[Congressional Record Volume 144, Number 88 (Tuesday, July 7, 1998)]
[Senate]
[Pages S7574-S7580]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. TORRICELLI (for himself and Mr. Wellstone):

[[Page S7575]]

  S. 2265. A bill to amend the Social Security Act to waive the 24-
month waiting period for Medicare coverage of individuals disabled with 
amyotrophic lateral sclerosis (ALS), to provide Medicare coverage of 
drugs used for treatment of ALS, and to amend the Public Health Service 
Act to increase Federal funding for research on ALS; to the Committee 
on Finance.


amyotrophic lateral sclerosis (als) research, treatment, and assistance 
                              act of 1998

 Mr. TORRICELLI. Mr. President, today I introduce legislation 
that will improve the lives of 30,000 Americans, 850 of whom live in my 
State of New Jersey, who are stricken with Amyotrophic Lateral 
Sclerosis (ALS). Many of us know ALS as the disease that struck down 
the famed Yankees 1st baseman, Lou Gehrig. Today, few of us are aware 
of the tragic effects ALS still has on its victims.
  First diagnosed over 130 years ago, ALS is a fatal neurological 
disorder that usually strikes individuals over 50 years old. Each year, 
over 5,000 new cases are diagnosed, and tragically, life expectancy is 
only 3 to 5 years. The financial costs to families of persons with ALS 
can be up to $200,000 a year.
  Mr. President, the legislation I introduce today addresses the need 
for the federal government to provide increased medical services and 
research for ALS. First, the bill waives the 24-month waiting period 
that ALS patients must endure in order to receive Medicare services. 
Since the life-expectancy for ALS patients is only a few short years, 
it is crucial that these individuals have access to Medicare services 
as soon as possible. It makes absolutely no sense to require 
individuals to wait two years to receive Medicare services when their 
life expectancy is only three to five years.
  Next, the legislation will ensure Medicare provides coverage for all 
Food and Drug Administration (FDA) drugs used to treat ALS. Medicare 
typically does not provide coverage for drug therapies, but in the case 
of ALS, the need for an exception is clear. In addition, expanding 
Medicare coverage for ALS therapies will hopefully stimulate further 
research.
  Finally, the bill recognizes the need to increase critical research 
into ALS by authorizing $25 million to the National Institutes of 
Health.
  Mr. President, this legislation is simple, it's modest, and the logic 
is overwhelming. ALS is a disease that strikes at every community, with 
the potential for every American. No one is immune, and everyone is 
vulnerable. I am pleased to be joined by my colleague Senator Wellstone 
in introducing legislation that represents a first real step toward 
improving the quality of life for people with ALS while bringing us 
much closer to finding a cause and a cure.
  Mr. President, I ask unanimous consent that the text of the bill, in 
its entirety, be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; FINDINGS; PURPOSES.

       (a) Short Title.--This Act may be cited as the 
     ``Amyotrophic Lateral Sclerosis (ALS) Research, Treatment, 
     and Assistance Act of 1998''.
       (b) Findings.--Congress finds the following:
       (1) Amyotrophic lateral sclerosis (ALS), commonly known as 
     Lou Gehrig's Disease, is a progressive neuromuscular disease 
     characterized by a degeneration of the nerve cells of the 
     brain and spinal cord leading to the wasting of muscles, 
     paralysis, and eventual death.
       (2) Approximately 30,000 individuals in the United States 
     are afflicted with ALS at any time, with approximately 5,000 
     new cases appearing each year.
       (3) ALS usually strikes individuals who are 50 years of age 
     or older.
       (4) The life expectancy of an individual with ALS is 3 to 5 
     years from the time of diagnosis.
       (5) There is no known cure or cause for ALS.
       (6) Aggressive treatment of the symptoms of ALS can extend 
     the lives of those with the disease. Recent advances in ALS 
     research have produced promising leads, many related to 
     shared disease processes that appear to operate in many 
     neurodegenerative diseases.
       (c) Purposes.--The purposes of this Act are--
       (1) to assist individuals suffering from ALS by waiving the 
     24-month waiting period for medicare eligibility on the basis 
     of disability for ALS patients and to provide medicare 
     coverage for outpatient drugs and therapies for ALS; and
       (2) to increase Federal funding of research into the cause, 
     treatment, and cure of ALS.

     SEC. 2. WAIVER OF 24-MONTH WAITING PERIOD FOR MEDICARE 
                   COVERAGE OF INDIVIDUALS DISABLED WITH 
                   AMYOTROPHIC LATERAL SCLEROSIS (ALS).

