[Congressional Record Volume 144, Number 105 (Thursday, July 30, 1998)]
[Senate]
[Pages S9426-S9451]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. GRASSLEY (for Mr. Lott (for himself, Mr. Hagel, Mr. 
        Roberts, Mr. Burns, Mr. Craig, Mr. Shelby, Mr. Sessions, and 
        Mr. Thomas)):
  S. 2371. A bill to amend the Internal Revenue Code of 1986 to reduce 
individual capital gains tax rates and to provide tax incentives for 
farmers; to the Committee on Finance.


              family investment and rural savings tax act

  Mr. GRASSLEY. Mr. President, today several of us from rural States 
and the leadership of the Senate take a step to help America's farmers 
as representatives of States with major agricultural economies. All of 
us introducing this legislation agree that farmers are facing some 
difficult times.
  While we must do what we can to make sure that farmers survive for 
the short term, the key to the agricultural economic situation is long-
term solutions. While we can't eliminate every risk and we can't 
control every factor that governs the success of the family farm, there 
are initiatives that we can pursue that will help smooth out some of 
the bumps that are in the road.
  That is why today several of us are introducing the FIRST Act, the 
Family Investment and Rural Savings Tax Act of 1998. As I said at the 
outset, there are some genuine problems in the ag community. Some parts 
of the country are experiencing problems that are worse than we are 
seeing in my own State of Iowa. We can offer reforms that address 
short-term and long-term needs.
  To address short-term needs and help give farmers that extra support 
that some will need to get through this year, I have joined with 
several of my colleagues in supporting legislation that will speed up 
transition payments, payments that would be made during 1999 and could, 
upon election by individual farmers, be taken in 1998. In my State of 
Iowa, that will bring 36 cents per bushel into the farmer's income in 
1998 that would otherwise not be there.
  But the focus of this legislation which I am speaking about today, 
the FIRST Act, is to address long-term need, because what I just 
described to you, advancing the transition payments, is obviously a 
short-term solution.
  What we are saying is that we must ensure economic stability for 
everyone first through the transition proposition I described, and then 
we must help our farmers plan for the future.
  This measure takes a three-prong approach to assist farmers and 
families through tax reform.
  The first section of our bill reduces the capital gains tax rate for 
individuals from 20 percent to 15 percent. This will spur growth, 
entrepreneurship and help farmers make the most of their capital 
assets. It will also encourage movement of capital investment from one 
generation to the other to help young farmers get started.
  This language builds on the capital gains tax reform that we made in 
last year's Tax Relief Act.
  Secondly, the FIRST Act includes my legislation that creates savings 
accounts for farmers. This initiative would allow farmers to make 
contributions to tax-deferred accounts. These Grassley savings 
accounts, as I call them, will give farmers a tool to control their 
lives. This savings account legislation will encourage farmers to save 
during good years to help cushion the fall from the inevitable bad 
years. The accounts will give farmers even greater freedom in their 
business decisions rather than giving the Government more authority 
over farmers and their lives.
  As a working farmer myself, and an American, I know that we want to 
control our own destiny. We want to manage our own business. We want to 
make those decisions that are connected with being a good business 
operator. We do not want to have to wait for the bureaucrats at the 
USDA in Washington, DC, in that bureaucracy to tell us how many acres 
of corn and how many acres of soybeans that we can plant. This allows, 
through the balancing out of income, the leveling out of the peaks and 
valleys from one year to another, because in farming, it seems to be 
all boom or all bust. This farmers' savings account that I suggest will 
give farmers an opportunity to do that.
  Finally, our tax legislation allows for the permanent extension of 
income averaging. Income averaging helps farmers because when prices 
are low and when farmers' income goes down, their tax burden will also 
be lowered. This helps farmers prepare for the especially volatile 
nature of their income.
  This is a tough time for a lot of farmers. I know there is a great 
deal of anxiety among farmers about what the future might bring. This 
proposal will help them to know that we in Congress recognize the 
particular difficulties they face in trying to plan for the future. I, 
along with other Members who have worked on this bill, believe that our 
initiatives will provide farmers with additional financial insurance 
they need to help face the future.
  The initiatives of this legislation have been endorsed by virtually 
every major agricultural organization. These organizations know that 
these measures are what farmers need to have more confidence and 
security in the future.
  I am very pleased to see the majority leader, Trent Lott, the Senator 
from Mississippi, taking a strong stand in favor of this. I thank my 
colleagues who have worked with me on this legislation. We all agree 
that passing this measure as soon as possible is one of the best things 
that we can do for our farmers in our States and across the country.
  This legislation is a long-term solution. It helps our farmers and 
our families survive and to keep control of their own decisions, so 
that we can let Washington make decisions for Washington but let 
farmers make decisions for themselves.
  The bottom line, Mr. President, is right now we are facing a variety 
of troubling circumstances: an economic crisis in southeast Asia, a 
drought combined with the hot weather in Texas today, fires in Florida, 
too much wheat coming across the Canadian border, unfairly, to drive 
down the price of

[[Page S9427]]

wheat in North Dakota, and the prospect of having bumper crops this 
year and big carryovers from last year. These are things that are 
beyond the control of the family farmer.
  Because we in family farming assume the responsibility--each one of 
us--of feeding, on average, 126 other people, we must keep the family 
farms strong as a matter of national policy, as a matter of good 
economics. We do that not because of nostalgia for family farmers but 
because when there is a good supply of food, the urban populations of 
this country are going to feel more secure and more certain about the 
future.
  We want to continually remind people, though, through actions of this 
Congress that we in the Congress know that food grows on farms, it does 
not grow in supermarkets. If there were not farmers producing, if there 
were not the labor and processing people, if there were not truckers 
and trains taking the food from the farm to the city, we would not have 
the high quality of food we have, we would not have the quantity of 
food we have, we would not have the stability that we have in our 
cities, we would not have the quality of life that we have beyond food 
for the American people. Let's not forget that food as a percentage of 
disposable income at about 11 percent is cheaper for the American 
consumer than any consumer anywhere else in the world.
  This legislation that we are all introducing is in support of 
maintaining that sort of environment for the people of America, and 
also as we export food for people around the world. We are committed to 
it, but also as a Congress we are committed to maintaining the family 
farm as well. So I introduce this bill for Senator Lott, myself, 
Senator Hagel, Senator Roberts, Senator Burns, Senator Craig, Senator 
Shelby, and Senator Sessions. I thank my colleagues for their hard work 
and support.
  I yield the floor.
  Mr. HAGEL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. HAGEL. Thank you, Mr. President.
  Mr. President, I rise to support, as an original cosponsor, the 
Family Investment and Rural Savings Tax Act of 1998. I thank the 
majority leader, Senator Lott, for working with many of us to make tax 
relief for farmers and ranchers a very top priority this year.
  Mr. President, I am not a farmer. When I want advice about 
agricultural issues, I ask farmers, I ask ranchers. About a month ago, 
the Senators offering this bill, and several others concerned about the 
problems facing rural America, agriculture today, right now, sat down 
with every major farm and commodity group in America. These 
representatives of American agriculture--real agriculture--told us the 
same thing I hear repeatedly from ranchers and farmers across my State 
of Nebraska: ``We do not want to go back to the failed Government 
supply and demand policies of the past.'' That is clear. They told us 
very clearly that there are three things--three things--Congress can do 
to help America's farmers and ranchers: One, open up more export 
markets; two, tax relief; and, three, reduce Government regulation. 
This, after all, Mr. President, was indeed the promise of the 1996 
Freedom to Farm Act.
  Those of us on the floor today and our colleagues have been working 
very hard over the last few months to open more markets overseas, 
especially in the area of dealing with unilateral sanctions. And we are 
going to keep pushing aggressively for important export tools, 
important for all of America, not just American agriculture, important 
tools like fast track, and reform and complete funding for the IMF.
  This bill we are introducing today goes to the second point. It will 
provide real and meaningful tax relief, tax relief to America's 
agricultural producers. It will provide farmers and ranchers with the 
tools they need in managing the unique financial situations that they 
alone face on their farms and ranches.
  This bill has three provisions, which Senator Grassley has just 
outlined accurately and succinctly: One, the farm and ranch risk 
management accounts; two, the permanent extension of income averaging 
for farmers; and, three, reduction of capital gains rates not just for 
American agriculture but for all of America.
  Mr. President, I have said over the last 2 years I would like to see 
the capital gains tax completely eliminated. But that is a debate for 
another day. However, this bill is a major step in the right direction. 
This bill will mean lower taxes for our farmers and ranchers and many 
Americans. It is the right thing to do.
  I hope a majority of my colleagues will join us in support of this 
bill, an important bill for America, an important bill for our farmers 
and ranchers.
  Mr. THOMAS. Mr. President, I rise for just a moment to thank the 
Senator from Nebraska and the Senator from Iowa for their leadership on 
this agricultural issue that we have before us. I join as an original 
cosponsor to the effort.
  It seems to me that clearly there are two areas that have to be 
pursued. The Senator from Nebraska talked about one, and that is 
seeking to reopen and to strengthen these foreign markets that are 
there that are critical to agricultural production.
  One of the areas, of course, in this matter is unilateral sanctions, 
of which some action has already been taken in the case of Pakistan and 
India. We need to do more of that. The other, of course, is to do 
something domestically. I agree entirely that we should not try to 
return to the managed agriculture that we had before, but to continue 
to move towards market agriculture in which our production is based on 
demand. But it is a difficult transition. And that, coupled with the 
Asian crisis, coupled with the fact that, particularly in the northern 
tier and in the south, we have had drought, we have had floods, we have 
had freezes--we have had a series of difficult things that lend to the 
difficulty of agriculture.
  So I am pleased that the Congress has taken some steps. I think this 
idea of moving forward with the transition payments is a good idea.
  Certainly we can do that for farmers. Then if we can provide a farmer 
savings account which will allow them to have these payments, in 
advance, without being taxed until they are used, is a good one.
  Certainly, as the Senator from Nebraska has indicated, I, too, favor 
the idea of reducing and, indeed, eventually eliminating the capital 
gains taxes. I just want to say I support this very much.
  There perhaps are other activities that we can undertake that will be 
helpful, but we do need to get started. I think this is a good 
beginning. I want to say again that I appreciate the leadership of the 
Senator from Iowa and the Senator from Nebraska.
  I yield the floor.
  Mr. CRAIG addressed the Chair.
  The PRESIDING OFFICER (Mr. Thomas). The Senator from Idaho.
  Mr. CRAIG. Mr. President, I, too, have come to the floor this morning 
to thank you, and certainly the Senator from Iowa, the Senator from 
Wyoming, who has been involved with us, along with our leader, Trent 
Lott, Senator Burns of Montana, Senator Roberts, and myself in looking 
at the current agricultural situation in this country, which is very 
concerning to all of us as commodity prices plummet in the face of what 
could be record harvests and as foreign markets diminish because of the 
Asian crisis and world competition.
  As a result of that, we have come together to look at tools that we 
could bring to American agriculture, production agriculture, farmers 
and ranchers, that would assist them now and into the future to build 
stability there and allow them not only to invest but to save during 
years of profit in a way that is unique for American agricultural.
  In 1986, when this Congress made sweeping tax reform, they eliminated 
income averaging. I was in the House at that time and I opposed that 
legislation. I remember an economist from the University of Virginia 
saying that it would take a decade or more, but there would come a time 
when all of us in Congress would begin to see the problems that a 
denial of income averaging would do to production agriculture; that 
slowly but surely the ability to divert income during cyclical market 
patterns would, in effect, weaken production agriculture at the farm 
and ranch level to a point that they could not sustain themselves 
during

[[Page S9428]]

these cyclical patterns. Bankruptcies would occur; family operations 
that had been in business for two or three generations would begin to 
fail.
  We are at that point. We have been at that point for several years. I 
remember the words of that economist in a hearing before one of the 
House committees echoing, saying, ``Don't do this. This is the wrong 
approach.'' In those days, though, I wasn't, but others in Congress 
were anxious to crank up the money and spend it here in Washington and 
return it in farm products, recycle it, skim off the 15 or 20 percent 
that it oftentimes takes to run a government operation, and then 
somehow appear to be magnanimous by returning it in some form of farm 
program.
  That day is over. We ought to be looking at the tools that we can 
offer production agriculture of the kind that is now before the Senate 
in the legislation that we call the Family Investment and Rural Savings 
Act, not only looking at a permanency income averaging, but looking at 
real estate depreciation, recapturing, and a variety of tools that we 
think will be extremely valuable to production agriculture at a time 
when they are in very real need.
  Also, the transition payments' extension that we have talked about 
moving forward to give some immediate cash to production agriculture, 
that is appropriate under the Freedom to Farm transitions in which we 
are currently involved, becomes increasingly valuable.
  I join today and applaud those who have worked on this issue, to 
bring it immediately, and I hope that we clearly can move it in this 
Congress, to give farmers and ranchers today those tools--be it drought 
or be it a very wet year or be it the collapse of foreign markets. 
Prices in some of our commodity areas today are at a 20-plus year low, 
yet, of course, the tractor and the combine purchased is at an all-time 
high.
  I do applaud those who have worked with us in bringing this 
legislation to the floor, and I thank the chairman for the time.
  I yield the floor.
  The PRESIDING OFFICER. The distinguished former chairman of the House 
Agriculture Committee, the Senator from Kansas.
  Mr. ROBERTS. I thank the Presiding Officer and the distinguished 
Senator from Wyoming.
  Mr. ROBERTS. Mr. President, I am pleased to join my friends and 
colleagues in introducing the Family Investment and Rural Savings Tax 
(FIRST) Act. I would especially like to thank our Leader, Senator Lott, 
for his strong commitment to this effort. His dedication and interest 
in these important issues should underscore how serious we are about 
providing tax relief and improvements for farmers and ranchers before 
the 105th Congress adjourns.
  America's producers are currently experiencing a troubling time. 
Thanks in large part to the Asian economic crisis and the 
Administration's inability to open up new markets for U.S. farm 
products, commodity prices across the board have fallen to dangerously 
low levels. Low prices, combined with isolated weather-related problems 
in some regions of the country on one hand and election-year posturing 
on the other, have prompted some of our Democratic colleagues to call 
for a return to the failed agriculture policies of the past. They 
support loan programs that price the United States out of the world 
market. They support a return to the system whereby the U.S. Government 
is in the grain business. And they support a return to command-and-
control agriculture whereby producers are required to limit their 
production in a foolish and futile attempt to try to bolster commodity 
prices. These policies did not work for 50 years and they will not work 
now.
  The FIRST Act is designed to address the real needs of producers 
today. The FIRST Act provides tax relief for every farmer and rancher 
in the United States. Specifically, income averaging--which was an 
important component of the 1996 tax bill--would become permanent, the 
capital gains tax brackets would be cut by 25 percent across the board 
and a new Farm and Ranch Risk Management Account would be established 
to allow producers to manage the volatile shifts in farm income from 
one year to another.
  I specifically want to address the capital gains tax cut and the 
FARRM accounts. The capital gains tax represents one of the most 
burdensome, expensive provisions of the U.S. Tax Code for America's 
farmers and ranchers and for America's families. Production agriculture 
is a capital-intensive business. Without equipment and inputs--
expensive equipment and inputs--you simply can't survive in the 
incredibly competitive agriculture world. Therefore, because of the 
tremendous costs of depreciating that expensive equipment, the capital 
gains tax hits farmers and ranchers especially hard. In addition, today 
the Congress encourages middle-income families to save for their future 
in part to take pressure off of the Social Security system. However, we 
continue to allow capital gains taxes to hit America's families twice. 
Investors' money is taxed both as income when they get their paycheck 
and as capital gain when they make a smart investment. That's a strange 
and counterproductive way to encourage personal responsibility and 
savings for the future. As a result, I am very grateful to our Majority 
Leader for including the ``Crown Jewel'' of his tax and Speaker 
Gingrich's tax bill in the FIRST Act today and I look forward to 
working with the Leader to pass meaningful tax relief before the Senate 
adjourns.
  I also want to address the creation of the new FARRM Accounts. While 
Chairman of the House Agriculture Committee, I was charged with 
producing the 1996 farm bill. As we were producing that legislation, I 
wanted very badly to create what I called a ``farmer IRA.'' Basically, 
the farmer IRA would be a rainy day account whereby if a farmer or 
rancher had a good year, he could invest part of his profits in a tax-
deferred account. Then, when a bad year hits, he could withdraw that 
money to offset the downturn. That's exactly what the FARRM Accounts 
would do. Producers will be able to invest up to 20 percent of their 
Schedule F (farm) income in any interest-bearing account. They may 
withdraw that money at any time during a five-year period. If passed, 
FARRM Accounts will correct the huge problem in our existing Tax Code 
that encourages producers to buy a new tractor or combine at the end of 
the year in order to reduce taxable income instead of saving for the 
future. Again, I wanted to do this during the farm bill but we ran out 
of time. I'm very pleased that the Congress may finally get the 
opportunity to provide the flexibility and tax relief producers so 
desperately need.
  I want to thank my colleagues again for their leadership in this area 
and I look forward to working with them and the rest of the Senate to 
pass this important legislation.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that a copy 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. 2371

       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 ``Family 
     Investment and Rural Savings Tax Act''.
       (b) Table of Contents.--

Sec. 1. Short title; table of contents.

        TITLE I--REDUCTION IN INDIVIDUAL CAPITAL GAINS TAX RATES

Sec. 101. Reduction in individual capital gains tax rates.

                  TITLE II--TAX INCENTIVES FOR FARMERS

Sec. 201. Farm and ranch risk management accounts.
Sec. 202. Permanent extension of income averaging for farmers.
        TITLE I--REDUCTION IN INDIVIDUAL CAPITAL GAINS TAX RATES

     SEC. 101. REDUCTION IN INDIVIDUAL CAPITAL GAINS TAX RATES.

       (a) In General.--Subsection (h) of section 1 of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(h) Maximum Capital Gains Rate.--
       ``(1) In general.--If a taxpayer has a net capital gain for 
     any taxable year, the tax imposed by this section for such 
     taxable year shall not exceed the sum of--
       ``(A) a tax computed at the rates and in the same manner as 
     if this subsection had not been enacted on taxable income 
     reduced by the net capital gain,
       ``(B) 7.5 percent of so much of the net capital gain (or, 
     if less, taxable income) as does not exceed the excess (if 
     any) of--
       ``(i) the amount of taxable income which would (without 
     regard to this paragraph) be taxed at a rate below 28 
     percent, over

[[Page S9429]]

       ``(ii) the taxable income reduced by the net capital gain, 
     and
       ``(C) 15 percent of the amount of taxable income in excess 
     of the sum of the amounts on which tax is determined under 
     subparagraphs (A) and (B).
       ``(2) Net capital gain taken into account as investment 
     income.--For purposes of this subsection, the net capital 
     gain for any taxable year shall be reduced (but not below 
     zero) by the amount which the taxpayer takes into account as 
     investment income under section 163(d)(4)(B)(iii).''
       (b) Alternative Minimum Tax.--Paragraph (3) of section 
     55(b) of such Code is amended to read as follows:
       ``(3) Maximum rate of tax on net capital gain of 
     noncorporate taxpayers.--The amount determined under the 
     first sentence of paragraph (1)(A)(i) shall not exceed the 
     sum of--
       ``(A) the amount determined under such first sentence 
     computed at the rates and in the same manner as if this 
     paragraph had not been enacted on the taxable excess reduced 
     by the net capital gain,
       ``(B) 7.5 percent of so much of the net capital gain (or, 
     if less, taxable excess) as does not exceed the amount on 
     which a tax is determined under section 1(h)(1)(B), and
       ``(C) 15 percent of the amount of taxable excess in excess 
     of the sum of the amounts on which tax is determined under 
     subparagraphs (A) and (B).''
       (c) Conforming Amendments.--
       (1) Paragraph (1) of section 1445(e) of such Code is 
     amended by striking ``20 percent'' and inserting ``15 
     percent''.
       (2) The second sentence of section 7518(g)(6)(A) of such 
     Code, and the second sentence of section 607(h)(6)(A) of the 
     Merchant Marine Act, 1936, are each amended by striking ``20 
     percent'' and inserting ``15 percent''.
       (3) Section 311 of the Taxpayer Relief Act of 1997 is 
     amended by striking subsection (e).
       (4) Paragraph (7) of section 57(a) of such Code (as amended 
     by the Internal Revenue Service Restructuring and Reform Act 
     of 1998) is amended by striking the last sentence.
       (5) Paragraphs (11) and (12) of section 1223, and section 
     1235(a), of such Code (as amended by the Internal Revenue 
     Service Restructuring and Reform Act of 1998) are each 
     amended by striking ``18 months'' each place it appears and 
     inserting ``1 year''.
       (d) Transitional Rules For Taxable Years Which Include June 
     24, 1998.--
       (1) In general.--Subsection (h) of section 1 of such Code 
     (as amended by the Internal Revenue Service Restructuring and 
     Reform Act of 1998) is amended by adding at the end the 
     following new paragraph:
       ``(14) Special Rules for taxable years which include june 
     24, 1998.--For purposes of applying this subsection in the 
     case of a taxable year which includes June 24, 1998--
       ``(A) Gains or losses properly taken into account for the 
     period on or after such date shall be disregarded in applying 
     paragraph (5)(A)(i), subclauses (I) and (II) of paragraph 
     (5)(A)(ii), paragraph (5)(B), paragraph (6), and paragraph 
     (7)(A).
       ``(B) The amount determined under subparagraph (B) of 
     paragraph (1) shall be the sum of--
       ``(i) 7.5 percent of the amount which would be determined 
     under such subparagraph if the amount of gain taken into 
     account under such subparagraph did not exceed the net 
     capital gain taking into account only gain or loss properly 
     taken into account for the portion of the taxable year on or 
     after such date, plus
       ``(ii) 10 percent of the excess of the amount determined 
     under such subparagraph (determined without regard to this 
     paragraph) over the amount determined under clause (i).
       ``(C) The amount determined under subparagraph (C) of 
     paragraph (1) shall be the sum of--
       ``(i) 15 percent of the amount which would be determined 
     under such subparagraph if the adjusted net capital gain did 
     not exceed the net capital gain taking into account only gain 
     or loss properly taken into account for the portion of the 
     taxable year on or after such date, plus
       ``(ii) 20 percent of the excess of the amount determined 
     under such subparagraph (determined without regard to this 
     paragraph) over the amount determined under clause (i).
       ``(D) Rules similar to the rules of paragraph (13)(C) shall 
     apply.''
       (2) Alternative minimum tax.--Paragraph (3) of section 
     55(b) of such Code (as amended by the Internal Revenue 
     Service Restructuring and Reform Act of 1998) is amended by 
     adding at the end the following new sentence: ``For purposes 
     of applying this paragraph for a taxable year which includes 
     June 24, 1998, rules similar to the rules of section 1(h)(14) 
     shall apply.''
       (e) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years beginning on or after June 24, 1998.
       (2) Transitional rules for taxable years which include june 
     24, 1998.--The amendments made by subsection (d) shall apply 
     to taxable years beginning before such date and ending on or 
     after June 24, 1998.
       (3) Withholding.--The amendment made by subsection (c)(1) 
     shall apply only to amounts paid after the date of the 
     enactment of this Act.
       (4) Certain conforming amendments.--The amendments made by 
     subsection (c)(5) shall take effect on June 24, 1998.
                  TITLE II--TAX INCENTIVES FOR FARMERS

     SEC. 201. FARM AND RANCH RISK MANAGEMENT ACCOUNTS.

