[Congressional Record Volume 145, Number 29 (Wednesday, February 24, 1999)]
[Senate]
[Pages S1926-S1950]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. THOMAS (for himself and Mr. Enzi):
S. 449. A bill to direct the Secretary of the Interior to transfer to
the personal representative of the estate of Fred Steffens of Big Horn
County, Wyoming, certain land comprising the Steffens family property;
to the Committee on Energy and Natural Resources.
legislation to transfer property in big horn county, wyoming
Mr. THOMAS. Mr. President, I rise today to introduce legislation
which was passed by the Senate during the 105th Congress and
unfortunately was not passed by the House of Representatives. This
measure, which would return a family farm in Big Horn County, WY, to
its rightful owners, has also gained the Administration's full support.
The family of Fred Steffens lost ownership of the property where they
lived and prospered for almost 70 years, as a result of a
misrepresentation by the original property owners. Mr. Steffens'
relatives have explored every avenue to regain the title to their
property, and are left with no other option than to seek congressional
assistance. I stand before you today, on behalf of my constituents, to
request help in providing a timely solution to this problem. It is my
hope that in doing so, this wrong can be righted.
Upon the death of Fred Steffens on January 20, 1995, his sister Marie
Wambeke was appointed personal representative of the 80-acre Steffens
Estate. In February 1996, Ms. Wambeke learned from the Bureau of Land
Management (BLM) that she did not have a clear title to her brother's
property, and she submitted a Color-of-Title application. Shortly
thereafter, Ms. Wambeke was informed that her brother's property was
never patented, so her application was rejected.
The injustice of this situation is that when Mr. Steffens purchased
this property in 1928, he did receive a Warranty Deed with Release of
Homestead from the former owners. Unfortunately, these individuals did
not have a reclamation entry to assign to Mr. Steffens. In fact, 2
years before selling the property, the original owners had been
informed that the land they occupied was withdrawn by the Bureau of
Reclamation for the Shoshone Reclamation Project. At the same time,
they were notified that they had never truly owned the property.
Unethically, this did not stop them from selling the land to Mr.
Steffens in 1928. In good faith Mr. Steffens purchased the property,
paid taxes on the property from the time of purchase, and is on record
at the Big Horn County Assessor's office as owner of this property. Due
to the dishonesty of others, his family now faces the sobering reality
of losing this land unless a title transfer can be effected
legislatively.
Mr. President, the legislation I am introducing today would transfer
the land from Fred Steffens' Estate to his sister Marie. This property
has been in their family since 1928. Through no fault of their own,
these folks are being forced to relinquish rights not only to their
land, but to a part of their heritage and a legacy to their future
generations. I hope we can expedite this matter by turning this land
over the Marie Wambeke's ownership.
Mr. President, I ask unanimous consent that a copy of the legislation
be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 449
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. TRANSFER OF STEFFENS FAMILY PROPERTY.
(a) Conveyance.--Subject to subsection (b) and valid
existing rights, the Secretary of the Interior shall issue,
without consideration, a quitclaim deed to Marie Wambeke of
Big Horn County, Wyoming, the personal representative of the
estate of Fred Steffens, to the land described in subsection
(c).
(b) Reservation of Minerals.--All minerals underlying the
land described in subsection (c) are reserved to the United
States.
(c) Land Description.--The land described in this
subsection is the parcel comprising approximately 80 acres
and known as ``Farm Unit C'' in the E\1/2\NW\1/4\ of Section
27 in Township 57 North, Range 97 West, 6th Principal
Meridian, Wyoming.
(d) Revocation of Withdrawal.--The withdrawal for the
Shoshone Reclamation Project made by the Bureau of
Reclamation under Secretarial Order dated October 21, 1913,
is revoked with respect to the land described in subsection
(c).
______
By Mr. HATCH:
S. 451. A bill for the relief of Saeed Rezai; to the Committee on the
Judiciary.
[[Page S1927]]
private relief bill
Mr. HATCH. Mr. President, I rise today to introduce private relief
legislation on behalf of my constituents, Mr. Saeed Rezai, and his
wife, Mrs. Julie Rezai.
As my colleagues are aware, those immigration cases that warrant
private legislation are extremely rare, but are warranted in some
cases. I am introducing a bill for the relief of Saeed Rezai. I had
hoped that this case would not require congressional intervention.
Unfortunately, it is clear that private legislation is the only means
remaining to ensure that the equities of Mr. and Mrs. Rezai's case are
heard and that a number of unresolved questions are answered without
imposing a terrible hardship on Mr. and Mrs. Rezai and on their
marriage.
I wish to take a moment, Mr. President, to provide something by way
of background to this somewhat complicated case and to explain the
urgency of this legislation. Mr. Rezai first came to the United States
in 1986. On June 15, 1991, he married his current wife, Julie, who is a
U.S. citizen. Shortly thereafter, she filed an immigrant visa petition
on his behalf. Approval of this petition has been blocked, however, by
the application of 204(c) of the Immigration and Nationality Act.
Section 204(c) precludes the approval of a visa petition for anyone who
entered, or conspired to enter, into a fraudulent marriage. The
Immigration and Nationalization Service [INS] applied this provision in
Mr. Rezai's case because his previous marriage ended in divorce before
his 2-year period of conditional residence had expired. In immigration
proceedings following the divorce, the judge heard testimony from
witness on behalf of Mr. Rezai and his former wife. After considering
that testimony, he found there was insufficient evidence to warrant
lifting the conditions on Mr. Rezai's permanent residency and, in the
absence of a qualifying marriage, granted Mr. Rezai voluntary departure
from the United States. The judge was very careful to mention, however,
that there was no proof of false testimony by Mr. Rezai, and he granted
voluntary departure rather than ordering deportation because, in his
words, Mr. Rezai `may be eligible for a visa in the future.'
Despite these comments by the immigration judge, who clearly did not
anticipate the future application of the 204(c) exclusion to Mr.
Rezai's case, the INS has refused to approve Mrs. Rezai's petition for
permanent residence on behalf of her husband based on that very
exclusion. In the meantime, Mr. Rezai appealed the initial termination
of his lawful permanent resident status in 1990. In August 1995, the
10th Circuit Court of Appeals denied this appeal and reinstated the
voluntary departure order. Under current law, there is no provision to
stay Mr. Rezai's deportation pending the BIA's consideration of Mrs.
Rezai's current immigrant visa petition.
Mr. President, there is no question that Mr. Rezai deportation will
create extraordinary hardship for both Mr. and Mrs. Rezai. Throughout
all the proceedings of the past 6 years, not a single person that I
know of--including the INS--has questioned the validity of Mr. and Mrs.
Rezai's marriage. In fact, many that I have heard from have
emphatically told me that Mr. and Mrs. Rezai's marriage is as strong as
any they have seen. Given the prevailing political and cultural climate
in Iran, I would not expect that Mrs. Rezia will choose to make her
home there. Thus, Mrs. Rezai's deportation will result in either the
breakup of a legitimate family or the forced removal of a U.S. citizen
and her husband to a third country foreign to both of them.
It should also be noted that Mr. Rezai has been present in the United
States for more than a decade. During this time he has assimilated to
America culture and has become a contributing member of his community.
He has been placed in a responsible position of employment as the
security field supervisor at Westiminster College where he has gained
the respect and admiration of both his peers and his supervisors. In
fact, I received a letter from the interim president of Westminister
College, signed by close to 150 of Mr. Rezai's associates, attesting to
his many contributions to the college and the community. This is just
one of the many, many letters and phone calls I have received from
members of our community. Mr. Rezai's forced departure in light of
these considerations would both unduly limit his own opportunities and
deprive the community of his continued contributions.
______
By Mr. HATCH:
S. 452. A bill for the relief of Belinda McGregor; to the Committee
on the Judiciary.
private relief bill
Mr. HATCH. Mr. President, I am today introducing a private relief
bill on behalf of Belinda McGregor, the beloved sister of one of my
constituents, Rosalinda Burton.
Mistakes are made every day, Mr. President, and when innocent people
suffer severe consequences as a result of these mistakes, something
ought to be done to remedy the situation.
In the particular case of Ms. Belinda McGregor, the federal
bureaucracy made a mistake--a mistake which cost Ms. McGregor dearly
and it is now time to correct this mistake. Unfortunately, the only way
to provide relief is through Congressional action.
Belinda McGregor, a citizen of the United Kingdom, filed an
application for the 1995 Diversity Visa program. Her husband, a citizen
of Ireland, filed a separate application at the same time. Ms.
McGregor's application was among those selected to receive a diversity
visa. When the handling clerk at the National Visa Center received the
application, however, the clerk erroneously replaced Ms. McGregor's
name in the computer with that of her husband.
As a result, Ms. McGregor was never informed that she had been
selected and never provided the requisite information. The mistake with
respect to Ms. McGregor's husband was caught, but not in time for Ms.
McGregor to meet the September, 1995 deadline. Her visa number was
given to another applicant.
In short, Ms. McGregor was unfairly denied the 1995 diversity visa
that was rightfully hers due to a series of errors by the National Visa
Center. As far as I know, these facts are not disputed.
Unfortunately, the Center does not have the legal authority to
rectify its own mistake by simply granting Ms. McGregor a visa out of a
subsequent year's allotment. Thus, a private relief bill is needed in
order to see that Ms. McGregor gets the visa to which she was clearly
entitled to in 1995.
Mr. President, I have received a very compelling letter from
Rosalinda Burton of Cedar Hills, UT which I am placing in the Record.
Ms. Burton is Ms. McGregor's sister and she described to me the strong
relationship that she and her sister have and the care that her sister
provided when Ms. Burton was seriously injured in a 1993 car accident.
I hope that the Senate can move forward on this bill expeditiously.
Ms. McGregor was the victim of a simple and admitted bureaucratic
snafu. The Senate ought to move swiftly to correct this injustice.
Mr. President, I am also including in the Record additional relevant
correspondence which documents the background of this case.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Cedar Hills, UT,
September 23, 1997.
Hon. Orrin Hatch,
U.S. Senate.
Dear Senator Hatch: This is one of the many endless
attempts to seek fairness and justification regarding a very
unique and still unresolved case pertaining to the future of
my beloved sister, Belinda McGregor.
This is a plea on my part for you to please allow me the
opportunity to humbly express in this letter, my deepest
concern which is also personally shared by Senator Edward
Kennedy.
It would be a challenge to explain what once started as
``the dream come true'' for my sister, Belinda, on to paper,
but I hope you will grant me a moment of your time to read
this attempt to seek your help, as my Senator.
Towards the end of 1993 I was the victim of a very serious
car accident and I could not have coped without the support
of my church and the tremendous help of my beloved sister,
Belinda, after which she expressed a strong desire to come
and live in Utah, to be close to me, her only sister. In
1994, therefore, a dream came true when, after applying for
the DVI Program, which is held yearly, my sister's husband
David, was informed by the National Visa Center, that he was
selected in the 1995 Diversity Visa Lottery
[[Page S1928]]
Program. Finally, my sister had a chance to live near her
family and friends, Belinda, who is Austrian/British, then
working for the ``United Nations Drug Control Programme''
(UNDCP) at the UN Headquarters in Vienna, Austria, was so
thrilled to be informed of the good news. Therefore, all the
necessary documents were provided to the National Visa Center
in New Hampshire.
* * * * *
______
By Mr. SARBANES (for himself and Ms. Mikulski):
S. 454. A bill to amend title 28, United States Code, to authorize
the appointment of additional bankruptcy judges for the judicial
district of Maryland, to the Committee on the Judiciary.
BANKRUPTCY JUDGESHIPS FOR THE DISTRICT OF MARYLAND
Mr. SARBANES. Mr. President, I rise today on behalf of myself
and my colleague from Maryland, Senator Mikulski, to introduce
legislation that is absolutely critical to the administration of
justice and the economy in our State of Maryland. This legislation
provides for four additional bankruptcy judges for the federal judicial
District of Maryland.
This bill represents only the most recent of our efforts to
strengthen Maryland's federal bankruptcy court. Early in the 105th
Congress, we introduced legislation adding two additional bankruptcy
judges for the District of Maryland, in line with the then-pending
request of the Judicial Conference. The House of Representatives
followed suit in summer 1997, passing legislation that authorized these
two judges, in addition to other new bankruptcy judgeships throughout
the country. Last year, the Senate overwhelmingly passed bankruptcy
reform legislation that, among other things, authorized these two
judgeships, though under the Senate bill the judges were of temporary,
rather than permanent, status. This legislation ultimately was not
enacted into law, however, and with such inaction the problem facing
Maryland's sitting bankruptcy judges has only grown. Maryland remains
without the additional judgeships it so desperately needs to make our
bankruptcy system work.
Our State's need for additional bankruptcy judges has long since
passed the critical stage. Since November 1993, when Maryland last
received an additional bankruptcy judge, the number of bankruptcy
filings in the State has more than doubled. While the entire nation has
witnessed a surge in bankruptcy filings over the past several years,
the increase in Maryland has dwarfed the national average increase.
Bankruptcy filings in Maryland in the second quarter of 1998 grew at
eight times the national rate of increase for that period; for the 12-
month period ending June 30, 1998, the rate of increase in Maryland was
the tenth greatest of the 90 federal judicial districts in the Nation.
The District of Maryland ranks first among federal judicial districts
in filings per judge. As noted earlier, each House of Congress
authorized two additional bankruptcy judges for Maryland during the
105th Congress. Simply put, however, the problem has outpaced this
solution.
The need for the four additional judgeships sought in this
legislation becomes even more evident when one considers it in the
context of the case-weighting system adopted by the Judicial Conference
in 1991 to assess requests for additional bankruptcy judges. Under this
system, different types of bankruptcy cases are assigned different
degrees of difficulty and overall weighted case-hour goals are
established for the judges.
The Judicial Conference begins to consider requests for additional
judges when a district's per-judge weighted caseload reaches 1500
hours. The average United States Bankruptcy Judge had a weighted case-
hour load of 1429 hours per year for the 12-month period ending June
30, 1998. For that same period, Maryland's bankruptcy judges averaged a
weighted case-hour load of 3020 hours--an astounding 211 percent of the
national average. Not only do the Maryland figures dwarf the national
average; they also dwarf the prior Maryland figures which led to
legislation passed by each Houses of Congress authorizing additional
judgeships. Indeed, Maryland's overall weighted case load for the 12-
month period ending June 30, 1998, represented a 25% increase over its
load for the prior 12-month period alone.
I ask my colleagues to consider these telling statistics:
If Maryland were to receive two additional judgeships tomorrow, its
per-judge weighted caseload would still be 2013 hours--41 percent
greater than the national average last year, and 34 percent greater
than the 1500-hour benchmark used by the Judicial Conference to
evaluate requests for additional judgeships.
If Maryland were to receive three additional judgeships tomorrow, its
per-judge weighted caseload would still be 1725 hours--21 percent more
than the national average, and 15 percent greater than the Judicial
Conference benchmark.
Only if Maryland were to receive four additional judgeships, as
requested in this bill, would the per-judge caseload in Maryland
approximate the national average. And even then each Maryland judge
would have a caseload of 1510 case-weighted hours--still above the
1429-hour national average, and still above the 1500-hour Judicial
Conference benchmark.
The additional judgeships sought in this bill are essential not only
for effective judicial administration, but also for Maryland's economy.
Bankruptcy laws foster orderly, constructive relationships between
debtors and creditors during times of economic difficulty. Their
effective and expeditious implementation results in businesses being
reorganized, jobs (provided by creditors and debtors) preserved, and
debts managed fairly. Overworked bankruptcy courts have a destabilizing
effect on this system, and the inevitable delays occasioned by the lack
of judges harm creditors and debtors, imperiling Maryland's businesses
and the people they employ.
It is expected that bankruptcy reform legislation will be one of the
first items on the Senate's agenda now that it has resumed legislative
business. Adding judgeships in Maryland's and other bankruptcy courts
in need of relief is an essential component of any such reform, given
that the legislation we are contemplating will not only not ease the
burdens on these courts, but in fact will increase these burdens by
imposing new responsibilities on our nation's bankruptcy judges. And
even if comprehensive bankruptcy reform fails or is delayed, the
current state of affairs facing Maryland's bankruptcy court requires
immediate action in the form of adding judges to that court.
In closing let me once again commend the efforts of Maryland's four
sitting bankruptcy judges--Chief Judge Paul Mannes and Judges Duncan
Keir, James Schneider, and Steve Derby. Their dedication to the
administration of justice is especially impressive given the
extraordinary burdens placed on them--burdens which the Senate ought to
ease at the earliest possible instance.
______
By Mr. DURBIN (for himself and Mrs. Hutchison):
S. 455. A bill to amend the Immigration and Nationality Act with
Respect to the requirements for the admission of nonimmigrant nurses
who will practice in health professional shortage areas; to the
Committee on the Judiciary.
nursing relief for disadvantaged areas act of 1999
Mr. DURBIN. Mr. President, I rise today with by colleague, Senator
Kay Bailey Hutchison to introduce the Nursing Relief for Disadvantaged
Areas Act of 1999. Today, some of our nation's poorest rural and inner-
city communities face a crisis--they may soon have inadequate or no
hospital healthcare because nurses are unwilling to work in these
neighborhoods. The Nursing Relief for Disadvantaged Areas Act of 1999
will ensure that hospitals located in these desperately underserved
areas can continue to provide adequate healthcare to our most needy
communities.
Hospitals located in underprivileged areas often experience severe
difficulty in attracting nurses. These hospitals operate in the middle
of some of the harshest poverty and crime in our country. The employees
of these hospitals often treat the worst and most troubling cases.
[[Page S1929]]
The condition of the surrounding area imperils the ability of these
hospitals to recruit and maintain an adequate nursing staff. These
circumstances have pushed some hospitals into a financial crisis,
threatening the quality of healthcare to those most in need.
For the past eight years, this problem has been addressed by the
H(1)(a) visa program which has allowed these hospitals to hire
nonimmigrant nurses. Unfortunately, the H(1)(a) visa program sunset in
1997, and so once again such hospitals are in crisis. By replacing the
H(1)(a) visa, the Nursing Relief Act will alleviate this crisis.
The true beneficiary of this program will not be the hospitals, but
the underprivileged communities which rely on the hospitals' services.
Let me tell you a story about the role that this program can play in
the health of a community. The story is about the St. Bernard Hospital
on the South Side of Chicago.
St. Bernard Hospital is the only remaining hospital in the Englewood
community, which serves over 100,000 people. It is located in one of
the poorest and most crime ridden neighborhoods in the country. Over
the years, St. Bernard has become indispensable to its community. Even
though it has not been designated as a trauma center, St. Bernard
receives the second highest number of ambulance runs from the Chicago
Fire Department. St. Bernard also provides free vision exams and free
screening for blood pressure, cholesterol, diabetes, and sickle cell
anemia. In addition, schoolchildren receive free physicals and
inoculations.
St. Bernard Hospital also offers a great number of outreach and
community services. A food pantry is stocked, and clothes are made
available for patients in need. St. Bernard is sponsoring a project for
affordable housing in the community. The hospital has opened four
family clinics in Englewood to provide safe and easy access to
healthcare for community residents. Physicians from St. Bernard visit
senior housing facilities on a regular basis, and the hospital has been
recognized by Catholic Charities for its work with senior housing and
healthcare.
In addition, St. Bernard is by far the largest employer in the
Englewood area. When the hospital faces a crisis, many jobs in the
community are placed at risk.
Even though the health of Englewood relies on this hospital, St.
Bernard almost had to close its doors in 1992. After aggressive
recruitment efforts, the hospital was unable to attract enough
healthcare professionals to maintain its services. The hospital was
especially in need of registered nurses.
The problem had been solved in part by hiring foreign nurses through
the H(1)(a) visa program. The hospital had gone through great lengths
to hire domestic nurses, and was using the H(1)(a) program only as a
last alternative to closing its doors.
In the first half of 1997, for example, the hospital placed want ads
in the Chicago Tribune and received approximately 200 responses.
However, almost 75 percent of the responses declined to interview when
they learned where the hospital was located. St. Bernard has also tried
to hire nurses through nurse registries. However, the rates of the
registries would cost the hospital more than $2 million a year, an
unsustainable expense for an already financially burdened hospital.
Clearly, the H(1)(a) visa program had been offering St. Bernard a way
to maintain its service to the community when no other option was
available. In 1997, even that option was eliminated.
The Nursing Relief for Disadvantaged Areas Act will ensure that
hospitals like St. Bernard can keep their doors open to the public and
continue to support their community. In addition, however, the bill has
been designed to protect the jobs of domestic nurses and to ensure that
hospitals use the visa program faithfully and only as a last resort
solution.
This bill is more narrowly targeted than the old H(1)(a) visa
program. The measure ensures that nurses can only be brought into the
United States by hospitals that have no alternative. In short, we have
made every effort to ensure that no American nurse will lose his or her
job as a result of this bill. While we want to assure that these
hospitals have an adequate nursing staff, we must also guarantee that
foreign nurses are not taking away jobs from domestic nurses.
Let me tell you what this bill does:
It establishes a nonimmigrant classification for nurses in health
professional shortage areas. The program provides non-immigrant visas
for 500 nurses each year to work in hospitals where there are severe
nursing shortages.
The Nursing Relief Act protects the jobs of domestic nurses in three
separate ways:
First, the measure requires that a hospital must certify that it has
gone through great lengths to hire and retain domestic nurses before it
can use this visa program to hire nonimmigrant nurses.
Second, the measure requires that nonimmigrant nurses must be paid
the same wages and work under the same conditions as domestic nurses.
In addition, nonimmigrant nurses cannot be hired in order to disrupt
the activities of labor unions. These provisions ensure that hospitals
cannot undercut the working conditions of domestic nurses.
And third, the measure limits the number of nonimmigrant nurses who
may enter the United States in any given year. The Act provides spaces
for only 500 nonimmigrants each year, and it caps the number of nurses
who may enter each state.
In addition, the Nursing Relief Act provides for serious penalties
for abuse, thus ensuring that hospitals will not misuse this new visa
category. Moreover, the bill guarantees that hospitals use this program
faithfully by narrowly defining the hospitals which are eligible. In
order to hire nonimmigrant nurses through this visa program, hospitals
must fulfill four strict requirements.