       (a) In General.--Section 226 of the Social Security Act (42 
     U.S.C. 426) is amended--
       (1) by redesignating subsection (h) as subsection (j); and
       (2) by inserting after subsection (g) the following new 
     subsection:
       ``(h) For purposes of applying this section in the case of 
     an individual medically determined to have amyotrophic 
     lateral sclerosis (ALS), the following special rules apply:
       ``(1) Subsection (b) shall be applied as if there were no 
     requirement for any entitlement to benefits, or status, for a 
     period longer than 1 month.
       ``(2) The entitlement under such subsection shall begin 
     with the first month (rather than twenty-fifth month) of 
     entitlement or status.
       ``(3) Subsection (f) shall not be applied.''.
       (b) Conforming Amendment.--Section 1837 of such Act (42 
     U.S.C. 1395p) is amended by adding at the end the following 
     new subsection:
       ``(j) In applying this section in the case of an individual 
     who is entitled to benefits under part A pursuant to the 
     operation of section 226(h), the following special rules 
     apply:
       ``(1) The initial enrollment period under subsection (d) 
     shall begin on the first day of the first month in which the 
     individual satisfies the requirement of section 1836(1).
       ``(2) In applying subsection (g)(1), the initial enrollment 
     period shall begin on the first day of the first month of 
     entitlement to disability insurance benefits referred to in 
     such subsection.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to benefits for months beginning after the date 
     of enactment of this Act.

     SEC. 3. MEDICARE COVERAGE OF DRUGS TO TREAT AMYOTROPHIC 
                   LATERAL SCLEROSIS (ALS).

       (a) In General.--Section 1861(s)(2) of the Social Security 
     Act (42 U.S.C. 1395x(s)(2)) is amended--
       (1) by striking ``and'' at the end of subparagraph (S);
       (2) by striking the period at the end of subparagraph (T) 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(U) any drug (which is approved by the Federal Food and 
     Drug Administration) prescribed for use in the treatment or 
     alleviation of symptoms relating to amyotrophic lateral 
     sclerosis (ALS);''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to drugs furnished on or after the first day of 
     the first month beginning after the date of enactment of this 
     Act.

     SEC. 4. INCREASED FEDERAL FUNDS FOR RESEARCH INTO AMYOTROPHIC 
                   LATERAL SCLEROSIS (ALS).

       For the purpose of conducting or supporting research on 
     amyotrophic lateral sclerosis through the National Institutes 
     of Health, there are authorized to be appropriated 
     $25,000,000 for fiscal year 1999, and such sums as may be 
     necessary for each of the fiscal years 2000 through 2003. 
     Such authorization is in addition to any other authorization 
     of appropriations that may be available for such 
     purpose.
                                 ______
                                 
      By Mr. THURMOND (for himself and Mr. Helms):
  S. 2266. A bill to amend the Americans with Disabilities Act of 1990 
and the Rehabilitation Act of 1973 to exempt State and local agencies 
operating prisons from the provisions relating to public services; to 
the Committee on Labor and Human Resources.


                   state and local prison relief act

  Mr. THURMOND. Mr. President, I rise today to introduce legislation to 
address an undue burden that has arisen out of the Americans with 
Disabilities Act.
  The purpose of the ADA to give disabled Americans the opportunity to 
fully participate in society and contribute to it. This was a worthy 
goal. But even legislation with the best of intentions often has 
unintended consequences. I submit that one of those is the application 
of the ADA to state and local prisons throughout America.
  Last month, the Supreme Court ruled in Pennsylvania Department of 
Corrections versus Yeskey that the ADA applies to every state prison 
and local jail in this country. The circuit courts were split on the 
issue. The Fourth Circuit Court of Appeals, my home circuit, forcefully 
concluded that the ADA, as well as its predecessor and companion law, 
the Rehabilitation Act, did not apply to state prisoners, focusing on 
federalism concerns and the fact that the Congress did not make clear 
that it intended to involve itself to this degree in an activity 
traditionally reserved to the states.
  However, the Supreme Court did not agree, holding that the language 
of the

[[Page S7576]]

Act is broad enough to clearly cover state prisons. It is not an issue 
on the Federal level because the Federal Bureau of Prisons voluntarily 
complies with the Act. The Supreme Court did not say whether applying 
the ADA to state prisons exceeded the Congress' powers under the 
Commerce Clause or the Fourteenth Amendment, but we should not wait on 
the outcome of this argument to act. Although it was rational for the 
Supreme Court to read the broad language of the ADA the way it did, it 
is far from clear that we in the Congress considered the application of 
this sweeping new social legislation in the prison environment.
  The Seventh Circuit recognized that the ``failure to exclude 
prisoners may well have been an oversight.'' The findings and purpose 
of the law seem to support this. The introductory language of the ADA 
states, ``The Nation's proper goals regarding individuals with 
disabilities are to assure quality of opportunity, full participation, 
independent living, and economic self-sufficiency'' to allow ``people 
with disabilities * * * to compete on an equal basis and to pursue 
those opportunities for which our free society is justifiably famous.'' 
Of course, a prison is not a free society, as the findings and purpose 
of the Act envisioned. Indeed, it is quite the opposite. In short, as 
the Ninth Circuit explained, ``The Act was not designed to deal 
specifically with the prison environment; it was intended for general 
societal application.''
  In any event, now that the Supreme Court has spoken, it is time for 
the Congress to confront this issue. The Congress should act now to 
exempt state and local prisons from the ADA. If we do not, this law 
will have broad adverse implications for the management of these 
institutions. Prisoners will file an endless number of lawsuits 
demanding special privileges, which will involve Federal judges in the 
intricate details of running our state and local prisons.
  Mr. President, we should continuously remind ourselves that the 
Constitution created a Federal government of limited, enumerated 
powers. Those powers not delegated to the Federal government were 
reserved to the states or the people. As James Madison wrote in 
Federalist No. 45, ``the powers delegated to the Federal government are 
few and definite. * * * [The powers] which are to remain in the State 
governments are numerous and indefinite.'' The Federal government 
should avoid intrusion into matters traditionally reserved for the 
states. We must respect this delicate balance of power. Unfortunately, 
federalism is more often spoken about than respected.
  Although the entire ADA raises federalism concerns, the problem is 
especially acute in the prison context. There are few powers more 
traditionally reserved for the states than crime. The crime laws have 
always been the province of the states, and the vast majority of 
prisoners have always been housed in state prisons. The First Congress 
enacted a law asking the states to house Federal prisoners in their 
jails for fifty cents per month. The first Federal prison was not built 
until over 100 years later, and only three existed before 1925.
  Even today, as the size and scope of Federal government has grown 
immensely, only about 6% of prisoners are housed in 
Federal institutions. Managing that other 94% is a core state function. 
As the Supreme Court has stated,