       (a) In General.--Subpart C of part II of subchapter E of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     taxable year for which deductions taken) is amended by 
     inserting after section 468B the following new section:

     ``SEC. 468C. FARM AND RANCH RISK MANAGEMENT ACCOUNTS.

       ``(a) Deduction Allowed.--In the case of an individual 
     engaged in an eligible farming business, there shall be 
     allowed as a deduction for any taxable year the amount paid 
     in cash by the taxpayer during the taxable year to a Farm and 
     Ranch Risk Management Account (hereinafter referred to as the 
     `FARRM Account').
       ``(b) Limitation.--The amount which a taxpayer may pay into 
     the FARRM Account for any taxable year shall not exceed 20 
     percent of so much of the taxable income of the taxpayer 
     (determined without regard to this section) which is 
     attributable (determined in the manner applicable under 
     section 1301) to any eligible farming business.
       ``(c) Eligible Farming Business.--For purposes of this 
     section, the term `eligible farming business' means any 
     farming business (as defined in section 263A(e)(4)) which is 
     not a passive activity (within the meaning of section 469(c)) 
     of the taxpayer.
       ``(d) FARRM Account.--For purposes of this section--
       ``(1) In general.--The term `FARRM Account' means a trust 
     created or organized in the United States for the exclusive 
     benefit of the taxpayer, but only if the written governing 
     instrument creating the trust meets the following 
     requirements:
       ``(A) No contribution will be accepted for any taxable year 
     in excess of the amount allowed as a deduction under 
     subsection (a) for such year.
       ``(B) The trustee is a bank (as defined in section 408(n)) 
     or another person who demonstrates to the satisfaction of the 
     Secretary that the manner in which such person will 
     administer the trust will be consistent with the requirements 
     of this section.
       ``(C) The assets of the trust consist entirely of cash or 
     of obligations which have adequate stated interest (as 
     defined in section 1274(c)(2)) and which pay such interest 
     not less often than annually.
       ``(D) All income of the trust is distributed currently to 
     the grantor.
       ``(E) The assets of the trust will not be commingled with 
     other property except in a common trust fund or common 
     investment fund.
       ``(2) Account taxed as grantor trust.--The grantor of a 
     FARRM Account shall be treated for purposes of this title as 
     the owner of such Account and shall be subject to tax thereon 
     in accordance with subpart E of part I of subchapter J of 
     this chapter (relating to grantors and others treated as 
     substantial owners).
       ``(e) Inclusion of Amounts Distributed.--
       ``(1) In general.--Except as provided in paragraph (2), 
     there shall be includible in the gross income of the taxpayer 
     for any taxable year--
       ``(A) any amount distributed from a FARRM Account of the 
     taxpayer during such taxable year, and
       ``(B) any deemed distribution under--
       ``(i) subsection (f)(1) (relating to deposits not 
     distributed within 5 years),
       ``(ii) subsection (f)(2) (relating to cessation in eligible 
     farming business), and
       ``(iii) subparagraph (A) or (B) of subsection (f)(3) 
     (relating to prohibited transactions and pledging account as 
     security).
       ``(2) Exceptions.--Paragraph (1)(A) shall not apply to--
       ``(A) any distribution to the extent attributable to income 
     of the Account, and
       ``(B) the distribution of any contribution paid during a 
     taxable year to a FARRM Account to the extent that such 
     contribution exceeds the limitation applicable under 
     subsection (b) if requirements similar to the requirements of 
     section 408(d)(4) are met.

     For purposes of subparagraph (A), distributions shall be 
     treated as first attributable to income and then to other 
     amounts.
       ``(3) Exclusion from self-employment tax.--Amounts included 
     in gross income under this subsection shall not be included 
     in determining net earnings from self-employment under 
     section 1402.
       ``(f) Special Rules.--
       ``(1) Tax on deposits in account which are not distributed 
     within 5 years.--
       ``(A) In general.--If, at the close of any taxable year, 
     there is a nonqualified balance in any FARRM Account--
       ``(i) there shall be deemed distributed from such Account 
     during such taxable year an amount equal to such balance, and
       ``(ii) the taxpayer's tax imposed by this chapter for such 
     taxable year shall be increased by 10 percent of such deemed 
     distribution.

     The preceding sentence shall not apply if an amount equal to 
     such nonqualified balance is distributed from such Account to 
     the taxpayer before the due date (including extensions) for 
     filing the return of tax imposed by this chapter for such 
     year (or, if earlier, the date the taxpayer files such return 
     for such year).
       ``(B) Nonqualified balance.--For purposes of subparagraph 
     (A), the term `nonqualified balance' means any balance in the 
     Account on the last day of the taxable year which is 
     attributable to amounts deposited in such

[[Page S9430]]

     Account before the 4th preceding taxable year.
       ``(C) Ordering rule.--For purposes of this paragraph, 
     distributions from a FARRM Account shall be treated as made 
     from deposits in the order in which such deposits were made, 
     beginning with the earliest deposits. For purposes of the 
     preceding sentence, income of such an Account shall be 
     treated as a deposit made on the date such income is received 
     by the Account.
       ``(2) Cessation in eligible farming business.--At the close 
     of the first disqualification period after a period for which 
     the taxpayer was engaged in an eligible farming business, 
     there shall be deemed distributed from the FARRM Account (if 
     any) of the taxpayer an amount equal to the balance in such 
     Account at the close of such disqualification period. For 
     purposes of the preceding sentence, the term 
     `disqualification period' means any period of 2 consecutive 
     taxable years for which the taxpayer is not engaged in an 
     eligible farming business.
       ``(3) Certain rules to apply.--Rules similar to the 
     following rules shall apply for purposes of this section:
       ``(A) Section 408(e)(2) (relating to loss of exemption of 
     account where individual engages in prohibited transaction).
       ``(B) Section 408(e)(4) (relating to effect of pledging 
     account as security).
       ``(C) Section 408(g) (relating to community property laws).
       ``(D) Section 408(h) (relating to custodial accounts).
       ``(4) Time when payments deemed made.--For purposes of this 
     section, a taxpayer shall be deemed to have made a payment to 
     a FARRM Account on the last day of a taxable year if such 
     payment is made on account of such taxable year and is made 
     within 3\1/2\ months after the close of such taxable year.
       ``(5) Individual.--For purposes of this section, the term 
     `individual' shall not include an estate or trust.
       ``(g) Reports.--The trustee of a FARRM Account shall make 
     such reports regarding such Account to the Secretary and to 
     the person for whose benefit the Account is maintained with 
     respect to contributions, distributions, and such other 
     matters as the Secretary may require under regulations. The 
     reports required by this subsection shall be filed at such 
     time and in such manner and furnished to such persons at such 
     time and in such manner as may be required by those 
     regulations.''
       (b) Deduction Allowed in Computing Adjusted Gross Income.--
     Subsection (a) of section 62 of such Code (defining adjusted 
     gross income) is amended by inserting after paragraph (17) 
     the following new paragraph:
       ``(18) Contributions to farm and ranch risk management 
     accounts.--The deduction allowed by section 468C(a).''
       (c) Tax on Excess Contributions.--
       (1) Subsection (a) of section 4973 of such Code (relating 
     to tax on certain excess contributions) is amended by 
     striking ``or'' at the end of paragraph (3), by redesignating 
     paragraph (4) as paragraph (5), and by inserting after 
     paragraph (3) the following new paragraph:
       ``(4) a FARRM Account (within the meaning of section 
     468C(d)), or''.
       (2) Section 4973 of such Code is amended by adding at the 
     end the following new subsection:
       ``(g) Excess Contributions to FARRM Accounts.--For purposes 
     of this section, in the case of a FARRM Account (within the 
     meaning of section 468C(d)), the term `excess contributions' 
     means the amount by which the amount contributed for the 
     taxable year to the Account exceeds the amount which may be 
     contributed to the Account under section 468C(b) for such 
     taxable year. For purposes of this subsection, any 
     contribution which is distributed out of the FARRM Account in 
     a distribution to which section 468C(e)(2)(B) applies shall 
     be treated as an amount not contributed.''
       (3) The section heading for section 4973 of such Code is 
     amended to read as follows:

     ``SEC. 4973. EXCESS CONTRIBUTIONS TO CERTAIN ACCOUNTS, 
                   ANNUITIES, ETC.''

       (4) The table of sections for chapter 43 of such Code is 
     amended by striking the item relating to section 4973 and 
     inserting the following new item:

``Sec. 4973. Excess contributions to certain accounts, annuities, 
              etc.''
       (d) Tax on Prohibited Transactions.--
       (1) Subsection (c) of section 4975 of such Code (relating 
     to prohibited transactions) is amended by adding at the end 
     the following new paragraph:
       ``(6) Special rule for farrm accounts.--A person for whose 
     benefit a FARRM Account (within the meaning of section 
     468C(d)) is established shall be exempt from the tax imposed 
     by this section with respect to any transaction concerning 
     such Account (which would otherwise be taxable under this 
     section) if, with respect to such transaction, the account 
     ceases to be a FARRM Account by reason of the application of 
     section 468C(f)(3)(A) to such Account.''
       (2) Paragraph (1) of section 4975(e) of such Code is 
     amended by redesignating subparagraphs (E) and (F) as 
     subparagraphs (F) and (G), respectively, and by inserting 
     after subparagraph (D) the following new subparagraph:
       ``(E) a FARRM Account described in section 468C(d),''.
       (e) Failure To Provide Reports on FARRM Accounts.--
     Paragraph (2) of section 6693(a) of such Code (relating to 
     failure to provide reports on certain tax-favored accounts or 
     annuities) is amended by redesignating subparagraphs (C) and 
     (D) as subparagraphs (D) and (E), respectively, and by 
     inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) section 468C(g) (relating to FARRM Accounts).''
       (f) Clerical Amendment.--The table of sections for subpart 
     C of part II of subchapter E of chapter 1 of such Code is 
     amended by inserting after the item relating to section 468B 
     the following new item:

``Sec. 468C. Farm and Ranch Risk Management Accounts.''
       (g) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 202. PERMANENT EXTENSION OF INCOME AVERAGING FOR 
                   FARMERS.

       Section 933(c) of the Taxpayer Relief Act of 1997 is 
     amended by striking ``, and before January 1, 2001''.

  Mr. BURNS. Mr. President, I rise today along with Senators Lott, 
Craig, Grassley, Hagel, Roberts, Sessions, Shelby, and Thomas to 
introduce the Family Investment and Rural Savings Tax (FIRST) Act of 
1998.
  Mr. President, today's family farms are in jeopardy. This bill will 
help all Americans as well as our nation's farming families.
  The bill consists of two titles--the first will reduce the top 
individual capital gains tax rate from 20% to 15% and reduces the 
capital gains tax rate for individuals with lower incomes from 10% to 
7.5%.
  Title two of the bill consists of two separate measures which work 
hand in hand: First, the bill will allow farmers to open their own tax 
deferred savings accounts. These accounts would provide farmers and 
ranchers an opportunity to set aside income in high-income years and 
withdraw the money in low-income years. The money is taxed only when it 
is withdrawn and can be deferred for up to five years.
  In 1995, 2.2 million taxpayers, qualified as farmers under IRS 
definitions, would have been eligible to use these accounts. Only 
725,000 of those filed a net income while 1.5 million filed a net loss.
  Now that could mean one of two things: (1) fewer and fewer farmers 
are able to stay in the black or; (2) more and more farmers are going 
out of business. We cannot continue to treat our farmers and ranchers 
as second class citizens in our tax code.
  The second part of this title contains language that I introduced 
earlier this year. This language would allow farmers to use average 
their income over three years and make that tool permanent in the tax 
code. This bill will give American farmers a fair tool to offset the 
unpredictable nature of their business.
  The question is who will benefit most from income averaging and farm 
savings accounts. This is the best part--this legislation will allow 
farmers to delay payment of their taxes by reducing their overall 
income and spreading it out over a number of years.
  However, based on the tax rate schedule, this bill would favor 
farmers in the lower tax bracket. If a farmer could use these tools to 
reduce their tax burden from one year to the next, it is very 
conceivable that taxpayer would pay only 15% on his income compared to 
28%. That is a significant savings.
  This bill leaves the business decisions in the hands of farmers, not 
the government. Farmers can decide whether to defer income and when to 
withdraw funds to supplement operations.
  Farmers and ranchers labor seven days a week, from dawn until dusk, 
to provide our nation with the world's best produce, dairy products and 
meats. Farming is a difficult business requiring calloused hands and 
rarely a profitable financial reward. This profession is not getting 
any easier. Today, we are seeing more and more of our family farms 
swallowed up by the corporate farms.
  Farming has always been a family affair. Rural communities rely on 
the family farm for their own economic sustenance. Although family 
farms are traditionally passed on from father to son--it is becoming 
more and more difficult as the economics of farming are becoming more 
and more complicated. Further tightening of the belt on these folks can 
only mean the eventual loss of the family farm.
  Montana's farmers take pride in their harvests. You could call  
today's farmer the ultimate environmentalist. They know how to take 
care of the land and ensure that future harvests

[[Page S9431]]

will be plentiful. As land managers, farmers understand the importance 
of proper land stewardship.

  Those colleagues of mine who grew up on a farm or ranch would 
certainly understand the frustration of this business. Farmers and 
ranchers don't receive an annual salary. They cannot rely on income 
that may not be there at the end of the year and they certainly cannot 
count on a monthly paycheck. This is a crucial time for family farms 
and tax relief can mean the difference between keeping the family farm 
for future generations or losing it.
  With the recent passage of the Farm Bill, farmers are more than ever 
impacted by market forces and in the farming business, those market 
forces can be very unpredictable.
  Market forces in farming are very unique--drought, flooding, 
infestation and disease all play a vital role in a farmer's bottom 
line. And it's not often when the elements of mother nature allow for a 
profitable harvest.
  At best, most farmers are lucky to break even more than two years in 
a row. One year may be a windfall, while the next may mean bankruptcy. 
Farmers and ranchers are forced to make large capital investments in 
machinery, livestock and improvements to their properties.
  Agricultural markets are rarely predictable. Farmers, more than any 
other sector of our economy are likely to experience substantial 
fluctuations in income.
  We also need to address the issue of the estate tax. This is a death 
blow to a family farm that has been passed down through the 
generations. A family farm in Montana is not really referred to as an 
estate. We call it home, we call it work, and we call it our lives, but 
we don't call it an estate.
  I urge my colleagues to support this bill and urge you also to 
support future bills such as estate tax relief legislation to encourage 
America's farming family of a safe and secure future.
  I have letters in support of this bill signed by numerous agriculture 
groups as well as a letter from the National Federation of Independent 
Businesses (NFIB). I ask unanimous consent to have both of these 
letters printed in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                                    July 23, 1998.
     Hon. Conrad Burns,
     U.S. Senate, Dirksen Senate Office Building, Washington, DC.
       Dear Senator Burns: Farming and ranching is a high risk 
     endeavor. Problems due to this year's adverse weather and low 
     prices provide a vivid illustration of the difficulties that 
     can be caused by nature and markets.
       The tax code can and should help producers deal with 
     financial uncertainties unique to agriculture. Agricultural 
     organizations have recommended estate tax relief, permanent 
     income averaging for farmers, the full deductibility of 
     health insurance premiums for the self-employed and the 
     creation of farm and ranch risk management accounts (FARRM).
       We applaud you for introducing legislation that encompasses 
     the creation of FARRM accounts and makes income averaging a 
     permanent part of the tax code. FARRM accounts will help 
     producers by providing incentives to save during good times 
     for times that are not. Income averaging will help producers 
     by allowing them to manage their volatile incomes for 
     financial planning.
       A reduction in capital gains tax rates is also part of your 
     legislation. Because farming and ranching is a capital 
     intensive business, capital gains taxes have a huge impact on 
     agriculture. Lower capital gains tax rates will help 
     producers by making it easier for them to invest in their 
     businesses and make the best use of their capital assets.
       We support your legislation and pledge our help to secure 
     its passage into law.
       Agricultural Retailers Association.
       Alabama Farmers Federation .
       American Farm Bureau Federation.
       American Horse Council.
       American Nursery and Landscape Association.
       American Sheep Industry Association.
       American Soybean Association.
       American Sugarbeet Growers Association.
       Communicating for Agriculture.
       Farm Credit Council.
       The Fertilizer Institute.
       National Association of State Departments of Agriculture.
       National Association of Wheat Growers.
       National Barley Growers Association.
       National Cattlemen's Beef Association.
       National Corn Growers Association.
       National Cotton Council of America.
       National Council of Farmer Cooperatives.
       National Grain Sorghum Producers Association.
       National Grange.
       National Pork Producers Council.
       National Sunflower Association.
       North Carolina Peanut Growers Association.
       United Fresh Fruit and Vegetable Association.
       USA Rice Federation.
                                  ____

         National Federation of Independent Business--The Voice of 
           Small Business,
                                                    July 29, 1998.
     Hon. Conrad Burns,
     U.S. Senate, Washington, DC.
       Dear Senator Burns: I am writing to commend you for 
     introducing legislation, ``The Family Investment and Rural 
     Savings Tax (FIRST) Act of 1998, that will provide needed tax 
     relief to small businesses and farms.
       Among other provisions, this legislation would reduce and 
     simplify the current capital gains tax for the many small 
     business owners who file as individuals. Small businesses 
     face unique difficulties trying to obtain capital, including 
     lack of access to the securities market and difficulty in 
     getting bank loans. They often must get their capital from 
     the business itself, family members or associates. Small 
     businesses, therefore, need capital gains relief that will 
     promote investment by both investors and business owners 
     themselves.
       The FIRST Act also contains needed relief to help farmers 
     and ranchers by allowing eligible ones to make contributions 
     to tax deferred accounts and by restoring income averaging. 
     We very much support extending income averaging to small 
     businesses, as well, and hope that Congress will consider 
     this soon.
       We applaud your efforts to reduce the tax burden on small 
     businesses, farmers and ranchers, and look forward to working 
     with you in the future.
           Sincerely,

                                                   Dan Danner,

                                                   Vice President,
                                   Federal Governmental Relations.
                                 ______
                                 
      By Mr. BOND (for himself, Ms. Snowe, and Mr. Bennett):
  S. 2372. A bill to provide for a pilot loan guarantee program to 
address Year 2000 problems of small business concerns, and for other 
purposes; to the Committee on Small Business.


                 small business year 2000 readiness act

  Mr. BOND. Mr. President, I rise today to introduce the Small Business 
Year 2000 Readiness Act along with my colleagues Senators Bennett and 
Snowe. This bill provides small businesses with the resources necessary 
to repair Year 2000 computer problems. This legislation is an important 
step toward avoiding the widespread failure of small businesses.
  The problem, as many Senators are aware, is that certain computers 
and processors in automated systems will fail because such systems will 
not recognize the Year 2000. My colleague Senator Bennett, who is the 
Chairman of the Senate Special Year 2000 Technology Problem Committee 
and is co-sponsoring this bill, is very well versed in this problem and 
has been active in getting the word out to industries and to agencies 
of the federal government of the drastic consequences that may result 
from the Y2K problem.
  Recently, the Committee on Small Business, which I chair, held 
hearings on the effect the Y2K problem will have on small businesses. 
The outlook is not good. The Committee received testimony that the 
companies most at risk from Y2K failures are small and medium-sized 
industries, not larger companies. The major reasons for this anomaly is 
that many small companies have not begun to realize how much of a 
problem Y2K failures will be and may not have the access to capital to 
cure such problems before they cause disastrous effects.
  A study on Small Business and the Y2K Problem sponsored by Wells 
Fargo Bank and the NFIB found that an estimated four and three-quarter 
million small employers are exposed to the Y2K problem. This equals 
approximately 82 percent of all small businesses that have at least two 
employees. Such exposure to the Y2K problem will have devastating 
affects on our economy generally. As the result of communications with 
small businesses, computer manufacturers, consultants and groups, the 
Small Business Committee has found there is significant likelihood that 
the Y2K issue will cause many small businesses to close, playing a 
large role in Federal Reserve Chairman Greenspan's prediction of a 40 
percent chance for recession at the beginning of the new millennium.
  The Committee received information indicating that approximately 
330,000 small businesses will shut down due to the Y2K problem and an 
even larger number will be severely crippled. Such failures will affect 
not only the employees and owners of such small businesses, but also 
the creditors, suppliers and customers of such failed small businesses. 
Lenders, including banks

[[Page S9432]]

and non-bank lenders, that have extended credit to small businesses 
will face significant losses if small businesses either go out of 
business or have a sustained period in which they cannot operate.
  It must be remembered that the Y2K problem is not a problem for only 
those businesses that have large computer networks or mainframes. A 
small business is at risk if it uses any computers in its business, if 
it has customized software, if it is conducting e-commerce, if it 
accepts credit card payments, if it uses a service bureau for its 
payroll, if it depends on a data bank for information, if it has 
automated equipment for communicating with its sales or service force 
of if it has automated manufacturing equipment.
  A good example of how small businesses are dramatically affected by 
the Y2K problem is the experience of John Healy, the owner of Coventry 
Spares Ltd. in Holliston, Massachusetts, as reported in INC Magazine. 
Coventry Spares is a distributor of vintage motorcycle parts. Like many 
small business owners, Mr. Healy's business depends on trailing 
technology purchased over the years, including a 286 computer, with 
software that is 14 years old and an operating system that is six or 
seven versions out of date. Mr. Healy uses this computer equipment, 
among other matters, for handling the company's payroll, ordering, 
inventory control, product lookup and maintaining a database of 
customers and subscribers to a vintage motorcycle magazine he 
publishes. The system handles 85 percent of his business and, without 
it working properly, Mr. Healy stated that ``I'd be a dead duck in the 
water.'' Unlike many small business owners, however, Mr. Healy is aware 
of the Y2K problem and tested his equipment to see if his equipment 
could handle the Year 2000. His tests confirmed his fear--the equipment 
and software could not process the year 2000 date and would not work 
properly after December 21, 1999. Therefore, Mr. Healy will have to 
expand over $20,000 to keep his business afloat. The experience of Mr. 
Healy has been and will continue to be repeated across the country as 
small businesses realize the impact the Y2K problem will have on their 
business.

