[Congressional Record Volume 145, Number 38 (Wednesday, March 10, 1999)]
[Senate]
[Pages S2503-S2519]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. BREAUX (for himself and Mr. Mack):
S. 572. A bill to prohibit the Secretary of the Treasury from issuing
regulations dealing with hybrid transactions; to the Committee on
Finance.
SUBPART F OF INTERNAL REVENUE CODE
Mr. BREAUX. Mr. President, today Mr. Mack and I are again introducing
legislation to place a permanent moratorium on the Department of the
[[Page S2504]]
Treasury's authority to finalize any proposed regulations issued
pursuant to Notice 98-35, dealing with the treatment of hybrid branch
transactions under subpart F of the Internal Revenue Code. Our bill
also prohibits Treasury from issuing new regulations relating to the
tax treatment of hybrid transactions under subpart F and requires the
Secretary to conduct a study of the tax treatment of hybrid
transactions and to provide a written report to the Senate Committee on
Finance and the House Committee on Ways and Means.
By way of background, the United States generally subjects U.S.
citizens and corporations to current taxation on their worldwide
income. Two important devices mitigate or eliminate double taxation of
income earned from foreign sources. First, bilateral income tax
treaties with many countries exempt American taxpayers from paying
foreign taxes on certain types of income (e.g. interest) and impose
reduced rates of tax on other types (e.g. dividends and royalties).
Second, U.S. taxpayers receive a credit against U.S. taxes for foreign
taxes paid on foreign source income. To reiterate, these devices have
been part of our international tax rules for decades and are aimed at
preventing U.S. businesses from being taxed twice on the same income.
The policy of currently taxing U.S. citizens on their worldwide income
is in direct contrast with the regimes employed by most of our foreign
trading competitors. Generally they tax their citizens and domestic
corporations only on the income earned within their borders (the so-
called ``water's edge'' approach).
Foreign corporations generally are also not subject to U.S. tax on
income earned outside the United States, even if the foreign
corporation is controlled by a U.S. parent. Thus, U.S. tax on income
earned by foreign subsidiaries of U.S. companies--that is, from foreign
operations conducted through a controlled foreign corporation (CFC)--is
generally deferred until dividends paid by the CFC are received by its
U.S. parent. This policy is referred to as ``tax deferral.''
In 1961, President John F. Kennedy proposed eliminating tax deferral
with respect to the earnings of U.S.-controlled foreign subsidiaries.
The proposal provided that U.S. corporations would be currently taxable
on their share of the earnings of CFCs, except in the case of
investments in certain ``less developed countries.'' The business
community strongly opposed the proposal, arguing that in order for U.S.
multinational companies to be able to compete effectively in global
markets, their CFCs should be subject only to the same taxes to which
their foreign competitors were subject.
In the Revenue Act of 1962, Congress rejected the President's
proposal to completely eliminate tax deferral, recognizing that to do
so would place U.S. companies operating in overseas markets at a
significant disadvantage vis-a-vis their foreign competitors. Instead,
Congress opted to adopt a policy regime designed to end deferral only
with respect to income earned from so-called ``tax haven'' operations.
This regime, known as ``subpart F,'' generally is aimed at currently
taxing foreign source income that is easily moveable from one taxing
jurisdiction to another and that is subject to low rates of foreign
tax.
Thus, the subpart F provisions of the Internal Revenue Code (found in
sections 951-964) have always reflected a balancing of two competing
policy objectives: capital export neutrality (i.e. neutrality of
taxation as between domestic and foreign operations) and capital import
neutrality (i.e. neutrality of taxation as between CFCs and their
foreign competitors). While these competing principles continue to form
the foundation of subpart F today, recent actions by the Department of
the Treasury threaten to upset this long-standing balance.
On January 16, 1998, the Department of the Treasury announced in
Notice 98-11 its intention to issue regulations to prevent the use of
hybrid branches ``to circumvent the purposes of subpart F.'' The hybrid
branch arrangements identified in Notice 98-11 involved entities
characterized for U.S. tax purposes as part of a controlled foreign
corporation, but characterized for purposes of the tax law of the
country in which the CFC was incorporated as a separate entity. The
Notice indicated that the creation of such hybrid branches was
facilitated by the entity classification rules contained in section
301.7701-I through -3 of the Income Tax Regulations (the ``check the
box'' regulations).
Notice 98-11 acknowledged that U.S. international tax policy seeks to
balance the objectives of capital export neutrality with the objective
of allowing U.S. businesses to compete on a level playing field with
foreign competitors. In the view of the Treasury and IRS, however, the
hybrid transactions attacked in the Notice ``upset that balance.''
Treasury indicated that the regulations to be issued generally would
apply to hybrid branch arrangements entered into or substantially
modified after January 16, 1998, and would provide that certain
payments to and from foreign hybrid branches of CFCs would be treated
as generating subpart F income to U.S. shareholders in situations in
which subpart F would not otherwise apply to a hybrid branch as a
separate entity. This represented a significant expansion of subpart F,
by regulation rather than through legislation.
Shortly after Notice 98-11 was issued, the Administration released
its Fiscal Year 1999 budget proposals which, among other things,
included a provision requesting Congress to statutorily grant broad
regulatory authority to the Treasury Secretary to prescribe regulations
clarifying the tax consequences of hybrid transactions in cases in
which the intended results are inconsistent with the purposes of U.S.
tax law. . . . While the explanation accompanying the budget proposal
argued that this grant of authority as applied to many cases ``merely
makes the Secretary's current general regulatory authority more
specific, and directs the Secretary to promulgate regulations pursuant
to such authority,'' the explanation conceded that in other cases,
``the Secretary's authority may be questioned and should be
clarified.''
Notice 98-11 and the accompanying budget proposal generated
widespread concerns in the Congress and the business community that the
Treasury was undertaking a major new initiative in the international
tax arena that would undermine the ability of U.S. multinationals to
compete in international markets. For example, House Ways and Means
Committee Chairman Bill Archer wrote to Treasury Secretary Rubin on
March 20, 1998 requesting that ``Notice 98-11 be withdrawn and that no
regulations in this area be issued or allowed to take effect until
Congress has an appropriate opportunity, to consider these matters in
the normal legislative process.'' The Ranking Democrat on the
Committee, Charles Rangel, wrote to Secretary Rubin expressing strong
concerns about the Treasury's increasing propensity to ``legislate
through the regulatory process as evidenced by Notice 98-11.''
Despite these concerns, on March 23, 1998, the Treasury department
issued two sets of proposed and temporary regulations, the first
relating to the treatment of hybrid branch arrangements under subpart
F, and the second relating to the treatment of a CFC's distributive
share of partnership income. As Notice 98-11 had promised, the
regulations provided that certain payments between a controlled foreign
corporation and a hybrid branch would be recharacterized as subpart F
income if the payments reduce the payer's foreign taxes.
The week after the temporary and proposed regulations were issued,
the Senate Finance Committee considered H.R. 2676, the Internal Revenue
Service Restructuring and Reform Act of 1998. A provision was included
in the bill prohibiting the Treasury and IRS from implementing
temporary or final regulations with respect to Notice 98-11 prior to
six months after the date of enactment of H.R. 2676. The Senate bill
also included language expressing the ``sense of the Senate'' that
``the Department of the Treasury and the Internal Revenue Service
should withdraw Notice 98-11 and the regulations issued thereunder, and
that the Congress, and not the Department of the Treasury or the
Internal Revenue Service, should determine the international tax policy
issues relating to the treatment of hybrid transactions under subpart F
provisions of the Code.''
Opposition to Notice 98-11 and the temporary and proposed regulations
[[Page S2505]]
continued to mount. On April 23, 1998, 33 Members of the House Ways and
Means Committee wrote to Secretary Rubin expressing concern about the
Treasury's decision to move forward and issue regulations pursuant to
Notice 98-11 without an appropriate opportunity for Congress to
consider this issue in the normal legislative process, urging Treasury
to withdraw the regulations.
In the face of these and other pressures from the Congress and the
business community, on June 19, 1998, the Treasury Department announced
in Notice 98-35 that it was withdrawing Notice 98-11 and the related
temporary, and proposed regulations. According to Notice 98-35,
Treasury intends to issue a new set of proposed regulations to be
effective in general for payments made under hybrid branch arrangements
on or after June 19, 1998. These regulations, however, will not be
finalized before January 1, 2000, in order to permit both the Congress
and Treasury Department the opportunity to further study the issues
that were raised following the publication of Notice 98-11 earlier this
year.
While we applaud the Treasury's decision to withdraw Notice 98-11 and
the temporary regulations, we believe that additional legislative
action is needed to prevent the Treasury from finalizing the
forthcoming regulations until Congress considers the issues involved.
We believe that only the Congress has the authority to achieve a
permanent resolution of this issue. Notice 98-35, like its predecessor,
Notice 98-11 continues to suffer from a fatal flaw; it is the
prerogative of Congress, and not the Executive Branch, to pass laws
establishing the nation's fundamental tax policies. Simply put, Notice
98-35 adds restrictions to the subpart F regime that are not supported
by the Code's clear statutory language, and there has been no express
delegation of regulatory authority to the Treasury that relates
specifically to the issues presented in the Notice.
More importantly, we question the policy objectives to be achieved by
Notice 98-35 and the accompanying proposed regulations. We do not
understand the rationale for penalizing U.S. multinational companies
for employing normal tax planning strategies that reduce foreign (as
opposed to U.S.) income taxes. Moreover, Notice 98-35 is contrary to
recent Congressional efforts to simplify the international tax
provisions of the Code. For example, the Congress reduced complexity
and ridded the code of a perverse incentive for U.S. companies to
invest overseas by repealing the Section 956A tax on excess passive
earnings in 1996. Again in 1997, the Congress repealed the application
of the Passive Foreign Investment Company regime to U.S. shareholders
of controlled foreign corporations because of the complexity involved
in applying both regimes, in addition to enacting a host of other
foreign tax simplifications. The Senate Finance Committee will hold a
hearing on March 11, 1999 to further investigate the reforms needed in
the international tax arena that not only reduce complexity, but also
encourage U.S. global economic competition. I fully expect Notice 98-35
to be discussed at this hearing.
In order for Congress to gain a better understanding of the Treasury
Department's position on this matter, our bill would require the
Treasury to conduct a thorough study of the tax treatment of hybrid
transactions under subpart F and to provide a report to the Senate
Committee on Finance and House Committee on Ways and Means on this
issue.
If the forthcoming regulations are permitted to be finalized by the
Treasury, U.S. multinational businesses will be placed at a competitive
disadvantage vis-a-vis foreign companies who remain free to employ
strategies to reduce the foreign taxes they pay. Clearly, such a result
should be permitted to take effect only if Congress, after having an
opportunity to fully consider all of the tax and economic issues
involved, agrees that the arguments advanced by the Treasury are
compelling and determines that additional statutory changes to subpart
F are necessary and appropriate.
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. 572
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. HYBRID TRANSACTIONS UNDER SUBPART F.
(a) Prohibition on Regulations.--The Secretary of the
Treasury (or his delegate)--
(1) shall not issue temporary or final regulations relating
to the treatment of hybrid transactions under subpart F of
part III of subchapter N of chapter 1 of the Internal Revenue
Code of 1986 pursuant to Internal Revenue Service Notice 98-
35 or any other regulations reaching the same or similar
result as such notice,
(2) shall retroactively withdraw any regulations described
in paragraph (1) which were issued after the date of such
notice and before the date of the enactment of this Act, and
(3) shall not modify or withdraw sections 301.7701-1
through 301.7701-3 of the Treasury Regulations (relating to
the classification of certain business entities) in a manner
which alters the treatment of hybrid transactions under such
subpart F.
(b) Study and Report.--The Secretary of the Treasury (or
his delegate) shall study the tax treatment of hybrid
transactions under such subpart F and submit a report to the
Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate. The Secretary
shall hold at least one public hearing to receive comments
from any interested party prior to submitting such report.
Mr. MACK. Mr. President, today Senator Breaux and I introduce a bill
reaffirming that the lawmaking power is the province of the Congress,
not the executive branch. Our bill prohibits the Treasury Department
from issuing regulations that would impose taxes on U.S. companies
merely because one of their subsidiaries pays money to itself.
As a general rule, U.S. corporations pay U.S. corporate income tax on
the earnings of their foreign subsidiaries only when those earnings are
actually distributed to the U.S. parent companies. An exception to this
general rule is contained in subpart F of the Internal Revenue Code,
which accelerates the income tax liability of U.S. parent companies
under certain circumstances. The Treasury Department has announced, in
Notice 98-35, an intention to issue regulations that will accelerate
income tax liability for U.S. companies--not based on the specific
circumstances enumerated in subpart F, but instead on a new
``interpretation'' of the ``policies'' that Treasury infers from that
36-year-old provision. This action crosses the line between
administering the laws and making the laws, and cannot be allowed by
Congress.
Notice 98-35 concerns so-called ``hybrid arrangements.'' These
involve business entities that are considered separate corporations for
foreign tax purposes, but are viewed as one company with a branch
office for U.S. purposes. U.S. companies organize their subsidiaries in
this manner to reduce the amount of foreign taxes they owe.
Transactions between a subsidiary and its branch have no impact on U.S.
taxable income of the parent, as its subsidiary is merely paying money
to itself. But the Treasury Department intends to impose a tax on the
U.S. parent to penalize it for reducing the foreign taxes it owes.
This effort is wrong for several reasons. First, the Treasury
Department possesses only the power to issue regulations to administer
the laws passed by Congress. New rules based on Congressional purpose
are known as laws, and under the Constitution laws are made by
Congress.
Second, the Treasury Department is elevating one policy underlying
subpart F--taxing domestic and foreign operations in the same manner--
over the other policy of maintaining the competitiveness of U.S.
companies in foreign markets. This proposed tax would put U.S.-owned
subsidiaries at a competitive disadvantage.
