[Congressional Record Volume 145, Number 63 (Tuesday, May 4, 1999)]
[Senate]
[Pages S4665-S4680]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. LUGAR (for himself, Mr. Fitzgerald, and Mr. Feingold):
  S. 949. A bill to clarify and enhance the authorities of the Chief 
Information Officer of the Department of Agriculture; to the Committee 
on Agriculture, Nutrition, and Forestry.


the usda information technology reform and year-2000 compliance act of 
                                  1999

  Mr. LUGAR. Mr. President, today I rise to introduce the USDA 
Information Technology Reform and Year-2000 Compliance Act of 1999. 
This legislation aims to centralize all year 2000 computer conversion 
and other information technology acquisition and management activities 
within the Office of the Chief Information Office of the Department of 
Agriculture. Centralization is the most efficient way to manage the 
complex and important task of ensuring that all critical computer 
functions at the department are operational on January 1, 2000. It is 
also a wiser and more cost-effective way to construct an information 
technology infrastructure to enable USDA's hundreds of computer systems 
to interoperate, which unfortunately they cannot now do.
  The Department of Agriculture is charged with enormous 
responsibilities and its year 2000 readiness is crucial. It has a 
diverse portfolio of over 200 Federal programs throughout the Nation 
and the world. The department delivers about $80 billion in programs. 
It is the fourth largest Federal agency, with 31 agencies and offices. 
The department is responsible for the safety of our food supply, 
nutrition programs that serve the poor, young and old, and the 
protection of our natural resources. Since more than 40 percent of the 
non-tax debt owed to the Federal Government is owed to USDA, the 
department has a responsibility to ensure the financial soundness of 
taxpayers' investments.
  Responsibility for keeping the mission-critical information 
technology functioning should clearly rest with the Chief Information 
Officer. The decentralized approach to the year 2000 issue at USDA led 
to a lack of focus on departmental priorities. Each agency was allowed 
to determine what services, programs, and activities it deemed 
important enough to be operational at the end of the millennium. This 
decentralized approach also led to a lack of guidance, oversight and 
the development of contingency plans. Efforts to rectify this situation 
are well underway. I am pleased that Secretary of Agriculture Glickman 
has pledged his personal commitment to the success of year 2000 
compliance and has made it one of the highest priorities for USDA.
  In fiscal year 1999, USDA plans to spend more than $1.2 billion on 
information technology and related information resources management 
activities, including year 2000 computer compliance. The General 
Accounting Office has chronicled USDA's long history of problems in 
managing its substantial information technology investments. The GAO 
reports that such ineffective planning and management have resulted in 
USDA's wasting millions of dollars on computer systems.
  Last year, I introduced S. 2116, a bill to reform the information 
technology systems of the Department of Agriculture. It gave the Chief 
Information Officer control over the planning, development, and 
acquisition of information technology at the department. Introduction 
of that bill and similar legislation in 1997 prompted some coordination 
of information technology among the department's agencies and offices. 
However, component agencies are still allowed to independently acquire 
and manage information technology investments solely on the basis of 
their own parochial interests or needs. This legislation is needed to 
strengthen that coordination and ensure that centralized information 
technology management continues in the future.
  This legislation further requires that the Chief Information Officer 
manage the design and implementation of an information technology 
architecture based on strategic business plans that maximizes the 
effectiveness and efficiency of USDA's program activities. Included in 
the bill is authority for the Chief Information Officer to approve 
expenditures for information resources and for year 2000 compliance 
purposes, except for minor acquisitions. To accomplish these purposes, 
the bill requires that each agency transfer up to 10 percent of its 
information technology budget to the Chief Information Officer's 
control.
  The bill makes the Chief Information Officer responsible for ensuring 
that the information technology architecture facilitates a flexible 
common computing environment for the field service centers based on 
integrated program delivery. The architecture will also provide maximum 
data sharing with USDA customers and other Federal and state agencies, 
which is expected to result in a significant reduction in operating 
costs.
  Mr. President, this is a bill whose time has come. Unfortunately, 
USDA's problems in managing information technology are not unusual 
among Government agencies, according to the General Accounting Office. 
I commend the attention of my colleagues to this bill designed to 
address a portion of the information resource management problems of 
the Federal Government and ask for their support of it.
  Mr. President, I ask that the full text and a summary of the bill be 
printed in the Record.
  There being no objection, the materials were ordered to be printed in 
the Record, as follows:

                                 S. 949

       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 ``USDA 
     Information Technology Reform and Year-2000 Compliance 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. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Management of year-2000 compliance at Department.
Sec. 5. Position of Chief Information Officer.
Sec. 6. Duties and authorities of Chief Information Officer.
Sec. 7. Funding approval by Chief Information Officer.
Sec. 8. Availability of agency information technology funds.
Sec. 9. Authority of Chief Information Officer over information 
              technology personnel.
Sec. 10. Annual Comptroller General report on compliance.
Sec. 11. Office of Inspector General.
Sec. 12. Technical amendment.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) United States agriculture, food safety, the health of 
     plants and animals, the economies of rural communities, 
     international commerce in food, and food aid rely on the 
     Department of Agriculture for the effective and timely 
     administration of program activities essential to their 
     success and vitality;
       (2) the successful administration of the program activities 
     depends on the ability of the Department to use information 
     technology in as efficient and effective manner as is 
     technologically feasible;
       (3) to successfully administer the program activities, the 
     Department relies on information technology that requires 
     comprehensive and Department-wide overview and control to 
     avoid needless duplication and misuse of resources;
       (4) to better ensure the continued success and vitality of 
     agricultural producers and rural communities, it is 
     imperative that measures are taken within the Department to 
     coordinate and centrally plan the use of the information 
     technology of the Department;
       (5) because production control and subsidy programs are 
     ending, agricultural producers of the United States need the 
     best possible information to make decisions that will 
     maximize profits, satisfy consumer demand, and contribute to 
     the alleviation of hunger in the United States and abroad;
       (6) a single authority for Department-wide planning is 
     needed to ensure that the information technology architecture 
     of the Department is based on the strategic business plans, 
     information technology, management goals, and core business 
     process methodology of the Department;
       (7) information technology is a strategic resource for the 
     missions and program activities of the Department;
       (8) year-2000 compliance is 1 of the most important 
     challenges facing the Federal Government and the private 
     sector;
       (9) because the responsibility for ensuring year-2000 
     compliance at the Department was initially left to individual 
     offices and agencies, no overall priorities have been 
     established, and there is no assurance that the

[[Page S4666]]

     most important functions of the Department will be operable 
     on January 1, 2000;
       (10) it is the responsibility of the Chief Information 
     Officer to provide leadership in--
       (A) defining and explaining the importance of achieving 
     year-2000 compliance;
       (B) selecting the overall approach for structuring the 
     year-2000 compliance efforts of the Department;
       (C) assessing the ability of the information resource 
     management infrastructures of the Department to adequately 
     support the year-2000 compliance efforts; and
       (D) mobilizing the resources of the Department to achieve 
     year-2000 compliance;
       (11) the failure of the Department to meet the requirement 
     of the Director of the Office of Management and Budget that 
     all mission-critical systems of the Department achieve year-
     2000 compliance would have serious adverse consequences on 
     the program activities of the Department, the economies of 
     rural communities, the health of the people of the United 
     States, world hunger, and international commerce in 
     agricultural commodities and products;
       (12) centralizing the approval authority for planning and 
     investment for information technology in the Office of the 
     Chief Information Officer will--
       (A) provide the Department with strong and coordinated 
     leadership and direction;
       (B) ensure that the business architecture of an office or 
     agency is based on rigorous core business process 
     methodology;
       (C) ensure that the information technology architecture of 
     the Department is based on the strategic business plans of 
     the offices or agencies and the missions of the Department;
       (D) ensure that funds will be invested in information 
     technology only after the Chief Information Officer has 
     determined that--
       (i) the planning and review of future business requirements 
     of the office or agency are complete; and
       (ii) the information technology architecture of the office 
     or agency is based on business requirements and is consistent 
     with the Department-wide information technology architecture; 
     and
       (E) cause the Department to act as a single enterprise with 
     respect to information technology, thus eliminating the 
     duplication and inefficiency associated with a single office- 
     or agency-based approach; and
       (13) consistent with the Information Technology Management 
     Reform Act of 1996 (40 U.S.C. 1401 et seq.), each office or 
     agency of the Department should achieve at least--
       (A) a 5 percent per year decrease in costs incurred for 
     operation and maintenance of information technology; and
       (B) a 5 percent per year increase in operational efficiency 
     through improvements in information resource management.
       (b) Purposes.--The purposes of this Act are--
       (1) to facilitate the successful administration of programs 
     and activities of the Department through the creation of a 
     centralized office, and Chief Information Officer position, 
     in the Department to provide strong and innovative managerial 
     leadership to oversee the planning, funding, acquisition, and 
     management of information technology and information resource 
     management; and
       (2) to provide the Chief Information Officer with the 
     authority and funding necessary to correct the year-2000 
     compliance problem of the Department.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Chief information officer.--The term ``Chief 
     Information Officer'' means the individual appointed by the 
     Secretary to serve as Chief Information Officer (as 
     established by section 5125 of the Information Technology 
     Management Reform Act of 1996 (40 U.S.C. 1425)) for the 
     Department.
       (2) Department.--The term ``Department'' means the 
     Department of Agriculture.
       (3) Information resource management.--The term 
     ``information resource management'' means the process of 
     managing information resources to accomplish agency missions 
     and to improve agency performance.
       (4) Information technology.--
       (A) In general.--The term ``information technology'' means 
     any equipment or interconnected system or subsystem of 
     equipment that is used by an office or agency in the 
     automatic acquisition, storage, manipulation, management, 
     movement, control, display, switching, interchange, 
     transmission, or reception of data or information.
       (B) Use of equipment.--For purposes of subparagraph (A), 
     equipment is used by an office or agency if the equipment is 
     used by--
       (i) the office or agency directly; or
       (ii) a contractor under a contract with the office or 
     agency--

       (I) that requires the use of the equipment; or
       (II) to a significant extent, that requires the use of the 
     equipment in the performance of a service or the furnishing 
     of a product.

       (C) Inclusions.--The term ``information technology'' 
     includes computers, ancillary equipment, software, firmware 
     and similar procedures, services (including support 
     services), and related resources.
       (D) Exclusions.--The term ``information technology'' does 
     not include any equipment that is acquired by a Federal 
     contractor that is incidental to a Federal contract.
       (5) Information technology architecture.--The term 
     ``information technology architecture'' means an integrated 
     framework for developing or maintaining existing information 
     technology, and acquiring new information technology, to 
     achieve or effectively use the strategic business plans, 
     information resources, management goals, and core business 
     processes of the Department.
       (6) Office or agency.--The term ``office or agency'' means, 
     as applicable, each--
       (A) national, regional, county, or local office or agency 
     of the Department;
       (B) county committee established under section 8(b)(5) of 
     the Soil Conservation and Domestic Allotment Act (16 U.S.C. 
     590h(b)(5));
       (C) State committee, State office, or field service center 
     of the Department; and
       (D) group of multiple offices and agencies of the 
     Department that are, or will be, connected through common 
     program activities or systems of information technology.
       (7) Program activity.--The term ``program activity'' means 
     a specific activity or project of a program that is carried 
     out by 1 or more offices or agencies of the Department.
       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.
       (9) Year-2000 compliance.--The term ``year-2000 
     compliance'', with respect to the Department, means a 
     condition in which information systems are able to accurately 
     process data relating to the 20th and 21st centuries--
       (A) within the Department;
       (B) between the Department and local and State governments;
       (C) between the Department and the private sector;
       (D) between the Department and foreign governments; and
       (E) between the Department and the international private 
     sector.

     SEC. 4. MANAGEMENT OF YEAR-2000 COMPLIANCE AT DEPARTMENT.

       (a) Finding.--Congress finds that the Chief Information 
     Officer of the Department has not been provided the funding 
     and authority necessary to adequately manage the year-2000 
     compliance problem at the Department.
       (b) Management.--The Chief Information Officer shall 
     provide the leadership and innovative management within the 
     Department to--
       (1) identify, prioritize, and mobilize the resources needed 
     to achieve year-2000 compliance;
       (2) coordinate the renovation of computer systems through 
     conversion, replacement, or retirement of the systems;
       (3) develop verification and validation strategies (within 
     the Department and by independent persons) for converted or 
     replaced computer systems;
       (4) develop contingency plans for mission-critical systems 
     in the event of a year-2000 compliance system failure;
       (5) coordinate outreach between computer systems of the 
     Department and computer systems in--
       (A) the domestic private sector;
       (B) State and local governments;
       (C) foreign governments; and
       (D) the international private sector, such as foreign 
     banks;
       (6) identify, prioritize, and mobilize the resources needed 
     to correct periodic date problems in computer systems within 
     the Department and between the Department and outside 
     computer systems; and
       (7) during the period beginning on the date of enactment of 
     this Act and ending on June 1, 2001, consult, on a quarterly 
     basis, with the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate on actions taken to carry out this 
     section.
       (c) Funding and Authorities.--To carry out subsection (b), 
     the Chief Information Officer shall use--
       (1) the authorities in sections 7, 8, and 9, particularly 
     the authority to approve the transfer or obligation of funds 
     described in section 7(a) intended for information technology 
     and information resource management; and
       (2) the transferred funds targeted by offices and agencies 
     for information technology and information resource 
     management under section 8.

     SEC. 5. POSITION OF CHIEF INFORMATION OFFICER.

       (a) Establishment.--To ensure the highest quality and most 
     efficient planning, acquisition, administration, and 
     management of information technology within the Department, 
     there is established the position of the Chief Information 
     Officer of the Department.
       (b) Confirmation.--
       (1) In general.--The position of the Chief Information 
     Officer shall be appointed by the President, by and with the 
     advice and consent of the Senate.
       (2) Succession.--An official who is serving as Chief 
     Information Officer on the date of enactment of this Act 
     shall not be required to be reappointed by the President.
       (c) Report.--The Chief Information Officer shall report 
     directly to the Secretary.
       (d) Position on Executive Information Technology Investment 
     Review Board.--The Chief Information Officer shall serve as 
     an officer of the Executive Information Technology Investment 
     Review Board (or its successor).