  The Gartner Group, an international computer consulting firm, has 
conducted studies showing small businesses are way behind--the worst of 
all sectors studied--where they need to be in order to avoid 
significant failures due to non-Y2K compliance. It estimates that only 
15 percent of all businesses with under 200 employees have even begun 
to inventory the automated systems that may be affected by this 
computer glitch. That means that 85 percent of small businesses have 
not be even begun the initial task of determining how much of a problem 
they may have or taken steps to ensure that their businesses are not 
impaired by this problem.
  Given the effects a substantial number of small business failures 
will have on our nation's economy, it is imperative that Congress take 
steps to ensure that small businesses are aware of the Y2K problem and 
have access to capital to fix such problems. Moreover, it is imperative 
that Congress take such steps before the problem occurs, not after it 
has already happened. Therefore, today I am introducing the Small 
Business Year 2000 Readiness Act.
  This Act will serve the dual purpose of providing small businesses 
with the means to continue operating successfully after January 1, 
2000, and making lenders and small firms more aware of the dangers that 
lie ahead. The Act requires the Small Business Administration to 
establish a limited-term loan program whereby SBA would guarantee 50 
percent of the principal amount of a loan made by a private lender to 
assist small businesses in correcting Year 2000 computer problems. The 
loan amount would be capped at $50,000. The guarantee limit and loan 
amount will limit the exposure of the government and ensure that 
eligible lenders retain sufficient risk so that they make sound 
underwriting decisions.
  The Y2K loan program guidelines will be based on the guidelines SBA 
has already established governing its FA$TRACK pilot program. Lenders 
originating loans under the Y2K loan program would be permitted to 
process and document loans using the same internal procedures they 
would on loans of a similar type and size not governed by a government 
guarantee. Otherwise, the loans are subject to the same requirements as 
all other loans made under the (7)(a) loan program.
  Under the loan program, each lender designated as a Preferred Lender 
or Certified Lender by SBA would be eligible to participate in the Y2K 
loan program. This would include approximately 1,000 lenders that have 
received special authority from the SBA to originate loans under SBA's 
existing 7(a) loan program. The Year 2000 loan program would sunset 
after October 31, 2001.
  To assure that the loan program is made available to those small 
businesses that need it, the legislation requires SBA to inform all 
lenders eligible to participate in the program of the loan program's 
availability. It is intended that these lenders, in their own self-
interest, will contact their small business customers to ensure that 
they are Y2K complaint and inform them of the loan program if they are 
not.
  The Small Business Year 2000 Readiness Act is a necessary step to 
ensure that the economic health of this country is not marred by a 
substantial number of small business failures following January 1, 
2000, and that small businesses continue to be the fastest growing 
segment of our economy in the Year 2000 and beyond.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2372

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Business Year 2000 
     Readiness Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the failure of many computer programs to recognize the 
     Year 2000 will have extreme negative financial consequences 
     in the Year 2000 and in subsequent years for both large and 
     small businesses;
       (2) small businesses are well behind larger businesses in 
     implementing corrective changes to their automated systems--
     85 percent of businesses with 200 employees or less have not 
     commenced inventorying the changes they must make to their 
     automated systems to avoid Year 2000 problems;
       (3) many small businesses do not have access to capital to 
     fix mission critical automated systems; and
       (4) the failure of a large number of small businesses will 
     have a highly detrimental effect on the economy in the Year 
     2000 and in subsequent years.

     SEC. 3. YEAR 2000 COMPUTER PROBLEM LOAN GUARANTEE PROGRAM.

       (a) Program established.--Section 7(a) of the Small 
     Business Act (15 U.S.C. 636(a)) is amended by adding at the 
     end the following:
       ``(27) Year 2000 computer problem pilot program.--
       ``(A) Definitions.--In this paragraph--
       ``(i) the term `eligible lender' means any lender 
     designated by the Administration as eligible to participate 
     in--

       ``(I) the Preferred Lenders Program authorized by the 
     proviso in section 5(b)(7); or
       ``(II) the Certified Lenders Program authorized in 
     paragraph (19); and

       ``(ii) the term `Year 2000 computer problem' means, with 
     respect to information technology, any problem that prevents 
     the information technology from accurately processing, 
     calculating, comparing, or sequencing date or time data--

       ``(I) from, into, or between--

       ``(aa) the 20th or 21st centuries; or
       ``(bb) the years 1999 and 2000; or

       ``(II) with regard to leap year calculations.

       ``(B) Establishment of program.--The Administration shall--
       ``(i) establish a pilot loan guarantee program, under which 
     the Administration shall guarantee loans made by eligible 
     lenders to small business concerns in accordance with this 
     subsection; and
       ``(ii) notify each eligible lender of the establishment of 
     the program under this paragraph.
       ``(C) Use of funds.--A small business concern that receives 
     a loan guaranteed under this paragraph shall use the proceeds 
     of the loan solely to address the Year 2000 computer problems 
     of that small business concern, including the repair or 
     acquisition of information technology systems and other 
     automated systems.
       ``(D) Maximum amount.--The total amount of a loan made to a 
     small business concern and guaranteed under this paragraph 
     shall not exceed $50,000.
       ``(E) Guarantee limit.--The guarantee percentage of a loan 
     guaranteed under this paragraph shall not exceed 50 percent 
     of the balance of the financing outstanding at the time of 
     disbursement of the loan.
       ``(F) Report.--The Administration shall annually submit to 
     the Committees on Small Business of the House of 
     Representatives and the Senate a report on the results of the 
     program under this paragraph, which shall include information 
     relating to--
       ``(i) the number and amount of loans guaranteed under this 
     paragraph;

[[Page S9433]]

       ``(ii) whether the loans guaranteed were made to repair or 
     replace information technology and other automated systems; 
     and
       ``(iii) the number of eligible lenders participating in the 
     program.''.
       (b) Regulations.--
       (1) In general.--Not later than 60 days after the date of 
     enactment of this Act, the Administrator of the Small 
     Business Administration shall issue final regulations to 
     carry out the program under section 7(a)(27) of the Small 
     Business Act, as added by this section.
       (2) Requirements.--Except to the extent inconsistent this 
     section or section 7(a)(27) of the Small Business Act, as 
     added by this section, the regulations issued under this 
     subsection shall be substantially similar to the requirements 
     governing the FA$TRACK pilot program of the Small Business 
     Administration, or any successor pilot program to that pilot 
     program.
       (c) Repeal.--Effective on October 1, 2001, this section and 
     the amendment made by this section are repealed.

     SEC. 4. PILOT PROGRAM REQUIREMENTS.

       Section 7(a)(25) of the Small Business Act (15 U.S.C. 
     636(a)(25)) is amended by adding at the end the following:
       ``(D) Notification of change.--Not later than 30 days prior 
     to initiating any pilot program or making any change in a 
     pilot program under this subsection that may affect the 
     subsidy rate estimates for the loan program under this 
     subsection, the Administration shall notify the Committees on 
     Small Business of the House of Representatives and the 
     Senate, which notification shall include--
       ``(i) a description of the proposed change; and
       ``(ii) an explanation, which shall be developed by the 
     Administration in consultation with the Director of the 
     Office of Management and Budget, of the estimated effect that 
     the change will have on the subsidy rate.
       ``(E) Report on pilot programs.--The Administration shall 
     annually submit to the Committees on Small Business of the 
     House of Representatives and the Senate a report on each 
     pilot program under this subsection, which report shall 
     include information relating to--
       ``(i) the number and amount of loans made under the pilot 
     program;
       ``(ii) the number of lenders participating in the pilot 
     program; and
       ``(iii) the default rate, delinquency rate, and recovery 
     rate for loans under each pilot program, as compared to those 
     rates for other loan programs under this subsection.''.
                                 ______
                                 
      By Mr. GRASSLEY (for himself and Mr. Durbin):
  S. 2373. A bill to amend title 28, United States Code, with respect 
to the use of alternative dispute resolution processes in United States 
district courts, and for other purposes; to the Committee on the 
Judiciary.


                   alternative dispute resolution act

  Mr. GRASSLEY. Mr. President, I rise today to introduce the 
Alternative Dispute Resolution Act of 1998. My Judiciary Subcommittee 
on Administrative Oversight and the Courts has jurisdiction over this 
matter, and I am very pleased that the ranking member of the 
subcommittee, Senator Durbin, has joined me in sponsoring this bill. It 
will require every Federal district court in the country to institute 
an alternative dispute resolution, or ADR, program. The bill will 
provide parties and district court judges with options other than the 
traditional, costly and adversarial process of litigation.
  ADR programs have been gaining in popularity and respect for years 
now. For example, many contracts drafted today--between private 
parties, corporations, and even nations--include arbitration clauses. 
Most State and Federal bar associations, including the ABA, have 
established committees to focus on ADR. Also, comprehensive ADR 
programs are flourishing in many of the States.
  ADR is also being used at the Federal level. In 1990, for example, 
President Bush signed into law a bill that I introduced called the 
Administrative Dispute Resolutions Act. The law promoted the increased 
use of ADR in Federal agency proceedings. In 1996, because ADR was 
working so well, we permanently re-authorized the law. And earlier this 
year, the executive branch recommitted themselves to using ADR as much 
as possible.
  Since the late 1970s, our Federal district courts have also been 
successfully introducing ADR. In 1998, we authorized 20 district courts 
to begin implementing ADR programs. The results were very encouraging, 
so last year we made these programs permanent. It's time to take 
another step and make ADR available in all district courts.
  Mr. President, ADR allows innovations and flexibility in the 
administration of justice. The complex legal problems that people have 
demand creative and flexible solutions on the part of the courts. There 
are numerous benefits to providing people with alternatives to 
traditional litigation. For example, a recent Northwestern University 
study of ADR programs in State courts indicated that mediation 
significantly reduced the duration of lawsuits and produced significant 
cost savings for litigants. That means fewer cases on the docket and 
decreased costs. The Federal courts should be taking every opportunity 
to reap the benefits that the state courts have been enjoying.

  Mr. President, the fact of the matter is that ADR works. The future 
of justice in this country includes ADR. Perhaps one of the signs of 
this is that many of the best law, business, and graduate schools in 
the country are beginning to emphasize training in negotiation, 
mediation, and other kinds of dispute resolution.
  Quite simply, this bill will increase the availability of ADR in our 
Federal courts. It mandates that every district court establish some 
form of professional ADR program. It provides the district, however, 
with the flexibility to decide what kind of ADR works best locally. The 
bill also allows a district with a current ADR program that's working 
well to continue the program.
  This bill is the Senate companion to H.R. 3528, which was reported 
out of the Judiciary Committee today without any opposition. Our bill 
tracks the original House bill, except for some findings and a few 
technical changes to improve the legislation. These changes were 
included in the bill reported out of committee. The House bill received 
overwhelming, bipartisan support, passing 405-2.
  The Department of Justice, along with the administration, the 
Administrative Office of the Courts, and the American Bar Association, 
including its business section, all support the legislation with these 
improvements. The consensus is clear: ADR has an important role to play 
in our Federal court system.
  Mr. President, this bill is a step in the right direction for the 
administration of justice in our country. Increased availability of ADR 
will benefit all of us. It should be an option to people in every 
judicial district of the country. This bill assures that it will be.
                                 ______
                                 
      By Mr. SARBANES:
  S. 2374. A bill to provide additional funding for repair of the 
Korean War Veterans Memorial; to the Committee on Energy and Natural 
Resources.


                korean war veterans memorial legislation

   Mr. SARBANES. Mr. President, today I am introducing 
legislation to fix and restore one of our most important monuments, the 
Korean War Veterans Memorial. My bill would authorize the Secretary of 
the Army to provide, within existing funds, up to $2 million to 
complete essential repairs to the Memorial.
  The Korean War Memorial is the newest war monument in Washington, DC. 
It was authorized in 1986 by Public Law 99-752 which established a 
Presidential Advisory Board to raise funds and oversee the design of 
the project, and charged the American Battle Monuments Commission with 
the management of this project. The authorization provided $1 million 
in federal funds for the design and initial construction of the 
memorial and Korean War Veterans' organizations and the Advisory Board 
raised over $13 million in private donations to complete the facility. 
Construction on the memorial began in 1992 and it was dedicated on July 
27, 1995.
  For those who haven't visited, the Memorial is located south of the 
Vietnam Veteran's Memorial on the Mall, to the east of the Lincoln 
Memorial. Designed by world class Cooper Lecky Architects, the monument 
contains a triangular ``field of service,'' with 19 stainless steel, 
larger than life statues, depicting a squad of soldiers on patrol. A 
curb of granite north of the statues lists the 22 countries of the 
United Nations that sent troops in defense of South Korea. To the south 
of the patrol stands a wall of black granite, with engraved images of 
more than 2,400 unamed servicemen and women detailing the countless 
ways in which Americans answered the call to service. Adjacent to the 
wall is a fountain which is supposed to be encircled by a Memorial 
Grove of linden trees, creating a peaceful setting for quiet 
reflection. When

[[Page S9434]]

this memorial was originally created, it was intended to be a lasting 
and fitting tribute to the bravery and sacrifice of our troops who 
fought in the ``Forgotten War.'' Unfortunately, just three years after 
its dedication, the monument is not lasting and is no longer fitting.
  The Memorial has not functioned as it was originally conceived and 
designed and has instead been plagued by a series of problems in its 
construction. The grove of 40 linden trees have all died and been 
removed from the ground, leaving forty gaping holes. The pipes feeding 
the ``pool of remembrance's'' return system have cracked and the pool 
has been cordoned off. The monument's lighting system has been deemed 
inadequate and has caused safety problems for those who wish to visit 
the site at night. As a result, most of the 1.3 million who visit the 
monument each year--many of whom are veterans--must cope with 
construction gates or areas which have been cordoned off instead of 
experiencing the full effect of the Memorial.
  Let me read a quote from the Washington Post--from a Korean War 
Veteran, John LeGault who visited the site--that I think captures the 
frustration associated with not having a fitting and complete tribute 
for the Korean War. He says, ``Who cares?'' ``That was the forgotten 
war and this is the forgotten memorial.'' Mr. President, we ought not 
to be sunshine patriots when it comes to making decisions which affect 
our veterans. Too often, we are very high on the contributions that our 
military makes in times of crisis, but when a crisis fades from the 
scene, we seem to forget about this sacrifice. Our veterans deserve 
better.
  To resolve these problems and restore this monument to something that 
our Korean War Veterans can be proud of, the U.S. Army Corps of 
Engineers conducted an extensive study of the site in an effort to 
identify, comprehensively, what corrective actions would be required. 
The Corps has determined that an additional $2 million would be 
required to complete the restoration of the grove work and replace the 
statuary lighting. My legislation would provide the authority for the 
funds to make these repairs swiftly and once and for all.
  With the 50th anniversary of the Korean War conflict fast 
approaching, we must ensure that these repairs are made as soon as 
possible. This additional funding would ensure that we have a fitting, 
proper, and lasting tribute to those who served in Korea and that we 
will never forget those who served in the ``Forgotten War.'' I urge my 
colleagues to join me in supporting this important legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2374

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

     SECTION 1. ADDITIONAL FUNDING FOR KOREAN WAR VETERANS 
                   MEMORIAL.

       Section 3 of Public Law 99-572 (40 U.S.C. 1003 note) is 
     amended by adding at the end the following:
  ``(c) Additional Funding.--
       ``(1) In general.--In addition to amounts made available 
     under subsections (a) and (b), the Secretary of the Army may 
     expend, from any funds available to the Secretary on the date 
     of enactment of this paragraph, $2,000,000 for repair of the 
     memorial.
       ``(2) Disposition of funds received from claims.--Any funds 
     received by the Secretary of the Army as a result of any 
     claim against a contractor in connection with construction of 
     the memorial shall be deposited in the general fund of the 
     Treasury.''.
                                 ______
                                 
      By Mr. JEFFORDS:
  S. 2376. A bill to amend the Internal Revenue Code of 1986 to provide 
tax incentives for land sales for conservation purposes; to the 
Committee on Finance.


              the conservation tax incentives act of 1998

 Mr. JEFFORDS. Mr. President, today, I am introducing the 
Conservation Tax Incentives Act of 1998, a bill that will result in a 
reduction in the capital gains tax for landowners who sell property for 
conservation purposes. This bill creates a new incentive for private, 
voluntary land protection. This legislation is a cost-effective non-
regulatory, market-based approach to conservation, and I urge my 
colleagues to join me in support of it.
  The tax code's charitable contribution deduction currently provides 
an incentive to taxpayers who give land away for conservation purposes. 
That is, we already have a tax incentive to encourage people to donate 
land or conservation easements to government agencies like the Fish and 
Wildlife Service or to citizens' groups like the Vermont Land Trust. 
This incentive has been instrumental in the conservation of 
environmentally significant land across the country.
  Not all land worth preserving, however, is owned by people who can 
afford to give it away. For many landowners, their land is their 
primary financial asset, and they cannot afford to donate it for 
conservation purposes. While they might like to see their land 
preserved in its underdeveloped state, the tax code's incentive for 
donations is of no help.
  The Conservation Tax Incentives Act will provide a new tax incentive 
for sales of land for conservation by reducing the amount of income 
that landowners would ordinarily have to report--and pay tax on--when 
they sell their land. The bill provides that when land is sold for 
conservation purposes, only one half of any gain will be included in 
income. The other half can be excluded from income, and the effect of 
this exclusion is to cut in half the capital gains tax the seller would 
otherwise have to pay. The bill will apply to land and to partial 
interests in land and water.
  It will enable landowners to permanently protect a property's 
environmental value without forgoing the financial security it 
provides. The bill's benefits are available to landowners who sell land 
either to a government agency or to a qualified conservation nonprofit 
organization, as long as the land will be used for such conservation 
purposes as protection of fish, wildlife or plant habitat, or as open 
space for agriculture, forestry, outdoor recreation or scenic beauty.
  Land is being lost to development and commercial use at an alarming 
rate. By Department of Agriculture estimates, more than four square 
miles of farmland are lost to development every day, often with 
devastating effects on the habitat wildlife need to thrive. Without 
additional incentives for conservation, we will continue to lose 
ecologically valuable land.

  A real-life example from my home state illustrates the need for this 
bill. A few years ago, in an area of Vermont known as the Northeast 
Kingdom, a large well-managed forested property came on the market. The 
land had appreciated greatly over the years and was very valuable 
commercially. With more than 3,000 acres of mountains, forests, and 
ponds, with hiking trails, towering cliffs, scenic views and habitat 
for many wildlife species, the property was very valuable 
environmentally. Indeed, the State of Vermont was anxious to acquire it 
and preserve it for traditional agricultural uses and habitat 
conservation.
  After the property had been on the market for a few weeks, the seller 
was contacted by an out-of-state buyer who planned to sell the timber 
on the land and to dispose of the rest of the property for development. 
After learning of this, the State quickly moved to obtain appraisals 
and a legislative appropriation in preparation for a possible purchase 
of the land by the State. Subsequently, the State and The Nature 
Conservancy made a series of purchase offers to the landowner. The out-
of-state buyer however, prevailed upon the landowner to accept his 
offer. Local newspaper headlines read, ``State of Vermont Loses Out On 
Northeast Kingdom Land Deal.'' The price accepted by the landowner was 
only slightly higher than the amount the State had offered. Had the 
bill I'm introducing today been on the books, the lower offer by the 
State may well have been as attractive--perhaps more so--than the 
amount offered by the developer.
  This bill provides an incentive-based means for accomplishing 
conservation in the public interest. It helps tax dollars accomplish 
more, allowing public and charitable conservation funds to go to 
higher-priority conservation projects. Preliminary estimates indicate 
that with the benefits of this bill, nine percent more land could be 
acquired, with no increase in the amount governments currently spend 
for conservation land acquisition. At a time when little money is 
available for conservation, it is important that we

[[Page S9435]]

stretch as far as possible the dollars that are available.
  State and local governments will be important beneficiaries of this 
bill. Many local communities have voted in favor of raising taxes to 
finance bond initiatives to acquire land for conservation. My bill will 
help stretch these bond proceeds so that they can go further in 
improving the conservation results for local communities. In addition, 
because the bill applies to sales to publicly-supported national, 
regional, State and local citizen conservation groups, its provisions 
will strengthen private, voluntary work to save places important to the 
quality of life in communities across the country. Private fundraising 
efforts for land conservation will be enhanced by this bill, as funds 
will be able to conserve more, or more valuable, land.
  Let me provide an example to show how I intend the bill to work. 
Let's suppose that in 1952 a young couple purchased a house and a tract 
of adjoining land, which they have maintained as open land. Recently, 
the county where they lived passed a bond initiative to buy land for 
open space, as county residents wanted to protect the quality of their 
life from rampant development and uncontrolled sprawl. Let's further 
assume that the couple, now contemplating retirement, is considering 
competing offers for their land, one from a developer, the other from 
the county, which will preserve the land in furtherance of its open-
space goals. Originally purchased for $25,000, the land is now worth 
$250,000 on the open market. If they sell the land to the developer for 
its fair market value, the couple would realize a gain of $225,000 
($250,000 sales price minus $25,000 costs), owe tax of $45,000 (at a 
rate of 20% on the $225,000 gain), and thus net $205,000 after tax.