First, the hospital must be located in an area which has been defined
by the Department of Health and Human Services as having a shortage of
health care professionals.
Second, the hospital must have at least 190 acute care beds.
Third, the hospital must have at least 35 percent of its in-patient
days reimbursed by Medicare.
Fourth, the hospital must have at least 28 percent of its in-patient
days reimbursed by Medicaid.
All of these measures ensure that the Nursing Relief Act will serve
as a relief to our communities rather than a loophole in the
immigration laws.
Thank you, Mr. President, for the opportunity to introduce this
important and very timely initiative. I hope that my colleagues will
join me and support the Nursing Relief for Disadvantaged Areas Act of
1999 so that every hospital can maintain an adequate nursing staff
regardless of its location.
Mr. President, I ask unanimous consent that a copy of the legislation
be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 455
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 ``Nursing Relief for
Disadvantaged Areas Act of 1999''.
SEC. 2. REQUIREMENTS FOR ADMISSION OF NONIMMIGRANT NURSES IN
HEALTH PROFESSIONAL SHORTAGE AREAS DURING 4-
YEAR PERIOD.
(a) Establishment of a New Nonimmigrant Classification for
Nonimmigrant Nurses in Health Professional Shortage Areas.--
Section 101(a)(15)(H)(i) of the Immigration and Nationality
Act (8 U.S.C. 1101(a)(15)(H)(i)) is amended by striking ``;
or'' at the end and inserting the following: ``, or (c) who
is coming temporarily to the United States to perform
services as a registered nurse, who meets the qualifications
described in section 212(m)(1), and with respect to whom the
Secretary of Labor determines and certifies to the Attorney
General that an unexpired attestation is on file and in
effect under section 212(m)(2) for the facility (as defined
in section 212(m)(6)) for which the alien will perform the
services; or''.
(b) Requirements.--Section 212(m) of the Immigration and
Nationality Act (8 U.S.C. 1182(m)) is amended to read as
follows:
``(m)(1) The qualifications referred to in section
101(a)(15)(H)(i)(c), with respect to an alien who is coming
to the United States to perform nursing services for a
facility, are that the alien--
``(A) has obtained a full and unrestricted license to
practice professional nursing in the country where the alien
obtained nursing education or has received nursing education
in the United States;
``(B) has passed an appropriate examination (recognized in
regulations promulgated
[[Page S1930]]
in consultation with the Secretary of Health and Human
Services) or has a full and unrestricted license under State
law to practice professional nursing in the State of intended
employment; and
``(C) is fully qualified and eligible under the laws
(including such temporary or interim licensing requirements
which authorize the nurse to be employed) governing the place
of intended employment to engage in the practice of
professional nursing as a registered nurse immediately upon
admission to the United States and is authorized under such
laws to be employed by the facility.
``(2)(A) The attestation referred to in section
101(a)(15)(H)(i)(c), with respect to a facility for which an
alien will perform services, is an attestation as to the
following:
``(i) The facility meets all the requirements of paragraph
(6).
``(ii) The employment of the alien will not adversely
affect the wages and working conditions of registered nurses
similarly employed.
``(iii) The alien employed by the facility will be paid the
wage rate for registered nurses similarly employed by the
facility.
``(iv) The facility has taken and is taking timely and
significant steps designed to recruit and retain sufficient
registered nurses who are United States citizens or
immigrants who are authorized to perform nursing services, in
order to remove as quickly as reasonably possible the
dependence of the facility on nonimmigrant registered nurses.
``(v) There is not a strike or lockout in the course of a
labor dispute, the facility did not lay off and will not lay
off a registered nurse employed by the facility within the
period beginning 90 days before and ending 90 days after the
date of filing of any visa petition, and the employment of
such an alien is not intended or designed to influence an
election for a bargaining representative for registered
nurses of the facility.
``(vi) At the time of the filing of the petition for
registered nurses under section 101(a)(15)(H)(i)(c), notice
of the filing has been provided by the facility to the
bargaining representative of the registered nurses at the
facility or, where there is no such bargaining
representative, notice of the filing has been provided to the
registered nurses employed at the facility through posting in
conspicuous locations.
``(vii) The facility will not, at any time, employ a number
of aliens issued visas or otherwise provided nonimmigrant
status under section 101(a)(15)(H)(i)(c) that exceeds 33
percent of the total number of registered nurses employed by
the facility.
``(viii) The facility will not, with respect to any alien
issued a visa or otherwise provided nonimmigrant status under
section 101(a)(15)(H)(i)(c)--
``(I) authorize the alien to perform nursing services at
any worksite other than a worksite controlled by the
facility; or
``(II) transfer the place of employment of the alien from
one worksite to another.
Nothing in clause (iv) shall be construed as requiring a
facility to have taken significant steps described in such
clause before the date of the enactment of the Nursing Relief
for Disadvantaged Areas Act of 1999. A copy of the
attestation shall be provided, within 30 days of the date of
filing, to registered nurses employed at the facility on the
date of filing.
``(B) For purposes of subparagraph (A)(iv), each of the
following shall be considered a significant step reasonably
designed to recruit and retain registered nurses:
``(i) Operating a training program for registered nurses at
the facility or financing (or providing participation in) a
training program for registered nurses elsewhere.
``(ii) Providing career development programs and other
methods of facilitating health care workers to become
registered nurses.
``(iii) Paying registered nurses wages at a rate higher
than currently being paid to registered nurses similarly
employed in the geographic area.
``(iv) Providing reasonable opportunities for meaningful
salary advancement by registered nurses.
The steps described in this subparagraph shall not be
considered to be an exclusive list of the significant steps
that may be taken to meet the conditions of subparagraph
(A)(iv). Nothing in this subparagraph shall require a
facility to take more than one step if the facility can
demonstrate that taking a second step is not reasonable.
``(C) Subject to subparagraph (E), an attestation under
subparagraph (A)--
``(i) shall expire on the date that is the later of--
``(I) the end of the one-year period beginning on the date
of its filing with the Secretary of Labor; or
``(II) the end of the period of admission under section
101(a)(15)(H)(i)(c) of the last alien with respect to whose
admission it was applied (in accordance with clause (ii));
and
``(ii) shall apply to petitions filed during the one-year
period beginning on the date of its filing with the Secretary
of Labor if the facility states in each such petition that it
continues to comply with the conditions in the attestation.
``(D) A facility may meet the requirements under this
paragraph with respect to more than one registered nurse in a
single petition.
``(E)(i) The Secretary of Labor shall compile and make
available for public examination in a timely manner in
Washington, D.C., a list identifying facilities which have
filed petitions for nonimmigrants under section
101(a)(15)(H)(i)(c) and, for each such facility, a copy of
the facility's attestation under subparagraph (A) (and
accompanying documentation) and each such petition filed by
the facility.
``(ii) The Secretary of Labor shall establish a process,
including reasonable time limits, for the receipt,
investigation, and disposition of complaints respecting a
facility's failure to meet conditions attested to or a
facility's misrepresentation of a material fact in an
attestation. Complaints may be filed by any aggrieved person
or organization (including bargaining representatives,
associations deemed appropriate by the Secretary, and other
aggrieved parties as determined under regulations of the
Secretary). The Secretary shall conduct an investigation
under this clause if there is reasonable cause to believe
that a facility fails to meet conditions attested to. Subject
to the time limits established under this clause, this
subparagraph shall apply regardless of whether an attestation
is expired or unexpired at the time a complaint is filed.
``(iii) Under such process, the Secretary shall provide,
within 180 days after the date such a complaint is filed, for
a determination as to whether or not a basis exists to make a
finding described in clause (iv). If the Secretary determines
that such a basis exists, the Secretary shall provide for
notice of such determination to the interested parties and an
opportunity for a hearing on the complaint within 60 days of
the date of the determination.
``(iv) If the Secretary of Labor finds, after notice and
opportunity for a hearing, that a facility (for which an
attestation is made) has failed to meet a condition attested
to or that there was a misrepresentation of material fact in
the attestation, the Secretary shall notify the Attorney
General of such finding and may, in addition, impose such
other administrative remedies (including civil monetary
penalties in an amount not to exceed $1,000 per nurse per
violation, with the total penalty not to exceed $10,000 per
violation) as the Secretary determines to be appropriate.
Upon receipt of such notice, the Attorney General shall not
approve petitions filed with respect to a facility during a
period of at least one year for nurses to be employed by the
facility.
``(v) In addition to the sanctions provided for under
clause (iv), if the Secretary of Labor finds, after notice
and an opportunity for a hearing, that a facility has
violated the condition attested to under subparagraph
(A)(iii) (relating to payment of registered nurses at the
prevailing wage rate), the Secretary shall order the facility
to provide for payment of such amounts of back pay as may be
required to comply with such condition.
``(F)(i) The Secretary of Labor shall impose on a facility
filing an attestation under subparagraph (A) a filing fee, in
an amount prescribed by the Secretary based on the costs of
carrying out the Secretary's duties under this subsection,
but not exceeding $250.
``(ii) Fees collected under this subparagraph shall be
deposited in a fund established for this purpose in the
Treasury of the United States.
``(iii) The collected fees in the fund shall be available
to the Secretary of Labor, to the extent and in such amounts
as may be provided in appropriations Acts, to cover the costs
described in clause (i), in addition to any other funds that
are available to the Secretary to cover such costs.
``(3) The period of admission of an alien under section
101(a)(15)(H)(i)(c) shall be 3 years.
``(4) The total number of nonimmigrant visas issued
pursuant to petitions granted under section
101(a)(15)(H)(i)(c) in each fiscal year shall not exceed 500.
The number of such visas issued for employment in each State
in each fiscal year shall not exceed the following:
``(A) For States with populations of less than 9,000,000,
based upon the 1990 decennial census of population, 25 visas.
``(B) For States with populations of 9,000,000 or more,
based upon the 1990 decennial census of population, 50 visas.
``(C) If the total number of visas available under this
paragraph for a fiscal year quarter exceeds the number of
qualified nonimmigrants who may be issued such visas during
those quarters, the visas made available under this paragraph
shall be issued without regard to the numerical limitation
under subparagraph (A) or (B) of this paragraph during the
last fiscal year quarter.
``(5) A facility that has filed a petition under section
101(a)(15)(H)(i)(c) to employ a nonimmigrant to perform
nursing services for the facility--
``(A) shall provide the nonimmigrant a wage rate and
working conditions commensurate with those of nurses
similarly employed by the facility;
``(B) shall require the nonimmigrant to work hours
commensurate with those of nurses similarly employed by the
facility; and
``(C) shall not interfere with the right of the
nonimmigrant to join or organize a union.
``(6) For purposes of this subsection and section
101(a)(15)(H)(i)(c), the term `facility' means a subsection
(d) hospital (as defined in section 1886(d)(1)(B) of the
Social Security Act (42 U.S.C. 1395ww(d)(1)(B))) that meets
the following requirements:
``(A) As of March 31, 1997, the hospital was located in a
health professional shortage
[[Page S1931]]
area (as defined in section 332 of the Public Health Service
Act (42 U.S.C. 254e)).
``(B) Based on its settled cost report filed under title
XVIII of the Social Security Act for its cost reporting
period beginning during fiscal year 1994--
``(i) the hospital has not less than 190 licensed acute
care beds;
``(ii) the number of the hospital's inpatient days for such
period which were made up of patients who (for such days)
were entitled to benefits under part A of such title is not
less than 35 percent of the total number of such hospital's
acute care inpatient days for such period; and
``(iii) the number of the hospital's inpatient days for
such period which were made up of patients who (for such
days) were eligible for medical assistance under a State plan
approved under title XIX of the Social Security Act, is not
less than 28 percent of the total number of such hospital's
acute care inpatient days for such period.
``(7) For purposes of paragraph (2)(A)(v), the term `lay
off', with respect to a worker--
``(A) means to cause the worker's loss of employment, other
than through a discharge for inadequate performance,
violation of workplace rules, cause, voluntary departure,
voluntary retirement, or the expiration of a grant or
contract; but
``(B) does not include any situation in which the worker is
offered, as an alternative to such loss of employment, a
similar employment opportunity with the same employer at
equivalent or higher compensation and benefits than the
position from which the employee was discharged, regardless
of whether or not the employee accepts the offer.
Nothing in this paragraph is intended to limit an employee's
or an employer's rights under a collective bargaining
agreement or other employment contract.''.
(c) Repealer.--Clause (i) of section 101(a)(15)(H) of the
Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(H)(i))
is amended by striking subclause (a).
(d) Implementation.--Not later than 90 days after the date
of enactment of this Act, the Secretary of Labor (in
consultation, to the extent required, with the Secretary of
Health and Human Services) and the Attorney General shall
promulgate final or interim final regulations to carry out
section 212(m) of the Immigration and Nationality Act (as
amended by subsection (b)).
(e) Limiting Application of Nonimmigrant Changes to 4-Year
Period.--The amendments made by this section shall apply to
classification petitions filed for nonimmigrant status only
during the 4-year period beginning on the date that interim
or final regulations are first promulgated under subsection
(d).
SEC. 3. RECOMMENDATIONS FOR ALTERNATIVE REMEDY FOR NURSING
SHORTAGE.
Not later than the last day of the 4-year period described
in section 2(e), the Secretary of Health and Human Services
and the Secretary of Labor shall jointly submit to the
Congress recommendations (including legislative
specifications) with respect to the following:
(1) A program to eliminate the dependence of facilities
described in section 212(m)(6) of the Immigration and
Nationality Act (as amended by section 2(b)) on nonimmigrant
registered nurses by providing for a permanent solution to
the shortage of registered nurses who are United States
citizens or aliens lawfully admitted for permanent residence.
(2) A method of enforcing the requirements imposed on
facilities under sections 101(a)(15)(H)(i)(c) and 212(m) of
the Immigration and Nationality Act (as amended by section 2)
that would be more effective than the process described in
section 212(m)(2)(E) of such Act (as so amended).
SEC. 4. CERTIFICATION FOR CERTAIN ALIEN NURSES.
(a) In General.--
(1) Section 212 of the Immigration and Nationality Act (8
U.S.C. 1182) is amended by adding at the end the following
new subsection:
``(r) Subsection (a)(5)(C) shall not apply to an alien who
seeks to enter the United States for the purpose of
performing labor as a nurse who presents to the consular
officer (or in the case of an adjustment of status, the
Attorney General) a certified statement from the Commission
on Graduates of Foreign Nursing Schools (or an equivalent
independent credentialing organization approved for the
certification of nurses under subsection (a)(5)(C) by the
Attorney General in consultation with the Secretary of Health
and Human Services) that--
``(1) the alien has a valid and unrestricted license as a
nurse in a State where the alien intends to be employed and
such State verifies that the foreign licenses of alien nurses
are authentic and unencumbered;
``(2) the alien has passed the National Council Licensure
Examination (NCLEX);
``(3) the alien is a graduate of a nursing program--
``(A) in which the language of instruction was English;
``(B) located in a country--
``(i) designated by such commission not later than 30 days
after the date of the enactment of the Nursing Relief for
Disadvantaged Areas Act of 1999, based on such commission's
assessment that the quality of nursing education in that
country, and the English language proficiency of those who
complete such programs in that country, justify the country's
designation; or
``(ii) designated on the basis of such an assessment by
unanimous agreement of such commission and any equivalent
credentialing organizations which have been approved under
subsection (a)(5)(C) for the certification of nurses under
this subsection; and
``(C)(i) which was in operation on or before the date of
the enactment of the Nursing Relief for Disadvantaged Areas
Act of 1999; or
``(ii) has been approved by unanimous agreement of such
commission and any equivalent credentialing organizations
which have been approved under subsection (a)(5)(C) for the
certification of nurses under this subsection.''.
(2) Section 212(a)(5)(C) of the Immigration and Nationality
Act (8 U.S.C. 1182(a)(5)(C)) is amended by striking ``Any
alien who seeks'' and inserting ``Subject to subsection (r),
any alien who seeks''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect on the date of the enactment of this Act,
without regard to whether or not final regulations to carry
out such amendments have been promulgated by such date.
(c) Issuance of Certified Statements.--The Commission on
Graduates of Foreign Nursing Schools, or any approved
equivalent independent credentialing organization, shall
issue certified statements pursuant to the amendment under
subsection (a) not more than 35 days after the receipt of a
complete application for such a statement.
______
By Mr. CONRAD (for himself, Mrs. Feinstein, Mr. Daschle, Mr.
Johnson, Mr. Reid, Mr. Sarbanes, Mrs. Boxer, Ms. Snowe, Mr.
Robb, Mrs. Murray, and Mr. Rockefeller):
S. 456. A bill to amend the Internal Revenue Code of 1986 to allow
employers a credit against income tax for information technology
training expenses paid or incurred by the employer, and for other
purposes; to the Committee on Finance.
information technology training act
Mr. CONRAD. Mr. President, throughout the 105th Congress, the
Administration and the Congress focused considerable attention on
information technology (IT) issues, particularly the difficulties that
many American companies are experiencing in recruiting skilled workers
to fill key positions in information technology.
The Department of Commerce, early in the 105th Congress, released a
study, ``America's New Deficit: The Shortage of Information Technology
Workers,'' alerting us to the severe shortage of information technology
workers. This report was supported by a study from the Information
Technology Association of America, ``Help Wanted 1998: A Call for
Collaborative Action For the New Millennium,'' which estimated that
there are more than 340,000 highly skilled positions in information
technology that are not filled. Moreover, the Department of Labor
projected that our economy will require more than 130,000 information
technology jobs in three fields--systems analysts, computer scientists
and engineers, and computer programmers--every year for the next 10
years.
Mr. President, the shortage of skilled high-tech workers is not
unique to any one region of the country--Silicon Valley, Dallas,
Atlanta, or Northern Virginia. It is a matter of urgent concern across
the country. The shortage affects every State, every sector of the
economy, and its impact was documented during a conference of more than
350 educators, State officials, and business community leaders that I
hosted last fall in Bismarck, North Dakota. The conference was
scheduled to examine the challenges and opportunities of information
technology in the 21st century.
Without question, the shortage of skilled IT workers is a major
concern for State officials and the North Dakota business community.
During the conference, many North Dakota business leaders from firms,
including Great Plains Software, Gateway, U.S. West, and North Central
Data Co-op, confirmed the difficulties they are having in recruiting
employees with qualified information technology skills. The business
community and educators, representing all levels of education,
emphasized the importance of expanding opportunities in information
technology training and education.
Last year, during the closing days of the 105th Congress, we took the
first step to respond to the concern over the shortage of skilled high-
tech workers by increasing the annual cap on H1-B visas for foreign
workers recruited to work in U.S. high-tech industries. As important as
this first step is, the increase in H1-B visas by itself will not
adequately respond to the shortage of
[[Page S1932]]
skilled workers in the U.S. Nor is it acceptable to authorize an
increase in the number of foreign workers coming to the U.S. to fill IT
vacancies without taking steps to ensure that American workers and
students have opportunities to train and qualify for these excellent
opportunities.
Mr. President, that is why, during consideration of the American
Competitiveness Act last year, I introduced legislation, S. 2089, to
allow employers an income tax credit for information technology
training expenses paid on behalf of employees or other individuals who
are entering information technology careers. I believe it is essential
that we provide every opportunity to American workers and individuals
to become aware of opportunities in information technology, and to
ensure that training and education is available at all levels. I regret
that we did not adopt this important initiative during the 105th
Congress.
Today, I am introducing this legislation to provide employers a tax
credit for information technology training. I am very pleased that
Senators Feinstein, Johnson, Daschle, Sarbanes, Boxer, Snowe, Murray,
Reid, and Robb are cosponsoring this important initiative. This
legislation is also endorsed by the Information Technology Association
of America, the Software and Information Industry Association, the
Computing Technology Industry Association, the Information Technology
Training Association, and the American Society For Training and
Development.
Under this legislation, the tax credit would be an amount equal to 20
percent of information technology training program expenses, not to
exceed $6,000 in a taxable year. The value of the credit would increase
by 5 percent if the IT training program is operated in an Empowerment
Zone, Enterprise Community, Rural Economic Area Partnership (REAP)
zone, in a school district in which at least 50 percent of the students
in the school district participate in the school lunch program, in an
area designated as a disaster zone by the President or Secretary of
Agriculture, or associated with a small business with no more than 200
employees.
Mr. President, last year we responded to the IT worker shortage by
increasing the opportunities for skilled high-tech workers from other
countries to come to the U.S. to work in the information technology
field. Now we have an obligation to make certain that the same exciting
opportunities in information technology are available to American
workers and other individuals interested in information technology
careers. I welcome additional cosponsors of this legislation, and I
strongly urge my colleagues to incorporate this important bill in the
tax legislation that we are expected to consider in the 106th Congress.
Mr. President, I ask unanimous consent that the text of the bill and
letters of support be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 456
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CREDIT FOR INFORMATION TECHNOLOGY TRAINING PROGRAM
EXPENSES.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business-related credits) is amended by adding at the end the
following:
``SEC. 45D. INFORMATION TECHNOLOGY TRAINING PROGRAM EXPENSES.
``(a) General Rule.--For purposes of section 38, in the
case of an employer, the information technology training
program credit determined under this section is an amount
equal to 20 percent of information technology training
program expenses paid or incurred by the taxpayer during the
taxable year.
``(b) Additional Credit Percentage for Certain Programs.--
The percentage under subsection (a) shall be increased by 5
percentage points for information technology training program
expenses paid or incurred--
``(1) by the taxpayer with respect to a program operated
in--
``(A) an empowerment zone or enterprise community
designated under part I of subchapter U,
``(B) a school district in which at least 50 percent of the
students attending schools in such district are eligible for
free or reduced-cost lunches under the school lunch program
established under the National School Lunch Act,
``(C) an area designated as a disaster area by the
Secretary of Agriculture or by the President under the
Disaster Relief and Emergency Assistance Act in the taxable
year or the 4 preceding taxable years,
``(D) a rural enterprise community designated under section
766 of the Agriculture, Rural Development, Food and Drug
Administration, and Related Agencies Appropriations Act,
1999, or
``(E) an area designated by the Secretary of Agriculture as
a Rural Economic Area Partnership Zone, or
``(2) by a small employer.
``(c) Limitation.--The amount of information technology
training program expenses with respect to an individual which
may be taken into account under subsection (a) for the
taxable year shall not exceed $6,000.
