[Congressional Record Volume 145, Number 77 (Wednesday, May 26, 1999)]
[Senate]
[Pages S6050-S6071]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Ms. COLLINS (for herself and Mr. Coverdell):
  S. 1124. A bill to amend the Internal Revenue Code of 1986 to 
eliminate the 2-percent floor on miscellaneous itemized deductions for 
qualified professional development expenses of elementary and secondary 
school teachers; to the Committee on Finance.


                  teacher professional development act

                                 ______
                                 
      By Mr. COVERDELL (for himself and Ms. Collins):
  S. 1127. A bill to amend the Internal Revenue Code of 1986 to 
eliminate the 2-percent floor on miscellaneous itemized deductions for 
reasonable and incidental expenses related to instruction, teaching, or 
other educational job-related activities; to the Committee on Finance.


             teacher deduction for incidental expenses act

  Ms. COLLINS. Mr. President, today, Senator Coverdell and I are 
introducing two bills that will help teachers who spend their personal 
funds in order to improve their teaching skills and to provide quality 
learning materials for their students. I am going to discuss the first 
of those bills, the Teachers' Professional Development Act.
  I am very pleased to be joined by my colleague from Georgia, Senator 
Coverdell, in presenting this response to the critical need of our 
elementary and secondary schoolteachers for more professional 
development.
  Other than involved parents, a well-qualified teacher is the most 
important element of student success. Educational researchers have 
repeatedly demonstrated the close relationship between well-qualified 
teachers and successful students. Moreover, teachers themselves 
understand how important professional development is to maintaining and 
expanding their level of competence. When I meet with Maine teachers, 
they tell me of their need for more professional development and the 
scarcity of financial support for this worthwhile pursuit.
  In Maine, we have seen the results of a strong, sustained 
professional development program on student achievement in science and 
math. With support from the National Science Foundation, the U.S. 
Department of Education, the State of Maine, private foundations, the 
business community, and colleges in our State, the Maine Mathematics 
and Science Alliance established a statewide training program for 
teachers. The results have been outstanding.
  While American students, overall, performed at the bottom of the 
Third International Science and Mathematics Study, Maine students 
outperformed the students of all but one of the 41 participating 
nations. The professional development available to Maine's science and 
math teachers undoubtedly played a critical role in this tremendous 
success story. Unfortunately, however, this level of support for 
professional development is the exception and not the rule.
  The willingness of Maine's teachers to fund their own professional 
development activities has impressed me deeply. For example, an English 
teacher who serves as a member of my Educational Policy Advisory 
Committee told me of spending her own money to attend a curriculum 
conference. She then came back to her high school and shared the 
results of this curriculum conference with all the other teachers in 
her English department. She is typical of the many teachers throughout 
the United States who generously reach within their own pockets to pay 
for their own professional development to make them even better, even 
more effective at their jobs.
  I firmly believe that we should encourage our educators to seek 
professional training, and that is the purpose of the legislation I am 
introducing today. The Collins-Coverdell legislation would help 
teachers to finance professional development by allowing them to deduct 
from their taxable income such expenses as conference fees, tuitions, 
books, supplies, and transportation associated with qualifying 
programs. Under the current law, teachers may only deduct these 
expenses if they exceed 2 percent of their income. My bill would 
eliminate this 2 percent floor and allow all of the professional 
development expenses to be deductible.
  I greatly admire the many teachers who have voluntarily financed the 
additional education they need to improve their skills and to serve 
their students better. I hope that this legislation will encourage 
teachers to continue to take courses in the subject areas that they 
teach, to complete graduate degrees in either their subject area or in 
education, and to attend conferences to get new ideas for presenting 
course work in a challenging manner. This bill would reimburse our 
teachers for a very small part of what they invest in our children's 
future. This would be money well spent.
  Investing in education is the surest way for us to build one of our 
most important assets for our country's future, and that is a well-
educated population. We need to ensure that our nation's elementary and 
secondary school teachers are the best possible so that they can bring 
out the best in our students. Adopting this legislation would help us 
to accomplish this goal.
  I urge my colleagues to support these efforts, and I look forward to 
working with my colleagues in assuring enactment of this legislation.
  Thank you, Mr. President.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Ashcroft, Mr. Hatch, and Mr. 
        Mack):
  S. 1125. A bill to restrict the authority of the Federal 
Communications Commission to review mergers and to impose conditions on 
licenses and other authorizations assigned or transferred in the course 
of mergers or other transactions subject to review by the Department of 
Justice or the Federal Trade Commission; to the Committee on Commerce, 
Science, and Transportation.