  Under my bill, if the couple sold the land for conservation purposes, 
they could exclude from income one half of any gain they realized upon 
the sale. This means they would pay a lower capital gains tax; 
consequently, they would be in a position to accept a lower offer from 
a local government or a conservation organization, yet still end up 
with more money in their pockets than they would have had if they had 
accepted the developer's offer. Continuing with the example from the 
preceding paragraph, let's assume the couple sold the property to the 
county, for the purpose of conservation, at a price of $240,000. They 
would realize a gain of $215,000 ($240,000 sales price minus $25,000 
cost). Under my bill, only half of this gain $107,500, would be 
includible in income. The couple would pay $21,500 in capital gains tax 
(at a rate of 20% on the $107,500 gain includible in income) and thus 
net $218,500 ($240,000 sales price minus $21,500 tax). Despite having 
accepted a sales price $10,000 below the developer's offer, the couple 
will keep $13,000 more than they would have kept if they had accepted 
his offer.
  The end result is a win both for the landowners, who end up with more 
money in their pocket than they would have had after a sale to an 
outsider, and for the local community, which is able to preserve the 
land at a lower price. This example illustrates how the exclusion from 
income will be especially beneficial to middle-income, ``land rich/cash 
poor'' landowners who can't avail themselves of the tax benefits 
available to those who can afford to donate land.
  As this bill also applies to partial interests in land, the exclusion 
from income--and the resulting reduction in capital gains tax--will, in 
certain instances, also be available to landowners selling partial 
interests in their land for conservation purposes. A farmer could, for 
example, sell a conservation easement, continuing to remain on and farm 
his land, yet still be able to take advantage of the provisions in this 
bill. The conservation easement must meet the tax code's requirements 
i.e., it must serve a conservation purpose, such as the protection of 
fish or wildlife habitat or the preservation of open space (including 
farmland and forest land).
  There are some things this bill does not do. It does not impose new 
regulations or controls on people who own environmentally-sensitive 
land. It does not compel anyone to do anything; it is entirely 
voluntary. Nor will it increase government spending for land 
conservation. In fact, the effect of this bill will be to allow better 
investment of tax and charitable dollars used for land conservation.
  The estimated cost of this bill is just $50 million annually. This 
modest cost, however, does not take into account the value of the land 
conserved. It is estimated that for every dollar foregone by the 
Federal treasury, $1.76 in land will be permanently preserved.
  I urge all my colleagues to join me in support of the Conservation 
Tax Incentives Act of 1998.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself, Mr. Levin, Mr. Jeffords, Mr. Leahy, 
        Mr. Cleland, Mr. Durbin, Mr. D'Amato, and Mrs. Boxer):
  S. 2377. A bill to amend the Clean Air Act to limit the concentration 
of sulfur in gasoline used in motor vehicles; to the committee on 
Environment and Public Works.


                       clean gasoline act of 1998

 Mr. MOYNIHAN. Mr. President, I am proud to introduce today the 
Clean Gasoline Act of 1998, a bill to establish a nationwide, year-
round cap on the sulfur content of gasoline. My bill presents an 
opportunity to make tremendous progress in improving our national air 
quality through a simple, cost-effective measure. Today, 70 million 
people--30 percent of the nation's population--live in counties which 
exceed heatlh-based ozone standards. For just a few pennies a gallon, 
we can make our urban environment appreciably better.
  Sulfur in gasoline contaminates catalytic converters so that they 
remove less of the nitrogen oxide (NOx), carbon monoxide 
(CO), and hydrocarbons (HC) contained in tailpipe emissions. These 
pollutants elevate the levels of particulate matter (PM) and contribute 
to ground-level ozone. By reducing the amount of sulfur allowed in 
gasoline sold nationwide, my bill will substantially improve air 
quality, especially in America's largest cities.
  The current average sulfur content in U.S. gasoline is approximately 
330 parts per million (ppm), and ranges as high as 1,000 ppm. the Clean 
Gasoline Act will impose a year-round cap of 40 ppm on the sulfur 
content of all gasoline sold in the United States. Under my bill, 
refineries will also have the option of meeting an 80 ppm cap, provided 
that they maintain an overall average sulfur content of no more than 30 
ppm.
  Imposing limits on the sulfur content of gasoline will achieve 
tremendous--and virtually immediate--air quality benefits. The 
emissions reductions achieved by lowering gasoline sulfur levels to 40 
ppm would be equivalent to removing 3 million vehicles from the streets 
of New York, and nearly 54 million vehicles from our roads nationwide.
  California imposed a similar cap on gasoline sulfur beginning in 
1996, resulting in significant air quality gains. Japan has already 
established a 50 ppm gasoline standard, and the European Union 
currently has a gasoline sulfur standard of 150 ppm--which will drop to 
50 ppm beginning in the year 2005.
  The gasoline sulfur cap established by my bill will apply year-round. 
A seasonal cap is insufficient because the damage done to catalytic 
converters by sulfur poisoning is not fully reversible by typical 
driving--meaning that vehicle emission controls would be re-poisoned 
every year when high-sulfur gasoline returned to the market. In the 
absence of national standards, travel over state boundaries could 
disable emissions controls.
  The current high-sulfur content of U.S. gasoline will also preclude 
the introduction of the next generation of fuel efficiency 
technologies--most notably fuel cells and direct-injection gasoline 
engines. U.S. citizen will not have access to these advanced 
technologies--unless we adopt low sulfur gasoline standards.
  Mr. President, I believe our task is clear. A national low sulfur 
gasoline standard will result in considerable health and environmental 
benefits. It will maximize the effectiveness of currently available 
vehicle emissions technology, and will enable the introduction of the 
next generation of vehicle technology into the U.S. market. Refineries 
can reduce the sulfur content of gasoline using existing technology 
that is already being used to supply markets in California, Japan, and 
the European Union. Our national fleet is already comprised of world-
class vehicles. It is time for us to provide this fleet with world-
class fuel. I

[[Page S9436]]

urge my colleagues to join my cosponsors and me in supporting this 
important legislation.
 Mr. JEFFORDS. Mr. President, I join Senator Moynihan in 
offering legislation that would reduce the sulfur content of gasoline. 
Current levels of sulfur in gasoline lead to high nitrogen oxide, 
carbon monoxide, and hydrocarbon emissions by weakening catalytic 
converter emission controls. These emissions elevate ground-level ozone 
and particulate matter pollution.
  As we all have learned, long-term exposure to ozone pollution can 
have significant health impacts, including asthma attacks, breathing 
and respiratory problems, loss of lung function, and lowered immunity 
to disease. The EPA has compared breathing ozone to getting a sunburn 
in your lungs. Children, including Vermont's approximately 10,000 
asthmatic children, are at special risk for adverse health effects from 
ozone pollution. Children playing outside in the summer time, the 
season when concentrations of ground-level ozone are the greatest, may 
suffer from coughing, decreased lung function, and have trouble 
catching their breath. Exposure to particulate matter pollution is 
similarly dangerous causing premature death, increased respiratory 
symptoms and disease, decreased lung function, and alterations in lung 
tissue. These pollutants also result in adverse environmental effects 
such as acid rain and visibility impairment.
  Mr. President, this bill will reduce these pollutants in our 
communities, and more importantly it will reduce these pollutants cost-
effectively. To reduce the sulfur content of gasoline, refineries can 
use currently available technology. These measures will not break the 
bank. California has already adopted the measures in this bill on a 
statewide basis. So have Japan and the members of the European Union.
  Mr. President, I urge my colleagues to support this bill. Let's clean 
up our air so we can all breathe just a little bit easier.
 Mr. CLELAND. Mr. President, I am pleased today to announce 
that I have added my name as an original co-sponsors of the Low Sulfur 
Fuel Act of 1998 and to express my reasons for supporting this 
important legislation. I would first like to thank my colleague from 
New York, Senator Moynihan, for his authorship of this measure and his 
leadership on this issue. The bill establishes a national, year-round 
cap on gasoline sulfur levels, and would impose a reduction of sulfur 
content in gasoline from 300 parts per million (ppm) to 40 ppm within 
two years from the date of enactment.
  High sulfur levels in gasoline increase vehicle emissions of nitrogen 
oxides (NOx), carbon monoxide (CO), and hydrocarbons (HC) 
which in turn produce higher levels of particulate matter (PM) and 
contribute to ground level ozone. Reducing sulfur content levels to 40 
ppm has been shown to reduce Nitrogen Oxides by 51 percent, Carbon 
Monoxide by 40 percent, and Hydrocarbons by 24 percent. Essentially, 
the sulfur in gasoline inhibits the catalyst in an automobile from 
doing its job--which is to reduce the emissions of the aforementioned 
pollutants. Sulfur is a contaminant only and does not in any way 
enhance engine performance.
  There are two compelling reasons which led me to support this bill: 
First, helping our states attain the health requirements set forth by 
the Clean Air Act by providing them with a viable tool for reducing 
NOx and CO emissions; and second, updating our gasoline to 
keep pace with other industrialized nations thereby keeping our 
automotive fleet competitive in the international marketplace.
  In my home state of Georgia, the Metro Atlanta area has experienced 
extensive difficulties in complying with the standards set forth by the 
Clean Air Act. In a recent attempt to meet these standards, the Georgia 
Department of Natural Resources (DNR), has voted to implement reduced 
sulfur content in fuel. The rule would require gasoline in the 25 
county area surrounding Atlanta to be reduced to 30 ppm by 2003. 
Georgia is only the second state, after California, to take such 
innovative steps to meet air quality goals. In my review of this bill, 
I sent a copy to Harold Reheis, Director of the Georgia Environmental 
Protection Division (EPD), an agency of the Georgia DNR for his 
comments. In his response, which I will ask unanimous consent to add as 
part of the Record after my statement, Mr. Reheis states that the 
Moynihan bill would ``result in a reduction in air pollutants statewide 
and nationwide.'' Further, he added that this bill ``could help prevent 
ozone nonattainment problems in other urban areas of Georgia like 
Augusta, Columbus, and Macon, which all could have difficulty meeting 
the tighter federal ozone standards adopted by the USEPA last year.'' I 
encourage all my colleagues to contact their State Environmental 
Agencies to request their input on this matter.
  Relating to the second point in support of the bill, the U.S. must 
maintain our innovative and forward thinking approach and support this 
measure because other countries, such as Japan, Egypt, Thailand, and 
every member of the European Union have already required similar caps 
on the sulfur content of their gasoline. Thus, in order for us to 
compete with these and other countries, we must take this extremely 
valuable step. California has already taken such action and now we have 
the opportunity to send a message to the rest of the world, that we, as 
a nation, are committed to cleaner, more fuel efficient gasoline. 
Further, we should signify that we are committed to ensuring that our 
auto industry and the U.S. consumer are equipped with the 
infrastructure necessary to take advantage of the emerging market for 
new, innovative, less polluting automobiles.
  There is a real possibility that if the U.S. does not take this 
action, we would fall behind the rest of the industrialized world--a 
position that the US should never be in--and become the dumping ground 
for higher sulfur level fuels--making it more difficult to shift to the 
lower sulfur fuels and inhibiting U.S. automakers from producing and 
U.S. consumers from purchasing, cleaner and more fuel efficient 
technologies.
  The crux of this issue is that reducing sulfur content in gasoline to 
40 ppm, year round, is a viable, cost-effective tool to dramatically 
reduce pollutants which cause high levels of Particulate Matter as well 
as Ozone and I urge my colleagues to support this bill.
  I ask unanimous consent that the letter from Mr. Reheis be printed in 
the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                Georgia Department


                                         of Natural Resources,

                                       Atlanta, GA, June 22, 1998.
     Hon. Max Cleland,
     U.S. Senate, Dirksen Senate Office Building, Washington, DC.
       Dear Senator Cleland: Thank you for sharing with EPD the 
     proposed bill by Senator Moynihan to require the use of low 
     sulfur gasoline all over the United States. The bill is a 
     fine idea, and we have done something similar in Georgia. The 
     Board of Natural Resources, upon my recommendation, recently 
     promulgated rules to require low sulfur gasoline to be sold 
     in 25 counties in and around Metro Atlanta starting May 1999.
       The proposed Senate bill would result in a reduction in air 
     pollutants statewide and nationwide. This could help prevent 
     ozone nonattainment problems in other urban areas of Georgia 
     like Augusta, Columbus, and Macon, which all could have 
     difficulty meeting the tighter federal ozone standards 
     adopted by USEPA last year.
       I think the bill deserves your support. Please contact me 
     if you need future information.
           Sincerely,
                                                 Harold F. Reheis,
                                                 Director.
                                 ______
                                 
      By Mr. AKAKA:
  S. 2378. A bill to amend title XVIII of the Social Security Act to 
increase the amount of payment under the Medicare program for pap smear 
laboratory tests; to the Committee on Finance.


             investment in women's health care act of 1998

  Mr. AKAKA. Mr. President, today I introduce the Investment in Women's 
Health Act of 1998, a bill to increase Medicare reimbursement for Pap 
smear laboratory tests. This is the Senate companion measure to the 
bill introduced in the House by my colleague and friend, Representative 
Neil Abercrombie.
  Last year, I was contacted by pathologists who alerted me to the 
cost-payment differential for Pap smear testing in Hawaii. According to 
the American Pathology Foundation, Hawaii is one of 23 states where the 
cost of performing the test significantly exceeds the Medicare payment. 
In Hawaii, the cost of performing the test

[[Page S9437]]

ranges between $13.04 and $15.80. The Medicare reimbursement rate is 
only $7.15.
  This large disparity between the reimbursement rate and the actual 
cost may force labs in Hawaii and other states to discontinue Pap smear 
testing. Additionally, the below-cost-reimbursement may compel some 
labs to process tests faster and in higher volume to improve cost 
efficiency. This situation increases the risk of inaccurate results and 
can severely handicap patient outcomes.
  If the Pap smear is to continues an effective cancer screening tool, 
it must remain widely available and reasonably priced for all women. 
Adequate payment is a necessary component of ensuring women's continued 
access to quality Pap smears.
  My bill will increase the Medicare reimbursement rate for Pap smear 
lab work from its current $7.15 to $14.60--the national average cost of 
the test. This rate is important because it establishes a benchmark for 
many private insurers.
  No other cancer screening procedure is as effective for early 
detection of cancer as the Pap smear. Over the last 50 years, the 
incidence of cervical cancer deaths has declined by 70 percent due in 
large part to the use of this cancer detection measure. Experts agree 
that the detection and treatment of precancerous lesions can actually 
prevent cervical cancer. Evidence also shows that the likelihood of 
survival when cervical cancer is detected in its earliest stage is 
almost 100 percent with timely and appropriate treatment and follow-up.
  Mr. President, an estimated 13,700 new cases of invasive cervical 
cancer will be diagnosed in 1998 and 4,900 women will die of the 
disease. I urge my colleagues to support this important legislation.
  Mr. President, I ask unanimous consent that a list of the average Pap 
smear production costs for 23 states be printed in the Record.
  There being no objection, the list was ordered to be printed in the 
Record, as follows:


                       Pap Smear Production Costs

California.......................................................$18.84
                                                                  17.11
                                                                  17.00
                                                                  13.05
Colorado..........................................................16.94
Connecticut.......................................................16.87
Delaware..........................................................22.00
Florida...........................................................14.00
Georgia...........................................................10.73
Hawaii............................................................13.04
                                                                  14.04
                                                                  15.40
                                                                  15.80
Illinois..........................................................13.12
Iowa..............................................................13.78
Kansas............................................................14.62
Kentucky..........................................................16.00
                                                                  13.01
Maryland..........................................................14.05
Michigan..........................................................13.16
Nebraska..........................................................16.12
New Mexico........................................................20.65
Ohio..............................................................18.46
                                                                  14.15
                                                                  14.50
South Carolina....................................................16.89
                                                                  13.00
South Dakota......................................................10.25
Tennessee.........................................................12.36
Texas.............................................................13.50
Vermont...........................................................18.92
Washington........................................................11.64
                                                                  12.00
                                                                  12.52
                                                                  12.90
                                                                  12.91
                                                                  13.22
                                                                  13.42
                                                                  14.69
Wisconsin.........................................................13.00

Note.--This data was obtained from the American Pathology Foundation.
                                 ______
                                 
      By Mr. MURKOWSKI (for himself and Mr. Daschle):
  S. 2379. A bill to establish a program to establish and sustain 
viable rural and remote communities; to the Committee on Banking, 
Housing, and Urban Affairs


          the rural and remote community fairness act of 1998

 Mr. MURKOWSKI. Mr. President, today I introduce the Rural and 
Remote Community Fairness Act of 1998. This Act will lead to a brighter 
future for rural and remote communities by establishing two new grant 
programs that will address the unique economic and environmental 
challenges faced by small communities in rural and remote areas across 
this country. I am pleased that this legislation is co-sponsored by the 
Minority Leader, Senator Daschle.
  The bill authorizes up to $100 million a year in grant aid from 1999 
through 2005 for any commuunities across the nation with populations of 
less than 10,000 which face electric rates in excess of 150 percent of 
the national average retail price. The money can go for electricity 
system improvements, energy efficiency and weatherization efforts, 
water and sanitation improvements or work to solve leaking fuel storage 
tanks.
  The bill also amends the Rural Electrification Act to authorize Rural 
and Remote Electrification Grants of an additional $20 million a year 
to the same communities. The grants can be used to increase energy 
efficiency, lower electricity rates or provide for the modernization of 
electric facilities.
  This nation has well-established programs for community development 
grants. The majority of these programs were established to help resolve 
the very real problems found in this Nation's urban areas. However, our 
most rural and remote communities experience different, but equally 
real, problems that are not addressed by existing law. Not only are 
these communities generally ineligible for the existing programs, their 
unique challenges, while sometimes similar to those experienced by 
urban areas, require a different focus and approach.
  The biggest single economic problem facing small communities is the 
expense of establishing a modern infrastructure. These costs, which are 
always substantial, are exacerbated in remote and rural areas. The 
existence of this infrastructure, including efficient housing, 
electricity, bulk fuel storage, waste water and water service, is a 
necessity for the health and welfare of our children, the development 
of a prosperous economy and minimizing environmental problems.
  There is a real cost in human misery and to the health and welfare of 
everyone, especially our children and our elderly from poor or polluted 
water or bad housing or an inefficient power system. Hepatitis B 
infections in rural Alaska are five times more common than in urban 
Alaska. We just have to do better if we are to bring our rural 
communities into the 21st Century.
  The experience of many Alaskans is a perfect example. Most small 
communities or villages in Alaska are not interconnected to an 
electricity grid, and rely upon diesel generators for their 
electricity. Often, the fuel can only be delivered by barge or 
airplane, and is stored in tanks. These tanks are expensive to 
maintain, and in many cases, must be completely replaced to prevent 
leakage of fuel into the environment. While economic and environmental 
savings clearly justify the construction of new facilities, these 
communities simply don't have the ability to raise enough capital to 
make the necessary investments.
  As a result, these communities are forced to bear an oppressive 
economic and environmental burden that can be eased with a relatively 
small investment on the part of the Federal government. I can give you 
some examples: in Manley Hot Springs, Alaska, the citizens pay almost 
70 cents per kilowatt hour for electricity. In Igiugig, Kokhanok, 
Akiachak Native Community, and Middle Kuskokwim, consumers all pay over 
50 cents per kilowatt hour for electricity. The national average is 
around 7 cents per kilowatt hour.
  Further, in Alaska, for example, many rural villages still lack 
modern water and sewer sanitation systems taken for granted in all 
other areas of America. According to a Federal Field Working Group, 190 
of the state's villages have ``unsafe'' sanitation systems, 135 
villages still using ``honey buckets'' for waste disposal. Only 31 
villages have a fully safe, piped water system; 71 villages having only 
one central watering source.
  Concerning leaking storage tanks, the Alaska Department of Community 
and Regional Affairs estimates that there are more than 2,000 leaking 
above-ground fuel storage tanks in Alaska. There are several hundred 
other below-ground tanks that need repair, according to the Alaska 
Department of Environmental Conservation.
  These are not only an Alaskan problem. The highest electricity rates 
in America are paid by a small community in Missouri, and communities 
in Maine, as well as islands in Rhode Island and New York will likely 
qualify

[[Page S9438]]

for this program. Providing safe drinking water and adequate waste 
treatment facilities is a problem for very small communities all across 
this land.
  What will this Act do to address these problems? First, the Act 
authorizes $100 million per year for the years 1999-2005 for block 
grants to communities of under 10,000 inhabitants who pay more than 150 
percent of the national average retail price for electricity.

  The grants will be allocated by the Secretary of Housing and Urban 
Development among eligible communities proportionate to cost of 
electricity in the community, as compared to the national average. The 
communities may use the grants only for the following eligible 
activities:
  Low-cost weatherization of homes and other buildings;
  Construction and repair of electrical generation, transmission, 
distribution, and related facilities;
  Construction, remediation and repair of bulk fuel storage facilities;
  Facilities and training to reduce costs of maintaining and operating 
electrical generation, distribution, transmission, and related 
facilities;
  Professional management and maintenance for electrical generation, 
distribution and transmission, and related facilities;
  Investigation of the feasibility of alternate energy services;
  Construction, operation, maintenance and repair of water and waste 
water services;
  Acquisition and disposition of real property for eligible activities 
and facilities; and
  Development of an implementation plan, including administrative costs 
for eligible activities and facilities.
  In addition, this bill will amend the rural Electrification Act of 
1936 to authorize Rural and Remote Electrification Grants for $20 
million per year for years 1999-2005 for grants to qualified borrowers 
under the Act that are in rural and remote communities who pay more 
than 150 percent of the national average retail price for electricity. 
These grants can be used to increase energy efficiency, lower 
electricity rates, or provide or modernize electric facilities.
  This Act makes a significant step toward resolving the critical 
social, economic, and environmental problems faced by our Nation's 
rural and remote communities. I encourage my colleagues to support this 
legislation.
                                 ______
                                 
      By Mr. ASHCROFT:
  S. 2380. A bill to require the written consent of a parent of an 
unemancipated minor prior to the provision of contraceptive drugs or 
devices to such a minor, or the referral of such minor for abortion 
services, under any Federally funded program; to the Committee on the 
Judiciary.


                       putting parents first act

  Mr. ASHCROFT. Mr. President, I rise today to introduce legislation to 
reaffirm the vital role parents play in the lives of their children. My 
legislation, the Putting Parents First Act, will guarantee that parents 
have the opportunity to be involved in their children's most important 
decisions--whether or not to have an abortion and whether or not to 
receive federally-subsidized contraception.
  The American people have long understood the unique role the family 
plays in our most cherished values. As usual, President Reagan said it 
best. Within the American family, Reagan said, ``the seeds of personal 
character are planted, the roots of public value first nourished. 
Through love and instruction, discipline, guidance and example, we 
learn from our mothers and fathers the values that will shape our 
private lives and public citizenship.''
  The Putting Parents First Act contains two distinct provisions to 
protect the role of parents in the important life decisions of their 
minor children. The first part ensures that parents are given every 
opportunity to be involved in a child's decision whether or not to have 
an abortion. Specifically, the Act prohibits any individual from 
performing an abortion upon a woman under the age of 18 unless that 
individual has secured the informed written consent of the minor and a 
parent or guardian. In accordance with Supreme Court decisions 
concerning state-passed parental consent laws, the Putting Parents 
First Act allows a minor to forego the parental involvement requirement 
where a court has issued a waiver certifying that the process of 
obtaining the consent of a parent or guardian is not in the best 
interests of the minor or that the minor is emancipated.
  For too long, the issue of abortion has polarized the American 
people. To some extent, this is the inevitable result of vastly 
distinct views of what an abortion is. Many, including myself, view 
abortion as the unconscionable taking of innocent human life. Others, 
including a majority of Supreme Court Justices, view abortion as a 
constitutionally-protected alternative for pregnant women.
  There are, however, a few areas of common ground where people on both 
sides of the abortion issue can agree. One such area of agreement is 
that, whenever possible, parents should be involved in helping their 
young daughters to make the critically important decision of whether or 
not to have an abortion. A recent CNN/USA Today survey conducted by the 
Gallup Organization found that 74 percent of Americans support parental 
consent before an abortion is performed on a girl under age 18. Even 
those who do not view an abortion as a taking of human life recognize 
it as a momentous and life-changing decision that a minor should not 
make alone. The fact that nearly 40 states have passed laws requiring 
doctors to notify or seek the consent of a minor's parents before 
performing an abortion also demonstrates the consensus in favor of 
parental involvement.