``(d) Information Technology Training Program Expenses.--
For purposes of this section--
``(1) In general.--The term `information technology
training program expenses' means expenses paid or incurred by
reason of the participation of the employer in any
information technology training program.
``(2) Information technology training program.--The term
`information technology training program' means a program--
``(A) for the training of computer programmers, systems
analysts, and computer scientists or engineers (as such
occupations are defined by the Bureau of Labor Statistics),
``(B) involving a partnership of--
``(i) employers, and
``(ii) State training programs, school districts,
university systems, or certified commercial information
technology training providers, and
``(C) at least 50 percent of the costs of which is paid or
incurred by the employers.
``(3) Certified commercial information technology training
provider.--The term `certified commercial information
technology training providers' means a private sector
provider of educational products and services utilized for
training in information technology which is certified with
respect to--
``(A) the curriculum that is used for the training, or
``(B) the technical knowledge of the instructors of such
provider,
by 1 or more software publishers or hardware manufacturers
the products of which are a subject of the training.
``(e) Small Employer.--For purposes of this section, the
term `small employer' means, with respect to any calendar
year, any employer if such employer employed 200 or fewer
employees on each business day in each of 20 or more calendar
weeks in such year or the preceding calendar year.
``(f) Denial of Double Benefit.--No deduction or credit
under any other provision of this chapter shall be allowed
with respect to information technology training program
expenses (determined without regard to the limitation under
subsection (c)).
``(g) Certain rules made applicable.--For purposes of this
section, rules similar to the rules of section 45A(e)(2) and
subsections (c), (d), and (e) of section 52 shall apply.''
(b) Credit To Be Part of General Business Credit.--Section
38(b) of the Internal Revenue Code of 1986 (relating to
current year business credit) is amended by striking ``plus''
at the end of paragraph (11), by striking the period at the
end of paragraph (12) and inserting ``, plus'', and by adding
at the end the following:
``(13) the information technology training program credit
determined under section 45D.''
(c) No Carrybacks.--Subsection (d) of section 39 of the
Internal Revenue Code of 1986 (relating to carryback and
carryforward of unused credits) is amended by adding at the
end the following:
``(9) No carryback of section 45D credit before effective
date.--No portion of the unused business credit for any
taxable year which is attributable to the information
technology training program credit determined under section
45D may be carried back to a taxable year ending before the
date of the enactment of section 45D.''
(d) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following:
``Sec. 45D. Information technology training program expenses.''
(e) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after the date of
enactment of this Act in taxable years ending after such
date.
____
Information Technology
Association of America,
Arlington, VA, February 5, 1999.
Hon. Kent Conrad,
Hart Senate Office Building,
Washington, DC.
Dear Senator Conrad: The Information Technology Association
of America (ITAA) and our member companies strongly support
tax credits for information technology (IT) training. With
over 346,000 IT jobs currently vacant in the United States,
American industry faces a severe shortage of trained IT
professionals. Filling these positions is imperative to the
growth of our national economy and securing our place as a
leader in the global marketplace.
In order to grow the nation's IT workforce, we must provide
educational opportunities for all Americans that will allow
them to
[[Page S1933]]
enter to this high-growth, high-wage industry Training is
readily available at both public institutions of higher
education and private training facilities, but many cannot
afford to take advantage of them.
ITAA and our members urge you to cosponsor Senator Conrad's
proposed legislation that would amend the Internal Revenue
Code of 1986 allowing employers a credit against income tax
for IT training expenses paid or incurred. It is critical
that we do everything we can to provide affordable access to
IT training for all Americans. If you need any additional
information, please contact me at 703-284-5340 or
[email protected] or Bob Foust with Senator Conrad at 202-224-
2043.
Sincerely,
Harris N. Miller,
President.
____
Software Information
Industry Association
Washington, DC, February 18, 1999.
Re endorsement of information technology training tax credit
legislation.
Hon. Kent Conrad,
U.S. Senator,
Washington, DC 20510.
Dear Senator Conrad: Recognizing that increasing the supply
of highly qualified information sector workers is an
essential cornerstone for sustaining U.S. economic
prosperity, the Software & Information Industry Association
(SIIA) is pleased to endorse your legislative proposal to
encourage greater business investment in workforce skills
training.
SIIA is the principal trade association of the software and
information industry, representing 1,400 leading high-tech
companies that develop and market software and electronic
content for business, education, entertainment and the
Internet. SIIA was formed Jan. 1, 1999, as a result of a
merger between the Software Publishers Association and
Information Industry Association.
To meet the demands of the Information Age, virtually every
business in every economic sector is undergoing a
transformation that requires its workers to use modern
workplace technologies to achieve higher levels of
productivity. Unfortunately, not enough of these ``high-
performance'' workers exist to meet increasing demand. As the
Department of Commerce has estimated, hundreds of thousands
of positions will continue to go unfilled in the next decade
unless we improve our ability to build and sustain a modern,
high-tech workforce.
Your proposal offers an important opportunity to focus
national attention on this problem. It would amend the
Internal Revenue Code to allow employers a credit against
income tax for information technology training expenses paid
or incurred by the employer. The credit would be an amount
equal to 20 percent of training program expenses up to $6,000
a year. The credit would increase by five percent for
expenses paid or incurred in programs operated in specific
underserved locations.
The proposal complements bills enacted in 1998 that seek to
improve the technical skills of high school students and
adult learners, provide better training opportunities for
incumbent and dislocated workers and ease immediate high-tech
worker shortages by increasing the number of foreign workers
allowed in the U.S. on a temporary basis. We strongly believe
that passage of this legislation will signal a continued
national commitment to creating new opportunities for
American workers while addressing the urgent need to
alleviate the undersupply of technology-proficient workers.
We look forward to working with you and your Senate
colleagues to gain swift passage.
Sincerely,
Kenneth A. Wasch,
President.
____
American Society for
Training & Development,
February 2, 1999.
Hon. Kent Conrad,
Hart Senate Office Building, Washington, DC.
Dear Senator Conrad: On behalf of the American Society for
Training & Development (ASTD), I want to thank you for
introducing legislation in the 106th Congress, that would
offer employers income tax credits that can be used to offset
IT training expenses.
ASTD is the largest professional association in the field
of workplace learning and performance with 70,000 members who
work in more than 15,000 multinational corporations, small
and medium-sized business, government agencies, colleges and
universities. ASTD works with the federal government as well
as the business, labor and education communities to support
public policies and programs that encourage continuous
learning opportunities for all segments of the working
population.
ASTD is a supporter of efforts to address the high-tech job
shortage. This legislation will serve as a significant
incentive for employer investment in continuing education
while providing employees with an opportunity to maintain and
improve skills in this rapidly advancing industry.
ASTD appreciates your support for this important tax
credit. We look forward to working with you to move a bill
forward.
Sincerely,
Laura Liswood,
President and CEO.
____
Information Technology Training
Association, Inc.,
Austin, TX, February 22, 1999.
Hon. Kent Conrad,
U.S. Senate,
Washington, DC.
Hon. Jim Moran,
House of Representatives,
Washington, DC.
Dear Senator Conrad and Representative Moran: The
Information Technology Training Association (ITTA)
congratulates and thanks both of you for introducing
information technology training tax credit legislation in the
U.S. Senate and House of Representatives. In 1999 alone, our
380 member companies will train over 5,000,000 U.S. workers
on various IT topics. While most of our members are
responsible for providing the actual training to
corporations, we also represent various Fortune 1000
companies that conduct their own internal IT Training. More
than ever, we know that the value of trained and skilled IT
workers is crucial to the continued growth of the United
States in their high-tech arena. Many of our members cite
this as the number one problem facing their businesses today.
Our nation's most important asset is our people. It is
important for the nation's economy to invest in the future of
its citizens and businesses. The most productive and cost
effective way to achieve that objective is to concentrate the
federal investment in incentives that most effectively help
citizens enter existing high-paying jobs. For that reason
directing this incentive to areas where jobs already exist is
a prudent decision. Industry studies have revealed that at
lest 340,000 high paying jobs are currently available. Since
those receiving training will find jobs waiting for them when
they finish their training, the country will immediately
begin recouping its investment in the form of additional
personal and corporate income taxes that would otherwise not
be generated.
Tax credits are an efficient way to deliver incentives to
small and medium-sized businesses, which typically are unable
to afford the costs of IT training and lack the resources to
keep up with paperwork required for other support programs.
There is also a shortage of industry workers with technical/
vocational IT skills. Many economically disadvantaged
students and displaced workers enter the industry after
completing single courses or series of technical courses in
order to acquire the skills needed to become certified.
We also want to acknowledge our support for your decision
to include the private-sector IT Training providers in this
legislation. Due to the rapidly changing nature of
technology, the private sector has led the way in developing
successful training programs on the latest and most current
technologies. Many of these companies have also partnered
with software and hardware vendors to ensure that the
training on their products is accurate and of a high quality.
We believe that the only way to have an impact on the IT
worker shortage is to include all providers of training:
private and public.
Your legislation is a prudent, cost-effective, and user-
friendly tool that will simultaneously help economically
disadvantaged students and displaced workers, the companies
in our industry, U.S. competitiveness, and our trade balance.
We thank you for your leadership on this important issue.
Sincerely,
Peter Squier,
President.
____
CompTIA Public Policy Committee,
Arlington, VA, February 22, 1999.
Hon. Kent Conrad,
U.S. Senate,
Washington, DC.
Hon. Jim Moran,
House of Representatives,
Washington, DC.
Dear Senator Conrad and Representative Moran: The Computing
Technology Industry Association (CompTIA) congratulates and
thanks both of you for introducing technology training tax
credit legislation in the US Senate and House of
Representatives. CompTIA represents 7,800 computer and
semiconductor manufacturers, distributors, software
publishers, resellers, retailers, Internet, long distance
training and other service companies. We believe that
productive investment in education and training are critical
to maintaining US economic strength.
Our nation's most important asset is our people. It is
important for the nation's economy to invest in the future of
its citizens and businesses. The most productive and cost
effective way to achieve that objective is to concentrate the
federal investment in incentives that most effectively help
citizens enter existing high-paying jobs. For that reason
directing this incentive to areas where jobs already exist is
a prudent decision. Industry studies have revealed that at
least 340,000 high paying jobs are currently available. Since
those receiving training will find jobs waiting for them when
they finish their training, the country will immediately
begin recouping its investment in the form of additional
personal and corporate income taxes that would otherwise not
be generated.
Tax credits are an efficient way to deliver incentives to
small businesses, which typically are unable to afford the
high costs of technology training and lack the manpower to
keep up with paperwork required to qualify for other support
programs. There is also
[[Page S1934]]
a shortage of industry workers with technical/vocational IT
skills. Many economically disadvantaged students and
displaced workers enter the industry after completing single
courses or series of technical courses in order to acquire
the skills needed to become certified. CompTIA is currently
assisting in school-to-work programs in over 100 high schools
and assisting the Head Start program at the Department of
Labor develop introductory IT certifications for their
constituents.
Your legislation is a prudent, cost-effective, and user-
friendly tool that will simultaneously help economically
disadvantaged students and displaced workers, the companies
in our industry, US competitiveness, and our trade balance.
We thank you for your leadership on this important issue.
Sincerely,
Alan P. Hald,
Chairman, CompTIA Public Policy Committee.
____
Sundog Interactive, Inc.,
Fargo, ND, February 24, 1999.
Proposed Legislation Would Help High-Tech Startups
Fargo, N.D.--A shortage of high-tech employees has eclipsed
job creation as one of the most pressing economic issues in
many areas of the country, especially in rural states like
North Dakota. A bill to be introduced by Sen. Kent Conrad
would help high-tech startups train and retain highly-skilled
information technology (IT) workers.
In North Dakota, the farm crisis is driving many young
people out of the state, and economic conditions make it more
difficult for companies to compete for top talent.
One company that has seen firsthand how difficult it can be
to find and keep skilled IT workers is Fargo-based new media
and software developer Sundog Interactive. As a high-tech
startup in the heart of America's breadbasket, Sundog is
forced to compete with much larger firms on a national level,
not only for clients but also for talent.
``From the outside, Fargo might not seem like an ideal
location to start a high-tech company,'' explains Brent
Teiken, Sundog Interactive's cofounder and president. ``But
our community has three major colleges and universities and a
large technical college, so we produce a high level of
educated, skilled and motivated young people. Unfortunately,
many of these bright minds leave the area after graduation
because employers in larger metropolitan areas can offer
higher salaries and better benefits. The tax credit
legislation Senator Conrad is proposing should help level the
playing field.''
Sen. Conrad's bill would allow high-tech companies like
Sundog Interactive to earn tax credits on the information
technology training they provide employees.
``In the long run, everybody would win,'' Teiken says. ``We
already rely on our area universities for qualified interns.
This legislation would provide an incentive to keep doing
that--and the working capital to grow our company and offer
more competitive salaries as a result. Students would gain
real-world knowledge and experience they could take with them
wherever they go. And more students would consider remaining
in the state after graduation, since employers here would be
able to afford better wages.''
Teiken is scheduled to appear with Sen. Conrad at his press
conference on Wednesday, February 24, 1999, in Washington,
D.C., in support of the senator's proposed legislation.
Teiken is also a member of the North Dakota Information
Technology Council, a group Sen. Conrad helped organize to
address IT concerns in the state.
To learn more about Sundog Interactive, visit the company's
Web site at http://www.sundoginteractive.com. The News
section of the site includes a feature story which provides
Teiken's perspective on the future of information technology
in the state.
____
Cisco Systems CEO Chambers: High-Tech Training Key to Prosperity in the
Internet Economy
bi-partisan senate bill demonstrates u.s. leadership
Washington, DC.--February 24, 1999--Cisco Systems CEO and
President John Chambers today hailed a bi-partisan effort in
the Senate to focus on high-tech job-training and education
programs.
``As the Internet Economy takes shape, there is a critical
need to prepare our workers for the jobs of tomorrow. There
is already a shortage of skilled high-tech workers and more
than 1.8 million new jobs will be created as the Internet
Economy transforms our economy,'' said Chambers.
With these challenges ahead, Chambers praised lawmakers for
ensuring that policymakers will address the pressing need for
training and education.
``I salute Sen. Kent Conrad--along with Sen. Olympia Snowe,
Sen. Dianne Feinstein, Sen. Barbara Boxer and others--for
highlighting the need for the government and the private
sector to partner to train workers for the Internet
Economy,'' he added.
Cisco Systems, the worldwide leader in networking for the
Internet, has already worked with Sen. Conrad on a number of
high-tech initiatives, including the establishment of a Cisco
Networking Academy in the State of North Dakota. The Cisco
Networking Academy program, currently in 1,200 high schools
across the country, teaches high-tech skills to students.
About 17,000 students are currently in the Networking
Academy program and Cisco expects more than 2,000 students to
graduate in 1999.
``The kind of training Sen. Conrad and his colleagues are
encouraging through this legislation will allow students to
learn skills needed for jobs in high-technology companies and
help current employees to be retrained to meet the needs of
21st Century jobs,'' said Chambers.
____
Great Plains Software,
Fargo, ND, February 23, 1999.
Re tax credit for information technology training expenses.
Senator Kent Conrad,
Hart Senate Office Building,
Washington, DC.
Dear Senator Conrad: We have reviewed the legislation
drafted and sponsored by yourself, along with Senators
Feinstein, Boxer, Johnson, Daschle and Sarbanes which would
provide tax credits to businesses that train workers in
information technology skills. As the largest technology-
based employer in North Dakota, we support this legislation.
While benefit to our Company may be modest, smaller, start-up
technology companies, especially those in rural areas of our
state, should see substantial benefits.
As you know, American industry faces a severe shortage of
information training (IT) professionals. Any legislation
which addresses this issue is welcome.
Please feel free to note our Company's support of your
legislation publicly.
Very truly yours,
Douglas R. Herman,
General Counsel.
Mrs. FEINSTEIN. Mr. President, I rise today alongside my colleague
from North Dakota in support of S. 456, the Information Technology Tax
Credit bill, which provides employers with a tax credit for information
technology training for their employees.
The purpose of this legislation is quite simple: To assist American
companies which are having difficulty in recruiting skilled workers to
fill positions in the information technology field.
Information technology--including computer programmers, systems
analysts, computer scientists and engineers--is a critical ingredient
in the growth of the U.S. economy as well as the economy of California.
A field that barely existed a few decades ago, information technologies
are now among the most important emerging technologies in the world.
Information technology now accounts for more than $500 billion a year
to U.S. economy, and one-third of all new jobs created since 1992 are
in computers, semiconductors, software, and communications equipment.
According to recent studies, ``e-commerce'' is projected to grow from
$2.6 billion in 1996 to over $220 billion in 2001--explosive growth
that will generate countless additional jobs.
And, just as important, many information technology jobs tend to be
high value added, high-wage.
Last year California alone was responsible for sales of approximately
$125 billion in high-tech production--almost than double 1992's $64
billion in sales.
Computer services--just one sector of the IT economy--have created
100,000 jobs in California in the past five years. There are now over
400,000 people in California employed directly in high-tech
manufacturing jobs. When information technology business service jobs
are added into the mix, there are currently over 700,000 information
technology jobs in California, according to the Center for the
Continuing Study of the California Economy.
And yet, despite this explosive growth--or perhaps because of it--
America is simply not producing enough skilled and able workers to meet
the needs of the information technology field.
Last year the Information Technology Association of America releases
a study which estimated that there are more than 340,000 high skilled
positions in the information technology field that are not filled.
And the Department of Labor has projected that our economy will
require more than 130,000 information technology jobs in just three
fields--computer scientists and engineers, systems analysts, and
computer programmers--every year for the next decade.
One of the most sobering experiences of my Senate career occurred
last year when I was told point blank by the CEO's of several large
California high-tech companies that the United States is simply not
producing a sufficient number of skilled and educated workers to fill
the information technology positions that their companies need to fill
if they were to be able to continue
[[Page S1935]]
to grow and successfully compete in the international economy.
To meet the needs of these companies, last year Congress had to
revise the cap on H1B visas to allow foreign professional and skilled
workers who had the education and skills to fill these information
technology positions to come to the United States.
While raising the H1B visa cap may meet the short term needs of these
companies and of the economy, it is not a long-term solution to this
problem.
To avoid the danger of a ``hollowing out'' the U.S. workforce we must
invest more in the education and training of American workers so that
they have the education and skills needed for the information
technology jobs which make up the backgone of the new high-tech
economy.
We must make sure that new workers entering the workforce have the
skills they need to match with the jobs they want to be able to get. We
must focus on retraining unemployed, older, and displaced workers, and
encourage new partnerships between the IT industry and educational
institutions. And we must reach out to those who have been left out to
make sure that they have the training they need to join in our current
economic prosperity.
To meet these needs, this legislation provides a tax credit for
employers who offer information technology training for individuals,
equal to 20 percent of the information technology training program
expense, capped to $6,000 in a calender year.
And, to help those who may have been excluded from the economy of
today take their place in the economy of tomorrow, it provides a 5
percent increase in the value of the credit as an additional incentive
for training in empowerment zones or enterprise communities.
The current strength of U.S. information technology industry comes,
in large part, from a long and successful partnership between
government, educational institutions, and industry.
This legislation builds on that partnership to both meet our current
needs and to train the next generation of information technology
workers, and to maintain the U.S. economy's strength and leadership in
the twenty-first century.
______
By Mr. DURBIN (for himself, Mr. Chafee, Mr. Schumer, Mr.
Lautenberg, Mr. Torricelli, Mr. Reed, Mrs. Boxer, and Mr.
Dodd):
S. 457. A bill to amend section 922(t) of title 18, United States
Code, to require the reporting of information to the chief law
enforcement officer of the buyer's residence and to require a minimum
72-hour waiting period before the purchase of a handgun, and for other
purposes; to the Committee on the Judiciary.
the permanent brady waiting period act of 1999
Mr. DURBIN. Mr. President, I rise today with my colleagues Senators
Chafee, Schumer, Lautenberg, Torricelli, Reed, Boxer and Dodd to
introduce the ``Permanent Brady Waiting Period Act of 1999.'' It is
vital that we enact this measure if we are to ensure Americans that the
popular Brady Bill will continue to be one hundred percent effective.
Five years ago, Congress passed the Brady Bill. That law contained a
provision that required a 5-day waiting period before a person can buy
a gun. Unfortunately last November, the waiting period was eliminated
when we begin using the national instant check system for gun
purchasers.
I fully support the use of an instant check system to determine if a
putative firearm purchaser is legally barred from owning a gun because
of a criminal record. But I believe that it must be coupled with a
cooling off period.
Let me briefly explain what this legislation would do. It would
require that anyone who wishes a buy a handgun must wait three days.
There are two exceptions to this requirement. First, if a prospective
purchaser presents a written statement from his of her local chief law
enforcement officer stating that the handgun is needed immediately
because of a threat to that person's life or that of his family, then
the cooling off period will not apply. Second, if a prospective
purchaser lives in a state that has a licensing requirement--and there
are 27 such states--then the federal cooling off period will not apply.
I think both of these are common sense exceptions. Obviously people
who have a legitimate and immediate need of a handgun for self-defense
should be able to buy one. And in the states that have licensing or
permit systems, the process of getting a permit acts as a state cooling
off period.
This measure also requires that when a person applies to buy a gun
that the gun shop owner send a copy of the application to the local
chief law enforcement officer. In addition, it alters the amount of
time that the state or federal government has to investigate a
potential purchaser who has an arrest record. Under the law that will
go into effect on the first of December this year, if a person with an
arrest record applies for a gun, law enforcement will have three days
to determine if that arrest resulted in a conviction. The measure we
introduce today would give law enforcement five days.
Mr. President, let me walk you through the process of buying a gun if
this law were in place.
If you are in a state that does not have a permit system in place,
then you go into a store and fill out a purchase form. A copy of that
form will be sent to the Insta-Check point of contact for your state
and a copy will also be sent to the chief law enforcement officer for
where you live. You will then need to wait three days whereupon,
assuming that you do not have a criminal record or any of the other
disqualifying characteristics, you will be able to pick up your gun.
If on the other hand, when the Insta-Check is run, the FBI learns
that you were arrested, then you will have to wait at least 5 days.