Finally, the Treasury Department should not impose a tax on U.S.
companies to force these companies to reorganize in a way that
increases the taxes they owe to foreign countries. The Treasury
Department is not the tax collector for other nations. And by raising
the foreign tax bills of U.S. companies, the Treasury Department is
also increasing the size of foreign tax credits and thereby reducing
U.S. tax revenues.
The Treasury Department is not only making policy that it has no
right to make, it is also making bad policy. Our bill places a
moratorium on this lawmaking. It also directs the Treasury
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Secretary to study these issues and submit a report to the tax-writing
committees of Congress. Many people and organizations, including the
Treasury Department, desire changes in the tax laws. But only Congress
has the power to make these changes, and this is a power we intend to
keep.
______
By Mr. LEAHY (for himself, Mr. Kennedy, Mr. Daschle, and Mr.
Dorgan):
S. 573. A bill to provide individuals with access to health
information of which they are a subject, ensure personal privacy with
respect to health-care-related information, impose criminal and civil
penalties for unauthorized use of protected health information, to
provide for the strong enforcement of these rights, and to protect
States' rights; to the Committee on Health, Education, Labor, and
Pensions.
Medical Information Privacy and Security Act
Mr. LEAHY. Mr. President, today, I am pleased to be joined by
Senators Kennedy, Daschle and Dorgan in introducing the Medical
Information Privacy and Security Act (MIPSA). I am also pleased that a
companion bill will be introduced in the House by Congressman Edward
Markey.
The Millennium Bug is not the only computer-related problem Congress
confronts this year. We face the deadline that Congress set for itself
of August 21, 1999, to solve the multitude of privacy glitches in the
handling of our medical records.
At a time when some states are selling driving license photos and
information, when our leading computer chip and software companies have
built secret identifiers into their products to trace our every move in
cyberspace without our consent, it is time for Congress to wake up to
the privacy rights and expectations of all Americans before it is too
late.
The trouble is this: If you have a medical record, you have a medical
privacy problem.
A guiding principle in drafting this legislation has been that the
movement to a more integrated system of health care in our country will
only continue to be supported by the American people if they are
assured that the personal privacy of their health care information is
protected. In fact, without the confidence that one's personal privacy
will be protected, many will be discouraged from seeking medical help.
Most of us envision that our medical records are held in a manila
file folder under the watchful care of our health care provider. If
this is what you are picturing, you are sorely mistaken. Increased
computerization of medical records and other health information is
fueling both the supply and demand for our personal information. I do
not want advancing technology to lead to a loss of personal privacy,
and I do not want the fear that confidentiality is being compromised to
deter people from seeking medical treatment or to stifle technological
or scientific development.
The traditional right of confidentiality between a health care
provider and a patient is at risk. This erosion may reduce the
willingness of patients to confide in physicians and other
practitioners and may inhibit patients from seeking care.
Unlike some, I believe that computerization can assure more privacy
to individuals than the current system, if MIPSA is enacted. But if we
do not act the increased potential for embarrassment and harassment is
tremendous.
The ability to compile, store and cross reference personal health
information has made our intimate health history a valuable commodity.
In 1996 alone, the health care industry spent an estimated $10 to $15
billion on information technology.
This data can be very useful for quality assurance, and to provide
more cost effective health care. But I doubt that the American public
would agree with a Fortune magazine article which lauded a health
insurer that poked through the individual medical records of clients to
figure out who may be depressed and could benefit from the use of the
anti-depressant Prozac. Are we now encouraging the replacement of sound
clinical judgment of doctors with health insurance clerks who look at
records to determine whether you are not really suffering from a
physical illness, but a mental illness?
Just a few days ago The Wall Street Journal wrote about a company
that is ``seeking the mother lode in health `data mining.' '' This
company wants to get medical data on millions of Americans to sell to
any buyer. Currently there are no laws constraining the creation of
large data bases filled with sensitive personally identifiable
information on any of us. Our information is like gold to these ``data
miners.''
If this battle is between American families who want some privacy and
big business buying access to their personal medical records, I will
stand with American families every time.
Last year, an article in the Washington Post described the story of a
woman whose prescription purchases were tracked electronically by a
pharmacy benefits management company two states away, hired by her
employer. With every swipe of her prescription-drug card she saved 50%
on her prescriptions. At the same time, however, without her knowledge
her sensitive health information was being compiled. Her doctor was
soon informed that she would be enrolled in a ``depression program,''
watched for continued use of anti-depression medications, and be
targeted for ``educational'' material on depression. All of this was
done at the behest of her employer who had unfettered access to all of
her personal health information.
This woman was not suffering from a depression-related illness; her
doctor prescribed the medication to help her sleep. This woman had no
idea that by signing up for her managed care plan she was signing up to
have her personal health information disclosed to individuals she had
never even met.
Employer access to personal health information of their workers is a
real problem. A recent University of Illinois study found that 35
percent of all Fortune 500 companies regularly review health
information before making hiring decisions. On-work-site health care
providers have testified before Congress that they are routinely
pressured for employee health information and must comply or lose their
jobs.
What MIPSA makes clear is that there must be a ``fire wall'' between
those within a company involved in providing health services and
benefits, and other managers. The goal of privacy legislation is to be
the first line of defense, so that individuals are not put in the
situation of possibly being discriminated against. Our bill complements
other laws and proposed legislation that bar discrimination based on
health status.
We must not let privacy slide to the point that the only way for a
person to ensure confidentiality is to avoid seeking medical treatment.
The simple fact is that many patients will not agree to participate
in health research or to be tested if they fear the information that is
revealed in the course of the research could be released, bringing them
harm. In genetic testing studies at the National Institutes of Health,
thirty-two percent of eligible people who were offered a test for
breast cancer risk declined to take it, citing concerns about loss of
privacy and the potential for discrimination in health insurance.
The bill we are introducing today, the Medical Information Privacy
and Security Act, would be the first comprehensive federal health
privacy law.
Our bill is broad in scope: It applies to medical records in whatever
form--paper or electronic. It applies to each release of medical
information, including re-releases. It comprehensively covers entities
other than just health care providers and payers, such as life
insurance companies, employers and marketers and others who may have
access to sensitive personal health data.
It gives individuals the right to inspect, copy and supplement their
protected health information.
It allows individuals to require the segregation of portions of their
medical records, such as mental health records, from broad viewing by
individuals who are not directly involved in their care.
It gives individuals a civil right of action against anyone who
misuses their personally identifiable health information. It
establishes criminal and civil penalties that can be invoked if
individually identifiable health information is knowingly or
negligently misused.
It creates a set of rules and norms to govern the disclosure of
personal
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health information and narrows the sharing of personal details within
the health care system to the minimum necessary to provide care, allow
for payment and to facilitate effective oversight. Special allowances
are made for situations such as emergency medical care and public
health requirements.
We have been very careful to balance the right to privacy with the
needs of providers and health care plans, who can use medical
information to improve the care of patients. MIPSA does not force
patients to sign a blanket authorization allowing their information to
go to anyone for any purpose in order to receive care. Unfortunately,
individuals now have no choice but to sign away their rights if they
want any health care treatment at all.
MIPSA changes the authorization procedure by requiring that
providers, health plans and hospitals clearly lay out to patients how
their protected health information will be used, who will have access
to their protected health information, and for what purpose. If anyone
wants to use or disclose personally identifiable health information for
a purpose that is not directly related to their treatment or billing,
the patient has that right to say no without losing the ability to
receive needed health care.
It also takes special care to make sure that important medical
research continues. MIPSA extends the protective practices currently
followed by the National Institutes of Health (NIH) to all health
research efforts--whether publicly or privately funded.
It establishes a clear and enforceable right of privacy for all
personally identifiable medical information including information
regarding the results of genetic tests.
We have tried to accommodate legitimate oversight concerns so that we
do not create unnecessary impediments to health care fraud
investigations. Effective health care oversight is essential if our
health care system is to function and fulfill its intended goals.
Otherwise, we risk establishing a publicly sanctioned playground for
the unscrupulous. Health care is too important a public investment to
be the subject of undetected fraud or abuse.
It prohibits law enforcement agents from searching through medical
records without a warrant. It does not limit law enforcement agents in
gaining information while in hot pursuit of a suspect.
We also require anyone who maintains your medical information to have
strong safeguards in place. And MIPSA offers strong enforcement
provisions and remedies for the misuse of medical information.
It sets up a national office of health information privacy to aid
consumers in learning about their rights and about how they can seek
recourse for violations of their rights.
Most importantly, our bill does not preempt any federal or state law
or regulation that offers stronger privacy safeguards. We propose a
floor rather than a ceiling, achieving two goals:
First, a strong federal privacy law will eliminate much of the
current patchwork of state laws governing the exchange of medical
information, and will replace the patchwork with strong, clear
standards that will apply to everyone.
Second, MIPSA makes room for the many possible future threats to
medical privacy that we may not even anticipate today. As medical and
information technology moves forward into the next century we must
maintain the public's right to seek stronger medical privacy laws
closer to home.
The elements of MIPSA are essential to any strong medical privacy
effort.
I am encouraged that a variety of public policy and health
professional organizations, across the political spectrum, are
signaling their intentions to step forward to join forces with
consumers during this debate.
We have 164 days to implement a strong federal medical privacy law.
With the clock ticking toward the August deadline, let us act sooner
rather than later.
Mr. KENNEDY. Mr. President, we are here today to propose legislation
to protect the privacy of personal medical information in our rapidly
changing health care system. Today, video rental records have greater
protection than sensitive medical information. Last month, we learned
that the University of Michigan Medical Center posted information from
thousands of patient records on the Internet, without any password
protection or other safeguards. In many other cases, individual
patients have been harmed by improper release of their private medical
records.
The legislation that Senator Daschle, Senator Leahy, Congressman
Markey, and I are introducing today--the Medical Information Privacy
and Security Act--puts patients first, while allowing for legitimate
uses of medical information to improve health care.
Congress recognized the need to act to protect the privacy of medical
information when we passed the Kassebaum-Kennedy Act in 1996. That
legislation contained a provision requiring Congress to pass
legislation on the issue by August of this year. If the deadline is not
met, the Administration has the power to act by regulation.
The measure we are introducing ensures strong protections nationwide.
It also allows individual states to take additional action. Stronger
state laws are not pre-empted.
The goal of these protections is to safeguard the confidential
relationship between patients and physicians. Patients concerned about
their privacy are less likely to disclose important information to
their physicians. A recent survey by the California HealthCare
Foundation found that one in six adults has taken steps to protect
their personal medical information, such as providing inaccurate
information in their medical history, or asking physicians not to
include certain information in their medical records.
Our legislation recognizes the fundamental right of patients to limit
disclosure of personally-identifiable medical information. We have
balanced that right with the needs of providers and health care plans
to use medical information to improve patient care. Our proposal does
not force patients to sign a blanket authorization in order to receive
care. Instead, it contains a flexible framework that can be modified to
fit different situations.
Medical research is essential for progress against disease. But it is
also essential for patients to have confidence that research is
beneficial, not an invasion of privacy. In genetic testing studies at
the National Institutes of Health, 32 percent of eligible people who
were offered a test for breast cancer declined to take it, because of
concerns about loss of privacy and the potential for discrimination in
health insurance.
Currently, most federal health research is governed by the ``Common
Rule'', which includes evaluations by Institutional Review Boards in
order to protect patients involved in the research. Our proposed
legislation strengthens the privacy provisions in the ``Common Rule,''
and extends those protections to all health research.
These issues are important, and I am optimistic that Congress will
act in time to meet the August deadline. We have a responsibility to
enact strong protections for privacy in all aspects of health care, and
now is the time to act.
______
By Mr. CLELAND (for himself and Mr. Coverdell):
S. 575. A bill to redesignate the National School Lunch Act as the
``Richard B. Russell National School Lunch Act''; to the Committee on
Agriculture, Nutrition, and Forestry.
richard b. russell national school lunch act
Mr. CLELAND. Mr. President, I rise today to introduce a bill to
rename the National School Lunch Act after Senator Richard Russell. I
am pleased to have Senator Coverdell as a original co-sponsor.
Having met Senator Russell over 30 years ago when I was an intern on
Capitol Hill, I gained a deep respect and reverence for the ``Senator
from Georgia'' Richard B. Russell. Since being elected to the Senate
over two years ago, I have been looking for a way to appropriately
honor and express my appreciation for the contributions of Senator
Russell. Honestly, I, like many others, usually associate Senator
Russell with military issues and the work he did to provide our nation
with a strong national defense. However, in researching his history in
the Senate, I noticed that, time and again, Senator Russell stated that
he viewed his proudest achievement in the Senate as the School Lunch
Act.
[[Page S2508]]
On February 26, 1946, speaking on the Senate floor, Senator Russell
noted that the School Lunch Program, ``has been one of the most helpful
ones which has been inaugurated and promises to contribute more to the
cause of public education in these United States than has any other
policy which has been adopted since the creation of free public
schools.'' Strong words, not only about the school lunch program, but
about Senator Russell's commitment to the same.
Starting the first grade in 1947, I, like some of you, have always
considered myself to be a true product of the national school lunch
program. The program has been woven into the fabric of the American
family. Today, the National School Lunch Program operates in more than
95,000 public and nonprofit private schools and residential child care
institutions throughout the country, providing nutritionally balanced,
low-cost or free lunches to more than 26 million children each school
day. The knowledge that every one of our children is ensured a healthy
and affordable meal every school day provides us all with a great deal
of comfort and satisfaction. The program is available in almost 99
percent of all public schools, and in many private schools as well.
About 92 percent of all students nationwide have access to meals
through the National School Lunch Program. As cited in several studies,
a well fed child is more likely to do better in school and is less
likely to misbehave--both highly desirable outcomes.
Senator Russell was a tireless champion for establishing a program to
deliver a healthy meal to our nation's schoolchildren. Senator Russell
began his campaign to make school feeding programs available in the mid
1930's by utilizing Section 32 funds of the Act of August 24, 1935. As
Chairman of the Subcommittee on Agricultural Appropriations, Senator
Russell exerted a great deal of influence and was a vigilant advocate
of directing the Section 32 food surpluses towards school feeding
programs. In the early 1940's, Senator Russell introduced several bills
authorizing a national school lunch program. And, after several
unsuccessful attempts, Senator Russell sponsored and pushed through the
National School Lunch Act in 1946.