  The instruction and guidance of which President Reagan spoke are 
needed most when children are forced to make important life decisions. 
It is hard to imagine a decision more fundamental in our culture than 
whether or not to beget a child. Parental involvement in this crucial 
decision is necessary to ensure that the sanctity of human life is 
given appropriate consideration. There are few more issues deserving of 
our attention than promoting parental involvement.
  Only half of the 39 states with parental involvement laws on the 
books currently enforce them. Some states have enacted laws that have 
been struck down in state or federal courts while in other states the 
executive department has chosen not to enforce the legislature's will. 
As a result, just over 20 states have parental laws in effect today. In 
these states, parents do not have the right to be involved in their 
minor children's most fundamental decisions, decisions that can have 
severe physical and emotional health consequences for young women.
  Moreover, in those states where laws requiring consent are on the 
books and being enforced, those laws are frequently circumvented by 
pregnant minors who cross state lines to avoid the laws' requirements. 
Sadly, nowhere is this problem more apparent than in my home state of 
Missouri. I was proud to have successfully defended Missouri's parental 
consent law before the Supreme Court in Planned Parenthood versus 
Ashcroft. Unfortunately, the law has not been as effective as I had 
hoped. A study last year in the American Journal of Public Health found 
that the odds of a minor traveling out of state for an abortion 
increased by over 50 percent after Missouri's parental consent law went 
into effect.
  The limited degree of enforcement and the ease with which state laws 
can be evaded demand a national solution. The importance of protecting 
life demands a national solution. It is time for Congress to act. 
Requiring a parent's consent before a minor can receive an abortion is 
one way states have chosen to protect not only the role of parents and 
the health and safety of young women, but also, the lives of the 
unborn. Congress shares with the states the authority--and duty--to 
protect life under the Constitution. Thus, enactment of a federal 
parental consent law will allow Congress to protect the guiding role of 
parents as it protects human life.
  The Putting Parents First Act is based on state statutes that already 
have been determined to be constitutional by the U.S. Supreme Court. 
The legislation establishes a minimum level of parental involvement 
that must be honored nationwide. It does not preempt state parental 
involvement laws that provide additional protections to the parents of 
pregnant minors.

[[Page S9439]]

  The second part of the Putting Parents First Act extends the idea of 
parental involvement to the arena of federally-subsidized 
contraception. Currently, the federal government funds many different 
programs through the Department of Health and Human Services and the 
Department of Education that can provide prescription contraceptive 
drugs and devices, as well as abortion referrals, to minors without 
parental consent.
  The case of the little girl from Crystal Lake, IL is just one 
example, but it makes clear everything that is wrong with current law 
in this area. In that case, the young girl was just 14 years old when 
her 37-year-old teacher brought her to the county health department for 
birth control injections. He wanted to continue having sex with her, 
but had grown tired of using condoms. A county health official injected 
the young girl with the controversial birth control drug Depo-Provera 
without notifying the girl's parents. The teacher knew that federal 
Title X rules prohibited clinics from notifying parents when issuing 
birth control drugs to minors. He continued to molest her for 18 months 
until the girl finally broke down and told her parents. The teacher was 
arrested and sentenced to ten years in prison. The young girl spent 
five days a week in therapy and is still recovering from effects of 
anorexia nervosa.
  Although the teacher's crime was unspeakable, it was the federal 
government's policy that allowed him to shield his crime for so long. 
This is an outrage. The policy of the Government of the United States 
should be to help parents to help their children. Providing 
contraceptives and abortion referrals to children without involving 
parents undermines, not strengthens the role of parents. Worse yet, it 
jeopardizes the health of children.
  The current law for federally-funded contraceptives puts bureaucrats 
in front of parents when it comes to a child's decision-making process. 
That is intolerable. We must put parents first when it comes to such 
critical decisions. The legislation I am introducing today restores 
common sense to government policy by requiring programs that receive 
federal funds to obtain a parent's consent before dispensing 
contraceptives or referring abortion services to the parent's minor 
child.
  In my view, Mr. President, sound and sensible public policy requires 
that parents be involved in critical, life-shaping decisions involving 
their children. A young person whose life is in crisis may be highly 
anxious, and may want to take a fateful step without their parents' 
knowledge. But it is at these times of crisis that children need their 
parents, not government bureaucrats or uninvolved strangers. This 
legislation will strengthen the family and protect human life by 
ensuring that parents have the primary role in helping their children 
when they are making decisions that will shape the rest of their lives.
                                 ______
                                 
      By Mr. McCAIN (for himself and Mr. Kerry):
  S. 2382. A bill to amend title XIX of the Social Security Act to 
allow certain community-based organizations and health care providers 
to determine that a child is presumptively eligible for medical 
assistance under a State plan under that title; to the Committee on 
Finance.


  children's health assurance through the medicaid program (champ) act

 Mr. McCAIN. Mr. President, today I am proud to rise with my 
colleague and dear friend, John Kerry, to introduce legislation which 
would help provide thousands, if not millions, of children with health 
care coverage. Clearly, a bipartisan priority in the 105th Congress has 
been to find a solution for providing access to health insurance for 
the approximately 10 million uninsured children in our nation. This 
matter has been a very high priority for me since coming to Congress. 
The legislation we are introducing today, the ``Children's Health 
Assurance through the Medicaid Program'' (CHAMP), would help our states 
reach more than 3 million uninsured children who are eligible for the 
Medicaid program but not enrolled.

  The consequences of lack of insurance are problematic for everyone, 
but they are particularly serious for children. Uninsured and low 
income children are less likely to receive vital primary and 
preventative care services. This is quite discouraging since it is 
repeatedly demonstrated that regular health care visits facilitate the 
continuity of care which plays a critical role in the development of a 
healthy child. For example, one analysis found that children living in 
families with incomes below the poverty line were more likely to go 
without a physician visit than those with Medicaid coverage or those 
with other insurance. The result is many uninsured, low-income children 
not seeking health care services until they are seriously sick.
  Studies have further demonstrated that many of these children are 
more likely to be hospitalized or receive their care in emergency 
rooms, which means higher health care costs for conditions that could 
have been treated with appropriate outpatient services or prevented 
through regular check ups.
  Last year, as Congress was searching for ways to reduce the number of 
uninsured children, I kept hearing about children who are uninsured, 
yet, could qualify for health care insurance through the Medicaid 
program. I was unable to find specific information about who these 
children are, where they reside, and why they are not enrolled in the 
Medicaid program. Subsequently, I requested that the General Accounting 
Office conduct an in-depth analysis to provide Congress data on 
uninsured Medicaid eligible children. This information would provide 
the necessary tools to develop community outreach strategies and 
education programs to address this problem.
  The GAO study was completed in March. The data shows that 3.4 million 
children are eligible for the Medicaid program (under the minimum 
federal standards) but are not enrolled. It also shows that these kids 
are more likely to be part of a working family with parents who are 
employed but earning a low income. A significant number of these 
children come from two-parent families rather than single-parent 
families. The study also discovered that more than thirty-five percent 
of these children are Hispanic, with seventy-four percent of them 
residing in Southern or Western states. Finally, the GAO report 
suggested that states need to be developing and implementing creative 
outreach and enrollment strategies which specifically target the 
unenrolled children.
  It is important that we build upon these findings and develop methods 
for states to reach out to these families and educate them about the 
resources which exist for their children. The CHAMP bill is an 
important step in this process and would assist these children by 
expanding the state offices which can presume Medicaid eligibility for 
a child.
  As you know, the 1997 Balanced Budget Act provided states with the 
option of utilizing ``presumptive eligibility'' as an outreach method 
for enrolling eligible children into their state Medicaid programs. 
Presumptive eligibility allows certain agencies to temporarily enroll 
children in the state Medicaid program for a brief period if the child 
appears to be eligible for the program based on their family's income. 
Health care services can be provided to these children if necessary 
during this ``presumptive'' period while the state Medicaid agency 
processes the child's application and makes a final determination of 
their eligibility.
  Presumptive eligibility is completely optional for the states and is 
not mandatory.
  Under current law, states are only given the limited choice of using 
a few specific community agencies for presumptive eligibility 
including: Head Start Centers, WIC clinics, Medicaid providers and 
state or local child care agencies. The McCain-Kerry CHAMP bill would 
expand the types of community-based organizations which would be 
recognized as qualified entities and permitted to presume eligibility 
for children. Under our bill, public schools, entities operating child 
welfare programs under Title IV-A, Temporary Assistance to Needy 
Families (TANF) offices and the new Children Health Insurance Program 
(CHIP) offices would be permitted to help identify Medicaid eligible 
kids. Allowing more entities to participate in outreach would increase 
the opportunities for screening children and educating their families 
about the Medicaid services available to

[[Page S9440]]

them. By increasing the ``net'' for states, we would be helping them 
``capture'' more children who are going without health care services 
because their families are not familiar, comfortable or aware of the 
Medicaid program and its enrollment process.
  Our bill would help millions of children gain access to health care 
without creating a new government program, imposing mandates on states, 
or expanding the role of government in our communities. This is 
important to note--we would not be creating new agencies, bureaucracies 
or benefits. Instead we would be increasing the efficiency and 
effectiveness of a long-standing program designed to help one of our 
most vulnerable populations, children. We urge our colleagues to 
support this innovative piece of legislation.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2382

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Children's Health Assurance 
     through the Medicaid Program (CHAMP) Act''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Twenty-three percent or 3,400,000 of the 15,000,000 
     medicaid-eligible children went without health insurance in 
     1996.
       (2) Medicaid-eligible children with working parents are 
     more likely to be uninsured.
       (3) More than 35 percent of the 3,400,000 million uninsured 
     medicaid-eligible children are Hispanic.
       (4) Almost three-fourths of the uninsured medicaid-eligible 
     children live in the Western and Southern States.
       (5) Multiple studies have shown that insured children are 
     more likely to receive preventive and primary health care 
     services as well as to have a relationship with a physician.
       (6) Studies have shown that a lack of health insurance 
     prevents parents from trying to obtain preventive health care 
     for their children.
       (7) These studies demonstrate that low-income and uninsured 
     children are more likely to be hospitalized for conditions 
     that could have been treated with appropriate outpatient 
     services, resulting in higher health care costs.

     SEC. 3. ADDITIONAL ENTITIES QUALIFIED TO DETERMINE MEDICAID 
                   PRESUMPTIVE ELIGIBILITY FOR LOW-INCOME 
                   CHILDREN.

       Section 1920A(b)(3)(A)(i) of the Social Security Act (42 
     U.S.C. 1396r-1a(b)(3)(A)(i)) is amended--
       (1) by striking ``or (II)'' and inserting ``, (II)''; and
       (2) by inserting ``eligibility of a child for medical 
     assistance under the State plan under this title, or 
     eligibility of a child for child health assistance under the 
     program funded under title XXI, or (III) is an elementary 
     school or secondary school, as such terms are defined in 
     section 14101 of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 8801), an elementary or secondary school 
     operated or supported by the Bureau of Indian Affairs, a 
     State child support enforcement agency, a child care resource 
     and referral agency, or a State office or private contractor 
     that accepts applications for or administers a program funded 
     under part A of title IV or that determines eligibility for 
     any assistance or benefits provided under any program of 
     public or assisted housing that receives Federal funds, 
     including the program under section 8 or any other section of 
     the United States Housing Act of 1937 (42 U.S.C. 1437 et 
     seq.)'' before the semicolon.
 Mr. KERRY. Mr. President, I want to thank my friend and 
colleague Senator McCain for his work on this important issue. I am 
honored to introduce with him this legislation, entitled the Children's 
Health Assurance Through the Medicaid Program (CHAMP), which would 
increase health coverage for eligible children and increase state 
flexibility.
  Mr. President, the Balanced Budget Act of 1997 gave States the option 
to bring more eligible but uninsured children into Medicaid by allowing 
states to grant ``presumptive eligibility.'' This means that a child 
would temporarily be covered by Medicaid if preliminary information 
suggests that they qualify. Providing health insurance for children is 
important because studies show that children without health insurance 
are more likely to be in worse health, less likely to see a doctor, and 
less likely to receive preventive care such as immunizations.
  Mr. President, the legislation Senator McCain and I are introducing 
today would strengthen the existing option and give states more 
flexibility. First, it will allow states to rely on a broader range of 
agencies to assist with Medicaid outreach and enrollment. By expanding 
the list of community-based providers and state and local agencies to 
include schools, child support agencies, and some child care 
facilities, states will be able to make significant gains in the number 
of children identified and enrolled in Medicaid. States would not be 
required to rely on these additional providers but would have the 
flexibility to choose among qualified providers and shape their own 
outreach and enrollment strategies.
  The cost of these changes to the presumptive eligibility option for 
Medicaid under last year's Balanced Budget Act are modest. Our 
understanding is that our proposal would cost approximately $250 
million over five years. This is a positive step in the right 
direction, helping ensure that the growing population of American 
children start off on the right foot. Access to affordable health care 
in the early years saves the country's financial resources in the long 
run.
  Once again, I would like to thank Senator McCain for his invaluable 
work on behalf of children. I look forward to working with him and the 
Senate to pass this important legislation.
                                 ______
                                 
      By Mr. HARKIN (for himself, Mr. Kennedy, Mr. Kerry, and Ms. 
        Moseley-Braun):
  S. 2383. A bill to amend the Fair Labor Standards Act of 1938 to 
reform the provisions relating to child labor; to the Committee on 
Labor and Human Resources.


             THE CHILDREN'S ACT FOR RESPONSIBLE EMPLOYMENT

 Mr. HARKIN. Mr. President, on behalf of myself, Mr. Kennedy, 
Mr. Kerry and Ms. Moseley-Braun I introduce the Children's Act for 
Responsible Employment or the CARE Act that will modernize our 
antiquated domestic child labor laws. Congressman Richard Gephardt and 
Congressman Tom Lantos are introducing companion legislation in the 
House.
  It is hard to imagine that we are on the verge of entering the 21st 
century and we still have young children working under hazardous 
conditions in the United States. Unfortunately, outdated U.S. child 
labor laws that have not been revamped since the 1930's allow this 
practice to continue.
  I have been working on the eradication of child labor overseas since 
1992. At that time, I introduced the Child Labor Deterrence Act, which 
prohibits the importation of products made by abusive and exploitative 
child labor. Since then, we have made some important progress, but in 
order to end child labor overseas the U.S. must lead by example and 
address child labor in our own backyard.
  Now, when I talk about child labor, I'm not talking about a part time 
job or a teenager who helps out on the family farm after school. There 
is nothing wrong with that. What I am talking about is the nearly 
300,000 children illegally employed in the U.S. I would like to insert 
for the record at this time the testimony of Sergio Reyes, who was 
expected to testify at a hearing before the Senate Subcommittee on 
Employment and Training I requested on June 11 of this year. Mr. Reyes 
was unable to attend that hearing but his written testimony tells a 
story that is becoming all to familiar in the United States.
  According to a recent study by economist Douglas L. Krause of Rutgers 
University, there are nearly 60,000 children under age 14 working in 
the U.S. Of those children, one will die every five days in a work 
related accident according to the National Institute of Occupational 
Safety and Health. Nowhere is this more true than children who work in 
agriculture.
  In general, children receive fewer protections in agriculture than 
other industries. The minimum age for hazardous work in agriculture is 
16, it is 18 for all other occupations. In a GAO preliminary report 
released in March 1998, the researchers noted that ``children working 
in agriculture are legally permitted to work at younger ages, in more 
hazardous occupations, and for longer periods of time than their peers 
in other industries.'' For example, a 13 year old child can not work as 
a clerk in an air conditioned office building, but can pick 
strawberries in a field in the middle of summer. That same report noted 
that over 155,000 children

[[Page S9441]]

are working in agriculture. However, because that number is based on 
census data, the Farm Worker Union places the number at nearly 800,000 
children working in agriculture.
  In December 1997, the Associated Press (AP) did a five part series on 
child labor in the United States documenting 4 year olds picking chili 
peppers in New Mexico and 10 year olds harvesting cucumbers in Ohio. In 
one tragic example reported by the AP, 14 year-old Alexis Jaimes was 
crushed to death when a 5000 lb. hammer fell on him while working on a 
construction site in Texas. I was outraged.
  At the June hearing of the Senate Employment and Training 
Subcommittee, two things became clear with regard to U.S. domestic 
child labor. First, agricultural child laborers are dropping out of 
school at an alarming rate. Over of 45 percent of farm worker youth 
will never complete high school. Second, the laws that we do have 
regarding child labor are inadequate to protect a modern workforce. Our 
present civil and criminal penalties are simply insufficient to deter 
compliance with the law and need to be strengthened and more vigorously 
enforced.
  My legislation, which is supported by the Administration and 
children's advocates groups across the country, such as the Child Labor 
Coalition and the Solidarity Center, will help rectify this alarming 
situation. It will; raise the current age of 16 to 18 in order to 
engage in hazardous agricultural work, close the loopholes in federal 
child labor laws which allow a three year old to work in the fields, 
and increase the civil and criminal penalties for child labor 
violations to a minimum of $500, up from $100 and a maximum of $15,000, 
up from $10,000.
  In closing. Let me say that we must end child labor--the last vestige 
of slavery in the world. It is time to give all children the chance at 
a real childhood and give them the skills necessary to compete in 
tomorrow's work place. There is no excuse for the number of children 
being maimed or killed in work related accidents when labor saving 
technologies have been developed in recent years. So, on today's farms, 
it makes even less sense than ever to put kids in dangerous situations 
operating hazardous machinery.
  Mr. President, I hope that we will be able to vote on this 
legislation in the near future so that we can prepare our children for 
the 21st century. I urge my colleagues to support this important 
legislation.
  Mr. President, I ask unanimous consent that a copy of the bill, a 
letter from the Child Labor Coalition, and the testimony of Sergio 
Reyes be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2383

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

     SECTION 1. SHORT TITLE; REFERENCE.

       (a) Short Title.--This Act may be cited as the ``Children's 
     Act for Responsible Employment'' or the ``CARE Act''.
       (b) Reference.--Whenever in this Act an amendment or repeal 
     is expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 201 et seq.).

     SEC. 2. AGRICULTURAL EMPLOYMENT.

       Section 13(c) (29 U.S.C. 213(c)) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) The provisions of section 12 relating to child labor 
     shall not apply to any employee employed in agriculture 
     outside of school hours for the school district where such 
     employee is living while he or she is so employed, if such 
     employee is employed by his or her parent or legal guardian, 
     on a farm owned or operated by such parent or legal 
     guardian.''; and
       (2) by striking paragraphs (2) and (4).

     SEC. 3. YOUTH PEDDLING.

       (a) Fair Labor Standards Act Coverage.--
       (1) Finding.--The last sentence of section 2(a) (29 U.S.C. 
     202(a)) is amended by inserting after ``households'' the 
     following: ``, and the employment of employees under the age 
     of 16 years in youth peddling,''.
       (2) Definition.--Section 3 (29 U.S.C. 203) is amended by 
     adding at the end the following:
       ``(y) `Youth peddling' means selling goods or services to 
     customers at their residences, places of business, or public 
     places such as street corners or public transportation 
     stations. `Youth peddling' does not include the activities of 
     persons who, as volunteers, sell goods or services on behalf 
     of not-for-profit organizations.''.
       (b) Definition of Oppressive Child Labor.--Section 3(l) (29 
     U.S.C. 203(l)) is amended in the last sentence by insert 
     after ``occupations other than'' the following: ``youth 
     peddling,''.
       (c) Prohibition of Youth Peddling.--Section 12(c) (29 
     U.S.C. 212(c)) is amended by inserting after ``oppressive 
     child labor in commerce or in the production of goods for 
     commerce'' the following: ``, or in youth peddling,''.

     SEC. 4. CIVIL AND CRIMINAL PENALTIES FOR CHILD LABOR 
                   VIOLATIONS.

       (a) Civil Money Penalties.--Section 16(e) (29 U.S.C. 
     216(e)) is amended in the first sentence--
       (1) by striking ``$10,000'' and inserting ``$15,000'';
       (2) by inserting after ``subject to a civil penalty of'' 
     the following: ``not less than $500 and''.
       (b) Criminal Penalties.--Section 16(a) (29 U.S.C. 216(a)) 
     is amended by adding at the end the following: ``Any person 
     who violates the provisions of section 15(a)(4), concerning 
     oppressive child labor, shall on conviction be subject to a 
     fine of not more than $15,000, or to imprisonment for not 
     more than 5 years, or both, in the case of a willful or 
     repeat violation that results in or contributes to a fatality 
     of a minor employee or a permanent disability of a minor 
     employee, or a violation which is concurrent with a criminal 
     violation of any other provision of this Act or of any other 
     Federal or State law.''.

     SEC. 5. GOODS TAINTED BY OPPRESSIVE CHILD LABOR.

       Section 12(a) (29 U.S.C. 212(a)) is amended by striking the 
     period at the end and inserting the following: ``: And 
     provided further, that the Secretary shall determine the 
     circumstances under which such goods may be allowed to be 
     shipped or delivered for shipment in interstate commerce.''.

     SEC. 6. COORDINATION.

       Section 4 (29 U.S.C. 204) is amended by adding at the end 
     the following:
       ``(g) The Secretary shall encourage and establish closer 
     working relationships with non-governmental organizations and 
     with State and local government agencies having 
     responsibility for administering and enforcing labor and 
     safety and health laws. Upon the request of the Secretary, 
     and to the extent permissible under applicable law, State and 
     local government agencies with information regarding injuries 
     and deaths of employees shall submit such information to the 
     Secretary for use as appropriate in the enforcement of 
     section 12 and in the promulgation and interpretation of the 
     regulations and orders authorized by section 3(l). The 
     Secretary may reimburse such State and local government 
     agencies for such services.''.

     SEC. 7. REGULATIONS AND MEMORANDUM OF UNDERSTANDING.

       (a) Regulations.--The Secretary of Labor shall issue such 
     regulations as are necessary to carry out this Act and the 
     amendments made by this Act.
       (b) Memorandum of Understanding.--The Secretary of Labor 
     and the Secretary of Agriculture shall, not later than 180 
     days after the date of enactment of this Act, enter into a 
     memorandum or understanding to coordinate the development and 
     enforcement of standards to minimize child labor.

     SEC. 8. AUTHORIZATION.