     SEC. 6. DUTIES AND AUTHORITIES OF CHIEF INFORMATION OFFICER.

       (a) In General.--Notwithstanding any other provision of law 
     (except the Government Performance and Results Act of 1993 
     (Public Law 103-62), amendments made by that Act, and the 
     Information Technology Management Reform Act of 1996 (40 
     U.S.C.

[[Page S4667]]

     1401 et seq.)) and policies and procedures of the Department, 
     in addition to the general authorities provided to the Chief 
     Information Officer by section 5125 of the Information 
     Technology Management Reform Act of 1996 (40 U.S.C. 1425), 
     the Chief Information Officer shall have the authorities and 
     duties within the Department provided in this Act.
       (b) Information Technology Architecture.--
       (1) In general.--To ensure the efficient and effective 
     implementation of program activities of the Department, the 
     Chief Information Officer shall ensure that the information 
     technology architecture of the Department, and each office or 
     agency, is based on the strategic business plans, information 
     resources, goals of information resource management, and core 
     business process methodology of the Department.
       (2) Design and implementation.--The Chief Information 
     Officer shall manage the design and implementation of an 
     information technology architecture for the Department in a 
     manner that ensures that--
       (A) the information technology systems of each office or 
     agency maximize--
       (i) the effectiveness and efficiency of program activities 
     of the Department;
       (ii) quality per dollar expended; and
       (iii) the efficiency and coordination of information 
     resource management among offices or agencies, including the 
     exchange of information between field service centers of the 
     Department and each office or agency;
       (B) the planning, transfer or obligation of funds described 
     in section 7(a), and acquisition of information technology, 
     by each office or agency most efficiently satisfies the needs 
     of the office or agency in terms of the customers served, and 
     program activities and employees affected, by the information 
     technology; and
       (C) the information technology of each office or agency is 
     designed and managed to coordinate or consolidate similar 
     functions of the missions of the Department and offices or 
     agencies, on a Department-wide basis.
       (3) Compliance with resulting architecture.--The Chief 
     Information Officer shall--
       (A) if determined appropriate by the Chief Information 
     Officer, approve the transfer or obligation of funds 
     described in section 7(a) in connection with information 
     technology architecture for an office or agency; and
       (B) be responsible for the development, acquisition, and 
     implementation of information technology by an office or 
     agency in a manner that--
       (i) is consistent with the information technology 
     architecture designed under paragraph (2);
       (ii) results in the most efficient and effective use of 
     information technology of the office or agency; and
       (iii) maximizes the efficient delivery and effectiveness of 
     program activities of the Department.
       (4) Field service centers.--The Chief Information Officer 
     shall ensure that the information technology architecture of 
     the Department facilitates the design, acquisition, and 
     deployment of an open, flexible common computing environment 
     for the field service centers of the Department that--
       (A) is based on strategic goals, business reengineering, 
     and integrated program delivery;
       (B) is flexible enough to accommodate and facilitate future 
     business and organizational changes;
       (C) provides maximum data sharing, interoperability, and 
     communications capability with other Department, Federal, and 
     State agencies and customers; and
       (D) results in significant reductions in annual operating 
     costs.
       (c) Evaluation of Proposed Information Technology 
     Investments.--
       (1) In general.--In consultation with the Executive 
     Information Technology Investment Review Board (or its 
     successor), the Chief Information Officer shall adopt 
     criteria to evaluate proposals for information technology 
     investments that are applicable to individual offices or 
     agencies or are applicable Department-wide.
       (2) Criteria.--The criteria adopted under paragraph (1) 
     shall include consideration of--
       (A) whether the function to be supported by the investment 
     should be performed by the private sector, negating the need 
     for the investment;
       (B) the Department-wide or Government-wide impacts of the 
     investment;
       (C) the costs and risks of the investment;
       (D) the consistency of the investment with the information 
     technology architecture;
       (E) the interoperability of information technology or 
     information resource management in offices or agencies; and
       (F) whether the investment maximizes the efficiency and 
     effectiveness of program activities of the Department.
       (3) Evaluation of information technology and information 
     resource management.--
       (A) In general.--In consultation with the Executive 
     Information Technology Investment Review Board (or its 
     successor), the Chief Information Officer shall monitor and 
     evaluate the information resource management practices of 
     offices or agencies with respect to the performance and 
     results of the information technology investments made by the 
     offices or agencies.
       (B) Guidelines for evaluation.--The Chief Information 
     Officer shall issue Departmental regulations that provide 
     guidelines for--
       (i) establishing whether the program activity of an office 
     or agency that is proposed to be supported by the information 
     technology investment should be performed by the private 
     sector;
       (ii)(I) analyzing the program activities of the office or 
     agency and the mission of the office or agency; and
       (II) based on the analysis, revising the mission-related 
     and administrative processes of the office or agency, as 
     appropriate, before making significant investments in 
     information technology to be used in support of the program 
     activities and mission of the office or agency;
       (iii) establishing effective and efficient capital planning 
     for selecting, managing, and evaluating the results of all 
     major investments in information technology by the 
     Department;
       (iv) ensuring compliance with governmental and Department-
     wide policies, regulations, standards, and guidelines that 
     relate to information technology and information resource 
     management;
       (v) identifying potential information resource management 
     problem areas that could prevent or delay delivery of program 
     activities of the office or agency;
       (vi) validating that information resource management of the 
     office or agency facilitates--

       (I) strategic goals of the office or agency;
       (II) the mission of the office or agency; and
       (III) performance measures established by the office or 
     agency; and

       (vii) ensuring that the information security policies, 
     procedures, and practices for the information technology are 
     sufficient.
       (d) Electronic Fund Transfers.--The Chief Information 
     Officer shall ensure that the information technology 
     architecture of the Department complies with the requirement 
     of section 3332 of title 31, United States Code, that certain 
     current, and all future payments after January 1, 1999, be 
     tendered through electronic fund transfer.
       (e) Departmental Regulations.--The Chief Information 
     Officer shall issue such Departmental regulations as the 
     Chief Information Officer considers necessary to carry out 
     this Act within all offices and agencies.
       (f) Report.--Not later than March 1 of each year through 
     March 1, 2003, the Chief Information Officer shall submit a 
     report to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate that includes--
       (1) an evaluation of the current and future information 
     technology directions and needs of the Department;
       (2) an accounting of--
       (A) each transfer or obligation of funds described in 
     section 7(a), and each outlay of funds, for information 
     technology or information resource management by each office 
     or agency for the past fiscal year; and
       (B) each transfer or obligation of funds described in 
     section 7(a) for information technology or information 
     resource management by each office or agency known or 
     estimated for the current and future fiscal years;
       (3) a summary of an evaluation of information technology 
     and information resource management applicable Department-
     wide or to an office or agency; and
       (4) a copy of the annual report to the Secretary by the 
     Chief Information Officer that is required by section 
     5125(c)(3) of the Information Technology Management Reform 
     Act of 1996 (40 U.S.C. 1425(c)(3)).

     SEC. 7. FUNDING APPROVAL BY CHIEF INFORMATION OFFICER.

       (a) In General.--Notwithstanding any other provision of 
     law, an office or agency, without the prior approval of the 
     Chief Information Officer, shall not--
       (1) transfer funds (including appropriated funds, mandatory 
     funds, and funds of the Commodity Credit Corporation or any 
     other corporation within the Department) from 1 account of a 
     fund or office or agency to another account of a fund or 
     office or agency for the purpose of investing in information 
     technology or information resource management involving 
     planning, evaluation, or management, providing services, or 
     leasing or purchasing personal property (including all 
     hardware and software) or services;
       (2) obligate funds (including appropriated funds, mandatory 
     funds, and funds of the Commodity Credit Corporation or any 
     other corporation within the Department) for the purpose of 
     investing in information technology or information resource 
     management involving planning, evaluation, or management, 
     providing services, or leasing or purchasing personal 
     property (including all hardware and software) or services; 
     or
       (3) obligate funds (including appropriated funds, mandatory 
     funds, and funds of the Commodity Credit Corporation) for the 
     purpose of investing in information technology or information 
     resource management involving planning, evaluation, or 
     management, providing services, or leasing or purchasing 
     personal property (including all hardware and software) or 
     services, obtained through a contract, cooperative agreement, 
     reciprocal agreement, or any other type of agreement with an 
     agency of the Federal Government, a State, the District of 
     Columbia, or any person in the private sector.
       (b) Discretion of Chief Information Officer.--The Chief 
     Information Officer may, by Departmental regulation, waive 
     the requirement under subsection (a) applicable to, as the 
     Chief Information Officer determines is appropriate for the 
     office or agency--
       (1) the transfer or obligation of funds described in 
     subsection (a) in an amount not to exceed $200,000; or

[[Page S4668]]

       (2) a specific class or category of information technology.
       (c) Conditions for Approval of Funding.--Under subsection 
     (a), the Chief Information Officer shall not approve the 
     transfer or obligation of funds described in subsection (a) 
     with respect to an office or agency unless the Chief 
     Information Officer determines that--
       (1) the proposed transfer or obligation of funds described 
     in subsection (a) is consistent with the information 
     technology architecture of the Department;
       (2) the proposed transfer or obligation of funds described 
     in subsection (a) for information technology or information 
     resource management is consistent with and maximizes the 
     achievement of the strategic business plans of the office or 
     agency;
       (3) the proposed transfer or obligation of funds described 
     in subsection (a) is consistent with the strategic business 
     plan of the office or agency; and
       (4) to the maximum extent practicable, economies of scale 
     are realized through the proposed transfer or obligation of 
     funds described in subsection (a).
       (d) Consultation With Executive Information Technology 
     Investment Review Board.--To the maximum extent practicable, 
     as determined by the Chief Information Officer, prior to 
     approving a transfer or obligation of funds described in 
     subsection (a) for information technology or information 
     resource management, the Chief Information Officer shall 
     consult with the Executive Information Technology Investment 
     Review Board (or its successor) concerning whether the 
     investment--
       (1) meets the objectives of capital planning processes for 
     selecting, managing, and evaluating the results of major 
     investments in information technology or information resource 
     management; and
       (2) links the affected strategic plan with the information 
     technology architecture of the Department.

     SEC. 8. AVAILABILITY OF AGENCY INFORMATION TECHNOLOGY FUNDS.

       (a) Transfer.--
       (1) In general.--Not later than December 1 of each fiscal 
     year, the Secretary shall transfer to the appropriations 
     account of the Chief Information Officer an amount of funds 
     of an office or agency determined under paragraph (2).
       (2) Amount.--
       (A) In general.--Subject to subparagraph (B), the amount of 
     funds of an office or agency for a fiscal year transferred 
     under paragraph (1) may be up to 10 percent of the 
     discretionary funds made available for that fiscal year by 
     the office or agency for information technology or 
     information resource management.
       (B) Adjustment.--Not later than September 30 of each fiscal 
     year, the Secretary shall adjust the amount to be transferred 
     from the funds of an office or agency for the fiscal year to 
     the extent that the estimate for the fiscal year was in 
     excess of, or less than, the amount actually expended by the 
     office or agency for information technology or information 
     resource management.
       (b) Use of Funds.--Funds transferred under subsection (a) 
     shall be used by the Chief Information Officer--
       (1) to carry out the duties and authorities of the Chief 
     Information Officer under--
       (A) this Act;
       (B) section 5125 of the Information Technology Management 
     Reform Act of 1996 (40 U.S.C. 1425); and
       (C) section 3506 of title 44, United States Code;
       (2) to direct and control the planning, transfer or 
     obligation of funds described in section 7(a), and 
     administration of information technology or information 
     resource management by an office or agency;
       (3) to meet the requirement of the Director of the Office 
     and Management and Budget that all mission-critical systems 
     achieve year-2000 compliance; or
       (4) to pay the salaries and expenses of all personnel and 
     functions of the office of the Chief Information Officer.
       (c) Availability of Funds.--The Chief Information Officer 
     shall transfer unexpended funds at the end of a fiscal year 
     to the office or agency that made the funds available under 
     subsection (a), to remain available until expended.
       (d) No Reduction of Employees of Offices or Agencies.--A 
     transfer of funds under subsection (a) shall not result in a 
     reduction in the number of employees in an office or agency.
       (e) Termination of Authority.--The authority under this 
     section terminates on September 30, 2004.

     SEC. 9. AUTHORITY OF CHIEF INFORMATION OFFICER OVER 
                   INFORMATION TECHNOLOGY PERSONNEL.

       (a) Agency Chief Information Officers.--
       (1) Establishment.--Subject to the concurrence of the Chief 
     Information Officer, the head of each office or agency shall 
     establish within the office or agency the position of Agency 
     Chief Information Officer and shall appoint an individual to 
     that position.
       (2) Relationship to head of office or agency.--The Agency 
     Chief Information Officer shall--
       (A) report to the head of the office or agency; and
       (B) regularly update the head of the office or agency on 
     the status of year-2000 compliance and other significant 
     information technology issues.
       (3) Performance review.--The Chief Information Officer 
     shall--
       (A) provide input for the performance review of an Agency 
     Chief Information Officer of an office or agency;
       (B) annually review and assess the information technology 
     functions of the office or agency; and
       (C) provide a report on the review and assessment to the 
     Under Secretary or Assistant Secretary for the office or 
     agency.
       (4) Duties.--The Agency Chief Information Officer of an 
     office or agency shall be responsible for carrying out the 
     policies and procedures established by the Chief Information 
     Officer for that office or agency, the Administrator for the 
     office or agency, and the Under Secretary or Assistant 
     Secretary for the office or agency.
       (b) Managers of Major Information Technology Projects.--
       (1) In general.--The assignment, and continued eligibility 
     for the assignment, of an employee of the Department to serve 
     as manager of a major information technology project (as 
     defined by the Chief Information Officer) of an office or 
     agency, shall be subject to the approval of the Chief 
     Information Officer.
       (2) Performance review.--The Chief Information Officer 
     shall provide input into the performance review of a manager 
     of a major information technology project.
       (c) Detail and Assignment of Personnel.--Notwithstanding 
     any other provision of law, an employee of the Department may 
     be detailed to the Office of the Chief Information Officer 
     for a period of more than 30 days without reimbursement by 
     the Office of the Chief Information Officer to the office or 
     agency from which the employee is detailed.
       (d) Information Technology Procurement Officers.--A 
     procurement officer of an office or agency shall procure 
     information technology for the office or agency in a manner 
     that is consistent with the Departmental regulations issued 
     by the Chief Information Officer.