Senator Russell's strong commitment to domestic agriculture
production strengthened his support for the school feeding programs. In
fact, Senator Russell's commitment to a strong national defense may
have also played a role in his support for the program. As you know,
Senator Russell served as a member, and later Chairman, of the Senate
Armed Services Committee. During World War II and in post war hearings
before the Armed Services Committee, testimony was provided by General
Hershey and Surgeon General Parran and others indicating that a large
percentage of men rejected from military service had diet-related
health problems. This revelation resulted in the recognition by many
that the school lunch program is a matter of national security.
As stated in a report I received from the Congressional Research
Service, ``Senator Russell played a key role in the creation and
formation of the national school lunch program. The historical record
of Senator Russell's actions on behalf of this program in the 1930's
and 1940's give him a strong claim to being regarded as the ``father''
of the national school lunch program, and make a strong case for
renaming the 1946 Act after him.'' There have most certainly been
several other members from the House and Senate, both past and present,
who have played an irreplaceable role in developing and championing the
cause of the school lunch program and I believe that all of these
members should be commended for their dedication. This proposal is not
meant to diminish the contribution of countless others, but simply to
recognize that Senator Russell played a primary role in the passage of
the National School Lunch Act. I am convinced that no other member was
as significant as Senator Russell in seeing the National School Lunch
Act enacted into law. I am pleased to have received the strong
endorsement of the Georgia School Food Service Association in their
Resolution of support on January 23, 1999.
Considering Senator Russell's vital role in making the school lunch
program a reality and the passion he expressed for being its author, I
believe that by renaming the School Lunch Act in his honor, we can
fittingly memorialize his contribution, as well as call renewed
attention to this vital national program. I ask for my colleagues
support.
Mr. President, I ask unanimous consent that the text, a letter of
support, be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Georgia School Food Service Association Resolution in Support of
Senator Max Cleland's Proposal to Memorialize Senator Richard B.
Russell
Whereas, The Georgia School Food Service Association
(GSFSA) has learned that Senator Max Cleland wishes to
sponsor legislation to permanently associate the name of
Senator Richard B. Russell with and to memorialize the
contribution that he made to the establishment of the
National School Lunch Act by naming The National School Lunch
Act of 1946 (NSLA), the Richard B. Russell National School
Lunch Act, and
Whereas, Senator Richard B. Russell has been known as ``the
father of the school lunch act'' as documented in a 1973
publication, ``Education in the States,'' published by The
National Education Association in cooperation with The Chief
State School Officers, and
Whereas, a review of the 1945-46 Congressional debates
leading up to the passage of the Act in May 1946 and signing
by President Harry Truman on June 4, 1946 reflects the
leadership role of Senator Russell as author of the bill that
finally was approved by the Congress, and
Whereas, Senator Russell's success in getting the
legislation passed was greatly enhanced by the outstanding
bi-partisan support in the Senate by Senator George D. Aiken,
Vermont and Senator Allen J. Ellender, Louisiana and in
collaboration with The House of Representatives under the
committee leadership of Congressman Flannagan of Virginia,
and
Whereas, with the passage of time the names of NSLA
pioneers are faded from memory and we believe there should be
an appropriate memorial established to perpetuate the memory
of the contribution made by the visionary Richard B. Russell
for the program.
Whereas, the year 2000 will mark the 55th Anniversary of
The National School Lunch Act and GSFSA joins with Senator
Max Cleland in believing that the time is right for the name
of Richard B. Russell to be memorialized and permanently
attached to The National School Lunch Act, and
Whereas, the vision of this program defined by Senator
Russell and articulated in The NSLA, Section 1 Policy, to
``safeguard the health and well-being of all children . . .
by supporting the establishment of programs and promoting the
consumption of nutritious agricultural commodities'' laid the
foundation as a nutrition program for all children, and
Whereas, this vision enacted into legislation in 1946 has
provided the framework for the growth of Child Nutrition
Programs, which began as a single meal, and has been expanded
many times by many Congressional sessions promoted by the
leaders in Congress to a year round, all day program serving
breakfast, lunch, after school supplements, summer food
service, and the child and adult care food program, and
Whereas, the leadership and commitment of Senator Richard
B. Russell as Chairman of the US Senate Committee on
Agriculture and Forestry in close collaboration with a bi-
partisan group in the Senate and a collaborative relationship
with the US House of Representatives, persisted through 10
years of year-to-year appropriations for the program and two
long years of debate and resulted in the enactment of
permanent legislation that established an infrastructure for
the school lunch program and a framework for all child
nutrition programs, and
Whereas, his leadership for the program did not stop at
that point as he had a major role in having the school lunch
program designated as an educational program in the states as
many state agencies were vying to have administration of the
program, and
Whereas his leadership continued into the 1960's during his
final years in the US Senate when he was Chair of the Armed
Services Committee, and he provided leadership to have the
apportionment formula changed to allocate money to the states
on the number of meals served rather than on state enrollment
of children,
the georgia school food service association therefore recommends
That the General Assembly of Georgia be requested to adopt
this resolution in support of Senator Cleland's proposal to
have the National School Lunch Act of 1946 renamed the
Richard B. Russell National School Lunch Act, and
The American School Food Service Association be requested
to provide support for Senator Cleland's proposal for
permanently associating Senator Russell's name with the NSLA,
which would be an appropriate memorial to his leadership in
authoring legislation that established the foundation for a
program that has been successful for more than half-a-
century, and,
The GSFSA expresses its appreciation to Senator Max Cleland
for recognizing the importance of memorializing Senator
Russell
[[Page S2509]]
as ``the father of the school lunch program'' by attaching
his name to the Act, and pledges its support to Senator
Cleland in having his proposal turned into reality, and
finally,
That copies of this resolution be provided all members of
the Georgia Congressional delegation as a means of seeking
their support for honoring an outstanding statesman from
Georgia who has been memorialized in many ways, including
having a Senate Office Building named in his honor, but has
never been publicly honored for the ``piece of legislation
that he often claimed to be his proudest work'' that of the
passage of the NSLA, as it served all children, the education
program and the agriculture programs of the nation. ``this
program has been one of the most helpful ones which has been
inaugurated and promises to contribute more to the cause of
public education in these United States than has any other
policy which has been adopted since the creation of free
public schools.''--Richard B. Russell, Feb. 26, 1946. The
Congressional Record
Approved by,
Joan Kidd,
President, GSFSA.
______
By Mr. HATCH:
S. 577. A bill to provide for injunctive relief in Federal district
court to enforce State laws relating to the interstate transportation
of intoxicating liquors; to the Committee on the Judiciary.
The Twenty-First Amendment Enforcement Act
Mr. HATCH. Mr. President, today I am proud to introduce the Twenty-
First Amendment Enforcement Act. This legislation will provide a
mechanism enabling States to more effectively enforce their laws
regulating the interstate shipment of alcoholic beverages.
Interstate shipments of alcohol directly to consumers are increasing
exponentially. Unfortunately, along with that growing commerce,
problems associated with that trade are also growing. While I certainly
believe that interstate commerce should be encouraged, and while I do
not want small businesses stifled by unnecessary or overly burdensome
and complex regulations, I do not subscribe to the notion that
purveyors of alcohol are free to avoid State laws which are consistent
with the power bestowed upon them by the Twenty-First Amendment.
All States, including the State of Utah, need to be sure that the
liquor that is brought into their State is labelled properly and
subject to certain quality control standards. States need to protect
their citizens from consumer fraud and have a claim to the tax revenue
generated by the sale of such goods. And of the utmost importance,
States need to ensure that minors are not provided with unfettered
access to alcohol. Unfortunately, indiscriminate direct sales of
alcohol have opened a sophisticated generation of minors to the perils
of alcohol abuse.
I can tell you that my home State of Utah, which has some of the
strictest controls in the nation on the distribution of alcohol, is not
immune from the dangers of direct sales. A recent story which ran on
KUTV in Salt Lake City showed how a thirteen year old was able to
purchase beer over the internet and have it shipped directly to her
home--no questions asked. If a thirteen year old is capable of ordering
beer and having it delivered by merely borrowing her brother's credit
card and making a few clicks with her mouse, there is something very
wrong with the level of control that is being exercised over these
sales. Of course the Utah case is not an isolated example. Stings set
up by authorities in New York and Maryland have also shown how easy it
is for minors to obtain alcohol.
Debate over the control of alcoholic beverages has been raging for as
long as this country has existed. Prior to 1933, every time individuals
or legislative bodies engaged in efforts to control the flow and
consumption of alcohol, whether by moral persuasion, legislation or
Constitutional Prohibition, others were equally determined to repeal,
circumvent or ignore those barriers. However, the Twenty-First
Amendment did, for a time, create an ordered system for the
distribution of alcohol.
The Twenty-First Amendment was ratified in 1933. That amendment ceded
to the States the right to regulate the importation and transportation
of alcoholic beverages across their borders. By virtue of that grant of
authority, each State created its own unique regulatory scheme to
control the flow of alcohol. Some set up State stores to effectuate
control of the shipment into, and dissemination of alcohol within,
their State. Others refrained from direct control of the product, but
set up other systems designed to monitor the shipments and ensure
compliance with its laws. But whatever the type of State system
enacted, the purpose was much the same: to protect its citizens and
ensure that its laws were obeyed.
Although not perfect, the systems set up by the States worked
reasonably well for many years. However, modern technology has opened
the door for abuse and created the need for further governmental action
to address those abuses. No longer must a State prosecute just an
errant neighborhood retailer for selling to a minor--now, the ones
selling to minors and others in violation of a State's regulatory laws
are a continent away. A small winery can create its own web page and
accept orders over the internet; a large retailer can advertise
nationally in the New York Times and accept orders over the phone; an
ad can be placed in a magazine with a national circulation offering
sales through an 800 number.
Let me emphasize that there are many companies engaged in the direct
interstate shipment of alcohol who do not violate State laws. In fact,
many of these concerns look beyond their own interests and make
diligent efforts to disseminate information to others to ensure that
State laws are understood and complied with by all within the
interstate industry.
I should also note that I am certainly sympathetic to the small
wineries and specialty micro-breweries who feel that the requirement
that they operate through a three tier system (producer-wholesaler-
retailer) which does not embrace them may, in effect, shut them out of
the marketplace. They make the argument that if wholesalers do not
carry their product, they have no other avenue to the consumer other
than through direct sales. However, if there is a problem with the
system, we need to fix the system, not break the laws.
Federal law already prohibits the interstate shipment of alcohol in
violation of State law. Unfortunately that general prohibition lacks
any enforcement mechanism. The legislation I am introducing simply
provides that mechanism by permitting the Attorney General of a State,
who has reasonable cause to believe that his or her State laws
regulating the importation and transportation of alcohol are being
violated, to be permitted to file an action in federal court for an
injunction to stop those illegal shipments.
This bill is balanced to ensure due process and fairness to both the
State bringing the action and the company or individual alleged to have
violated the State's laws. The bill:
1. Permits the chief law enforcement officer of a State to seek an
injunction in federal court to prevent the violation of its laws
regulating the importation or transportation of alcohol;
2. Allows for venue for the suit where the defendant resides and
where the violations occur;
3. Does not require the posting of a bond by the requesting party;
4. Does not permit an injunction without notice to the opposing
party;
5. Requires that any injunction be specific as to the parties, the
conduct and the rationale underlying that injunction;
6. Allows for quick consideration of the application for an
injunction and conserves court resources by avoiding redundant
proceedings;
7. Mandates a bench trial; and
8. Does not preclude other remedies allowed by law.
Some will argue that State courts are capable of handling this issue.
Unfortunately, States have had mixed success in enforcing their laws
through State court actions. Companies and individuals have raised
jurisdictional, procedural and legal defenses that have stalled those
efforts, and that continue to hamper effective enforcement. It is, in
part, because of those inconsistent rulings, that federal leadership is
needed in this area.
Moreover, the scope and limitations of a State's ability to
effectively enact laws under the Twenty-First Amendment are essentially
federal questions that need to be decided by a federal court, and
perhaps ultimately, by the Supreme Court. Only through such rulings can
both the States and companies seeking to conduct interstate shipments
be assured of consistency in interpretation and enforcement of the
laws.
[[Page S2510]]
The introduction of a bill is just the beginning of the legislative
process. It is my hope that, working together, we can reach an
agreement on how best to balance legitimate commercial interests with
the Constitutional rights of the States as ceded to them by the Twenty-
First Amendment.
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. 577
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 ``Twenty-First Amendment
Enforcement Act''.
SEC. 2. SHIPMENT OF INTOXICATING LIQUOR INTO STATE IN
VIOLATION OF STATE LAW.
The Act entitled ``An Act divesting intoxicating liquors of
their interstate character in certain cases'', approved March
1, 1913 (commonly known as the ``Webb-Kenyon Act'') (27
U.S.C. 122) is amended by adding at the end the following:
``SEC. 2. INJUNCTIVE RELIEF IN FEDERAL DISTRICT COURT.
``(a) Definitions.--In this section--
``(1) the term `attorney general' means the attorney
general or other chief law enforcement officer of a State, or
the designee thereof;
``(2) the term `intoxicating liquor' means any spirituous,
vinous, malted, fermented, or other intoxicating liquor of
any kind;
``(2) the term `person' means any individual and any
partnership, corporation, company, firm, society,
association, joint stock company, trust, or other entity
capable of holding a legal or beneficial interest in
property, but does not include a State or agency thereof; and
``(3) the term `State' means any State of the United
States, the District of Columbia, the Commonwealth of Puerto
Rico, or any territory or possession of the United States.
``(b) Action By State Attorney General.--If the attorney
general of a State has reasonable cause to believe that a
person is engaged in, is about to engage in, or has engaged
in, any act that would constitute a violation of a State law
regulating the importation or transportation of any
intoxicating liquor, the attorney general may bring a civil
action in accordance with this section for injunctive relief
(including a preliminary or permanent injunction or other
order) against the person, as the attorney general determines
to be necessary to--
``(1) restrain the person from engaging, or continuing to
engage, in the violation; and
``(2) enforce compliance with the State law.
