Congressional Record, Volume 144 Issue 98 (Tuesday, July 21, 1998)

[Congressional Record Volume 144, Number 98 (Tuesday, July 21, 1998)]
[Senate]
[Pages S8659-S8676]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

Medicare Waste Tax Reduction Act of 1998--Summary

Doubling and Better Targeting Audits and Reviews To Detect
and Discourage Abuse. Only a tiny fraction of Medicare claims
are reviewed before being paid and less than 2 percent of
providers receive a comprehensive audit annually. In order to
better detect mistakes and abuses and to provide a more
significant deterrent to abuse, the number of medical,
utilization and fraud reviews would be doubled. In addition,
at least 15% of provider cost reports submitted by home
health agencies, skilled nursing facilities and durable
medical equipment would be subject to annual audits. The
increased reviews would be targeted at services and providers
most likely to be subject to abuse.
Expanding Medicare Senior Waste Patrol Nationwide--Seniors
are our front line of defense against Medicare fraud, waste
and abuse. However, too often, seniors don't have the
information they need to detect and report suspected mistakes
and fraud. A program to recruit and train retired nurses,
doctors, accountants and others to serve as volunteer
resources to meet this need at the local level was
established as part of the FY 97 Labor-HHS appropriations
bill. This 12 state program has proven successful and would
be expanded nationwide.
Increased Assistance and Education for Providers to Comply
with Medicare Rules--A good deal of the mispayments made by
Medicare are the result not of fraud or abuse, but of simple
misunderstanding of Medicare billing rules by providers.
Therefore, this bill provides $10 million a year to fund a
major expansion of assistance and education for providers on
program integrity requirements.
Reducing Paperwork and Administrative Hassle for
Providers--Health professionals have to spend too much time
completing paperwork and dealing with administrative hassles
associated with Medicare and private health plans. In order
to reduce this hassle and provide more time for patient care,
the

[[Page S8660]]

Institute of Medicine would be charged with developing a
comprehensive plan by no later than June 1, 1999. Their
recommendations are to include the streamlining of variations
between Medicare and other payers.
Making Medicare a More Prudent Purchaser--As passed by the
Senate, the Balanced Budget Act gave Medicare the authority
to quickly reduce Part B payment rates (except those made for
physician services) it finds to be grossly excessive when
compared to rates paid by other government programs and the
private sector. In conference, the provision was limited to
reductions of no more than 15 percent. This bill would
restore the original Senate language. In addition, to assure
that Medicare gets the price it deserves given its status as
by far the largest purchaser of medical supplies and
equipment, Medicare would pay no more than any other
government program for these items. Finally, overpayments for
prescription drugs and biologicals would be eliminated by
lowering Medicare's rate to the lowest of either the actual
acquisition cost or 95% of the wholesale cost.
Using State of the Art Private Sector Technology to Reduce
Billing Errors and Abuse--The GAO and Medicare agree that
taxpayers could save over $400 million a year simply by
employing up to date computer software developed by the
private sector to detect and stop billing errors and abuse.
This bill would require Medicare to promptly employ private
sector edits determined compatible with Medicare payment
policy.
Improving Oversight of Home Health Agencies--Medicare
oversight of home health care services would be strengthened.
The Secretary would be required to conduct validation surveys
of at least 5 percent of the agencies surveyed by every
state. This would provide greater assurance that problem
agencies are identified and help to reduce variation among
states in inspection and enforcement.
Closing Loophole in Anti-Kickback Law for Managed Care--
Provisions of HIPAA created a broadened exception from
Medicare's anti-kickback rules for any arrangement where a
medical provider is at ``substantial financial risk'' through
``any risk arrangement.'' This broad exception may be serving
as a loophole to get around important anti-kickback
protections. It would be eliminated, returning to pre-HIPAA
law.
Expanding Criminal Penalties For Kickbacks--Criminal
penalties upon persons violating the federal anti-kickback
provisions with respect to private health care benefit
programs. It will also authorize the Attorney General to
bring civil actions in U.S. District Courts to impose civil
penalties and treble damages on violators. There will be no
diminution of the existing authority of any agency of the
U.S. Government to administer and enforce the criminal laws
of the United States.
Extending Subpoena And Injunction Authority--Medicare's
ability to gather evidence in fraud and abuse cases would be
strengthened by extending the Secretary's testimonial
subpoena power and injunctive authority for civil monetary
penalties to other administrative sanctions such as
exclusions from the program.
Stopping Abusive Billings for Services Ordered by Excluded
Providers--While current law provides for penalties against
billing for services directly rendered by a provider who has
been excluded from Medicare for criminal or other serious
violations, no such authority exists for services or items
prescribed or ordered by these providers. This provision
would close the loophole by establishing civil monetary
penalties for anyone who knows or should know that they are
submitting claims for services ordered or prescribed by an
excluded provider.
Combating Abuse of Hospice and Partial Hospitalization
Benefits--Recent reviews have identified significant waste
and abuse in the new Medicare partial hospitalizatio benefit.
Abuse would be deterred by making a number of reforms to this
benefit and authorize the Secretary to begin a prospective
payment system. A new civil monetary penalty against doctors
who knowingly provide false certification that an individual
meets Medicare requirements to receive these services would
also be established. A similar provision already exists for
false certification of home health services.
Protecting Medicare Against Bankruptcy Abuses--Under
current law it is possible for providers to use bankruptcy as
a shield against Medicare and Medicaid penalties and
overpayment recoveries. This provision would protect Medicare
in a number of ways, including: A provider would still be
liable to refund overpayments and pay penalties and fines
even if he or she filed for bankruptcy. If Medicare law and
bankruptcy law conflict, Medicare law would prevail.
Bankruptcy courts would not be able to re-adjudicate Medicare
coverage or payment decisions.
Ensuring Medicare Does Not Pay for Claims Owed by Other
Plans--Too often, Medicare pays claims that are owed by
private insurers because it has no way of knowing a
beneficiary is working and has private insurance that should
pay first. This provision would reduce Medicare losses by
requiring insurers to report any Medicare beneficiaries they
insure. Also, Medicare would be given the authority to
recover double the amount owed by insurers who purposely let
Medicare pay claims they should have paid.
Improving Coordination with Private Sector in Combating
Medicare Fraud--Often, those ripping off Medicare are also
defrauding private health plans. Yet, too little information
on fraud cases is shared between Medicare and private plans.
In order to encourage better coordination, health plans and
their employees could not be held liable for sharing
information with Medicare regarding health care fraud as long
as the information is not false, or the person providing the
information had no reason to believe the information was
false.
Self-Funding Plan for Medicare Provider and Supplier
Agreements--In order to provide the resources necessary to
stop bogus or unqualified providers from billing Medicare,
the Secretary may impose fees for the initial and or renewal
of provider agreements. This will allow for more on-site
visits of those seeking provider numbers to assure that the
provider or supplier actually exists and is legitimate.
Balanced Budget Act Technical Changes--Several technical
changes to Balanced Budget Act provisions relating to health
care fraud are made.
______

By Mr. SANTORUM (for himself and Mr. Specter):
S. 2336. A bill to amend chapter 5 of title 28, United States Code,
to transfer Schuylkill County, Pennsylvania, from the Eastern Judicial
District of Pennsylvania to the Middle Judicial District of
Pennsylvania; to the Committee on the Judiciary.

united states district court legislation

Mr. SANTORUM. Mr. President, today I introduce legislation
transferring Schuylkill County from the Eastern Judicial District of
Pennsylvania to the Middle District. I am pleased to work on this
needed effort with the senior Senator from Pennsylvania Senator
Spector, who has signed on as an original cosponsor.
Many of the residents of Schuylkill County have voiced concern about
the hardship they face in performing jury duty as they are often forced
to travel as far as Philadelphia. Most of the counties adjacent to
Schuylkill County are in the Middle District, where courtrooms are
generally twice as close as those in Philadelphia. In addition,
transferring Schuylkill County will help relieve the Eastern District
of its much larger caseload.
Both the Chief Judge of the Eastern District, Edward Cahn, and of the
Middle District, Sylvia Rambo, have raised no objections with this
transfer. The Schuylkill County Bar Association, the Schuylkill County
District Attorney, and numerous judges and attorneys have expressed
strong support.
This legislation serves as a companion bill to H.R. 2123, a bill
introduced by my esteemed colleague in the House of Representatives,
Representative Tim Holden, whose district includes Schuylkill County.
Representative Holden has worked diligently on passage of his bill or
over a year, including a successful effort at incorporating its
provisions into the Federal Courts Improvement Act of 1998. H.R. 2294,
which passed the House on March 18, 1998. I congratulate my colleague
on his success. Now, it is the responsibility of myself and Senator
Specter to shepherd this legislation through the Senate.
I look forward to working with the Chairman of the Judiciary
Committee, Senator Hatch, and the Ranking Member, Senator Leahy, and
the rests of my colleagues in securing passage of much needed
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. 2336

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

SECTION 1. TRANSFER OF COUNTY.

Section 118 of title 28, United States Code, is amended--
(1) in subsection (a) by striking ``Philadelphia, and
Schuylkill'' and inserting ``and Philadelphia''; and
(2) in subsection (b) by inserting ``Schuylkill,'' after
``Potter,''.

SEC. 2. EFFECTIVE DATE.

(a) In General.--This Act and the amendments made by this
Act shall take effect 180 days after the date of the
enactment of this Act.
(b) Pending Cases Not Affected.--This Act and the
amendments made by this Act shall not affect any action
commenced before the effective date of this Act and pending
on such date in the United States District Court for the
Eastern District of Pennsylvania.
(c) Juries Not Affected.--This Act and the amendments made
by this Act shall not affect the composition, or preclude the
service, of any grand or petit jury summoned, impaneled, or
actually serving on the effective date of this Act.

[[Page S8661]]

______

By Mr. SMITH of Oregon (for himself, Mr. Wyden, Mr. Craig, Mr.
Graham, Mr. Gorton, Mr. Bumpers, Mr. Hatch, Mr. McConnell, and
Mr. Mack):
S. 2337. A bill to establish a system of registries of temporary
agricultural workers to provide for a sufficient supply of such workers
and to amend the Immigration and Nationality Act to streamline
procedures for the admission and extension of stay of nonimmigrant
agricultural workers, and for other purposes; to the Committee on the
Judiciary.

agriculture job opportunity benefits and security act of 1998

Mr. CRAIG. Mr. President, today legislation is being introduced by my
colleague from Oregon, Gordon Smith, along with Senators Wyden, Graham
of Florida, Gorton, Bumpers, and McConnell. This bill would deal with a
situation that is a problem today and could well be a crisis tomorrow.
The Senate now has an opportunity to do what our Federal Government
does all too rarely, and that is fix a problem in a timely and
commonsense fashion before it inflicts great hurt on millions of
Americans.
Mr. President, I am talking about agricultural growers and their need
for a stable, predictable, legal workforce that would receive good,
fair, market-based compensation.
I am talking about unemployed workers and those hoping to move from
welfare to work, who want and need to be matched up with agricultural
jobs, if possible. American citizens should have first claim to
American jobs. All workers would rather be working legally and know
they can claim full legal protections only when their employment
situation is open and lawful.
Farm employers need to be provided with a secure work force. Workers
need to be assured of basic legal and labor standard protections.
These goals are not being met today. In fact, current federal law,
and its bureaucratic implementation, are hurting growers and workers.
In fact, current Federal laws and their bureaucratic implementation
are hurting both growers and workers. This is why I am pleased to join
with my colleagues in the introduction of what we will call AgJOBS.
This stands for the Agricultural Job Opportunity, Benefits and Security
Act.
This bill will represent the culmination of work that has been going
on for years amongst our colleagues, to resolve the issue of the
necessary labor force for American agriculture. We have examined all of
the issues involved with trying to ensure a supply of legal temporary
and seasonal labor. We understand that that employers in many cases
need guest workers and that employees, domestic and guest workers, need
more and better jobs. We have looked at all sides. The result is a
consensus bill that we think is nothing less than remarkable, and I
commend my colleagues on this very important bipartisan effort.
The key elements of our bipartisan proposal would include the
following: The creation of a new, voluntary, national registry of
migrant farm workers to which growers can turn for workers they know
are legal. If enough domestic workers could not be supplied through the
registry, growers could apply for legal guest workers through an
expedited, reformed H-2A program. The new program would resemble the
current H-2A program, but it would have much, much faster turnaround,
less red tape, and greater certainty for employers, continued
protections for workers, and greater flexibility for employers, related
to conditions of employment such as housing, transportation, and
market-based wages.
The crisis is at hand not only on the farm but with the worker who is
attempting to get across our borders today. With the tremendous heat in
the South right now, there are warnings out to workers hoping for a job
opportunity in this country: Do not try to traffic the area or you
could die--simply by using the transportation methods in which so many
workers are travelling today. Current law has created a phenomenal
situation that is most inhumane.
Two years ago, Senators Wyden, Gorton, and others joined with me in
requiring the General Accounting Office to study the current H-2A Guest
Worker Program.
As a result, the GAO has estimated that at least 37 percent of all
farm workers in the United States are not here legally, not legally
qualified to work. How they got the figure is amazing: They went out
and asked, and the workers, by self-disclosure, admitted that they were
here illegally.
The current H-2A program has been a red tape nightmare.
Too often, when growers need a timely response to their needs, with
produce in the field, it cannot be done.
Even when growers meet all the deadlines the Government sets for
them, then the Government fails to meet its own deadlines. In fact,
GAO's study found that, when growers made timely applications, the
Department of Labor still missed statutory deadlines 40 percent of the
time.
The bureaucracy grinds to a halt sometimes because it doesn't
understand the needs in the field, and sometimes because it doesn't
want to supply the workforce.
Current H-2A has been completely ineffective as a means of obtaining
temporary and seasonal workers, supplying only about 24,000 out of the
1.6 million farm workers necessary on an annual basis.
In the 1996 immigration law, and in appropriations over recent years,
Congress has made it a priority to secure our borders and crack down on
illegal immigrants.
That is exactly what we want and what our citizens want.
But as a result, serious spot shortages of farm labor are multiplying
from Florida to New England, Kentucky to Colorado--to California and
Idaho, and across the Nation.
For example, California growers and local officials have made a real
effort to address the shortfall with welfare-to-work efforts. But it is
not happening. We are at near full employment in our economy. People
are simply not available to do agricultural-style work. And sometimes
the needs of agriculture are uniquely not matched to the needs or
capabilities of available domestic workers.
Because of the robust counterfeit ID industry and current Federal
laws, we have many of these illegals moving into our country who are,
in fact, carrying what appear to be legal credentials. Employers do not
want that to happen, but the law actually punishes them if they are too
diligent in inquiring about the legal status of job applicants. Current
law has created an unwinnable Catch-22 for employers. Most have no
realistic way of ensuring their work force is entirely legal.
A single Immigration and Naturalization Service raid, netting a
handful of illegal workers, can scare and clean out thousands of
workers in surrounding counties. It happened just a few weeks ago in
the Georgia onion fields. The employers in such cases typically have
complied with the law. But, of course, the crops were left rotting in
the fields. That is not what the American farmer needs. It is certainly
not what the American consumers need.
As workers disappear from U.S. fields, and crops stay there instead
of moving to the stores, not only are the farmers hurt, as I mentioned,
but consumers are hurt. And then we have to reach inevitably toward an
effort to import foods, much of which may not meet our health and
safety standards. This means a mainstay of our economy, the U.S.
agriculture industry, is threatened with a major breakdown. This means
that our families are threatened with the increased risk of exposure to
food-borne illnesses on imported, foreign foods. And it happens simply
because the current H-2A system won't supply the kind of labor that is
necessary.
Let's be humane and let's be responsible. Let's move the AgJOBS bill
introduced today, so it can be signed on the President's desk and
become law this year. It is critically necessary that we do this.
We have reached out to the Department of Labor to work with them and
be sensitive to their concerns in the crafting of this legislation to
streamline the H-2A program. We have tried to anticipate and answer
every objection that might be raised to this kind of reform. We have
tried to solve problems before bringing this bill to the floor.
I thank my colleagues for this tremendous effort, especially Senator
Gordon Smith of Oregon, Senator Wyden, Senator Graham of Florida, and
Senator Gorton, who have worked