     SEC. 10. ANNUAL COMPTROLLER GENERAL REPORT ON COMPLIANCE.

       (a) Report.--Not later than May 15 of each year through May 
     15, 2003, in coordination with the Inspector General of the 
     Department, the Comptroller General of the United States 
     shall submit to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a report evaluating the compliance 
     with this Act in the past fiscal year by the Chief 
     Information Officer and each office or agency.
       (b) Contents of Report.--Each report shall include--
       (1) an audit of the transfer or obligation of funds 
     described in section 7(a) and outlays by an office or agency 
     for the fiscal year;
       (2) an audit and evaluation of the compliance of the Chief 
     Information Officer with the requirements of section 8(c);
       (3) a review and evaluation of the performance of the Chief 
     Information Officer under this Act; and
       (4) a review and evaluation of the success of the 
     Department in--
       (A) creating a Department-wide information technology 
     architecture; and
       (B) complying with the requirement of the Director of the 
     Office of Management and Budget that all mission-critical 
     systems of an office or agency achieve year-2000 compliance.

     SEC. 11. OFFICE OF INSPECTOR GENERAL.

       (a) In General.--The Office of Inspector General of the 
     Department shall be exempt from the requirements of this Act.
       (b) Report.--The Inspector General of the Department shall 
     semiannually submit a report to the Committee on Agriculture 
     and the Committee on Government Reform and Oversight of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate on the progress of the 
     Office of Inspector General regarding--
       (1) year-2000 compliance; and
       (2) the establishment of an information technology 
     architecture for the Office of Inspector General of the 
     Department.

     SEC. 12. TECHNICAL AMENDMENT.

       Section 13 of the Commodity Credit Corporation Charter Act 
     (15 U.S.C. 714k) is amended in the second sentence by 
     striking ``section 5 or 11'' and inserting ``section 4, 5, or 
     11''.
                                  ____


    Summary of the USDA Information Technology Reform and Year 2000 
                         Compliance Act of 1999

       The bill:
       Requires the Chief Information Officer to manage the design 
     and implementation of an information technology architecture, 
     based on strategic business plans, that maximizes the 
     effectiveness and efficiency of USDA's program activities;
       requires the Chief Information Officer to approve or 
     disapprove all expenditures for information resources, and 
     allows the Chief Information Officer to waive this authority 
     for expenditures under $200,000;
       permits the Secretary of Agriculture to transfer to the 
     Chief Information Officer up to ten percent of each agency's 
     information technology funds for year 2000 compliance, 
     information technology acquisition or information resource 
     management (this authority expires in 2003);
       requires the Secretary of Agriculture to ensure the 
     transfer of information technology funds does not result in a 
     reduction in the number of employees in an agency;
       requires the Chief Information Officer to manage the year 
     2000 computing crisis

[[Page S4669]]

     throughout USDA agencies, between USDA and other federal, 
     state and local agencies and between USDA and private and 
     international partners;
       makes the Chief Information Officer a presidential 
     appointee, subject to Senate confirmation, thereby raising 
     the stature of the Chief Information Officer in the 
     department as envisioned by the Clinger-Cohen Act; and
       requires an annual report from the Comptroller General 
     regarding USDA's compliance with this act.
                                 ______
                                 
      By Mr. DOMENICI (for himself, Mr. Bingaman, Mr. Frist, Mr. 
        Lieberman, and Ms. Snowe):
  S. 951. A bill to amend the Internal Revenue Code of 1986 to 
establish permanent tax incentives for research and development, and 
for other purposes; to the Committee on Finance.


     private sector research and development investment act of 1999

  Mr. DOMENICI. Mr. President, today I am joining my cosponsors, 
Senators Bingaman, Frist, Lieberman, and Snowe, in introducing the 
Private Sector Research and Development Investment Act of 1999.
  This bill makes the research tax credit permanent and significantly 
improves the structure of that credit. Many Senators are for this 
extension, and it is high time, and for the permanentization of this 
credit.
  This also adjusts the credit to today. That credit was put in place 
many years ago, and much of what it does doesn't fit today's industrial 
base, including many startup companies that cannot take the right kind 
of credit.
  We have made some changes which will make it cost a little bit more, 
but I think the Finance Committee should take a look at some of the 
changes that are in this Domenici-Bingaman bill, because it will make 
the credit more effective and more available.
  In March of 1998, 150 of our Nation's top decisionmakers met at MIT 
for the first national innovative summit. The summit leaders included 
CEOs, university presidents, labor leaders, Governors, Members of 
Congress, and senior administrative officials.
  In essence, they conclude that in order to keep the United States of 
America on the cutting edge of research that can be applied to 
innovative things for America's future and for our businesses, that we 
must make this tax permanent, that dollar for dollar it is the best 
investment in both general research and specific research to keep 
America strong and competitive in the world.
  When those people say dollar for dollar it is the most effective, 
they are saying it is more effective than programmatic assistance to 
research, which obviously is very necessary, and we continue to expand 
upon and have it grow. But if you don't make this permanent, you are 
losing a lot of research by American businesses, No. 1. If you don't 
correct it, you will lose the effectiveness among companies that need 
it the most. And third, you will see to it that more, rather than less, 
American companies do research overseas.
  Research jobs are great jobs. They are just as much a part of 
America's basic prosperity as are the jobs that come from that research 
by way of products or activities.
  Mr. President, advanced technologies drive a significant part of our 
nation's economic strength. Our economy and our standard of living 
depend on a constant influx of new technologies, processes, and 
products from our industries.
  Many countries provide labor at lower costs than the United States. 
Thus, as any new product matures, competitors using overseas labor 
frequently find ways to undercut our production costs. We maintain our 
economic strength only by constantly improving our products through 
innovation. Maintaining and improving our national ability to innovate 
is critically important to the nation.
  The majority of new products requires industrial research and 
development to reach the market stage. I want to encourage that 
research and development to create new products to ensure that our 
factories stay busy and that our workforce stays fully employed at high 
salaried jobs.
  I want more of our large multi-national companies to select the 
United States as the location of their R&D. R&D done here creates 
American jobs. And since frequently the benefits of research in one 
area apply in another area, I want those spin-off benefits here, too.
  Congress created the Research Tax Credit to encourage companies to 
perform research. But many studies document that the present form of 
this Tax Credit is not providing as much stimulation to industrial R&D 
as it could. Today, we're introducing legislation to improve the 
Research Tax Credit.
  In March of 1998, 150 of our nation's top decision makers met at MIT, 
for the first National Innovation Summit. The Summit included corporate 
CEO's, university presidents, labor leaders, governors, members of 
Congress, and Senior Administration officials.
  At the Summit, these experts discussed the health of the future 
national research base. More than three-quarters of them thought that 
the quality of that base would be no better or worse than it is today, 
with nearly one third projecting that it would be weaker.
  The Summit participants singled out the Research Tax Credit as the 
policy measure with the greatest potential for a positive near-term 
impact. The Council on Competitiveness, who co-sponsored that Summit, 
stated that ``making the [Research] Tax Credit permanent reflected a 
widely share consensus among leaders whose companies and universities 
contribute decisively to the nation's economy.''
  The single most important change in our bill is to make the Credit 
permanent. Many studies point out that the temporary nature of the 
Credit has prevented companies from building careful research 
strategies.
  Many of my colleagues in Congress have also expressed interest in 
making the Credit permanent. But we're urging them to go beyond that 
action and, at the same time, address shortcomings that have been 
identified in the current Credit. I want to use the current enthusiasm 
for permanence to also craft a Credit that will better serve the 
nation.
  For example, the current Credit references a company's research 
intensity back to 1984-88. That's too outdated to meet today's dynamic 
market conditions. Many companies are involved today in products that 
weren't even invented in 1984.
  Our legislation allows a company to base their credit on their 
research intensity averaged over the preceding eight years. It also 
allows companies to stay with the current formulation of the Credit if 
they prefer.
  Our bill builds other improvements into the Credit as well. For 
example, the Alternative Research Credit component has been criticized 
because it only rewards the maintenance level of a company's research, 
it does not provide significant motivation to increase research 
intensity. With our proposed changes, the Alternative Credit now 
incorporates the same 20 percent motivation for increased research 
intensity that is found in the regular Credit--this is a major 
improvement. We also increase the base level of the Alternative Credit 
significantly.
  The current Credit has a provision that severely restricts the 
ability of start-up companies to fully benefit. Analysis by the 
Congressional Research Service showed that 5 our of 6 start-up 
companies received reduced benefits because of a current provision that 
limits their allowable increase in research expenditures.
  I'm concerned when start-up companies aren't receiving full Credit. 
These are just the companies that drive the innovative cycle in this 
country; they are the ones that frequently bring out the newest 
leading-edge products. Our legislation thus drops this limitation and 
introduces additional help for start-up businesses.
  Our legislation addresses several other shortcomings in the current 
Credit as well. Now there is a ``Basic Research Credit'' allowed, but 
rarely used. This should be encouraging research conducted at 
universities.
  But that part of the Credit is now defined to include only research 
that does ``not have a specific commercial objective.'' There aren't 
many companies that want to support--much less admit to their 
stockholders that they are supporting--research with no commercial 
interest. The idea of this clause was to encourage support of long term 
research, which is a fine idea.
  This is the kind of research that benefits far more than just the 
next product improvement. It can enable a whole

[[Page S4670]]

new product or service and we need to encourage it.
  Our legislation adds major incentives for basic research by dropping 
the requirement that only increments above a baseline can be used and 
by including any research that is done for a consortium of U.S. 
companies or any research that is destined for open literature 
publication. We're also allowing this Credit to apply to research done 
in national labs.
  And finally our legislation recognizes the importance of encouraging 
companies to use research capabilities wherever they exist in the 
country, whether in other businesses, universities, or national labs. 
The current credit disallows 35% of all expenses for research performed 
under an external contract--our legislation allows all such expenses to 
apply towards the Credit when the research is performed at a 
university, small business, or national laboratory.
  In summary, this bill incorporates all the improvement suggested in 
other bills that primarily make the credit permanent and provide some 
increase in the alternative credit. But this bill goes further and 
corrects weaknesses in the current formulation of the Credit. I want to 
seize this opportunity to make the Research Tax Credit a tool that will 
truly meet the goals for which it was established.
  The fact that this bill addresses significant shortcomings in the 
current Credit has not gone unnoticed. Spokesman for several groups 
that endorse this bill are here with us today. After Senator Bingaman 
speaks, I'll invite representatives from the Council on 
Competitiveness, the National Association of State Universities and 
Land Grant Colleges, the National Coalition for Advanced Manufacturing, 
and the American Association of Engineering Societies to add their 
perspectives.
  With this new bill, we will significantly strengthen incentives for 
private companies to undertake research that leads to new processes, 
new services, and new products. The result will be stronger companies 
that are better positioned for global competition. Those stronger 
companies will hire people at higher salaries with real benefits to our 
national economy and workforce.
  I ask unanimous consent that the text and a summary of the bill, 
section by section, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 951

       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 ``Private Sector Research and 
     Development Investment Act of 1999''.

     SEC. 2. PERMANENT EXTENSION OF RESEARCH CREDIT.

       (a) In General.--Section 41 of the Internal Revenue Code of 
     1986 (relating to credit for increasing research activities) 
     is amended by striking subsection (h).
       (b) Conforming Amendment.--Section 45C(b)(1) of the 
     Internal Revenue Code of 1986 is amended by striking 
     subparagraph (D).
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after June 30, 1999.

     SEC. 3. IMPROVED ALTERNATIVE INCREMENTAL CREDIT.

       (a) In General.--Section 41 of the Internal Revenue Code of 
     1986 (relating to credit for increasing research activities), 
     as amended by section 2, is amended by adding at the end the 
     following new subsection:
       ``(h) Election of Alternative Incremental Credit.--
       ``(1) In general.--At the election of the taxpayer, the 
     credit under subsection (a)(1) shall be determined under this 
     section by taking into account the modifications provided by 
     this subsection.
       ``(2) Determination of base amount.--
       ``(A) In general.--In computing the base amount under 
     subsection (c)--
       ``(i) notwithstanding subsection (c)(3), the fixed-base 
     percentage shall be equal to 80 percent of the percentage 
     which the aggregate qualified research expenses of the 
     taxpayer for the base period is of the aggregate gross 
     receipts of the taxpayer for the base period, and
       ``(ii) the minimum base amount under subsection (c)(2) 
     shall not apply.
       ``(B) Start-up and small taxpayers.--In computing the base 
     amount under subsection (c), the gross receipts of a taxpayer 
     for any taxable year in the base period shall be treated as 
     at least equal to $1,000,000.
       ``(C) Base period.--For purposes of this subsection, the 
     base period is the 8-taxable year period preceding the 
     taxable year (or, if shorter, the period the taxpayer (and 
     any predecessor) has been in existence).
       ``(3) Election.--An election under this subsection shall 
     apply to the taxable year for which made and all succeeding 
     taxable years unless revoked with the consent of the 
     Secretary.''
       (b) Conforming Amendment.--Section 41(c) of the Internal 
     Revenue Code of 1986 is amended by striking paragraph (4) and 
     by redesignating paragraphs (5) and (6) as paragraphs (4) and 
     (5), respectively.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 4. MODIFICATIONS TO CREDIT FOR BASIC RESEARCH.