       Maintenance of penal institutions is an essential part of 
     one of government's primary functions--the preservation of 
     societal order through enforcement of the criminal law. It is 
     difficult to imagine an activity in which a State has a 
     stronger interest, or one that is more intricately bound up 
     with state laws, regulations, and procedures.

  The primary function of prisons is to house criminals. Safety and 
security are the overriding concerns of prison administration. The 
rules and regulations, the daily schedules, the living and working 
arrangements--these all revolve around protecting prison employees, 
inmates, and the public. But the goal of the ADA is to take away any 
barrier to anyone with any disability. It requires the authorities to 
provide ``reasonable accommodation'' for essentially any disability 
unless doing so would impose an ``undue burden'' or ``a direct threat 
to the health or safety of others,'' as broadly defined by the courts. 
Accommodating inmates will interfere with the ability of prison 
administrators to keep safety and security their overriding concern.
  The practical effect of the ADA will be that prison officials will 
have to grant special privileges to certain inmates and to excuse 
others from complying with generally-applicable prison rules.
  The ADA presents a perfect opportunity for prisoners to try to beat 
the system, and use the courts to do it. There are over 1.6 million 
inmates in state prisons and local jails, and the numbers are rising 
every year. Indeed, the total prison population has grown about 6.5% 
per year since 1990. Prisons have a substantially greater percentage of 
persons with disabilities that are covered by the ADA than the general 
population, including AIDS, mental retardation, psychological 
disorders, learning disabilities, drug addiction, and alcoholism. 
Further, administrators control every aspect of prisoners' lives, such 
as assigning educational and vocational training, recreation, and jobs 
in prison industries. Combine these facts, and the opportunities for 
lawsuits are endless.
  For example, in most state prison systems, inmates are classified and 
assigned based in part on their disabilities. This helps administrators 
meet the disabled inmates' needs in a cost-effective manner. However, 
under the ADA, prisoners probably will be able to claim that they must 
be assigned to a prison without regard to their disability. Were it not 
for their disability, they may have been assigned to the prison closest 
to their home, and in that case, every prison would have to be able to 
accommodate every disability. That could mean every prison having, for 
example, mental health treatment centers, services for hearing-impaired 
inmates, and dialysis treatment. The cost is potentially enormous.
  Adequate funding is hard for prisons to achieve, especially in state 
and local communities where all government funds are scarce. The public 
is angry about how much money they have to spend to house prisoners. 
Even with prison populations rising, they do not want more of their 
money spent on prisoners. Often, there is simply not enough money to 
make the changes in challenged programs to accommodate the disabled. If 
prison administrators do not have the money to change a program, they 
will probably have to eliminate it. Thus, accommodation could mean the 
elimination of worthwhile educational, recreational, and rehabilitative 
programs, making all inmates worse off.
  Apart from money, accommodation may mean modifying the program in 
such a way as to take away its beneficial purpose. A good example is 
the Supreme Court's Yeskey case itself. Yeskey was declared medically 
ineligible to participate in a boot camp program because he had high 
blood pressure. So, he sued under the ADA. The boot camp required 
rigorous physical activity, such as work projects. If the program has 
to be changed to accommodate his physical abilities, it may not meet 
its basic goals, and the authorities may eliminate it. Thus, the result 
could be that everyone loses the benefit of an otherwise effective 
correctional tool.
  Another impact of the ADA may be to make an already volatile prison 
environment even more difficult to control. Many inmates are very 
sensitive to the privileges and benefits that others get in a world 
where privileges are relatively few. Some have irrational suspicions 
and phobias. An inmate who is not disabled may be angry if he believes 
a disabled prisoner is getting special treatment, without rationally 
accepting that the law requires it, and could take out his anger on 
others around him, including the disabled prisoner.