[[Page S8662]]

very closely, to make this legislation a reality.
We think this bill will create a win-win situation so those who wish
to enter our country to work at our agricultural jobs can enter
legally, so they can enter in a safe way instead of in the backs of
trucks or almost literally in tin cans where, as a result of tragic
accidents, they oftentimes lose their lives. We saw another tragic
example of this in recent days.
We can do better. We can pass the AgJOBS reforms. I am pleased to be
a part of the introduction of this legislation today.
Mr. SMITH of Oregon. Mr. President, I rise today with Senators Wyden,
Craig, Graham of Florida, Gorton, Bumpers, Hatch, McConnell, and Mack
to introduce the Agricultural Job Opportunity Benefits and Security Act
of 1998, also known as AgJOBS. Our bill will create a streamlined guest
worker program to allow for a reliable supply of legal, temporary,
agricultural workers.
Mr. President, we are facing a crisis in agriculture--a crisis born
of an inadequate labor supply. For many years, farmers and nurserymen
have struggled to hire enough legal agricultural workers to harvest
their produce and plants. The labor pool is competitive, especially in
my state of Oregon, where jobs are many and domestic workers willing to
do farm work are few. The General Accounting Office even confirmed that
there have been local, regional and crop-based labor shortages and
losses.
Labor intensive agriculture is the most rapidly growing area of
agricultural production in this country and we can only expect the
demand for agricultural labor jobs to continue to rise. When coupled
with the lowest unemployment rates in decades and a crackdown on
illegal immigration, the agriculture industry--and ultimately its
consumers--face a crisis.
Currently, the H-2A program is the only legal, temporary, foreign
agricultural worker program in the United States. This program is not
practicable for the agriculture and horticulture industries because it
is loaded with burdensome regulations, excessive paperwork, a
bureaucratic certification process and untimely and inconsistent
decision-making by the U.S. Department of Labor. Also, as reported by
the recent Department of Labor Inspector General, the H-2A program does
not meet the interests of domestic workers because it does a poor job
of placing domestic workers in agricultural jobs.
I am proud to announce legislation that is the product of a
bipartisan effort put forth today by several of my colleagues. With
their help, we have been able to develop a consensus solution that will
create a workable system for recruiting workers domestically and
preventing crops from rotting in the fields. The bipartisan support for
this bill reflects months of hard work by members of both parties.
Mr. President, as we introduce this balanced bill, we have two goals
in mind--to make it easier for employers to hire legal workers to
harvest their crops, and to ensure that workers are treated fairly in
the process. These workers deserve the dignity of legal status when
they are here doing work that benefits all of us.
I'm very concerned that workers are protected, but let's not forget
that growers have been victimized by this process too. In order to feed
their families--and ours--the growers need to harvest their crops on
time, meet payroll, and ultimately maintain their bottom line. Without
achieving those things, farms go out of business and the jobs they
create are lost along with them. So it is in all of our best
interests--workers, growers, and consumers alike--that growers have the
means by which to hire needed workers. I believe our legislation will
help achieve that goal.
Mr. President, let me briefly summarize the improvements our bill
makes over the current H-2A program.
First and foremost, all of the labor protections currently in place
for workers have been preserved. In fact, they have been improved
substantially. Domestic workers under the new program will now receive
unemployment insurance and all complaints filed by workers will be
investigated by the Department of Labor. Also, foreign workers under
the new program will retain their ability to transfer to other H-2A
farms once they've completed work with their current employer. These
provisions will ensure that the rights of workers--both foreign and
domestic--continue to be protected.
We've also improved the housing provision in the existing H-2A
program, currently another barrier for many farmers. For instance, in
my state of Oregon, our strict land use laws prohibit building on farm
land. This means that many farms do not have housing to offer and
therefore cannot use the H-2A program. Under our new bill, we allow
employers the option of providing a housing allowance to workers if
housing cannot be provided. This change will make it possible for many
more farmers to use the guest worker program, and guest workers will
still receive housing benefits.
To be fair to domestic workers, we also created a process that would
make agriculture jobs available to them first. The bureaucratic and
untimely labor certification process of the H-2A program will be
replaced by a registry which uses existing DOL job bank computers to
match domestic workers seeking jobs with employers seeking workers. If
job openings still exist, then employers will be allowed to bring in
temporary foreign workers to fill the open jobs.
In order for employers to offer these and other protections, the
program has to be more practical to use. In our bill, we have
streamlined the impractical time-frame requirements for applying to the
program. Currently, farmers must apply for H-2A workers 60 days before
they think they will need workers. In a very unpredictable industry,
this requirement is a barrier for many farmers. In our bill, we have
reduced this time period to 21 days, making the program much more
responsive to the unpredictable nature of agriculture crops and much
more practical for use by farmers.
Our legislation makes many other improvements to the existing H-2A
program--for both employers and workers. As a result, we can expect
more growers to use it, and consequently, we can expect more domestic
and foreign workers to benefit from the ample wage and labor
protections afforded by it.
Let's not make fugitives out of farmworkers and felons out of
farmers. That is the effect of our current guest worker program.
I urge my fellow colleagues to join Senators Wyden, Craig, Graham,
Gorton, Bumpers, Hatch, Feinstein, McConnell, Mack and me as we
introduce this important bipartisan legislation.
Mr. President, I ask unanimous consent that this legislation, along
with the list of over 100 agriculture-related associations that endorse
this bill, be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 2337

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the
``Agricultural Job Opportunity Benefits and Security Act of
1998''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Agricultural worker registries.
Sec. 4. Employer applications and assurances.
Sec. 5. Search of registry.
Sec. 6. Issuance of visas and admission of aliens.
Sec. 7. Employment requirements.
Sec. 8. Enforcement and penalties.
Sec. 9. Alternative program for the admission of temporary H-2A
workers.
Sec. 10. Inclusion in employment-based immigration preference
allocation.
Sec. 11. Migrant and seasonal Head Start program.
Sec. 12. Regulations.
Sec. 13. Funding from Wagner-Peyser Act.
Sec. 14. Effective date.

SEC. 2. DEFINITIONS.

In this Act:
(1) Adverse effect wage rate.--The term ``adverse effect
wage rate'' means the rate of pay for an agricultural
occupation that is 5-percent above the prevailing rate of pay
for that agricultural occupation in an area of intended
employment, if the average hourly equivalent of the
prevailing rate of pay for the occupation is less than the
prior year's average hourly earnings of field and livestock
workers for the State (or region that includes the State), as
determined by the

[[Page S8663]]

Secretary of Agriculture. No adverse effect wage rate shall
be more than the prior year's average hourly earnings of
field and livestock workers for the State (or region that
includes the State), as determined by the Secretary of
Agriculture.
(2) Agricultural employment.--The term ``agricultural
employment'' means any service or activity included within
the provisions of section 3(f) of the Fair Labor Standards
Act of 1938 (29 U.S.C. 203(f)) or section 3121(g) of the
Internal Revenue Code of 1986 and the handling, planting,
drying, packing, packaging, processing, freezing, or grading
prior to delivery for storage of any agricultural or
horticultural commodity in its unmanufactured state.
(3) Eligible.--The term ``eligible'' as used with respect
to workers or individuals, means individuals authorized to be
employed in the United States as provided for in section
274A(h)(3) of the Immigration and Nationality Act (8 U.S.C.
1188).
(4) Employer.--The term ``employer'' means any person or
entity, including any independent contractor and any
agricultural association, that employs workers.
(5) Job opportunity.--The term ``job opportunity'' means a
specific period of employment for a worker in one or more
specified agricultural activities.
(6) Prevailing wage.--The term ``prevailing wage'' means
with respect to an agricultural activity in an area of
intended employment, the rate of wages that includes the 51st
percentile of employees in that agricultural activity in the
area of intended employment, expressed in terms of the
prevailing method of pay for the agricultural activity in the
area of intended employment.
(7) Registered worker.--The term ``registered worker''
means an individual whose name appears in a registry.
(8) Registry.--The term ``registry'' means an agricultural
worker registry established under section 3(a).
(9) Secretary.--The term ``Secretary'' means the Secretary
of Labor.
(10) United states worker.--The term ``United States
worker'' means any worker, whether a United States citizen, a
United States national, or an alien who is authorized to work
in the job opportunity within the United States other than an
alien admitted pursuant to section 101(a)(15)(H)(ii)(a) or
218 of the Immigration and Nationality Act, as in effect on
the effective date of this Act.

SEC. 3. AGRICULTURAL WORKER REGISTRIES.

(a) Establishment of Registries.--
(1) In general.--The Secretary of Labor shall establish and
maintain a system of registries containing a current database
of eligible United States workers who seek to perform
temporary or seasonal agricultural work and the employment
status of such workers--
(A) to ensure that eligible United States workers are
informed about available agricultural job opportunities;
(B) to maximize the work period for eligible United States
workers; and
(C) to provide timely referral of such workers to temporary
and seasonal agricultural job opportunities in the United
States.
(2) Coverage.--
(A) Single state or group of states.--Each registry
established under paragraph (1) shall include the job
opportunities in a single State, or a group of contiguous
States that traditionally share a common pool of seasonal
agricultural workers.
(B) Requests for inclusion.--Each State requesting
inclusion in a registry, or having any group of agricultural
producers seeking to utilize the registry, shall be
represented by a registry or by a registry of contiguous
States.
(b) Registration.--
(1) In general.--An eligible individual who seeks
employment in temporary or seasonal agricultural work may
apply to be included in the registry for the State or States
in which the individual seeks employment. Such application
shall include--
(A) the name and address of the individual;
(B) the period or periods of time (including beginning and
ending dates) during which the individual will be available
for temporary or seasonal agricultural work;
(C) the registry or registries on which the individual
desires to be included;
(D) the specific qualifications and work experience
possessed by the applicant;
(E) the type or types of temporary or seasonal agricultural
work the applicant is willing to perform;
(F) such other information as the applicant wishes to be
taken into account in referring the applicant to temporary or
seasonal agricultural job opportunities; and
(G) such other information as may be required by the
Secretary.
(2) Validation of employment authorization.--No person may
be included on any registry unless the Attorney General has
certified to the Secretary of Labor that the person is
authorized to be employed in the United States.
(3) Workers referred to job opportunities.--The name of
each registered worker who is referred and accepts employment
with an employer pursuant to section 5 shall be classified as
inactive on each registry on which the worker is included
during the period of employment involved in the job to which
the worker was referred, unless the worker reports to the
Secretary that the worker is no longer employed and is
available for referral to another job opportunity. A
registered worker classified as inactive shall not be
referred pursuant to section 5.
(4) Removal of names from a registry.--The Secretary shall
remove from all registries the name of any registered worker
who, on 3 separate occasions within a 3-month period, is
referred to a job opportunity pursuant to this section, and
who declines such referral or fails to report to work in a
timely manner.
(5) Voluntary removal.--A registered worker may request
that the worker's name be removed from a registry or from all
registries.
(6) Removal by expiration.--The application of a registered
worker shall expire, and the Secretary shall remove the name
of such worker from all registries if the worker has not
accepted a job opportunity pursuant to this section within
the preceding 12-month period.
(7) Reinstatement.--A worker whose name is removed from a
registry pursuant to paragraph (4), (5), or (6) may apply to
the Secretary for reinstatement to such registry at any time.
(c) Confidentiality of Registries.--The Secretary shall
maintain the confidentiality of the registries established
pursuant to this section, and the information in such
registries shall not be used for any purposes other than
those authorized in this Act.
(d) Advertising of Registries.--The Secretary shall widely
disseminate, through advertising and other means, the
existence of the registries for the purpose of encouraging
eligible United States workers seeking temporary or seasonal
agricultural job opportunities to register.

SEC. 4. EMPLOYER APPLICATIONS AND ASSURANCES.

(a) Applications to the Secretary.--
(1) In general.--Not later than 21 days prior to the date
on which an agricultural employer desires to employ a
registered worker in a temporary or seasonal agricultural job
opportunity, the employer shall apply to the Secretary for
the referral of a United States worker through a search of
the appropriate registry, in accordance with section 5. Such
application shall--
(A) describe the nature and location of the work to be
performed;
(B) list the anticipated period (expected beginning and
ending dates) for which workers will be needed;
(C) indicate the number of job opportunities in which the
employer seeks to employ workers from the registry;
(D) describe the bona fide occupational qualifications that
must be possessed by a worker to be employed in the job
opportunity in question;
(E) describe the wages and other terms and conditions of
employment the employer will offer, which shall not be less
(and are not required to be more) than those required by this
section;
(F) contain the assurances required by subsection (c); and
(G) specify the foreign country or region thereof from
which alien workers should be admitted in the case of a
failure to refer United States workers under this Act.
(2) Applications by associations on behalf of employer
members.--
(A) In general.--An agricultural association may file an
application under paragraph (1) for registered workers on
behalf of its employer members.
(B) Employers.--An application under subparagraph (A) shall
cover those employer members of the association that the
association certifies in its application have agreed in
writing to comply with the requirements of this Act.
(b) Amendment of Applications.--Prior to receiving a
referral of workers from a registry, an employer may amend an
application under this subsection if the employer's need for
workers changes. If an employer amends an application on a
date which is later than 21 days prior to the date on which
the workers on the amended application are sought to be
employed, the Secretary may delay issuance of the report
described in section 5(b) by the number of days by which the
filing of the amended application is later than 21 days
before the date on which the employer desires to employ
workers.
(c) Assurances.--The assurances referred to in subsection
(a)(1)(F) are the following:
(1) Assurance that the job opportunity is not a result of a
labor dispute.--The employer shall assure that the job
opportunity for which the employer requests a registered
worker is not vacant because a worker is involved in a
strike, lockout, or work stoppage in the course of a labor
dispute involving the job opportunity at the place of
employment.
(2) Assurance that the job opportunity is temporary or
seasonal.--
(A) Required assurance.--The employer shall assure that the
job opportunity for which the employer requests a registered
worker is temporary or seasonal.
(B) Seasonal basis.--For purposes of this Act, labor is
performed on a seasonal basis where, ordinarily, the
employment pertains to or is of the kind exclusively
performed at certain seasons or periods of the year and
which, from its nature, may not be continuous or carried on
throughout the year.
(C) Temporary basis.--For purposes of this Act, a worker is
employed on a temporary basis where the employment is
intended not to exceed 10 months.
(3) Assurance of provision of required wages and
benefits.--The employer shall assure that the employer will
provide the wages and benefits required by subsections (a),
(b), and (c) of section 7 to all workers employed in job
opportunities for which the