       (a) Elimination of Incremental Requirement.--
       (1) In general.--Paragraph (1) of section 41(e) of the 
     Internal Revenue Code of 1986 (relating to credit allowable 
     with respect to certain payments to qualified organizations 
     for basic research) is amended to read as follows:
       ``(1) In general.--The amount of basic research payments 
     taken into account under subsection (a)(2) shall be 
     determined in accordance with this subsection.''
       (2) Conforming amendments.--
       (A) Section 41(a)(2) of such Code is amended by striking 
     ``determined under subsection (e)(1)(A)'' and inserting ``for 
     the taxable year''.
       (B) Section 41(e) of such Code is amended by striking 
     paragraphs (3), (4), and (5) and by redesignating paragraphs 
     (6) and (7) as paragraphs (3) and (4), respectively.
       (C) Section 41(e)(4) of such Code, as redesignated by 
     subparagraph (B), is amended by striking subparagraph (B) and 
     by redesignating subparagraphs (C), (D), and (E) as 
     subparagraphs (B), (C), and (D), respectively.
       (D) Clause (i) of section 170(e)(4)(B) of such Code is 
     amended by striking ``section 41(e)(6)'' and inserting 
     ``section 41(e)(3)''.
       (b) Basic Research.--
       (1) Specific commercial objective.--Section 41(e)(4) of the 
     Internal Revenue Code of 1986 (relating to definitions and 
     special rules), as redesignated by subsection (a)(2)(B), is 
     amended by adding at the end the following new subparagraph:
       ``(E) Specific commercial objective.--For purposes of 
     subparagraph (A), research shall not be treated as having a 
     specific commercial objective if the results of such research 
     are to be published in a timely manner as to be available to 
     the general public prior to their use for a commercial 
     purpose.''
       (2) Exclusions from basic research.--Clause (ii) of section 
     41(e)(4)(A) of such Code (relating to definitions and special 
     rules), as redesignated by subsection (a), is amended to read 
     as follows:
       ``(ii) basic research in the arts and humanities.''
       (c) Expansion of Credit to Research Done at Federal 
     Laboratories.--Section 41(e)(3) of the Internal Revenue Code 
     of 1986, as redesignated by subsection (a), is amended by 
     adding at the end the following new subparagraph:
       ``(E) Federal laboratories.--Any organization which is a 
     Federal laboratory (as defined in section 4(6) of the 
     Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
     3703(6)).''
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 5. CREDIT FOR EXPENSES ATTRIBUTABLE TO CERTAIN 
                   COLLABORATIVE RESEARCH CONSORTIA.

       (a) Credit for Expenses Attributable to Certain 
     Collaborative Research Consortia.--Subsection (a) of section 
     41 of the Internal Revenue Code of 1986 (relating to credit 
     for increasing research activities) is amended by striking 
     ``and'' at the end of paragraph (1), striking the period at 
     the end of paragraph (2) and inserting ``, and '', and by 
     adding at the end the following new paragraph:
       ``(3) 20 percent of the amounts paid or incurred by the 
     taxpayer in carrying on any trade or business of the taxpayer 
     during the taxable year (including as contributions) to a 
     qualified research consortium.''
       (b) Qualified Research Consortium Defined.--Subsection (f) 
     of section 41 of the Internal Revenue Code of 1986 is amended 
     by adding at the end the following new paragraph:
       ``(6) Qualified research consortium.--The term `qualified 
     research consortium' means any organization--
       ``(A) which is--
       ``(i) described in section 501(c)(3) and is exempt from tax 
     under section 501(a) and is organized and operated primarily 
     to conduct scientific or engineering research, or
       ``(ii) organized and operated primarily to conduct 
     scientific or engineering research in the public interest 
     (within the meaning of section 501(c)(3)),
       ``(B) which is not a private foundation,
       ``(C) to which at least 5 unrelated persons paid or 
     incurred during the calendar year in which the taxable year 
     of the organization begins amounts (including as 
     contributions) to such organization for scientific or 
     engineering research, and
       ``(D) to which no single person paid or incurred (including 
     as contributions) during such calendar year an amount equal 
     to more than 50 percent of the total amounts received by such 
     organization during such calendar year for scientific or 
     engineering research.

     All persons treated as a single employer under subsection (a) 
     or (b) of section 52 shall be treated as related persons for 
     purposes of subparagraph (C) and as a single person for 
     purposes of subparagraph (D).''

[[Page S4671]]

       (c) Conforming Amendment.--Paragraph (3) of section 41(b) 
     of the Internal Revenue Code of 1986 is amended by striking 
     subparagraph (C).
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 6. IMPROVEMENT TO CREDIT FOR SMALL BUSINESSES AND 
                   RESEARCH PARTNERSHIPS.

       (a) Assistance to Small and Start-Up Businesses.--The 
     Secretary of the Treasury or the Secretary's delegate shall 
     take such actions as are appropriate to--
       (1) provide assistance to small and start-up businesses in 
     complying with the requirements of section 41 of the Internal 
     Revenue Code of 1986, and
       (2) reduce the costs of such compliance.
       (b) Repeal of Limitation on Contract Research Expenses Paid 
     to Small Businesses, Universities, and Federal 
     Laboratories.--Section 41(b)(3) of the Internal Revenue Code 
     of 1986, as amended by section 5(c), is amended by adding at 
     the end the following new subparagraph:
       ``(C) Amounts paid to eligible small businesses, 
     universities, and federal laboratories.--
       ``(i) In general.--In the case of amounts paid by the 
     taxpayer to an eligible small business, an institution of 
     higher education (as defined in section 3304(f)), or an 
     organization which is a Federal laboratory (as defined in 
     subsection (e)(3)(E)), subparagraph (A) shall be applied by 
     substituting `100 percent' for `65 percent'.
       ``(ii) Eligible small business.--For purposes of this 
     subparagraph, the term `eligible small business' means a 
     small business with respect to which the taxpayer does not 
     own (within the meaning of section 318) 50 percent or more 
     of--

       ``(I) in the case of a corporation, the outstanding stock 
     of the corporation (either by vote or value), and
       ``(II) in the case of a small business which is not a 
     corporation, the capital and profits interests of the small 
     business.

       ``(iii) Small business.--For purposes of this 
     subparagraph--

       ``(I) In general.--The term `small business' means, with 
     respect to any calendar year, any person if the annual 
     average number of employees employed by such person during 
     either of the 2 preceding calendar years was 500 or fewer. 
     For purposes of the preceding sentence, a preceding calendar 
     year may be taken into account only if the person was in 
     existence throughout the year.
       ``(II) Startups, controlled groups, and predecessors.--
     Rules similar to the rules of subparagraphs (B) and (D) of 
     section 220(c)(4) shall apply for purposes of this clause.''

       (c) Credit For Patent Filing Fees.--Section 41(a) of the 
     Internal Revenue Code of 1986, as amended by section 5(a), is 
     amended by striking ``and'' at the end of paragraph (2), by 
     striking the period at the end of paragraph (3) and inserting 
     ``, and'', and by adding at the end the following new 
     paragraph:
       ``(4) 20 percent of the patent filing fees paid or incurred 
     by a small business (as defined in subsection (b)(3)(C)(iii)) 
     to the United States or to any foreign government in carrying 
     on any trade or business.''
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.
                                  ____


               Domenici-Bingaman Research Tax Credit Bill

       This bill addresses two broad goals: establishes a 
     permanent Credit, and strengthens the formulation of the 
     Credit.
       The Bill enhances the Credit received by all users of the 
     regular Research Tax Credit. Thus, all companies benefiting 
     from its current formulation are positively impacted. The 
     changes in the Credit are focused in the Alternative Credit 
     and Basic Research Credit portions of the current Credit 
     legislation and represent significant enhancements to these 
     options.
       The Bill addresses several concerns with the existing 
     Credit: base period used for the regular credit, 1984-88, is 
     out-dated; 50% rule precludes most startups from gaining full 
     credit; basic research credit is very difficult to use, and 
     alternative credit provides no strong incentive for increased 
     research intensity.
       In addition to permanence, the Bill increases the 
     maintenance level of the alternative credit to 4%. (Thus the 
     Bill meets the goals of some groups who favor simply 
     permanence and 1% additional to the alternative credit). In 
     addition, the bill; establishes a 20% marginal rate for 
     increased intensity for users of the alternative credit; 
     changes the base period for alternative credit users to an 8 
     year average; eliminates the 50% rule for users of the 
     alternative credit; encourages industrial partnerships with 
     universities and national labs; expands definition of basic 
     research to include all published work; enables basic 
     research at FFRDCs to count toward their basic research 
     credit; qualifies 100% of contract research accomplished at 
     universities, national labs, and small businesses; encourages 
     establishment of research-driven consortia by providing 20% 
     credit for their research expenses; provides a phase-in of 
     credit for start-up businesses, and enables small businesses 
     to count patent filing fees toward research expenses.
       With these enhancements, the Domenici-Bingaman Bill 
     provides a permanent Research Tax Credit that address 
     shortcomings in the current formulation of the Credit. 
     Furthermore, the Bill meets the goals of constituents who 
     favor only permanence or only permanence plus an increase in 
     the alternative credit.

                                 SUMMARY
Joint Tax 10-yr evaluations:
    Section II: Make the Credit permanent....................    $26.3 B
    Section III: Improve the Alternative Investment Credit,          3.8
     AIC, by increasing the Credit allowed for the base
     maintenance level of R&E expenditures, and add an
     incremental incentive package onto the AIC. Create a
     floating 8-year base period for the AIC. Drop the
     ``50%'' rule for the AIC. Insert a transition approach
     to help startups........................................
    Section IV: Provide a flat credit for basic research             5.0
     expenditures at universities, small businesses, and
     national labs. Improve definition of basic research.....
    Section V: Provide flat credit for consortia-based               0.1
     research................................................
    Section VI: Increase the allowance for contract research      \1\3??
     conducted at universities, small businesses, and
     national labs from 65% to 100%. Add patent filing
     expenses as qualified expenditures for small businesses.
      Total..................................................       38.2
 
 
\1\ Joint Tax did not score Section VI yet. A version of Section VI was
  in S. 2072 last year, except that it increased the allowance for
  everybody, including large businesses. They scored that at $4.8B. The
  score this year ``has to'' be well below $4.8B, I used $3 for talking
  purposes.

                       Notes--To Joint Tax Scores

       Section II duplicates Senator Boxer's S. 195 by just making 
     the Credit permanent, Representative Sensenbrenner has the 
     same version in the House.
       Sections II and III together duplicate and extend the 
     approach of the Baucus/Hatch S. 680 with 36 cosponsors and 
     the Johnson/Matsui Bill in the House. These two sections give 
     permanence plus increase the AIC by slightly more than 1%. 
     They also add major enhancements to the AIC by establishing 
     an option for companies to realize a 20% incremental benefit. 
     The Baucus/Hatch version is supported by the R&D Tax 
     Coalition, using their mantra of ``Permanence plus 1%.'' 
     Sections II and III do everything that the R&D Tax Coalition 
     wants and a lot more.
       Section IV is expensive at $5 Billion, but gains the 
     strongest possible support from universities. This section 
     changes the definition of basic research, but more important, 
     lets contract research at a university (+SB or lab) be 
     treated as a flat 20% credit, not above an incremental base. 
     This is a tremendous incentive to fund expenditures for basic 
     research at universities.
       Section V encourages consortia to fund research. Senator 
     has encouraged consortia formation in other ways, this 
     continues his leadership in this area.
       Section VI is a further major incentive for companies to 
     fund research at universities, labs, and small businesses.

  Mr. BINGAMAN. Mr. President, I am pleased to join with my co-
sponsors, Senators Domenici, Lieberman, Frist, and Snowe in introducing 
the Private Sector Research and Development Investment Act of 1999. 
This bill will finally make the Research and Experimentation Tax Credit 
permanent, a provision of the federal tax code that was first enacted 
in 1981, and has been extended 9 times since.
  In addition to the provision of permanence, our bill has other 
improvements that I believe will address many of the shortcomings of 
existing law, and will bring the code more in synch with the ways 
industry is performing R&D today. But before I speak to some of those 
provisions, I would like to spend a little time discussing why I think 
we need to enact this legislation now.
  I think it is fair to say that the nation's economy owes much of its 
resurgence to the increases in productivity attributable to the 
infusion of high technology products and services. Our nation is today 
in the enviable position of not only having the greatest access to 
these products, but also being the primary provider of these products 
for the rest of the world.
  These capabilities have enabled American businesses to be in a 
position of world leadership in areas as diverse as medical and bio 
technologies, microelectronics, and financial services.
  In order for us to insure that the economic engine continues to run 
at peak form, we must assure that there is a continual infusion of new 
technologies

[[Page S4672]]

that will spawn the products and services of the future market. Many 
economists state that the best way to do this is to create a stable 
incentive for research investment and an environment where businesses 
have the flexibility to choose among all the options available to 
perform the research. A policy which achieves these goals will provide 
businesses with the long-term incentive to invest in both the research 
and the people that will create the next generation of commercially 
successful products.
  That is exactly what the ``Private Sector Research and Development 
Investment Act of 1999'' does. First, it makes Section 41 of the 
Internal Revenue Code permanent, creating a stable long-term 
environment for investment. But it goes beyond that.
  Present law does not allow all companies to benefit equally from the 
Tax Credit. Some companies, simply as a result of where they were in 
the business cycle in the late 80's, find that they cannot attain the 
full benefit of the credit. And, if the company did not exist at all in 
the 80's, as is the case with most of the Internet and many of the 
biotech start-up firms, there is simply no way at all for them to 
access the full credit rate. This is simply not fair. Our bill proposes 
to correct that inequity by making the 20% marginal rate available to 
all companies that are growing their research investment.
  With much of the nation's research talent residing in our 
universities and federal laboratories, we are proposing to extend the 
full Tax Credit for research investments companies make in those 
institutions.
  I am particularly pleased with the part of this provision that 
provides a more cost effective way for companies to invest in the 
education of our future generation of scientists and engineers at our 
universities. If this bill becomes law, as many as 3000 additional 
masters and doctoral level engineers and scientists could be produced 
each year, with up to 1000 of these being women and minorities, all at 
no additional cost to businesses.