       There is authorized to be appropriated to the Secretary of 
     Labor such sums as may be necessary for to carry out this Act 
     and the amendments made by this Act.
                                  ____



                                    The Child Labor Coalition,

                                    Washington, DC, July 30, 1998.
     Hon. Tom Harkin,
     U.S. Senate,
     Washington, DC.
       Dear Senator Harkin: The Child Labor Coalition thanks you 
     for your leadership over the last six years to end child 
     labor exploitation overseas. Your influence has spurred much 
     of the progress that has been made in the international 
     community.
       As you are certainly aware, the United States is not immune 
     to child labor problems. Two of our most significant problems 
     are the escalating injuries to young workers and the 
     inadequate protection of children working in agriculture. The 
     legislation you are introducing is a positive step toward 
     addressing these problems.
       Evey year, more than 200,000 minors are injured and more 
     than 100 die in the workplace. Research has shown that 
     injuries often occur when youth are engaged in prohibited 
     duties or occupations. Your legislation to increase penalties 
     for child labor violations will send a clear message to 
     employers to ensure the safety of their young workers through 
     increased diligence in following the child labor laws.
       The FLSA does not adequately protect children working as 
     hired farmworkers. Children may work at younger ages, for 
     more hours, and engage in hazardous employment at a younger 
     age than a minor employed in any other workplace or 
     occupation. This has to change and your legislation to 
     equalize the protections of all children who are working, 
     regardless of the occupation, is applauded.
       On behalf of the more than 50 organizational members of the 
     Child Labor Coalition we thank you for your efforts to update 
     our nation's child labor laws and wholeheartedly support this 
     legislation.
           Sincerely,
                                                Darlene S. Adkins,
     Coordinator.
                                  ____


[[Page S9442]]

Testimony of Sergio Reyes Before the Senate Subcommittee on Employment 
                      and Training, June 11, 1998

       Good morning. My name is Sergio Reyes, and I'm 15 years 
     old. This is my brother Oscar and he is nine years old. We're 
     from Hollister, California, and we are farmworkers like our 
     father and our grandfather. We are permanent residents here 
     in the United States. Thank you for inviting us to speak 
     today about our experience being frameworkers. We both have 
     been farmworkers for five years now, ever since our family 
     came from Mexico. I started working when I was 10 years old, 
     and Oscar started when he was four. He has been working for 
     more than half of his life. We work for as many as 10 hours a 
     days, cutting paprika, topping garlic and pulling onions. The 
     work is very hard and it gets very hot. It's tough working 
     these long and going to school too. We work after school, 
     during the weekends, during the summer and on holidays. Oscar 
     can show you some of the tools that we use and how we top 
     garlic and cut onions. I don't have any idea when pesticides 
     are used on these crops or not.
       To do this work we have to stay bent over for most of the 
     time and have to lift heavy bags and buckets filled with the 
     crops that we're picking. It's hard work for adults and very 
     hard work for kids. We work because our family needs the 
     money. I'd rather be in school. I am in the 10th grade and 
     someday I'd like to be a lawyer. Oscar wants to be fireman 
     when he grow up. My family knows how important it is to go to 
     school and get an education. But there are times when working 
     is more important. We know lots of families like ours where 
     the kids drop out of school because they need to work. It's 
     sad because they really need an education or to learn another 
     job skill if they're ever going to get out of the fields. 
     Without an education, I will never become a lawyer and Oscar 
     will never be a fireman.
       My dad is trying to get out of farmwork. He is working in 
     farmwork and also in a farmworker job training program to 
     learn another skill. He is trying to get another job so that 
     he can earn more money and have some health insurance. We've 
     never had health insurance before. As hard as my dad works, 
     he's not guaranteed to make a good living. And my dad works 
     very hard. I just hope that when I get older and if something 
     happens to keep me from graduating from school, that there 
     will be a program for Oscar and me.
       Thank you for letting us come. We appreciate all the you do 
     that will help our dad, other farmworker kids and my brother 
     Oscar and me.
                                 ______
                                 
      By Mr. ASHCROFT (for himself and Mr. Faircloth):
  S. 2384. A bill entitled ``Year 2000 Enhance Cooperation Solution''; 
to the Committee on the Judiciary.


                     YEAR 2000 SOLUTION LEGISLATION

  Mr. ASHCROFT. Mr. President, I rise today to introduce a bill that 
addresses a critical problem that demands immediate attention from the 
Congress.
  For many years now I have been involved with a variety of issues that 
affect the technology sector. As I have said before, no other sector of 
the economy is as vibrant and forward looking. The ingenuity, drive and 
vision of this industry should be a model for all of us, including 
those of us in the Senate. Moreover, the importance of this industry 
should only grow in the coming years. However, as I look to the future 
with the hope of seeing the next century stamped ``Made in America'' I 
see one large impediment--the Year 2000 bug.
  The 105th Congress must consider this problem and assist the country 
in trying to avoid a potentially disastrous crisis. We cannot wait for 
disaster to strike. We must act now to enable companies to avert the 
crisis. No individual will be left untouched if the country fails to 
address this problem and experiences widespread ramifications. No 
company will escape huge costs if they cannot successfully fix their 
own problems and have some assurances that their business partners and 
suppliers have fixed their problems. A great deal of effort has been 
undertaken to bring attention to this problem, including several 
efforts here in the U.S. Senate. However, it is now time to move beyond 
simply highlighting the problem. We need to roll up our sleeves and get 
to work on a solution.
  I begin today to lay out my plan for assisting individuals and 
businesses to walk safely through the minefield called the Y2K problem. 
The first part of this overall plan is the Year 2000 Enhanced 
Cooperation Solution. This legislation provides a very narrow exemption 
to the antitrust laws if and when a company is engaged in cooperative 
conduct to alleviate the impact of a year 2000 date failure in hardware 
or software. The exemption has a clear sunset and expressly ensures 
that the law continues to prohibit anti-competitive conduct such as 
boycotts or agreements to allocate markets or fix prices.
  This simple, straightforward proposal is critical to allowing for 
true cooperation in an effort to rectify the problem. No company can 
solve the Y2K problem alone. Even if one company devises a workable 
solution to their own problems they still face potential disaster from 
components provided by outside suppliers. What is more, when companies 
find workable solutions we certainly want to provide them with every 
incentive to disseminate those solutions as widely as possible. 
Cooperation is essential. But without a clear legislative directive, 
potential antitrust liability will stand in the way of cooperation. We 
must provide our industries with the appropriate incentives and tools 
to fix this problem without the threat of antitrust lawsuits based on 
the very cooperation we ought to be encouraging.
  I do want to be very clear on one point--as important as it is that 
this legislation be enacted and enacted soon, it is merely the first 
piece of a difficult puzzle. The Administration has presented the 
Congress with their view of how information sharing on the Y2K problem 
should be furthered. Based on my initial review, that proposal appears 
to be headed in the right direction but falls far short of the target 
destination. Most importantly, the proposed approach which purports to 
promote information sharing does not accomplish its objective as it 
leaves the problem of potential antitrust liability. In other words, it 
does not accomplish the task that it set out to complete.

  I will seek the introduction of the second piece of the solution, the 
Year 2000 Enhanced Information Solution, which while working within the 
guidelines of the Administration's language will add the teeth, make 
clear that good faith disclosure of information will be protected, and 
provide for protection of individual consumers. Together with the 
antitrust legislation I introduce today, this should provide sufficient 
protection to promote the kind of cooperation that will be essential to 
addressing this looming problem.
  The final piece of the package will be the Year 2000 Litigation 
Solution. Real harm from inadequate efforts to address this problem 
must be compensated. However, we cannot allow the prospect of frivolous 
litigation to block efforts to avoid such harm. We also must ensure 
that frivolous litigation over the Y2K problem does not consume the 
lion's share of the next millennium. While it is not possible for 
Congress to guarantee that private individuals and companies will be 
able to solve the Y2K problem, Congress can eliminate legal obstacles 
that stand in the way of private solutions. Information regarding 
existing software and known problems must be shared as completely and 
openly as possible. The current fear of litigation and liability that 
imposes a distinct chilling effect on information sharing must be 
alleviated.
  Resources to address the Y2K problem, particularly time, are finite. 
They must be focused as fully as possible on remediation, rather than 
on unproductive litigation. Moreover, the availability of adequate 
development and programming talent may hinge upon a working environment 
that protects good faith remediation efforts from the threat of 
liability for their work. Congress must prevent a fiasco where only 
lawyers win.
  I look forward to working with those that are interested as this 
process moves forward. I believe that this Congress cannot wait to 
address this problem. This issue is about time, and we have precious 
little left in this Congress and before the Y2K problem is upon us. I 
hope we can work together to free up talented individuals to address 
this serious problem.
                                 ______
                                 
      By Mr. BENNETT (for himself and Mr. Hatch):
  S. 2385. A bill to establish the San Rafael Swell National Heritage 
Area and the San Rafael National Conservation Area in the State of 
Utah, and for other purposes; to the Committee on Energy and Natural 
Resources.


         The San Rafael National Heritage and Conservation Act

  Mr. BENNETT. Mr. President, I am pleased to introduce the ``San 
Rafael

[[Page S9443]]

National Heritage and Conservation Act'' and I am pleased to be joined 
by Senator Hatch in this effort.
  The San Rafael National Heritage and Conservation Act not only 
accomplishes the preservation of an important historic area, but it is 
the result of a collaborative approach among Federal land managers, 
state and local governments and other concerned agencies and 
organizations. This revised legislation incorporates several of the 
suggestions of the Administration, the House and those who originally 
expressed concerns about the bill as introduced in the House. The 
legislation we introduce today is the result of months of discussions 
between the Bureau of Land Management, the citizens of Emery County and 
Members of Congress. It is a good-faith effort to initiate what we hope 
will bring resolution to the larger philosophical differences between 
land management practices in Utah. With a little luck, we might even 
begin a process which could lead to a resolution to the ongoing Utah 
wilderness debate.
  The San Rafael Swell region in the State of Utah was one of America's 
last frontiers. I have in my office, a map of the State of Utah drafted 
in 1876 in which large portions of the San Rafael Swell were simply 
left blank because they were yet to be explored. Visitors who comment 
on this map are amazed when they see that large portions of the San 
Rafael area remained unmapped thirty years after the Mormon pioneers 
arrived in the Salt Lake Valley.
  This area is known for its important historical sites, notable 
tradition of mining, widely recognized paleontological resources, and 
numerous recreational opportunities. As such, it needs to be protected. 
The San Rafael Swell National Conservation Area created through this 
legislation will be approximately 630,000 acres in size and will 
comprise wilderness, a Bighorn Sheep Management Area, a scenic Area of 
Critical Environmental Concern, and Semi-Primitive Area of Non-
Motorized Use. The value of the new management structure for the 
National Conservation Area can be found in the flexibility it gives in 
addressing a broad array of issues from the protection of critical 
lands to the oversight of recreational uses.
  The San Rafael National Heritage and Conservation Act sets aside 
130,000 acres as BLM wilderness lands. It permanently removes the 
threat of mining, oil drilling, and timbering from the Swell. It also 
sets aside a conservation area of significant size to protect Utah's 
largest herd of Desert Bighorn Sheep. Vehicle travel is restricted to 
designated roads and trails in other areas and visitors recreational 
facilities are provided. Finally, it will assist the BLM and the local 
communities in developing a long term strategy to preserve the history 
and heritage of the region through the National Heritage Area. Careful 
study of the bill shows that the San Rafael Swell National Heritage and 
Conservation Act is a multidimensional management plan for an area with 
multidimensional needs. It provides comprehensive protection and 
management for an entire ecosystem.
  My colleagues in the House have worked hard to address the concerns 
of the Administration and they have made several changes to the House 
version as introduced in an effort to improve the legislation. We have 
redrawn maps, eliminated roads from wilderness areas, eliminated cherry 
stems of other roads and increased the size of wilderness and semi-
primitive areas. Specifically, by including new provisions dealing with 
the Compact and Heritage Plan, the new language ensures that the 
resources found in the county will be properly surveyed and understood 
prior to the Heritage Area moving forward.
  With regards to the Conservation Area, bill language guarantees that 
the management plan will not impair any of the important resources 
within the Swell. We have also included new language that ensures the 
Secretary of Interior is fully represented on the Advisory Council.
  The San Rafael Swell National Heritage and Conservation Act is unique 
in that it sets the San Rafael Swell apart from Utah's other national 
parks and monuments. It protects not only the important lands in this 
area but also another resource just as precious--its captivating 
history and heritage. This bill is an example of how a legislative 
solution can result from a grassroots effort involving both state and 
local government officials, the BLM, historical preservation groups, 
and wildlife enthusiasts. Most important, it takes the necessary steps 
to preserve the wilderness value of these lands.
  This legislation has broad statewide and local support. It is sound, 
reasonable, and innovative in its approach to protecting and managing 
the public land treasures of the San Rafael Swell. Finally, it is based 
on the scientific methods of ecosystem management and prevents the 
fracturing of large areas of multiple use lands with small parcels of 
wilderness interspersed between.
  Mr. President, I will conclude with this point; the wilderness debate 
in Utah has gone on too long. My colleagues will be reminded that in 
the last Congress, the debate centered around whether two million acres 
or 5.7 million acres were the proper amount of wilderness to designate. 
We are now trying to protect more than 600,000 acres in one county in 
Utah alone. The Emery County Commissioners should be commended for 
their foresight and vision in preparing this proposal. I hope that this 
legislation can become a model for future conflict resolutions.
  Unfortunately, the shouting match over acreage has often drowned out 
the discussion over what types of protection were in order for these 
lands. I doubt that there are few people who would debate the need to 
protect these lands. But too often in the past we have argued over the 
definition of what constitutes ``protection.'' Unfortunately for some 
groups, a certain designation is the only method of acceptable 
protection. I urge those groups to look beyond the trees and see the 
forest for a change. Should these groups decide to come to the table, 
lend their considerable expertise to our efforts and try to reach a 
consensus, the first steps toward resolving the decades-old wilderness 
debate in Utah will have been taken.
  I hope my colleagues will carefully review this legislation and 
support for this bill.
  Mr. HATCH. Mr. President, I rise in support of the San Rafael Swell 
National Heritage and Conservation Act. As a cosponsor of this measure, 
I applaud the efforts of my friend and colleague, Senator Bennett, for 
bringing this matter before the United States Senate. This is a 
refreshing approach to managing public lands in the West.
  This legislation reflects the ability of our citizens to make wise 
decisions about how land in their area should be used and protected. It 
is an article of our democracy that we recognize the prerogatives and 
preferences of citizens who are most affected by public policy. This 
measure gives citizens who live next to these lands a say as to what is 
right and appropriate for the land's management. I believe this 
initiative, which began locally at the grassroots level, is a cynosure 
for future land management decisions in the West.
  Much more than simply protecting rocks and soil, this legislation 
safeguards wildlife and their habitat, cultural sites and artifacts, 
and Indian and Western heritage. This is not your standard one-size-
fits-all land management plan. It provides for the conservation of this 
unique area, opting to encourage visitors not development.
  Mr. President, the San Rafael Swell is an area of immense scenic 
beauty and cultural heritage. It was once the home to Native Americans 
who adorned the area with petroglyphs on the rock outcrops and canyon 
walls. What were once their dwellings are now significant 
archaeological sites scattered throughout the Swell. After the Indian 
tribes came explorers, trappers, and outlaws. In the 1870s, ranchers 
and cowboys came to the area and began grazing the land, managing it 
for its continued sustainability. Today, there are still citizens with 
roots in this long western tradition. These citizens understand the 
land; they understand conservation and preservation principles; and 
they want to see the land they love and depend on preserved for present 
and future generations.
  First of all, Mr. President, this legislation sets up a National 
Heritage Area, the first of its kind west of the Mississippi. In the 
new National Heritage Area, tourists will walk where Indians walked and 
where other outstanding historical figures such as Kit

[[Page S9444]]

Carson, Chief Walker, Jedediah Smith, John Wesley Powell, Butch 
Cassidy, and John C. Fremont spent time. The area already boasts a 
number of fine museums, including the John Wesley Powell Museum, the 
Museum of the San Rafael, the College of Eastern Utah Prehistoric 
Museum, the Helper Mining Museum, and the Cleveland-Lloyd Dinosaur 
Quarry. Consolidated under the new National Heritage Area, these 
important sites and museums will add a Western flavor to the already 
diverse network of existing National Heritage Areas in our nation.
  Next, this legislation sets up one of our nation's most significant 
and dynamic conservation areas. The San Rafael Conservation Area will 
encompass the entire San Rafael Swell and protect approximately 1 
million acres of scenic splendor. The area will be managed according to 
the same standards set by Congress for all other conservation areas. In 
fact, this legislation withdraws the entire San Rafael Swell from 
future oil drilling, logging, mining, and tar sands development. 
Moreover, the area will protect important paleontological resources 
including an area on the northern edge of the Swell know as the 
Cleveland-Lloyd Dinosaur Quarry which was set aside in 1966 as a 
National Natural Landmark, preserving one of the largest sources of 
fossils in the New World.
  Of particular interest, Mr. President, is the designation of the 
Desert Bighorn Sheep National Management Area. This provision ensures 
that our precious herd of bighorn sheep will continue to be monitored 
by state wildlife managers. The bill also provides strict protections 
to other resources in the area. Last but not least, Mr. President, this 
legislation formally designates certain areas within the Swell as 
wilderness.
  This proposal preserves a portion of the West as it currently exists 
and allows for traditional uses, where appropriate, such as hunting, 
trapping, and fishing. It will foster the development and management of 
tourism in keeping with the overall goals of preservation. This 
management concept is one of multiple use and allows for the 
continuation of working landscapes including agriculture, irrigation, 
and ranching, which are a part of our Western tradition.
  Mr. President, this initiative is compatible with local and regional 
needs, but it invites the world to come and enjoy the natural and 
historical treasures of the San Rafael Swell. I urge my colleagues to 
support this important citizens' initiative to preserve the San Rafael 
Swell.
                                 ______
                                 
      By Mr. BIDEN:
  S. 2387. A bill to confer and confirm Presidential authority to use 
force abroad, to set forth procedures governing the exercise of that 
authority, and thereby to facilitate cooperation between the President 
and Congress in decisions concerning the use or deployment of United 
States Armed Forces abroad in situations of actual or potential 
hostilities; to the Committee on Foreign Relations.


                            use of force act

 Mr. BIDEN. Mr. President, today I introduce legislation 
designed to provide a framework for joint congressional-executive 
decision-making about the most solemn decision that a nation can make: 
to send men and women to fight and die for their country.
  Entitled the ``Use of Force Act,'' the legislation would replace the 
war powers resolution of 1973 with a new mechanism that, I hope, will 
be more effective than the existing statute.
  Enacted nearly a quarter century ago, over the veto of President 
Nixon, the war powers resolution has enjoyed an unhappy fate--scorned 
by Presidents who questioned its constitutionality, and ignored by a 
Congress too timid to exercise its constitutional duty.
  That was not, of course, the intent of its framers, who sought to 
improve executive-congressional cooperation on questions involving the 
use of force--and to remedy a dangerous constitutional imbalance.
  This imbalance resulted from what I call the ``monarchist'' view of 
the war power--the thesis that the President holds nearly unlimited 
power to direct American forces into action.
  The thesis is largely a product of the cold war and the nuclear age: 
the view that, at a time when the fate of the planet itself appeared to 
rest with two men thousands of miles apart, Congress had little choice, 
or so it was claimed but to cede tremendous authority to the executive.
  This thesis first emerged in 1950, when President Truman sent forces 
to Korea without congressional authorization. It peaked twenty years 
later, in 1970, when President Nixon sent U.S. forces into Cambodia--
also without congressional authorization, but this time accompanied by 
sweeping assertions of autonomous Presidential power.
  President Nixon's theory was so extreme that it prompted the Senate 
to begin a search--a search led by Republican Jacob Javits and strongly 
supported by a conservative Democrat, John Stennis of Mississippi--for 
some means of rectifying the constitutional imbalance. That search 
culminated in the war powers resolution.
  Unfortunately, the war powers resolution has failed to fulfill its 
objective. If anything, the monarchist view has become more deeply 
ingrained with the passage of time.
  This trend was been on display throughout this decade. Before the 
gulf war, for example, with half a million American forces standing 
ready in Saudi Arabia--a situation clearly requiring congressional 
authorization--President Bush still refused to concede that he required 
an act of Congress before using force. Only at the last minute, and 
only grudgingly, did President Bush seek congressional support. Even 
then, he continued to assert that he sought only support, refusing to 
concede that congressional authorization was a legal necessity.
  Several years ago, the notion of broad executive power was claimed on 
the eve of a proposed invasion of Haiti--an invasion that, thankfully, 
was averted by a last-minute diplomatic initiative.
  In 1994, officials of the Clinton administration characterized the 
Haiti operation as a mere ``police action''--a semantic dodge designed 
to avoid congressional authorization--and a demonstration that the 
monarchist view prevails in the White House, without regard to 
political party.

  And, most recently, the Clinton administration asserted that it had 
all the authority it needed to initiate a military attack against 
Iraq--though it never publicly elaborated on this supposed authority.
  In this case, the question was not clear-cut--as it was in 1991. But 
two things emerged in the debate that reinforce the need for this 
legislation. First, it demonstrated that the executive instinct to find 
``sufficient legal authority'' to use force is undiluted.
  Second, it demonstrated that Congress often lacks the institutional 
will to carry out its responsibilities under the war power. Although 
there was strong consensus that a strong response was required to 
Saddam Hussein's resistance to U.N. inspections, there was no consensus 
in this body about whether Congress itself should authorize military 
action. Lacking such a consensus, Congress did nothing.
  Congress' responsibilities could not be clearer. Article one, section 
eight, clause eleven of the Constitution grants to Congress the power 
``to declare war, grant letters of marque and reprisal and to make 
rules concerning captures on land and water.''
  To the President, the Constitution provides in article two, section 
two the role of ``Commander in Chief of the Army and Navy of the United 
States.''
  It may fairly be said that, with regard to many constitutional 
provisions, the Framers' intent was ambiguous. But on the war power, 
both the contemporaneous evidence and the early construction of these 
clauses do not leave much room for doubt.
  The original draft of the Constitution would have given to Congress 
the power to ``make war.'' At the Constitutional Convention, a motion 
was made to change this to ``declare war.'' The reason for the change 
is instructive.
  At the Convention, James Madison and Elbridge Gerry argued for the 
amendment solely in order to permit the President the power ``to repel 
sudden attacks.'' Just one delegate, Pierce Butler of South Carolina, 
suggested that the President should be given the power to initiate war.
  The rationale for vesting the power to launch war in Congress was 
simple.

[[Page S9445]]

The Framers' views were dominated by their experience with the British 
King, who had unfettered power to start wars. Such powers the Framers 
were determined to deny the President.
  Even Alexander Hamilton, a staunch advocate of Presidential power, 
emphasized that the President's power as Commander in Chief would be 
``much inferior'' to the British King, amounting to ``nothing more than 
the supreme command and direction of the military and naval forces,'' 
while that of the British King ``extends to declaring of war and to the 
raising and regulating of fleets and armies--all which, by [the U.S.] 
Constitution, would appertain to the legislature.''
  It is frequently contended by those who favor vast Presidential 
powers that Congress was granted only the ceremonial power to declare 
war. But the Framers had little interest, it seems, in the ceremonial 
aspects of war. The real issue was congressional authorization of war. 
As Hamilton noted in Federalist twenty-five, the ``ceremony of a formal 
denunciation of war has of late fallen into disuse.''
  The conclusion that Congress was given the power to initiate all 
wars, except to repel attacks on the United States, is also 
strengthened in view of the second part of the war clause: the power to 
``grant letters of marque and reprisal.''