  We must keep in mind that it is judges who will be making these 
policy decisions. To determine what vague phrases like ``reasonable 
accommodation'' and ``undue burden'' mean, judges must get involved in 
intricate, fact-intensive issues, Essentially, the ADA requires judges 
to micromanage prisons. Judges are not qualified to second-guess prison 
administrators and make these complex, difficult decisions. Prisons 
cannot be run by judicial decree.
  The Supreme Court in recent years has recognized this. In apply 
Constitutional rights to prisoners, the Court

[[Page S7577]]

has tried to get away from micromanagement and has viewed prisoner 
claims deferentially in favor of the expertise of prison officials. It 
has stated that we will not ``substitute our judgment on difficult and 
sensitive matters of institutional administration for the 
determinations of those charged with the formidable task of running a 
prison. This approach ensures the ability of corrections officials to 
anticipate security problems and to adopt innovative solutions to the 
intractable problems of prison administration, and avoid unnecessary 
intrusion of the judiciary into problems particularly ill suited to 
resolution by decree.''
  Take for example a case from the Fourth Circuit, my home circuit, 
from 1995. The Court explained that a morbidly obese inmate presented 
corrections officials ``with a lengthy and ever-increasing list of 
modifications which he insisted were necessary to accommodate his obese 
condition. Thus, he demanded a larger cell, a cell closer to support 
facilities, handrails to assist him in using the toilet, wider 
entrances to his cell and the showers, non-skid matting in the lobby 
area, and alternative outdoor recreational activities to accommodate 
his inability to stand or walk for long periods.'' It is not workable 
for judges to resolve all of these questions.
  It is noteworthy that a primary purpose of the Prison Litigation 
Reform Act was to stop judges from micromanaging prisons and to reduce 
the burdens of prison litigation. As the Chief Justice of the Supreme 
Court recently recognized, the PLRA is having some success. However, 
this most recent Supreme Court decision will hamper that progress.
  Moreover, the ADA delegated to Federal agencies the authority to 
create regulations to implement the law. State and local correction 
authorities must fall in line behind these regulations. In yet another 
way, we will have the Justice Department exercising regulatory 
oversight over our state and local communities.
  Prisons are fundamentally different from other places in society. 
Prisoners are not entitled to all of the rights and privileges of law-
abiding citizens, but they often get them. They have cable television. 
They have access to better gyms and libraries than most Americans. The 
public is tired of special privileges for prisoners. Applying the ADA 
to prisons is a giant step in the wrong direction. Prisoners will abuse 
the ADA to get privileges they were previously denied, and the reason 
will be the overreaching hand of the Federal government. We should not 
let this happen.
  Mr. President, the National Government has gone full circle. We have 
gone from asking the states to house Federal prisoners to dictating to 
the states how they must house their own prisoners. There must be some 
end to the powers of the Federal government, and to the privileges it 
grants the inmates of this Nation. I propose that we start by passing 
this important legislation.
  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. 2266

       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 ``State and Local Prison 
     Relief Act''.

     SEC. 2. EXEMPTIONS FOR STATE AND LOCAL AGENCIES OPERATING 
                   PRISONS.

       (a) Americans with Disabilities Act of 1990.--Section 
     201(1) of the Americans with Disabilities Act of 1990 (42 
     U.S.C. 12131(1)) is amended by adding at the end the 
     following: ``The term `public entity' does not include any 
     department, agency, district, or instrumentality of a State 
     or local government that operates a prison, as defined in 
     section 3626(g) of title 18, United States Code, with respect 
     to the services, programs, or activities relating to the 
     prison.''.
       (b) Rehabilitation Act of 1973.--Section 504(b) of the 
     Rehabilitation Act of 1973 (29 U.S.C. 794(b)) is amended by 
     adding at the end of the following: ``Notwithstanding the 
     preceding sentence, for the purposes of this section, the 
     term `program or activity' does not include any operations 
     relating to a prison, as defined in section 3626(g) of title 
     18, United States Code, by any entity described in any of 
     paragraphs (1) through (4).''.
                                 ______
                                 
      By Mr. D'AMATO (for himself and Mr. Murkowski):
  S. 2267. A bill to amend the Internal Revenue Code of 1986 to grant 
relief to participants in multiemployer plans from certain section 415 
limits on defined benefit pension plans; to the Committee on Finance.


           multiemployer defined benefit pension legislation

  Mr. D'AMATO. Mr. President, today I introduce legislation with my 
friend and colleague, Senator Murkowski, to correct an inequity in the 
Tax Code that deprives working people of hard earned pension benefits. 
The problem is section 415 of the Internal Revenue Code, which sets 
compensation based limits and a dollar limit on pension plans. In 
effect, these section 415 limits discourage retirement savings.