  I fully expect that the ``Private Sector Research and Development 
Investment Act of 1999'' will accelerate business investment in 
universities, growing the number of trained scientists and engineers 
even faster. At a time when there has been much debate over providing 
additional employment visas to foreign engineers, this bill provides 
one mechanism for educating qualified Americans to fill these high tech 
jobs.
  As the cost of doing research continues to escalate, and companies 
find it more difficult to go it alone, our bill proposes that the 
research investments companies make in research consortia with other 
businesses, universities, and federal laboratories be fully available 
for the Tax Credit. I have seen firsthand, at places like Sandia and 
Los Alamos National Laboratories, the results of consortia partnerships 
between industry and our national labs, and I believe that it is in our 
nation's best interest to promote these research arrangements.
  All of our studies indicate that small businesses are the ``high 
test'' fuel of the nation's economy, producing more and highly paid 
jobs. Yet it is this group of companies that have the hardest time in 
accessing the Tax Credit under existing law. We propose to modify the 
law so that small businesses have greater benefit in their early years, 
when the value of the credit can have the greatest impact on a rapidly 
growing, but often cash-limited, company.
  Finally, to assure that these small businesses are truly able to 
compete in the global market and to protect their intellectual assets, 
we are proposing that the full value of the Tax Credit be applied to 
their patent filing fees, both here and abroad.
  In speaking with owners of small, high tech businesses in New Mexico, 
I hear that anything we can do to increase the capital funds available 
to these businesses as they are starting up is critical to their 
success. These two special provisions for small businesses are positive 
steps in that direction.
  Mr. President, many of my fellow Senators and Members of the House 
have already endorsed the concept of a permanent R&D Tax Credit. With 
that base of enthusiasm already in place, I encourage my colleagues to 
seize the opportunity to move forward and complete the job. Let's make 
it permanent, and let's make it right.
  Mr. LIEBERMAN. Mr. President, I am pleased to join Senators Domenici 
and Bingaman today in supporting the Private Sector Research and 
Development Investment Act of 1999. This bill recognizes that we are 
moving toward a New Economy and supports the engine of that New 
Economy. Let me explain.
  In this decade, we have returned to our nation's historic growth rate 
of 3% plus growth. We haven't seen this in 30 years, but now we are 
back there again. We know what the last few years of growth feel like--
America is starting to feel like an opportunity society again. We are 
moving toward some fundamental changes in our economic structure, 
toward a knowledge-based economy and further away from a resource-based 
economy. Key to these high growth rates has been overall productivity 
gains that are back in the 2% range, which has enabled the United 
States to experience real growth and real growth in incomes without 
significant inflation. A significant part of our productivity gains 
have come from gains in manufacturing productivity, which has 
approached 4% in each of the past three years. These manufacturing 
gains come directly from innovation, and in recent years these are 
largely driven by innovation in information technology--one of the most 
amazing results of R&D in this century from the invention of the 
transistor over 50 years ago to the development of the Internet today. 
And it looks like we are starting to get noticeable productivity gains 
in our services sector as well, also driven by information technology. 
The digital revolution is affecting every sector of our economy. As 
Andy Grove, Chairman of Intel, said, ``In five years, there will be no 
Internet companies. Every company will be an Internet company,'' or it 
won't be in business.
  Some analysts look at the stock market today and compare it to the 
1600's Dutch tulip bulbs investment bubble, maybe the largest bubble of 
all time, and its subsequent crash. The difference is that tulip bulbs 
did not fundamentally alter the means of communication and increase 
productivity as the Internet does.
  Pharmaceuticals and health care is another area in which our 
country's investment in R&D has catapulted us above our competitors. A 
recent study from the Department of Commerce found that the United 
States is decades ahead of other countries in the pharmaceutical and 
health related industries directly because of our investment in R&D. In 
the past 50 years, researchers from U.S. pharmaceutical companies have 
discovered and developed breakthrough treatments for asthma, heart 
disease, osteoporosis, HIV/AIDS, stroke, ulcers, and glaucoma. And they 
have developed vaccines against previously common causes of infant 
death including polio, rubella, influenza B and whooping cough. Why is 
the U.S. pharmaceutical industry the number one global innovator in 
medicine? According to Raymond Gilmartin, Chairman, President and CEO 
of Merck & Co., because ``The U.S. pharmaceutical industry leads the 
world in its commitment to research. . .''
  There have been at least a dozen major economic studies, including 
those of Nobel Prize winner Robert Solow, which conclude that 
technological progress accounts for 50%, and lately considerable more, 
of our total growth and has twice the impact on economic growth as 
labor or capital. For the long term health of our economy, we need to 
invest now in activities that will have a future payoff in innovation 
and productivity. A one percent increase in our nation's investment in 
research results in a productivity increase of 0.23%. We need to ensure 
our future by creating the institutions and incentives to increase R&D 
investment in the United States. This Act will replace our current, 
dysfunctional system of on-again, off-again R&D tax credits with a tax 
credit that is reliably permanent. In the global economy we will have 
to not only out-perform our competitors, but out-innovate them. Giving 
our industry the tools to support their own innovation is a timely act.
  This Act meets the goals of some groups who favor simply making the 
credit permanent and increasing the alternative credit by one percent, 
as does

[[Page S4673]]

the bill introduced by my esteemed colleague Senator Hatch. I am a 
cosponsor of Senator Hatch's bill. I believe we need to make the R&D 
credit permanent. But I feel strongly that we need further changes to 
the Act to increase its effectiveness, make it more accessible to small 
and start up businesses, update the credit to account for changes we 
are seeing in industry and, importantly, to complement the relationship 
between Federal and private sector research. The bill that Senators 
Domenici, Bingaman, Frist, Snowe, and myself are introducing makes 
these important changes, as well as making the R&D tax credit 
permanent.
  Industry research is largely dependent on the basic research 
undertaken by the Federal government. Because industry itself does not 
perform basic research--84% of industry research is concentrated on 
product development, the final stage of R&D--the private sector must 
draw on government-funded research to develop ideas for new market 
products. Of all papers cited in U.S. industry patents, 73% are from 
government and non-profit funded research. This marriage of basic 
Federal research and applied private research is essential. Yet, as a 
percent of GDP, Federal investment in R&D has been nearly halved over 
the last 30 years. We are living off of the fruits of basic research 
from the mid-1960s. In addition, the national labs and universities are 
facing a brain drain by the private sector as engineers and scientists 
are in high demand and increasingly in short supply. The private sector 
recognizes the importance of work accomplished through Federal funding 
and knows this is a problem that needs to be addressed. This bill 
encourages collaboration between private sector research and national 
labs and universities and offers a financial incentive to use the 
national labs and universities. Specifically, the Act encourages 
industry to use the federally funded programs by qualifying 100% of 
contract research accomplished at universities, national labs, and 
small businesses. It also enables basic research at Federally Funded 
R&D Centers to count toward the basic research credit. By expanding the 
credit to research done in consortia, the Act also recognizes that 
research today is more often done in collaboration than in isolation.
  The fastest method of moving research into the marketplace is often 
through small, startup companies. The Act updates the tax credit rules 
to accommodate the special R&D cycles faced by these companies. By 
supporting the small but crucial R&D efforts of new technology-based 
firms, the Act nurtures the very companies who contribute 
disproportionately to our national productivity and employment growth.
  The Act also updates our view of R&D. For the alternative credit, it 
calculates R&D expenditures with respect to a rolling baseline, rather 
than a fixed 1980's baseline that is increasingly remote and outdated 
as time passes.
  Mr. President, I believe there has been a growing awareness among 
Senators over the past couple of years that technology has been one of 
the driving forces behind our fantastic economic growth in this 
country. Despite that we are finally out of the red on the budget and 
finally in the black, we know that continued control and restraint must 
be exercised on the budget and we will have to make difficult choices 
about what programs to fund and what tax cuts to make. But now that we 
know that technological progress is responsible for 50% or more of 
economic growth, I think we owe it to ourselves to encourage such 
progress whenever possible. It is an investment in our future which we 
cannot do without.
                                 ______
                                 
      By Mr. SPECTER:
  S. 952. A bill to expand an antitrust exemption applicable to 
professional sports leagues and to require, as a condition of such an 
exemption, participation by professional football and major league 
baseball sports leagues in the financing of certain stadium 
construction activities, and for other purposes; to the Committee on 
the Judiciary.


         stadium financing and franchise relocation act of 1999

  Mr. SPECTER. Mr. President, I have sought recognition today to 
introduce legislation, the Stadium Financing and Franchise Relocation 
Act of 1999, which is designed to respond to the need for stabilizing 
major league baseball and football franchises located in metropolitan 
areas of the United States.
  I have long been concerned with the pressure put upon communities by 
baseball and football clubs seeking new playing facilities, where, with 
the gun to their heads of the team's overt or tacit threat to move to 
another city, government leaders feel compelled to have taxpayers 
finance a lion's share of ballpark and stadium construction costs. As 
those costs rise--a present state-of-the-art new facility goes for 
close to $300 million--those pressures have intensified.
  Professional sports teams are entrusted with a public interest. The 
movement of the Dodgers from Brooklyn, which broke the hearts of 
millions of their Flatbush followers, was the start of pirating of 
sports franchises in America, and should never have been allowed. It 
was accompanied, of course, by the flight of the Giants from New York 
to San Francisco.
  Since then, the matter has proliferated to an almost absurd degree. 
It is hard to understand why the taxpayers of Maryland and Baltimore 
had to be in a bidding contest for the Cleveland Browns, when Baltimore 
should have had its own team, the Colts, instead of the Colts moving 
out of Baltimore in the middle of the night to go to Indianapolis.
  I have participated in America's love affair with sports since I was 
a youngster in Wichita, Kansas, reading the box scores in the Wichita 
Eagle every morning because of my love and passion for baseball. I have 
been attending Phillies and Eagles games, and, when I can, Pirates and 
Steelers games, because of my love for each of these sports. They are 
tremendously exciting.
  Basically, it was unfair for the old Browns to have been taken out of 
Cleveland, but now I am glad to hail the arrival of the new Browns, 
even though it was at great cost to the taxpayers, and deprived the 
Eagles of a well-earned first overall draft pick.
  The value of sports franchises to their owners has ballooned in 
recent years. Jeffrey Lurie bought the Philadelphia Eagles in 1995 for 
a then-high price of $185 million. Last year, the successful bidder for 
an expansion NFL franchise in Cleveland paid $530 million. The bidding 
for the Washington Redskins franchise (including Cooke Stadium) has 
surpassed $800 million. There also seems to be no limit to the amount 
of money available to club owners when it comes to paying players--
witness Mike Piazza's signing last year of a $91 million ten-year 
contract with the New York Mets.
  New ballparks and stadiums clearly provide an enhancement to the 
culture and tax base of communities. That said, however, there is also 
no doubt that having a new ballpark or stadium significantly increases 
the value of a sports franchise for its owner. In December, 1998, 
Forbes Magazine estimated the net worth of the nation's professional 
sports teams. Seven of the top ten valued baseball franchises and eight 
of the top ten valued football franchises were in cities with ballparks 
and stadiums built or approved to be built since 1990.
  In January, 1999, the Philadelphia Inquirer quoted Jeffrey Stein, 
managing director of McDonald Investments, a Cleveland brokerage house, 
who said: ``New stadiums, in and of themselves, significantly enhance 
the value of a team.'' He cited the Cleveland Indians Baseball Club as 
an example. In the December, 1998, Forbes article, the value of that 
team, which now plays in beautiful new Jacobs Field, was listed as $322 
million, the third highest in baseball. In 1986, the Indians had been 
purchased for $35 million. In 1993, the last year the Indians played at 
Cleveland Stadium, the team had revenues of $54.1 million. Its 1997 
revenues were $140 million.

  The value of these sports franchises to a community is reflected in 
the astronomical broadcast rights fees the sports leagues command in 
the U.S. marketplace. Ten years ago, the National Football League 
received $970 million a year for its network television rights. The NFL 
now receives three times that amount, through contracts with TV and 
cable networks that pay the League $17.6 billion for its TV rights over 
an 8-year period commencing with the 1998 season, an average of $2.2 
billion per year, while Major

[[Page S4674]]