              telecommunications merger review act of 1999

  Mr. McCAIN. Mr. President, I rise this morning to introduce The 
Telecommunications Merger Review Act of 1999, which will make the 
government's review of telecommunications industry mergers more 
coherent and effective.
  It seems like hardly a week goes by without the announcement of yet 
another precedent-setting merger in the telecommunications industry. 
Consumers are right to be concerned about the possible effects of these 
mergers, and the Congress is right to be concerned that government 
review of these mergers is careful and consistent in keeping consumer 
interests uppermost.
  The urgent need for competence and clarity in reviewing telecom 
industry mergers highlights a glaring problem in the current system. 
That problem, Mr. President, arises from the fact that different 
agencies sequentially go over the same issues, and, after considerable 
delay, can make radically different decisions on the same sets of 
facts.
  Two of these agencies, the Department of Justice and the Federal 
Trade Commission, have extensive expertise in analyzing the 
competition-related issues that are involved in mergers, and they 
approach the merger review process with a great deal of professionalism 
and efficiency. The third agency, the Federal Communications 
Commission, has comparatively little expertise in these issues, and 
only limited authority under the law.
  Nevertheless, the FCC has bootstrapped itself into the unintended 
role of official federal dealbreaker. How? By using its authority to 
impose conditions on the FCC licenses that are being transferred as 
part and parcel of the overall merger deal. Because the FCC must pre-
approve all license transfers, its ability to pass on the underlying 
licenses gives it a chokehold on the parties to the merger. And it uses 
that chokehold to prolong the process and extract concessions from the 
merging parties that oftentimes

[[Page S6051]]

have very little, if anything, to do with the merger itself.
  Mr. President, many people might ask, what's so bad about that? Won't 
the FCC's conditions make sure that consumer interests are served? The 
short answer is, the FCC is simply duplicating the review and that the 
Department of Justice performs with much more competence and 
efficiency. About the best you can say is that the FCC is wasting 
valuable resources that could more productively be spent elsewhere. But 
the real harm lies in the fact that the FCC is foisting needless 
burdens and restrictions on the merging companies that translate into 
higher costs for consumers.
  The FCC tries to defend its efforts by arguing that its job is really 
different from DOJ's--that DOJ makes sure that a merger won't harm 
competition, while the FCC makes sure that the same merger will help 
competition. In other words, according to the FCC, DOJ looks at a 
merger's effect on business; the FCC looks at its effect on people. For 
example, last week FCC Chairman Kennard gave a speech in which he 
proclaimed that, despite the strain these merger reviews were imposing 
on the agency, ``We will not rest until on each transaction we can 
articulate to the American public what are the benefits of this merger 
to average American consumers, because I believe that's what the 
public-interest review requires.''

  If that's true, I have good news for Chairman Kennard--he can take a 
rest, because DOJ is doing exactly the same thing. In a separate speech 
last week Assistant Attorney General Joel Klein, DOJ's chief merger 
review official, said that what most people do not understand 
(including, evidently, the FCC), is that ``everything we do in 
antitrust . . . is consumer driven.'' He then went on to say precisely 
what that means:

       We are a unique federal agency. Our interest is to protect 
     what the economists call consumer welfare. And there is one 
     simple truth that animates everything we do, and that is 
     competition--the more people chasing after the consumer, to 
     serve him or her better, to get lower prices, to get new 
     innovations, to create new opportunities--the more of that 
     juice that goes through the system, the better.