[[Page S8664]]

employer has applied under subsection (a) and to all other
workers in the same occupation at the place of employment.
(4) Assurance of employment.--The employer shall assure
that the employer will refuse to employ individuals referred
under section 5, or terminate individuals employed pursuant
to this Act, only for lawful job-related reasons, including
lack of work.
(5) Assurance of compliance with labor laws.--
(A) In general.--An employer who requests registered
workers shall assure that, except as otherwise provided in
this Act, the employer will comply with all applicable
Federal, State, and local labor laws, including laws
affecting migrant and seasonal agricultural workers, with
respect to all United States workers and alien workers
employed by the employer.
(B) Limitations.--The disclosure required under section
201(a) of the Migrant and Seasonal Agricultural Worker
Protection Act (29 U.S.C. 1821(a)) may be made at any time
prior to the time the alien is issued a visa permitting entry
into the United States.
(6) Assurance of advertising of the registry.--The employer
shall assure that the employer will, from the day an
application for workers is submitted under subsection (a),
and continuing throughout the period of employment of any job
opportunity for which the employer has applied for a worker
from the registry, post in a conspicuous place a poster to be
provided by the Secretary advertising the availability of the
registry.
(7) Assurance of contacting former workers.--The employer
shall assure that the employer has made reasonable efforts
through the sending of a letter by United States Postal
Service mail, or otherwise, to contact any eligible worker
the employer employed during the previous season in the
occupation at the place of intended employment for which the
employer is applying for registered workers, and has made the
availability of the employer's job opportunities in the
occupation at the place of intended employment known to such
previous worker, unless the worker was terminated from
employment by the employer for a lawful job-related reason or
abandoned the job before the worker completed the period of
employment of the job opportunity for which the worker was
hired.
(8) Assurance of provision of workers compensation.--The
employer shall assure that if the job opportunity is not
covered by the State workers' compensation law, that the
employer will provide, at no cost to the worker, insurance
covering injury and disease arising out of and in the course
of the worker's employment which will provide benefits at
least equal to those provided under the State workers'
compensation law for comparable employment.
(9) Assurance of unemployment insurance coverage.--The
employer shall assure that if the employer's employment is
not covered employment under the State's unemployment
insurance law, the employer will provide unemployment
insurance coverage for the employer's United States workers
at the place of employment for which the employer has applied
for workers under subsection (a).
(d) Withdrawal of Applications.--
(1) In general.--An employer may withdraw an application
under subsection (a), except that, if the employer is an
agricultural association, the association may withdraw an
application under subsection (a) with respect to one or more
of its members. To withdraw an application, the employer
shall notify the Secretary in writing, and the Secretary
shall acknowledge in writing the receipt of such withdrawal
notice. An employer who withdraws an application under
subsection (a), or on whose behalf an application is
withdrawn, is relieved of the obligations undertaken in the
application.
(2) Limitation.--An application may not be withdrawn while
any alien provided status under this Act pursuant to such
application is employed by the employer.
(3) Obligations under other statutes.--Any obligation
incurred by an employer under any other law or regulation as
a result of recruitment of United States workers under an
offer of terms and conditions of employment required as a
result of making an application under subsection (a) is
unaffected by withdrawal of such application.
(e) Review of Application.--
(1) In general.--Promptly upon receipt of an application by
an employer under subsection (a), the Secretary shall review
the application for compliance with the requirements of such
subsection.
(2) Approval of applications.--If the Secretary determines
that an application meets the requirements of subsection (a),
and the employer is not ineligible to apply under paragraph
(2), (3), or (4) of section 8(b), the Secretary shall, not
later than 7 days after the receipt of such application,
approve the application and so notify the employer.
(3) Rejection of applications.--If the Secretary determines
that an application fails to meet 1 or more of the
requirements of subsection (a), the Secretary, as
expeditiously as possible, but in no case later than 7 days
after the receipt of such application, shall--
(A) notify the employer of the rejection of the application
and the reasons for such rejection, and provide the
opportunity for the prompt resubmission of an amended
application; and
(B) offer the applicant an opportunity to request an
expedited administrative review or a de novo administrative
hearing before an administrative law judge of the rejection
of the application.
(4) Rejection for program violations.--The Secretary shall
reject the application of an employer under this section if
the employer has been determined to be ineligible to employ
workers under section 8(b) or subsection (b)(2) of section
218 of the Immigration and Nationality Act (8 U.S.C. 1188).

SEC. 5. SEARCH OF REGISTRY.

(a) Search Process and Referral to the Employer.--Upon the
approval of an application under section 4(e), the Secretary
shall promptly begin a search of the registry of the State
(or States) in which the work is to be performed to identify
registered workers with the qualifications requested by the
employer. The Secretary shall contact such qualified
registered workers and determine, in each instance, whether
the worker is ready, willing, and able to accept the
employer's job opportunity and will commit to work for the
employer at the time and place needed. The Secretary shall
provide to each worker who commits to work for the employer
the employer's name, address, telephone number, the location
where the employer has requested that employees report for
employment, and a statement disclosing the terms and
conditions of employment.
(b) Deadline for Completing Search Process; Referral of
Workers.--As expeditiously as possible, but not later than 7
days before the date on which an employer desires work to
begin, the Secretary shall complete the search under
subsection (a) and shall transmit to the employer a report
containing the name, address, and social security account
number of each registered worker who has committed to work
for the employer on the date needed, together with sufficient
information to enable the employer to establish contact with
the worker. The identification of such registered workers in
a report shall constitute a referral of workers under this
section.
(c) Notice of Insufficient Workers.--If the report provided
to the employer under subsection (b) does not include
referral of a sufficient number of registered workers to fill
all of the employer's job opportunities in the occupation for
which the employer applied under section 4(a), the Secretary
shall indicate in the report the number of job opportunities
for which registered workers could not be referred, and
promptly transmit a copy of the report to the Attorney
General and the Secretary of State, by electronic or other
means ensuring next day delivery.

SEC. 6. ISSUANCE OF VISAS AND ADMISSION OF ALIENS.

(a) In General.--
(1) Number of admissions.--The Secretary of State shall
promptly issue visas to, and the Attorney General shall
admit, a sufficient number of eligible aliens designated by
the employer to fill the job opportunities of the employer--
(A) upon receipt of a copy of the report described in
section 5(c);
(B) upon receipt of an application (or copy of an
application under subsection (b));
(C) upon receipt of the report required by subsection
(c)(1)(B); or
(D) upon receipt of a report under subsection (d).
(2) Procedures.--The admission of aliens under paragraph
(1) shall be subject to the procedures of section 218A of the
Immigration and Nationality Act, as added by this Act.
(3) Agricultural associations.--Aliens admitted pursuant to
a report described in paragraph (1) may be employed by any
member of the agricultural association that has made the
certification required by section 4(a)(2)(B).
(b) Direct Application Upon Failure To Act.--
(1) Application to the secretary of state.--If the employer
has not received a referral of sufficient workers pursuant to
section 5(b) or a report of insufficient workers pursuant to
section 5(c), by the date that is 7 days before the date on
which the work is anticipated to begin, the employer may
submit an application for alien workers directly to the
Secretary of State, with a copy of the application provided
to the Attorney General, seeking the issuance of visas to and
the admission of aliens for employment in the job
opportunities for which the employer has not received
referral of registered workers. Such an application shall
include a copy of the employer's application under section
4(a), together with evidence of its timely submission. The
Secretary of State may consult with the Secretary of Labor in
carrying out this paragraph.
(2) Expedited consideration by secretary of state.--The
Secretary of State shall, as expeditiously as possible, but
not later than 5 days after the employer files an application
under paragraph (1), issue visas to, and the Attorney General
shall admit, a sufficient number of eligible aliens
designated by the employer to fill the job opportunities for
which the employer has applied under that paragraph.
(c) Redetermination of Need.--
(1) Requests for redetermination.--
(A) In general.--An employer may file a request for a
redetermination by the Secretary of the needs of the employer
if--
(i) a worker referred from the registry is not at the place
of employment on the date of need shown on the application,
or the date the work for which the worker is needed has
begun, whichever is later;
(ii) the worker is not ready, willing, able, or qualified
to perform the work required; or

[[Page S8665]]

(iii) the worker abandons the employment or is terminated
for a lawful job-related reason.
(B) Additional authorization of admissions.--The Secretary
shall expeditiously, but in no case later than 72 hours after
a redetermination is requested under subparagraph (A), submit
a report to the Secretary of State and the Attorney General
providing notice of a need for workers under this subsection.
(2) Job-related requirements.--An employer shall not be
required to initially employ a worker who fails to meet
lawful job-related employment criteria, nor to continue the
employment of a worker who fails to meet lawful, job-related
standards of conduct and performance, including failure to
meet minimum production standards after a 3-day break-in
period.
(d) Emergency Applications.--Notwithstanding subsections
(b) and (c), the Secretary may promptly transmit a report to
the Attorney General and Secretary of State providing notice
of a need for workers under this subsection for an employer--
(1) who has not employed aliens under this Act in the
occupation in question in the prior year's agricultural
season;
(2) who faces an unforeseen need for workers (as determined
by the Secretary); and
(3) with respect to whom the Secretary cannot refer able,
willing, and qualified workers from the registry who will
commit to be at the employer's place of employment and ready
for work within 72 hours or on the date the work for which
the worker is needed has begun, whichever is later.
(e) Regulations.--The Secretary of State shall prescribe
regulations to provide for the designation of aliens under
this section.

SEC. 7. EMPLOYMENT REQUIREMENTS.

(a) Required Wages.--
(1) In general.--An employer applying under section 4(a)
for workers shall offer to pay, and shall pay, all workers in
the occupation or occupations for which the employer has
applied for workers from the registry, not less (and is not
required to pay more) than the greater of the prevailing wage
in the occupation in the area of intended employment or the
adverse effect wage rate.
(2) Payment of prevailing wage determined by a state
employment security agency sufficient.--In complying with
paragraph (1), an employer may request and obtain a
prevailing wage determination from the State employment
security agency. If the employer requests such a
determination, and pays the wage required by paragraph (1)
based upon such a determination, such payment shall be
considered sufficient to meet the requirement of paragraph
(1).
(3) Reliance on wage survey.--In lieu of the procedure of
paragraph (2), an employer may rely on other information,
such as an employer-generated prevailing wage survey and
determination that meets criteria specified by the Secretary.
(4) Alternative methods of payment permitted.--
(A) In general.--A prevailing wage may be expressed as an
hourly wage, a piece rate, a task rate, or other incentive
payment method, including a group rate. The requirement to
pay at least the prevailing wage in the occupation and area
of intended employment does not require an employer to pay by
the method of pay in which the prevailing rate is expressed,
except that, if the employer adopts a method of pay other
than the prevailing rate, the burden of proof is on the
employer to demonstrate that the employer's method of pay is
designed to produce earnings equivalent to the earnings that
would result from payment of the prevailing rate.
(B) Compliance when paying an incentive rate.--In the case
of an employer that pays a piece rate or task rate or uses
any other incentive payment method, including a group rate,
the employer shall be considered to be in compliance with any
applicable hourly wage requirement if the average of the
hourly earnings of the workers, taken as a group, the
activity for which a piece rate, task rate, or other
incentive payment, including a group rate, is paid, for the
pay period, is at least equal to the required hourly wage.
(C) Task rate.--For purposes of this paragraph, the term
``task rate'' means an incentive payment method based on a
unit of work performed such that the incentive rate varies
with the level of effort required to perform individual units
of work.
(D) Group rate.--For purposes of this paragraph, the term
``group rate'' means an incentive payment method in which the
payment is shared among a group of workers working together
to perform the task.
(b) Requirement To Provide Housing.--
(1) In general.--An employer applying under section 4(a)
for registered workers shall offer to provide housing at no
cost (except for charges permitted by paragraph (5)) to all
workers employed in job opportunities to which the employer
has applied under that section, and to all other workers in
the same occupation at the place of employment, whose
permanent place of residence is beyond normal commuting
distance.
(2) Type of housing.--In complying with paragraph (1), an
employer may, at the employer's election, provide housing
that meets applicable Federal standards for temporary labor
camps or secure housing that meets applicable local standards
for rental or public accommodation housing or other
substantially similar class of habitation, or, in the absence
of applicable local standards, State standards for rental or
public accommodation housing or other substantially similar
class of habitation.
(3) Workers engaged in the range production of livestock.--
The Secretary shall issue regulations that address the
specific requirements for the provision of housing to workers
engaged in the range production of livestock.
(4) Limitation.--Nothing in this subsection shall be
construed to require an employer to provide or secure housing
for persons who were not entitled to such housing under the
temporary labor certification regulations in effect on June
1, 1986.
(5) Charges for housing.--
(A) Utilities and maintenance.--An employer who provides
housing to a worker pursuant to paragraph (1) may charge an
amount equal to the fair market value (but not greater than
the employer's actual cost) for maintenance and utilities, or
such lesser amount as permitted by law.
(B) Security deposit.--An employer who provides housing to
workers pursuant to paragraph (1) may require, as a condition
for providing such housing, a deposit not to exceed $50 from
workers occupying such housing to protect against gross
negligence or willful destruction of property.
(C) Damages.--An employer who provides housing to workers
pursuant to paragraph (1) may require a worker found to have
been responsible for damage to such housing which is not the
result of normal wear and tear related to habitation to
reimburse the employer for the reasonable cost of repair of
such damage.
(6) Reduced user fee for workers provided housing.--An
employer shall receive a credit of 40 percent of the payment
otherwise due pursuant to section 218(b) of the Immigration
and Nationality Act on the earnings of alien workers to whom
the employer provides housing pursuant to paragraph (1).
(7) Housing allowance as alternative.--
(A) In general.--In lieu of offering housing pursuant to
paragraph (1), subject to subparagraphs (B) through (D), the
employer may on a case-by-case basis provide a reasonable
housing allowance. An employer who offers a housing allowance
to a worker pursuant to this subparagraph shall not be deemed
to be a housing provider under section 203 of the Migrant and
Seasonal Agricultural Worker Protection Act (29 U.S.C. 1823)
solely by virtue of providing such housing allowance.
(B) Limitation.--At any time after the date that is 3 years
after the effective date of this Act, the governor of the
State may certify to the Secretary that there is not
sufficient housing available in an area of intended
employment of migrant farm workers or aliens provided status
pursuant to this Act who are seeking temporary housing while
employed at farm work. Such certification may be canceled by
the governor of the State at any time, and shall expire after
5 years unless renewed by the governor of the State.
(C) Effect of certification.--If the governor of the State
makes the certification of insufficient housing described in
subparagraph (A) with respect to an area of employment,
employers of workers in that area of employment may not offer
the housing allowance described in subparagraph (A) after the
date that is 5 years after such certification of insufficient
housing for such area, unless the certification has expired
or been canceled pursuant to subparagraph (B).
(D) Amount of allowance.--The amount of a housing allowance
under this paragraph shall be equal to the statewide average
fair market rental for existing housing for nonmetropolitan
counties for the State in which the employment occurs, as
established by the Secretary of Housing and Urban Development
pursuant to section 8(c) of the United States Housing Act of
1937 (42 U.S.C. 1437f(c)), based on a 2-bedroom dwelling unit
and an assumption of 2 persons per bedroom.
(c) Reimbursement of Transportation.--
(1) To place of employment.--A worker who is referred to a
job opportunity under section 5(a), or an alien employed
pursuant to this Act, who completes 50 percent of the period
of employment of the job opportunity for which the worker was
hired, may apply to the Secretary for reimbursement of the
cost of the worker's transportation and subsistence from the
worker's permanent place of residence (or place of last
employment, if the worker traveled from such place) to the
place of employment to which the worker was referred under
section 5(a).
(2) From place of employment.--A worker who is referred to
a job opportunity under section 5(a), or an alien employed
pursuant to this Act, who completes the period of employment
for the job opportunity involved, may apply to the Secretary
for reimbursement of the cost of the worker's transportation
and subsistence from the place of employment to the worker's
permanent place of residence (or place of next employment, if
the worker travels from the place of current employment to a
subsequent place of employment and is otherwise ineligible
for reimbursement under paragraph (1) with respect to such
subsequent place of employment).
(3) Limitation.--
(A) Amount of reimbursement.--Except as provided in
subparagraph (B), the amount of reimbursement provided under
paragraph (1) or (2) to a worker or alien shall not exceed
the lesser of--

[[Page S8666]]