  An anachronism today, letters of marque and reprisal were licenses 
issued by governments empowering agents to seize enemy ships or take 
action on land short of all-out war. In essence, it was an eighteenth 
century version of what we now regarded as ``limited war'' or ``police 
actions.''
  The framers undoubtedly knew that reprisals, or ``imperfect war,'' 
could lead to an all-out war. England, for example, had fought five 
wars between 1652 and 1756 which were preceded by public naval 
reprisals.
  Surely, those who met at Philadelphia--all learned men--knew and 
understood this history. Given this, the only logical conclusion is 
that the framers intended to grant to Congress the power to initiate 
all hostilities, even limited wars.
  In sum, to accept the proposition that the war power is merely 
ceremonial, or applies only to ``big wars,'' is to read much of the war 
clause out of the Constitution. Such a reading is supported neither by 
the plain language of the text, or the original intent of the framers.
  Any doubt about the wisdom of relying on this interpretation of the 
intent of the framers is dispelled in view of the actions of early 
Presidents, early Congresses, and early Supreme Court decisions.
  Our earliest Presidents were extremely cautious about encroaching on 
Congress' power under the war clause.
  For example, in 1793, the first President, George Washington, stated 
that offensive operations against an indian tribe, the Creek Nation, 
depended on congressional action: ``The Constitution vests the power of 
declaring war with Congress; therefore no offensive expedition of 
importance can be undertaken until after they have deliberated upon the 
subject, and authorized such a measure.''
  During the Presidency of John Adams, the United States engaged in an 
undeclared naval war with France. But it bears emphasis that these 
military engagements were clearly authorized by Congress by a series of 
incremental statutes.
  The naval war with France also yielded three important Supreme Court 
decisions regarding the scope of the war power.
  In 1799, Congress authorized the President to intercept any U.S. 
vessels headed to France. President Adams subsequently ordered the Navy 
to seize any ships traveling to or from France.
  The Supreme Court declared the seizure of a U.S. vessel traveling 
from France to be illegal--thus ruling that Congress had the power not 
only to authorize limited war, and but also to limit Presidential power 
to take military action.
  The court ruled in two other cases bearing on the question of limited 
war. Wars, the Court said, even if ``imperfect,'' are nonetheless wars. 
In still another case, Chief Justice Marshall opined that ``the whole 
powers of war [are] by the Constitution . . . vested in Congress . . . 
[which] may authorize general hostilities . . . or partial war.''
  These precedents, and the historical record of actions taken by other 
early Presidents, have significantly more bearing on the meaning of the 
war clause than the modern era.
  As Chief Justice Warren once wrote, ``The precedential value of 
[prior practice] tends to increase in proportion to the proximity'' to 
the constitutional convention.
  Unfortunately, this constitutional history seems largely forgotten, 
and the doctrine of Presidential power that arose during the cold war 
remains in vogue.
  To accept the status quo requires us to believe that the 
constitutional imbalance serves our nation well. But it can hardly be 
said that it does.
  As matters now stand, Congress is denied its proper role in sharing 
in the decision to commit American troops, and the President is 
deprived of the consensus to help carry this policy through.
  I believe that only by establishing an effective war powers mechanism 
can we ensure that both of these goals are met. The question then is 
this: How to revise the war powers resolution in a manner that gains 
bipartisan support--and support of the executive?
  In the past two decades, a premise has gained wide acceptance that 
the war powers resolution is fatally flawed. Indeed, there are flaws in 
the resolution but they need not have been fatal.
  In 1988, determining that a review of the war powers resolution was 
in order, the Foreign Relations Committee established a special 
subcommittee to assume the task.
  As chairman of the subcommittee, I conducted extensive hearings. Over 
the course of two months, the subcommittee heard from many 
distinguished witnesses: former President Ford, former Secretaries of 
State and Defense, former Joint Chiefs of Staff, former Members of 
Congress who drafted the war powers resolution, and many constitutional 
scholars.
  At the end of that process, I wrote a law review article describing 
how the war powers resolution might be thoroughly rewritten to overcome 
its actual and perceived liabilities.
  That effort provided the foundation for the legislation I introduced 
in the 104th Congress, and that I reintroduce today. The bill has many 
elements; I will briefly summarize it.
  First, the bill replaces the war powers resolution with a new 
version. But I should make clear that I retain its central element: a 
time-clock mechanism that limits the President's power to use force 
abroad. That mechanism, it bears emphasis, was found to be 
unambiguously constitutional in a 1980 opinion issued by the Office of 
Legal Counsel at the Department of Justice.
  It is often asserted that the time-clock provisions is 
``unworkable,'' or that it invites our adversaries to make a conflict 
so painful in the short run so as to induce timidity in the Congress.
  But with or without a war powers law, American willingness to 
undertake sustained hostilities will always be subject to democratic 
pressures. A statutory mechanism is simply a means of delineating 
procedure.
  And the procedure set forth in this legislation assures that if the 
President wants an early congressional vote on a use of force abroad, 
his congressional supporters can produce it.
  Recent history tells us, of course, that the American people, as well 
as Congress, rally around the flag--and the Commander-in-Chief--in the 
early moments of a military deployment.
  Second, my bill defuses the specter that a ``timid Congress'' can 
simply sit on its hands and permit the authority for a deployment to 
expire.
  First, it establishes elaborate expedited procedures designed to 
ensure that a vote will occur. And it explicitly defeats the ``timid 
Congress'' specter by granting to the President the authority he has 
sought if these procedures nonetheless fail to produce a vote.
  Thus, if the President requests authority for a sustained use of 
force--one outside the realm of emergency--and Congress fails to vote, 
the President's authority is extended indefinitely.
  Third, the legislation delineates what I call the ``going in'' 
authorities for the President to use force. One fundamental weakness of 
the war powers resolution is that it fails to acknowledge powers that 
most scholars agree are inherent Presidential powers: to repel an

[[Page S9446]]

armed attack upon the United States or its Armed Forces, or to rescue 
Americans abroad.
  My legislation corrects this deficiency by enumerating five instances 
where the President may use force:
  (1) To repel attack on U.S. territory or U.S. forces;
  (2) To deal with urgent situations threatening supreme U.S. 
interests;
  (3) To extricate imperiled U.S. citizens;
  (4) To forestall or retaliate against specific acts of terrorism;
  (5) To defend against substantial threats to international sea lanes 
or airspace;
  It may be that no such enumeration can be exhaustive. But the 
circumstances set forth would have sanctioned virtually every use of 
force by the United States since World War Two.
  This concession of authority is circumscribed by the maintenance of 
the time-clock provision.
  After sixty days have passed, the President's authority would expire, 
unless one of three conditions had been met:
  (1) Congress has declared war or enacted specific statutory 
authorization;
  (2) The President has requested authority for an extended use of 
force but Congress has failed to act on that request, notwithstanding 
the expedited procedures established by this act:
  (3) The President has certified the existence of an emergency 
threatening the supreme national interests of the United States.
  The legislation also affirms the importance of consultation between 
the President and Congress and establishes a new means to facilitate 
it.
  To overcome the common complaint that Presidents must contend with 
``535 Secretaries of State,'' the bill establishes a congressional 
leadership group with whom the President is mandated to consult on the 
use of force.
  Another infirmity of the war powers resolution is that it fails to 
define ``hostilities.'' Thus, Presidents frequently engaged in a verbal 
gymnastics of insisting that ``hostilities'' were not ``imminent''--
even when hundreds of thousands of troops were positioned in the 
Arabian desert opposite Saddam's legions.
  Therefore, the legislation includes a more precise definition of what 
constitutes a ``use of force.''
  Finally, to make the statutory mechanism complete, the use of force 
act provides a means for judicial review. Because I share the 
reluctance of many of my colleagues to inject the judiciary into 
decisions that should be made by the political branches, this provision 
is extremely limited. It empowers a three-judge panel to decide only 
whether the time-clock mechanism has been triggered.
  The bill contains a provision granting standing to Members of 
Congress, a door that the Supreme Court appears to have largely closed 
in the case of Raines versus Byrd--the line-item veto challenge brought 
by the senior Senator from West Virginia. I believe, notwithstanding 
the holding of that case, that a Member of Congress would suffer the 
concrete injury necessary to satisfy the standing requirement under 
article three of the Constitution.
  The reason is this: The failure of the President to submit a use of 
force report would harm the ability of a Member of Congress to exercise 
a power clearly reposed in Congress under article one, section eight. 
That injury, I believe, should suffice in clearing the high hurdle on 
standing which the Court imposed in the Byrd case. No private 
individual can bring such a suit; if a Member of Congress cannot, then 
no one can.
  I have no illusions that enacting this legislation will be easy. But 
I am determined to try.
  The status quo--with Presidents asserting broad executive power, and 
Congress often content to surrender its constitutional powers--does not 
serve the American people well.
  More fundamentally, it does not serve the men and women who risk 
their lives to defend our interests. For that, ultimately, must be the 
test of any war powers law.
  Mr. President, I ask unanimous consent that the section-by-section 
analysis be included in the Record.
  There being no objection, the section-by-section analysis was ordered 
to be printed in the Record, as follows:

                      Section-by-Section Analysis

       Section 1. Short Title. The title of the bill is the ``Use 
     of Force Act (UFA).''
       Section 2. Table of Contents.
       Section 3. Findings. This section sets forth three findings 
     regarding the need to provide a statutory framework to 
     facilitate joint decisionmaking between Congress and the 
     President regarding decisions to use force abroad.
       Section 4. Statement of Purpose. The key phrase in this 
     section is ``confer and confirm Presidential authority.'' The 
     Use of Force Act is designed to bridge the long-standing--
     and, for all practical purposes, unresolvable--dispute over 
     precisely what constitutes the President's ``inherent'' 
     authority to use force. Whereas the War Powers Resolution 
     purported to delineate the President's constitutional 
     authority and to grant no more, the Use of Force Act sets 
     forth a range of authorities that are practical for the 
     modern age and sufficiently broad to subsume all presidential 
     authorities deemed ``inherent'' by any reasonable 
     constitutional interpretation.
       Section 5. Definitions. This section defines a number of 
     terms, including the term ``use of force abroad,'' thus 
     correcting a major flaw of the War Powers Resolution, which 
     left undefined the term ``hostilities.''
       As defined in the Use of Force Act, a ``use of force 
     abroad'' comprises two prongs:
       (1) a deployment of U.S. armed forces (either a new 
     introduction of forces, a significant expansion of the U.S. 
     military presence in a country, or a commitment to a new 
     mission or objective); and
       (2) the deployment is aimed at deterring an identified 
     threat, or the forces deployed are incurring or inflicting 
     casualties (or are operating with a substantial possibility 
     of incurring or inflicting casualties).


                      title i--general provisions

       Section 101. Authority and Governing Principles. This 
     section sets forth the Presidential authorities being 
     ``conferred and confirmed.'' Based on the Constitution and 
     this Act, the President may use force--
       (1) to repel an attack on U.S. territory or U.S. forces;
       (2) to deal with urgent situations threatening supreme U.S. 
     interests;
       (3) to extricate imperiled U.S. citizens;
       (4) to forestall or retaliate against specific acts of 
     terrorism;
       (5) to defend against substantial threats to international 
     sea lanes or airspace.
       Against a complaint that this list is excessively 
     permissive, it should be emphasized that these are the 
     President's initial authorities to undertake a use of force--
     so-called ``going in'' authorities--and that the ``staying 
     in'' conditions set forth in section 104 will, in most cases, 
     bear heavily on the President's original decision.
       Section 102. Consultation. Section 102 affirms the 
     importance of consultation between the President and Congress 
     and establishes new means to facilitate it. To overcome the 
     common complaint that Presidents must contend with ``535 
     secretaries of state,'' the UFA establishes a Congressional 
     Leadership Group with whom the President is mandated to 
     consult on the use of force.
       A framework of regular consultations between specified 
     Executive branch officials and relevant congressional 
     committees is also mandated in order to establish a ``norm'' 
     of consultative interaction and in hope of overcoming what 
     many find to be the overly theatrical public-hearing process 
     that has superseded the more frank and informal consultations 
     of earlier years.
       Note: An alternative to the Use of Force Act is to repeal 
     (or effectively repeal) the War Powers Resolution and leave 
     in its place only a Congressional Leadership Group. (This is 
     the essence of S.J. Res. 323, 100th Congress, legislation to 
     amend the War Powers Resolution introduced by Senators Byrd, 
     Warner, Nunn, and Mitchell in 1988.) This approach, which 
     relies on ``consultation and the Constitution,'' avoids the 
     complexities of enacting legislation such as the UFA but 
     fails to solve chronic problems of procedure or authority, 
     leaving matters of process and power to be debated anew as 
     each crisis arises. In contrast, the Use of Force Act would 
     perform one of the valuable functions of law, which is to 
     guide individual and institutional behavior.
       Section 103. Reporting Requirements. Section 103 requires 
     that the President report in writing to the Congress 
     concerning any use of force, not later than 48 hours after 
     commencing a use of force abroad.
       Section 104. Conditions for Extended Use of Force. Section 
     104 sets forth the ``staying in'' conditions: that is, the 
     conditions that must be met if the President is to sustain a 
     use of force he has begun under the authorities set forth in 
     section 101. A use of force may extend beyond 60 days only 
     if--
       (1) Congress has declared war or enacted specific statutory 
     authorization;
       (2) the President has requested authority for an extended 
     use of force but Congress has failed to act on that request 
     (notwithstanding the expedited procedures established by 
     Title II of this Act);
       (3) the President has certified the existence of an 
     emergency threatening the supreme national interests of the 
     United States.
       The second and third conditions are designed to provide 
     sound means other than a declaration of war or the enactment 
     of specific statutory authority by which the President may 
     engage in an extended use of force.

[[Page S9447]]

     Through these conditions, the Use of Force Act avoids two 
     principal criticisms of the War Powers Resolution: (1) that 
     Congress could irresponsibly require a force withdrawal 
     simply through inaction; and (2) that the law might, under 
     certain circumstances, unconstitutionally deny the President 
     the use of his ``inherent'' authority.
       To defuse the specter of a President hamstrung by a 
     Congress too timid or inept to face its responsibilities, the 
     UFA uses two means: first, it establishes elaborate expedited 
     procedures designed to ensure that a vote will occur; second, 
     it explicitly defeats the ``timid Congress'' specter by 
     granting to the President the authority he has sought if 
     these procedures nonetheless fail to produce a vote. Thus, if 
     the President requests authority for a sustained use of 
     force--one outside the realm of emergency--and Congress fails 
     to vote, the President's authority is extended indefinitely.
       The final condition should satisfy all but proponents of an 
     extreme ``monarchist'' interpretation under which the 
     President has the constitutional authority to use force as he 
     sees fit. Under all other interpretations, the concept of an 
     ``inherent'' authority depends upon the element of emergency: 
     the need for the President to act under urgent circumstances 
     to defend the nation's security and its citizens. If so, the 
     UFA protects any ``inherent'' presidential authority by 
     affirming his ability to act for up to 60 days under the 
     broad-ranging authorities in section 101 and, in the event he 
     is prepared to certify an extended national emergency, to 
     exercise the authority available to him through the final 
     condition of section 104.
       Section 105. Measures Eligible for Congressional Priority 
     Procedures. This section establishes criteria by which joint 
     and concurrent resolutions become eligible for the expedited 
     procedures created by Title II of the UFA.
       A joint resolution that declares war or provides specific 
     statutory authorization--or one that terminates, limits, or 
     prohibits a use of force--becomes eligible if it is 
     introduced: (1) pursuant to a written request by the 
     President to any one member of Congress; (2) if cosponsored 
     by a majority of the members of the Congressional Leadership 
     Group in the house where introduced; or (3) if cosponsored by 
     30 percent of the members of either house. Thus, there is 
     almost no conceivable instance in which a President can be 
     denied a prompt vote: he need only ask one member of Congress 
     to introduce a resolution on his behalf.
       A concurrent resolution becomes eligible if it meets either 
     of the cosponsorship criteria cited above and contains a 
     finding that a use of force abroad began on a certain date, 
     or has exceeded the 60 day limitation, or has been undertaken 
     outside the authority provided by section 101, or is being 
     conducted in a manner inconsistent with the governing 
     principles set forth in section 101.
       While having no direct legal effect, the passage of a 
     concurrent resolution under the UFA could have considerable 
     significance: politically, it would represent a clear, 
     prompt, and formal congressional repudiation of a 
     presidential action; within Congress, it would trigger 
     parliamentary rules blocking further consideration of 
     measures providing funds for the use of force in question (as 
     provided by section 106 of the UFA); and juridically, it 
     would become a consideration in any action brought by a 
     member of Congress for declaratory judgment and injunctive 
     relief (as envisaged by section 107 of the UFA).
       Section 106. Funding Limitations. This section prohibits 
     the expenditure of funds for any use of force inconsistent 
     with the UFA. Further, this section exercises the power of 
     Congress to make its own rules by providing that a point of 
     order will lie against any measure containing funds to 
     perpetuate a use of force that Congress, by concurrent 
     resolution, has found to be illegitimate.
       Section 107. Judicial Review. This section permits judicial 
     review of any action brought by a Member of Congress on the 
     grounds that the UFA has been violated. It does so by--
       (1) granting standing to any Member of Congress who brings 
     suit in the U.S. District Court for the District of Columbia;
       (2) providing that neither the District Court nor the 
     Supreme Court may refuse to make a determination on the 
     merits based on certain judicial doctrines, such as political 
     question or ripeness (doctrines invoked previously by courts 
     to avoid deciding cases regarding the war power);
       (3) prescribing the judicial remedies available to the 
     District Court; and
       (4) creating a right of direct appeal to the Supreme Court 
     and encouraging expeditious consideration of such appeal.
       It bears emphasis that the remedy prescribed is modest, and 
     does not risk unwarranted interference of the judicial branch 
     in a decision better reposed in the political branches. It 
     provides that the matter must be heard by a three-judge 
     panel; one of these judges must a circuit judge. 
     Additionally, the power of the court is extremely limited: it 
     may only declare that the 60-day period set forth in Section 
     104 has begun.
       In 1997, the Supreme Court held, in Raines v. Byrd, that 
     Members of Congress did not have standing to challenge an 
     alleged constitutional violation under the Line-Item Veto 
     Act. That case might be read to suggest that a Member of 
     Congress can never attain standing. But such a conclusion 
     would be unwarranted. First, the Court made clear in Raines 
     that an explicit grant of authority to bring a suit 
     eliminates any ``prudential'' limitations on standing. Raines 
     v. Byrd, 521 U.S. ____, ____, n.3 (1997) (slip op., at 8, 
     n.3) Second, a more recent decision of the Court suggests 
     that a Member of Congress could attain ``constitutional 
     standing'' (that is, meet the ``case or controversy'' 
     requirements of Article III) in just the sort of case 
     envisaged by the Use of Force Act. In Federal Election 
     Commission v. Akins, a case decided on June 1, 1998, the 
     Court permitted standing in a case where the plaintiffs 
     sought to require the Federal Election Commission (FEC) to 
     treat an organization as a ``political committee,'' which 
     then would have triggered public disclosure of certain 
     information about that organization. The Court held that 
     standing would be permitted where the plaintiff ``fails to 
     obtain information which must be publicly disclosed pursuant 
     to statute.'' A case under the Use of Force Act would be 
     analogous--in that the plaintiff Members of Congress would 
     seek information in a ``Use of Force Report'' required to be 
     submitted to Congress by Section 103(a). Such information, 
     quite obviously, would be essential to Members of Congress in 
     the exercise of their constitutional powers under the war 
     clause of the Constitution (Article I, Section 8, Clause 11), 
     a power they alone possess.
       Section 108. Interpretation. This section clarifies several 
     points of interpretation, including these: that authority to 
     use force is not derived from other statutes or from treaties 
     (which create international obligations but not authority in 
     a domestic, constitutional context); and that the failure of 
     Congress to pass any joint or concurrent resolution 
     concerning a particular use of force may not be construed as 
     indicating congressional authorization or approval.
       Section 109. Severability. This section stipulates that 
     certain sections of the UFA would be null and void, and 
     others not affected, if specified provisions of the UFA were 
     held by the Courts to be invalid.
       Section 110. Repeal of War Powers Resolution. Section 110 
     repeals the War Powers Resolution of 1973.


                     title ii--expedited procedures

       Section 201. Priority Procedures. Section 201 provides for 
     the expedited parliamentary procedures that are integral to 
     the functioning of the Act. (These procedures are drawn from 
     the war powers legislation cited earlier, introduced by 
     Senator Robert Byrd et al. in 1988.)
       Section 202. Repeal of Obsolete Expedited Procedures. 
     Section 202 repeals other expedited procedures provided for 
     in existing law.
                                 ______
                                 
      By Mr. DORGAN.
  S. 2388. A bill to amend the Internal Revenue Code of 1986 to provide 
an exclusion for gain from the sale of farmland which is similar to the 
exclusion from gain on the sale of a principal residence; to the 
Committee on Finance.


  legislation to provide exclusion for gain from the sale of farmland

 Mr. DORGAN. Mr. President, a new and disastrous farm crisis is 
roaring through the Upper Midwest. Family farmers are under severe 
assault and many of them are simply not making it. It's not their 
fault. It's just that the combination of bad weather, crop disease, low 
yield, low prices and bad federal farm policy is too much to handle. 
Under the current federal farm law there is no price safety net. 
Farmers are--as they were in the 1930's --at the mercy of forces much 
bigger than they are.
  The exodus occurring from family farms in the Upper Midwest is heart-
breaking and demands the immediate attention of this Congress. We need 
to address this problem both within the farm program and in other 
policy areas as well.
  For example, Mr. President, there's a fundamental flaw in the tax 
code that we need to fix. It adds insult to injury for many of these 
farmers. You see, too often, these family farmers are not able to take 
full advantage of the $500,000 capital gains tax break that city folks 
get when they sell their homes. Once family farmers have been beaten 
down and forced to sell the farm they've farmed for generations, they 
get a rude awakening. Many of them discover, as they leave the farm, 
that Uncle Sam is waiting for them at the end of the lane with a big 
tax bill.
  One of the most popular provisions included in last year's major tax 
bill permits families to exclude from federal income tax up to $500,000 
of gain from the sale of their principal residences. That's a good 
deal, especially for most urban and suburban dwellers who have spent 
many years paying for their houses, and who regard their houses as both 
a home and a retirement account. For many middle income families, their 
home is their major financial asset, an asset the family can draw on in 
retirement. House prices in major growth markets such as Washington, 
D.C., New York, or California may start at hundreds of thousands of 
dollars. As a result, the urban