  To be accurate, there is one big difference between the way the FCC 
and the DOJ do merger reviews: DOJ is infinitely better at it. Two 
weeks ago the FCC's already-faltering merger review process hit rock-
bottom when a staff member (an ostensible antitrust expert) heading up 
the FCC's review of the SBC-Ameritech merger (which DOJ has already 
approved) publicly proclaimed that, unless the FCC imposed major 
conditions, the proposed transaction ``flunks the public interest 
test.'' An ``unnamed agency spokeswoman'' then cheerfully agreed that a 
majority of the Commissioners shared the same view.
  Can you imagine either the FTC or DOJ countenancing such happenings 
during the course of their merger review processes? I think not. This 
appallingly unprofessional behavior by the FCC staff drove the value of 
SBC and Ameritech stock down over $2 billion, and it confirmed that, if 
this is what passes for FCC merger review ``expertise,'' the FCC has no 
business being in it.
  Mr. President, this bill will restore integrity and professionalism 
to federal review of telecommunications industry mergers. It does not 
touch either DOJ's or FTC's broad authority to review all mergers, 
including all telecommunications industry mergers. It would make sure 
that any FCC concerns are heard by incorporating the FCC into DOJ and 
FTC merger review proceedings. Nor does it touch the FCC's broad 
authority to adopt and enforce rules to govern the behavior of 
telecommunications companies. What it does do is tell the FCC that, in 
cases where either DOJ or FTC has reviewed a proposed 
telecommunications merger and stated in writing no intent to intervene, 
the FCC must follow the determination of these expert agencies and 
transfer any FCC licenses without further delay.
  Under this bill the FCC may independently review proposed mergers 
when neither DOJ nor FTC states in writing its intent not to intervene. 
Nevertheless, because DOJ and FTC review all mergers and have authority 
to intervene in any merger, their nonintervention is any proposed 
merger appropriately signifies that they find the transaction at issue 
is unobjectionable. Therefore, any FCC review in such cases is subject 
to a strict 60-day deadline, and the FCC is directed to presume 
approval without attaching further conditions or obligations on any of 
the parties. Nothing (except extreme unlikelihood) would preclude the 
FCC from rebutting the presumption with hard facts, nor would the FCC 
be precluded from subsequently exercising its existing enforcement and 
rulemaking prerogatives to deal with any unanticipated problems.

  Mr. President, we can streamline the way the federal government 
reviews telecom industry mergers and still safeguard the public 
interest. That's what this bill is intended to do by eliminating 
bureaucratic mismanagement while preserving essential federal review 
and enforcement prerogatives. I urge my colleagues to give it careful 
consideration and support.
  This bill, the Telecom Merger Review Act of 1999, would do nothing to 
change the authority that the Department of Justice and the Federal 
Trade Commission currently have to review all telecom industry mergers.
  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. 1125

       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 ``Telecommunications Merger 
     Review Act of 1999''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) A stated intent of the Congress in enacting the 
     Telecommunications Act of 1996 was to reduce regulation.
       (2) Under existing law, the Department of Justice and the 
     Federal Trade Commission exercise primary authority to review 
     all mergers, including telecommunications industry mergers. 
     The Federal Communications Commission has only limited 
     authority under the Clayton Act to review telecommunications 
     industry mergers.
       (3) The Department of Justice and the Federal Trade 
     Commission have extensive expertise in analyzing issues of 
     industry concentration and its effects on competition. The 
     Federal Communications Commission has only limited expertise 
     in analyzing such issues.
       (4) Notwithstanding the limitations on its Clayton Act 
     jurisdiction and on its substantive expertise, the Federal 
     Communications Commission exercises broad authority over 
     telecommunications industry mergers pursuant to the 
     nonspecific public interest standard and other provisions in 
     the Communications Act of 1934 that allow it to impose terms 
     and conditions on the assignment and transfer of licenses and 
     other authorizations.
       (5) The Federal Communications Commission's exercise of 
     broad authority over telecommunications industry mergers 
     overreaches its intended statutory authority and its 
     substantive expertise and produces delay and inconsistency in 
     its decisions.
       (6) Under existing law, parties to a proposed 
     telecommunications industry merger are unable to proceed 
     without the prior approval of the Federal Communications 
     Commission, even if the Department of Justice or the Federal 
     Trade Commission have already approved the merger.
       (7) The Federal Communications Commission's existing 
     rulemaking and enforcement prerogatives constitute normal and 
     effective means of assuring that all licensees, including 
     parties to a telecommunications industry merger, operate in 
     the public interest.
       (8) The primary jurisdiction and preeminent expertise of 
     the Department of Justice and the Federal Trade Commission on 
     all matters involving industry concentration and its effects 
     on competition, combined with the Federal Communications 
     Commission's existing rulemaking and enforcement 
     prerogatives, make the exercise of separate 
     telecommunications industry merger approval authority by the 
     Federal Communications Commission unnecessary.
       (9) Because the duplication of effort, inconsistency, and 
     delay resulting from the Federal Communications Commission's 
     review of telecommunications industry mergers is unnecessary, 
     it imposes unwarranted costs on the industry, on the 
     Commission, and on the public, and it fails to serve the 
     public interest.