  Workers are being denied the full benefits that they have earned 
through many years of labor and on which they and their spouses have 
counted in planning their retirement. We can all appreciate the 
frustration and anger of workers who are told, upon applying for their 
pension, that the federal government won't let their pension plan pay 
them the full amount of the benefits that they earned under the rules 
of their plan. For some workers, this benefit cutback means that they 
will not be able to retire when they wanted or needed to. For other 
workers, it means retirement with less income to live on, and in some 
cases, retirement without health care coverage and other necessities of 
life.
  The bill that Senator Murkowski and I are introducing today will give 
these workers relief from the most confiscatory provisions of section 
415 and enable them to receive the full measure of their retirement 
savings, consistent with the policy goals of the National Summit on 
Retirement Savings recently sponsored by the President and the 
Congress.
  Mr. President, Congress has recognized and corrected the adverse 
effects of section 415 on government employee pension plans. In fact, 
as part of the Small Business Jobs Protection Act of 1996 and the Tax 
Relief Act of 1997, we exempted government employee pension plans from 
the compensation-based limit, from certain early retirement limits, and 
from other provisions of section 415. Relief measures for workers 
covered by multiemployer plans have been passed three times by the 
Senate, most recently in the Senate version of the Taxpayer Relief Act 
of 1997. Unfortunately, those changes were not maintained in the 
Senate/House Conference Report.
  Section 415 was enacted more than two decades ago when the pension 
world was quite different than today. The section 415 limits were 
designed to contain the tax-sheltered pensions that could be received 
by highly paid executives and professionals. The passage of time and 
Congressional action has stood this original design on its head. Today, 
the limits are forcing cutbacks in the pensions of rank-and-file 
workers. Executives and professionals are now able to receive pensions 
far in excess of the section 415 limits by establishing non-qualified 
supplemental retirement programs.
  Generally, section 415 limits the benefits payable to a worker by 
defined benefit pension plans to the lesser of (1) the worker's average 
annual compensation for the three consecutive years when his 
compensation was the highest (the compensation-based limit); and (2) a 
dollar limit that is sharply reduced if a worker retires before the 
Social Security normal retirement age of 65 or 66.
  The compensation-based limit assumes that the pension earned under a 
plan is linked to each worker's salary, as is typical in corporate 
pension plans (e.g., a percentage of the worker's final year's salary 
for each year of employment). That assumption is wrong as applied to 
multiemployer pension plans. Multiemployer plans, which cover more than 
ten million individuals, have long based their benefits on the 
collectively bargained contribution rates and years of covered 
employment with one or more of the multiple employers which contribute 
to the plan. In other words, benefits earned under a multiemployer plan 
generally have no relationship to the wages received by a worker from 
the contributing employers. The same benefit level is paid to all 
workers with the same contribution and covered employment records 
regardless of their individual wage histories.

[[Page S7578]]

  A second assumption underlying the compensation based limit is that 
workers' salaries increase steadily over the course of their careers so 
that the three highest salary years will be the last three consecutive 
years. While this salary history may be the norm in the corporate 
world, it is unusual in the multiemployer plan world. In multiemployer 
plan industries like building and construction, a worker's wage 
earnings typically fluctuate from year-to-year according to several 
variables including the availability of covered work and whether the 
worker is unable to work due to illness or disability. An individual 
worker's wage history may include many dramatic ups-and-downs. Because 
of these fluctuations, the three highest years of compensation for many 
multiemployer plan participants are not consecutive. Consequently, the 
section 415 compensation-based limit for these workers is artificially 
low; lower than it should be if they were covered by corporate plans.
  The dollar limit under section 415 is forcing severe cutbacks in the 
earned pensions of workers who retire under multiemployer pension plans 
before they reach age 65. For example, construction work is physically 
hard, and is often performed under harsh climatic conditions. Workers 
are worn down sooner than those in most other industries. Often, early 
retirement is a must. Multiemployer pension plans accommodate these 
needs of their covered worker by providing for early retirement, 
disability, and service pensions that provide a subsidized, partial or 
full pension benefit.
  As it stands now, section 415 is forcing cutbacks in these pensions 
because the dollar limit is severely reduced for each year you are 
under the normal Social Security retirement age. For a worker who 
retires at age 50, the dollar limit restricts their pension at about 
$40,000 per year.
  This reduced limit applies regardless of the circumstances under 
which the worker retires and regardless of his plan's rules regarding 
retirement age. A multiemployer plan participant who becomes disabled 
and is forced into early retirement is nonetheless subject to the 
reduced limit. In addition, a construction worker who, after 30 years 
of demanding labor, has well-earned a 30-and-out service pension at age 
50, is nonetheless subject to the reduced limit.
  Our bill will ease this early retirement benefit cutback by extending 
to workers covered by multiemployer plans some of the more favorable 
early retirement rules that now apply to government employee pension 
plans and other retirement plans. These rules still provide for a 
reduced dollar limit for retirements earlier than age 62, but the 
reduction is less severe than under the current rules that apply to 
multiemployer plans.
  Mr. President, I am particularly concerned that early retirees who 
suffer pension benefit cutbacks will not be able to afford the health 
care coverage that they need. Workers who retire before they become 
eligible for Medicare are typically required to pay all or a 
substantial part of the cost of their health insurance. Section 415 
pension cutbacks deprive workers of income they need to bear these 
health care costs. This is contrary to the sound public policy of 
encouraging workers and retirees to responsibly provide for their 
health care.
  I urge my colleagues on both sides of the aisle to cosponsor this 
important and necessary legislation.
  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. 2267

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

     SECTION 1. TREATMENT OF MULTIEMPLOYER PLANS UNDER SECTION 415 
                   LIMIT ON DEFINED BENEFIT PENSION PLAN BENEFITS.

