[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
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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.
____________________