     SEC. 3. REPEAL OF MERGER APPROVAL AUTHORITY.

       Section 11(a) of the Clayton Act (15 U.S.C. 21(a)) is 
     amended by striking ``in the Federal Communications 
     Commission where applicable to common carriers engaged in 
     wire or radio communication or radio transmission of 
     energy;''.

     SEC. 4. REPEAL OF AUTHORITY TO CONDITION LICENSES, ETC.

       (a) Basic Administrative Authority.--Section 4(i) of the 
     Communications Act of 1934 (15 U.S.C. 154(i)) is amended by 
     adding at the end thereof the following: ``The authority of 
     the Commission to impose terms or conditions on the transfer 
     or assignment of

[[Page S6052]]

     any license or other authorization assigned or transferred in 
     a merger or other transaction subject to review by the 
     Department of Justice or the Federal Trade Commission is 
     subject to section 314.''.
       (b) Public Convenience and Necessity.--Section 214(c) of 
     the Communications Act of 1934 (47 U.S.C. 214(c)) is amended 
     by inserting after ``require.'' the following: ``The 
     authority of the Commission to impose terms or conditions on 
     the transfer or assignment of any such certificate assigned 
     or transferred in a merger or other transaction subject to 
     review by the Department of Justice or the Federal Trade 
     Commission is subject to section 314.''.
       (c) Restrictions and Conditions Necessary To Carry Out 1934 
     Act; Treaties; International Conventions.--Section 303(r) of 
     the Communications Act of 1934 (47 U.S.C. 303(r)) is amended 
     by adding at the end thereof the following: ``The authority 
     of the Commission under this paragraph to impose terms or 
     conditions on the transfer or assignment of any license or 
     other authority assigned or transferred in a merger or other 
     transaction subject to review by the Department of Justice or 
     the Federal Trade Commission is subject to section 314.''.
       (d) Alien-operated Amateur Radio Stations.--Section 310(d) 
     of the Communications Act of 1934 (47 U.S.C. 310(d)) is 
     amended by adding at the end thereof the following: ``The 
     authority of the Commission to impose terms or conditions on 
     the transfer or assignment of any authorization issued under 
     this section that is assigned or transferred in a merger or 
     other transaction subject to review by the Department of 
     Justice or the Federal Trade Commission is subject to section 
     314.''.
       (e) Preservation of Competition in Commerce.--Section 314 
     of the Communications Act of 1934 (47 U.S.C. 314) is amended 
     to read as follows:

     ``SEC. 314. PRESERVATION OF COMPETITION IN COMMERCE.