``(c) Federal Jurisdiction.--
``(1) In general.--The district courts of the United States
shall have jurisdiction over any action brought under this
section.
``(2) Venue.--An action under this section may be brought
only in accordance with section 1391 of title 28, United
States Code.
``(d) Requirements For Injunctions and Orders.--
``(1) In general.--In any action brought under this
section, upon a proper showing by the attorney general of the
State, the court shall issue a preliminary or permanent
injunction or other order without requiring the posting of a
bond.
``(2) Notice.--No preliminary or permanent injunction or
other order may be issued under paragraph (1) without notice
to the adverse party.
``(3) Form and scope of order.--Any preliminary or
permanent injunction or other order entered in an action
brought under this section shall--
``(A) set forth the reasons for the issuance of the order;
``(B) be specific in terms;
``(C) describe in reasonable detail, and not by reference
to the complaint or other document, the act or acts to be
restrained; and
``(D) be binding only upon--
``(i) the parties to the action and the officers, agents,
employees, and attorneys of those parties; and
``(ii) persons in active cooperation or participation with
the parties to the action who receive actual notice of the
order by personal service or otherwise.
``(e) Consolidation of Hearing With Trial on Merits.--
``(1) In general.--Before or after the commencement of a
hearing on an application for a preliminary or permanent
injunction or other order under this section, the court may
order the trial of the action on the merits to be advanced
and consolidated with the hearing on the application.
``(2) Admissibility of evidence.--If the court does not
order the consolidation of a trial on the merits with a
hearing on an application described in paragraph (1), any
evidence received upon an application for a preliminary or
permanent injunction or other order that would be admissible
at the trial on the merits shall become part of the record of
the trial and shall not be required to be received again at
the trial.
``(f) No right to trial by jury.--An action brought under
this section shall be tried before the court.
``(g) Additional remedies.--
``(1) In general.--A remedy under this section is in
addition to any other remedies provided by law.
``(2) State court proceedings.--Nothing in this section may
be construed to prohibit an authorized State official from
proceeding in State court on the basis of an alleged
violation of any State law.''.
______
By Mr. JEFFORDS (for himself and Mr. Dodd).
S. 578. A bill to ensure confidentiality with respect to medical
records and health care-related information, and for other purposes; to
the Committee on Health, Education, Labor, and Pensions.
the health care personal information nondisclosure act of 1998
Mr. DODD. Mr. President. I am pleased to join the Chairman of the
Health, Education, Labor and Pensions Committee, Senator Jeffords, in
introducing the Health Care Personal Information Nondisclosure (PIN)
Act of 1999. This legislation is designed to offer Americans the peace
of mind that comes with knowing that their most personal and private
medical information is protected from misuse and exploitation.
Medicine has changed dramatically since the time Norman Rockwell
painted the scene of a doctor examining his young patient's doll. The
flow of medical information is no longer confined to doctor-patient
conversations and hospital charts. Recent technological advances have
introduced more efficient methods of organizing data that allow
information to be shared instantaneously--helping to contain costs--and
even save lives.
But in the view of many Americans, the widespread sharing of medical
records without appropriate safeguards, even in the pursuit of
admirable goals, creates a staggering potential for abuse.
In fact, concerns that medical information is not being adequately
protected from misuse has led some patients to avoid full disclosure of
mental health or other sensitive conditions to their physicians and to
unnecessarily forego opportunities for treatment--in effect negating
the benefits of the new technology.
The Health Care PIN Act offers the privacy protections that the
public demands. This legislation sets clear guidelines for the use and
disclosure of medical information by health care providers,
researchers, insurers, employers and others. The Health Care PIN Act
provides individuals with control over their most personal information,
yet promotes the efficient exchange of health data for the purposes of
treatment, payment, research and oversight. To ensure the
accountability of entities and individuals with access to personal
medical information, the legislation impose stiff penalties for
unauthorized disclosures.
Just as you lock your doors to protect your home, this measure can
act as deadbolt against those who would exploit your medical privacy.
This legislation represents common-sense middle ground in the range
of proposals that have been offered both this and the previous
Congress. I look forward to working with Senator Jeffords, as well as
with Senators Bennett, Leahy, and Kennedy, who have contributed so much
to this debate, to move forward quickly to enact comprehensive,
bipartisan legislation.
______
By Mr. SPECTER:
S. 581. A bill to protect the Paoli and Brandywine Battlefields in
Pennsylvania, to authorize a Valley Forge Museum of the American
Revolution at Valley Forge National Historical Park, and for other
purposes; to the Committee on Energy and Natural Resources.
pennsylvania battlefields protection act of 1999
Mr. SPECTER. Mr. President, I have sought recognition today to
introduce the Pennsylvania Battlefields Protection Act, legislation
which will protect two important Revolutionary War sites in
Pennsylvania and authorize the construction and operation of a new
museum and visitor center dedicated to the American Revolution at
Valley Forge National Historical Park. Representative Curt Weldon has
introduced similar legislation in the House, with the remaining twenty
Members of the Pennsylvania House delegation joining him in this
effort.
The first part of this legislation authorizes $3 million for the
acquisition of the 472-acre area generally known as the Meetinghouse
Road Corridor, where the largest engagement of the American Revolution,
the Battle of Brandywine, took place from September 10-11,
[[Page S2511]]
1777. During the 1777 British campaign to capture Philadelphia, British
General William Howe defeated but proved unable to demoralize General
George Washington's Continental Army of 12,500 men at the Battle of
Brandywine.
While George Washington's and the Marquis de Lafayette's headquarters
are preserved as part of the Brandywine Battlefield Park, the area
where the actual fighting took place is not. The land is privately held
and is in immediate danger of being sold and developed. The battlefield
was declared a National Historic Landmark in 1961, and local officials,
preservation groups, and the Commonwealth of Pennsylvania have been
working together to protect the battlefield. This legislation will
provide half of the $6 million needed to purchase the land from willing
buyers, with the remaining $3 million to be raised from non-federal
sources on a dollar for dollar basis. As with all aspects of this
legislation, I have worked closely with the National Park Service, and
they are supportive of federal assistance to protect this important
Revolutionary War site.
This legislation will also protect the Paoli Battlefield, in Malvern,
Pennsylvania, where at least fifty-three Americans were killed. Shortly
after the Battle of Brandywine, General Washington ordered General
``Mad'' Anthony Wayne and 2,000 of his men to move to the rear and
contain the British army. The British learned of General Wayne's move
and attacked and bayoneted Wayne's men on September 20, 1777 in what
has infamously become known as the Paoli massacre.
While the Senate passed legislation which I introduced late in the
105th Congress to authorize the addition of the Paoli Battlefield site
to Valley Forge National Historical Park, at that time the bill did not
enjoy the support of the National Park Service and eventually died in
the House of Representatives. I have worked with Congressman Weldon on
this legislation, and we believe that the federal government should
provide assistance to acquire the 40-acre Paoli Battlefield, an
unprotected Revolutionary War site that is privately owned by the
Malvern Preparatory School. The School intends to sell the land in
order to strengthen its endowment, but officials have agreed to give
the community a first chance to purchase the land for historical
preservation purposes. Thus, the Paoli Battlefield will become open to
residential or commercial development if $2.5 million is not raised by
September 1999 to purchase the land. This bill envisions a combination
of public and private financing to purchase the battlefield by
authorizing a purchase price of $2.5 million with not less than $1
million in nonfederal funds. After much consultation with the National
Park Service, I am now informed that they are supportive of this
approach to protecting Paoli Battlefield.
The bill also authorizes the Secretary of the Interior to enter into
a cooperative agreement with the Borough of Malvern, which has agreed
to manage the 45-acre Paoli Battlefield site in perpetuity. A similar
provision authorizes the Secretary of Interior to enter into a
cooperative agreement with the Commonwealth of Pennsylvania or the
Brandywine Conservancy to manage the Meetinghouse Road Corridor area of
the Brandywine Battlefield. Moreover, the bill directs the Secretary of
Interior to undertake a resource study of Paoli and Brandywine
Battlefields to identify the full range of their resources and historic
themes and alternatives for National Park Service involvement at these
two sites.
Finally, the last section of the bill authorizes the Secretary of
Interior to enter into an agreement with the private, non-profit Valley
Forge Historical Society to construct and operate a museum and visitor
center within the boundaries of Valley Forge National Historical Park.
After the Battles of Brandywine, the Clouds, Paoli, Germantown, and
Whitemarsh, the Continental Army made Valley Forge its camp from
December 19, 1777 to June 19, 1778, when it emerged as a new, better
equipped, and well trained American army. Currently, there is no museum
in the United States dedicated to the American Revolution. I believe it
is important that Congress provide the authorization to bring this
worthwhile project to fruition, which will not only tell the story of
the Philadelphia campaign, but the story of the entire American
Revolution as well.
This museum will combine the holdings of the Valley Forge National
Historical Park and the Valley Forge Historical Society, making it the
largest collection of Revolutionary War era artifacts in the world. The
Valley Forge Historical Society, established in 1918, has a long
history of service to the park, and has amassed one of the best
collections of artifacts, art, books, and documents relating to the
1777-1778 encampment of the Continental Army at Valley Forge, the
American Revolution, and the American colonial era. Their collection is
currently housed in a facility that is inadequate to properly maintain,
preserve, and display the Society's ever-growing collection.
Construction of a new facility will rectify this situation.
This project is supported by local officials, and a new facility is
part of the Valley Forge National Historical Park's General Management
Plan, which has identified inadequacies in the park's current visitor
center and calls for the development of a new or significantly
renovated museum and visitor center. The museum will educate an
estimated 500,000 visitors a year about the critical events surrounding
the birth of our nation.
This legislation authorizes the Valley Forge Historical Society to
operate the museum in cooperation with the Secretary of Interior. This
project will directly support the historical, educational, and
interpretive activities and needs of Valley Forge National Historical
Park and the Valley Forge Historical Society while combining two
outstanding museum collections.
Mr. President, too many important historical sites, especially
Revolutionary War battlefields, have already been lost to residential
and commercial development. The 105th Congress made a commitment to
protecting battlefield sites. I have been pleased to support these
efforts as well as the successful effort to obtain funding in the FY99
Interior and Related Agencies Appropriations bill to begin conducting
the Revolutionary War and War of 1812 Historic Preservation Study. I
hope the 106th Congress will continue that commitment by protecting the
Brandywine and Paoli Battlefields. In addition, this legislation holds
enormous potential for all Americans to learn about our country's rich
history by establishing a new visitor center and museum at Valley Forge
National Historical Park, which will then be better able to tell the
story of the American Revolution. I therefore urge my colleagues to
support this bill.
______
By Mr. SPECTER (for himself and Mr. Santorum):
S. 582. A bill to authorize the Secretary of the Interior to enter
into an agreement for the construction and operation of the Gateway
Visitor Center at Independence National Historical Park; to the
Committee on Energy and Natural Resources.
gateway visitor center authorization act of 1999
Mr. SPECTER. Mr. President, I have sought recognition today to
reintroduce legislation to authorize the operation of the Gateway
Visitor Center in Independence National Historical Park in
Philadelphia, Pennsylvania. Similar legislation has already been
introduced in the House of Representatives by Representatives Robert
Borski, Curt Weldon, and Robert Brady.
As many of my colleagues are aware, Independence National Historical
Park is one of the National Park Service's crown jewels, home to the
Liberty Bell and Independence Hall and the birthplace of the
Constitution and the Declaration of Independence. In the Spring of
1997, the Final General Management Plan for Independence Park was
released, which spells out the vision for the Park for the next fifteen
years. The first block of Independence Mall will contain a new home for
the Liberty Bell, the second block the Gateway Visitor Center, and the
third block the National Constitution Center. The revitalization of
Independence Mall is well underway, but legislation is needed to fully
implement the General Management Plan with regards to the Gateway
Visitor Center.
The National Park Service is aware that this type of site-specific
legislation is necessary for the Gateway Visitor Center. I have worked
closely with the National Park Service and the Gateway Visitor Center
Corporation in
[[Page S2512]]
developing this legislation, and the National Park Service expressed
its full support for this legislation during hearings held in the 105th
Congress.
I would note that the $24 million needed to construct the Gateway
Visitor Center has already been committed, with the City of
Philadelphia contributing $5 million, the Commonwealth of Pennsylvania
$10 million, and various Foundations $15 million, of which $6 million
will fund an endowment. The legislation I am introducing today merely
provides the authorization for the operation of the Center. The Gateway
Visitor Center will be financially self-sustaining, with only a modest
contribution coming from the National Park Service for operations and
maintenance.
While the Gateway Visitor Center will provide the traditional
services to visitors to the Park, the Center will also provide some
services which are somewhat beyond the scope of existing National Park
Service legislation. In addition to its role as the Park's primary
visitor center, providing visitor orientation to the Park, the city,
and the region as a whole, the Gateway Visitor Center will be permitted
to charge fees, conduct events, and sell merchandise, tickets, and food
to visitors to the Center. These activities will allow the Gateway
Visitor Center to meet its parkwide, citywide and regional missions
while defraying the operating and management expenses of the Center.
The current visitor center in Independence National Historical Park
is poorly located, making it underutilized and inconvenient to the
millions of people who visit the Park each year. The Gateway Visitor
Center will serve far more people than ever possible with the current
facility by providing information, interpretation, facilities, and
services to visitors to the Park, its surrounding historic areas, the
City of Philadelphia, and the region in order to assist visitors in
their enjoyment of the historical, cultural, educational, and
recreational resources of the area. The Gateway Visitor Center will be
a major asset for the Park and critical to the central management goal
addressed in the General Management Plan of creating an outstanding
visitor experience. The Gateway Visitor Center holds enormous potential
for Independence National Historical Park and the greater Philadelphia
region as a whole, and I therefore urge my colleagues to support this
legislation.