League Baseball annually derives more than $400 million from this 
source. These revenues are shared by the clubs and their players.
  One would think some of that giant revenue windfall might trickle 
down and be used to help finance new ballparks and stadiums, which 
produce greatly enhanced revenues for team owners, yet it seems the 
more TV money a league makes, the more its clubs demand from local 
taxpayers to fund the construction of new playing facilities. The irony 
of this is that none of these huge TV revenues would accrue to the 
clubs and their players if the leagues did not have the benefit of an 
antitrust exemption permitting clubs to pool their TV rights.
  In the interest of fairness, I believe the leagues should, with a 
small portion of these TV revenues, assist local communities in the 
financing of new playing facilities for the leagues' clubs, as a 
condition of their continuing to receive the antitrust exemption which 
permits pooling of TV rights.
  I also believe the leagues should have an antitrust exemption which 
permits them to deny a club's request to move, thus minimizing the 
implied threat to move which has characteristically accompanied demands 
upon local government for a new ballpark or stadium.
  Both these objectives are met by the legislation I am offering today. 
It will clarify the broadcast antitrust exemption given to sports 
leagues and give the National Football League and Major League Baseball 
an opportunity to continue to receive it by agreeing to place 10% of 
their network TV revenues into a trust fund to be used to help finance 
construction or renovation of ballparks and stadiums for use by their 
teams. Trust fund revenues will be restricted to such use and will be 
excluded from the league's gross receipts which are distributed to 
clubs and players.
  Money from the trust fund will be provided to finance up to one-half 
the cost of construction or renovation of ballparks and stadiums on a 
matching fund basis, conditioned upon the local government's agreement 
to provide at least one dollar of financing for every two dollars to be 
provided from the trust fund.
  Thus, for example, if the cost of constructing a new stadium for the 
Philadelphia Eagles, or for the Pittsburgh Steelers, were $280 million, 
the National Football League would be obliged to provide $140 million 
to each such project, on condition that the city and state, combined, 
provided at least $70 million. Ideally, the League would pay one-half 
the cost out of the trust fund and the other half would be financed by 
the club owner and the local government.
  The legislation will also enlarge the antitrust exemption given to 
baseball, basketball, football, and hockey leagues to permit those 
leagues to deny a member club's request to move its franchise to a 
different city.
  My bill will take effect on the date of its passage, and will apply 
to all network TV revenues thereafter received by the leagues, and to 
all new ballpark and stadium facilities not yet constructed, such as 
the construction now underway in Cleveland and Pittsburgh.
  I have sought recognition today to introduce the Stadium Financing 
and Franchise Relocation Act of 1999. This legislation would require 
that the National Football League and Major League Baseball act to 
provide financing for 50 percent of new stadium construction costs, and 
that the National Football League be given a limited antitrust 
exemption to regulate franchise moves.
  This legislation is necessary because baseball and football have for 
too long had a public-be-damned attitude. At the present time, major 
league sports is out of control on franchise moves for football teams 
and the demands upon cities and states for exorbitant construction 
costs is a form of legalized extortion in major league sports.
  The National Football League has a multi-year television contract for 
$17.6 billion which it enjoys by virtue of a special status and 
antitrust exemption which they have for revenue sharing or else they 
could not collect television receipts of $17 billion. But, at the same 
time, when they are asked to step forward and help with stadium 
construction costs, which are minimal compared to their television 
receipts, they put one community in competition with another community. 
A franchise, being what it is, leaves a city like Hartford and a state 
like Connecticut to offer $375 million to lure the Patriots from 
Massachusetts to Connecticut.
  This is a problem which is particularly acute for my State, 
Pennsylvania, which is now looking at the construction of four new 
stadiums. Two are now under construction in western Pennsylvania--
Pittsburgh for the Pirates and the Steelers--and two more are being 
sought in eastern Pennsylvania for the Phillies and for the Eagles. It 
is a $1 billion price tag which we are looking at now, which is 
significant for public funding, especially in a context where our 
schools are under funded, where our housing is in need of assistance, 
where we need funds for child assistance, where we need funds for 
transition from welfare to work, where we need funds for highways, and 
for so many other important matters. But, understandably, a NFL 
franchise is a very major matter for the prestige of a city and also 
for the economy of a city. And a major league baseball franchise, 
similarly, is a major matter for the economy and the prestige of a 
city.
  You have a situation, for example, where the Colts left Baltimore in 
the middle of the night for Indianapolis. Then there was a bidding war 
for the Browns, which left Cleveland to go to Baltimore at an enormous 
cost to the taxpayers of Maryland and Baltimore. Indianapolis ought to 
have a football team, but they ought not to have Baltimore's football 
team. Similarly, Cleveland ought to be able to retain the Browns. It 
has been a matter of great pride for Cleveland for many, many years.
  The start occurred in 1958 when the Dodgers left Brooklyn to go to 
Los Angeles. Brooklyn had no more precious possession than ``Dem 
Bums,'' the Dodgers. And I recall as a youngster the 1941 World Series, 
Mickey Owens' famous fumble, dropping of the third strike, and the 
tremendous tradition that the Dodgers had with Jackie Robinson and Pee 
Wee Reese in the Pennant races. And off they went to Los Angeles. Los 
Angeles should have had a baseball team, but not Brooklyn's baseball 
team. And they had a twofer, they took the Giants out of New York and 
put them in San Francisco at the same time.
  Baseball has had an opportunity, to some extent, to control franchise 
moves because baseball has an unlimited antitrust exemption. And they 
have it in a very curious, illogical way. Justice Oliver Wendell Holmes 
ruled in the 1920s that baseball was a sport and not involved in 
interstate commerce and therefore exempt. That has been an item which 
has been out of touch with reality for a long time. Justice Blackmun 
said baseball was a big business, in a Supreme Court decision, and 
involved in interstate commerce. But since it had been unregulated with 
the antitrust exemption for so long, it has been left to Congress to 
make a change.
  It may be that we ought to make a change and take away the antitrust 
exemption from baseball generally. Baseball fiercely resists any 
contribution to stadium construction costs--fiercely resists with a 
lobbying campaign, which is now underway, of great intensity. I will 
not list the cosponsors who have prospectively dropped off this bill 
because of that lobbying.
  I am introducing this bill on behalf of Senator Hatch, chairman of 
the Judiciary Committee, Senator Biden, former chairman of the 
Judiciary Committee, and myself. We had a hearing in the Antitrust 
Subcommittee of Judiciary where I serve, and I asked the head of the 
Antitrust Division of the Department of Justice and the Chairman of the 
Federal Trade Commission to take a look at revoking baseball's 
antitrust exemption totally. Baseball has not been responsible in 
dealing with salary caps and with revenue sharing. So there would be 
some equality and some parity for cities like Pittsburgh, small cities, 
where you have the financial power of the New York Yankees dominating 
the league, buying up all the players; where you have Mr. Murdoch 
acquiring the Dodgers for a giant price in connection with his 
satellite ideas and with television revenues and the superstation which 
Atlanta now has.
  Here you have a goose which is laying a golden egg and baseball has 
not

[[Page S4675]]

faced up to fairness in changing its approach to dealing with the 
realities of the market and has not undertaken the salary caps and the 
revenue sharing necessary to stabilize baseball.

  So this bill goes, to a limited extent, on conditioning baseball's 
continuation of its antitrust exemption to helping with stadium 
construction costs. I want them to help build a stadium for the 
Philadelphia Phillies. I want them to help on the construction costs 
for the Pittsburgh Pirates. I went them to help on construction costs 
for new teams, where cities are facing the reality of either spending 
hundreds of millions of dollars for these new stadiums, or having the 
teams flee to other cities. That is something baseball ought to face up 
to, even though it is true that baseball has a different situation from 
football, because baseball's television revenues are lesser. But there 
has to be some equality and there has to be some parity. Or if baseball 
wants to function like any other business, let them do so, but without 
the antitrust exemption, and let's see what will happen to those giant 
salaries for the baseball players and those tremendous rates and the 
way baseball operates, if it does not have an antitrust exemption which 
is very special and unique.
  Football has an antitrust exemption as to revenue sharing. Without 
that exemption they could not have the $17 billion multi-year 
television contract. They have plenty of funds to face up to stadium 
construction costs for the Pittsburgh Steelers and for the Philadelphia 
Eagles and for other teams. The facts are not yet before the public, 
but I hear the rumors that football is putting up a very substantial 
sum to have the Patriots remain in Massachusetts to top the bid of 
Connecticut. Connecticut is a television market, according to the 
media, about 24th. Boston, MA, is a media market about 6th. And the 
National Football League wants to protect its media market so they will 
put up a substantial sum of money to accomplish that.
  It ought to be regularized and they ought to have a specific 
obligation. And 50 percent is not too much for the leagues to 
contribute. That would leave the owners with 25 percent and would still 
leave the public with 25 percent. One of the prospective cosponsors 
dropped off the bill because he does not want to be associated with 
even 25 percent for the public. But I suggest when the raiders--I am 
not talking about the Oakland Raiders; I am talking about the sports 
franchise raiders coming to his State, which I shall not name--go after 
his baseball team and go after his football team, watch the scurrying 
around to pay a lot more than 25 percent unless there is some 
leveraging and some compulsion.
  Baseball and football are not going to face up to a fair allocation 
of funds if they are left to their own devices. But the Congress of the 
United States does have control of the antitrust exemption and we can 
take it away from baseball or we can limit it for baseball. And we can 
take away, if we choose, the football antitrust exemption on revenue 
sharing. So I do believe this is a matter which is of significant 
public interest. When a city like Hartford and a State like Connecticut 
bids $375 million of funds which could obviously be used better; where 
Pennsylvania is looking at more than $1 billion in four new stadiums at 
a time when $17 billion comes to the NFL, and the salaries are 
astronomical. If the leagues are to have this exemption, if they are to 
have this special break, they ought to face up to some public 
responsibility.
  The second part of this legislation would grant football a limited 
antitrust exemption so they could regulate franchise moves. When the 
Raiders moved from Oakland to Los Angeles, there was a multimillion-
dollar lawsuit which the NFL had to pay. So they are reluctant to take 
a stand on exercising their league rules which require three-fourths 
approval. But, if they had an antitrust exemption to this limited 
extent, then they would be in a position to ameliorate the larceny. 
Maybe it would be petit larceny instead of grand larceny. But I think 
that kind of antitrust exemption would be worthwhile.
  As you can tell, I feel very strongly about this subject. I have been 
a sports fan since I was 8 years old--perhaps 5 years old when my 
family, living in Wichita, KS, made a trip to Chicago for the World's 
Fair and I became a Cubs fan. And I became a Phillies fan when I moved 
to Philadelphia more than a half century ago. And I am a Pirates fan, 
too, except when they are playing the Phillies.
  If you lived in Wichita, KS, when the morning paper came, the major 
item of interest would be the sports page and the box scores. And I am 
an Eagles fan and a Steelers fan and held season tickets as early as 
1958. When the Dodgers and Giants moved away from Brooklyn and New York 
City, I thought that was really a very serious breach. Such moves have 
a great impact on the public, and we ought to stop this legalized 
extortion, and we ought to get a fair share for the tremendous 
antitrust break which baseball and football enjoy.
                                 ______
                                 
      By Mr. SMITH of New Hampshire:
  S. 954. A bill to amend title 18, United States Code, to protect 
citizens' rights under the second amendment to obtain firearms for 
legal use, and for other purposes; to the Committee on the Judiciary.


               Second Amendment Preservation Act of 1999

  Mr. SMITH of New Hampshire. Mr. President, I rise today to introduce 
the Second Amendment Preservation Act of 1999.
  Mr. President, my bill is intended to address the lawsuits that have 
been filed by various municipal governments against firearms 
manufacturers. These lawsuits are premised on the novel theory that 
manufacturers in full compliance with all of the laws governing the 
production of their products can nevertheless be held liable for the 
criminal misuse of those products by individuals who are completely 
beyond their control. This radical notion is flatly contrary to the 
principle of individual responsibility on which the tort laws of our 
Nation are based.
  In at least some cases, Mr. President, these lawsuits seem to be 
intended to subject firearms manufacturers, importers and dealers to 
legal costs that are so onerous that they may not be able to defend 
themselves, or indeed be able to remain in business. A majority of 
firearms manufacturers, importers and dealers are small, privately-
owned businesses that cannot afford to bear the legal costs of 
defending themselves in a large number of judicial forums. Moreover, 
compared to most firearms manufacturers, importers and dealers, States 
and local governments are large and relatively wealthy entities that 
are able to spend large amounts of taxpayers' dollars on wars of 
attrition against small business.
  Mr. President, these lawsuits represent an effort by social activists 
and trial lawyers to use the Nation's judiciary to secure victories 
against the firearms industry that they never would be able to achieve 
through the legislative process. In fact, the firearms industry won't 
be the last target of these lawsuits. In a January 31, 1999, article in 
the Washington Post, plaintiffs' attorney John Coale stated ``. . . we 
are interested in taking a close look at the exorbitant prices of 
prescription drugs for the elderly, for example.'' ``Unless the courts 
reject our approach,'' Coale continued, ``we will continue to utilize 
it to tackle industry bullies.''
  Thankfully, Mr. President, the public is not fooled. A December, 
1998, survey of 1,008 U.S. adults by DecisionQuest, a jury consulting 
firm, found that 66.2% of American adults oppose these lawsuits against 
firearms manufacturers. Only 19.3% of Americans believe that these 
suits are justified.
  Even some anti-gun elements of the media oppose these lawsuits. A 
March 1, 1999, editorial in the Boston Globe stated that ``. . . guns 
should be controlled by the legislative process rather than through 
litigation.'' ``gun makers may be responsible for flaws in their 
products that lead to injury or death,'' the editorial continued. 
``Making manufacturers liable for the actions of others,'' the 
editorial concluded, ``. . . stretches the boundaries beyond reasonable 
limits . . . .''
  Mr. President, I believe that fairness requires that a unit of 
government that undertakes an unsuccessful ``fishing expedition'' 
against a firearms manufacturer, importer or dealer should bear the 
costs of that business in defending itself against such an frivolous 
and unwarranted civil action. Fairness also requires that taxpayers not 
be required to pay millions of dollars to wealthy attorneys, out of

[[Page S4676]]

awards that are intended, at least in part, to benefit the victims of 
crime.
  The second amendment to the Constitution of the United States 
requires that Congress must respond to actions that are intended to, 
and that would have the effect of, nullifying that provision of the 
Bill of Rights. Congress has the power under the second amendment, and 
under the Commerce Clause, to take appropriate action to protect the 
rights of citizens to obtain and own firearms.
  Onr action that Congress may take, Mr. President, is to provide 
protection from excessive and unwarranted legal fees. The Second 
Amendment Preservation Act, which I am introducing today, provides that 
protection. My bill limits attorneys' fees to plaintiffs in civil 
lawsuits that seek ``to hold a firearms manufacturer, importer, or 
dealer liable for damages caused by the unlawful or tortuous use of a 
firearm by a person not employed by or affiliated with the 
manufacturer, dealer, or importer.'' Under my bill, those fees are 
limited to the lesser of $150 per hour, plus expenses, or 10% of the 
amount that the plaintiff is awarded in the action.
  Further, my bill provides that in lawsuits in which the defendant is 
found by the court to be ``not wholly or primarily liable for the 
damages sought,'' the plaintiff must reimburse the defendant for 
reasonable attorney's fees and costs.
  Finally, Mr. President, my bill provides that if a court strikes down 
this legislation as unconstitutional, the decision is directly 
appealable as of right to the Supreme Court of the United States.
  Mr. President, I ask unanimous consent that the text of my bill, the 
Second Amendment Preservation Act, be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 954

       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 ``Second Amendment 
     Preservation Act of 1999''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) a number of State and local governments have commenced 
     civil actions, or are considering commencing civil actions, 
     against manufacturers, importers, and dealers of firearms 
     based on the unlawful use of the firearms by a purchaser or 
     other person;
       (2) in at least some cases, the intent in bringing the 
     action is to subject manufacturers, importers, and dealers to 
     legal costs that are so onerous that the manufacturers, 
     importers, and dealers may not be able defend themselves, or 
     indeed be able to remain in business;
       (3) a majority of manufacturers, importers, and dealers of 
     firearms are small, privately owned businesses that cannot 
     afford to bear the legal costs of defending themselves in a 
     large number of judicial forums;
       (4) compared to most manufacturers, importers, and dealers 
     of firearms, States and local governments are large and 
     relatively wealthy entities that are able to spend large 
     amounts of taxpayers' dollars on a war of attrition with 
     small businesses;
       (5) fairness requires that--
       (A) a unit of government that undertakes an unsuccessful 
     ``fishing expedition'' against a firearm manufacturer, 
     importer, or dealer bear the cost of defending against its 
     frivolous and unwarranted civil action; and
       (B) taxpayers not be required to pay millions of dollars to 
     wealthy attorneys, out of awards that are intended, at least 
     in part, to benefit the victims of crime;
       (6) the Second Amendment to the Constitution requires that 
     Congress respond to actions that are intended to, and that 
     would have the effect of, nullifying that provision of the 
     Bill of Rights;
       (7) Congress has power under the Second Amendment and under 
     the Commerce Clause to take appropriate action to protect the 
     right of citizens to obtain and own firearms; and
       (8) one appropriate action that Congress may take is to 
     provide protection from excessive and unwarranted legal fees.