(i) the actual cost to the worker or alien of the
transportation and subsistence involved; or
(ii) the most economical and reasonable transportation and
subsistence costs that would have been incurred had the
worker or alien used an appropriate common carrier, as
determined by the Secretary.
(B) Distance traveled.--No reimbursement under paragraph
(1) or (2) shall be required if the distance traveled is 100
miles or less.
(4) Use of trust fund.--Reimbursements made by the
Secretary to workers or aliens under this subsection shall be
considered to be administrative expenses for purposes of
section 218A(b)(4) of the Immigration and Nationality Act, as
added by this Act.
(d) Establishment of Pilot Program for Advancing
Transportation Costs.--
(1) In general.--The Secretary shall establish a pilot
program for the issuance of vouchers to United States workers
who are referred to job opportunities under section 5(a) for
the purpose of enabling such workers to purchase common
carrier transportation to the place of employment.
(2) Limitation.--A voucher may only be provided to a worker
under paragraph (1) if the job opportunity involved requires
that the worker temporarily relocate to a place of employment
that is more than 100 miles from the worker's permanent place
of residence or last place of employment, and the worker
attests that the worker cannot travel to the place of
employment without such assistance from the Secretary.
(3) Number of vouchers.--The Secretary shall award vouchers
under the pilot program under paragraph (1) to workers
referred from each registry in proportion to the number of
workers registered with each such registry.
(4) Reimbursement.--
(A) Use of trust fund.--Reimbursements for the cost of
vouchers provided by the Secretary under this subsection for
workers who complete at least 50 percent of the period of
employment of the job opportunity for which the worker was
hired shall be considered to be administrative expenses for
purposes of section 218A(b)(4) of the Immigration and
Nationality Act, as added by this Act.
(B) Of secretary.--A worker who receives a voucher under
this subsection who fails to complete at least 50 percent of
the period of employment of the job opportunity for which the
worker was hired under the job opportunity involved shall
reimburse the Secretary for the cost of the voucher.
(5) Report and continuation of program.--
(A) Collection of data.--The Secretary shall collect data
on--
(i) the extent to which workers receiving vouchers under
this subsection report, in a timely manner, to the jobs to
which such workers have been referred;
(ii) whether such workers complete the job opportunities
involved; and
(iii) the extent to which such workers do not complete at
least 50 percent of the period of employment the job
opportunities for which the workers were hired.
(B) Report.--Not later than 6 months after the expiration
of the second fiscal year during which the program under this
subsection is in operation, the Secretary, in consultation
with the Secretary of Agriculture, shall prepare and submit
to the Committee on the Judiciary of the Senate and the
Committee on the Judiciary of the House of Representatives, a
report, based on the data collected under subparagraph (A),
concerning the results of the program established under this
section. Such report shall contain the recommendations of the
Secretary concerning the termination or continuation of such
program.
(C) Termination of program.--The recommendations of the
Secretary in the report submitted under subparagraph (B)
shall become effective upon the expiration of the 90-day
period beginning on the date on which such report is
submitted unless Congress enacts a joint resolution
disapproving such recommendations.
(d) Continuing Obligation To Employ United States
Workers.--
(1) In general.--An employer that applies for registered
workers under section 4(a) shall, as a condition for the
approval of such application, continue to offer employment to
qualified, eligible United States workers who are referred
under section 5(b) after the employer receives the report
described in section 5(b).
(2) Limitation.--An employer shall not be obligated to
comply with paragraph (1)--
(A) after 50 percent of the anticipated period of
employment shown on the employer's application under section
4(a) has elapsed; or
(B) during any period in which the employer is employing no
aliens in the occupation for which the United States worker
was referred; or
(C) during any period when the Secretary is conducting a
search of a registry for job opportunities in the occupation
and area of intended employment to which the worker has been
referred, or other occupations in the area of intended
employment for which the worker is qualified that offer
substantially similar terms and conditions of employment.
(3) Limitation on requirement to provide housing.--
Notwithstanding any other provision of this Act, an employer
to whom a registered worker is referred pursuant to paragraph
(1) may provide a reasonable housing allowance to such
referred worker in lieu of providing housing if the employer
does not have sufficient housing to accommodate the referred
worker and all other workers for whom the employer is
providing housing or has committed to provide housing.
(4) Referral of workers during 50-percent period.--The
Secretary shall make all reasonable efforts to place a
registered worker in an open job acceptable to the worker,
including available jobs not listed on the registry, before
referring such worker to an employer for a job opportunity
already filled by, or committed to, an alien admitted
pursuant to this Act.

SEC. 8. ENFORCEMENT AND PENALTIES.

(a) Enforcement Authority.--
(1) Investigation of complaints.--
(A) In general.--The Secretary shall establish a process
for the receipt, investigation, and disposition of complaints
respecting an employer's failure to meet a condition
specified in section 4 or an employer's misrepresentation of
material facts in an application under that section.
Complaints may be filed by any aggrieved person or any
organization (including bargaining representatives). No
investigation or hearing shall be conducted on a complaint
concerning such a failure or misrepresentation unless the
complaint was filed not later than 12 months after the date
of the failure or misrepresentation, as the case may be. The
Secretary shall conduct an investigation under this paragraph
if there is reasonable cause to believe that such a failure
or misrepresentation has occurred.
(B) Statutory construction.--Nothing in this Act limits the
authority of the Secretary of Labor to conduct any compliance
investigation under any other labor law, including any law
affecting migrant and seasonal agricultural workers or, in
the absence of a complaint under this paragraph, under this
Act.
(2) Written notice of finding and opportunity for appeal.--
After an investigation has been conducted, the Secretary
shall issue a written determination as to whether or not any
violation described in subsection (b) has been committed. The
Secretary's determination shall be served on the complainant
and the employer, and shall provide an opportunity for an
appeal of the Secretary's decision to an administrative law
judge, who may conduct a de novo hearing.
(b) Remedies.--
(1) Back wages.--Upon a final determination that the
employer has failed to pay wages as required under this
section, the Secretary may assess payment of back wages due
to any United States worker or alien described in section
101(a)(15)(H)(ii)(a) of the Immigration and Nationality Act
employed by the employer in the specific employment in
question. The back wages shall be equal to the difference
between the amount that should have been paid and the amount
that actually was paid to such worker.
(2) Failure to pay wages.--Upon a final determination that
the employer has failed to pay the wages required under this
Act, the Secretary may assess a civil money penalty up to
$1,000 for each failure, and may recommend to the Attorney
General the disqualification of the employer from the
employment of aliens described in section
101(a)(15)(H)(ii)(a) of the Immigration and Nationality Act
for a period of time determined by the Secretary not to
exceed 1 year.
(3) Other violations.--If the Secretary, as a result of an
investigation pursuant to a complaint, determines that an
employer covered by an application under section 4(a) has--
(A) filed an application that misrepresents a material
fact; or
(B) failed to meet a condition specified in section 4,

the Secretary may assess a civil money penalty not to exceed
$1,000 for each violation and may recommend to the Attorney
General the disqualification of the employer for substantial
violations in the employment of any United States workers or
aliens described in section 101(a)(15)(ii)(a) of the
Immigration and Nationality Act for a period of time
determined by the Secretary not to exceed 1 year. In
determining the amount of civil money penalty to be assessed,
or whether to recommend disqualification of the employer, the
Secretary shall consider the seriousness of the violation,
the good faith of the employer, the size of the business of
the employer being charged, the history of previous
violations by the employer, whether the employer obtained a
financial gain from the violation, whether the violation was
willful, and other relevant factors.
(4) Program disqualification.--
(A) 3 years for second violation.--Upon a second final
determination that an employer has failed to pay the wages
required under this Act or committed other substantial
violations under paragraph (3), the Secretary shall report
such determination to the Attorney General and the Attorney
General shall disqualify the employer from the employment of
aliens described in section 101(a)(15)(H)(ii)(a) of the
Immigration and Nationality Act for a period of 3 years.
(B) Permanent for third violation.--Upon a third final
determination that an employer has failed to pay the wages
required under this section, or committed other substantial
violations under paragraph (3), the Secretary shall report
such determination to the Attorney General, and the Attorney
General shall disqualify the employer from any subsequent
employment of aliens described in section
101(a)(15)(H)(ii)(a) of the Immigration and Nationality Act.

[[Page S8667]]

(c) Role of Associations.--
(1) Violation by a member of an association.--An employer
on whose behalf an application is filed by an association
acting as its agent is fully responsible for such
application, and for complying with the terms and conditions
of this Act, as though the employer had filed the application
itself. If such an employer is determined to have violated a
requirement of this section, the penalty for such violation
shall be assessed against the employer who committed the
violation and not against the association or other members of
the association.
(2) Violation by an association acting as an employer.--If
an association filing an application on its own behalf as an
employer is determined to have committed a violation under
this subsection which results in disqualification from the
program under subsection (b), no individual member of such
association may be the beneficiary of the services of an
alien described in section 101(a)(15)(H)(ii)(a) of the
Immigration and Nationality Act in an occupation in which
such alien was employed by the association during the period
such disqualification is in effect, unless such member files
an application as an individual employer or such application
is filed on the employer's behalf by an association with
which the employer has an agreement that the employer will
comply with the requirements of this Act.

SEC. 9. ALTERNATIVE PROGRAM FOR THE ADMISSION OF TEMPORARY H-
2A WORKERS.

(a) Amendments to the Immigration and Nationality Act.--
(1) Election of procedures.--Section 214(c)(1) of the
Immigration and Nationality Act (8 U.S.C. 1184(c)(1)) is
amended--
(A) by striking the fifth and sixth sentences;
(B) by striking ``(c)(1) The'' and inserting ``(c)(1)(A)
Except as provided in subparagraph (B), the''; and
(C) by adding at the end the following new subparagraph:
``(B) Notwithstanding subparagraph (A), in the case of the
importing of any nonimmigrant alien described in section
101(a)(15)(H)(ii)(a), the importing employer may elect to
import the alien under the procedures of section 218 or
section 218A, except that any employer that applies for
registered workers under section 4(a) of the Agricultural Job
Opportunity Benefits and Security Act of 1998 shall import
nonimmigrants described in section 101(a)(15)(H)(ii)(a) only
in accordance with section 218A. For purposes of subparagraph
(A), with respect to the importing of nonimmigrants under
section 218, the term `appropriate agencies of Government'
means the Department of Labor and includes the Department of
Agriculture.''.
(2) Alternative program.--The Immigration and Nationality
Act is amended by inserting after section 218 (8 U.S.C. 1188)
the following new section:

``ALTERNATIVE PROGRAM FOR THE ADMISSION OF TEMPORARY H-2A WORKERS

``Sec. 218A. (a) Procedure for Admission or Extension of
Aliens.--
``(1) Aliens who are outside the united states.--
``(A) Criteria for admissibility.--
``(i) In general.--An alien described in section
101(a)(15)(H)(ii)(a) of the Immigration and Nationality Act
shall be admissible under this section if the alien is
designated pursuant to section 6 of the Agricultural Job
Opportunity Benefits and Security Act of 1998, otherwise
admissible under this Act, and the alien is not ineligible
under clause (ii).
``(ii) Disqualification.--An alien shall be ineligible for
admission to the United States or being provided status under
this section if the alien has, at any time during the past 5
years--

``(I) violated a material provision of this section,
including the requirement to promptly depart the United
States when the alien's authorized period of admission under
this section has expired; or
``(II) otherwise violated a term or condition of admission
to the United States as a nonimmigrant, including overstaying
the period of authorized admission as such a nonimmigrant.

``(iii) Initial waiver of ineligibility for unlawful
presence.--An alien who has not previously been admitted to
the United States pursuant to this section, and who is
otherwise eligible for admission in accordance with clauses
(i) and (ii), shall not be deemed inadmissible by virtue of
section 212(a)(9)(B).
``(B) Period of admission.--The alien shall be admitted for
the period requested by the employer not to exceed 10 months,
or the ending date of the anticipated period of employment on
the employer's application for registered workers, whichever
is less, plus an additional period of 14 days, during which
the alien shall seek authorized employment in the United
States. During the 14-day period following the expiration of
the alien's work authorization, the alien is not authorized
to be employed unless an employer who is authorized to employ
such worker has filed an extension of stay on behalf of the
alien pursuant to paragraph (2).
``(C) Abandonment of employment.--
``(i) In general.--An alien admitted or provided status
under this section who abandons the employment which was the
basis for such admission or providing status shall be
considered to have failed to maintain nonimmigrant status as
an alien described in section 101(a)(15)(H)(ii)(a) and shall
depart the United States or be subject to removal under
section 237(a)(1)(C)(i).
``(ii) Report by employer.--The employer (or association
acting as agent for the employer) shall notify the Attorney
General within 7 days of an alien admitted or provided status
under this Act who prematurely abandons the alien's
employment.
``(D) Issuance of identification and employment eligibility
document.--
``(i) In general.--The Attorney General shall cause to be
issued to each alien admitted under this section a card in a
form which is resistant to counterfeiting and tampering for
the purpose of providing proof of identity and employment
eligibility under section 274A.
``(ii) Design of card.--Each card issued pursuant to clause
(i) shall be designed in such a manner and contain a
photograph and other identifying information (such as date of
birth, sex, and distinguishing marks) that would allow an
employer to determine with reasonable certainty that the
bearer is not claiming the identity of another individual,
and shall--

``(I) specify the date of the alien's acquisition of status
under this section;
``(II) specify the expiration date of the alien's work
authorization; and
``(III) specify the alien's admission number or alien file
number.

``(2) Extension of stay of aliens in the united states.--
``(A) Extension of stay.--If an employer with respect to
whom a report or application described in section 6(a)(1) of
the Agricultural Job Opportunity Benefits and Security Act of
1998 has been submitted seeks to employ an alien who has
acquired status under this section and who is present in the
United States, the employer shall file with the Attorney
General an application for an extension of the alien's stay
or a change in the alien's authorized employment. The
application shall be accompanied by a copy of the appropriate
report or application described in section 6 of the
Agricultural Job Opportunity Benefits and Security Act of
1998.
``(B) Limitation on filing an application for extension of
stay.--An application may not be filed for an extension of an
alien's stay for a period of more than 10 months, or later
than a date which is 3 years from the date of the alien's
last admission to the United States under this section,
whichever occurs first.
``(C) Work authorization upon filing an application for
extension of stay.--An employer may begin employing an alien
who is present in the United States who has acquired status
under this Act on the day the employer files an application
for extension of stay. For the purpose of this requirement,
the term `filing' means sending the application by certified
mail via the United States Postal Service, return receipt
requested, or delivered by guaranteed commercial delivery
which will provide the employer with a documented
acknowledgment of the date of sending and receipt of the
application. The employer shall provide a copy of the
employer's application to the alien, who shall keep the
application with the alien's identification and employment
eligibility document as evidence that the application has
been filed and that the alien is authorized to work in the
United States. Upon approval of an application for an
extension of stay or change in the alien's authorized
employment, the Attorney General shall provide a new or
updated employment eligibility document to the alien
indicating the new validity date, after which the alien is
not required to retain a copy of the application.
``(D) Limitation on employment authorization of aliens
without valid identification and employment eligibility
card.--An expired identification and employment eligibility
document, together with a copy of an application for
extension of stay or change in the alien's authorized
employment, shall constitute a valid work authorization
document for a period of not more than 60 days from the date
of application for the extension of stay, after which time
only a currently valid identification and employment
eligibility document shall be acceptable.
``(E) Limitation on an individual's stay in status.--An
alien having status under this section may not have the
status extended for a continuous period longer than 3 years
unless the alien remains outside the United States for an
uninterrupted period of 6 months. An absence from the United
States may break the continuity of the period for which a
nonimmigrant visa issued under section 101(a)(15)(H)(ii)(a)
is valid. If the alien has resided in the United States 10
months or less, an absence breaks the continuity of the
period if its lasts for at least 2 months. If the alien has
resided in the United States 10 months or more, an absence
breaks the continuity of the period if it lasts for at least
one-fifth the duration of the stay.
``(b) Trust Fund.--
``(1) Establishment.--There is established in the Treasury
of the United States a trust fund (in this section referred
to as the `Trust Fund') for the purpose of funding the costs
of administering this section and, in the event of an adverse
finding by the Attorney General under subsection (c), for the
purpose of providing a monetary incentive for aliens
described in section 101(a)(15)(H)(ii)(a) to return to their
country of origin upon expiration of their visas under this
section.
``(2) Transfers to trust fund.--
``(A) In general.--There is appropriated to the Trust Fund
amounts equivalent to the sum of the following:

[[Page S8668]]

``(i) Such employers shall pay to the Secretary of the
Treasury a user fee in an amount equivalent to so much of the
Federal tax that is not transferred to the States on the
earnings of such aliens that the employer would be obligated
to pay under the Federal Unemployment Tax Act and the Federal
Insurance Contributions Act if the earnings were subject to
such Acts. Such payment shall be in lieu of any other
employer fees for the benefits provided to employers pursuant
to this Act or in connection with the admission of aliens
pursuant to section 218A.
``(ii) In the event of an adverse finding by the Attorney
General under subsection (c), employers of aliens under this
section shall withhold from the wages of such aliens an
amount equivalent to 20 percent of the earnings of each alien
and pay such withheld amount to the Secretary of the
Treasury.
``(B) Treatment of amounts.--Amounts paid to the Secretary
of the Treasury under subparagraph (A) shall be treated as
employment taxes for purposes of subtitle C of the Internal
Revenue Code of 1986.
``(C) Treatment as offsetting receipts.--Amounts
appropriated to the Trust Fund under this paragraph shall be
treated as offsetting receipts.
``(3) Administrative expenses.--Amounts transferred to the
Trust Fund pursuant to paragraph (2)(A)(ii), shall, without
further appropriation, be paid to the Attorney General, the
Secretary of Labor, the Secretary of State, and the Secretary
of Agriculture in amounts equivalent to the expenses incurred
by such officials in the administration of section
101(a)(15)(H)(ii)(a) and this section.
``(4) Distribution of funds.--In the event of an adverse
finding by the Attorney General under subsection (c), amounts
transferred to the Trust Fund pursuant to paragraph
(2)(A)(ii), and interest earned thereon under paragraph (6),
shall be held on behalf of an alien and shall be available,
without further appropriation, to the Attorney General for
payment to the alien if--
``(A) the alien applies to the Attorney General (or the
designee of the Attorney General) for payment within 30 days
of the expiration of the alien's last authorized stay in the
United States;
``(B) in such application the alien establishes that the
alien has complied with the terms and conditions of this
section; and
``(C) in connection with the application, the alien tenders
the identification and employment authorization card issued
to the alien pursuant to subsection (a)(1)(D) and establishes
that the alien is identified as the person to whom the card
was issued based on the biometric identification information
contained on the card.
``(5) Migrant agricultural worker housing.--Such funds as
remain in the Trust Fund after the payments described in
paragraph (4) shall be used by the Secretary of Agriculture,
in consultation with the Secretary, for the purpose of
increasing the stock of in-season migrant worker housing in
areas where such housing is determined to be insufficient to
meet the needs of migrant agricultural workers, including
aliens admitted under this section.
``(6) Regulations.--The Secretary of the Treasury, in
consultation with the Attorney General, shall prescribe
regulations to carry out this subsection.
``(7) Investment of portion of trust fund.--
``(A) In general.--It shall be the duty of the Secretary of
the Treasury to invest such portion of the amounts
transferred to the Trust Fund pursuant to paragraph
(2)(A)(i), and, if applicable paragraph (2)(A)(ii), as is
not, in the Secretary's judgment, required to meet current
withdrawals. Such investments may be made only in interest-
bearing obligations of the United States or in obligations
guaranteed as to both principal and interest by the United
States. For such purpose, such obligations may be acquired--
``(i) on original issue at the price; or
``(ii) by purchase of outstanding obligations at the market
price.

The purposes for which obligations of the United States may
be issued under chapter 31 of title 31, United States Code,
are hereby extended to authorize the issuance at par of
special obligations exclusively to the Trust Fund. Such
special obligations shall bear interest at a rate equal to
the average rate of interest, computed as to the end of the
calendar month next preceding the date of such issue, borne
by all marketable interest-bearing obligations of the United
States then forming a part of the public debt, except that
where such average rate is not a multiple of one-eighth of 1
percent next lower than such average rate. Such special
obligations shall be issued only if the Secretary of the
Treasury determines that the purchase of other interest-
bearing obligations of the United States, or of obligations
guaranteed as to both principal and interest by the United
States on original issue or at the market price, is not in
the public interest.
``(B) Sale of obligation.--Any obligation acquired by the
Trust Fund (except special obligations issued exclusively to
the Trust Fund) may be sold by the Secretary of the Treasury
at the market price, and such special obligations may be
redeemed at par plus accrued interest.
``(C) Credits to trust fund.--The interest on, and the
proceeds from the sale or redemption of, any obligations held
in the Trust Fund shall be credited to and form a part of the
amounts transferred to the Trust Fund pursuant to paragraph
(2)(A)(i).
``(D) Report to congress.--It shall be the duty of the
Secretary of the Treasury to hold the Trust Fund, and (after
consultation with the Attorney General) to report to the
Congress each year on the financial condition and the results
of the operations of the Trust Fund during the preceding
fiscal year and on its expected condition and operations
during the next fiscal year. Such report shall be printed as
both a House and a Senate document of the session of the
Congress to which the report is made.
``(c) Study by the Attorney General.--The Attorney General
shall conduct a study to determine whether aliens under this
section depart the United States in a timely manner upon the
expiration of their period of authorized stay. If the
Attorney General finds that a significant number of aliens do
not so depart and that a financial inducement is necessary to
assure such departure, then the Attorney General shall so
report to Congress and, upon receipt of the report,
subsections (b)(2)(A)(ii) and (b)(4) shall take effect.''.
(b) No Family Members Permitted.--Section 101(a)(15)(H) of
the Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(H))
is amended by striking ``specified in this paragraph'' and
inserting ``specified in this subparagraph (other than in
clause (ii)(a))''.
(c) Conforming Amendment.--The table of contents of the
Immigration and Nationality Act is amended by inserting after
the item relating to section 218 the following new item:

``Sec. 218A. Alternative program for the admission of H-2A workers.''.
(d) Repeal and Additional Conforming Amendments.--
(1) Repeal.--Section 218 of the Immigration and Nationality
Act is repealed.
(2) Technical amendments.--(A) Section 218A of the
Immigration and Nationality Act is redesignated as section
218.
(B) The table of contents of that Act is amended by
striking the item relating to section 218A.
(C) The section heading for section 218 of that Act is
amended by striking ``alternative program for''.
(3) Termination of employer election.--Section 214(c)(1)(B)
of the Immigration and Nationality Act is amended to read as
follows:
``(B) Notwithstanding subparagraph (A), the procedures of
section 218 shall apply to the importing of any nonimmigrant
alien described in section 101(a)(15)(H)(ii)(a).''.
(4) Maintenance of certain section 218 provisions.--Section
218 (as redesignated by paragraph (2) of this subsection) is
amended by adding at the end the following:
``(d) Miscellaneous Provisions.--(1) The Attorney General
shall provide for such endorsement of entry and exit
documents of nonimmigrants described in section
101(a)(15)(H)(ii) as may be necessary to carry out this
section and to provide notice for purposes of section 274A.
``(2) The provisions of subsections (a) and (c) of section
214 and the provisions of this section preempt any State or
local law regulating admissibility of nonimmigrant
workers.''.
(5) Effective date.--The repeal and amendments made by this
subsection shall take effect 5 years after the date of
enactment of this Act.

SEC. 10. INCLUSION IN EMPLOYMENT-BASED IMMIGRATION PREFERENCE
ALLOCATION.

(a) Amendment of the Immigration and Nationality Act.--
Section 203(b)(3)(A) of the Immigration and Nationality Act
(8 U.S.C. 1153(b)(3)(A)) is amended--
(1) by redesignating clause (iii) as clause (iv); and
(2) by inserting after clause (ii) the following:
``(iii) Agricultural workers.--Qualified immigrants who
have completed at least 6 months of work in the United States
in each of 4 consecutive calendar years under section
101(a)(15)(H)(ii)(a), and have complied with all terms and
conditions applicable to that section.''.
(b) Conforming Amendment.--Section 203(b)(3)(B) of the
Immigration and Nationality Act (8 U.S.C. 1153(b)(3)(A)) is
amended by striking ``subparagraph (A)(iii)'' and inserting
``subparagraph (A)(iv)''.
(c) Effective Date.--The amendments made by subsections (a)
and (b) shall apply to aliens described in section
101(a)(15)(H)(ii)(a) admitted to the United States before,
on, or after the effective date of this Act.

SEC. 11. MIGRANT AND SEASONAL HEAD START PROGRAM.

(a) In General.--Section 637(12) of the Head Start Act (42
U.S.C. 9832(12)) is amended--
(1) by inserting ``and seasonal'' after ``migrant''; and
(2) by inserting before the period the following: ``, or
families whose incomes or labor is primarily dedicated to
performing seasonal agricultural labor for hire but whose
places of residency have not changed to another geographic
location in the preceding 2-year period''.
(b) Funds Set-Aside.--Section 640(a) (42 U.S.C. 9835(a)) is
amended--
(1) in paragraph (2), strike ``13'' and insert ``14'';
(2) in paragraph (2)(A), by striking ``1994'' and inserting
``1998''; and
(3) by adding at the end the following new paragraph:
``(8) In determining the need for migrant and seasonal Head
Start programs and services, the Secretary shall consult with
the

[[Page S8669]]

Secretary of Labor, other public and private entities, and
providers. Notwithstanding paragraph (2)(A), after conducting
such consultation, the Secretary shall further adjust the
amount available for such programs and services, taking into
consideration the need and demand for such services.''.

SEC. 12. REGULATIONS.

(a) Regulations of the Attorney General.--The Attorney
General shall consult with the Secretary and the Secretary of
Agriculture on all regulations to implement the duties of the
Attorney General under this Act.
(b) Regulations of the Secretary of State.--The Secretary
of State shall consult with the Attorney General on all
regulations to implement the duties of the Secretary of State
under this Act.

SEC. 13. FUNDING FROM WAGNER-PEYSER ACT.

If additional funds are necessary to pay the start-up costs
of the registries established under section 3(a), such costs
may be paid out of amounts available to Federal or State
governmental entities under the Wagner-Peyser Act (29 U.S.C.
49 et seq.).

SEC. 14. EFFECTIVE DATE.

This Act and the amendments made by this Act shall take
effect 180 days after the date of enactment of this Act.

Endorsing Organizations

National Council of Agricultural Employers; American Farm
Bureau Federation; AgriBank; Agricultural Affiliates, Inc.;
Agricultural Council of California; Agricultural Producers;
Allied Grape Growers; Almond Hullers & Processors
Association, Inc.; American Mushroom Institute; American
Nursery & Landscape Association; American Sheep Industry
Association; Apple Growers of Dutchess County; California
Apple Commission; California Association of Winegrape
Growers; California Beet Growers Association; California
Citrus Mutual; California Cherry Export Association;
California Cotton Ginners & Growers Association; California
Cotton Growers Association; California Cut Flower Commission;
California Farm Bureau Federation; California Floral Council;
California Grape & Tree Fruit League; California Tomato
Growers Association; Colorado Onion Association; Colorado
Sugarbeet Growers Association; Fagerberg Produce; Farm Credit
Services of North Central Wisconsin; Florida Citrus Mutual;
Florida Citrus Packers; Florida Citrus Processors
Association; Florida Farm Bureau Federation; Florida Fruit &
Vegetable Association; Florida Nurserymen & Growers
Association; Florida Strawberry Growers Association;
Frederick County Fruit Growers Association, Inc.; Fresno
County Farm Bureau; Georgia Agribusiness Council, Inc.;
Grower-Shipper Vegetable Association of Central California;
Grower-Shipper Vegetable Association of San Luis Obispo &
Santa Barbara Counties; Gulf Citrus Growers Association,
Inc.; Hood River Grower-Shipper Association; Idaho Grower
Shippers Association; Imperial Valley Vegetable Growers
Association; Jackson County Fruit Growers League; Marsing
Agriculture Labor Association; Michigan Asparagus Advisory
Board; Michigan Farm Bureau; Midwest Food Processors
Association; Midwest Sod Council; National Christmas Tree
Association; National Cotton Council of America; National
Cotton Ginners' Association; National Watermelon Association;
New England Apple Council; New Jersey Farm Bureau Federation;
New York Apple Association, Inc.; New York Cherry Growers
Association, Inc.; New York Farm Bureau; Nisei Farmers
League; North Carolina Growers Association, Inc.; North
Carolina Sweet Potato Commission, Inc.; Northern California
Growers Association; Northern Christmas Trees & Nursery;
Northwest Horticultural Council; Ohio Farm Bureau Federation,
Inc.; Ohio Fruit Growers Society; Ohio Vegetable & Potato
Growers Association; Olive Growers Council; Oregon
Association of Nurserymen, Inc.; Oregon Farm Bureau
Federation; Oregon Hop Growers Association; Oregon Raspberry
& blackberry Commission; Oregon Strawberry Commission; Peach
Commission; Raisin Bargaining Association; San Joaquin Valley
Dairymen; Snake River Farmers Association; Society of
American Florists; Sod Growers Association of Mid-America;
South Carolina Farm Bureau Federation; Southeast Cotton
Ginners Association, Inc.; Southeast Forestry Contractors'
Association; Southern Cotton Growers Association; State
Horticultural Association of Pennsylvania; Sugar Cane Growers
Cooperative of Florida; Texas Cotton Ginners Association;
Texas Produce Association; Turfgrass Producers
International; United Fresh Fruit & Vegetable Association;
United States Apple Association; United States Sugar
Corporation; Vegetable Growers Association of New Jersey;
Ventura County Agricultural Association; Wasco County
Fruit & Produce League; Washington Growers Clearing House
Association; Washington Growers League; Washington State
Farm Bureau; Washington Women for Agriculture; Wenatchee
Valley Traffic Association; Western Growers Association;
Western Range Association; Western United Dairymen;
Wisconsin Christmas Tree Producers; Wisconsin Farm Bureau;
and Yakima Valley Grower-Shipper Association.