[[Page S9448]]

dwellers who have owned their homes through many years of appreciation 
can often benefit from a large portion of this new $500,000 capital 
gains tax exclusion. Unfortunately this provision, as currently 
applied, is virtually useless to family farmers.
  For farm families, their farm is their major financial asset. 
Unfortunately, family farmers under current law receive little or no 
benefit from the new $500,000 exclusion because the IRS separates the 
value of their homes from the value of the farmland the homes sit on. 
As people from my state of North Dakota know, houses out on the 
farmsteads of rural America are more commonly sold for $5,000 to 
$40,000. Most farmers plow any profits they make into the whole farm 
rather than into a house that will hold little or no value when the 
farm is sold. It's not surprising that the IRS often judges that homes 
far out in the country have very little value and thus farmers receive 
much less benefit from this $500,000 exclusion than do their urban and 
suburban counterparts. As a result, the capital gain exclusion is 
little or no help to farmers who are being forced out of business. They 
may immediately face a hefty capital gains tax bill from the IRS.
  This is simply wrong, Mr. President. It is unfair. Federal farm 
policy helped create the hole that many of these farmers find 
themselves in. Federal tax policy shouldn't dig the hole deeper as they 
attempt to shovel their way out.
  The legislation that I'm introducing today recognizes the unique 
character and role of our family farmers and their important 
contributions to our economy. It expands the $500,000 capital gains tax 
exclusion for sales of principal residences to cover family farmers who 
sell their farmhouses or surrounding farmland, so long as they are 
actively engaged in farming prior to the sales. In this way, farmers 
may get some benefit from a tax break that would otherwise be 
unavailable to them.
  I fully understand that this legislation is not a cure-all for 
financial hardships that are ailing our farm communities. This 
legislation is just one of a number of policy initiatives we can use to 
ease the pain for family farmers as we pursue other initiatives to help 
turn around the crippled farm economy.
  Again, my legislation would expand the $500,000 tax exclusion for 
principle residences to cover the entire farm. Specifically, the 
provision will allow a family or individual who has actively engaged in 
farming prior to the farm sale to exclude the gain from the sale up to 
the $500,000 maximum.
  What does this relief mean to the thousands of farmers who are being 
forced to sell off the farm due to current economic conditions?
  Take, for example, a farmer who is forced to leave today because of 
crop disease and slumping grain prices and sells his farmstead that his 
family has operated for decades. If he must report a gain of $10,000 on 
the sale of farm house, that is all he can exclude under current law. 
But if, for example, he sold 1000 acres surrounding the farm house for 
$400,000, and the capital gain was $200,000, he would be subject to 
$40,000 tax on that gain. Again, my provision excludes from tax the 
gain on the farmhouse and land up to the $500,000 maximum that is 
otherwise available to a family on the sale of its residence.
  We must wage, on every federal and state policy front, the battle to 
stem the loss of family farmers. Tax provisions have grown increasingly 
important as our farm families deal with drought, floods, diseases and 
price swings.
  I believe that Congress should move quickly to pass this legislation 
and other meaningful measures to help get working capital into the 
hands of our family farmers in the Great Plains. Let's stop penalizing 
farmers who are forced out of agriculture. Let's allow farmers to 
benefit from the same kind of tax exclusion that most homeowners 
already receive. This is the right thing to do. And it's the fair thing 
to do.
                                 ______
                                 
      By Mr. WELLSTONE:
  S. 2389. A bill to strengthen the rights of workers to associate, 
organize and strike, and for other purposes; to the Committee on Labor 
and Human Resources.


                       fair labor organizing act

 Mr. WELLSTONE. Mr. President, I rise to introduce a bill, the 
Fair Labor Organizing Act, to strengthen the basic rights of workers 
freely to associate, organize and to join a union. The bill would 
address significant shortcomings in the National Labor Relations Act. 
These shortcomings amount to impediments to one of the most fundamental 
ways that working people can seek to improve their own and their 
families' standard of living and quality of life, which is to join, 
belong to and participate in a union.

  Mr. President, in the past few years, working men and women across 
the country have been fighting and organizing with a new energy. They 
are fighting for better health care, pensions, a living wage, better 
education policy and fairer trade policy. They also are fighting and 
organizing to ensure that they have the opportunity to be represented 
by a union through which they can collectively bargain with their 
employers. Much of this organizing is taking place among sectors of the 
workforce, and among portions of our working population, that have not 
previously been organized. I think these new efforts are part of what 
really is a new civil rights and human rights struggle in our country. 
It is an important and positive historical development. There is 
probably no clearer indication that the impact of this development is 
being felt, and that many of these efforts are succeeding, than some of 
the attacks in the current Congress on unions representing the 
country's working people.
  Why have we seen so many bills with Orwellian titles such as the TEAM 
Act, which has little to do with employer-employee teamwork and a lot 
more to do with company-dominated labor organizations? Such as the 
``Family Friendly Workplace Act,'' which really isn't family friendly, 
but would reduce working families' pay and undercut the 40-hour 
workweek? Such as the so-called SAFE Act, which doesn't promote safety 
but actually would roll back well-established and necessary OSHA 
protections?
  Why does the majority in Congress seem so desperate to single out 
unions to suppress their political activities at the same time they 
maneuver to kill genuine political campaign finance reform?
  It is because unions are succeeding. That is a good thing because in 
my view, when organized labor fights for job security, for dignity, 
justice and for a fair share of America's prosperity, it is not a 
struggle merely for their own benefit. The gains of unionized workers 
on basic bread and butter issues are key to the economic security of 
all working families.
  How can it be that as many as 10,000 Americans lose their jobs each 
year for supporting union organizing when the National Labor Relations 
Act already supposedly prohibits the firing of an employee to deny his 
or her right to freely organize or join a union? If more than four in 
10 workers who are not currently in a union say they would join one if 
they had the opportunity, why aren't there more opportunities? Since we 
know that union workers earn up to one-third more than non-union 
workers and are more likely to have pensions and health benefits, why 
aren't more workers unionized when the new labor movement is correctly 
focused on organizing?
  The answer to these basic questions is this: we need labor law 
reform. We need to improve the National Labor Relations Act (NLRA).
  The Fair Labor Organizing Act would achieve three basic goals. First, 
it would help employees make fully informed, free decisions about union 
representation. Second, it would expand the remedies available to 
wrongfully discharged employees. Third, it would require mediation and 
arbitration when employers and employees fail to reach a collective 
bargaining agreement on their own.
  It is late in the current Congress. My bill may not receive full 
consideration or be enacted into law this year. But I believe it is 
important to set a standard and place a marker. Workers across America 
are fighting for their rights, and many are finding that the playing 
field is tilted against them. The NLRA does not fully allow them fair 
opportunity to speak freely, to associate, organize and join a union, 
even though that is its intended purpose. I have walked some picket 
lines during the

[[Page S9449]]

past two years. I have joined in solidarity with workers seeking to 
organize. I have called on employers to bargain in good faith with 
their employees during disputes. I intend to continue doing so, and I 
urge colleagues to do the same. At the same time, it is clear to nearly 
any organizer and to many workers who have sought to join a union that 
the rules in crucial ways are stacked against them. My bill seeks to 
address that fact.
  First, it is a central tenet of U.S. labor policy that employees 
should be free to make informed and free decisions about union 
representation. Yet, union organizers have limited access to employees 
while employers have unfettered access. Employers have daily contact 
with employees. They may distribute written materials about unions. 
They may require employees to attend meetings where they present their 
views on union representation. They may talk to employees one-on-one 
about how they view union representation. On the other hand, union 
organizers are restricted from worksites and even public areas.
  If we want people to make independent, informed decisions about 
whether they should be represented by a union, then we have to give 
them equal access to both sides of the story. This bill would amend the 
National Labor Relations Act to provide equal time to labor 
organizations to provide information about union representation. Equal 
time. That means that an employer would trigger the equal time 
provision that this bill would insert into the NLRA by expressing 
opinions on union representation during work hours or at the worksite. 
The provision would give a union equal time to use the same media used 
by the employer to distribute information, and would allow the union 
access to the worksite to communicate with employees.
  The second reform in the bill would toughen penalties for wrongful 
discharge violations. It would require the National Labor Relations 
Board to award back pay equal to 3 times the employee's wages when the 
Board finds that an employee is discharged as a result of an unfair 
labor practice. It also would allow employees to file civil actions to 
recover punitive damages when they have been discharged as a result of 
an unfair labor practice.
  Third, the bill would put in place mediation and arbitration 
procedures to help employers and employees reach mutually agreeable 
first-contract collective bargaining agreements. It would require 
mediation if the parties cannot reach agreement on their own after 60 
days. Should the parties not reach agreement 30 days after a mediator 
is selected, then either party could call in the Federal Mediation and 
Conciliation Service for binding arbitration. I believe that this 
proposal represents a balanced solution--one that would help both 
parties reach agreements they can live with. It gives both parties 
incentive to reach genuine agreement without allowing either side to 
indefinitely hold the other hostage to unrealistic proposals.
  Mr. President, this bill would be a step toward fairness for working 
families in America. The proposals are not new. I hope my colleagues 
will support the bill.
                                 ______
                                 

                            By Mr. DASCHLE:

  S. 2391. A bill to authorize and direct the Secretary of Commerce to 
initiate an investigation under section 702 of the Tariff Act of 1930 
of methlyl tertiary butyl ether imported from Saudi Arabia; to the 
Committee on Finance.


                     Fair Trade in MTBE Act of 1998

  Mr. DASCHLE. Mr. President, today I am pleased to introduce 
legislation designed to combat unfairly traded imports of methyl 
tertiary butyl ether (MTBE) from Saudi Arabia. MTBE is an oxygenated 
fuel additive derived from methanol.
  Through the wintertime oxygenated fuels program to reduce carbon 
monoxide pollution and through the reformulated gasoline program to 
reduce emissions of toxics and ozone-causing chemicals, we have created 
considerable demand in this nation for oxygenated fuels, such as MTBE, 
ETBE and ethanol. It has been my hope that this demand could be met 
with domestically-produced oxygenates, thereby reducing our dependence 
on foreign imports and expanding economic opportunities at home. 
Unfortunately, this goal has not been achieved, in large part because 
of a substantial expansion of subsidized MTBE imports from Saudi 
Arabia.
  Mr. President, I am a supporter of free trade when it is also fair 
trade. However, there has been a marked surge in MTBE imports from 
Saudi Arabia in recent years that does not reflect the natural outcome 
of market-based competition.
  These imports appear to be driven by a pattern of government 
subsidies. Not only is this increasing our dependence on foreign 
suppliers, but it is unfairly harming domestic oxygenate producers and 
those who provide the raw materials for these oxygenates, such as 
America's farmers.
  The Saudi government has made no secret of its desire to expand 
domestic industrial capacity of methyl tertiary butyl ether (MTBE). In 
particular, several years ago, there were public reports that the Saudi 
government promised investors a 30% discount relative to world prices 
on the feedstock raw materials used in the production of MTBE. The 
feedstock is the major cost component of MTBE production, and the Saudi 
government decree has apparently translated into a nearly -30% 
artificial cost advantage to Saudi-based producers and exporters.
  Moreover, it appears that this blatant subsidy is in large measure 
responsible for the increase in Saudi MTBE exports to the United States 
in recent years. These exports have not only reduced the U.S. market 
share of American producers of MTBE, ETBE, and ethanol, but also has 
discouraged new capital investment, thereby depriving American workers, 
farmers, and investors of a significant share of the economic activity 
that Congress contemplated when it drafted the oxygenated fuel 
requirements of the Clean Air Act Amendments of 1990.
  Mr. President, I believe it is high time for the United States 
government to respond to the Saudi government's subsidies. Saudi Arabia 
is a valued ally; however, our bond of friendship should not be a 
justification for turning a blind eye to an unfair element of our 
otherwise mutually beneficial trading relationship.
  Because it is not a member of the World Trade Organization nor a 
party to its Agreement on Subsidies and Countervailing Measures, the 
Saudi government may not feel constrained by the international trade 
rules by which we legally are required to abide. This does not mean, 
however, that we must stand idly by while foreign subsidies undermine 
an important sector of our economy.
  For this reason, my bill would require the Secretary of Commerce to 
self-initiate an investigation under Section 702 of the Tariff Act of 
1930 to determine whether a countervailable subsidy has been provided 
with respect to Saudi Arabian exports of methyl tertiary butyl ether 
(MTBE). If the Secretary finds that a subsidy has indeed been provided 
to Saudi producers, he would be required under the terms of our 
existing law to impose an import duty in the amount necessary to offset 
the subsidy. Because Saudi Arabia is not a member of the WTO, there 
would be no requirement for a demonstration of injury to the domestic 
industry as a result of the subsidy.
  Let's talk for a moment about what is at stake here for American 
consumers. Last year, I asked the U.S. General Accounting Office (GAO) 
to assess the impact on U.S. oil imports of the Reformulated Gasoline 
(RFG) program that was created by Congress in 1991. The GAO found that 
the U.S. RFG program has already resulted in over 250,000 barrels per 
day less imported petroleum due to the addition of oxygenates like 
ethanol, ETBE and MTBE. That means, at an average of $20 spent per 
barrel of imported oil, we currently save nearly $2 billion per year 
due to domestically produced oxygenates.
  The GAO further found that, if all gasoline in the U.S. were 
reformulated (compared to the current 35%), the U.S. would import 
777,000 fewer barrels of oil per day. That is more than $5.5 billion 
per year that would not be flowing to foreign oil producers and could 
be reinvested in the United States.
  This is not ``pie-in-the-sky'' theory. Ethanol production and 
domestically produced MTBE can reduce oil imports and strengthen our 
economy. In rural America, for example, new ethanol and

[[Page S9450]]

ETBE plants will be built, so long as we wise up and create a level 
playing field against subsidized Saudi competition.
  Phase II of the Clean Air Act's reformulated gasoline program (RFG) 
requires transportation fuels to meet even tougher emissions standards 
starting in the year 2000. That gasoline market is growing, with demand 
for ethanol, ETBE and MTBE in 2005 estimated to be 300,000 barrels per 
day. Unless we act to ensure that American-made oxygenated fuels can 
compete in American fuels markets, we stand to cede those markets to 
subsidized Saudi Arabian MTBE.
  Mr. President, I am hopeful that my legislation will help level the 
playing field for American producers of ethanol, ETBE and MTBE and add 
new economic vitality to their associated communities of workers, 
farmers, and business owners. I urge my colleagues to give it serious 
consideration and to enact it as soon as possible so that we may begin 
the process of bringing fairness back into the realm of international 
trade in oxygenated fuels.
  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. 2391

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Fair Trade in MTBE Act of 
     1998''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Section 814 of Public Law 101-549 (commonly referred to 
     as the ``Clean Air Act Amendments of 1990'') expressed the 
     sense of Congress that every effort should be made to 
     purchase and produce American-made reformulated gasoline and 
     other clean fuel products.
       (2) Since the passage of the Clean Air Amendments Act of 
     1990, Saudi Arabia has added substantial industrial capacity 
     for the production of methyl tertiary butyl ether (in this 
     Act referred to as ``MTBE'').
       (3) The expansion of Saudi Arabian production capacity has 
     been stimulated by government subsidies, notably in the form 
     of a governmental decree guaranteeing Saudi Arabian MTBE 
     producers a 30 percent discount relative to world prices on 
     feedstock.
       (4) The expansion of subsidized Saudi Arabian production 
     has been accompanied by a major increase in Saudi Arabian 
     MTBE exported to the United States.
       (5) The subsidized Saudi Arabian MTBE exports have reduced 
     the market share of American producers of MTBE, ETBE, and 
     ethanol, as well as discouraged capital investment by 
     American producers.
       (6) Saudi Arabia is not a member of the World Trade 
     Organization and is not subject to the terms and conditions 
     of the Agreement on Subsidies and Countervailing Measures 
     negotiated as part of the Uruguay Round Agreements.

     SEC. 3. INITIATION OF COUNTERVAILING DUTY INVESTIGATION.

       (a) In General.--Not later than 30 days after the date of 
     enactment of this Act, the administering authority shall 
     initiate an investigation pursuant to title VII of the Tariff 
     Act of 1930 (19 U.S.C. 1671 et seq.) to determine if the 
     necessary elements exist for the imposition of a duty under 
     section 701 of such Act with respect to the importation into 
     the United States of MTBE from Saudi Arabia.
       (b) Administering Authority.--For purposes of this section, 
     the term ``administering authority'' has the meaning given 
     such term by section 771(1) of the Tariff Act of 1930 (19 
     U.S.C. 1677(1)).
                                 ______
                                 
      By Mr. BENNETT (for himself, Mr. Dodd, Mr. Moynihan, Mr. Kohl, 
        and Mr. Robb) (by request):
  S. 2392. A bill to encourage the disclosure and exchange of 
information about computer processing problems and related matters in 
connection with the transition to the Year 2000; to the Committee on 
the Judiciary.


                  year 2000 information disclosure act

 Mr. BENNETT. Mr. President, today I introduce, by request of 
President Bill Clinton, the Administration's ``Good Samaritan'' 
legislation referred to as the ``Year 2000 Information Disclosure 
Act''.
  I want to thank the White House for joining Vice Chairman Dodd and 
the rest of the members of the Special Committee on the Year 2000 
Technology Problem in the debate on how to promote the flow of 
information on Year 2000 readiness throughout the private sector. The 
Administration's recognition of this problem, the fear of law suits and 
its stifling effect on companies' willingness to disclose helpful Y2K 
information, is invaluable in helping all of us deal with this national 
crisis.
  The existing legal framework clearly discourages the sharing of 
critical information between private sector companies. The President's 
bill attempts to limit the legal liability of corporations and other 
organizations who in good faith openly share information about computer 
and technology processing problems and related matters in connection 
with the transition to the Year 2000. We welcome the thoughtful ideas 
of the White House and the hard work of the Office of Management and 
Budget, as well John Koskinen, the Chairman of the President's Council 
on Year 2000 Conversion.
  President Clinton's proposal represents a good starting point from 
which to begin the process of addressing the critical need for private 
sector information sharing announced in his speech before the National 
Sciences Foundation on Tuesday, July 14.
  The Senate Special Committee on the Year 2000 Technology Problem, 
which I chair, has to date held hearings on Year 2000 problems in 
several industry sectors including energy utilities, financial 
institutions, and health care. This Friday, July 31, the Committee will 
hold its fourth hearing the subject of which will be the 
telecommunications industry. In each of the prior hearings, it has 
become increasingly evident that the fear of legal liability has proven 
to be the single biggest deterrent to the open sharing of Year 2000 
information. With just over 500 days remaining before the Year 2000 
problem manifests itself in full, we must do everything we can to 
encourage the sharing of vital Year 2000 information. Through this 
sharing, organizations can save valuable time and resources in 
addressing their Year 2000 problems.
  But, we must be careful to pass meaningful legislation that will 
indeed encourage disclosure and sharing of Year 2000 information. For 
example, small companies which cannot afford to do all of their own 
testing and who, for the most part, are not as knowledgeable about 
where the dangers of the Y2K bug may appear are significant elements of 
our economy and their Y2K failures could have devastating impacts on 
those who depend on their services.
  We look forward to hearing the input of those companies and 
individuals who are affected both as plaintiffs and defendants. To be 
of value, we must pass legislation this year. To that end, we will be 
working closely with the administration, and with Senators Hatch and 
Leahy of the Judiciary Committee which has the primary jurisdiction for 
this legislation.
 Mr. MOYNIHAN. Mr. President, I am pleased to join with 
Senators Robert F. Bennett (R-UT) and Christopher Dodd (D-CT) today as 
original cosponsors of President Clinton's ``Year 2000 (Y2K) 
Information Disclosure Act.'' This legislation is intended to promote 
the open sharing of information about Y2K solutions by protecting those 
who share information in good faith from liability claims based on 
exchanges of information. As the President stated in his speech at the 
National Academy of Sciences on July 14, 1998, the purpose of this 
legislation is to ``guarantee that businesses which share information 
about their readiness with the public or with each other, and do it 
honestly and carefully, cannot be held liable for the exchange of that 
information if it turns out to be inaccurate.''
  The open sharing of information on the Y2K problem will play a 
significant role in preparing the nation and the world for the 
millennial malady. I urge the prompt and favorable consideration of 
this legislation. There is no time to waste.
 Mr. DODD. Mr. President, today I join with Senator Robert 
Bennett, the chairman of the Senate Special Committee on the Year 2000 
Technology Problem, to introduce, at the request of the President of 
the United States, ``The Year 2000 Information Disclosure Act.'' We are 
joined in this introduction by Senators Moynihan, Kohl, and Robb.
  It should be clear to even the most disinterested observer that we 
are facing a serious economic challenge in

[[Page S9451]]

form of the Year 2000 computer problem. There is little doubt that the 
millennium conversion will have a significant impact on the economy; 
the outstanding question is how large that impact will be.
  One of the most relevant factors in assessing the potential impact of 
this problem is the expected readiness of small and medium sized 
businesses to deal with this issue. Many of the nation's largest 
corporations are spending hundreds of millions of dollars to prepare 
for Year 2000 conversion: Citibank is spending $600 million, Aetna is 
spending more than $125 million, and the list goes on and on. However, 
it is not so clear that small and medium sized businesses are 
approaching the problem with similar vigor.
  As a result, it is my opinion that it will become increasingly 
necessary for those companies that have successfully completed 
remediation and are now testing to able to share those results with 
other companies that might not be as far along. It will be an 
increasing national economic priority to use all the tools available to 
help businesses and government entities meet the millennium deadline, 
and encouraging the sharing of information that can cut precious weeks 
off the time it takes to get ready will be essential.
  I agree with the statements of President Clinton that companies that 
make such voluntary disclosures should not be punished for those 
disclosures with frivolous or abusive lawsuits. It is to address that 
concern that the President has requested that Senator Bennett and I 
introduce his legislation.
  I also agree with the President's analysis that in order for this 
information-sharing to be effective, it must start to take place as 
soon as possible. Sharing information about non-compliant systems six, 
eight, or twelve months from now will be of limited value to all 
concerned.
  Some questions have emerged in the press as to the scope of this 
legislation. The fact is that there are very few weeks left in this 
session, and therefore the broader the bill, the more difficult it will 
be to pass. Therefore, if we are intent on providing protection for 
voluntary disclosures on Year 2000, it will be very hard to add to that 
provisions dealing with other aspects of Year 2000 liability. While I 
believe that concerns on underlying liability are real and meaningful, 
there is little question that dealing with any liability issues is 
always a controversial and lengthy process. So as we move forward with 
the concept of a safe harbor for voluntary disclosure, I hope that we 
can do so without encumbering that legislation with these larger and 
contentious issues regarding liability.
  President Clinton has given us an excellent starting point for 
discussing these important issues. I look forward to working with all 
my colleagues in the weeks remaining to craft final legislation that 
addresses these issues in a meaningful and constructive manner.

                          ____________________