       (a) Dollar Limit Reduction.--Subparagraph (F) of section 
     415(b)(2) of the Internal Revenue Code of 1986 (relating to 
     plans maintained by governments and tax-exempt organizations) 
     is amended--
       (1) by striking ``and tax-exempt organizations'' in the 
     heading and inserting ``, tax-exempt organizations, and 
     multiemployer plans'', and
       (2) by inserting in the first sentence ``a multiemployer 
     plan (as defined in section 414(f)),'' after ``subtitle''.
       (b) Average Compensation Limit.--Paragraph (11) of section 
     415(b) of such Code (relating to a special limitation rule 
     for governmental plans) is amended to read as follows:
       ``(11) Special limitation rule for governmental and 
     multiemployer plans.--In the case of a governmental plan (as 
     defined in section 414(d)) or a multiemployer plan (as 
     defined in section 414(f)), subparagraph (B) of paragraph (1) 
     shall not apply.''.
       (c) Combining and Aggregation of Plans.--
       (1) Combining of plans.--Subsection (f) of section 415 of 
     such Code (relating to combining of plans) is amended by 
     adding at the end the following:
       ``(3) Exception for multiemployer plan.--Notwithstanding 
     paragraph (1) and subsection (g), a multiemployer plan (as 
     defined in section 414(f)) shall not be combined or 
     aggregated with any other plan maintained by an employer for 
     purposes of applying the limitations established in this 
     section.''.
       (2) Conforming amendment for aggregation of plans.--
     Subsection (g) of section 415 of such Code (relating to 
     aggregation of plans) is amended by striking ``The 
     Secretary'' and inserting ``Except as provided in subsection 
     (f)(3), the Secretary''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 1997.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 2268. A bill to amend the Internal Revenue Code of 1986 to improve 
the research and experimentation tax credit, and for other purposes; to 
the Committee on Finance.


          research and experimentation tax credit legislation

  Mr. BINGAMAN. Mr. President, last Tuesday, June 30, 1998, the 
research and experimentation tax credit expired, once again. Once 
again, U.S. industry was left in a state of uncertainty as to how to 
value its investments in research and development, which are really 
investments in the economic future of our country. Today, I am 
introducing a bill to extend permanently and improve the research and 
experimentation tax credit. It is the fruit of analysis from the staff 
of the Joint Economic Committee, of which I am the ranking member. It 
is also the product of consultations with a spectrum of groups who 
share my concern for our Nation's future scientific and technological 
strength. The bill would, briefly, make the existing R&E tax credit 
permanent, improve the economic efficiency and practicality of the 
alternative incremental credit, convert the existing basic research 
credit into a flat credit, and accompany the basic research credit 
(which is aimed mostly at research in universities) with a new credit 
for nonprofit research consortia. The bill also makes a number of 
technical and clarifying adjustments to the basic research credit, so 
that it will be easier to use.
  I am not the first Member of this body to propose to make the R&E tax 
credit permanent, or to propose improvements in its functioning. I plan 
to work with other similarly-minded Senators in the days to come to see 
if we can construct an even broader coalition to make these permanent 
improvements in the R&E tax credit a reality this year.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2268

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

     SECTION 1. PERMANENT EXTENSION OF RESEARCH CREDIT.

       (a) In General.--Section 41 of the Internal Revenue Code of 
     1986 (relating to credit for increasing research activities) 
     is amended by striking subsection (h).
       (b) Conforming Amendment.--Section 45C(b)(1) of the 
     Internal Revenue Code of 1986 is amended by striking 
     subparagraph (D).

     SEC. 2. IMPROVED ALTERNATIVE INCREMENTAL CREDIT.

       (a) In General.--Section 41 of the Internal Revenue Code of 
     1986 (as amended by section 1 of this Act) is amended by 
     adding at the end the following new subsection:
       ``(h) Election of Alternative Incremental Credit.--
       ``(1) In general.--At the election of the taxpayer, the 
     credit under subsection (a)(1) shall be determined under this 
     subsection by taking into account the modifications provided 
     by this subsection.
       ``(2) Determination of base amount.--
       ``(A) In general.--In computing the base amount under 
     subsection (c)--
       ``(i) notwithstanding subsection (c)(3), the fixed-based 
     percentage shall be equal to 85 percent of the percentage 
     which the aggregate qualified research expenses of the 
     taxpayer for the base period is of the aggregate gross 
     receipts of the taxpayer for the base period, and

[[Page S7579]]

       ``(ii) the minimum base amount under subsection (c)(2) 
     shall not apply.
       ``(B) Start-up and small taxpayers.--In computing the base 
     amount under subsection (c), the gross receipts of a taxpayer 
     for any taxable year in the base period shall be treated as 
     at least equal to $1,000,000.
       ``(C) Base period.--For purposes of this subsection, the 
     base period is the 8-taxable year period preceding the 
     taxable year (or, if shorter, the period the taxpayer (and 
     any predecessor) has been in existence).
       ``(3) Qualified research.--
       ``(A) In general.--Notwithstanding subsection (d), the term 
     `qualified research' means research with respect to which 
     expenditures are treated as research and development costs 
     for the purposes of a report or statement concerning such 
     taxable year--
       ``(i) to shareholders, partners, or other proprietors, or 
     to beneficiaries, or
       ``(ii) for credit purposes.