     SEC. 3. RULES GOVERNING ACTIONS BROUGHT TO CURTAIL THE SALE 
                   OR AVAILABILITY OF FIREARMS FOR LEGAL PURPOSES.

       (a) In General.--Chapter 44 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec.  926B. Rules governing actions brought to curtail the 
       sale or availability of firearms for legal purposes

       ``(a) Definitions.--In this section, the term `action 
     brought to curtail the sale or availability of firearms for 
     legal purposes' means a civil action brought in Federal or 
     State court that--
       ``(1) has as a defendant a firearms manufacturer, importer, 
     or dealer in firearms;
       ``(2) expressly or by implication requests actual damages, 
     punitive damages, or any other form of damages in excess of 
     the lesser of--
       ``(A) $1,000,000; or
       ``(B) 50 percent of the net assets of any such defendant; 
     and
       ``(3) seeks, in whole or in part, to hold a firearms 
     manufacturer, importer, or dealer liable for damages caused 
     by the unlawful or tortious use of a firearm by a person not 
     employed by or affiliated with the manufacturer, dealer, or 
     importer.
       ``(b) Limitation on Attorney's Fees Awarded to Plaintiff.--
     In a civil action brought to curtail the sale or availability 
     of firearms for legal purposes, notwithstanding any other 
     provision of law or any agreement between any persons to the 
     contrary, amounts paid in plaintiff's attorney's fees in 
     connection with the settlement or adjudication of the action 
     shall not exceed the lesser of--
       ``(1) an amount equal to $150 per hour for each hour spent 
     productively, plus actual expenses incurred by the attorney 
     in connection with the action; or
       ``(2) an amount equal to 10 percent of the amount that the 
     plaintiff receives under the action.
       ``(c) Attorney's Fees for the Defendant.--In a civil action 
     brought to curtail the sale or availability of firearms for 
     legal purposes, if the court finds that the defendant is not 
     wholly or primarily liable for the damages sought, the court 
     shall require the plaintiff to reimburse the defendant for 
     reasonable attorney's fees and court costs, as determined by 
     the court, incurred in litigating the action, unless the 
     court finds that special circumstances make such a 
     reimbursement unjust.
       ``(d) Power of Congress.--If any court renders a decision 
     in an action brought to curtail the sale or availability of 
     firearms for legal purposes or in any other proceeding that 
     the Constitution does not confer on Congress the power to 
     enact this section, the decision shall be directly appealable 
     as of right to the Supreme Court.''.
       (b) Conforming Amendment.--The analysis for chapter 44 of 
     title 18 is amended by inserting after the item relating to 
     section 926A the following:

``926B. Rules governing actions brought to curtail the sale or 
              availability of firearms for legal purposes.''.

       (c) Effective Date.--The amendment made by subsection (a)--
       (1) takes effect on the date of enactment of this Act; and
       (2) applies to any action pending or on appeal on that date 
     or brought after that date.
                                 ______
                                 
      By Mr. WARNER (for himself, Mr. Robb, and Mr. McConnell):
  S. 955. A bill to allow the National Park Service to acquire certain 
land for addition to the Wilderness Battlefield in Virginia, as 
previously authorized by law, by purchase or exchange as well as by 
donation; to the Committee on Energy and Natural Resources.


                       longstreet's flank attack

  Mr. WARNER. Mr. President, I rise today to introduce legislation 
which will preserve a site of great historical importance. The legacy 
of Civil War battlefields must be perpetuated, not only to commemorate 
those who lost their lives in this tragic epoch, but also to consecrate 
land upon which some our country's finest strategic maneuvers occurred. 
On the hallowed land of Wilderness, Virginia occurred one of the 
greatest tactical stratagems in military history. Snatching the 
initiative to turn the tide of battle, Lt. General James A. Longstreet, 
under the command of General Robert E. Lee, forced back Union forces 
directed by General Ulysses S. Grant, in an advance known as 
``Longstreet's Flank Attack''.
  Mr. President, this legislation will allow the Park Service to 
acquire this stretch of land, which will serve to ``complete'' 
Wilderness Battlefield. The legacy of the Civil War is far-reaching. A 
war which wrought such destruction has been the source of much 
fascination for scholars and amateur historians. The Battle of 
Wilderness is legendary for the tactical skills employed and the 
caliber of the soldiers who fought. There, among the tangled forests 
and twisted undergrowth, the Union Army, numerically superior and well 
supplied, were forced into confrontation with General Lee's hard 
scrabble Confederate troops. It would be one of the last battles in 
which Lee's incomparable martial machine would force Grant's Army of 
the Potomac to withdraw. It is also the site of the wounding of Gen. 
Longstreet, who, like General Stonewall Jackson, was wounded by 
friendly fire. Though Longstreet's injury was not mortal, the genius of 
the cadre of officers under the command of Lee dwindled. Thus would 
begin the twilight of the Confederacy.
  Legislation passed in the 102nd Congress would have allowed the Park

[[Page S4677]]

Service to acquire this land by donation. Despite numerous efforts, the 
Park Service has been unable to accomplish this. The legislation at 
hand would amend Public Law 102-541 to allow the Park Service to 
procure the land by purchase or exchange as well as donation. The 
heritage and history which dwell amongst the interlaced undergrowth of 
this land deserve our recognition. I look forward to the swift passage 
of this bill.
  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. 955

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

     SECTION 1. ADDITION TO WILDERNESS BATTLEFIELD, VIRGINIA.

       (a) Removal of Condition on Battlefield Addition.--Section 
     2(a)(2) of Public Law 102-541 (16 U.S.C. 525k note; 106 Stat. 
     3565) is amended by striking ``: Provided,'' and all that 
     follows through ``Interior''.
       (b) Authorized Methods of Acquisition.--
       (1) Acquisition of certain lands by donation.--Section 3(a) 
     of Public Law 101-214 (16 U.S.C. 425l(a)) is amended by 
     adding at the end the following new sentence: ``However, the 
     lands designated `P04-04' on the map referred to in section 
     2(a) numbered 326-40072E/89/A and dated September 1990 may be 
     acquired only by donation.''.
       (2) Removal of restriction on acquisition of addition.--
     Section 2 of Public Law 102-541 (16 U.S.C. 525k note; 106 
     Stat. 3565) is amended by striking subsection (b).
       (c) Technical Correction.--Section 2(a) of Public Law 101-
     214 (16 U.S.C. 425k(a)) is amended by striking 
     ``Spotslyvania'' and inserting ``Spotsylvania''.
                                 ______
                                 
      By Ms. SNOWE (for herself, Mr. Harkin, and Mr. Frist):
  S. 956. A bill to establish programs regarding early detection, 
diagnosis, and interventions for newborns and infants with hearing 
loss; to the Committee on Health, Education, Labor, and Pensions.


   newborn and infant hearing screening and intervention act of 1999

 Ms. SNOWE. Mr. President, I rise today to introduce the 
Newborn and Infant Hearing Screening and Intervention Act of 1999. This 
bill is a companion bill to H.R. 1193, introduced in the House by 
Representative Jim Walsh. I am pleased to be joined again this year by 
my colleague from Iowa, Senator Harkin, who has long been a champion of 
the hearing impaired, and my colleague from Tennessee, Senator Frist.
  We usually associate hearing problems with the aging process, and it 
is true that the largest group of Americans suffering from hearing 
impairment are those in the 65 to 75 year age range. But at the same 
time, approximately 1.5 to 3 out of every 1000 children--or as many as 
33 children per day--are born with significant hearing problems. 
According to the National Institute on Deafness and Other Communication 
Disorders, as many as 12,000 infants are born each year in the United 
States with some form of hearing impairment.
  In recent years, scientists have stressed that the first years of a 
child's life are crucial to their future development. This makes early 
detection and intervention of hearing loss a necessity if we are to 
ensure that all our children get the strong start they deserve. 
Specialists in speech and language development believe that the crucial 
period of speech and communication in a child's life can begin as early 
as six months of age. Unfortunately, though the average age of 
diagnosis of hearing loss is close to three years of age.
  The ability to hear is a major element of one's ability to read and 
communicate. To the extent that we can help infants and young children 
overcome disabilities detected early in life, we will improve their 
ability to function in society, receive an education, obtain meaningful 
employment, and enjoy a better quality of life. Without early diagnosis 
and intervention, these children are behind the learning curve--
literally--before they have even started. They should not be denied a 
strong start in life simply for the lack of a simple screening test.
  There are many causes of hearing loss, and in many states a newborn 
child is screened only if the physician is aware of some factor that 
puts that baby in a risk category. The good news is that over 550 
hospitals in 46 states operate universal newborn hearing screening 
programs. Nine states--Hawaii, Rhode Island, Mississippi, Connecticut, 
Colorado, Utah, Virginia, West Virginia, and Massachusetts--have passed 
legislation requiring universal newborn hearing screening. Hawaii, 
Mississippi, Rhode Island, Utah, and Wyoming have statewide early 
hearing detection and intervention programs. And scientists across the 
country are developing and implementing model rural-based infant 
hearing, screening, follow-up, and intervention programs for children 
at risk for hearing and language disabilities.
  The bad news is that, unfortunately, only about 20 percent of the 
babies in this country are born in hospitals with universal newborn 
hearing screening programs, and more than 85 percent of all hospitals 
do not do a hearing screening before sending the baby home.
  Universal screening is not a new idea. As early as 1965, the Advisory 
Committee on Education of the Deaf, in a report of the Secretary of 
Health, Education and Welfare, recommended the development and 
nationwide implementation of ``universally applied procedures for early 
identification.'' In 1989, former Surgeon General C. Everett Koop used 
the year 2000 as a goal for identifying 90 percent of children with 
significant hearing loss before they are one year old.
  In 1997, an expert panel at the National Institute of Deafness and 
Other Communication Disorders recommended that the first hearing 
screening be carried out before an infant is three months old in order 
to ensure that treatment can begin before six months of age. The Panel 
also recommended that the most comprehensive and effective way of 
ensuring screening before an infant is six months old is to have 
newborns screened before they sent home from the hospital. But a 1998 
report by the Commission on Education of the Deaf estimated that the 
average age at which a child with congenital hearing loss was 
identified in the United States was a 2\1/2\ to 3 years old, with many 
children not being identified until five or six years old.
  It is time to move beyond the recommendations and achieve the goal of 
universal screening. In addition to the nine states that require 
screening, the Bureau of Maternal and Child Health, in conjunction with 
the Centers for Disease Control, is helping 17 states commit to 
achieving universal hearing screening by the year 2000. This plan will 
lead to the screening of more than one million newborns a year, but it 
still leaves more than half the states without universal screening 
programs.
  The purpose of the bill I am introducing today is to provide the 
additional assistance necessary to help all the states in implementing 
programs to ensure that all our newborns are tested and to ensure that 
those identified with a hearing impairment get help. Specifically, the 
bill:
  (1) Authorizes $5 million in FY 2000 and $8 million in FY 2001 for 
the Secretary of Health and Human Services to work with the states to 
develop early detection, diagnosis and intervention networks for the 
purpose of developing models to ensure testing and to collect data;
  (2) Authorizes $5 million in FY 2000 and $7 million in FY 2001 for 
the Centers for Disease Control to provide technical assistance to 
State agencies and to conduct applied research related to infant 
hearing detection, diagnosis and treatment/intervention; and
  (3) Authorizes the National Institutes of Health to carry out 
research on the efficacy of new screening techniques and technology.
  A baby born today will be part of this country's future in the 21st 
century. Surely we owe it to that child to give them a strong start on 
that future by ensuring that if they do have a hearing impairment it is 
diagnosed and treatment started well before their first year of life is 
completed. I urge my colleagues to join me, Senator Harkin, and Senator 
Frist in supporting the Newborn and Infant Hearing Screening and 
Intervention Act of 1999.
 Mr. HARKIN. Mr. President, I am pleased to introduce, along 
with my colleagues, Senator Snowe and Senator Frist, the Newborn and 
Infant Hearing Screening and Intervention Act of 1999.
  Tne Newborn and Infant Hearing Screening and Intervention Act would 
help States establish programs to detect and diagnose hearing loss in 
every

