iraq from conducting inspections, resulting in 
     the adoption on a United Nations Security Council 
     presidential statement deploring Iraq's decision to bar the 
     team as a clear violation of all applicable resolutions;
       Whereas, despite clear agreement on the part of Iraqi 
     President Saddam Hussein with United Nations Secretary 
     General Kofi Annan to grant access to all sites, and fully 
     cooperate with UNSCOM, and the adoption on March 2, 1998 of 
     United Nations Security Council Resolution 1154, warning that 
     any violation of the agreement with Annan would have the 
     ``severest consequences'' for Iraq, Iraq has continued to 
     actively conceal weapons and weapons programs, provide 
     misinformation and otherwise deny UNSCOM inspectors access;
       Whereas on June 24, 1998, UNSCOM Director Richard Butler 
     presented information to the UN Security Council indicating 
     clearly that Iraq, in direct contradiction to information 
     provided to UNSCOM, weaponized the nerve agent VX;
       Whereas Iraq's continuing weapons of mass destruction 
     programs threaten vital United States interests and 
     international peace and security; and
       Whereas the United States has existing authority to defend 
     United States interests in the Persian Gulf region; Now, 
     therefore, be it
       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, That the 
     Government of Iraq is in material and unacceptable breach

[[Page S7200]]

     of its international obligations, and therefore, the 
     President of the United States is urged to act accordingly.

                          ____________________