Mr. GORTON. Mr. President, a recent GAO report concluded that
approximately one-third of the U.S. agricultural labor force in the
United States is illegal. Many estimate that the percentage is in fact
much higher. For too long, Congress has failed to respond to the lack
of legal agricultural workers, and simply left on the books, and
largely unused, a guestworker program that is too administratively
complex and expensive to be workable. With recent crackdowns by INS,
our farmers and growers face a labor shortage crisis. Congress must
act, and it must act now.
I rise today, and join my colleagues on both sides of the aisle in
introducing the Agricultural Job Opportunity Benefits and Security Act
of 1998, a bill to address this problem. This legislation is long past
due and urgently needed. As the Senator from Florida described earlier
today, the bill is a win-win-win proposition. It is a win for farmers
and growers because it provides them a method of obtaining a legal,
reliable workforce. It is a win for workers both domestic and foreign.
For domestic workers, the bill, through a work registry, gives them
first preference on jobs, benefits above those they are currently
receiving, and continued employment by ensuring that American farms
remain economically viable and that production is not lost to other
countries. For foreign workers, the bill provides the dignity, freedom
from fear, and mobility that attends a legal status, as well as
significant worker protection and benefits. Finally, the bill is a win
for consumers because it ensures them a ready, affordable supply of
American agricultural products. I applaud this carefully considered,
balanced legislation and will work actively for its quick enactment.
Mr. McCONNELL. Mr. President, the Kentucky Farm Bureau and the
hundreds of farmers that I met with on my recent farm belt tour
convinced me that one of the most pressing issues facing Kentucky
farmers is the problem of finding legal, migrant farm workers.
Kentucky farmers depend heavily on migrant agricultural workers that
come to Kentucky under H-2A visas to help harvest tobacco and other
crops. Kentucky depends on the H-2A visa program more than every other
state, except North Carolina and Virginia.
The current H-2A process is slow, tedious and complex. It subjects
farmers to unreasonable costs, excessive bureaucracy, and mountains of
paperwork.
To add to the injustice, farmers are faced with frivolous lawsuits
and IRS raids--often at the peak time of the harvest.
The Agriculture Job Opportunity Benefits and Security Act would lift
the unfair burdens placed on farmers by reforming the H-2A visa program
and reducing: the mountains of paperwork, the excessive bureaucracy,
and the unfair threats of frivolous litigation.
In order to get migrant workers, a Kentucky farmer has to find his
way through the Kentucky Department of Labor, the U.S. Department of
Labor, and the Immigration and Naturalization Service--paying fees and
filling out cumbersome, confusing paperwork all along the way.
Most farmers will tell you that it's easier to wade through the tax
code and file a 1040 tax form every year than it is to slog through
multiple government agencies and mountains of paperwork just to hire a
migrant farm worker to help bale hay.
In fact, the Department of Labor needs a 325-page handbook to help
farmers find their way to migrant farm workers. The Government
Accounting Office managed to get through this handbook and found it to
be outdated, incomplete and very confusing.
You shouldn't have to hire a lawyer just to hire a migrant farmer.
I'd like to take a couple of minutes to walk through some of the
common problems faced by farmers and the common sense solutions offered
by the bill we are introducing today.
Problem: Farmers are hesitant to use the process because it is too
slow and complicated.
Solution: A simplified, streamlined H-2A visa program would encourage
more farmers to go through the system to hire legal migrant farm
workers.
Problem: Farmers must pay multiple fees, go through multiple
agencies, and fill-out multiple documents.
Solution: A Department of Labor computer registry would be
established to replace the current cumbersome and bureaucratic process.
Farmers would submit a simple form asking for a certain number of
workers at a specified

[[Page S8670]]

time. If there is an insufficient number of domestic workers available,
then the DOL would contact the INS to initiate an expedited visa
approval process for migrant farm workers. (All program costs would be
paid for by employer user fees.)
Problem: Farmers must apply for workers 60 days in advance--even
though they may not know exactly how many workers they will need or
exactly when they will need them.
Solution: Farmers do not have to begin process two months in advance.
They may apply any time prior to actually hiring foreign workers. The
total process from initial application to actual hiring should take no
more than 21 days.
Problem: DOL slows the process by failing to timely process
applications. A GAO study found that DOL missed statutory deadlines in
at least 40 percent of the cases.
Solution: Farmers do not have to wait for DOL. If the DOL does not
either meet the deadline or issue a specific objection, then the INS is
authorized to go ahead and issue visas for migrant workers.
Problem: Farmers have to spend hundreds of dollars advertising in the
newspaper or on the radio to prove what they already know--that is,
there is a shortage of domestic workers who will labor in the fields.
Solution: Farmers will not be required to engage in costly radio and
newspaper advertising, but may recruit domestic workers by simply using
the existing DOL job bank for available domestic workers. DOL will
match domestic workers with jobs.
Problem: Farmers are required to pay wages that are often higher than
both the minimum wage and the prevailing wage because the legal wage is
calculated based on wages paid for all farming jobs, not the specific
job in which the migrant worker employed.
Solution: Farmers would not have to pay exorbitant wages to migrant
farm workers. They would be required to pay wages only up to the
prevailing wage for the type of occupation in which the grower is
actually employed. The wage would not be based on the wages earned by
all persons in all farming jobs.
Problem: Farmers are faced with the threat of frivolous litigation
for failing to meet vague and open-ended statutory and regulatory
requirements.
Solution: The threat of litigation would be reduced by removing
unfair burdens on farmers and by clearly spelling out statutory
requirements.
Finally, let me respond to the critics of this compromise bill.
Critics wrongly claim the new alternative program has no labor
protections.
The alternative program provides foreign and domestic workers with
all the labor protections of federal and state labor laws. In addition,
it imposes special obligations on participating employers such as
payment of at least the prevailing wage.
The pilot program is modeled after the existing H-lB program for
specialty and high-tech occupations. It requires employers to recruit
domestic workers, and assures that domestic workers receive first
preference for jobs.
Finally, the new program provides strict penalties for employers who
fail to meet labor standards, including fines, back wages, and
debarment from future program participation.
I wanted to commend the bipartisan group of Senators, led by Gordon
Smith, who have worked together to craft a comprehensive and meaningful
solution for our nation's farmers.
I was proud to be a cosponsor of Senator Smith's original bill, S.
1563, and am equally pleased to be a part of this compromise bill.
I look forward to working with the American Farm Bureau and the
Kentucky Farm Bureau to move this bill in the Senate as soon as
possible.
Mr. GRAHAM. Mr. President, I rise today to join my colleagues in
introducing legislation that will simplify and streamline one of the
most frustrating aspects in the life of a farmer: Finding qualified,
legal farmworkers.
There are two large issues that cause this problem: (1) According to
the December 1997 GAO report, there are at least 600,000 farm workers
in the United States illegally--and most have false, but realistic-
looking, documents.
The farmer can go to extreme lengths to verify his workforce, and
still be vulnerable to INS enforcement action.
Our bill, through an Agricultural Registry of workers, ensures that a
farmer is able to get a legal, reliable workforce, and our bill ensures
that these American workers are paid a premium wage and receive the
benefits that they deserve.
(2) Under the current system, if a farmer cannot find available
American workers and does need to find temporary foreign help through
H-2A visas, he or she must navigate a maze of complex regulations, so
much so that it takes a 300-page guidebook to explain the process.
He or she also has little assurance that, even after successfully
completing the forms and initiating the process, that the Department of
Labor will approve or deny the petitions in a timely manner.
It may seem notable that we are all here together, in a bipartisan
manner, from every geographic region of our great Nation.
In the past, discussion of the H-2A program has broken down into a
partisan, polarized, gridlocked debate, and no one wins. Wages are
still low for workers, and growers still need legal reliable help.
I commend my colleagues, Senator Wyden, Senator Bumpers, Senators
Smith, Craig, and Gorton for helping bring common sense reality to the
table, and together, crafting a bill that helps all sides.
I thank Senator Abraham for holding a fair, educational and timely
hearing on this issue, and for bringing all sides together to discuss
what works and what doesn't work under the current system.
We, as a bipartisan group, want to accomplish several goals, and I
ask my colleagues in the Senate to support what we feel will bring
order to the current chaos, bring honor to the farming community, and
bring needed benefits to hard working farmworkers. Our goals are
simple:
1. Make the H-2A system simple. With our agricultural registry,
anyone can start the process by picking up the phone.
Turnaround time can be counted in minutes and hours instead of weeks
or months. Give our farmers the chance to choose between legal domestic
workers, and legal foreign workers, with the domestic workers getting
the first choice at all jobs. But the choice can be made to have a
legal workforce.
2. Ensure that American workers get the first choice of every job
opening. Under the Registry system--not a single foreign worker will
come to the United States until every domestic worker on the Registry
is employed in the area he or she has requested.
American farmworkers will be able to easily link together a year's
worth of work--moving from Florida to Kentucky to New England, if that
is what they want.
3. Ensure that American workers receive premium wages and benefits.
Under the Registry program, every legal domestic worker is guaranteed
at least prevailing wage, plus a 5 percent premium.
The growers will pay a higher price than they may be paying
currently, but they have the added value of knowing with certainty that
they are not vulnerable to INS enforcement action. Registry workers
also will receive housing benefits, either on-site housing, or a
housing allowance.

4. Put a stop to the horrible practice of smuggling human lives.
Under the current state of affairs, every day, human beings are dying--
crammed into the back of vans, dehydrating in the California deserts,
or murdered for the thousand dollars they are willing to pay for a
secretive trip across the border and a set of false documents.
They are drawn here by the jobs, many of them farmwork jobs. They put
their lives on the line to work in an underground economy. They keep
food on our table, and our economy growing.
Let us take this underground system above ground. Offer a simple,
reliable way to bring temporary, legal foreign workers here, paid at
wages that will not disadvantage any American workers and protected by
all labor laws and standards.
5. Don't hurt any other immigration category. All of this can be
accomplished without taking away from any current immigration numbers.
H-2A workers workers, by definition, are in our country for
temporary, seasonal work--and they return home

[[Page S8671]]

when the job is done. They will not swell the population of the United
States, or become a burden on our social safety net.
They will work side by side with the domestic workforce in one of the
most important, but difficult, jobs in our society: putting fresh
fruit, fresh vegetables, perishable delicacies on our plates each and
every meal.
Please join me in this bipartisan effort to simplify this complex
system.
______

By Mr. MOYNIHAN (for himself, Mr. D'Amato, and Mr. Specter):
S. 2338. A bill to amend the Harmonized Tariff Schedule of the United
States to provide for equitable duty treatment for certain wool used in
making suits; to the Committee on Finance.

legislation to provide equitable treatment for certain wool fabric

Mr. MOYNIHAN. Mr. President, today I introduce a bill to
correct a glaring competitive imbalance that has arisen because of an
anomaly in our tariff schedule. Hickey-Freeman has produced fine
tailored suits in Rochester, New York since 1899. Nearly a century.
However, the U.S. tariff schedule currently makes it difficult for
Hickey-Freeman to continue producing such suits in the United States.
The facts are straight-forward. Companies like Hickey-Freeman that
must import the very high quality wool fabric used to make men's and
boys' suits pay a tariff of 31.7 percent. They compete with companies
that import finished wool suits from a number of countries. If these
imported suits are from Canada, the importers pay no tariff whatever.
If the suits are imported from Mexico, the tariff is 11 percent. From
other countries, the importers pay a duty of 20.2 percent. Clearly,
domestic manufacturers of wool suits are put at a significant price
disadvantage. Indeed, the tariff structure provides an incentive to
import finished suits from abroad, rather than manufacture them in the
United States.
The bill I am introducing today, along with Senators D'Amato and
Specter, would correct this problem, at least temporarily. It suspends
through December 31, 2004 the duty on the finest wool fabrics (known in
the trade as Super 90s or higher grade--fabrics that are produced in
only very limited quantities in the United States. And it would reduce
the duty for slightly lower grade but still very fine wool fabric
(Super 70's and Super 80's) to 20.2 percent--the same duty as on
finished wool suits. The bill also provides that, in the event the
President proclaim a duty reduction on wool suits, corresponding
changes would be made to the tariffs applicable to `Super 70's' and
`Super 80's' grade wool fabric.
This bill would correct a troublesome tariff inversion that puts U.S.
wool suit producers at a serious competitive disadvantage. It is a
small step toward modifying a tariff schedule that favors foreign
producers of wools suits at the expense of U.S. suit makers. I
therefore urge my colleagues to join me in supporting its adoption, and
ask for unanimous consent that the full text of the bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 2338

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

SECTION 1. DUTY TREATMENT OF CERTAIN FABRICS.

(a) In General.--Subchapter II of chapter 99 of the
Harmonized Tariff Schedule of the United States is amended--
(1) by adding at the end of the U.S. notes the following
new note:
``13. For purposes of headings 9902.51.11 and 9902.51.12,
the term `suit' has the same meaning such term has for
purposes of headings 6203 and 6204.''; and
(2) by inserting in numerical sequence the following new
headings:

``9902.51.11.. Fabrics, of carded
or combed wool or
fine animal hair,
all the foregoing
certified by the
importer as
`Super 70's' or
`Super 80's'
intended for use
in making suits,
suit-type jackets
or trousers
(provided for in
subheadings
5111.11.70,
5111.19.60,
5112.11.20, or
5112.19.90)...... 20.2% No
change No
change On or
before
12/31/
2004
9902.51.12.... Fabrics, of carded
or combed wool or
fine animal hair,
all the foregoing
certified by the
importer as
`Super 90's' or
higher grade
intended for use
in making suits,
suit-type jackets
or trousers
(provided for in
subheadings
5111.11.70,
5111.19.60,
5112.11.20, or
5112.19.90)...... Free Free
(CA,
IL,
MX) No
change On or
before
12/31/
2004''.

(b) Staged Rate Reduction.--Any staged reduction of a rate
of duty set forth in heading 6203.31.00 of the Harmonized
Tariff Schedule of the United States that is proclaimed by
the President shall also apply to the corresponding rate of
duty set forth in heading 9902.51.11 of such Schedule (as
added by subsection (a)).
(c) Effective Date.--The amendments made by subsection (a)
apply with respect to goods entered, or withdrawn from
warehouse for consumption, on or after the 15th day after the
date of enactment of this Act.

Mr. D'AMATO. Mr. President, today I support this important
legislation to eliminate tariff duties on certain wool fabrics.
Currently, there exists a disparity in the tariff schedule which forces
companies like Hickey-Freeman, in Rochester, New York and Learbury in
Syracuse, New York, who import very high quality wool fabric, to pay a
tariff of 31.7 percent.
These same finished suits imported from Canada come into the United
States tariff free. If the suits are imported from Mexico, there is an
11 percent tariff and from other countries, the tariff rate is 20.2
percent. This inverted tariff schedule actually provides an incentive
to import suits rather than produce them here in the United States with
domestic labor and domestic wool.
This straightforward, clear legislation would suspend through
December 31, 2004 the duty on the finest wool fabrics (known
specifically as Super 90s weight or higher grade wool). These higher
quality fabrics are produced in very limited quantities in the United
States, so this tariff reduction would have no negative impact on
domestic producers.
Clearly, if there were enough of this wool fabric produced
domestically, there would be no need for this legislation since
suitmakers would not need to import wool and pay the extortionately
high rate of 31.7 percent. Indeed, if the U.S. suit manufacturing
industry is allowed to compete fairly with imported suits, and not
forced to reduce costs just to pay for inverted tariff rates, domestic
wool use will actually increase with the additional suits that will be
manufactured in the United States.
Additionally, the provision would reduce the duty for slightly lower
grade, fine wool fabric (Super 70s and 80s) to 20.2 percent--the same
duty as on finished wool suits.
Mr. President, under current law, if two fabric buyers, one American
and the other Canadian, purchase fabric from a foreign country, say
Italy, they each pay the exact same price. Yet when they bring the
fabric back to their country to be made into suits that is where the
problem occurs.
The American is forced to pay a tariff of 31.7 percent on the
imported fabric, which then must be absorbed into the cost of the suit,
or eaten by the manufacturer. The Canadian buyer pays no tariff.
Additionally, the Canadian suit maker can then export to the U.S., and
because of the NAFTA agreement, they pay no tariff. As a result,
Canadian shipments of men's suits into the United States has gone from
0 to 1.5 million in only ten years.
Mr. President, I am extremely concerned with the current wool tariff
because this inverted tariff policy has negatively impacted U.S. jobs.
U.S. production has fallen by 40 percent and jobs by 50 percent. And,
Mr. President, this additional tariff raises the costs for consumers as
well.
I am proud to join with Senators Moynihan and Specter in this
important legislation, and look forward to its early passage and
enactment into law.
Mr. SPECTER. Mr. President, today I join my colleagues,
Senators Daniel Patrick Moynihan and Alfonso

[[Page S8672]]