[[Page S4678]]

newborn child and to promote appropriate treatment and intervention for 
newborns with hearing loss. The Act would fund research by the National 
Institutes of Health to determine the best detection, diagnostic, 
treatment and intervention techniques and technologies.
  Every year, approximately 12,000 children in the United States are 
born with a hearing impairment. Most of them will not be diagnosed as 
hearing-impaired until after their second birthday. The consequences of 
not detecting early hearing impairment are significant, but easily 
avoidable.
  Late detection means that crucial years of stimulating the brain's 
hearing centers are lost. It may delay speech and language development. 
Delayed language development can retard a child's educational progress, 
minimize his or her socialization skills, and as a result, destroy his 
or her self-esteem and confidence. On top of all that, many children 
are diagnosed incorrectly as having behavioral or cognitive problems, 
simply because of their undetected hearing loss.
  In 1988, the Commission on Education of the Deaf reported to Congress 
that early detection, diagnosis and treatment were essential to 
improving the status of education for people who are deaf in the United 
States. Based on that report and others, in 1991, when I was chair of 
the Labor-HHS Subcommittee on Appropriations, we urged the National 
Institute on Deafness and Other Communication Deisorders--NIDCD--to 
determine the most effective means of identifying hearing impairments 
in newborn infants. In 1993, the Labor-HHS Subcommittee supported 
NIDCD's efforts to sponsor a consensus development conference on early 
identification of hearing impairment in infants and children. And in 
1998, the Subcommittee encouraged NIDCD to pursue research on 
intervention strategies for infants with hearing impairments, and 
encouraged HRSA to provide states with the results of the NIH study on 
the most effective forms of screening infants for hearing loss.
  Mr. President, the Act we are introducing today builds on these 
earlier efforts. The Act would help states develop programs that many 
of them already are working on; it would not impose a single federal 
mandate. At least eight states already have mandatory testing programs; 
many others have legislation pending to establish such programs. Other 
states have achieved universal newborn testing voluntarily. These 
programs can work; they deserve federal help.
  One of the highlights of my Congressional career, indeed, of my life, 
has been working on policies and laws to ensure that people with 
disabilities have an equal opportunity to succeed in our society. This 
is especially meaningful to me, because my brother Frank became deaf as 
a child.
  I watched Frank grow up, and I saw how few options and support 
services were available for people who were deaf. I remember the 
frustrations and challenges Frank faced, and I told myself early on 
that I would do all I could to break down the barriers in our society 
that prevented people who were deaf from reaching their potential. By 
supporting early screening, diagnosis, and treatment programs, this act 
would go a long way toward accomplishing that goal.
  I would like to thank Senators Snowe and Frist for their hard work 
and support of this act, and I hope our colleagues will join us in this 
worthy effort.
                                 ______
                                 
      By Mr. KOHL:
  S. 957. A bill to amend chapter 111 of title 28, United States Code, 
relating to protective orders, sealing of cases, disclosures of 
discovery information in civil actions, and for other purposes, to the 
Committee on the Judiciary.


                   sunshine in litigation act of 1999

  Mr. KOHL. Mr. President, I rise today to offer the Sunshine in 
Litigation Act of 1999, a measure that addresses the growing abuse of 
secrecy orders issued by our Federal courts. All too often our Federal 
courts allow vital information that is discovered in litigation--and 
which directly bears on public health and safety--to be covered up, to 
be shielded from mothers, fathers and children whose lives are 
potentially at stake, and from the public officials we have asked to 
protect our health and safety.
  All this happens because of the use of so-called ``protective 
orders''--really gag orders issued by courts--that are designed to keep 
information discovered in the course of litigation secret and 
undisclosed. Typically, injured victims agree to a defendant's request 
to keep lawsuit information secret. They agree because defendants 
threaten that, without secrecy, they will fight every document 
requested and will refuse to agree to a settlement. Victims cannot 
afford to take such chances. And while courts in these situations 
actually have the legal authority to deny requests for secrecy, 
typically they do not--because both sides have agreed, and judges have 
other matters to which they prefer to attend. So judges are regularly 
and frequently entering these protective orders, using the power of the 
Federal government to keep people in the dark about the dangers they 
face.
  Perhaps the worst offenders are the tobacco companies. They have used 
protective orders not only to keep incriminating documents away from 
public view, but also to drive up litigation costs by preventing 
document sharing, effectively forcing every successive plaintiff to 
``reinvent the wheel.'' One tobacco industry official even boasted, 
``The aggressive posture we have taken regarding depositions and 
discovery in general continues to make these cases extremely burdensome 
and expensive for plaintiffs' lawyers, particularly sole practitioners. 
To paraphrase General Patton, the way we won these cases was not by 
spending all of our money, but by making the other S.O.B. spend all 
his.''
  This systematic abuse of secrecy orders is one of the reasons that it 
took more than four decades of tobacco litigation to achieve a 
reasonable settlement. In fact, Congress and the public's shift in 
recent years against Big Tobacco resulted in large part from disclosure 
of materials that had been concealed under secrecy orders, including 
materials regarding youth targeting and nicotine manipulation.
  The problem of excessive secrecy orders in cases involving public 
health and safety has been apparent for years. The Judiciary Committee 
first held hearings on this issue in 1990 and again in 1994. In 1990, 
Arthur Bryant, the executive director of Trial Lawyers for Public 
Justice, told us, ``The one thing we learned . . . is that this problem 
is far more egregious than we ever imagined. It goes the length and 
depth of this country, and the frank truth is that much of civil 
litigation in this country is taking place in secret.''
  Four years later, attorney Gerry Spence told us about 19 cases in 
which he had been involved where his clients had been required to sign 
secrecy agreements. They included cases involving defects in a hormonal 
pregnancy test that caused severe birth defects, a defective braking 
system on a steamroller, and an improperly manufactured tire rim.
  But that's not surprising, because individual examples of this 
problem abound. For over a decade, Miracle Recreation, a U.S. 
playground equipment company, marketed a merry-go-round that caused 
serious injury to scores of small children--including severed fingers 
and feet. Lawsuits brought against the manufacturer were confidentially 
settled, preventing the public and the Consumer Products Safety 
Commission from learning about the hazard. It took more than a decade 
for regulators to discover the danger and for the company to recall the 
merry-go-round.

  There are yet more cases like these. In 1973, GM allegedly began 
marketing vehicles with dangerously placed fuel tanks that tended to 
rupture, burn, and explode on impact more frequently than regular 
tanks. Soon after these vehicles hit the American road, tragic 
accidents began occurring, and lawsuits were filed. More than 150 
lawsuits were settled confidentially by GM. For years this secrecy 
prevented the public from learning of the alleged dangers presented by 
these vehicles--millions of which are still on the road. It wasn't 
until a 1993 trail that the public learned about sidesaddle gas tanks 
and some GM crash test data that demonstrated these dangers.
  The thrust of our legislation is straightforward. In cases affecting 
public health and safety, Federal courts would be required to apply a 
balancing test: they could permit secrecy only if

[[Page S4679]]

the need for privacy outweighs the public need to know about potential 
health or safety hazards. Moreover, all courts--both Federal and 
state--would be prohibited from issuing protective orders that prevent 
disclosure to regulatory agencies. In this way, our bill will bring 
crucial information out of the darkness and into the light.
  Although this law may result in some small additional burden on 
judges, a little extra work seems a tiny price to pay to protect 
blameless people from danger. Every day, in the course of litigation, 
judges make tough calls about how to construe the public interest and 
interpret other laws that Congress passes. I am confident that the 
courts will administer this law fairly and sensibly. If this requires 
extra work, then that work is well worth the effort. After all, no one 
argues that spoiled meat should be allowed on the market because 
stricter regulations mean more work for FDA meat inspectors.
  Having said all this, we must in fairness recognize that there is 
another side to this problem. Privacy is a cherished possession, and 
business information is a cherished commodity. For this reason, the 
courts must, in some cases, keep trade secrets and other business 
information confidential.
  But, in my opinion, today's balance of these interests is entirely 
inadequate. Our legislation will ensure that courts do not carelessly 
and automatically sanction secrecy when the health and safety of the 
American public are at stake. At the same time, this bill will allow 
defendants to obtain secrecy orders when the need for privacy is 
significant and substantial.
  Indeed, this proposal would simply codify the practices of the most 
thoughtful Federal judges. As Justice Breyer has said, ``no court can 
or should stand silent when they see an immediate, serious risk to . . 
. health or safety.'' Virtually identical legislation received 49 votes 
on the floor in 1994 and was passed with bipartisan support out of the 
Judiciary Committee in 1996.
  Who knows what other hazards are hidden behind courthouse doors? Do 
we want to wait four decades for the next ``tobacco'' to be disclosed? 
We need to take action to prevent the next threat before it's too late.
  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. 957

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

     SECTION 1. PROTECTIVE ORDERS AND SEALING OF CASES AND 
                   SETTLEMENTS RELATING TO PUBLIC HEALTH OR 
                   SAFETY.

       (a) Short Title.--This section may be cited as the 
     ``Sunshine in Litigation Act of 1999''.
       (b) Protective Orders and Sealing of Cases.--Chapter 111 of 
     title 28, United States Code, is amended by adding at the end 
     the following new section:

     ``Sec. 1660. Protective orders and sealing of cases and 
       settlements relating to public health or safety

       ``(a)(1) A court shall enter an order under rule 26(c) of 
     the Federal Rules of Civil Procedure restricting the 
     disclosure of information obtained through discovery, an 
     order approving a settlement agreement that would restrict 
     the disclosure of such information, or an order restricting 
     access to court records in a civil case only after making 
     particularized findings of fact that--
       ``(A) such order would not restrict the disclosure of 
     information which is relevant to the protection of public 
     health or safety; or
       ``(B)(i) the public interest in disclosure of potential 
     health or safety hazards is clearly outweighed by a specific 
     and substantial interest in maintaining the confidentiality 
     of the information or records in question; and
       ``(ii) the requested protective order is no broader than 
     necessary to protect the privacy interest asserted.
       ``(2) No order entered in accordance with paragraph (1) 
     (other than an order approving a settlement agreement) shall 
     continue in effect after the entry of final judgment, unless 
     at or after such entry the court makes a separate 
     particularized finding of fact that the requirements of 
     paragraph (1) (A) or (B) have been met.
       ``(b) The party who is the proponent for the entry of an 
     order, as provided under this section, shall have the burden 
     of proof in obtaining such an order.
       ``(c)(1) No court of the United States may approve or 
     enforce any provision of an agreement between or among 
     parties to a civil action, or approve or enforce an order 
     subject to subsection (a)(1), that prohibits or otherwise 
     restricts a party from disclosing any information relevant to 
     such civil action to any Federal or State agency with 
     authority to enforce laws regulating an activity relating to 
     such information.
       ``(2) Any such information disclosed to a Federal or State 
     agency shall be confidential to the extent provided by 
     law.''.
       (c) Technical and Conforming Amendment.--The table of 
     sections for chapter 111 of title 28, United States Code, is 
     amended by adding after the item relating to section 1659 the 
     following:

``1660. Protective orders and sealing of cases and settlements relating 
              to public health or safety.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect 30 days after the date of enactment of this 
     Act and shall apply only to orders entered in civil actions 
     or agreements entered into on or after such date.
                                 ______
                                 
      By Mr. BENNETT:
  S. 958. A bill to amend certain banking and securities laws with 
respect to financial contracts; to the Committee on Banking, Housing, 
and Urban Affairs.


       financial institutions insolvency improvement act of 1999

  Mr. BENNETT. Mr. President, I rise today to introduce the Financial 
Institutions Insolvency Improvement Act of 1999. Recognizing that the 
changes to our Nations' banking laws have not kept pace with changes in 
our capital markets, this bill would strengthen the laws that enforce 
and protect certain financial agreements and transactions in the event 
that one of the parties involved becomes insolvent. This legislation 
would also harmonize the treatment of financial instruments under the 
bankruptcy code and the banking insolvency laws.
  The legislation that I am introducing is based largely on the 
recommendations made in March of 1998 by the President's Working Group 
on Financial Markets. This same working group reiterated on April 29th 
of this year, in their report on hedge fund activity, that Congress 
should pass this legislation. However, in an effort to keep this 
legislation free and separate from the ongoing bankruptcy debate, I am 
only introducing those portions of the proposal which amend banking 
law. I will be chairing a hearing on this legislation on the Financial 
Institutions Subcommittee tomorrow morning.
  Since the adoption of the Bankruptcy Code in 1978, Congress has 
recognized that certain financial market transactions qualify for 
different treatment in the event that one of the parties becomes 
insolvent. Specifically, many financial instruments are exempted from 
the automatic stay that is imposed on general commercial contracts 
during a bankruptcy proceeding. This is largely due to the fact that 
the Federal Deposit Insurance Corporation (FDIC), by law, becomes a 
trustee during any bankruptcy proceeding.
  Mr. President, the ability to terminate, or close out and ``net'' 
financial products is an essential and vital part of our capital 
markets. Congress has recognized that participants in swap transactions 
should have the ability to terminate and ``net'' their swap agreements. 
Simply put, netting means that money payments or other obligations owed 
between parties with multiple contracts can be offset against each 
other, and one net amount can be paid by one party to the other in 
settlement. Cross-product netting means that parties can net out 
different kinds of financial contracts, such as swap agreements being 
offset with repurchase agreements. By eliminating the need for large 
fund transfers for each transaction in favor of a smaller net payment, 
netting allows parties to enter into multiple-transaction relationships 
with reduced credit and liquidity exposures to a counterparty's 
insolvency.
  Many parties involved in financial transactions have entered into 
them for hedging purposes. My legislation encourages this type of 
behavior by clarifying that cross-product close-out netting should be 
permitted for positions in securities contracts, commodity contracts, 
forward contracts, repurchase agreements and swaps.
  For example, in certain cases, the protections for financial 
contracts in the bank insolvency laws have not kept pace with market 
evolution. Assume, for example, that Party A and Party B have two 
outstanding equity swaps in which the payments are calculated on the 
basis of an equity securities index. If Party A enter insolvency, it is 
not entirely clear whether Party B's contractual rights to close-out 
and net

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would be protected by the current ``swap agreement'' definition in the 
Federal Deposit Insurance Act. If both of the parties are ``financial 
institutions'' under the Federal Deposit Insurance Corporation 
Improvement Act or the Federal Reserve Board's Regulation EE and the 
swap agreements are ``netting contracts,'' then Party B might (although 
it is not entirely clear) be able to exercise its close-out, netting 
and foreclosure rights.
  However, if one of the parties is not a ``financial institution'' or 
the contract does not constitute a ``netting contract'' (for example, 
because it is governed by the laws of the United Kingdom), then Party B 
could be subject, among other things, to the risk of ``cherry-
picking''--the risk that Party A's receiver would assume responsibility 
only for the swap that currently favors Party A, leaving Party B with a 
potentially sizable claim against Party A (which would be undersecured 
because of the impairment of netting) and the risk that its foreclosure 
on any collateral would be blocked indefinitely. This could impair 
Party B's creditworthiness, which in turn could lead to its default to 
its counterparties. It is this sort of ``chain reaction'' that can 
exacerbate systemic risk in the financial markets.
  Finally, Mr. President, it is important to recognize that the 
framework for the bill I am introducing was contained in S. 1301, the 
bankruptcy bill introduced by Senator Grassley last year which passed 
the Senate by a vote of 97-1.

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