______
By Mr. CHAFEE (by request):
S. 583. A bill to amend the Robert T. Stafford Disaster Relief and
Emergency Assistance Act to authorize programs for pre-disaster
mitigation, to streamline the administration of disaster relief, to
control the Federal costs of disaster assistance, and for other
purposes; to the Committee on Environment and Public Works.
disaster mitigation act of 1999
Mr. CHAFEE. Mr. President, today, at the administration's request, I
am introducing the Disaster Mitigation Act of 1999. This bill is
designed to promote pre-disaster mitigation and streamline the
operations of the Federal Emergency Management Agency (FEMA).
Last year, the Senate Committee on Environment and Public Works,
which has oversight over FEMA, considered S. 2361, legislation authored
by Senators Inhofe and Graham that was based in part on the
administration's 1997 proposal. While S. 2361 was reported by the
committee, it was not considered by the Senate before it adjourned last
November.
I believe it makes sense for Congress and FEMA to pay attention to
pre-disaster mitigation efforts--i.e., the steps that can be taken
before a disaster strikes. It also makes sense for us to ensure that
FEMA's operations are streamlined so that the administering of disaster
relief proceeds as smoothly and efficiently as possible. Taking these
steps not only would be easier on the budget, but also would help
prevent needless human suffering.
It is my hope that working with the administration, we will be able
to craft legislation that will accomplish our goals. I look forward to
working with my colleagues and administration officials toward that
end.
I ask unanimous consent that the full text of the bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 583
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Disaster
Mitigation Act of 1999''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Amendments to the Robert T. Stafford Disaster Relief and
Emergency Assistance Act.
TITLE I--PREDISASTER HAZARD MITIGATION
Sec. 101. Findings and purpose.
Sec. 102. Pre-Disaster Hazard Mitigation.
Sec. 103. Maximum contribution for mitigation costs.
Sec. 104. Conforming amendment.
TITLE II--DISASTER PREPAREDNESS AND MITIGATION ASSISTANCE
Sec. 201. Insurance.
Sec. 202. Management costs.
Sec. 203. Assistance to repair, restore, reconstruct, or replace
damaged facilities.
Sec. 204. Federal assistance to households.
Sec. 205. Repeals.
TITLE III--MISCELLANEOUS
Sec. 301. Technical correction of short title.
Sec. 302. Definitions.
SEC. 2. AMENDMENTS TO THE ROBERT T. STAFFORD DISASTER RELIEF
AND EMERGENCY ASSISTANCE ACT.
Except as otherwise specifically provided, whenever in this
Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision of
law, the reference shall be considered to be made to a
section or other provision of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).
TITLE I--PREDISASTER HAZARDS MITIGATION
SEC. 101. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds that--
(1) natural disasters, including earthquakes, tsunamis,
tornadoes, hurricanes and flooding, cause great danger to
human life and to property throughout the United States.
(2) greater emphasis needs to be placed on identifying and
assessing the risks to State and local communities and on
implementing adequate measures to reduce losses from such
disasters, and to ensure that communities' critical public
infrastructure and facilities will continue to function after
a disaster.
(3) expenditures for post-disaster assistance are
increasing without commensurate reductions in the likelihood
of future losses from such natural disasters;
(4) high priority in the expenditure of Federal funds under
this Act should be given to mitigate hazards for existing and
new construction at the local level;
(5) with a unified effort of economic incentives, awareness
and education, technical assistance, and demonstrated Federal
support, States and local communities can form effective
community-based partnerships for hazard mitigation purposes,
implement effective hazards mitigation measures that reduce
the existing disaster potential, ensure continued
functionality of communities' critical public infrastructure,
leverage additional non-Federal resources into their disaster
resistance goals, and make commitments to long-term
mitigation efforts in new and existing construction.
(b) Purpose.--It is the purpose of this Act to establish a
national disaster mitigation program that--
(1) reduces the loss of life and property, human suffering,
economic disruption and disaster assistance costs resulting
from natural hazards, and
(2) provides a source of pre-disaster mitigation funding
that will assist states and local governments in implementing
effective mitigation measures that are designed to ensure the
continued functionality of their critical facilities and
public infrastructure after a natural disaster.
SEC. 102. PRE-DISASTER HAZARD MITIGATION.
(a) Title II of the Act is amended by adding new section
203 as follows:
``SEC. 203. PRE-DISASTER HAZARD MITIGATION.
``(a) General Authority.--The Director may establish a
program of technical and financial assistance to states and
local governments that implement predisaster mitigation
measures in order to reduce injuries and loss of life and
damage and destruction of property including damage to their
critical public infrastructure and facilities.
``(b) Approval by Director.--If the Director finds that a
state or local government has identified all natural hazards
in its jurisdiction and has demonstrated its ability to form
effective public/private disaster mitigation partnerships, he
may provide financial assistance to the State or local
government for such purposes from the fund established under
subsection (d) of this section.
``(c) Purpose of Grants.--(1) The financial assistance
shall be used principally by states and local governments to
implement the predisaster hazard mitigation measures
contained in proposals approved by the Director. Funding may
also be used to support effective public/private
partnerships, to ensure that new community growth and
construction is disaster resistant, and to improve the
[[Page S2513]]
assessment of a community's natural hazards vulnerabilities
or to set a community's mitigation priorities.
``(2) The Director shall take into account the following
when establishing priorities for pre-disaster mitigation
grants:
``(A) The level and nature of the risks to be mitigated;
``(B) Grantee commitment to reduce damages from future
disasters;
``(C) commitment by the State and local government to
support ongoing non-Federal support for the mitigation
measures to be undertaken.
``(d) National Pre-Disaster Mitigation Fund.--To carry out
the pre-disaster mitigation program authorized in subsection
(a), the Director may establish in the United States Treasury
a National Predisaster Mitigation Fund (``Fund''), which
shall be available without fiscal year limitation for grants
to States and local governments under subsection (b) of this
section.
``(e) Funds for the Account.--The Fund shall be credited
with:
``(1) Funds appropriated by the Congress for the purposes
of this section, which funds shall be available until
expended; and
``(2) sums available from bequests, gifts, or donations of
service, money, or property, real, personal, or mixed,
tangible, or intangible, given for purposes of pre-disaster
mitigation.
``(f) Federal Share.--Subject to the provisions of
subsections (g) and (h) of this section, grants from the Fund
shall be not more than 75 percent of the total costs of the
mitigation proposal(s) approved by the Director.
``(g) Limit on Grants.--No grants shall be made in excess
of the money available in the Fund.
``(h) Rules Governing the Account.--The Director shall
publish rules to carry out the provisions of this section.
``(b) Effective Date.--Subsection (a) of this section shall
take effect on the date of enactment of the Disaster
Mitigation Act of 1999.
SEC. 103. MAXIMUM CONTRIBUTION FOR MITIGATION COSTS.
``(a) In General.--Section 404(a) of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C.
5170c(a)) is amended in the last sentence by striking ``15
percent'' and inserting ``20 percent''.
``(b) Applicability.--The amendment made by subsection (a)
shall apply to each major disaster declared under the Robert
T. Stafford Disaster Relief and Emergency Assistance Act (42
U.S.C. 5121 et seq.) after the date of enactment of this Act.
SEC. 104. CONFORMING AMENDMENT.
Title II of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5131 et seq.) is amended
by striking the title heading and inserting the following:
``TITLE II--DISASTER PREPAREDNESS AND MITIGATION ASSISTANCE''.
TITLE II--DISASTER PREPAREDNESS AND MITIGATION ASSISTANCE
SEC. 201. INSURANCE.
Section 311(a)(2) of the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C. 5154(a)(2)) is
amended--
(a) by inserting ``(A)'' before the sentence; and
(b) adding paragraph (B) to the subsection as follows:
``(B) The President shall publish rules to require States,
communities or other applicants to protect property through
self-insurance or adequate mitigation measures if the
appropriate State insurance commissioner makes the
certification provided in paragraph (A) and the President
determines that the property is not adequately protected
against natural or other disasters.''
SEC. 202. MANAGEMENT COSTS.
(a) In General.--Title III of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5141
et seq.) is amended by adding a new Section 322 as follows:
``SEC. 322. MANAGEMENT COSTS.
``(a) Definition of Management Cost.--The term `management
cost', as used in this section, includes any indirect cost,
administrative expense, and any other expense not directly
chargeable to a specific project under a major disaster,
emergency, or emergency preparedness activity or measure.
``(b) Management Cost Rates.--Notwithstanding any other
provision of law (including any administrative rule or
guidance), the President shall establish management cost
rates for grantees and subgrantees that shall be used to
determine contributions under this Act for management costs.
``(c) Review.--The President shall review the management
cost rates established under subsection (b) not later than 3
years after the date of establishment of the rates and
periodically thereafter.
``(d) Regulations.--The President shall promulgate
regulations to define appropriate costs to be included in
management costs under this section.''.
(b) Applicability.--Section 322 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (as added by
subsection (a)) shall apply as follows:
(1) In general.--Subsections (a), (b), and (d) of section
322 of that Act shall apply to each major disaster declared
under that Act on or after the date of enactment of this Act.
Until the date on which the President establishes the
management cost rates under that subsection, section 406(f)
of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5172(f)) shall be used for
establishing the rates.
(2) Review; Other Expenses.--Section 322(c) of that Act
shall apply to each major disaster declared under that Act on
or after the date on which the President establishes the
management cost rates under that section.
SEC. 203. ASSISTANCE TO REPAIR, RESTORE, RECONSTRUCT, OR
REPLACE DAMAGED FACILITIES.
(a) Minimum Federal Share.--Section 406(b) of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42
U.S.C. 5172(b)) is amended to read as follows:
``(b)(1) Except as provided in paragraph (2) of this
subsection, the Federal share of assistance under this
section shall be not less than 75 percent of the eligible
cost of repair, restoration, reconstruction, or replacement
carried out under this section.
``(2) The President shall publish rules to reduce the
Federal share of assistance under this section for the
repair, restoration, reconstruction, or replacement of any
eligible public or private nonprofit facility that has
previously received significant disaster assistance under
this Act on multiple occasions.''
(b) Contributions and Federal Share.--Section 406 of the
Robert T. Stafford Disaster Relief and Emergency Assistance
Act (42 U.S.C. 5172) is amended by striking subsection (e)
and inserting new subsection (e) to read as follows:
``(e) Eligible Cost.--
``(1) Determination.--
``(A) In General.--For the purposes of this section, the
President shall estimate the eligible cost of repairing,
restoring, reconstructing, or replacing a public facility or
private nonprofit facility--
``(i) on the basis of the design of the facility as the
facility existed immediately before the major disaster; and
``(ii) in conformity with current applicable codes,
specifications, and standards (including floodplain
management and hazard mitigation criteria required by the
President or under the Coastal Barrier Resources Act (16
U.S.C. 3501 et seq.)).
``(B) Cost Estimation Procedures.--Subject to paragraph
(2), the President shall use the cost estimation procedures
developed under paragraph (3) to make the estimate under
subparagraph (A).
``(2) Modification of Eligible Cost.--If the actual cost of
repairing, restoring, reconstructing, or replacing a facility
under this section is more than 120 percent or less than 80
percent of the cost estimated under paragraph (1), the
President may determine that the eligible cost shall be the
actual cost of the repair, restoration, reconstruction, or
replacement.
``(3) Expert Panel.--Not later than 18 months after the
date of enactment of this paragraph, the President, acting
through the Director of the Federal Emergency Management
Agency, shall establish an expert panel, which shall include
representatives from the construction industry, to develop
procedures for estimating the cost of repairing, restoring,
reconstructing, or replacing a facility consistent with
industry practices.
``(4) Special rule.--In any case in which the facility
being repaired, restored, reconstructed, or replaced under
this section was under construction on the date of the major
disaster, the cost of repairing, restoring, reconstructing,
or replacing the facility shall include, for the purposes of
this section, only those costs that, under the contract for
the construction, are the owner's responsibility and not the
contractor's responsibility.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date of enactment of this Act,
except that paragraph (1) of section 406(e) of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (as
amended by paragraph (1)) shall take effect on the date on
which the procedures developed under paragraph (3) of that
section take effect.
SEC. 204. FEDERAL ASSISTANCE TO HOUSEHOLDS.
(a) In General.--Section 408 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5174)
is amended to read as follows:
``SEC. 408. FEDERAL ASSISTANCE TO HOUSEHOLDS.
``(a) General Authority.--In accordance with this section,
the President, in consultation and coordination with the
Governor of an affected State, may provide financial
assistance, and, if necessary, direct services, to disaster
victims who--
``(1) as a direct result of a major disaster have necessary
expenses and serious needs; and
``(2) are unable to meet the necessary expenses and serious
needs through other means, including insurance proceeds or
loan or other financial assistance from the Small Business
Administration or another Federal agency. Inability to meet
necessary expenses and serious needs through loan or other
financial assistance from the Small Business Administration
or another Federal agency shall not apply to temporary
housing or rental assistance under subsection (c)(2) or to
permanent housing construction under subsection (c)(4) of
this section.
``(b) Housing Assistance.--
``(1) Eligibility.--The President may provide financial or
other assistance under this section to household to respond
to the disaster-related housing needs of households that are
displaced from their predisaster primary residences or whose
predisaster primary residences are rendered uninhabitable as
a result of damage caused by a major disaster.
``(2) Determination of appropriate types of assistance.--
The President shall determine appropriate types of housing
assistance
[[Page S2514]]
to be provided to disaster victims under this section based
on considerations of cost effectiveness, convenience to
disaster victims, and such other factors as the President
considers to be appropriate. One or more types of housing
assistance may be made available, based on the suitability
and availability of the types of assistance, to meet the
needs of disaster victims in a particular disaster situation.
``(c) Types of Housing Assistance.--
``(1) Federal assistance under this subjection shall
continue no longer than 18 months after the date of the major
disaster declaration by the President, unless the President
determines that it is in the public interest to extend such
18-month period.