D'Amato, to introduce a bill that will keep high paying jobs in the
domestic tailored wool apparel industry in America. This bill will
suspend the duty on certain high quality wool fabrics used in American
garment manufacturing.
The duty rates on imported wool fabrics continued to be among the
highest rates imposed on products in the U.S. tariff schedules. Because
the duty on these fabrics exceeds the duty on imported garments by
about 20 percent, the duty schedule penalizes those American companies
which keep their production here in the U.S.
A special ``finished product'' concession made in the Canada Free
Trade Agreement (and later NAFTA) has greatly exacerbated the problem.
The concession allows Canadian companies to use imported, duty-free
wool fabric to manufacture men's suits, which are in turn shipped duty-
free into the U.S. As a result, over the past decade Canadian shipments
of suits into the U.S. have surged from nearly zero to approximately
one and a half million units shipped annually.
During the same time frame, production by the U.S. tailored clothing
industry has dropped 40 percent and the number of employees has been
cut in almost half, from 58,000 to 30,000 employees. In my home state
of Pennsylvania, the high-end tailored men's clothing industry provides
high paying jobs in the cities of Reading, Ashland, Easton,
Shippensberg and Philadelphia, but since 1991, Pennsylvania has lost
over 3000 jobs due to plant closings.
This duty has a real, direct and substantial effect on American jobs.
Suspension of the duty on these fabrics will level the playing field
with foreign manufacturers and allow the U.S. industry to compete,
saving American jobs. I therefore urge my colleagues to join me in
supporting its adoption.
Mr. GRAHAM. Mr. President, earlier today a group of my colleagues
representing both sides of the aisle joined together to announce that
we would be introducing legislation to increase the security in the
retirement of Americans. I want to especially recognize my colleague,
Senator Grassley, who has put a tremendous amount of effort into this
legislation and, through his position as Chair of the Aging Committee,
has demonstrated his commitment to the well-being of older Americans.
Senator Grassley and I recognize that for our Nation to solve what
would be one of this generation's greatest challenges, building a
retirement security for today's workers, we need to move in a
commonsense, bipartisan fashion.
Many of the original cosponsors of this bill were key in crafting the
sections of this legislation. Senator Grassley's efforts have expanded
fairness for women and families and focused on the benefits of
retirement education. Senator Baucus has brought the ideas that
expanded pension coverage and eased administration burdens on America's
small businesses. Portability, so important as we become a more mobile
society, received the specific attention of Senator Jeffords. All
businesses will have the hard work of Senator Hatch to thank for many
of the regulatory relief and administrative simplification elements of
this bill. And Senator Breaux, who focused on the big picture of
retirement security leading the CSIS task force, has incorporated some
of his ideas and the ideas of that task force into the legislation that
we introduced this evening.
Throughout this process of putting the bill together, our principal
task has been one to listen and attempt to understand what we were
hearing. We listened at the recent SAVER Summit, which was held here in
Washington, DC, held at the direction of this Congress. We listened at
town hall meetings throughout our States. We have listened at the
Retirement Security Summit, which I held in January of this year in
Tampa, FL, and the Women's Summit, which I held in Orlando in April.
The ideas have come from pension actuaries, tax attorneys, Cabinet
leaders, and some of the best ideas from everyday Americans. I want to
thank those who have endorsed our proposal.
Mr. President, with reason, much of the public debate has now focused
on President Clinton's call to ``Save Social Security first.'' I wish
to say, as the Senator from New Hampshire has just commented, I, too,
benefited by the remarks that were made this evening by the Senator
from Minnesota on what is happening on a global basis, in terms of
meeting the type of problems which we face in providing retirement
security for Americans. We all agree, on both sides of the aisle, that
we need to assure that Social Security is as viable for my nine
grandchildren and all of their peers, as it was for my parents and will
be for me. However, Social Security is only one part of the picture.
Pensions and personal savings will make up an ever-increasing part of
retirement security. So, when Congress takes action to assure the
future of Social Security, we are only addressing one-third of the
problem. Our bill addresses the other two-thirds of the problem.
Social Security will play less of a role for each succeeding
generation of Americans. We must develop personal savings. We must
assure that years of work pay off in reliable pensions. Our bill will
help hard-working Americans build personal retirement savings through
their employers, through 401(k)s, through payroll deduction IRAs,
through higher limits on savings. The employers and workers both will
win. Employers get simpler pension systems with less administrative
burden and more loyal employees, and workers build a secure retirement
and watch savings accumulate over their years of work.
How, specifically, will our bill help? The first focus of our bill is
small business. The reason for this primary focus is because this is
where the greatest difficulties in achieving retirement security are
lodged.
Fifty-one million American workers have no retirement plan at work--
51 million Americans without any retirement plan at the place of their
employment; 21 million of these employees work in small businesses. The
problem: Statistics indicate that only a small percentage of workers in
firms of less than 100 employees have access to a retirement plan.
This chart indicates that there is a direct correlation between the
number of employees in a business and the likelihood that there will be
a pension retirement plan. Firms with less than 25 employees have a
retirement plan of 20.2 percent. Firms of 100 or more have a proportion
of retirement plans of almost 85 percent.
We are particularly focusing our attention on these smallest firms
which are the least likely to have retirement plans, but which are the
fastest growing segment of our economy. In the State of Florida, these
firms of less than 25 have represented well over 70 percent of the job
growth in our State in the last 5 years.
We take a step forward in eliminating one of the principal hurdles
that small businesses face when establishing a pension plan.
What is that problem? It is the Federal Government having two hands:
On the one hand, the Federal Government is encouraging these businesses
to start pension plans, but when they hand out the second hand, they
find that the Federal Government wants a palm turned up because the
Federal Government is asking for up to $1,000 for a small business to
register its plan with the Internal Revenue Service.
We eliminate this fee for small businesses. We need to encourage
small businesses to start plans, not discourage them with high
registration fees.
Mr. President, the second target of our legislation is women and
families. Historically speaking, women live longer than men. Therefore,
they need greater savings for retirement because they will have to
stretch those savings over more years of life. Yet, our pension and
retirement laws do not reflect this fundamental reality. Women are more
mobile than men, moving in and out of the workforce due to family
responsibilities. Thus, they are less likely to vest in a retirement
system. Most retirement systems require a minimum period of time before
the employee becomes eligible and has a legal entitlement to the
retirement funds. Women are the least likely to meet those minimum
years of employment.
As this chart indicates, of women retirees today, 68 percent of women
who retire have no retirement benefits; fewer than 32 percent have a
pension for their retirement.
Currently, two-thirds of working women are employed in sectors of the
economy that are unlikely to offer a retirement plan--service and
retail and small businesses.

[[Page S8673]]

What is the solution? In an effort to address one of the problems of
preparing for a longer life expectancy, we realistically adjust upward
the age at which you must start withdrawing funds from your own 401(k)
or other similar pension instrument.
Under the current law, you must, you are obligated to start
withdrawing money from your retirement plan once you reach the age of
70\1/2\, 70 years and 6 months. At the age of 70 years and 6 months,
you are obligated to commence the process of withdrawing funds from
your retirement plan. However, a woman at the age of 70 can still have
three decades to look forward to in retirement. I know this because I
represent many of these wonderful people in my State of Florida.

At the retirement summit I hosted in Tampa, several retirees
mentioned that they wanted to keep their money in retirement savings
for as long as possible. We propose to raise the 70 years and 6 months
age to 75 for mandatory distribution. We do this for both genders,
because I am happy to say that men are also living longer. It just
happens that women will be the most affected group of Americans by this
proposal.
We go beyond raising the age from 70 years and 6 months to 75 years
by also providing that $300,000 of any defined benefit contribution
plan will be exempt from minimum distribution rules.
This accomplishes several important objectives: Simplifying the
bureaucracy for thousands of Americans who have less than $300,000 in
their retirement fund, and protecting a vital nest egg for the last
years of retirement so that items such as long-term care and other
expenses that are part of the aging process can be covered.
Next, Mr. President, we deal with the issue of increasing
portability. Over an average 40-year career, the current U.S. worker
will have seven different employers. This represents a dramatic shift
from the current worker's employment pattern from that of their
grandparents where it was common for a person to commence their career
and end their career with the same employer.
We have the possibility of a generation of American workers who
retire with many small retirement accounts, creating a complex maze of
statements and features different for each account.
The solution that we propose includes addressing one element of this
by allowing employees, such as teachers, who happen to move from one
State to another, to buy into their current locality's defined benefit
pension system through the purchase of service credits so that when
they retire, they will have one retirement account. It is easier to
monitor, less complicated to maintain records about and builds a more
secure retirement for the worker.
The next issue that our legislation confronts is that of reducing red
tape and administrative complexities. As I mentioned earlier, 51
million Americans have no pensions. The main obstacle that companies
face in establishing a retirement program is often bureaucratic
administrative burden.
For example, for a small plan, the plan that would deal with
companies that have 25 or fewer employees--in this case, the specific
example is for a plan with 15 employees--it costs $228 per employee per
year just to comply with all the forms, tests and regulations required
to maintain a pension plan.
We have a commonsense remedy to one of the most vexing problems in
pension administration: figuring out how much money to contribute to
the company's plan. It is a complex formula of facts, statistics and
assumptions under the current law. We want to be able to say to plans
that you have no problem with underfunding. To help make these
calculations, you can use the prior year's data to make the proper
contribution, and if you do so, you will not be subject to any after-
the-fact sanctions. You don't have to re-sort through the numbers each
and every year. If your plan is sound, use reliable data from the
previous year and then verify when all the final details are available.
Companies will be able to calculate and then budget, not wait until
figures and rates out of their control are released by external
sources.
Another issue is pension security. Under current law, companies
cannot fully fund their pension determination liability; that is,
provide for a sufficient amount of funding in their pension retirement
trust fund to be able to fund that particular pension to its full
actuarial amount.
The inability to do so puts workers at risk that the appropriate
funds will not be available when their workforce retires. Solution? It
makes little sense for the Federal Government to discourage companies
from fully funding their pension plans. We propose to repeal this
limit, the limit that keeps companies from fully funding their plan. In
last year's tax bill we phased this limit up. Now we have a chance to
take the final step and allow companies the flexibility to put more
money in their pension plans when their economic circumstances allow.
The next provision in our legislation, Mr. President, encourages
retirement education. The unfortunate reality is that many Americans do
not prepare for retirement because they just do not know that they need
to. It has been said in jest, but unfortunately it happens in too many
cases--it is true--that Americans spend more time planning a 2-week
summer vacation than they do 20 or 30 or more years of retirement.
Studies show that with education, participation rates in retirement
savings vehicles jump dramatically. Eighty-one percent of Americans say
retirement education has encouraged them to earmark more money for the
future. So as Americans have a better understanding of what is involved
in retirement--the financial aspects of retirement, the issues of
personal health, issues of utilization of leisure time, and all of the
other challenges that come in retirement--Americans respond as we would
expect, with intelligence and appropriate steps to protect their and
their families' interests.
Our solution is to let the Federal Government serve as a role model.
Programs already in place to educate our own Federal employees about
the need to prepare for retirement should be broadly shared with other
firms, both private and public. We ask that the paradigm for these
discussions be made available to the general public so that they can be
used by American workers who are employed by organizations beyond the
Federal Government.
We also ask that the Small Business Administration, which is so
helpful to America's entrepreneurs in getting ventures off the ground
and expanding when times are right, be involved in outreach in the
retirement arena. Through web sites, brochures, whatever means they
feel best, the Small Business Administration can help spread the word
on what has already been accomplished--simple accounts, payroll
deduction IRAs, and more--and keep businesses up to date with each
opportunity to save for a secure retirement.
Mr. President, I thank my colleagues who have worked so hard on this
measure. I ask for the support of those in this Chamber on this
important legislation.
Mr. GRASSLEY. Mr. President, I rise to join my colleagues, Senator
Graham, Senator Hatch, Senator Breaux, Senator Baucus, and Senator
Jeffords to introduce bipartisan pension reform legislation. This
legislation, the Pension Coverage and Portability Act of 1998, will go
a long way toward improving the pension system in this country.
Promoting retirement income security seems to be on everyone's mind
these days if the number of pension bills now pending in Congress is
any indication. But I think that our leaders need to understand that
pension legislation should be a priority for prompt action by Congress
and the President.
Let me try to explain: For better or worse, the most important
component of retirement income is the Social Security program. But our
nation is about to experience a demographic shift of very large
proportions that will have a very negative impact on Social Security.
My state is already feeling the impact of this shift.
The state of Iowa has the most people over the age of 85 as a percent
of the population. Iowa has the third highest percentage of people over
the age of 65. There is a popular statistic relating to the incomes of
elderly households we hear a lot--that Social Security is the most
important source of income for more than 80 percent of elderly
Americans. Knowing the demographics of my state, you can imagine

[[Page S8674]]

how often I hear about Social Security and the feeling that Social
Security isn't enough.
It's hard to tell an 82 year old widow that Social Security was never
supposed to be enough. Future retirees seem to understand this, as we
have seen a number of surveys indicating that Gen Xers do not believe
Social Security will be the most important source of income once they
retire.
But their income will have to come from somewhere. Many workers will
be able to rely on increased income from pensions. Unfortunately, right
now, one half of our workforce is not participating in a pension plan.
Mr. President, you know the statistics just as well as I do. Coverage
levels have been consistent over the last decade but among small
employers, coverage is low.
In June, the Employee Benefit Research Institute released the Small
Employer Retirement Survey. This survey is very instructive for
legislators.
Small employers identified three main reasons for not offering a
plan. The first reason is that small employers believe their employees
prefer increased wages or other types of benefits. The second reason
employers don't offer plans is the administrative costs. And the third
most important reason for not offering a plan: uncertain revenue, which
makes it difficult to commit to a plan.
Combine these barriers with the responsibilities of a small employer,
and we can understand why coverage among small employers has not
increased. Small employers who may just be starting out in business are
already squeezing every penny. These employers are also people who open
up the business in the morning, talk to customers, do the marketing,
pay the bills, and just do not know how they can take on the additional
duties, responsibilities, and liabilities of sponsoring a pension plan.
I firmly believe that an increase in the number of people covered by
pension plans will occur only when small employers have more
substantial incentives to establish pension plans.
The Pension Coverage and Portability Act contains provisions which
will provide more flexibility for small employers, relief from
burdensome rules and regulations, and a tax incentive to start new
plans for their employees. One of the new top heavy provisions we have
endorsed is an exemption from top heavy rules for employers who adopt
the 401(k) safe harbor. This safe harbor will take effect in 1999. When
the Treasury Department wrote the regulations and considered whether
safe harbor plans should also have to satisfy the top heavy rules, they
answered in the affirmative. As a result, a small employer would have
to make a contribution of 7 percent of pay for each employee, a very
costly proposition.
My colleagues and I also have included a provision which repeals user
fees for new plan sponsors seeking determination letters from the IRS.
These fees can run from $100 to more than $1,000, depending on the type
of plan. Given the need to promote retirement plan formation, we
believe this ``rob Peter to pay Paul'' approach needs to be eliminated.
We have also looked at the lack of success of SIMPLE 401(k) plans. A
survey by the Investment Company Institute found that SIMPLE IRAs have
proven successful, with almost 100,000 participants. However, SIMPLE
401(k)s just haven't taken off. A couple of the reasons may be that the
limits on SIMPLE 401(k)s are tighter than for the IRAs.
Our bill equalizes the compensation limits for these plans; in
addition, we have also increased the annual limit on both SIMPLEs to
$8,000.
One of the more revolutionary proposals is the creation of a Salary
Reduction SIMPLE with a limit of $4,000. Unlike other SIMPLEs, the
employer makes no match or automatic contributions. The employer match
is usually a strong incentive for a low-income employee to participate
in a savings plan. We hope that small employers will look at this
SIMPLE as a transition plan, in place for just a couple of years during
the initial stages of business operation--then adopt a more expansive
plan when the business is profitable.
The other targeted areas in the legislation include: Enhancing
pension coverage for women.
Women are more at risk of living in poverty as they age. They need
more ways to save because of periodic departures from the workforce. To
increase their saving capacity, we have also included a proposal
similar to legislation I sponsored earlier this year, S. 1856, the
Enhanced Savings Opportunities Act. Like S. 1856, the proposal repeals
the 25% of salary contribution limit on defined contribution plans.
This limit has seriously impeded savings by women, as well as low- and
mid-salary employees.
I prefer this approach to a catch-up provision. Catch-ups would most
likely be voluntary on the part of the employer, do not encourage
savings over working life, and do not necessarily help low and mid-
salary people. Repealing 415(c) is a simplifier, and will allow anyone
covered by a defined contribution plan to benefit.
The bill also contains proposals which promote new opportunities to
rollover accounts from an old employer to a new employer. The lack of
portability among plans is one of the weak links in our current pension
system. This new bill contains technical improvements which will help
ease the implementation of portability among the different types of
defined contribution plans.
Finally, I would like to point out a couple of other provisions in
the bill. The first is the new requirement that plan sponsors
automatically provide benefit statements to their participants on a
periodic basis. For defined contribution plans, the statement would be
required annually. For defined benefit plans, a statement would be
required every three years. There is a very strong lack of
understanding among participants about how their pensions work. There
is also a high percentage of people who have done nothing to plan for
their retirement.
Providing clear and understandable benefit statements to pension plan
participants would encourage people to think about how much money they
can expect to receive in retirement. Further, a benefit statement will
help people ensure that the information their employer maintains about
them is accurate. Almost 80 percent of employers who sponsor defined
benefit plans are providing some type of benefit statement
automatically. All participants need these statements.
This provision joins other proposals in a new section targeted at
encouraging retirement education. Education can make a difference to
workers. In fact, in companies which provide investment education, we
know workers benefitted because many of them changed their investment
allocations to more accurately reflect their investment horizons.
A new provision that I encourage my colleagues to carefully consider
targets the problem of participation by proposing an incentive for
negative enrollment or ``opt-out'' plans. My staff and I were familiar
with the example set by McDonald's Corp. which utilizes opt-out plans
for their employees. But McDonald's was concerned that they might get
in trouble with government regulators for operating their plan as an
opt-out. President Clinton announced that McDonald's plan was legal--
and encouraged other employers to try opt-out plans. This bill includes
an incentive for employers to create opt-out plans that we hope will
increase participation among low-salary workers.
This legislation joins a number of other strong proposals now pending
in the House and here in the Senate. This legislation includes
provisions which reflect some of those same proposals. I want to
commend the sponsors of those bills. Our legislation has a lot in
common with these other pension bills and we need to push for fast and
favorable consideration of, at a minimum, the similar provisions in our
legislation.
We have a window of opportunity to act. The Baby Boomers are coming.
The letters from AARP are starting to arrive in their mailboxes. The
Social Security Administration is starting to stagger the delivery of
benefit checks in preparation for their retirement. Many elderly
households rely too heavily on Social Security. Future retirees will
not be able to rely on all of the benefits now provided by Social
Security. We can look to the pension system to pick up where Social
Security leaves off, but we need to act.