     Such term shall not include any research described in 
     subparagraph (F) of (H) of subsection (d)(4).
       ``(B) Financial accounting standards.--
       ``(i) In general.--Subparagraph (A) shall only apply to the 
     extent that the treatment of expenditures as research and 
     development costs is consistent with the Statement of 
     Financial Accounting Standards No. 2 Accounting for Research 
     and Development Costs.
       ``(ii) Significant changes.--If the Secretary determines 
     that there is any significant change in the accounting 
     standards described in clause (i) after the date of enactment 
     of this subsection--
       ``(I) the Secretary shall notify the Committee on Ways and 
     Means of the House of Representatives and the Committee on 
     Finance of the Senate of such change, and
       ``(II) such change shall not be taken into account for any 
     taxable year beginning before the date which is 1 year after 
     the date of notice under subclause (I).
       ``(C) Transition rule.--At the election of the taxpayer, 
     this paragraph shall not apply in computing the base amount 
     for any taxable year in the base period beginning before 
     January 1, 1999.
       ``(4) Election.--An election under this subsection shall 
     apply to the taxable year for which made and all succeeding 
     taxable years unless revoked with the consent of the 
     Secretary.''
       (b) Assistance to Small and Start-Up Businesses.--The 
     Secretary of the Treasury or his delegate shall take such 
     actions as are appropriate to--
       (1) provide assistance to small and start-up businesses in 
     complying with the requirements of section 41 of the Internal 
     Revenue Code of 1986, and
       (2) reduce the costs of such compliance.
       (c) Conforming Amendment.--Section 41(c) of the Internal 
     Revenue Code of 1986 is amended by striking paragraph (4) and 
     redesignating paragraphs (5) and (6) as paragraphs (4) and 
     (5), respectively.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.

     SEC. 3. MODIFICATIONS TO CREDIT FOR BASIC RESEARCH.

       (a) Elimination of Incremental Requirement.--
       (1) In general.--Paragraph (1) of section 41(e) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(1) In general.--The amount of basic research payments 
     taken into account under subsection (a)(2) shall be 
     determined in accordance with this subsection.''.
       (2) Conforming amendments.--
       (A) Section 41(a)(2) of such Code is amended by striking 
     ``determined under subsection (e)(1)(A)'' and inserting ``for 
     the taxable year''.
       (B) Section 41(e) of such code is amended by striking 
     paragraphs (3), (4), and (5) and by redesignating paragraphs 
     (6) and (7) as paragraphs (3) and (4), respectively.
       (C) Section 41(e)(4) of such Code (as redesignated) is 
     amended by striking subparagraph (B) and by redesignating 
     subparagraphs (C), (D), and (E) as subparagraphs (B), (C), 
     and (D), respectively.
       (D) Clause (i) of section 170(e)(4)(B) of such Code is 
     amended by striking ``section 41(e)(6)'' and inserting 
     ``section 41(e)(3)''.
       (b) Basic Research.--
       (1) Specific commercial objective.--Section 41(e)(4) of the 
     Internal Revenue Code of 1986 (relating to definitions and 
     special rules) is amended by adding at the end the following 
     new subparagraph:
       ``(F) Specific commercial objective.--For purposes of 
     subparagraph (A), research shall not be treated as having a 
     specific commercial objective if all results of such research 
     are to be published in such a manner as to be available to 
     the general public prior to their use for a commercial 
     purpose.''
       (2) Exclusions from basic research.--Section 41(e)(4)(A) of 
     the Internal Revenue Code of 1986 (as redesignated by 
     subsection (a)) is amended by striking clause (ii) and 
     inserting the following:
       ``(ii) basic research in the arts or humanities.''
       (c) Expansion of Credit to Research at Federal 
     Laboratories.--Section 41(e)(3) of the Internal Revenue Code 
     of 1986 (as redesignated by subsection (a)(2)(C) of this 
     section) is amended by adding at the end the following new 
     subparagraph:
       ``(E) Federal laboratories.--Any organization which is a 
     federal laboratory within the meaning of that term in section 
     4(6) of the Stevenson-Wydler Technology Innovation Act of 
     1980 (15 U.S.C. 3703(6)).''
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.

     SEC. 4. CREDIT FOR EXPENSES ATTRIBUTABLE TO CERTAIN 
                   COLLABORATIVE RESEARCH CONSORTIA.