``(2) Temporary housing.--
``(A) Financial assistance.--
``(i) In general.--The President may provide financial
assistance under this section to households to rent alternate
housing accommodations, existing rental units, manufactured
housing, recreational vehicles, or other readily fabricated
dwellings.
``(ii) Amount.--The amount of assistance under clause (i)
shall be based on the sum of--
``(I) the fair market rent for the accommodation being
provided; and
``(II) the cost of any transportation, utility hookups, or
unit installation not being directly provided by the
President.
``(B) Direct assistance.--
``(i) In general.--The President may directly provide under
this section housing units, acquired by purchase or lease, to
households who, because of a lack of available housing
resources, would be unable to make use of the assistance
provided under subparagraph (A).
``(ii) Collection of rental charges.--After the expiration
of the 18-month period referred to in paragraph (c)(1), the
President may charge fair market rent for the accommodation
being furnished.
``(3) Repairs.--
``(A) In general.--The President may provide financial
assistance for the repair of owner-occupied primary
residences, utilities, and residential infrastructure (such
as private access routes) damaged by a major disaster to a
habitable or functioning condition.
``(B) Emergency repairs.--To be eligible to receive
assistance under subparagraph (A), a recipient shall not be
required to demonstrate that the recipient is unable to meet
the need for the assistance through other means, except
insurance proceeds, if the assistance--
``(i) is used for emergency repairs to make a private
primary residence habitable; and
``(ii) does not exceed $5,000, as adjusted annually to
reflect changes in the Consumer Price Index for Urban
Consumers as reported by the Bureau of Labor Statistics of
the Department of Labor.
``(4) Permanent housing construction.--The President may
provide financial assistance or direct assistance under this
section to households to construct permanent housing in
insular areas outside the continental United States and in
other remote locations in cases in which--
``(A) no alternative housing resources are available; and
``(B) the types of temporary housing assistance described
in paragraph (c)(1) are unavailable, infeasible, or not cost
effective.
``(d) Terms and Conditions Relating to Housing
Assistance.--
``(1) Sites.--
``(A) In general.--Any readily fabricated dwelling provided
under this section shall, whenever practicable, be located on
a site that--
``(i) is provided by the State or local government; and
``(ii) is complete with utilities provided by the State or
local government, by the owner of the site, or by the
occupant who was displaced by the major disaster.
``(B) Sites provided by the president.--Readily fabricated
dwellings may be located on sites provided by the President
if the President determines that the sites would be more
economical or accessible.
``(2) Disposal of units.--
``(A) Sale To Occupants.--
``(i) In general.--Notwithstanding any other provision of
law, a temporary housing unit purchased under this section by
the President for the purpose of housing disaster victims may
be sold directly to the household who is occupying the unit
if the household needs permanent housing.
``(ii) Sales price.--Sales of temporary housing units under
this clause shall be accomplished at prices that are fair and
equitable.
``(iii) Deposit of proceeds.--Notwithstanding any other
provision of law, the proceeds of a sale under clause (i)
shall be deposited into the appropriate Disaster Relief Fund
account.
``(iv) Use of gsa services.--The President may use the
services of the General Services Administration to accomplish
a sale under clause (i).
``(B) Other methods of disposal.--
``(i) Sale.--If not disposed of under subparagraph (A), a
temporary housing unit purchased by the President for the
purpose of housing disaster victims may be resold.
``(ii) Disposal to governments and voluntary
organizations.--A temporary housing unit described in clause
(i) may be sold, transferred, donated, or otherwise made
available directly to a State or other governmental entity or
to a voluntary organization for the sole purpose of providing
temporary housing to disaster victims in major disasters and
emergencies if, as a condition of the sale, transfer,
donation, or other making available, the State, other
governmental agency, or voluntary organizations agrees--
``(I) to comply with the nondiscrimination provisions of
section 308; and
``(II) to obtain and maintain hazard and flood insurance on
the housing unit.
``(e) Financial Assistance To Address Other Needs.--
``(1) Medical, dental, and funeral expenses.--The
President, in consultation and coordination with the Governor
of the affected State, may provide financial assistance under
this section to a household adversely affected by a major
disaster to meet disaster-related medical, dental, and
funeral expenses.
``(2) Personal property, transportation, and other
expenses.--The President, in consultation and coordination
with the Governor of the affected State, may provide
financial assistance under this section to a household
described in paragraph (1) to address personal property,
transportation, and other necessary expenses or serious needs
resulting from the major disaster.
``(f) State Role.--The President shall provide for the
substantial and ongoing involvement of the affected State in
administering assistance under this section.
``(g) Maximum Amount of Assistance.--The maximum amount of
financial assistance that a household may receive under this
section with respect to a single major disaster shall be
$25,000, as adjusted annually to reflect changes in the
Consumer Price Index for all Urban Consumers published by the
Department of Labor.
``(h) Issuance of Regulations.--The President shall issue
rules and regulations to carry out the program established by
this section, including criteria, standards, and procedures
for determining eligibility for assistance.''.
(b) Conforming Amendment.--Section 502(a)(6) of the Robert
T. Stafford Disaster Relief and Emergency Assistance Act (42
U.S.C. 5192(a)(6)) is amended by striking ``temporary
housing''.
(c) Repeal of Individual and Family Grant Programs.--
Section 411 of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5178) is repealed.
(d) Effective Date.--The amendments made by this section
take effect 18 months after the date of enactment of this
Act.
SEC. 205. REPEALS.
(a) Associated Expenses.--Subject to the provisions of
section 202(b)(2) of this Act, section 406(f) of the Robert
T. Stafford Disaster Relief and Emergency Assistance Act (42
U.S.C. 5172(f)) is repealed.
(b) Community Disaster Loans.--Section 417 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42
U.S.C. 5184) is repealed.
(c) Simplified Procedure.--Section 422 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42
U.S.C. 5189) is repealed.
____
Sectional Analysis
Sec. 1 Short title; table of contents. Section 1
establishes the short title of the bill as the ``Disaster
Mitigation Act of 1999.''
Sec. 2. Amendments to the Robert T. Stafford Disaster
Relief and Emergency Assistance Act. This section states that
unless otherwise specified, any amendment or repeal of a
section or provision shall be considered to be made to the
Stafford Act.
title i--predisaster hazard mitigation
Sec. 101. Findings and purpose. Adopts the findings and
statement of purpose found in S. 2361, 105th Congress.
Section 101 describes four findings of Congress: (1) greater
emphasis needs to be placed on hazard identification and
hazard mitigation, (2) expenditures for disaster assistance
are increasing without evidence of potential reduction of
future losses, (3) a high priority should be placed on the
implementation or predisaster mitigation activities, and (4)
a unified effort will be successful in reducing future losses
from natural disasters.
These findings signal the importance of commitments by
States and local communities to long-term disaster mitigation
efforts (including developing appropriate construction
standards, practices and materials) for new and existing
structures. Such commitments can help reduce the rise of
future damage to life and property and ensure that critical
facilities and public infrastructure will function after a
disaster strikes.
Sec. 102. Pre-Disaster Hazard Mitigation. Section 102
creates a new Section 203 in the Stafford Act that authorizes
the Director to establish a program for States, local
governments, and other entities for carrying out predisaster
mitigation activities that exhibit long-term, cost-effective
benefits and substantially reduce the risk of future damage
from major disasters. For the purposes of this section, the
term ``entities'' refers to governmental entities of the
State or local government, regional planning organizations,
governmental units organized along watershed or other
planning foci, or tribal governments.
In selecting a site, the Director must consider the
likelihood of damage resulting from a natural disaster; the
identification of cost effective mitigation activities with
meaningful outcomes; the consistency with State mitigation
programs; the opportunity to maximize net benefits to
society; the ability of a State or local government or entity
to fund mitigation activities; private sector interest; and
other criteria established in coordination with State and
local governments. The Director must take into account
[[Page S2515]]
the level and nature of risks to be mitigated, grantee
commitment to reduce damages from future disasters, and
commitment by the State or local government to support
ongoing non-Federal support for the mitigation measures to be
undertaken when establishing priorities for pre-disaster
mitigation grants.
With regard to mitigation activities, this section requires
the President and the States to consult on a list of those
activities that are appropriate, and delegates decisions
regarding selections from the list to local governments.
States receiving financial assistance under this section
may use the assistance to fund activities to disseminate
information about cost-effective mitigation technologies.
Certain construction standards, practices, and materials have
been proven effective in mitigating the risks or impacts of
actual natural disasters. Public awareness of these
technologies can allow communities to make informed decisions
that can substantially reduce the risk of future damage,
hardship or suffering from a major disaster.
Sec. 103. Maximum contribution for mitigation costs.
Section 103 amends Section 404(a) of the Stafford Act by
changing maximum hazard mitigation contributions from 15% to
20% of aggregate amount of grants. The changes made by this
section are applicable to all major disasters declared after
January 1, 1999.
Sec. 104. Conforming amendment. This section amends to the
heading of Title II to read ``Title II--Disaster Preparedness
and Mitigation Assistance''.
TITLE II--DISASTER PREPAREDNESS AND MITIGATION ASSISTANCE.
Sec. 201. Insurance. Section 201 amends Sec. 311(a)(2) of
the Stafford Act to authorize the President to require by
regulation that States, communities or other applicants
protect property through self-insurance or adequate
mitigation measures if the State's insurance commissioner
certifies that insurance is not reasonably available. Under
current law if the State insurance commissioner certifies
that insurance is not reasonably available, an applicant need
not take any further action to insure or mitigate the
property against future damage. This provision authorizes the
President to require further action to reduce future
potential damage to the affected property.
Sec. 202. Management costs. Section 203 adds a new Section
322 to the Stafford Act. It provides a definition for
management costs and directs the President to establish
management cost reimbursement rates, subject to periodic
review, for grantees and subgrantees receiving assistance
under the Act. Appropriate costs are to be established by
Federal regulation. The current reimbursement system will
remain in effect for disasters declared before the new rates
are established.
Sec. 203. Assistance to repair, restore, reconstruct, or
replace damaged facilities. Section 203 amends and
reorganizes the section of the Stafford Act (Section 406)
that provides authority to the President to make
contributions to a State, local government, or person for the
repair, restoration, or replacement of public facilities or
private nonprofit facilities. As amended, this section
establishes a minimum Federal share of 75 percent of the
cost of such activities. Section 203 would also amend
Section 206 to authorize reduction in Federal disaster
assistance for facilities which had received disaster
assistance in the past and for which insurance had not
been maintained since receipt of the disaster assistance.
This section also sets new rules for cost estimates by
allowing the cost of repairs in situations where the actual
cost is above 120 percent or below 80 percent of the
estimated cost to be reconsidered. In addition, it directs
the President to establish an expert panel for development of
procedures for cost estimations.
Sec. 204. Federal assistance to households. Section 204(a)
amends Section 408 of the Stafford Act to combine the Housing
and Individual and Family Grant (IFG) Programs. As amended,
this section establishes the type of assistance available for
housing, repairs, and construction, and caps total assistance
per individual or household under the combined program at
$25,000 per major disaster. It authorizes the President to
assist individuals by replacing their homes under certain
conditions or allowing them to rent alternate housing
accommodations, and by providing financial assistance for
medical, dental, funeral, personal property, and
transportation expenses. The President is to issue
regulations to determine eligibility for assistance.
Section 204(b) deletes the term ``temporary housing'' from
Sec. 502(a)(6) of the Stafford Act. Section 502 specifies and
limits the emergency assistance that the President may
provide when he declares an emergency under the Act.
Paragraph (a)(6) states that he may provide ``temporary
housing assistance'' under Sec. 408 of the Act. This
amendment would give the President authority to provide
assistance under Sec. 408, which would encompass both housing
and assistance to individuals and households in the
consolidated section.
Sec. 204(c) repeals the Individual and Family Grant
programs, which under this legislation are consolidated with
the Temporary Housing program.
Sec. 205. Repeals. Section 205 repeals Section 406(f) and
Section 417 of the Stafford Act (providing for Associated
Expenses and for Community Disaster Loans), as well as
Section 422 (regarding simplified procedure), in order to
conform with the amendment made under Section 202(d) of the
bill.
____
Ramseyer/Cordon Comparison
Materials deleted within bold brackets [ ], new text in italic.
SEC. 101. FINDINGS AND PURPOSE.
(d) Findings.--The Congress finds that--
(1) natural disasters, including earthquakes, tsunamis,
tornadoes, hurricanes and flooding, cause great danger to
human life and to property throughout the United States.
(2) greater emphasis needs to be placed on identifying and
assessing the risks to State and local communities and on
implementing adequate measures to reduce losses from such
disasters, and to ensure that communities' critical public
infrastructure and facilities will continue to function after
a disaster.
(3) expenditures for post-disaster assistance are
increasing without commensurate reductions in the likelihood
of future losses from such natural disasters;
(4) high priority in the expenditure of Federal funds under
this Act should be given to mitigate hazards for existing and
new construction at the local level;
(5) with a unified effort of economic incentives, awareness
and education, technical assistance, and demonstrated Federal
support, States and local communities can form effective
community-based partnerships for hazard mitigation purposes,
implement effective hazards mitigation measures that reduce
the existing disaster potential, ensure continued
functionality of communities' critical public infrastructure,
leverage additional non-Federal resources into their disaster
resistance goals, and make commitments to long-term
mitigation efforts in new and existing construction.
(b) Purpose.--It is the purpose of this Act to establish a
national disaster mitigation program that--
(1) reduces the loss of life and property, human suffering,
economic disruption and disaster assistance costs resulting
from natural hazards, and
(2) provides a source of pre-disaster mitigation funding
that will assist states and local governments in implementing
effective mitigation measures that are designed to ensure the
continued functionality of their critical facilities and
public infrastructure after a natural disaster.
SEC. 102. PRE-DISASTER HAZARD MITIGATION.
42 U.S.C. SEC. 203. PRE-DISASTER HAZARD MITIGATION.
(a) General Authority.--The Director may establish a
program of technical and financial assistance to states and
local governments that implement predisaster mitigation
measures in order to reduce injuries and loss of life and
damage and destruction of property including damage to their
critical public infrastructure and facilities.