[[Page S8675]]

I thank the other co-sponsors of this legislation for all of their
work, and I encourage our colleagues to give strong consideration to
co-sponsoring this bill. With concerted, bipartisan action, we can
improve the pension system. Pensions for today's workers will
substantially improve the retirement outlook for millions of Americans.
But we have some work to do if pensions are going to fulfill their
promise.
Mr. BAUCUS. Mr. President, most people my age have known the
heartache of having to watch their parents grow old. It is a sad day in
a person's life when they see their father get his first gray hair. Or
the day you notice lines in your mother's face where previously, there
were none.
This aging process is made worse by the scary and very real
possibility that too many people who will become senior citizens in the
next several years are not at all prepared for the transition from work
to retirement.
To be honest, it isn't our parents who we need to worry about so
much. They survived the Depression. They know what it takes to get by
during the lean years--it takes planning and saving. Putting money
aside, when it might be easier to spend it in the moment.
Those are the values that our parents live by. They are the values we
would do well to heed. And even better to teach those who will follow
us.
We as a nation have lost our imperative to save. Personal savings
rates have dropped to 3.8 percent of our Gross Domestic Product, the
lowest in 58 years.
Fifty-one million Americans in our nation's workforce have no pension
coverage. But statistics like those don't tell the whole story. They
don't do justice to the hardscrabble struggles that real people go
through every day. Struggles that involve agonizing questions like:
``Should I eat today or take my medication?'' or ``Will I be able to
heat my house this winter?''
Make no mistake, our nation's lack of saving for retirement is a
tragedy in the making.
That is why I am so proud to join my colleagues in introducing this
legislation.
A bill that will make it easier for Americans to put money aside, and
a bill that will help move pension issues to the forefront of
Americans' minds. A bill that will:
Expand coverage for small businesses because they have a harder time
affording health care and retirement plans;
Enhance pension fairness for women because they fall into categories
that have a harder time saving;
Increase the portability of pension plans so that when you change
jobs you don't have to worry about where your savings will go;
Strengthen pension security and enforcement so you can rest easy at
night, knowing your money is safe;
Reduce red tape so it's easier for employers to give their workers
retirement options;
And encourage retirement education so that husbands and wives,
parents and children, talk to each other--make plans for their future.
And know what to expect tomorrow and down the road.
One aspect of the bill I am particularly proud of are the small
business provisions. Thirty-eight million of the people in this country
who do not have a pension plan work at small businesses. Eighty percent
of all small business employees have no pension coverage.
In my state of Montana, more than 95 percent of our businesses are
small businesses. And almost 9 out of 10 offer no pension plans. We
cannot let these hard-working Americans down.
Currently, most small businesses can't afford pension plans. They
would like to, but they just can't make ends meet.
Our bill makes it a smart business decision for small business owners
to offer retirement plans.
I have made it my priority to work with members of the small business
community, both back in Montana and nationally, to identify legislative
solutions that will most readily enable small businesses to offer
pension plans to their employees. While this bill does not include
every recommendation we received, it does represent a collection of
high-priority proposals which we believe could be supported by a bi-
partisan majority of Congress.
The major provisions in this bill which would help small businesses
start and maintain pension plans include the following:
To help make pension plans more affordable we have included two new
tax credits: one to help defray start-up costs and the other to defray
the cost of employer contributions to pension plans;
In addition, we provide for the elimination of some fees.
To address the problems the small business community has identified
as a major impediment to establishing pension plans, we make
significant changes in the top-heavy rules that limit employer
contributions to plans.
To address concerns of our smallest businesses, who want to provide
pensions but can only afford `start-up' plans at first, we provide
increases in income limits that apply to SIMPLE pension plans, along
with a new, salary-reduction SIMPLE plan;
And for those employers that want to provide the security of a
defined benefit plan for their employees but cannot because of the
increased regulatory burden, we create a simplified defined benefit
plan for small business.
These provisions are designed to address the problems of cost and
complexity that are a barrier to so many small businesses. They will
help small employers establish a pattern of saving for themselves and
their employees.
Mr. President, I hope the Pension Coverage and Portability Act will
spearhead a national debate on how to improve employer-provide pensions
in this country.
This debate is essential if we are to achieve our goal of making
America in the next century, not only strong as a nation, but strong as
a community of individuals confident in the security of their financial
futures.
This is a good, bi-partisan bill. It takes the positive steps we as a
nation need to put our future in safe hands.
I am eager for the coming debate on this bill.
I hope it sparks a debate in the coffee shops and kitchen tables all
across the country. Working together, and with this bill, we can turn a
nation of spenders, into a nation of savers.
Mr. GRAHAM. Mr. President, I ask unanimous consent to have printed in
the Record letters from the Profit Sharing 401(k) Council of America,
the American Society of Pension Actuaries, the Association of Private
Pension and Welfare Plans, and the National Association of State
Retirement Administrators, all of whom endorse this legislation.
There being no objection, the letters were ordered to be printed in
the Record, as follows:

Profit Sharing 401(K)

Council of America,

Chicago, IL, July 21, 1998.

The Pension Coverage and Portability Act of 1998

The Profit Sharing/401(k) Council of America commends
Senators Graham, Grassley, Baucus, Breaux, Jeffords, D'Amato,
Hatch, and Kerrey for this comprehensive reform and updating
of the regulation of private pensions. We believe that this
legislation identifies and removes many barriers to
increasing retirement security for working Americans. Areas
of particular interest to our members include the
modification of top-heavy rules, the elimination of the
percentage of salary limit, and the removal of elective
deferrals from the employer deduction calculation.
The Profit Sharing/401(k) Council of America (PSCA) is a
non-profit association that for the past fifty years has
represented companies that sponsor profit sharing and 401(k)
plans for their employees. PSCA has approximately 1200
company-members who employ approximately 3 million plan
participants throughout the United States. PSCA's members
range in size from a six employee parts distributor to firms
with hundreds of thousands of employees.
We look forward to working together to achieve
implementation of this important bill.
____

American Society of

Pension Actuaries,

Arlington, VA, July 21, 1998.
Hon. Bob Graham,
Hart Senate Office Building, Washington, DC.
Dear Senator Graham: On behalf of the American Society of
Pension Actuaries, I am writing to express our strong support
for the Pension Coverage and Portability Act of 1998. This
comprehensive legislation recognizes the important role
played by the private pension system in providing retirement
savings for Americans.
By simplifying the complicated tax laws governing
retirement plans, your legislation is a significant step in
the right direction that will encourage retirement plan
formation and expansion. Current law, and the thousands of
pages of accompanying regulations, have gone too far. Though
intended to

[[Page S8676]]

increase access to private pension savings, these laws and
regulations have actually had an opposite effect, leaving
millions of American workers without an easy way to save
adequately for retirement.
ASPA represents over 3,000 pension professionals who
provide services to approximately one-third of the qualified
retirement plans in the United States. The vast majority of
these plans are maintained by small businesses. Our members
have first-hand knowledge of the existing regulatory barriers
preventing retirement plan formation and retention by
employers. We believe the provisions in your legislation,
including the new simplified defined benefit plan for small
business called the SAFE plan, the elimination of the 25
percent of compensation limit on plan contributions, and the
relaxation of the top-heavy rules, will encourage employers
to offer pension plans for their employees, and will make it
easier for employees to increase their own retirement
savings.
Again, ASPA thanks you for your work on retirement issues.
The Pension Coverage and Portability Act sends a strong
message that current regulations have gone too far. We look
forward to working with you to move this bill through the
legislative process.
Sincerely,
Brian Graff,
Executive Director.
____

Association of Private Pension

and Welfare Plans

Washington, DC, July 21, 1998.
Hon. Bob Graham,
U.S. Senate, Washington, DC.
Dear Senator Graham: I am writing on behalf of the
Association of Private Pension and Welfare Plans (APPWP) to
express our support for the Pension Coverage and Portability
Act. We commend you for your leadership in addressing the
need to strengthen the employer-sponsored retirement system.
The APPWP is the national trade association for companies
concerned about federal legislation and regulations affecting
all aspects of the employee benefits community. APPWP members
either sponsor directly or provide to employee benefit plans
covering more than 100 million Americans.
Your legislation represents a significant step towards
improving the rules governing the employer sponsored
retirement system upon which millions of Americans rely for a
majority of their retirement income. More specifically, we
believe that passage of this legislation will expand
coverage, particularly among small businesses, allow
employers to design their plans to more effectively meet
their workers' needs and increase portability and
preservation of retirement income.
In particular, we are pleased that you recognize the need
to include provisions that reduce the complexity and improve
the incentives for maintaining a retirement plan such as
repeal of the ``same desk rule,'' relief from the overly
restrictive ``anti-cut back rules,'' modification of the top-
heavy and minimum distribution rules, simplification of the
ESOP dividend reinvestment rules and relief from the
anomalies of the mechanical nondiscrimination rules.
However, as you continue your work on an improved employer-
sponsored retirement system, we urge you to consider two
major savings incentives that regrettably have not been
included in the bill. As we discussed with you when you spoke
to our Board of Directors last September, increasing the
contribution limits and adding a ``catch-up'' contribution
provision would encourage plan participants to save more for
retirement. The need for American workers to save more
effectively was recently highlighted at the National Summit
on Retirement Savings and we believe it is critical that
Congress acknowledge its importance by providing increased
incentives. As you have recognized by the Pension Coverage
and Portability Act, the employer-sponsored retirement system
plays a vital role in assuring that Americans have adequate
retirement incomes. We look forward to working with you to
improve the savings incentives in employer-sponsored
retirement plans.
Sincerely,
James A. Klein,
President.
____

National Association of State Retirement Administrators,
Washington, DC, July 21, 1998.
Hon. Bob Graham,
Senate Hart Office Building, Washington, DC.
RE: Support Public Pension Portability Provisions the
Senate Bipartisan Pension Tax Package
Dear Senator Graham: On behalf of our nation's State
retirement plans and the millions of public employees,
retirees and beneficiaries who they cover, the National
Association of State Retirement Administrators (NASRA)
supports public pension provisions contained in the Senate
Bipartisan Pension Tax Package.
In particular, we support provisions in your legislation
that promote portability between various defined contribution
and deferred compensation plans, and that allow funds from
all of these plans to be used to purchase permissive service
credits in public defined benefit plans. We also applaud
provisions that would remove certain pension limitations.
All of these provisions would help employees build and
strengthen their retirement savings, especially those who
have worked among various public, non-profit and private
institutions. Our organization is very grateful for your
leadership on former public pension legislation, and commends
you on your continued work in this area.
Sincerely,
M. Dee Williams,
President.
Richard E. Schumacher,
Immediate Past President, Chair, Legislative Committee.

Mr. JEFFORDS. Mr. President, I am glad to cosponsor the
Pension Coverage and Portability Act of 1998, (PCPA). I cosponsored the
predecessor bill, S. 889 with senators Graham, Hatch, and others, and
PCPA is a natural follow-on to S. 889.
This bill will encourage pension plan sponsorship among small
businesses and make it easier for the small business man or woman to
have greater confidence in government oversight of their plan and that
they will not have to constantly hire services of actuaries,
accountants and tax attorneys and investment advisers once they
establish it. The bill makes it easier to implement a payroll deduction
IRA, it provides for a simplified defined benefit pension plan, it
allows a payroll deduction SIMPLE plan with limits twice as high as
those currently available to IRAs, it eliminates IRS registration fees
for new plans and provides a tax credit for plan start up, as well as
many other things.
The bill also eases the top-heavy rules. In the days when the only
small pension plans belonged to doctor's and lawyer's offices, the top
heavy rules were needed to assure non-discrimination in provision of
benefits. But instead of expanding coverage, the top heavy rules now
tend to impose harsh requirements on the small business owner which
deters him or her from even offering a plan. This bill makes changes to
the top heavy rules in constructive and thoughtful ways, such as by
changing the family aggregation rules, taking employee elective
contributions into account for purposes of meeting the standards and
simplifying the definition of `key employee'.
The bill makes pension plans more portable, a feature that is
desperately needed in today's highly mobile workforce. Senator Graham
has incorporated the body of S. 2329, the bill that he, Senator
Bingaman and I introduced recently, as Title III of PCPA. Our bill
eases rollovers, allows rollovers of after-tax contributions, waives
the 60-day rule under certain circumstances, modifies the ``same-desk''
rule, rationalizes distribution rules and allows governmental workers
to purchase service credit with defined contribution plan money to
increase their benefits in their defined benefit plans. This bill makes
essentially the same changes.
In addition to encouraging plan sponsorship among small businesses
and facilitating pension portability, the bill encourages retirement
savings education. It also reduces the regulatory burdens associated
with maintaining a plan, such as providing coverage test flexibility
and freedom from the requirement to use mechanical nondiscrimination
testing rules.
Although I believe the vast majority of this measure takes positive
steps forward, I do have some misgivings about the staffing firms
provision included in section 108. I am cosponsoring PCPA despite the
inclusion of section 108 in the bill, but I hope that Senator Graham
and the other cosponsors will work with me to air the issues and try to
address the concerns of those who oppose this provision in as
constructive a manner as is appropriate.

____________________