That five days will be used to determine if the arrest resulted in a
conviction. If it did not, then after 5 days you can get your gun. If
you were arrested and convicted then you cannot get your gun and may be
prosecuted.
Enacting this law is only sensible. A cooling off period may be the
only barrier between a woman and her abusive husband whose local
restraining order doesn't show up on a computer check or the only
obstacle in the way of a troubled person planning to commit suicide and
take others with them. A cooling off period will prevent crimes of
passion and spontaneous suicides. The list of people who have bought
guns and used them within a few hours or a day to kill themselves or
others is far too long.
A recent study by the Center to Prevent Handgun Violence demonstrates
a disturbing trend that reinforces the need for a cooling off period.
Normally, 4 to 5 percent of all crime guns traced by the police were
used in murders. But the study found that 20 percent of all guns traced
within 7 days of purchase were used in murders. That is a startlingly
high incidence of guns being bought and used very soon thereafter to
commit a murder.
But this measure has a second, equally important justification.
That the Insta-Check system is in very good shape, but it will never
be perfect. For example, it will not have a lot of mental health
records. And it is unlikely to have information like restraining orders
entered in domestic violence cases. Letting local law enforcement know
about a potential gun purchase is a good idea--the local sheriff may
know that a person trying to buy a gun has a restraining order while
the FBI's Insta-check computer might not. In short, then, this bill
will help serve as a fail safe mechanism for the Insta-Check system. I
for one do not want to learn a year from now that someone got a gun and
used it to harm someone else when a simple check of local records in
addition to the Insta-Check would have revealed that the purchaser had
a history of mental instability.
Making the Brady waiting period permanent is not about more
government. It's about fewer gun crime victims. I hope that we can all
agree on this goal. Thank you.
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. 457
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 referred to as the ``Permanent Brady
Waiting Period Act of 1999''.
[[Page S1936]]
SEC. 2. ESTABLISHMENT OF MINIMUM 72-HOUR HANDGUN PURCHASE
WAITING PERIOD.
Section 922(t) of title 18, United States Code, is
amended--
(1) in paragraph (1)--
(A) in subparagraph (A)--
(i) by striking ``before the completion of the transfer,
the licensee'' and inserting ``after the most recent proposal
of the transfer by the transferee, the licensee, as
expeditiously as is feasible,''; and
(ii) by inserting ``and the chief law enforcement officer
of the place of residence of the transferee'' after ``Act'';
(B) in subparagraph (B)(ii)--
(i) by striking ``3'' and inserting ``5''; and
(ii) by striking ``and'' at the end;
(C) in subparagraph (C), by striking the period at the end
and inserting ``; and''; and
(D) by adding at the end the following:
``(D) if the firearm is a handgun--
``(i) not less than 72 hours have elapsed since the
licensee contacted the system;
``(ii) the transferee has presented to the transferor a
written statement, issued by the chief law enforcement
officer of the place of residence of the transferee during
the 10-day period ending on the date of the most recent
proposal of such transfer by the transferee, stating that the
transferee requires access to a handgun because of a threat
to the life of the transferee or of a member of the household
of the transferee; or
``(iii) the law of the State in which the proposed transfer
will occur requires, before any licensed importer, licensed
manufacturer, or licensed dealer completes the transfer of a
handgun to an individual who is not licensed under section
923, that an authorized State or local official verify that
the information available to the official does not indicate
that possession of a handgun by the transferee would be in
violation of the law, and the authorized State or local
official has provided such verification in accordance with
that law.''; and
(2) by adding at the end the following:
``(7) In this subsection, the term `chief law enforcement
officer' means the chief of police, the sheriff, or an
equivalent officer of a law enforcement agency, or the
designee of any such officer.
``(8) A chief law enforcement officer who is contacted
under paragraph (1)(A) with respect to the proposed transfer
of a firearm shall, not later than 20 business days after the
date on which the contact occurs, destroy any statement or
other record containing information derived from the contact,
unless the chief law enforcement officer determines that the
transfer would violate Federal, State, or local law.
``(9) The Secretary of the Treasury shall promulgate
regulations regarding the manner in which information shall
be transmitted by licensees to the national instant criminal
background check system under paragraph (1)(A).''.
Mr. CHAFEE. Mr. President, today, Senator Durbin and I are
introducing ``Permanent Brady,'' which would establish a mandatory 3
day cooling off period before the purchase of a handgun.
I am under no illusion that Permanent Brady will cure the problem of
handgun violence. But I do believe a waiting period helps. Prior to
enactment of the Brady law, in some States, an individual could walk
into a gun store and walk out with a handgun a few minutes later. Sure,
the individual had to fill out a form certifying that he or she had not
been convicted of a felony and is not mentally incompetent. But that
form was meaningless until the police had a chance to check to see if
the information provided was accurate. Now, the FBI has instituted an
insta-check system, which is working well. But a permanent three-day
waiting period gives local police the chance to conduct a check that
could turn up information not known to the FBI. For example, local
police could be aware of a restraining order against an individual for
domestic violence, or could be aware of a potential gun purchaser's
mental instability.
A waiting period also can help prevent people temporarily under the
influence of powerful emotions, drugs, or alcohol from obtaining a
handgun on impulse, thereby giving them a time to ``cool off'' and
reconsider before they do something rash.
Last November the five-day waiting period established by the Brady
Law was phased out and replaced with the NICS--National Instant Check
System. Establishment of a nationwide instant background check is a
good step, but I do not believe that an instant check renders a waiting
period unnecessary. The bill we are introducing today would restore the
waiting period.
______
By Mr. HAGEL (for himself, Mr. Bayh, Mr. Lott, Mr. Bennett, Mr.
Grams, Mr. Kerrey, Mr. Johnson, Mr. DeWine, Mr. Conrad, Mr.
Inhofe, Mr. Murkowski, Mr. Brownback, Mr. Bryan, Mr. Roberts,
and Mr. Burns):
S. 458. A bill to modernize and improve the Federal Home Loan Bank
System, and for other purposes; to the Committee on Banking, Housing,
and Urban Affairs.
FEDERAL HOME LOAN BANK SYSTEM MODERNIZATION ACT OF 1999
Mr. HAGEL. Mr. President, I rise today to introduce the Federal Home
Loan Bank System Modernization Act of 1999. I am joined in this effort
by my distinguished colleagues Senators Bayh, Lott, Bennett, Grams,
Kerrey, Johnson, DeWine, Conrad, Inhofe, Murkowski, Brownback, Bryan,
Roberts, and Burns. While we've made a few improvements, this is
essentially the same legislation I introduced during the 105th
Congress.
The bill has the formal support of the American Bankers Association,
the Independent Bankers Association of America, America's Community
Bankers, the Council of Federal Home Loan Banks, and the National
Association of Home Builders. Equally important, we have the support of
the regulator, the Federal Housing Finance Board.
The bill's main objective is to strengthen local community banks that
are vital to the economic growth and viability of our communities. The
Federal Home Loan Bank System Modernization Act of 1999 would ensure
that, in an era of banking megamergers, smaller banks are able to
compete effectively and continue to serve their customers' lending
needs.
Community banks are finding that, for a variety of reasons, their
funding sources are shrinking. This makes it more difficult to fund the
loan demands in their communities. During the 1980s in my state of
Nebraska--as in much of America--many community banks and thrifts
closed. As local credit dried up, local economies stagnated. Small
businesses, our greatest engines for job growth, were the first to feel
the crunch.
The Federal Home Loan Bank System Modernization Act of 1999
strengthens community banks in order to avoid a repeat of the 1980s. By
ensuring the viability of the community bank and thrift, our bill will
keep credit flowing to small businesses, farmers, and potential
homeowners--and help our local communities to thrive as we enter the
21st Century.
There is plenty of evidence that small banks are facing growing
deposit pressures. This problem has two causes: First, banks and
thrifts are competing for deposits with brokerage firms and mutual
funds--and local institutions are losing. That means that deposits that
used to go to local institutions and were used for local lending are
now going to major financial institutions outside the community.
Second, we have an aging population in many rural communities. When a
farmer dies, his inheritance goes to his children--who often have left
the community. That means money flows out of the community--out of
local financial institutions--and is no longer available for local
economic development.
These two factors mean less deposits in local banks. That means less
local capital available for local loans. Less economic development.
Less opportunity. And this problem won't fix itself--most of these
local institutions are too small to go to the capital markets on their
own.
This is where the Federal Home Loan Banks can make a real difference.
The Home Loan Banks can be a critical source of liquidity for community
banks and thrifts. I tend to focus on rural America because that is
where I come from--but liquidity problems can be equally serious in
urban areas. The Federal Home Loan Banks are an important tool for
providing credit to consumers no matter where they live.
A related problem our bill addresses is government subsidized
competition with the private sector. Commercial banks compete with
credit unions that pay no taxes and, therefore, have a lower cost of
funding. The same can be said of the Farm Credit System. Its connection
to the federal government gives it a funding advantage over commercial
banks. The purpose of this legislation is not to drive the Farm Credit
Banks or credit unions out of business--they play a vital role in our
country. The purpose is to allow the
[[Page S1937]]
Federal Home Loan Banks to help level the playing field for commercial
banks and thrifts that must compete with these entities.
I want to provide you with a real world example: the case of
Commercial State Bank in Wausa, Nebraska. Commercial has served
northeast Nebraska as an agricultural and business lender for more than
70 years.
Now, with a growing economy in the region, the bank is growing as
well. In the small community of 600 people, deposits can't keep pace
with the growing demand for loans--and that means the bank's liquidity
is declining. With less liquidity, there just isn't as much money
available for lending as the community demands.
This bill would help banks like Commercial and communities like
Wausa. As Doug Johnson, president of Commercial State Bank, wrote to me
about this legislation:
If banks like Commercial State Bank were able to access the
Federal Home Loan Bank, our customers would be better able to
be serviced with a consistent and competitive source of
funding. Denying credit to qualified borrowers is not
productive for Nebraska or the Midwest. Unfortunately, those
borrowers may miss the opportunities available to them at
this time to improve their economic prosperity.
Mr. President, that's what this bill is all about--helping
communities to better secure their economic futures.
The Federal Home Loan Bank system was established in 1932, primarily
to provide a source of credit to savings and loan institutions for home
lending. Now, a majority of the members in the FHLB system are
commercial banks. We should update this system to recognize this change
in its membership.
Not since 1989 has significant Federal Home Loan Bank legislation
become law. The system is working well, but I believe Congress can make
it better. It's time for Congress to act.
This legislation has five main components:
First, our legislation would ease membership requirements for smaller
community banks and thrifts that are vital sources of credit in their
local communities. It would allow the FHLB System to be more easily
accessed as an important source of liquidity for community lenders.
These institutions would be permitted to post different types of
collateral for various kinds of lending. This critical change will
facilitate more small business, rural development, agricultural, and
low-income community development lending in rural and urban
communities.
The second main component of this bill is an issue of basic fairness.
Federally chartered savings associations, or thrifts as they are called
today, are required to be members of the Federal Home Loan Bank system.
Commercial banks, on the other hand, are voluntary members. This
disparity is unfair.
Our legislation allows federally chartered thrifts to become
voluntary members. This is important to these institutions, which are
large stockholders in the Federal Home Loan Bank System. It is critical
that all member financial institutions have the ability to choose
whether Federal Home Loan Bank membership is appropriate or not. As a
result of this action, we also equalize stock purchase requirements for
all member institutions. We do this in a way that maintains and
enhances the safety and soundness of the FHLB system.
The third component of this legislation fixes an imbalance in the
system's annual REFCORP obligation. Currently, the 12 FHLBanks must
collectively pay a fixed $300 million obligation to service the REFCORP
bonds that were issued to help pay for the S&L bailout. This fixed
obligation has driven the banks to increase their levels of non-
mission-related investments.
Under our legislation each FHLBank would be required to pay 20.75
percent of its earnings to service the REFCORP debt. Freeing the
FHLBanks of the obligation to generate a specific dollar figure would
allow them to concentrate on their primary mission of housing finance
and community lending. The Congressional Budget Office has indicated
this change could bring in an additional $795 million over ten years to
the U.S. Treasury. In other words, we have protected the taxpayer from
picking up any additional cost of the S&L bailout.
Fourth, the legislation addresses the issue of devolution of
management functions from the Finance Board to the FHLBanks. On issues
of day-to-day management, the FHLBanks should be able to govern
themselves independently of their regulator. The function of the
Finance Board should be mission regulation and safety-and-soundness
regulation. The provisions of the legislation that accomplish this goal
are non-controversial and enjoy broad support. In fact, they follow the
recommendations of a recent General Accounting Office study.
Finally, this legislation reforms the capital structure of the
Federal Home Loan Bank system. Current law (established in 1932)
dictates that the level of FHLBank capital is determined by the size
and mix of a FHLBank's member assets, not by any rational capital
standards. The result is the FHLBanks' capital levels don't reflect the
risk profile of their lending activities. Furthermore, the FHLBanks'
capital lacks permanence because it is withdrawable by members upon
termination of their membership.
Our bill changes the existing capital rules to include a risk-based
capital requirement and a permanent capital requirement which ensures
the FHLBanks maintain capital levels appropriate to the risk of their
business activities. The new plan also encourages the FHLBanks to build
up their retained earnings which act as an additional buffer and
protection to the U.S. taxpayer.
Mr. President, it's time to modernize the Federal Home Loan Bank
System. The landscape of the financial services industry is rapidly
evolving. The Federal Home Loan Banks should be allowed to modernize to
keep pace with these changes. I am grateful to Senator Bayh, the
principal cosponsor of the legislation, for his help in this endeavor.
I am also grateful to the other cosponsors who have lent their names to
this effort. Today, Congressmen Baker and Kanjorski are introducing the
companion bill in the House of Representatives. Both are tireless
proponents for Federal Home Loan Bank modernization and their help in
the formulation of this legislation was critical.
I sincerely hope the Senate Banking Committee and the full Senate
will have the chance to consider this important legislation, and I
encourage my colleagues to support it.
Mr. BAYH. Mr. President, I rise this afternoon to join with my
colleague Senator Hagel to introduce the Federal Home Loan Bank System
Modernization Act of 1999. We are joined in this endeavor by Senators
Lott, Kerrey, Bennett, Bryan, Johnson, Grams, Conrad, Burns, Brownback,
DeWine, Murkowski, Roberts, and Inhofe.
Let me begin by expressing my thanks and appreciation to Senator
Hagel for spearheading this reform effort over the past two years. The
Home Loan Bank System is not something that is on the lips of every
Senator or every constituent and I commend him for mastering this
difficult subject and for devising some changes that will allow this
somewhat-obscure system to have a tangible positive impact upon the
lives of people who might not even be aware that the system exists.
Mr. President, the core element of our legislative proposal today
would be to allow community banks--defined as those institutions with
assets of less than $500 million--to access the low cost capital of the
Home Loan Bank System in order to make loans to small businesses,
farmers and other types of loans that benefit their community.
These small banks generally serve rural communities and small cities.
The plain fact is that while, overall, the national economy is robust,
there is still demand for credit and capital in rural communities that
cannot be met by the existing financial structure. These communities,
unfortunately, do not always attract the attention of the large banks
and securities firms that have come to dominate the financial
landscape. And since the community banks that serve these communities
are constrained in the amount of lending they can do by the amount of
deposits that they can raise from a limited geographic area, fueling
economic growth requires us to develop additional sources of private
sector funding.
By opening up the Home Loan Bank System to these small, community
banks, this legislation will, hopefully, not only allow the banks to
meet the
[[Page S1938]]
loan demand of their town or small city, but will also have the added
effect of keeping interest rates down--or even lowering those rates--
for these kind of loans.
Let me also emphasize, Mr. President, that these benefits will accrue
to these communities without a single dime of taxpayer money. Making
these changes to the Home Loan Bank System frees up access to capital
using existing private sector mechanisms.
Mr. President, let me briefly outline why it is necessary for
Congress to modernize the Federal Home Loan Bank System, and why
opening up the system to these small banks is consistent with the
mission that Congress endowed the system with in 1932.
The Federal Home Loan Bank System was created in 1932 to serve as a
public/private mechanism that would both regulate the thrift (S&L)
industry and would help the industry obtain low-cost capital for the
purpose of making home mortgages (at the time, the primary mission of
Savings & Loans). Borrowing by the individual home loan banks is backed
by the full faith and credit of the US Government, thus allowing them
to borrow at the lowest possible rates. In turn, the bank makes that
money available to its members in the form of ``advances.''
In 1989, as part of the clean-up of the S&L crisis, the Home Loan
Bank System was dramatically changed. It was stripped of its regulatory
authority (which was transferred to the newly created Office of Thrift
Supervision) and of its authority to administer the deposit insurance
fund (called FSLIC at the time and which was transferred to the FDIC
which now administers the SAIF). The banks retained authority to
provide low-cost capital to the thrift industry, though membership was
also opened up to commercial banks. A Federal Housing Finance Board was
created specifically to make sure that the activities of the 12 banks--
which were still controlled by their members--conformed to safety and
soundness regulations.
The Banks were also required to buy REFCORP bonds. As a result, the
banks must pay a total of $300 million each year out of their earnings.
The banks must also pay $100 million each year as part of the
Affordable Housing Program. The REFCORP formula required a payment of a
certain percentage of each banks annual earnings; if that failed to
meet the annual $300 million payment, a further allocation system went
into place with the heaviest burden placed on those banks with the
greatest number of S&L failures.
This legislation keeps in place all of the safety and soundness
regulations put into place by FIRREA and FDICIA. But it would reform
some of the basic management of the individual banks so that basic
administrative decisions are placed in the hands of the men and women
running the bank, rather than emanating from the Finance Board here in
Washington. The bill also seeks to rationalize the capital structure of
the individual banks so that the need to engage in non-advance
investments is reduced and so that banks' capital reserves are secured
by permanent--rather than tradeable--stock.
With the rise of the secondary mortgage market--primarily driven by
Fannie Mae and Freddie Mac--and the entry of other entities like
mortgage brokers into the mortgage market, many people have been
looking for ways to allow the banks to play a more relevant role in
today's society. Expanding the Home Loan Banks ability to provide low-
cost capital to the smallest banks in principally rural areas is both a
benefit to the banks and to communities that are still experiencing a
credit crunch.
In 1932, Congress correctly surmised that creating funding for
housing was the cornerstone of rebuilding towns, villages and cities
gripped in the vise of the Great Depression. Today, with the housing
market flush with capital, it is appropriate for Congress to use this
longstanding tool of community development--the Federal Home Loan Bank
System--to address the pressing and serious capital needs of rural
America.
I urge my colleagues to join with Senator Hagel and myself to work
towards enactment of this important legislation.
______
By Mr. BREAUX (for himself and Mr. Hatch):
S. 459. A bill to amend the Internal Revenue Code of 1986 to increase
the State ceiling on private activity bonds; to the Committee on
Finance.
THE STATE AND LOCAL INVESTMENT OPPORTUNITY ACT OF 1999
Mr. BREAUX. Mr. President, I am pleased to introduce today
with my colleague, Senator Hatch, an important bill that will assist
states and localities in working with private industry to foster
economic development and provide home ownership opportunities to low-
income Americans. Specifically, our bill will increase the private
activity tax-exempt bond cap to $75 per capita or $250 million, if
greater, and index the cap to inflation.
Congress created the private activity tax-exempt bond decades ago to
apply to mortgage revenue bonds and other bonds for multifamily
housing, redevelopment of blighted areas, student loans, manufacturing,
and hazardous waste disposal facilities. However, Congress
unintentionally restricted the growth of this program by imposing a cap
on the bond volume of $50 per capita or $150 million that was not
indexed to inflation. The resulting erosion in purchasing power has
crippled the ability of states to meet the growing demand for these
bonds.
Congress took an important step to correct this problem in the Fiscal
Year 1999 Omnibus Appropriations bill by approving a partial, phased-in
increase in each state's bond cap. The bond cap will be increased by $5
per capita beginning in 2003. The volume limit will reach $70 per
capita, or $210 million if greater, in 2006. Unfortunately, inflation
will have reduced the purchasing power of these bonds by nearly thirty-
three percent by the time the volume cap increase is fully phased in.
Tax-exempt bonds are issued by state and local governments to provide
below market interest rates to fund authorized programs and projects.
Revenue bond investors accept lower interest from these bonds because
the interest income is tax-exempt. For example, mortgage revenue bonds
are issued to help lower income working families buy their first homes.
These low interest loans significantly lower the cost of owning a home.
In my own state, the Louisiana Housing Finance Agency has issued over
$1.1 billion in mortgage revenue bonds for almost 16,000 affordable
home mortgages since the program began. In 1996 alone, the agency
issued over $112 million in mortgage revenue bonds for nearly 1,200
home loans. That's 1,200 Louisiana families who now know the pride of
owning their own home--Louisiana families that earned, on average, less
than $28,000 last year. The Louisiana Housing Finance Agency estimates
that it could have put another $50 million in bond authority to good
use. Nationwide, states could have used an additional $7 billion in
bond cap for mortgage revenue bonds, student loan bonds, industrial
revenue bonds, pollution control bonds and other worthy investments.
Student loan bonds are also issued to raise a pool of money at tax-
exempt interest rates resulting in lower interest rate college loans.
In my state, the Louisiana Public Facilities Authority has issued $745
million in student loan bonds since 1984. These bonds have funded over
80,000 college loans for deserving Louisiana students--students who
otherwise might not have been able to afford to attend college.
In Louisiana, the roughly $40 million of remaining 1997 volume cap
will not come close to fulfilling the $330 million of demand for these
bonds. The total 1997 volume cap for Louisiana was $217,500,000. After
funding minimal housing and student loan needs, little volume cap
remains available for industrial development bonds for manufacturing
purposes. Many of the industrial and manufacturing facilities create
substantial employment opportunities. Unfortunately, a deficiency in
volume cap limits these opportunities.
Our bill will correct this woeful situation and improve the ability
of states and localities to provide home ownership opportunities to
low-income families throughout the United States, to help fund student
loans for college students and to help finance industrial and
manufacturing facilities. These facilities will, in turn, increase
employment and the tax base of local governments. I urge my colleagues
to join me and Senator Hatch in this effort.