       (a) Credit for Expenses Attributable to Certain 
     Collaborative Research Consortia.--Subsection (a) of section 
     41 of the Internal Revenue Code of 1986 (relating to credit 
     for increasing research activities) is amended by--
       (1) striking ``and'' at the end of paragraph (1);
       (2) striking the period at the end of paragraph (2) and 
     inserting ``, and''; and
       (3) adding at the end the following new paragraph:
       ``(3) 20 percent of the amounts paid or incurred during the 
     taxable year (including as contributions) to a qualified 
     research consortium.''
       (b) Qualified Research Consortium Defined.--Subsection (f) 
     of such Code is amended by adding at the end the following 
     new paragraph:
       ``(6) Qualified research consortium.--The term `qualified 
     research consortium' means any organization which--
       ``(A) is described in section 501(c)(3) and is exempt from 
     tax under section 501(a).
       ``(B) is organized and operated primarily to conduct 
     scientific or engineering research,
       ``(C) is not a private foundation,
       ``(D) to which at least 15 unrelated persons paid or 
     incurred (including as contributions), during the calendar 
     year in which the taxable year of the organization begins, 
     amounts to such organization for scientific or engineering 
     research,
       ``(E) to which no 3 unrelated persons paid or incurred 
     (including as contributions) during such calendar year more 
     than 50 percent of the total amounts received by such 
     organization during such calendar year for scientific or 
     engineering research, and
       ``(F) to which no single person paid or incurred (including 
     as contributions) more than 25 percent of such total amounts.

     All persons treated as a single employer under subsection (a) 
     or (b) of section 52 shall be treated as related persons for 
     purposes of subparagraphs (D) and (E), and as a single person 
     for purposes of subparagraph (F).''
       (c) Conforming Amendment.--Paragraph (3) of section 41(b) 
     of such Code is amended by striking subparagraph (C).
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.
                                 ______
                                 
      By Mr. FAIRCLOTH:
  S. 2270. A bill to amend the Federal Deposit Insurance Act with 
respect to raising the level of the Deposit Insurance Fund reserve 
ratio and with respect to refunds of excess assessments, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.


    Legislation to Provide a Refund of Excess Reserves in the Bank 
                             Insurance Fund

  Mr. FAIRCLOTH. Mr. President, in 1991, the Congress reformed the FDIC 
and mandated that the fund keep a reserve to deposit ratio of 1.25%. 
Fortunately, no government funds were used to keep the FDIC solvent 
when this was mandated in 1991. It was thought by many that it would 
take years for the fund to reach that level, but, enough funds flowed 
into the Bank Insurance Fund that this reserve level was met relatively 
quickly.
  What has been happening for the past few years, however, is that the 
Fund is generating billions in interest and is now well over the 
designated reserve ratio of 1.25%. The Fund can only be used to provide 
for losses to the insurance fund, however, because the BIF is 
considered on budget these excess funds are effectively being used to 
exaggerate the government surplus. The law envisioned a stop in the 
need for additional premiums once that fund hit its legal limit, but it 
never made provisions for excess reserves building and building year 
after year.
  Rather than this money piling up in the Bank Insurance Fund, I think 
it would be put to greater use if these funds were recycled back into 
the banking system, and back into our economy.
  Today, I am introducing legislation that would require that the Fund 
provide a refund of this excess revenue when it reaches a reserve level 
of 1.5%. This means that the Fund could maintain a cushion of 20% above 
the level that is required by law, but once that outer level is 
reached, the excess would have to be refunded.
  Mr. President, the Bank Insurance Fund is composed entirely of non-
government funds. The money in this Fund is derived from assessments on 
the banking industry. The Congress chose a level at which the Fund 
could operate safely, and that level is being met, in fact, it is being 
exceeded. At the end of 1997, the Fund held nearly

[[Page S7580]]

$28 billion. I think it is wrong, however, to use the money paid by the 
banking industry to earn revenue for the government and not recycle 
that money back into the economy. The Fund earned nearly $1.5 billion 
in interest last year.
  If this amount of money were put back into the economy, $1.5 billion 
in capital could sustain another $15 billion in loans.
  I do not know when the Fund will reach 1.5% reserve to deposit ratio. 
The FDIC is projecting that the reserve ratio could be anywhere between 
1.36% and 1.43% by the end of this year. Clearly, my legislation means 
that sometime within the next two years, there will be a level reached 
at which this money will be put back into the economy.
  When I first came to Washington, I noticed that many believed money 
was simply appropriated. Actually, money has to be created. Somebody, 
somewhere had to do something, drive a truck, wait on a table, build a 
house--somebody had to create wealth. This is the point of this 
legislation--we need to send money back into the private sector so that 
it can be used to create new wealth, new jobs and new opportunities. 
Letting this money accumulate in Washington will not create new 
opportunities for the American people. That is why I am introducing 
this legislation, which I think is balancing the need for both a safe 
and sound deposit insurance fund and the need to keep dollars in 
banking system for new lending and new growth.

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