(b) Approval by Director.--If the Director finds that a
state or local government has identified all natural disaster
hazards in its jurisdiction and has demonstrated its ability
to form effective public/private disaster mitigation
partnerships, he may make grants to the State or local
government for such purposes from the fund established under
subsection (d) of this section.
``(c) Purpose of Grants.--(1) The financial assistance
shall be used principally by states and local governments to
implement the predisaster hazard mitigation measures
contained in proposals approved by the Director. Funding may
also be used to support effective public/private
partnerships, to ensure that new community growth and
construction is disaster resistant, and to improve the
assessment of a community's natural hazards vulnerabilities
or to set a community's mitigation priorities.
``(2) The Director shall take into account the following
when establishing priorities for pre-disaster mitigation
grants:
``(A) the level and nature of the risks to be mitigated;
``(B) Grantee commitment to reduce damages from future
disasters;
``(C) commitment by the State or local government to
support ongoing non-Federal support for the mitigation
measures to be undertaken.
(d) National Pre-Disaster Mitigation Fund.--To carry out
the pre-disaster mitigation program authorized in subsection
(a), the Director shall establish in the United States
Treasury a National Predisaster Mitigation Fund (``Fund''),
which shall be an account separate from any other accounts or
funds, and which shall be available without fiscal year
limitation for grants to States and local governments under
subsection (b) of this section.
(e) Funds for the Account.--The Fund shall be credited
with:
(1) funds appropriated by the Congress for the purposes of
this section which funds shall be available until expended;
and
(2) sums available from bequests, gifts, or donations of
service, money, or property, real, personal, or mixed,
tangible, or intangible, given for purposes of pre-disaster
mitigation.
(f) Federal Share.--Subject to the provisions of
subsections (g) and (h) of this section, grants from the Fund
shall be not more than 75 percent of the total cost of the
mitigation proposal(s) approved by the Director.
(g) Limit on Grants.--No grants shall be made in excess of
the money available in the Fund.
3(h) Rules Governing the Account.--The Director shall
publish rules to carry out the provisions of this section.
SEC. 103. MAXIMUM CONTRIBUTION FOR MITIGATION COSTS.
42 U.S.C. SEC. 404. HAZARD MITIGATION.
(a) In General.--
The President may contribute up to 75 percent of the cost
of hazard mitigation measures which the President has
determined are
[[Page S2516]]
cost-effective and which substantially reduce the risk of
future damage, hardship, loss, or suffering in any area
affected by a major disaster. Such measures shall be
identified following the evaluation of natural hazards under
section 5176 of this title and shall be subject to approval
by the President. The total of contributions under this
section for a major disaster shall not exceed [15] 20 percent
of the estimated aggregate amount of grants to be made (less
any associated administrative costs) under this chapter with
respect to the major disaster.
SEC. 201. INSURANCE.
42 U.S.C. SEC. 311. INSURANCE.
(a) Applicants for Replacement of Damaged Facilities.--
* * * * *
(2) Determination.--
(A) In making a determination with respect to availability,
adequacy, and necessity under paragraph (1), the President
shall not require greater types and extent of insurance than
are certified to him as reasonable by the appropriate State
insurance commissioner responsible for regulation of such
insurance.
(B) The President shall publish rules to require States,
communities or other applicants to protect property through
self-insurance or adequate mitigation measures if the
appropriate State insurance commissioner makes the
certification provided in paragraph (A) and the President
determines that the property is not adequately protected
against natural or other disasters.
SEC. 202. MANAGEMENT COSTS
SEC. 322. MANAGEMENT COSTS.
(a) Definition of Management Cost.--The term `management
cost', as used in this section, includes any indirect cost,
administrative expense, and any other expense not directly
chargeable to a specific project under a major disaster,
emergency, or emergency preparedness activity or measure.
(b) Management Cost Rates.--Notwithstanding any other
provision of law (including any administrative rule or
guidance), the President shall establish management cost
rates for grantees and subgrantees that shall be used to
determine contributions under this Act for management costs.
(C) Review.--The President shall review the management cost
rates established under subsection (b) not later than 3 years
after the date of establishment of the rates and periodically
thereafter.
(d) Regulations.--The President shall promulgate
regulations to define appropriate costs to be included in
management costs under this section.
SEC. 203. ASSISTANCE TO REPAIR, RESTORE, RECONSTRUCT, OR
REPLACE DAMAGED FACILITIES
42 U.S.C. SEC. 406. REPAIR, RESTORATION, AND REPLACEMENT OF
DAMAGED FACILITIES
(a) Minimum Federal Share.--
[Sec. 406] (b) Minimum Federal Share.--
[The Federal share of assistance under this section shall
be not less than--
(1) 75 percent of the net eligible cost of repair,
restoration, reconstruction, or replacement carried out under
this section;
(2) 100 percent of associated expenses described in
subsections (f)(1) and (f)(2); and
(3) 75 percent of associated expenses described in
subsections (f)(3), (f)(4), and (f)(5).]
(1) Except as provided in paragraph (2) of this subsection,
the Federal share of assistance under this section shall be
not less than 75 percent of the eligible cost of repair,
restoration, reconstruction, or replacement carried out under
this section.
(2) The President shall publish rules to reduce the Federal
share of assistance under this section for the repair,
restoration, reconstruction, or replacement of any eligible
public or private nonprofit facility that has previously
received significant disaster assistance under this Act on
multiple occasions.
(B) Contributions and Federal Share
[(e) Net Eligible Cost.--
[(1) General rule.--
[For purposes of this section, the cost of repairing,
restoring, reconstructing, or replacing a public facility or
private nonprofit facility on the basis of the design of such
facility as it existed immediately prior to the major
disaster and in conformity with current applicable codes,
specifications, and standards (including floodplain
management and hazard mitigation criteria required by the
President or by the Coastal Barrier Resources Act (16 U.S.C.
3501 et seq.)) shall, at a minimum, be treated as the net
eligible cost of such repair, restoration, reconstruction, or
replacement.
[(2) Special rule
[In any case in which the facility being repaired,
restored, reconstructed, or replaced under this section was
under construction on the date of the major disaster, the
cost of repairing, restoring, reconstructing, or replacing
such facility shall include, for purposes of this section,
only those costs which, under the contract for such
construction, are the owner's responsibility and not the
contractor's responsibility.
[Sec. 406] (e) Eligible cost.--
(1) Determination--
(A) In General.--For the purposes of this section, the
President shall estimate the eligible cost of repairing,
restoring, reconstructing, or replacing a public facility or
private nonprofit facility--
(i) on the basis of the design of the facility as the
facility existed immediately before the major disaster; and
(ii) in conformity with current applicable codes,
specifications, and standards (including floodplain
management and hazard mitigation criteria required by the
President or under the Coastal Barrier Resources Act (16
U.S.C. 3501 et seq.)).
(B) Cost estimation procedures.--Subject to paragraph (2),
the President shall use the cost estimation procedures
developed under paragraph (3) to make the estimate under
subparagraph (A).
(2) Modification of eligible cost.--If the actual cost of
repairing, restoring, reconstructing, or replacing a facility
under this section is more than 120 percent or less than 80
percent of the cost estimated under paragraph (1), the
President may determine that the eligible cost shall be the
actual cost of the repair, restoration, reconstruction, or
replacement.
(3) Expert panel.--Not later than 18 months after the date
of enactment of this paragraph, the President, acting through
the Director of the Federal Emergency Management Agency,
shall establish an expert panel, which shall include
representatives from the construction industry, to develop
procedures for estimating the cost of repairing, restoring,
reconstructing, or replacing a facility consistent with
industry practices.
(4) Special rule.--In any case in which the facility being
repaired, restored, reconstructed, or replaced under this
section was under construction on the date of the major
disaster, the cost of repairing, restoring, reconstructing,
or replacing the facility shall include, for the purposes of
this section, only those costs that, under the contract for
the construction, are the owner's responsibility and not the
contractor's responsibility.
SEC. 204. FEDERAL ASSISTANCE TO HOUSEHOLDS
42 U.S.C. [SEC. 408. TEMPORARY HOUSING ASSISTANCE
[(a) Provision of Temporary Housing--
[(1) In general--
[The President may--
[(A) provide, by purchase or lease, temporary housing
(including unoccupied habitable dwellings), suitable rental
housing, mobile homes, or other readily fabricated dwellings
to persons who, as a result of a major disaster, require
temporary housing; and
[(B) reimburse State and local governments in accordance
with paragraph (4) for the cost of sites provided under
paragraph (2).
[(2) Mobile home site--
[(A) In general--
[Any mobile home or other readily fabricated dwelling
provided under this section shall whenever possible be
located on a site which--
[(i) is provided by the State or local government; and
[(ii) has utilities provided by the State or local
government, by the owner of the site, or by the occupant who
was displaced by the major disaster.
[(B) Other sites--
[Mobile homes and other readily fabricated dwellings may be
located on sites provided by the President if the President
determines that such sites would be more economical or
accessible than sites described in subparagraph (A).
[(3) Period--
[Federal financial and operational assistance under this
section shall continue for not longer than 18 months after
the date of the major disaster declaration by the President,
unless the President determines that due to extraordinary
circumstances it would be in the public interest to extend
such 18-month period.
[(4) Federal share--
[The Federal share of assistance under this section shall
be 100 percent; except that the Federal share of assistance
under this section for construction and site development
costs (including installation of utilities) at a mobile home
group site shall be 75 percent of the eligible cost of such
assistance. The State or local government receiving
assistance under this section shall pay any cost which is not
paid for from the Federal share.
[(b) Temporary Mortgage and Rental Payments.--
[The President is authorized to provide assistance on a
temporary basis in the form of mortgage or rental payments to
or on behalf of individuals and families who, as a result of
financial hardship caused by a major disaster, have received
written notice of dispossession or eviction from a residence
by reason of a foreclosure of any mortgage or lien,
cancellation of any contract of sale, or termination of any
lease, entered into prior to such disaster. Such assistance
shall be provided for the duration of the period of financial
hardship but not to exceed 18 months.
[(c) In Lieu Expenditures.--
[In lieu of providing other types of temporary housing
after a major disaster, the President is authorized to make
expenditures for the purpose of repairing or restoring to a
habitable condition owner-occupied private residential
structures made uninhabitable by a major disaster which are
capable of being restored quickly to a habitable condition.
[(d) Transfer of Temporary Housing--
[(1) Direct sale to occupants--
[Notwithstanding any other provision of law, any temporary
housing acquired by purchase may be sold directly to
individuals and families who are occupants of temporary
housing at prices that are fair and equitable, as determined
by the President.
[(2) Transfers to states, local governments, and voluntary
organizations--
[The President may sell or otherwise make available
temporary housing units directly to States, other
governmental entities, and voluntary organizations. The
President shall impose as a condition of transfer under this
[[Page S2517]]
paragraph a covenant to comply with the provisions of section
308 requiring nondiscrimination in occupancy of such
temporary housing units. Such disposition shall be limited to
units purchased under the provisions of subsection (a) and to
the purposes of providing temporary housing for disaster
victims in major disasters or emergencies.
[(e) Notification--
[(1) In general--
[Each person who applies for assistance under this section
shall be notified regarding the type and amount of any
assistance for which such person qualifies. Whenever
practicable, such notice shall be provided within 7 days
after the date of submission of such application.
[(2) Information--
[Notification under this subsection shall provide
information regarding--
[(A) all forms of such assistance available;
[(B) any specific criteria which must be met to qualify for
each type of assistance that is available;
[(C) any limitations which apply to each type of
assistance; and
[(D) the address and telephone number of offices
responsible for responding to--
[(i) appeals of determinations of eligibility for
assistance; and
[(ii) requests for changes in the type or amount of
assistance provided.
[(f) Location--
[In providing assistance under this section, consideration
shall be given to the location of and travel time to--
[(1) the applicant's home and place of business;
[(2) schools which the applicant or members of the
applicant's family who reside with the applicant attend; and
[(3) crops of livestock which the applicant tends in the
course of any involvement in farming which provides 25
percent or more of the applicant's annual income.]
SEC. 408. FEDERAL ASSISTANCE TO HOUSEHOLDS.
(a) General Authority.--In accordance with this section,
the President, in consultation and coordination with the
Governor of an affected State, may provide financial
assistance, and, if necessary, direct services, to disaster
victims who--
(1) as a direct result of a major disaster have necessary
expenses and serious needs; and
(2) are unable to meet the necessary expenses and serious
needs through other means, including insurance proceeds or
loan or other financial assistance from the Small Business
Administration or another Federal agency. Inability to meet
necessary expenses and serious needs through loan or other
financial assistance from the Small Business Administration
or another Federal agency shall not apply to temporary
housing or rental assistance under subsection (c)(2) or to
permanent housing construction under subsection (c)(4) of
this section.
(b) Housing Assistance--
(1) Eligibility.--The President may provide financial or
other assistance under this section to households to respond
to the disaster-related housing needs of households that are
displaced from their predisaster primary residence or whose
predisaster primary residence are rendered uninhabitable as a
result of damage caused by a major disaster.
(2) Determination of Appropriate Types of Assistance.--The
President shall determine appropriate types of housing
assistance to be provided to disaster victims under this
section based on consideration of cost effectiveness,
convenience to disaster victims, and such other factors as
the President considers to be appropriate. One or more types
of housing assistance may be made available, based on the
suitability and availability of the types of assistance, to
meet the needs of disaster victims in a particular disaster
situation.
(c) Types of Housing Assistance--
(1) Federal assistance under this subsection shall continue
no longer than 18 months after the date of the major disaster
declaration by the President, unless the President determines
that it is in the public interest to extend such 18-month
period.
(2) Temporary Housing--
(A) Financial Assistance--
(i)--In general.--The President may provide financial
assistance under this section to households to rent alternate
housing accommodations, existing rental units, manufactured
housing, recreational vehicles, or other readily fabricated
dwellings.