[[Page S1939]]
Mr. HATCH. Mr. President, I am pleased to introduce with my good
friend Senator Breaux the ``State and Local Investment Opportunity Act
of 1999.'' This legislation would first, raise the annual limit on
States' authority to issue their own tax-exempt ``Private Activity''
Bonds to the greater of $75 times population or $225 million and,
second, index the limit to inflation.
Tax-exempt Private Activity Bonds finance much needed municipal
services, student loans, affordable housing, and economic development.
In my home State, the Utah Housing Finance Agency has financed first-
time homes for nearly 41,000 working families with Mortgage Revenue
Bonds. In addition, multifamily housing bonds have financed almost
3,300 affordable apartments. Both of these bonds are subject to the
cap.
However, many more Utah families still need the housing help that
these bonds provide. According to the National Council of State Housing
Agencies, demand in Utah for these bonds and other Private Activity
Bonds more than doubled supply. Nationwide, demand for bond authority
exceeded supply by almost 50 percent in 1997.
The current bond limit is the greater of $50 times population or $150
million. Cap growth is restricted by State population growth, which has
been less than 5 percent nationwide over the past decade. During the
same period, inflation has sliced bond purchasing power nearly in half,
as measured by the Consumer Price Index.
Last year's Omnibus Appropriations Act included a partial, phased-in
bond restoration among its limited tax provisions. However, the
increase will not become effective until 2007. By then, nearly one-
third of the purchasing power of Private Activity Bonds will have been
lost even with the phase-in.
Bond restoration has strong bipartisan support. A majority of the
Senate, and nearly three quarters of the House, cosponsored full
restoration and indexation in the 105th Congress. Furthermore, three-
quarters of the House, including nearly three-quarters of the Ways and
Means Committee, cosponsored identical House legislation.
The Nation's governors and mayors, along with other State and local
groups, and the public finance community strongly support full bond cap
restoration.
I encourage my colleagues to cosponsor the ``State and Local
Investment Opportunity Act of 1999,'' so that their States can continue
to make vital investments in their citizens and communities.
S. 460
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. DESIGNATION OF ROBERT K. RODIBAUGH UNITED STATES
BANKRUPTCY COURTHOUSE.
The United States courthouse located at 401 South Michigan
Street in South Bend, Indiana, shall be known and designated
as the ``Robert K. Rodibaugh United States Bankruptcy
Courthouse''.
SEC. 2. REFERENCES.
Any reference in a law, map, regulation, document, paper,
or other record of the United States to the United States
courthouse referred to in section 1 shall be deemed to be a
reference to the ``Robert K. Rodibaugh United States
Bankruptcy Courthouse''.
______
By Mr. HATCH (for himself, Mrs. Feinstein, and Mr. McConnell):
S. 461. A bill to assure that innocent users and businesses gain
access to solutions to the year 2000 problem-related failures through
fostering an incentive to settle year 2000 lawsuits that may disrupt
significant sectors of the American economy; to the Committee on the
Judiciary.
year 2000 fairness and responsibility act
Mr. HATCH. Mr. President, I am pleased to introduce the ``Year 2000
Fairness and Responsibility Act.'' This bill addresses what is
popularly known as the ``Y2K Problem'' or the ``Millennium Bug.'' It is
supported by over 85 industry organizations and is important to the
state of Utah, our nation's fastest growing high-tech state.
Due to a simple decision years ago to save space on computer punch
cards, many computers and electronic devices around the world still
express years in only two digits. As a result, these computers will be
incapable of making a smooth transition to the next millennium.
Technicians and economists have predicted that this problem, if not
corrected in time, could result in either a recession or at least
serious economic dislocation.
Over the last several years, the U.S. government and the private
sector have made great strides in aggressively targeting the technology
side of the Y2K problem. Although there remains much to do, many
critical areas have already been addressed.
Last year, a unanimous Congress passed a bipartisan Senate Judiciary
Committee-reported bill that unleashed the genius of the American
private sector by fostering the sharing of remedial information on the
Y2K problem. Prior to the bill's passage, various businesses were
fearful of being sued if they shared corrective and other information
concerning the Y2K problem. In essence, the bill insulates statements
about Y2K information and solutions from being used as admissions in a
court of law. This legislation has spurred solutions to the Y2K problem
by increasing the amount of information available to address the Y2K
challenge.
But while this first step was important, additional reforms are
needed to aid innocent users and manufacturers and to nurture an
environment where solutions to the Y2K problem will be forged. Last
year's advances are threatened by frivolous Y2K lawsuits--which will
disrupt and perhaps even cripple our courts, our high-tech industry,
and thousands of businesses, large and small, around our nation.
Indeed, one respected analyst recently estimated that the world-wide
cost of Y2K-related litigation would be a staggering one trillion
dollars.
The anticipated flood of lawsuits from those affected by the Y2K
crisis may very well impede the progress we have been making in solving
the problem. Companies of every variety will be forced to devote
precious resources to litigation rather than to repairing and
preventing computer problems, and many of these companies may even go
bankrupt as a result. Our courts could very well be deluged with
lawsuits, clogging the arteries of justice. These consequences must be
addressed.
The legislation introduced today will ameliorate the Y2K dilemma in a
fair and reasonable manner. One of the main features of this new Y2K
bill is that it provides for a problem-solving, cooling off period
before Y2K-related litigation may commence. The problem-solving period
is designed to allow prospective plaintiffs an opportunity to describe
the nature of the problem of which they seek legal remedy and give the
prospective defendants an opportunity to respond and, if necessary,
correct any material Y2K defect.
The parties may be able to resolve their disputes during the
mediation period, thus forestalling the need for costly and time-
consuming litigation. Correspondingly, the bill establishes an
alternative dispute resolution mechanism to resolve private disputes
and avoid litigation.
Of particular significance is the bill's limitations on damages. The
bill limits punitive damages in Y2K-related suits to three times
economic damages or $250,000, whichever is greater, or, if a small
business is a defendant, whichever is lesser. This and other provisions
will prevent frivolous lawsuits while preserving the ability of the
truly injured to recover damages and to deter future abuses.
The bill also remediates potential problems arising out of Y2K-
related class suits. Class action cases are currently a source of
abuse, and this bill seeks to limit such abuses by allowing class
actions to proceed only if a majority of class members' claims involve
material defects relating to Y2K problems. Thus, as a practical matter,
specious class action suits are barred.
The purpose of our bill is clear--to promote and increase the chances
that innocent users and businesses gain access to solutions to the Y2K
problem. And while the purpose is clear, we recognize that the solution
is not simple, We have worked to produce a fair, reasoned bill that
preserves the rights of all parties to settle disputes, but will help
avert the potential disasters awaiting us if we choose not to act.
This bill reflects the high levels of cooperation and broad consensus
that large manufactures, small businesses, the telecommunications
industry, the information technology industry, electric utilities, and
professional associations have been able to achieve. They
[[Page S1940]]
are all to be commended for their efforts in supporting this vitally
important legislation.
Let me explain the bill in more detail.
I. purpose of the bill
The bill's main purpose is to promote Y2K readiness and problem-
solving by discouraging a wasteful diversion of resources that would
otherwise support readiness and problem-solving toward Y2K-related
litigation. Such a costly diversion of resources could exacerbate the
risk of nationwide economic dislocation that the Y2K problem poses.
Accordingly, the bill aims to prohibit Y2K-related litigation but to
impose a slight delay in its commencement so as to promote resolution
of Y2K problems and disputes without resort to litigation. I believe
this will benefit plaintiffs, defendants, consumers, businesses, and
innocent users. We want to create an environment when people think,
``Let's try to solve it'' before they say, ``Let's sue them.''
ii. summary of the bill's provisions
Pre-litigation Remediation Period (Sec. 101):
If a person aggrieved by a year-2000-related (Y2K-related) problem
wants to file a lawsuit based on that problem, he must first provide
the prospective defendant, at least 90 days before filing suit, with
notice regarding how the Y2K defect manifests itself, what injury he
suffered or risk he bore as a result, and what relief he seeks. The
only exception to this mandatory 90-day remediation period is if the
prospective plaintiff is party to a contract that provides for a period
of delay before suit for breach of contract may commence. In that case,
the contract's waiting period prevails over the bill's.
If the prospective plaintiff fails to give notice to the prospective
defendant, as outlined above, and sues anyway, the defendant can treat
the plaintiff's lawsuit itself as a substitute notice, thus triggering
the 90-day remediation period. If the 90-day remediation period is
triggered by an actual lawsuit (instead of the notice) all discovery
will be stayed and pleading deadlines will be tolled for the duration
of the period.
The bill imposes responsibilities on prospective defendants as well
as plaintiffs. If a defendant has been given notice, as outlined above,
he must respond to this notice within 30 days of receiving it. In this
response, the prospective defendant must state in writing his
acknowledgement of receipt of the notice and what actions he will take
or has taken to address the Y2K problem identified in the plaintiff's
notice. Even if the plaintiff has not given notice and the defendant
treats his actual lawsuit as substitute notice, the defendant must
still respond to that notice within 30 days with all required
particulars.
If the defendant fails to respond to the plaintiff's notice, then the
remediation period terminates at the expiration of the defendant's 30-
day response deadline; the lawsuit can then proceed.
Also of particular significance, the 90-day remediation period may be
extended as part of mutual agreement of the parties to engage in
alternative dispute resolution. See Sec. 102(a).
Pleading Requirements (Sec. 103):
The bill requires all Y2K plaintiffs seeking money damages to make a
detailed statement in their lawsuits of the nature and amount of the
damages they seek to recover, specific facts that form the basis for
calculating those damages, and how material Y2K defects manifest
themselves. In addition, if the claim being pursued requires proof that
the defendant acted with a particular state of mind, the plaintiff must
``state in detail the facts giving rise to a strong inference that the
defendant acted with the required state of mind.''
The bill allows the court to dismiss a Y2K lawsuit that fails to meet
the above pleading requirements. However, the plaintiff can re-file his
lawsuit with the required detailed statements and still get a chance to
pursue his claim.
Duty to Mitigate (Sec. 104):
This provision codifies the common-law rule that bars recovery of
damages for injuries that the plaintiff could reasonably have been
avoided.
Evidence of Reasonable Efforts and Contract Defenses (Sec. 202(a)):
This provision allows a defendant, ``for the purpose of limiting or
eliminating the defendant's liability,'' for breach of contract to
offer evidence that his performance was ``reasonable in light of the
circumstances.'' This would overcome any objection, based on Federal or
State rules of evidence, that evidence of such reasonable-efforts
performance is irrelevant to the issue of breach. Also, this provision
expressly preserves the common-law and Uniform Commercial Code defenses
of impossibility and impracticability.
Contract Damages Limit (Sec. 203):
Contract damages are limited either to those provided for in a
liquidated damages clause or by operation of law that governed the
contract's interpretation at the time of contract formation. This does
not alter present-day contract law. Rather, it is designed to preempt
any State's attempt to change its contract law relating to Y2K problems
after the contract that is the subject of the lawsuit was entered into.
Proportionate Liability in Tort Cases (Sec. 301(b)):
This provision essentially codifies the tort doctrine of pure
comparative negligence in that it requires the court to assign a
percent share of liability to each person determined to have caused or
contributed to the plaintiff's loss in proportion to the relative fault
of each. Personal injury cases are exempt from this provision.
State of Mind and Foreseeability Requirements in Tort Cases
(Sec. 302):
This provision establishes a heightened state-of-mind element for
three types of lawsuits: For fraud and negligent misrepresentation
cases, the plaintiff must, in addition to proving all other elements of
the claim, prove by clear and convincing evidence that the defendant
``actually knew, or recklessly disregarded a known and substantial
risk, that [a Y2K] failure would occur.'' For cases that require proof
of gross negligence or recklessness, the plaintiff must, in addition to
proving all other elements of the claim, prove by clear and convincing
evidence that the defendant ``actually knew, or recklessly disregarded
a known and substantial risk, that plaintiff would suffer [actual or
potential] harm. For ordinary negligence cases, the plaintiff must, in
addition to proving all other elements of the claim, prove by clear and
convincing evidence that the defendant ``knew or reasonably should have
known that its actions would cause harm to the plaintiff.''
Reasonable Efforts Defense in Tort Cases (Sec. 303):
Under this provision, a plaintiff may not recover simply by showing
that a Y2K failure occurred in something that was under the control of
the defendant. This is intended to avoid a defendant being held
strictly liable for harm caused by a Y2K failure. Also, the bill
provides the defendant with a complete defense to liability if he can
show that he took reasonable efforts under the circumstances to prevent
the Y2K failure or its attendant damages. Breach of contract cases are
exempt from this provision.
Tort Punitive Damages Limit (Sec. 304):
This provision limits punitive damages to either: (1) lesser of three
times actual damages or $250,000 for individuals whose net worth is
$500,000 or less and for small businesses; or (2) the greater of three
times actual damages or $250,000 for all other defendants.
Limit on Economic Loss Recovery in Tort Cases (Sec. 305):
This provision essentially codifies the common-law economic loss
doctrine found in section 766C of the Restatement of Torts.
Accordingly, the provision allows recovery of economic losses only when
permitted by statute or judicial decision and (1) where permitted under
a contract to which the plaintiff is a party; (2) where permitted under
applicable law that governed interpretation of the contract at the time
of contract formation; (3) when they are incidental to a Y2K-related
personal injury claim; or (4) when they are incidental to a Y2K-related
property damage claim.
Liability of Officers and Directors (Sec. 306):
This provision limits the personal liability of corporate officers
and directors to the greater of $100,000 or the amount of cash
compensation such officer or director received in the year preceding
the act or omission for which he was found liable. This limitation on
personal liability does not apply where it is proven by clear and
convincing evidence that the officer or director specifically intended
to harm the plaintiff by (1) intentionally making materially misleading
statements on
[[Page S1941]]
which the plaintiff relied or (2) intentionally withholding material
information regarding a Y2K failure that he had a duty to disclose.
This provision expressly does not pre-empt State law on liability of
officers and directors.
Class Action Requirements:
Regarding Y2K-related class suits, the bill allows these actions to
proceed only if a majority of class members' claims involve material
Y2K defects. Also, only those individuals who have actual notice, as
certified by the court, of the suit are entitled to join the class,
unless they inform the court in writing prior to commencement of trial
or entry of judgment of their desire to join the class.
Finally, the bill changes the requirements of Federal jurisdiction
for Y2K-related actions in three respects: (1) there is no amount in
controversy requirement for Federal diversity jurisdiction; (2)
diversity of citizenship can be established as to any member of the
class, not just the named members; and (3) plaintiffs as well as
defendants can remove Y2K-related actions from state court to Federal
court.
In conclusion, Mr. President, I want to emphasize that the Y2K
problem is not a partisan issue. This is a bipartisan, fair bill. We
must all work together--now--to ensure that a rush to the courts does
not cripple the ability of American businesses to solve the Y2K problem
swiftly, efficiently and without unnecessary distractions. The real
beneficiaries of this bill will be individual consumers and businesses,
the engine of the American economy. I ask my colleagues to support this
worthwhile legislation.
I ask unanimous consent that the bill in its entirety be printed in
the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 461
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Year 2000
Fairness and Responsibility Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings, purposes, and scope.
Sec. 3. Definitions.
TITLE I--PRELITIGATION PROCEDURES FOR YEAR 2000 CIVIL ACTIONS
Sec. 101. Pre-trial notice.
Sec. 102. Alternative dispute resolution.
Sec. 103. Pleading requirements.
Sec. 104. Duty to mitigate.
TITLE II--YEAR 2000 CIVIL ACTIONS INVOLVING CONTRACTS
Sec. 201. Contract preservation.
Sec. 202. Evidence of reasonable efforts and defenses.
Sec. 203. Damages limitation.
TITLE III--YEAR 2000 CIVIL ACTIONS INVOLVING TORT AND OTHER
NONCONTRACTUAL CLAIMS
Sec. 301. Proportionate liability.
Sec. 302. State of mind and foreseeability.
Sec. 303. Reasonable efforts defense.
Sec. 304. Damages limitation.
Sec. 305. Economic losses.
Sec. 306. Liability of officers and directors.
TITLE IV--CLASS ACTIONS INVOLVING YEAR 2000 CLAIMS
Sec. 401. Minimum injury requirement.
Sec. 402. Notification.
Sec. 403. Dismissal prior to certification.
Sec. 404. Federal jurisdiction in class actions involving year 2000
claims.
TITLE V--EFFECTIVE DATE
Sec. 501. Effective date.
SEC. 2. FINDINGS, PURPOSES, AND SCOPE.
(a) Findings.--Congress finds the following:
(1)(A) Many information technology systems, devices, and
programs are not capable of recognizing certain dates in 1999
and after December 31, 1999, and will read dates in the year
2000 and thereafter as if those dates represent the year 1900
or thereafter or will fail to process those dates.
(B) If not corrected, the problem described in subparagraph
(A) and resulting failures could incapacitate systems that
are essential to the functioning of markets, commerce,
consumer products, utilities, Government, and safety and
defense systems, in the United States and throughout the
world.
(2) It is in the national interest that producers and users
of technology products concentrate their attention and
resources in the time remaining before January 1, 2000, on
assessing, fixing, testing, and developing contingency plans
to address any and all outstanding year 2000 computer date-
change problems, so as to minimize possible disruptions
associated with computer failures.
(3)(A) Because year 2000 computer date-change problems may
affect virtually all businesses and other users of technology
products to some degree, there is a substantial likelihood
that actual or potential year 2000 failures will prompt a
significant volume of litigation, much of it insubstantial.
(B) The litigation described in subparagraph (A) would have
a range of undesirable effects including the following:
(i) It would threaten to waste technical and financial
resources that are better devoted to curing year 2000
computer date-change problems and ensuring that systems
remain or become operational.
(ii) It could threaten the network of valued and trusted
business and customer relationships that are important to the
effective functioning of the national economy.
(iii) It would strain the Nation's legal system, causing
particular problems for the small businesses and individuals
who already find that system inaccessible because of its
complexity and expense.
(iv) The delays, expense, uncertainties, loss of control,
adverse publicity, and animosities that frequently accompany
litigation of business disputes could exacerbate the
difficulties associated with the date change and work against
the successful resolution of those difficulties.
(v) Concern about the potential for liability--in
particular, concern about the substantial litigation expense
associated with defending against even the most insubstantial
lawsuits--is prompting many persons and businesses with
technical expertise to avoid projects aimed at curing year
2000 computer date-change problems.
(b) Purposes.--Based upon the power contained in article I,
section 8, clause 3 of the Constitution of the United States,
the purposes of this Act are--
(1) to establish uniform legal standards that give all
businesses and users of technology products reasonable
incentives to solve year 2000 computer date-change problems
before they develop;
(2) to encourage the resolution of year 2000 computer date-
change disputes involving economic damages without recourse
to unnecessary, time consuming, and wasteful litigation; and
(3) to lessen burdens on interstate commerce by
discouraging insubstantial lawsuits, while also preserving
the ability of individuals and businesses that have suffered
real injury to obtain complete relief.
(c) Scope.--Nothing in this Act affects claims for personal
injury.
SEC. 3. DEFINITIONS.
In this Act:
(1) Actual damages.--The term ``actual damages''--
(A) means damages for physical injury to any person or
property; and
(B) includes the cost of repairing or replacing a product
that has a material defect.
(2) Contract.--The term ``contract'' means a contract,
tariff, license, or warranty.
(3) Defendant.--The term ``defendant'' means any person
against whom a year 2000 claim is asserted.
(4) Economic loss.--The term ``economic loss''--
(A) means any damages other than damages arising out of
personal injury or damage to tangible property; and
(B) includes damages for--
(i) lost profits or sales;
(ii) business interruption;
(iii) losses indirectly suffered as a result of the
defendant's wrongful act or omission;
(iv) losses that arise because of the claims of third
parties;
(v) losses that are required to be pleaded as special
damages; or
(vi) items defined as consequential damages in the Uniform
Commercial Code or an analogous State commercial law.
(5) Material defect.--
(A) In general.--The term ``material defect'' means a
defect in any item, whether tangible or intangible, or in the
provision of a service, that substantially prevents the item
or service from operating or functioning as designed or
intended.
(B) Exclusions.--The term does not include any defect
that--
(i) has an insignificant or de minimis effect on the
operation or functioning of an item;
(ii) affects only a component of an item that, as a whole,
substantially operates or functions as designed; or
(iii) has an insignificant or de minimis effect on the
efficacy of the service provided.
(6) Person.--The term ``person'' means any natural person
and any entity, organization, or enterprise, including any
corporation, company (including any joint stock company),
association, partnership, trust, or governmental entity.
(7) Personal injury.--
(A) In general.--The term ``personal injury'' means any
physical injury to a natural person, including death of the
person.
(B) Exclusions.--The term does not include mental
suffering, emotional distress, or like elements of injury
that do not constitute physical harm to a natural person.
(8) Plaintiff.--The term ``plaintiff'' means any person who
asserts a year 2000 claim.
(9) Punitive damages.--The term ``punitive damages'' means
damages, other than compensatory damages, that, in whole or
in part, are awarded against any person--
(A) to punish that person; or
(B) to deter that person, or other persons, from engaging
in similar behavior.
(10) State.--The term ``State'' means any State of the
United States, the District of Columbia, the Commonwealth of
Puerto
[[Page S1942]]
Rico, the Northern Mariana Islands, the U.S. Virgin Islands,
Guam, American Samoa, and any other territory or possession
of the United States, and any political subdivision thereof.
(11) Year 2000 civil action.--The term ``year 2000 civil
action'' means any civil action of any kind brought in any
court under Federal, State, or foreign law, in which--
(A) a year 2000 claim is asserted; or
(B) any claim or defense is related, directly or
indirectly, to an actual or potential year 2000 failure.
(12) Year 2000 claim.--The term ``year 2000 claim'' means
any claim or cause of action of any kind, whether asserted by
way of claim, counterclaim, cross-claim, third-party claim,
or otherwise, in which the plaintiff's alleged loss or harm
resulted, directly or indirectly, from an actual or potential
year 2000 failure.
(13) Year 2000 failure.--The term ``year 2000 failure''
means any failure by any device or system (including any
computer system and any microchip or integrated circuit
embedded in another device or product), or any software,
firmware, or other set or collection of processing
instructions, however constructed, in processing,
calculating, comparing, sequencing, displaying, storing,
transmitting, or receiving date-related data, including--
(A) the failure to accurately administer or account for
transitions or comparisons from, into, and between the 20th
and 21st centuries, and between 1999 and 2000; or
(B) the failure to recognize or accurately process any
specific date, and the failure accurately to account for the
status of the year 2000 as a leap year.
TITLE I--PRELITIGATION PROCEDURES FOR YEAR 2000 CIVIL ACTIONS
SEC. 101. PRE-TRIAL NOTICE.
(a) Notification Period.--
(1) In general.--Before filing a year 2000 claim, except an
action for a claim that seeks only injunctive relief, a
prospective plaintiff shall be required to provide to each
prospective defendant a written notice that identifies and
describes with particularity--
(A) any manifestation of a material defect alleged to have
caused injury;
(B) the injury allegedly suffered or reasonably risked by
the prospective plaintiff; and
(C) the relief or action sought by the prospective
plaintiff.
(2) Commencement of action.--Except as provided in
subsections (c) and (e), a prospective plaintiff shall not
file a year 2000 claim in Federal or State court until the
expiration of the 90-day period beginning on the date on
which the prospective plaintiff provides notice under
paragraph (1).
(b) Response to Notice.--Not later than 30 days after
receipt of the notice specified in subsection (a), each
prospective defendant shall provide each prospective
plaintiff a written statement that--
(1) acknowledges receipt of the notice; and
(2) describes any actions that the defendant will take, or
has taken, to address the defect or injury identified by the
prospective plaintiff in the notice.
(c) Failure To Respond.--If a prospective defendant fails
to respond to a notice provided under subsection (a)(1)
during the 30-day period prescribed in subsection (b) or does
not include in the response a description of actions referred
to in subsection (b)(2)--
(1) the 90-day waiting period identified in subsection (a)
shall terminate at the expiration of the 30-day period
specified in subsection (b) with respect to that prospective
defendant; and
(2) the prospective plaintiff may commence a year 2000
civil action against such prospective defendant immediately
upon the termination of that waiting period.
(d) Failure To Provide Notice.--
(1) In general.--Subject to subsections (c) and (e), a
defendant may treat a complaint filed by the plaintiff as a
notice required under subsection (a) by so informing the
court and the plaintiff if the defendant determines that a
plaintiff has commenced a year 2000 civil action--
(A) without providing the notice specified in subsection
(a); or
(B) before the expiration of the 90-day waiting period
specified in subsection (a).
(2) Stay.--If a defendant elects under paragraph (1) to
treat a complaint as a notice--
(A) the court shall stay all discovery and other
proceedings in the action for a period of 90 days beginning
on the date of filing of the complaint; and
(B) the time for filing answers and all other pleadings
shall be tolled during this 90-day period.
(e) Effect of Contractual Waiting Periods.--In any case in
which a contract requires notice of nonperformance and
provides for a period of delay before the initiation of suit
for breach or repudiation of contract, the contractual period
of delay controls and shall apply in lieu of the waiting
period specified in subsections (a) and (d).
(f) Sanction for Frivolous Invocation of the Stay
Provision.--If a defendant acts under subsection (d) to stay
an action, and the court subsequently finds that the
assertion by the defendant that the action is a year 2000
civil action was frivolous and made for the purpose of
causing unnecessary delay, the court may impose a sanction,
including an order to make payments to opposing parties in
accordance with Rule 11 of the Federal Rules of Civil
Procedure.
(g) Computation of Time.--For purposes of this section, the
rules regarding computation of time shall be governed by the
applicable Federal or State rules of civil procedure.
SEC. 102. ALTERNATIVE DISPUTE RESOLUTION.
(a) Requests Made During Notification Period.--At any time
during the 90-day notification period under section 101(a),
either party may request the other party to use alternative
dispute resolution. If, based upon that request, the parties
enter into an agreement to use alternative dispute
resolution, the parties may also agree to an extension of
that 90-day period.
(b) Request Made After Notification Period.--At any time
after expiration of the 90-day notification period under
section 101(a), whether before or after the filing of a
complaint, either party may request the other party to use
alternative dispute resolution.
(c) Payment Date.--If a dispute that is the subject of the
complaint or responsive pleading is resolved through
alternative dispute resolution as provided in subsection (a)
or (b), the defendant shall pay any amount of funds that the
defendant is required to pay the plaintiff under the
settlement not later than 30 days after the date on which the
parties settle the dispute, and all other terms shall be
implemented as promptly as possible based upon the agreement
of the parties, unless another period of time is agreed to by
the parties or established by contract between the parties.
SEC. 103. PLEADING REQUIREMENTS.
(a) Nature and Amount of Damages.--In any year 2000 civil
action in which a plaintiff seeks an award of money damages,
the complaint shall state with particularity with regard to
each year 2000 claim--
(1) the nature and amount of each element of damages; and
(2) the factual basis for the calculation of the damages.
(b) Material Defects.--In any year 2000 civil action in
which the plaintiff alleges that a product or service was
defective, the complaint shall, with respect to each year
2000 claim--
(1) identify with particularity the manifestations of the
material defects; and
(2) state with particularity the facts supporting the
conclusion that the defects were material.
(c) Required State of Mind.--In any year 2000 civil action
in which a year 2000 claim is asserted with respect to which
the plaintiff may prevail only on proof that the defendant
acted with a particular state of mind, the complaint shall,
with respect to each element of the claim, state in detail
the facts giving rise to a strong inference that the
defendant acted with the required state of mind.
(d) Motion To Dismiss; Stay of Discovery.--
(1) Dismissal for failure to meet pleading requirements.--
In any year 2000 civil action, the court shall, on the motion
of any defendant, dismiss without prejudice any year 2000
claim asserted in the complaint if any of the requirements
under subsection (a), (b), or (c) is not met with respect to
the claim.
(2) Stay of discovery.--In any year 2000 civil action, all
discovery and other proceedings shall be stayed during the
pendency of any motion to dismiss, unless the court finds
upon the motion of any party that particularized discovery is
necessary to preserve evidence or prevent undue prejudice to
that party.
(3) Preservation of evidence.--
(A) In general.--
(i) Treatment of evidence.--During the pendency of any stay
of discovery entered under this paragraph, unless otherwise
ordered by the court, any party to the action with actual
notice of the allegations contained in the complaint shall
treat the items described in clause (ii) as if they were a
subject of a continuing request for production of documents
from an opposing party under applicable Federal or State
rules of civil procedure.
(ii) Items.--The items described in this clause are all
documents, data compilations (including electronically stored
or recorded data), and tangible objects that--
(I) are in the custody or control of the party described in
clause (i); and
(II) relevant to the allegations.
(B) Sanction for willful violation.--A party aggrieved by
the willful failure of an opposing party to comply with
clause (A) may apply to the court for an order awarding
appropriate sanctions.
SEC. 104. DUTY TO MITIGATE.
(a) In General.--There shall be no recovery for any year
2000 claim on account of injury that the plaintiff could
reasonably have avoided in light of any disclosure or other
information with respect to which the plaintiff was, or
reasonably could have been, aware.
(b) Damages.--The damages awarded for any claim described
in subsection (a) shall exclude any amount that the plaintiff
reasonably could have avoided in light of any disclosure or
information described in that subsection.
TITLE II--YEAR 2000 CIVIL ACTIONS INVOLVING CONTRACTS
SEC. 201. CONTRACT PRESERVATION.
(a) In General.--Subject to subsections (b) and (c),
notwithstanding any other provision of Federal or State
statutory or case law, in any action in which a year 2000
claim is advanced, in resolving that claim all written
contractual terms, including limitations or exclusions of
liability or disclaimers of warranty, shall be fully
enforceable.
[[Page S1943]]
(b) Interpretation of Contract.--In any case in which a
contract is silent as to a particular issue, the
interpretation of the contract as to that issue shall be
determined by applicable law in effect at the time that the
contract was entered into.
(c) Unenforceable Contracts.--Subsection (a) does not apply
in any case in which a court determines that the contract as
a whole is unenforceable due to an infirmity in the formation
of the contract under applicable law in effect at the time
the contract was entered into.
SEC. 202. EVIDENCE OF REASONABLE EFFORTS AND DEFENSES.
(a) Reasonable Efforts.--In any action in which a year 2000
claim is advanced and in which a breach of contract or
related claim is alleged, in the resolution of that claim, in
addition to any other rights provided by applicable law, the
party against whom the claim of breach is asserted shall be
allowed, for the purpose of limiting or eliminating the
defendant's liability, to offer evidence that the
implementation of the contract by that party, or the efforts
made by that party to implement the contract, were reasonable
in light of the circumstances.
(b) Impossibility or Commercial Impracticability.--
(1) In general.--In any action in which a year 2000 claim
is advanced and in which a breach of contract or related
claim is alleged, in resolving that claim applicability of
the doctrines of impossibility and commercial
impracticability shall be determined by applicable law in
existence on January 1, 1999.
(2) Rule of construction.--Nothing in this Act shall be
construed as limiting or impairing a party's right to assert
defenses based upon the doctrines referred to in paragraph
(1).
SEC. 203. DAMAGES LIMITATION.
In any action in which a year 2000 claim is advanced and
that involves a breach of contract, warranty, or related
claim, in resolving that claim the court shall not award any
damages--
(1) unless those damages are provided for by the express
terms of the contract; or
(2) if the contract is silent on those damages, by
operation of the applicable Federal or State law that
governed interpretation of the contract at the time the
contract was entered into.
TITLE III--YEAR 2000 CIVIL ACTIONS INVOLVING TORT AND OTHER
NONCONTRACTUAL CLAIMS
SEC. 301. PROPORTIONATE LIABILITY.
(a) In General.--Except in cases involving personal injury,
a person against whom a final judgment is entered on a year
2000 claim shall be liable solely for the portion of the
judgment that corresponds to the percentage of responsibility
of that person, as determined under subsection (b).
(b) Determination of Responsibility.--
(1) In general.--As to any year 2000 claim, the court shall
instruct the jury to answer special interrogatories, or if
there is no jury, make findings, with respect to each
defendant and plaintiff, and each of the other persons
claimed by any of the parties to have caused or contributed
to the loss incurred by the plaintiff, including persons who
have entered into settlements with the plaintiff or
plaintiffs, concerning the percentage of responsibility of
that person, measured as a percentage of the total fault of
all persons who caused or contributed to the total loss
incurred by the plaintiff.
(2) Contents of special interrogatories or findings.--The
responses to interrogatories, or findings, as appropriate,
under paragraph (1) shall specify--
(A) the total amount of damages that the plaintiff is
entitled to recover; and
(B) the percentage of responsibility of each person found
to have caused or contributed to the loss incurred by the
plaintiff or plaintiffs.
(3) Factors for consideration.--In determining the
percentage of responsibility under this paragraph, the trier
of fact shall consider--
(A) the nature of the conduct of each person alleged to
have caused or contributed to the loss incurred by the
plaintiff; and
(B) the nature and extent of the causal relationship
between the conduct of each such person and the damages
incurred by the plaintiff or plaintiffs.
(4) Nondisclosure to jury.--The standard for allocation of
damages under paragraph (1) shall not be disclosed to members
of the jury.
SEC. 302. STATE OF MIND AND FORESEEABILITY.
(a) Defendant's State of Mind as to Year 2000 Failure.--
With respect to any year 2000 claim for money damages in
which the defendant's actual or constructive awareness of an
actual or potential year 2000 failure is an element of the
claim under applicable law, the defendant shall not be liable
unless the plaintiff, in addition to establishing all other
requisite elements of the claim, proves by clear and
convincing evidence that the defendant actually knew, or
recklessly disregarded a known and substantial risk, that the
failure would occur.
(b) Injury to Plaintiff.--With respect to any year 2000
claim for money damages in which the defendant's actual or
constructive awareness of actual or potential harm to
plaintiff is greater than the standard for negligence in
subsection (c) and is an element of the claim under
applicable law, the defendant shall not be liable unless the
plaintiff, in addition to establishing all other requisite
elements of the claim, proves by clear and convincing
evidence that the defendant actually knew, or recklessly
disregarded a known and substantial risk, that plaintiff
would suffer that harm.
(c) Negligence.--With respect to any year 2000 claim for
money damages, the defendant shall not be liable unless the
plaintiff establishes by clear and convincing evidence, in
addition to all other requisite elements of the claim, that
the defendant knew or should have known that the actions of
the defendant created an unreasonable risk of harm to the
plaintiff.
(d) Preservation of Existing Law.--Nothing in subsection
(a), (b), or (c) shall be deemed to create any year 2000
claim or to relieve the plaintiff in any year 2000 civil
action of the obligation of that plaintiff to establish any
element of the cause of action of that plaintiff under
applicable law.
SEC. 303. REASONABLE EFFORTS DEFENSE.
Except for breach or repudiation of contract claims, as to
any year 2000 claim seeking money damages--
(1) the fact that a year 2000 failure occurred in an
entity, facility, system, product, or component that was
within the control of the party against whom the claim is
asserted shall not constitute the sole basis for recovery;
and
(2) the party against whom the claim is asserted shall be
entitled to establish, as a complete defense to the claim,
that the party took measures that were reasonable under the
circumstances to prevent the year 2000 failure from occurring
or from causing the damages upon which the claim is based.
SEC. 304. DAMAGES LIMITATION.
(a) In General.--As to any year 2000 claim in which
punitive damages may be awarded under applicable law and in
which a defendant is found liable for punitive damages, the
amount of punitive damages that may be awarded to a claimant
shall not exceed the greater of--
(1) 3 times the amount awarded to the claimant for actual
damages; or
(2) $250,000.
(b) Special Rule.--
(1) Rule.--
(A) In general.--Notwithstanding subsection (a), as to any
year 2000 claim in which the defendant is found liable for
punitive damages and the defendant is an individual described
in subparagraph (B), the amount of punitive damages shall not
exceed the lesser of--
(i) 3 times the amount awarded to the claimant for actual
damages; or
(ii) $250,000.
(B) Description of individual.--An individual described in
this clause is an individual whose net worth does not exceed
$500,000, is an owner of an unincorporated business that has
fewer than 25 full-time employees, or is any partnership,
corporation, association, unit of local government, or
organization that has fewer than 25 full-time employees.
(2) Applicability.--For purposes of determining the
applicability of this subsection to a corporation, the number
of employees of a subsidiary of a wholly owned corporation
shall include all employees of a parent corporation or any
subsidiary of that parent corporation.
(c) Application of Limitations by the Court.--The
limitations contained in subsection (a) or (b) shall be
applied by the court and shall not be disclosed to the jury.
SEC. 305. ECONOMIC LOSSES.
(a) In General.--Subject to subsection (b), a party to a
year 2000 civil action may not recover economic losses for a
year 2000 claim based on tort unless the party is able to
show that at least one of the following circumstances exists:
(1) The recovery of these losses is provided for in the
contract to which the party seeking to recover such losses is
a party.
(2) If the contract is silent on those losses, and the
application of the applicable Federal or State law that
governed interpretation of the contract at the time the
contract was entered into would allow recovery of such
losses.
(3) These losses are incidental to a claim in the year 2000
civil action based on personal injury caused by a year 2000
failure.
(4) These losses are incidental to a claim in the year 2000
civil action based on damage to tangible property caused by a
year 2000 failure.
(b) Treatment of Economic Losses.--Economic losses shall be
recoverable in a year 2000 civil action only if applicable
Federal law, or applicable State law embodied in statute or
controlling judicial precedent as of January 1, 1999, permits
the recovery of such losses in the action.
SEC. 306. LIABILITY OF OFFICERS AND DIRECTORS.
(a) In General.--A director, officer, or trustee of a
business or other organization (including a corporation,
unincorporated association, partnership, or non-profit
organization) shall not be personally liable as to any year
2000 claim in the capacity of that individual as a director
or officer of the business or organization for an aggregate
amount greater than the greater of--
(1) $100,000; or
(2) the amount of cash compensation received by the
director or officer from the business or organization during
the 12-month period immediately preceding the act or omission
for which liability was imposed.
(b) Exception.--The limitation in subsection (a) shall not
apply to any claim in which it is found by clear and
convincing evidence that the director or officer, with
specific intent to cause harm to the plaintiff--
[[Page S1944]]
(1) intentionally made materially misleading statements
relied upon by the plaintiff regarding any actual or
potential year 2000 problem; or
(2) intentionally withheld material information regarding
any actual or potential year 2000 problem of the business or
organization that the director or officer had a duty to
disclose.
(c) Rule of Construction.--Nothing in this section shall be
deemed to impose, or to permit the imposition of, personal
liability on any director, officer, or trustee in excess of
the aggregate amount of liability to which such director,
officer, or trustee would be subject under applicable State
law in existence on January 1, 1999 (including any charter or
bylaw authorized by that State law).
TITLE IV--CLASS ACTIONS INVOLVING YEAR 2000 CLAIMS
SEC. 401. MINIMUM INJURY REQUIREMENT.
(a) In General.--In any action involving a year 2000 claim
that a product or service is defective, the action may be
maintained as a class action in Federal or State court with
respect to that claim only if--
(1) the claim satisfies all other prerequisites established
by applicable Federal or State law; and
(2) the court finds that the alleged defect in the product
or service was a material defect with respect to a majority
of the members of the class.
(b) Determination by Court.--
(1) In general.--As soon as practicable after the
commencement of an action involving a year 2000 claim that a
product or service is defective and that is brought as a
class action, the court shall determine by order whether the
requirement stated in paragraph (1) is satisfied.
(2) Orders.--An order under this subsection may be--
(A) conditional; and
(B) altered or amended before the decision on the merits.
SEC. 402. NOTIFICATION.
(a) Notice by Mail.--
(1) In general.--In any year 2000 civil action that is
maintained as a class action, the court, in addition to any
other notice required by applicable Federal or State law,
shall direct notice of the action to each member of the class
by United States mail, return receipt requested.
(2) Exclusion of certain persons.--Any person whose actual
receipt of the notice is not verified by the court or by
counsel for 1 of the parties shall be excluded from the class
unless that person informs the court in writing, on a date no
later than the commencement of trial or entry of judgment,
that the person wishes wish to join the class.
(b) Contents of Notice.--In addition to any information
required by applicable Federal or State law, the notice
described in this subsection shall--
(1) concisely and clearly describe the nature of the
action;
(2) identify the jurisdiction whose law will govern the
action;
(3) identify any potential claims that class counsel chose
not to pursue so that the action would satisfy class
certification requirements; and
(4) describe the fee arrangement of class counsel.
SEC. 403. DISMISSAL PRIOR TO CERTIFICATION.
Before determining whether to certify a class in a year
2000 civil action, the court may decide a motion to dismiss
or for summary judgment made by any party if the court
concludes that decision will--
(1) promote the fair and efficient adjudication of the
controversy; and
(2) not cause undue delay.
SEC. 404. FEDERAL JURISDICTION IN CLASS ACTIONS INVOLVING
YEAR 2000 CLAIMS.
(a) Diversity Jurisdiction.--Section 1332 of title 28,
United States Code, is amended--
(1) by redesignating subsections (b), (c), and (d) as
subsections (c), (d), and (e), respectively; and
(2) by inserting after subsection (a) the following:
``(b)(1)(A) The district courts shall, regardless of the
sum or value of the matter in controversy therein, have
original jurisdiction of any year 2000 civil action which is
brought as a class action and in which--
``(i) any member of a proposed plaintiff class is a citizen
of a State different from any defendant;
``(ii) any member of a proposed plaintiff class is a
foreign state or a citizen or subject of a foreign state and
any defendant is a citizen of a State; or
``(iii) any member of a proposed plaintiff class is a
citizen of a State and any defendant is a citizen or subject
of a foreign state.
``(B) As used in this paragraph, the term `foreign state'
has the meaning given that term in section 1603(a).
``(2)(A) The district court may, in its discretion, abstain
from hearing such action in a year 2000 civil action
described in paragraph (1) in which--
``(i) the substantial majority of the members of all
proposed plaintiff classes are citizens of a single State of
which the primary defendants are also citizens; and
``(ii) the claims asserted will be governed primarily by
the laws of that State, the district court should abstain
from hearing such action.
``(B) The district court may, in its discretion, abstain
from hearing such action in a year 2000 civil action
described in paragraph (1) in which--
``(i) all matters in controversy asserted by the individual
members of all proposed plaintiff classes in the aggregate do
not exceed the sum or value of $1,000,000, exclusive of
interest and costs;
``(ii) the number of members of all proposed plaintiff
classes in the aggregate is less than 100; or
``(iii) the primary defendants are States, State officials,
or other governmental entities against whom the district
court may be foreclosed from ordering relief, the district
court may, in its discretion, abstain from hearing such
action.
``(3)(A) Paragraph (1) and section 1453 shall not apply to
any class action that is brought under the Securities Act of
1933 (15 U.S.C. 77a et seq.).
``(B) Paragraph (1) and section 1453 shall not apply to a
class action described in subparagraph (C) that is based upon
the statutory or common law of the State in which the issuer
concerned is incorporated (in the case of a corporation) or
organized (in the case of any other entity).
``(C) A class action is described in this subparagraph if
it involves--
``(i) the purchase or sale of securities by an issuer or an
affiliate of an issuer exclusively from or to holders of
equity securities of the issuer; or
``(ii) any recommendation, position, or other communication
with respect to the sale of securities of an issuer that--
``(I) is made by or on behalf of the issuer or an affiliate
of the issuer to holders of equity securities of the issuer;
and
``(II) concerns decisions of those equity holders with
respect to voting their securities, acting in response to a
tender or exchange offer, or exercising dissenters' or
appraisal rights.
``(D) As used in this paragraph, the terms `issuer',
`security', and `equity security' have the meanings given
those terms in section 3 of the Securities Exchange Act of
1934 (15 U.S.C. 78c).''.
(b) Conforming Amendment.--Section 1332(c) of title 281
United States Code, (as redesignated by this section) is
amended by inserting after ``pursuant to subsection (a)''
after ``Federal courts''.
(c) Determination of Diversity.--Section 1332, as amended
by this section, is further amended by adding at the end the
following:
``(f) For purposes of subsection (b), a member of a
proposed class shall be deemed to be a citizen of a State
different from a defendant corporation only if that member is
a citizen of a State different from all States of which the
defendant corporation is deemed a citizen.''.