(ii) Amount.--The amount of assistance under clause (i)
shall be based on the sum of--
(I) the fair market rent for the accommodation being
provided; and
(II) the cost of any transportation, utility hookups, or
unit installation not being directly provided by the
President.
(B) Direct Assistance.--
(i) In General.--The President may direct provide under
this section housing units; acquired by purchase or lease, to
households who, because of a lack of available housing
resources, would be unable to make use of the assistance
provided under subparagraph (A).
(ii) Collection of Rental Charges.--After the expiration of
the 18-month period referred to in clause (ii), the President
may charge fair market rent for the accommodation being
provided.
(3) Repairs.--
(A) In general.--The President may provide financial
assistance for the repair of owner-occupied primary
residents, utilities, and residential infrastructure (such as
private access routes) damaged by a major disaster to a
habitable or functioning condition.
(B) Emergency Repairs.--To be eligible to receive
assistance under subparagraph (A), a recipient shall not be
required to demonstrate that the recipient is unable to meet
the need for the assistance through other means, except
insurance proceeds, if the assistance--
``(i) is used for emergency repairs to make a private
primary residence habitable; and
``(ii) does not exceed $5,000, as adjusted annually to
reflect changes in the Consumer Price Index for Urban
Consumers as reported by the Bureau of Labor Statistics of
the Department of Labor.
``(4) Permanent Housing Construction.--The President may
provide financial assistance or direct assistance under this
section to households to construct permanent housing in
insular areas outside the continental United States and in
other remote locations in cases in which--
``(A) no alternative housing resources are available; and
``(B) the types of temporary housing assistance described
in paragraph (c)(l) are unavailable, infeasible, or not cost
effective.
``(d) Terms and Conditions Relating to Housing Assistance--
``(l) Sites--
``(A) In General.--Any readily fabricated dwelling provided
under this section shall, whenever practicable, be located on
a site that--
``(i) is provided by the State or local government; and
``(ii) is complete with utilities provided by the State or
local government, by the owner of the site, or by the
occupant who was displaced by the major disaster.
``(B) Sites Provided by the President.--Readily fabricated
dwellings may be located on sites provided by the President
if the President determines that the sites would be more
economical or accessible.
``(2) Disposal of Units--
``(A) Sale to occupants--
``(i) In general.--Notwithstanding any other provision of
law, a temporary housing unit purchased under this section by
the President for the purpose of housing disaster victims may
be sold directly to the household who is occupying the unit
if the household needs permanent housing.
``(ii) Sales price.--Sales of temporary housing units under
clause shall be accomplished at prices that are fair and
equitable.
``(iii) Deposit of proceeds.--Notwithstanding any other
provision of law, the proceeds of a sale under clause (i)
shall be deposited into the appropriate Disaster Relief Fund
account.
``(iv) Use of GSA services.--The President may use the
services of the General Services Administration to accomplish
a sale under clause (i).
``(B) Other Methods of Disposal--
``(i) Sale.--If not disposed of under subparagraph (A), a
temporary housing unit purchased by the President for the
purpose of housing disaster victims may be resold.
``(ii) Disposal To Governments and Voluntary
Organizations.--A temporary housing unit described in clause
(i) may be sold, transferred, donated, or otherwise made
available directly to a State or other governmental entity or
to a voluntary organization for the sole purpose of providing
temporary housing to disaster victims in major disasters and
emergencies if, as a condition of the sale, transfer,
donation, or other making available, the State, other
governmental agency, or voluntary organization agrees--
``(I) to comply with the nondiscrimination provisions of
section 308; and
``(II) to obtain the maintain hazard and flood insurance on
the housing unit.
``(e) Financial Assistance to Address Other Needs--
``(l) Medical, Dental, and Funeral Expenses.--The
President, in consultation and coordination with the Governor
of the affected State, may provide financial assistance under
this section to a household adversely affected by a major
disaster to meet disaster-related medical, dental, and
funeral expenses.
``(2) Personal Property, Transportation, and Other
Expenses.--The President, in consultation and coordination
with the governor of the affected State, may provide
financial assistance under this section to a household
described in paragraph (l) to address personal property,
transportation, and other necessary expenses or serious needs
resulting from the major disaster.
(f) State Role.--The President shall provide for the
substantial and ongoing involvement of the affected State in
administering assistance under this section.
(g) Maximum Amount of Assistance.--The maximum amount of
financial assistance that a household may receive under this
section with respect to a single major disaster shall be
$25,000, as adjusted annually to reflect changes in the
Consumer Price Index for all Urban Consumers published by the
Department of Labor.
(h) Issuance of Regulations.--The President shall issue
rules and regulations to carry out the program established by
this section, including criteria, standards, and procedures
for determining eligibility for assistance.
SEC. 204(B). CONFORMING AMENDMENT.
SEC. 502. FEDERAL EMERGENCY ASSISTANCE.
(a) Specified.--
In any emergency, the President may--
* * * * *
(6) provide [temporary housing] assistance in accordance
with section 408 [42 U.S.C. Sec. 5174]; and
SEC. 204(C). REPEAL OF INDIVIDUAL AND FAMILY GRANT PROGRAMS.
42 U.S.C. [SEC. 411. INDIVIDUAL AND FAMILY GRANT PROGRAMS.
[(a) In General.--
The President is authorized to make a grant to a State for
the purpose of making grants to individuals or families
adversely affected by a major disaster for meeting disaster-
related necessary expenses or serious needs of such
individuals or families in those
[[Page S2518]]
cases where such individuals or families are unable to meet
such expenses or needs through assistance under other
provisions of this Act or through other means.
[(b) Cost Sharing.--
(1) Federal share.--
The Federal share of a grant to an individual or a family
under this section shall be equal to 75 percent of the actual
cost incurred.
(2) State contribution.--
The Federal share of a grant under this section shall be
paid only on condition that the remaining 25 percent of the
cost is paid to an individual or family from funds made
available by a State.
[(c) Regulations.--
[The President shall promulgate regulations to carry out
this section and such regulations shall include national
criteria, standards, and procedures for the determination of
eligibility for grants and the administration of grants under
this section.
[(d) Administrative Expenses.--
A State may expend not to exceed 5 percent of any grant
made by the President to it under subsection (a) for expenses
of administering grants to individuals and families under
this section.
[(e) Administration Through Governor.--
The Governor of a State shall administer the grant program
authorized by this section in the State.
[(f) Limit on Grants to Individual.--
No individual or family shall receive grants under this
section aggregating more than $10,000 with respect to any
single major disaster. Such $10,000 limit shall annually be
adjusted to reflect changes in the Consumer Price Index for
All Urban Consumers published by the Department of Labor.]
SEC. 205. REPEALS.
SEC. 205(A). ASSOCIATED EXPENSES.
[(f) Associated Expenses.--
For purposes of this section, associated expenses include
the following:
[(1) Necessary costs.--
Necessary costs of requesting, obtaining, and administering
Federal assistance based on a percentage of assistance
provided as follows:
(A) For an applicant whose net eligible costs equal less
than $100,000, 3 percent of such net eligible costs,
(B) For an applicant whose net eligible costs equal
$100,000 or more but less than $1,000,000, $3,000 plus 2
percent of such net eligible costs in excess of $100,000.
(C) For an applicant whose net eligible costs equal
$1,000,000 or more but less than $5,000,000, $21,000 plus 1
percent of such net eligible costs in excess of $1,000,000.
(D) For an applicant whose net eligible costs equal
$5,000,000 or more, $61,000 plus \1/2\ percent of such net
eligible costs in excess of $5,000,000.
[(2) Extraordinary costs--
Extraordinary costs incurred by a State for preparation of
damage survey reports, final inspection reports, project
applications, final audits, and related field inspections by
State employees, including overtime pay and per diem and
travel expenses of such employees, but not including pay for
regular time of such employees, based on the total amount of
assistance provided under sections 5170b, 5170c, 5172, 5173,
5192, 5193 of this title in such State in connection with the
major disaster as follows:
(A) If such total amount is less than $100,000, 3 percent
of such total amount,
(B) If such total amount is $100,000 or more but less than
$1,000,000, $3,000 plus 2 percent of such total amount net
eligible cost in excess of $100,000,
(C) If such total amount is $1,000,000 or more but less
than $5,000,000, $21,000 plus 1 percent of such total amount
net eligible cost in excess of $1,000,000,
(D) If such total amount is $5,000,000 or more, $61,000
plus \1/2\ percent of such total amount net eligible cost in
excess of $5,000,000.
[(3) Costs of National Guard--
The costs of mobilizing and employing the National Guard
for performance of eligible work.
[(4) Costs of prison labor--
The costs of using prison labor to perform eligible work,
including wages actually paid, transportation to a worksite,
and extraordinary costs of guards, food, and lodging.
[(5) Other labor costs--
Base and overtime wages for an applicant's employees and
extra hires performing eligible work plus fringe benefits on
such wages to the extent that such benefits were being paid
before the disaster]
SEC. 205(B) COMMUNITY DISASTER LOANS.
42 U.S.C. [SEC. 417. COMMUNITY DISASTER LOANS.
[(a) The President is authorized to make loans to any local
government which may suffer a substantial loss of tax and
other revenues as a result of a major disaster, and has
demonstrated a need for financial assistance in order to
perform its governmental functions. The amount of any such
loan shall be based on need, and shall not exceed 25 per
centum of the annual operating budget of that local
government for the fiscal year in which the major disaster
occurs. Repayment of all or any part of such loan to the
extent that revenues of the local government during the three
full fiscal year period following the major disaster are
insufficient to meet the operating budget of the local
government, including additional disaster-related expenses of
a municipal operation character shall be canceled.
[(b) Any loans made under this section shall not reduce or
otherwise affect any grants or other assistance under this
Act.]
SEC. 205(C) SIMPLIED PROCEDURE.
[(Sec. 422. SIMPLIFIED PROCEDURE.
[If the Federal estimate of the cost of--
(1) repairing, restoring, reconstructing, or replacing
under section 406 any damaged or destroyed public facility or
private nonprofit facility,
(2) emergency assistance under section 403 or 502, or
(3) debris removed under section 407,
is less than $35,000, the President (on application of the
State or local government or the owner or operator of the
private nonprofit facility) may make the contribution to such
State or local government or owner or operator under section
403, 406, 407, or 502, as the case may be, on the basis of
such Federal estimate. Such $35,000 amount shall be adjusted
annually to reflect changes in the Consumer Price Index for
All Urban Consumers published by the Department of Labor.]
______
By Mr. KENNEDY (for himself and Mr. Lautenberg):
S. 584. A bill to amend title XIX of the Social Security Act to
permit the Secretary of Health and Human Services to waive recoupment
under the medicaid program of certain tobacco-related funds received by
a State if a State uses a portion of such funds for tobacco use
prevention and health care and early learning programs; to the
Committee on Finance.
Children's Smoking Prevention, Health, and Early Learning Trust Fund
Mr. KENNEDY. Mr. President, today I am introducing legislation which
will insure that the federal share of the state Medicaid settlements
negotiated with the tobacco industry is used by the states to prevent
youth smoking, to improve health care, and to promote child
development. Fifty-seven cents of every Medicaid dollar spent by the
states comes from the federal government. The cost of Medicaid
expenditures to treat people suffering from smoking-induced disease was
at the core of state lawsuits against the tobacco industry. While the
federal government could legally demand that the states reimburse
Washington from their settlements, I believe the states should be
allowed to keep one hundred percent of the money. However, the federal
share should be used by the states for programs that will advance the
goals of protecting children and enhancing public health which were at
the heart of the litigation and are consistent with the purposes of
Medicaid. That would be an eminently fair and reasonable compromise of
this contentious issue.
While there were a variety of claims made by the states against the
tobacco industry, the Medicaid dollars used to treat tobacco-related
illness constituted by far the largest claim monetarily, and it formed
the basis for the national settlement. As part of that settlement,
every state released the tobacco companies from federal Medicaid
liability, as well as state Medicaid liability. Medicaid expenditures
heavily influenced the distribution formula used to divide the national
settlement amongst the states. In light of these undeniable facts, the
dollars obtained by the states from their settlements cannot now be
divorced from Medicaid. States are free to use the state share of their
recoveries in any way they choose. However, Congress has a vital
interest in how the federal share will be used.
My legislation would require states to use half of the amount of
money they receive from the tobacco industry each year (the federal
share) to protect children and improve public health. At least thirty-
five percent of the federal share would be spent on programs to deter
youth smoking and to help smokers overcome their addiction. This would
include a broad range of tobacco control initiatives, including school
and community based tobacco use prevention programs, counter-
advertising to discourage smoking, cessation programs, and enforcement
of the ban on sale to minors. Three thousand children start smoking
every day, and one thousand of them will die prematurely as a result of
tobacco-induced disease. Prevention of youth smoking should be, without
question, our highest priority for the use of these funds. The state
settlements provide the resources to dissuade millions of teenagers
from smoking, to break the cycle of addiction and early death. We must
seize that opportunity.
The remainder of the federal share would be available for states to
use to fund health care and early learning initiatives which they
select. States can either use the additional resources to supplement
existing programs in these
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areas, or to fund creative new state initiatives to improve public
health and promote child development.
Smoking has long been America's foremost preventable cause of disease
and early death. It has consumed an enormous amount of the nation's
health care resources. Finally, resources taken from the tobacco
companies would be used to improve the nation's health. A state could,
for example, use a portion of this money to help senior citizens pay
for prescription drugs, or to provide expanded health care services to
the uninsured. Funds could be used to support community health centers,
to reduce public health risks, or to make health insurance more
affordable.
For years, the tobacco companies callously targeted children as
future smokers. The financial success of the entire industry was based
upon addicting kids when they were too young to appreciate the health
risks of smoking. It is particularly appropriate that resources taken
from this malignant industry be used to give our children a better
start in life. States could use a portion of these funds to improve
early learning opportunities for young children, or to expand child
care services, or for other child development initiatives.
Congress has a compelling interest in how the federal share of these
dollars is used. They are Medicaid dollars. They should not be used for
road repair or building maintenance. They should be used by the states
to create a healthier future for all our citizens, and particularly for
our children.
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