(d) Removal of Class Actions.--Chapter 89 of title 28,
United States Code is amended by adding at the end the
following:
``Sec. 1453. Removal of class actions
``(a) In General.--A year 2000 civil action that is brought
as a class action may be removed to a district court of the
United States in accordance with this chapter, except that
such action may be removed--
``(1) by any defendant without the consent of all
defendants; or
``(2) by any plaintiff class member who is not a named or
representative class member of the action for which removal
is sought, without the consent of all members of such class.
``(b) When Removable.--This section shall apply to any year
2000 civil action that is brought as a class action before or
after the entry of any order certifying a class.
``(c) Procedure for Removal.--
``(1) In general.--The provisions of section 1446(a)
relating to a defendant removing a case shall apply to a
plaintiff removing a case under this section.
``(2) Application.--With respect to the application of
section 1446(b), the requirement relating to the 30-day
filing period shall be met if a plaintiff class member who is
not a named or representative class member of the action for
which removal is sought files notice of removal within 30
days after receipt by such class member, through service or
otherwise, of the initial written notice of the class action
provided at the trial court's direction.''.
(e) Removal Limitations.--Section 1446(b) is amended in the
second undesignated paragraph--
(1) by inserting ``, by exercising due diligence,'' after
``ascertained''; and
(2) by striking ``section 1332'' and inserting ``section''.
(f) Technical and Conforming Amendments.--The table of
sections for chapter 89 of title 28, United States Code, is
amended by adding after the item relating to section 1452 the
following:
``1453. Removal of class actions.''.
(g) Procedure After Removal.--Section 1447 of title 28,
United States Code, is amended by adding at the end the
following:
``(f)(1) If, after removal, the court determines that no
aspect of an action that is subject to its jurisdiction
solely under the provisions of section 1332(b) may be
maintained as a class action under Rule 23 of the Federal
Rules of Civil Procedure, the court shall strike the class
allegations from the action and remand the action to the
State court.
``(2) Upon remand of the action, the period of limitations
for any claim that was asserted in the action on behalf of
any named or unnamed member of any proposed class shall be
deemed tolled to the full extent provided under Federal
law.''.
(h) Application of Substantive State Law.--Nothing in the
amendments made by this section shall alter the substantive
law
[[Page S1945]]
applicable to an action to which such amendments apply.
TITLE V--EFFECTIVE DATE
SEC. 501. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take
effect on January 1, 1999.
Mrs. FEINSTEIN. Mr. President, I rise along with my colleague from
Utah, Senator Hatch, to introduce the Year 2000 Fairness and
Responsibility Act. This bill, supported by more than 80 industry
organizations, is especially important to California, where over 20
percent of the nation's high-tech jobs are located.
The genesis of the bill was a request by several industry groups--
including the Semiconductor Industry Association (SIA), the National
Association of Manufacturers (NAM), the Chamber of Commerce and the
Information Technology Association of America--to develop legislation
to prevent frivolous and baseless lawsuits that could jeopardize
companies actually solving Y2K problems.
In concert with Senator Hatch and industry groups, a bill has been
drafted that is narrow in focus and moderate in application. In
developing this legislation, we have sought to solve an important
problem and feel we have worked to develop a fair bill. We remain
willing to address concerns with this legislation. It is a starting
point, not a final piece of legislation.
This bill is a bill that will prevent frivolous and baseless
litigation, but will not restrict an individual's right to sue to
mitigate real damages.
Let me outline a few key provisions of the legislation.
First, this bill provides a 90-day ``cooling off period,'' during
which no Y2K lawsuit may be filed and a three-step process must be
followed:
A. Anyone alleging harm due to a Y2K failure must first provide
written notice to the potential defendant of the problem.
B. The defendant then has 3 days to respond in writing.
C. The defendant also has 60 additional days to fix the problem.
This cooling off period is important because it allows companies to
concentrate on solving the problem before suits are filed and
hopefully, it will eliminate the rush to litigation that many
anticipate.
Obviously, the hope is that if a company is given an opportunity to
solve a Y2K problem, that company will proceed to do so with dispatch.
Therefore, there will be fewer injured parties, ergo, fewer will need
to file suit.
Second, the bill limits punitive damages to $250,000 or three times
economic loss, whichever is greater. However, for individuals whose net
worth does not exceed $500,000 or for small businesses, of fewer that
25 full-time employees, punitive damages would be limited to the lesser
of $250,000 or three times economic damages.
Third, this bill provides for proportionate liability, so that a
defendant would be limited to the percentage proportion of that
defendant's fault in causing the alleged harm. In other words, ``no
deep pockets.''
Fourth, the bill establishes requirements that the plaintiffs must
allege specific harm and damages when filing suit, including the
factual basis for the calculation of damages.
The bill also provides either party the opportunity to request
Alternative Dispute Resolution at any time during the 90-day cooling
off period provided for in this bill. If the parties agree to use
Alternative Dispute Resolution and the dispute is settled, the
defendant must pay the settlement in 30 days unless other arrangements
are agreed to.
Sixth, the bill provides that if a contract specifically limits
liability for actions that would include a Y2K action, no recovery is
available beyond the contract terms. Recovery, however, is available if
the contract does not mention liability limitations. Recovery is also
available for any contract entered into without a true ``meeting of the
minds.'' This would include contracts, for instance, between large
companies and ordinary consumers. Even if the terms of use within a
product box state a limit on liability, courts can award Y2K damages.
The bill also sets minimum injury requirements for class action
lawsuits to prevent attorneys from gathering large numbers of
plaintiffs that have not really even been harmed by a given Y2K defect.
Additionally, the bill requires that all potential class members be
notified of a Y2K class action by U.S. mail, return receipt requested.
That notice must include information about the nature of the action,
the jurisdiction, claims that are not being pursued, and the
arrangement for attorneys fees.
Ninth, the bill provides federal courts with jurisdiction over Y2K
lawsuits so long as any member of the class is a citizen of a State
different from the defendant (or is a citizen of a foreign country).
Current law states that if any class representative of the class action
is a citizen of the State in which the business is located, the federal
courts have no diversity jurisdiction. This makes it easy for the
attorneys filing a class action to have it heard in state court.
However, the bill does allow a federal court to abstain from exerting
jurisdiction in cases where most class members are in the same State as
the defendant and the case will be governed primarily by that State's
law, or if the class is small or the amount in controversy is less than
$1 million.
In summary, it is clear that there are consumers and businesses that
have been and will be harmed by Y2K defects. For these companies and
individuals impacted by Y2K problems, the Hatch-Feinstein bill
preserves the right to sue and to recover damages, and actually
increases their chances of finding a quick solution to their problems.
But the bill also prevents the kind of litigation nightmares that
would distract from Y2K solutions and drain resources from already
burdened companies throughout the country.
Mr. President, we believe that this bill represents a fair and
reasoned approach to what is surely a real problem. But as I have said,
this bill also represents a starting point, not an ending point. I look
forward to working with my colleagues on both sides of the aisle to
continue developing a fair bill that can pass in the near future. We
must give businesses the reasonable protections they require to solve
Y2K problems efficiently, quickly and without unnecessary distractions.
I thank Senator Hatch for working with me on this issue, I urge my
colleagues to contact us and to work towards a bipartisan, reasonable
solution to this problem.
______
By Mr. DeWINE (for himself, Mr. Cochran, and Mr. Voinovich):
S. 462. A bill to amend the Internal Revenue Code of 1986, the Social
Security Act, the Wagner-Peyser Act, and the Federal-State Extended
Unemployment Compensation Act of 1970 to improve the method by which
Federal unemployment taxes are collected and to improve the method by
which funds are provided from Federal unemployment tax revenue for
employment security administration, and for other purposes; to the
Committee on Finance.
THE EMPLOYMENT SECURITY FINANCING ACT OF 1999
Mr. DeWINE. Mr. President, I rise today, on behalf of myself and
Senators Cochran and Voinovich, to introduce the ``Employment Security
Financing Act of 1999.''
As you may know, our nation's employment security system was
established as a federal-state partnership more than 60 years ago. This
system has not undergone major restructuring since its inception;
however, a ``temporary'' .2% surtax was enacted in the 1970's. Today,
this system overtaxes and overburdens employers, shortchanges states,
and, most importantly, underserves those who need it most--the
involuntarily unemployed.
Two separate payroll taxes fund the employment security system. The
most onerous and inefficient of these is the FUTA (Federal Unemployment
Tax Act) tax. FUTA is a payroll tax collected by the IRS, dedicated to
provide administrative funding for states through allocation from the
Department of Labor (DOL). Unfortunately, FUTA taxes sent to Washington
rarely find their way back to the states. In Fiscal Year 1997, DOL
estimated that states sent more than $6 billion in FUTA taxes to
Washington, but received only $3.1 billion in return.
Mr. President, reform of the unemployment insurance program is
essential to a state like Ohio, which receives less than 39 cents of
each employer FUTA dollar. This shortfall in funding has led to the
closing of 22 local employment service offices during the last four
years. In order to make up for
[[Page S1946]]
the shortfall of FUTA dollars, the Ohio legislature has appropriated
more than $50 million during the last four years to pay for the
administration of employment services, something that should be funded
by FUTA taxes. This appropriation of state tax dollars forces Ohio
taxpayers to pay twice to fund these services.
Ohio is not alone. Since 1990, less than 59 cents of every FUTA
dollar has been sent back to the states. In fact, in 1997, states
received a paltry 52% return on their FUTA tax dollars. As a result,
many states are being forced to make up the shortfall from their own
general funds, and cut back on other services provided to the
unemployed.
For businesses, the system's consequences are equally severe.
Employers are forced to pay two separate taxes. The current FUTA net
tax rate is .8%, or a maximum of $56 per employee. In addition,
employers must pay a similar state payroll tax to finance unemployment
benefits. It is estimated that the nation's 6 million FUTA-paying
employers spend a total of $1 billion annually simply complying with
FUTA reporting requirments.
Mr. President, the Employment Security Financing Act is designed to
address the problems the current system has imposed on the states and
FUTA taxpayers. Specifically, it would: reduce the tax burden by
repealing the ``temporary'' .2% FUTA surtax; streamline filings by
transferring responsibility for collection of the FUTA tax from the IRS
to the states; improve administration by ensuring that states get a
greater return on their employers' FUTA tax dollars; improve services
with an emphasis on reemployment; and combat fraud and abuse.
This is an important issue that Congress needs to consider. I look
forward to working with others on legislation that can meet the budget
rules, yet still achieve necessary reform of the unemployment insurance
program.
I ask unanimous consent that letters of support from the National
Federation of Independent Business, and Strategic Services on
Unemployment & Workers' Compensation be printed in the Record.
There being no objection, the letters were ordered to be printed in
the Record, as follows:
Strategic Services on Unemployment & Workers'
Compensation,
Washington, DC, February 19, 1999.
Hon. Mike DeWine,
U.S. Senate, Washington, DC.
Dear Senator DeWine: On behalf of the business community,
UWC enthusiastically endorses your proposal, the Employment
Security Financing Reform Act, which will save employers $4
billion in unemployment tax and claim costs each year and
provide a permanent fix for the chronic under-funding of
state unemployment insurance (UI) and employment service
agencies. UWC is the only national association specializing
exclusively in unemployment and workers' compensation issues
on behalf of business. Our members include large and small
employers and national and state business organizations
around the country. Enactment of your proposal is a top
priority for UWC.
Only 50 cents out of each dollar now collected from
employers under the Federal Unemployment Tax (FUTA) is used
as intended for administering the state UI program. The
balance of FUTA revenue is effectively diverted to other
programs, disguising the true deficit in federal general
revenues and accumulating IOU's in a sham Unemployment
``Trust Fund'' whose apparent buildup will later be used to
justify higher unemployment benefits--all at employer
expense. This charade would end under your proposal, which is
a win/win/win for workers, business, and government. It will
save money for employers and make government more efficient
and responsive to local needs and conditions. The proposal
achieves these results by reducing the FUTA rate and allowing
states to fund their agencies at a level closer to the amount
actually needed to administer unemployment benefits and help
match jobless workers with employers eager to fill widespread
job vacancies. It cuts paperwork for employers by eliminating
the separate FUTA tax forms; gives each state rather than
Washington responsibility to determine how much it needs to
administer its unemployment and employment services agencies;
and puts 100% of FUTA funds to work reducing state
unemployment taxes on business.
As a business organization, UWC supports adequate but not
excessive FUTA taxes. It is inexcusable that the federal
government collects more under FUTA than is needed for sound
UI administration and yet under-finances the agencies which
are responsible for efforts to move UI claimants off the
unemployment rolls and match workers with jobs. This under-
funding directly inflates the cost of state unemployment
benefits, which are financed through business payroll taxes
at the state level. It has also caused the states to impose
$200 million in additional state taxes to make up for the
shortfall in FUTA funds doled out by the federal government.
It's long past time to fix this problem, and we heartily
applaud your leadership in seeking permanent FUTA reform.
Sincerely,
Eric J. Oxfeld,
President.
____
National Federation of
Independent Business,
Washington, DC, February 22, 1999.
Hon. Mike DeWine,
U.S. Senate, Washington, DC.
Dear Senator DeWine: On behalf of the 600,000 small
business owners of the National Federation of Independent
Business (NFIB), I want to commend you for introducing ``The
Employment Security Financing Act of 1999.'' One of our top
legislative priorities this year is to encourage Congress to
cut payroll taxes and return the unemployment system to the
states. Your legislation will ease the burden of unemployment
taxes on small business and overhaul an inefficient and
duplicative system.
Small businesses tend to be labor intensive, so they are
disproportionately affected by taxes on labor. And unlike
income taxes, payroll taxes must be paid whether a business
makes a profit or loss. Most of our members survive on a thin
margin of positive cash flow. Payroll taxes make that margin
even thinner.
Importantly, your legislation takes steps to begin reducing
the burden of one payroll tax--the Federal Unemployment Tax
Act (FUTA). Specifically, it repeals the ``temporary'' FUTA
surtax put in place in 1976 in order to repay loans from the
federal unemployment trust fund. Even though this money was
fully repaid in 1987, Congress has extended this temporary
tax four times, imposing an annual $1.4 billion tax burden on
America's employers and employees. Repeal of the surtax is
long overdue.
As this legislation progresses through Congress, we hope
that you will look for opportunities to further reduce FUTA
taxes. Even with the elimination of the surtax, FUTA taxes
collect far more than is needed for the program. In FY 1997,
the Department of Labor estimates that states received only
$3.1 billion of the $6 billion in FUTA taxes sent to
Washington. Permanent FUTA taxes should be cut to reflect the
lower costs of the program.
Finally, we support language in your legislation that
transfers responsibility for collecting the FUTA tax from the
IRS to the states. This will provide a much needed paperwork
reduction boost for small business owners who currently have
to fill our separate state and federal unemployment tax
forms.
We thank you for introducing this important legislation and
look forward to working with you in the coming months to
enact it into law.
Sincerely,
Dan Danner,
Vice President, Federal Public Policy.
______
By Mr. WELLSTONE (for himself, Mr. Kennedy, and Ms. Landrieu):
S. 465. A bill to meet the mental health substance abuse treatment
needs of incarcerated children and youth; to the Committee on the
Judiciary.
the mental health juvenile justice act
Mr. WELLSTONE. Mr. President, today, I am introducing legislation
that outlines a comprehensive strategy for providing federal assistance
to states and localities, to better serve children in need of mental
health services who come in contact with our nation's juvenile justice
system. I am pleased to be joined by Senators Kennedy and Landrieu in
this effort. The bill has received the strong support of over forty
organizations including the American Bar Association, the American
Psychiatric Association, the Children's Defense Fund, the United Church
of Christ, and form states judges, probation and police officers.
Elie Wiesel once said: ``More than anything--more than hatred and
torture--more than pain--do I fear indifference.'' We must be vigilant
not to allow ourselves and our country to be indifferent to children's
misery, particularly those children who may be sick, difficult, and
test our patience, understanding, and compassion.
Yet, today, throughout America, I fear that we have become deeply
indifferent to how we treat juveniles in the justice system who live in
the shadow of mental illness.
Each year, more than one million youth come in contact with the
juvenile justice system, and more than 100,000 of these youth are
detained in some type of jail or prison. These children are
overwhelmingly poor and a disproportionate number of children of color.
By the time many of these children are arrested and incarcerated,
they have a long history of problems in their short lives. As many as
two-thirds suffer from a mental or emotional disturbance. One in have
has a
[[Page S1947]]
serious disorder. Many have substance abuse problems and learning
disabilities. Most come from troubled homes.
The `crimes' of these children vary. While some have committed
violent crimes, some have committed petty theft or skipped school.
Still others have simply run away from home to escape physical or
sexual abuse from parents or other adults.
Despite popular opinion, most of the children who are locked up are
not violent. Justice Department studies show that only one in twenty
youth in the juvenile system have committed violent offenses.
Jails and juvenile detention centers often find themselves unprepared
to deal with the mentally ill. For instance, medication may not be
given or properly monitored. Or, guards may not know, for example, how
to respond to disturbed youth who simply is not capable of standing in
an orderly line for meals. A common result is that these kids are
disciplined and put in solitary confinement.
What is happening to these troubled children is national tragedy.
Across the country, we are dumping emotionally disturbed kids into
juvenile prisons.
Why do so many youth with mental illness end up in the justice
system? Children with mental disorders often behave in ways that bring
them into conflict with family members, authority figures, and peers.
Over the last ten years, the public attitude toward juvenile crime has
grown toughter. Consequently, the juvenile justice system is casting a
wilder net. A growing fear and intolerance of children who misbehave or
commit nonviolent offenses have pushed children into the juvenile
system who would not have ended up there in earlier times.
At the same time, our country has failed to invest adequately in
services and programs that could reduce the need for incarceration.
These include mental health services. The warning signs for delinquency
are well known--school failure, drug and alcohol abuse, family violence
and abuse, and poverty. Yet, we have failed to put in place community
prevention, screening, and early intervention services for those
children most at risk. Proper mental health treatment can prevent or
reduce offending. But many communities don't have adequate treatment
services for children and their families.
For example, a recent report by Louisiana state officials
acknowledged that secure facilities held many children who had been
``discarded'' from the educational, child welfare and other systems of
care. I have heard that social workers in a number of states have been
even instructed desperate parents to have their children arrested in
order to get services because community health services are so scarce.
Last July, I went with the National Mental Health Association to the
Tallulah Correctional Center for Youth, a privately-owned correctional
facility for over 600 youth in northeast Louisiana, to see firsthand
the shocking civil rights violations cited by the U.S. Department of
Justice. I left with vivid and disturbing images of how we are dealing
with youth with mental and emotional problems in this country.
While in Tallulah, I saw one hallucinating and suicidal child in
isolation for observation, yet his transfer to an appropriate mental
health facility was uncertain. Another child I met was taking three
different types of powerful psychiatric medications, but had only seen
a psychiatrist twice in the last eight months. The Justice Department
reports chronicled instances where boys were being repeatedly sexually
and physically abused, and children with mental illnesses were being
housed with youths who have committed violent crimes. Mentally ill
children received no therapy, and when they were having symptoms, they
were isolated or punished for their illness.
Tallulah is not the only offending facility, however. The Justice
Department has exposed gross abuses in Georgia, Kentucky, and other
juvenile facilities in Louisiana. Other states are also experiencing
similar problems. Investigators found extreme cases of physical abuse
and neglect of mental health needs, including unwarranted and prolonged
isolation of suicidal children, hog-tie and chemical restraints used on
youth with serious emotional disturbances, forced medication and even
denial of medication. Children with extensive psychiatric histories who
are prone to self-mutilation (e.g., cutting themselves with glass)
never even saw a psychiatrist.
In some cases, abusive treatment of these children results directly
from their being emotionally disturbed. Staff in juvenile facilities
fail to recognize, and in fact punish them for, the symptom of their
disorders. Children have been punished for requesting treatment or put
in isolation when they refused to accept treatment. One child in a boot
camp was punished for making involuntary noises that were symptoms of
his Tourette's syndrome. Mental disorders are being handled almost
solely through discipline, isolation, and restraints according to
investigations by the US Justice Department and human rights groups.
A recent survey by the California Youth Authority found that 35
percent of boys in its custody and 73 percent of girls need treatment.
One reason for the higher percentage of young people with mental
illness in jail, specialists say, is that many states have cut budgets
for adolescent psychiatric care, even more than those for adults.
If a child had a broken leg, would any institution leave that leg
unattended? Why then, in America, are we dumping children with mental
health problems in institutions without treatment, and under conditions
which can only worsen their illnesses?
Our current system fails mentally ill children. How? The screening
and treatment of mental and emotional disorders are inadequate or
nonexistent at correctional facilities. Mental illness is often
addressed solely through discipline, isolation, and restraint. At
Tallulah, children told us that they were beaten and were put in
isolation for long periods, even months--echoing in painful detail what
had been revealed in the Justice Department reports.
The tragedy of this situation is that we know what works--treatment--
but our current system for children with mental illness favors
punishment over treatment. For children, we know that family-focused,
individualized treatment delivered in the child's community can improve
children's mental health and prevent them from offending in the first
place. It is proven that integrating these mental health and substance
abuse services with schools and child welfare agencies produces even
greater success. In fact, linked community services have been shown to
reduce contact with the juvenile justice system by 46 percent.
My legislation would help states provide critical assistance to these
children who suffer from mental disorders. It focuses on providing
appropriate services that can both prevent them from committing
delinquent offenses and from reoffending, and it is structured so that
services are planned and integrated at the local level.
First, it provides funds to train juvenile justice personnel on the
identification and appropriate treatment of mental illness in kids, and
on the use of community-based alternatives to incarceration. Currently,
juvenile justice system personnel lack routine training to deal with
mentally ill youth, many of whose low risk factors make them good
candidates for alternative treatment programs in the community.
Second, it authorizes a new treatment and diversion block grant
program to state and localities. Despite studies showing large numbers
of incarcerated children having psychiatric disorders, we know that
screening, assessment and treatment for children's mental disorders is
grossly inadequate. Further, many of these kids have multiple problems
before they are locked-up, and are involved with several different
child agencies and systems. Typically, these agencies shift the care
and costs for serving a child back and forth. The result is that the
child and the family never receive the services they need. States will
be able to access the new block grant funds to develop and implement
integrated treatment and diversion programs for juveniles who come up
against the police and the courts.
Third, it will establish training and technical assistance centers.
Now, States do not have the information and technical assistance they
need to provide appropriate services for youth with mental health
disorders. Further,
[[Page S1948]]
it will establish a federal council which will report to Congress on
recommendations to improve the treatment of mentally ill children who
come into contact with the justice system.
Next, it will give States the choice whether to use their federal
prison construction funds for treatment of incarcerated mentally ill
and children.
Finally, if will amend the Prison Litigation Reform Act, by restoring
to federal courts the authority to remedy abuse conditions in juvenile
justice facilities. Congress passed the act in 1996 largely to reduce
frivolous pro se lawsuits by prisoners, and nothing in my bill would
affect those provisions of the PLRA. Yet, the PLRA has had a
devastating effect on the conditions in which juvenile offenders and
mentally ill prisoners are held. My provision would not repeal the PLRA
or adversely effect the crackdown on frivolous lawsuits. Instead, it
would carve out a narrow exception to the PLRA restrictions in limited
circumstances, involving children and the mentally ill, for it has been
shown again and again that they are particularly vulnerable to abuse
and neglect in state institutions.
We can no longer be indifferent to this national tragedy. What I saw
in Tallulah, and what is happening in countless facilities across this
country, is a disgrace. The wholesale neglect of juveniles with mental
illness in our prisons must end. We as a society have the moral
obligation to see they get the help they need. Treating young people
with mental disorders in dehumanizing ways is not the answer to
questions of crime prevention and public safety. And it's not the way
to make children productive, law abiding, and caring citizens. I urge
my colleagues to support this important legislation.
I ask unanimous consent 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. 465
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 ``Mental Health Juvenile
Justice Act''.
SEC. 2. TRAINING OF JUSTICE SYSTEM PERSONNEL.
Title II of the Juvenile Justice and Delinquency Prevention
Act of 1974 (42 U.S.C. 5611 et seq.) is amended by adding at
the end the following:
``PART K--ACCESS TO MENTAL HEALTH AND SUBSTANCE ABUSE TREATMENT
``SEC. 299AA. GRANTS FOR TRAINING OF JUSTICE SYSTEM
PERSONNEL.
``(a) In General.--The Administrator shall make grants to
State and local juvenile justice agencies in collaboration
with State and local mental health agencies, for purposes of
training the officers and employees of the State juvenile
justice system (including employees of facilities that are
contracted for operation by State and local juvenile
authorities) regarding appropriate access to mental health
and substance abuse treatment programs and services in the
State for juveniles who come into contact with the State
juvenile justice system who have mental health or substance
abuse problems.
``(b) Use of Funds.--A State or local juvenile justice
agency that receives a grant under this section may use the
grant for purposes of--
``(1) providing cross-training, jointly with the public
mental health system, for State juvenile court judges, public
defenders, and mental health and substance abuse agency
representatives with respect to the appropriate use of
effective, community-based alternatives to juvenile justice
or mental health system institutional placements; or
``(2) providing training for State juvenile probation
officers and community mental health and substance abuse
program representatives on appropriate linkages between
probation programs and mental health community programs,
specifically focusing on the identification of mental
disorders and substance abuse addiction in juveniles on
probation, effective treatment interventions for those
disorders, and making appropriate contact with mental health
and substance abuse case managers and programs in the
community, in order to ensure that juveniles on probation
receive appropriate access to mental health and substance
abuse treatment programs and services.
``(c) Authorization of Appropriations.--There are
authorized to be appropriated from the Violent Crime
Reduction Trust Fund, $50,000,000 for fiscal years 1999,
2000, 2001, 2002, and 2003 to carry out this section.''.
SEC. 3. BLOCK GRANT FUNDING FOR TREATMENT AND DIVERSION
PROGRAMS.
Part K of title II of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5611 et seq.) is amended by
adding at the end the following:
``SEC. 299BB. GRANTS FOR STATE PARTNERSHIPS.
``(a) In General.--The Attorney General and the Secretary
of Health and Human Services shall make grants to
partnerships between State and local/county juvenile justice
agencies and State and local mental health authorities (or
appropriate children service agencies) in accordance with
this section.
``(b) Use of Funds.--A partnership described in subsection
(a) that receives a grant under this section shall use such
amounts for the establishment and implementation of programs
that address the service needs of juveniles who come into
contact with the justice system (including facilities
contracted for operation by State or local juvenile
authorities) who have mental health or substance abuse
problems, by requiring the following:
``(1) Diversion.--Appropriate diversion of those juveniles
from incarceration--
``(A) at imminent risk of being taken into custody;
``(B) at the time they are initially taken into custody;
``(C) after they are charged with an offense or act of
juvenile delinquency;
``(D) after they are adjudicated delinquent but prior to
case disposition; and
``(E) after they are released from a juvenile facility, for
the purposes of attending after-care programs.
``(2) Treatment.--
``(A) Screening and assessment of juveniles.--
``(i) In general.--Initial mental health screening shall be
completed for all juveniles immediately upon entering the
juvenile justice system or a juvenile facility. Screening
shall be conducted by qualified health and mental health
professionals or by staff who have been trained by qualified
health, mental health, and substance abuse professionals. In
the case of a screening by staff, the screening results
should be reviewed by qualified health, mental health
professionals not later than 24 hours after the screening.
``(ii) Acute mental illness.--Juveniles who suffer from
acute mental disorders, who are suicidal, or in need of
detoxification shall be placed in or immediately transferred
to an appropriate medical or mental health facility. They
shall be admitted to a secure correctional facility only with
written medical clearance.
``(iii) Comprehensive assessment.--All juveniles entering
the juvenile justice system shall have a comprehensive
assessment conducted and an individualized treatment plan
written and implemented within 2 weeks. This assessment shall
be conducted within 1 week for juveniles incarcerated in
secure facilities. Assessments shall be completed by
qualified health, mental health, and substance abuse
professionals.
``(B) Treatment.--
``(i) In general.--If the need for treatment is indicated
by the assessment of a juvenile, the juvenile shall be
referred to or treated by a qualified professional. A
juvenile who is currently receiving treatment for a mental or
emotional disorder shall have treatment continued.
``(ii) Period.--Treatment shall continue until additional
mental health assessment determines that the juvenile is no
longer in need of treatment. Treatment plans shall be
reevaluated at least every 30 days.
``(iii) Discharge plan.--An incarcerated juvenile shall
have a discharge plan prepared when the juvenile enters the
correctional facility in order to integrate the juvenile back
into the family or the community. This plan shall be updated
in consultation with the juvenile's family or guardian before
the juvenile leaves the facility. Discharge plans shall
address the provision of aftercare services.
``(iv) Medication.--Any juvenile receiving psychotropic
medications shall be under the care of a licensed
psychiatrist. Psychotropic medications shall be monitored
regularly by trained staff for their efficacy and side
effects.
``(v) Specialized treatment.--Specialized treatment and
services shall be continually available to a juvenile who--
``(I) has a history of mental health problems or treatment;
``(II) has a documented history of sexual abuse or
offenses, as victim or as perpetrator;
``(III) has substance abuse problems, health problems,
learning disabilities, or histories of family abuse or
violence; or
``(IV) has developmental disabilities.
``(C) Medical and mental health emergencies.--All
correctional facilities shall have written policies and
procedures on suicide prevention. All staff working in
correctional facilities shall be trained and certified
annually in suicide prevention. Facilities shall have written
arrangements with a hospital or other facility for providing
emergency medical and mental health care. Physical and mental
health services shall be available to an incarcerated
juvenile 24 hours per day, 7 days per week.
``(D) Classification of juveniles.--
``(i) In general.--Juvenile facilities shall classify and
house juveniles in living units according to a plan that
includes age, gender, offense, special medical or mental
health condition, size, and vulnerability to victimization.
Younger, smaller, weaker, and more vulnerable juveniles shall
not be placed in housing units with older, more aggressive
juveniles.
``(ii) Boot camps.--Juveniles who are under 13 years old or
who have serious medical conditions or mental illness shall
not be placed in paramilitary boot camps.
[[Page S1949]]
``(E) Confidentiality of records.--Mental health and
substance abuse treatment records of juveniles shall be
treated as confidential and shall be excluded from the
records that States require to be routinely released to other
correctional authorities and school officials.
``(F) Mandatory reporting.--States shall keep records of
the incidence and types of mental health and substance abuse
disorders in their juvenile justice populations, the range
and scope of services provided, and barriers to service. The
State shall submit an analysis of this information yearly to
the Department of Justice.
``(G) Staff ratios for correctional facilities.--Each
secure correctional facility shall have a minimum ratio of no
fewer than 1 mental health counselor to every 50 juveniles.
Mental health counselors shall be professionally trained and
certified or licensed. Each secure correctional facility
shall have a minimum ratio of 1 clinical psychologist for
every 100 juveniles. Each secure correctional facility shall
have a minimum ratio of 1 licensed psychiatrist for every 100
juveniles receiving psychiatric care.
``(H) Use of force.--
``(i) Written guidelines.--All juvenile facilities shall
have a written behavioral management system based on
incentives and rewards to reduce misconduct and to decrease
the use of restraints and seclusion by staff.
``(ii) Limitations on restraint.--Control techniques such
as restraint, seclusion, chemical sprays, and room
confinement shall be used only in response to extreme threats
to life or safety. Use of these techniques shall be approved
by the facility superintendent or chief medical officer and
documented in the juvenile's file along with the
justification for use and the failure of less restrictive
alternatives.
``(iii) Limitation on isolation.--Isolation and seclusion
shall be used only for immediate and short-term security or
safety reasons. No juvenile shall be placed in isolation
without approval of the facility superintendent or chief
medical officer or their official staff designee. All cases
shall be documented in the juvenile's file along with the
justification. A juvenile shall be in isolation only the
amount of time necessary to achieve security and safety of
the juvenile and staff. Staff shall monitor each juvenile in
isolation once every 15 minutes and conduct a professional
review of the need for isolation at least every 4 hours. Any
juvenile held in seclusion for 24 hours shall be examined by
a physician or licensed psychologist.
``(I) IDEA and rehabilitation act.--All juvenile facilities
shall abide by all mandatory requirements and time lines set
forth under the Individuals with Disabilities Education Act
and section 504 of the Rehabilitation Act of 1973.
``(J) Advocacy assistance.--
``(i) In general.--The Secretary of Health and Human
Services shall make grants to the systems established under
part C of the Developmental Disabilities Assistance and Bill
of Rights Act (42 U.S.C. 6041 et seq.) to monitor the mental
health and special education services provided by grantees to
juveniles under paragraph (2) (A), (B), (C), (H), and (I) of
this section, and to advocate on behalf of juveniles to
assure that such services are properly provided.
``(ii) Appropriation.--The Secretary of Health and Human
Services will reserve no less than 3 percent of the funds
appropriated under this section for the purposes set forth in
paragraph (2)(J)(i).
``(c) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
from the Violent Crime Reduction Trust Fund, $500,000,000 for
fiscal years 1999, 2000, 2001, 2002, and 2003 to carry out
this section.
``(2) Allocation.--Of amounts appropriated under paragraph
(1)--
``(A) 35 percent shall be used for diversion programs under
subsection (b)(1); and
``(B) 65 percent shall be used for treatment programs under
subsection (b)(2).
``(3) Incentives.--The Attorney General and the Secretary
of Health and Human Services shall give preference under
subsection (b)(2) to partnerships that integrate treatment
programs to serve juveniles with co-occurring mental health
and substance abuse disorders.
``(4) Waivers.--The Attorney General and the Secretary of
Health and Human Services may grant a waiver of requirements
under subsection (b)(2) for good cause.
``SEC. 299CC. GRANTS FOR PARTNERSHIPS.
``(a) In General.--Any partnership desiring to receive a
grant under this part shall submit an application at such
time, in such manner, and containing such information as the
Attorney General and the Secretary of Health and Human
Services may prescribe.
``(b) Contents.--In accordance with guidelines established
by the Attorney General and the Secretary of Health and Human
Services, each application submitted under subsection (a)
shall--
``(1) set forth a program or activity for carrying out one
or more of the purposes specified in section 299BB(b) and
specifically identify each such purpose such program or
activity is designed to carry out;
``(2) provide that such program or activity shall be
administered by or under the supervision of the applicant;
``(3) provide for the proper and efficient administration
of such program or activity;
``(4) provide for regular evaluation of such program or
activity;
``(5) provide an assurance that the proposed program or
activity will supplement, not supplant, similar programs and
activities already available in the community; and
``(6) provide for such fiscal control and fund accounting
procedures as may be necessary to ensure prudent use, proper
disbursement, and accurate accounting of funds receiving
under this part.''.
SEC. 4. INITIATIVE FOR COMPREHENSIVE, INTERSYSTEM PROGRAMS.
Subpart 3 of part B of title V of the Public Health Service
Act (42 U.S.C. 290bb-31 et seq.) is amended by adding at the
end the following:
``SEC. 520C. INITIATIVE FOR COMPREHENSIVE, INTERSYSTEM
PROGRAMS.
``(a) In General.--The Attorney General and the Secretary,
acting through the Director of the Center for Mental Health
Services, shall award competitive grants to eligible entities
for programs that address the service needs of juveniles and
juveniles with serious mental illnesses by requiring the
State or local juvenile justice system, the mental health
system, and the substance abuse treatment system to work
collaboratively to ensure--
``(1) the appropriate diversion of such juveniles and
juveniles from incarceration;
``(2) the provision of appropriate mental health and
substance abuse services as an alternative to incarceration
and for those juveniles on probation or parole; and
``(3) the provision of followup services for juveniles who
are discharged from the juvenile justice system.
``(b) Eligibility.--To be eligible to receive a grant under
this section an entity shall--
``(1) be a State or local juvenile justice agency, mental
health agency, or substance abuse agency (including community
diversion programs);
``(2) prepare and submit to the Secretary an application at
such time, in such manner, and containing such information as
the Secretary may require, including--
``(A) an assurance that the applicant has the consent of
all entities described in paragraph (1) in carrying out and
coordinating activities under the grant; and
``(B) with respect to services for juveniles, an assurance
that the applicant has collaborated with the State or local
educational agency and the State or local welfare agency in
carrying out and coordinating activities under the grant;
``(3) be given priority if it is a joint application
between juvenile justice and substance abuse or mental health
agencies; and
``(4) ensure that funds from non-Federal sources are
available to match amounts provided under the grant in an
amount that is not less than--
``(A) with respect to the first 3 years under the grant, 25
percent of the amount provided under the grant; and
``(B) with respect to the fourth and fifth years under the
grant, 50 percent of the amount provided under the grant.
``(c) Use of Funds.--
``(1) Initial year.--An entity that receives a grant under
this section shall, in the first fiscal year in which amounts
are provided under the grant, use such amounts to develop a
collaborative plan--
``(A) for how the guarantee will institute a system to
provide intensive community services--
``(i) to prevent high-risk juveniles from coming in contact
with the justice system; and
``(ii) to meet the mental health and substance abuse
treatment needs of juveniles on probation or recently
discharged from the justice system; and
``(B) providing for the exchange by agencies of information
to enhance the provision of mental health or substance abuse
services to juveniles.
``(2) 2-5th years.--With respect to the second through
fifth fiscal years in which amounts are provided under the
grant, the grantee shall use amounts provided under the
grant--
``(A) to furnish services, such as assertive community
treatment, wrap-around services for juveniles, multisystemic
therapy, outreach, integrated mental health and substance
abuse treatment, case management, health care, education and
job training, assistance in securing stable housing, finding
a job or obtaining income support, other benefits, access to
appropriate school-based services, transitional and
independent living services, mentoring programs, home-based
services, and provision of appropriate after school and
summer programing;
``(B) to establish a network of boundary spanners to
conduct regular meetings with judges, provide liaison with
mental health and substance abuse workers, share and
distribute information, and coordinate with mental health and
substance abuse treatment providers, and probation or parole
officers concerning provision of appropriate mental health
and drug and alcohol addiction services for individuals on
probation or parole;
``(C) to provide cross-system training among police,
corrections, and mental health and substance abuse providers
with the purpose of enhancing collaboration and the
effectiveness of all systems;
``(D) to provide coordinated and effective aftercare
programs for juveniles with emotional or mental disorders who
are discharged from jail, prison, or juvenile facilities;
``(E) to purchase technical assistance to achieve the grant
project's goals; and
[[Page S1950]]
``(F) to furnish services, to train personnel in
collaborative approaches, and to enhance intersystem
collaboration.
``(3) Definition.--In paragraph (2)(B), the term `boundary
spanners' means professionals who act as case managers for
juveniles with mental disorders and substance abuse
addictions, within both justice agency facilities and
community mental health programs and who have full authority
from both systems to act as problem-solvers and advocates on
behalf of individuals targeted for service under this
program.
``(d) Area Served by the Project.--An entity receiving a
grant under this section shall conduct activities under the
grant to serve at least a single political jurisdiction.
``(e) Authorization of Appropriations.--There shall be made
available to carry out the section, not less than 10 percent
of the amount appropriated under section 1935(a) for each of
the fiscal years 1999 through 2003.''.
SEC. 5. INTERAGENCY RESEARCH, TRAINING, AND TECHNICAL
ASSISTANCE CENTERS.
(a) Grants or Contracts.--The Secretary of Health and Human
Services, acting through the Substance Abuse and Mental
Health Services Administration and in consultation with the
Juvenile Justice and Delinquency Prevention Office and the
Justice Assistance Bureau, shall award grants and contracts
for the establishment of 4 research, training, and technical
assistance centers to carry out the activities described in
subsection (c).
(b) Eligibility.--To be eligible to receive a grant or
contract under subsection (a), an entity shall--
(1) be a public or nonprofit private entity; and
(2) prepare and submit to the Secretary of Health and Human
Services an application, at such time, in such manner, and
containing such information as the Secretary may require.
(c) Activities.--A center established under a grant or
contract under subsection (a) shall--
(1) provide training with respect to state-of-the-art
mental health and justice-related services and successful
mental health and substance abuse-justice collaborations, to
public policymakers, law enforcement administrators, public
defenders, police, probation officers, judges, parole
officials, jail administrators and mental health and
substance abuse providers and administrators;
(2) engage in research and evaluations concerning State and
local justice and mental health systems, including system
redesign initiatives, and disseminate information concerning
the results of such evaluations;
(3) provide direct technical assistance, including
assistance provided through toll-free telephone numbers,
concerning issues such as how to accommodate individuals who
are being processed through the courts under the Americans
with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.), what
types of mental health or substance abuse service approaches
are effective within the judicial system, and how community-
based mental health or substance abuse services can be more
effective, including relevant regional, ethnic, and gender-
related considerations; and
(4) provide information, training, and technical assistance
to State and local governmental officials to enhance the
capacity of such officials to provide appropriate services
relating to mental health or substance abuse.
(d) Authorization of Appropriations.--There is authorized
to be appropriated, $4,000,000 for each fiscal year to carry
out this section.
SEC. 6. FEDERAL COORDINATING COUNCIL ON THE CRIMINALIZATION
OF JUVENILES WITH MENTAL DISORDERS.
(a) Establishment.--There is established a Federal
Coordinating Council on Criminalization of Juveniles With
Mental Disorders as an interdepartmental council to study and
coordinate the criminal and juvenile justice and mental
health and substance abuse activities of the Federal
Government and to report to Congress on proposed new
legislation to improve the treatment of mentally ill
juveniles who come in contact with the juvenile justice
system.
(b) Membership.--The Council shall include representatives
from--
(1) the appropriate Federal agencies, as determined by the
President, including, at a minimum--
(A) the Office of the Secretary of Health and Human
Services;
(B) the Office for Juvenile Justice and Delinquency
Prevention;
(C) the National Institute of Mental Health;
(D) the Social Security Administration;
(E) the Department of Education; and
(F) the Substance Abuse and Mental Health Services
Administration; and
(2) children's mental health advocacy groups.
(c) Duties.--The Council shall--
(1) review Federal policies that hinder or facilitate
coordination at the State and local level between the mental
health and substance abuse systems on the one hand and the
juvenile justice and corrections system on the other;
(2) study the possibilities for improving collaboration at
the Federal, State, and local level among these systems; and
(3) recommend to Congress any appropriate new initiatives
which require legislative action.
(d) Final Report.--The Council shall submit--
(1) an interim report on current coordination and
collaboration, or lack thereof, 18 months after the Council
is established; and
(2) recommendations for new initiatives in improving
coordination and collaboration in a final report to Congress
2 years after the Council is established.
(e) Expiration.--The Council shall expire 2 years after the
Council is established.
SEC. 7. MENTAL HEALTH SCREENING AND TREATMENT FOR PRISONERS.
(a) Additional Requirements for the Use of Funds Under the
Violent Offender Incarceration and Truth-in-Sentencing Grants
Program.--Section 20105(b) of the Violent Crime Control and
Law Enforcement Act of 1994 is amended to read as follows:
``(b) Additional Requirements.--
``(1) Eligibility for grant.--To be eligible to receive a
grant under section 20103 or 20104, a State shall, not later
than January 1, 2001, have a program of mental health
screening and treatment for appropriate categories of
juvenile and other offenders during periods of incarceration
and juvenile and criminal justice supervision, that is
consistent with guidelines issued by the Attorney General.
``(2) Use of funds.--
``(A) In general.--Notwithstanding any other provision of
this subtitle, amounts made available to a State under
section 20103 or 20104, may be applied to the costs of
programs described in paragraph (1), consistent with
guidelines issued by the Attorney General.
``(B) Additional use.--In addition to being used as
specified in subparagraph (A), the funds referred to in that
subparagraph may be used by a State to pay the costs of
providing to the Attorney General a baseline study on the
mental health problems of juvenile offenders and prisoners in
the State, which study shall be consistent with guidelines
issued by the Attorney General.''.
SEC. 8. INAPPLICABILITY OF AMENDMENTS.
Section 3626 of title 18 is amended by adding at the end
the following:
``(h) Inapplicability of Amendments.--A civil action that
seeks to remedy conditions which pose a threat to the health
of individuals who are--
``(1) under the age of 16; or
``(2) mentally ill;
shall be governed by the terms of this section, as in effect
on the day before the date of enactment of the Prison
Litigation Reform Act of 1995 and the amendments made by that
Act (18 U.S.C. 3601 note).''.
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