       ``(a) In General.--Notwithstanding any other provision of 
     law, the Commission has no authority to review a merger or 
     other transaction, or to impose any term or condition on the 
     assignment or transfer of any license or other authorization 
     issued under this Act that is proposed to be assigned or 
     transferred in the course of a merger or other transaction, 
     while that merger or other transaction is subject to review 
     by either the Department of Justice or the Federal Trade 
     Commission.
       ``(b) Communications Mergers Primarily Reviewable by DOJ 
     and FTC.--The Department of Justice, or the Federal Trade 
     Commission, has primary authority under existing law to 
     review mergers and other transactions involving the proposed 
     assignment or transfer of any license or other authorization 
     issued under this Act. The Commission may file comments in 
     any proceeding before the Department of Justice or the 
     Federal Trade Commission to review a merger or other 
     transaction involving the proposed assignment or transfer of 
     any license or other authorization issued under this Act if 
     those comments reflect the views of a majority of the 
     Commission.
       ``(c) Commission Shall Implement DOJ or FTC Decision 
     without Additional Terms or Conditions.--If--
       ``(1) the Department of Justice or the Federal Trade 
     Commission reviews a merger or other transaction involving 
     the proposed assignment or transfer of any license or other 
     authorization issued under this Act; and
       ``(2) it issues a written decision of absolute or 
     conditional approval of, or issues a written statement of 
     nonintervention in, the proposed merger or other transaction,

     then the Commission shall authorize the assignment or 
     transfer of any license or other authorization involved in 
     the merger or transaction in accordance with the decision, if 
     any, or as proposed, if a written statement of 
     nonintervention is issued. The Commission may not impose any 
     other term or condition on the assignment or transfer of the 
     license or other authorization so assigned or transferred, or 
     impose any other obligation on any party to that merger or 
     transaction.
       ``(d) Commission Review of Mergers Absent DOJ or FTC 
     Pronouncement.--
       ``(1) In general.--The Commission may not review any 
     application for assignment or transfer of a license or other 
     authorization issued under this Act in connection with a 
     merger or other transaction unless neither the Department of 
     Justice nor the Federal Trade Commission issues a decision or 
     statement described in subsection (c)(2) in connection with 
     that merger or other transaction.
       ``(2) 60-day turnaround.--The Commission shall conclude any 
     review of a merger or other transaction it may conduct under 
     paragraph (1) within 60 days after the date on which the 
     Department of Justice and the Federal Trade Commission, 
     whichever is appropriate, issues such a decision or 
     statement.
       ``(3) Presumption; default approval.--In reviewing an 
     application under paragraph (1), the Commission shall apply a 
     presumption in favor of unconditional approval of the 
     application. If the Commission fails to issue a final 
     decision within the 60-day period described in paragraph (2), 
     the application shall be deemed to have been granted 
     unconditionally by the Commission.''.
                                 ______
                                 
      By Ms. MIKULSKI (for herself, Mr. Kennedy, and Mr. Durbin):
  S. 1126. A bill to amend the Federal Food, Drug, and Costmetic Act to 
improve the safety of imported food, and for other purposes; to the 
Committee on Agriculture, Nutrition, and Forestry.


              Imported food safety improvement act of 1999

  Ms. MIKULSKI. Mr. President, I rise today to introduce the ``Imported 
Food Safety Act of 1999.'' I am proud to be the sponsor of this 
important legislation which guarantees the improved safety of imported 
foods.
  The health of Americans is not something to take chances with. It is 
important that we make food safety a top priority. Every person should 
have the confidence that their food is fit to eat. We should be 
confident that imported food is as safe as food produced in this 
country. Cars can't be imported unless they meet U.S. safety 
requirements. Prescription drugs can't be imported unless they meet FDA 
standards. You shouldn't be able to import food that isn't up to U.S. 
standards, either.
  We import increasing quantities of fresh fruits and vegetables, 
seafood, and many other foods. In the past seven years, the amount of 
food imported into the U.S. has more than doubled. Out of all the 
produce we eat, 40% of it is imported. Our food supply has gone global, 
so we need to have global food safety.
  The impact of unsafe food is staggering. There have been several 
frightening examples of food poisoning incidents in the U.S. When 
Michigan schoolchildren were contaminated with Hepatitis A from 
imported strawberries in 1997, Americans were put on alert. Thousands 
of cases of cyclospora infection from imported raspberries--resulting 
in severe, prolonged diarrhea, weight loss, vomiting, chills and 
fatigue were also reported that year. Imported cantaloupe eaten in 
Maryland sickened 25 people. As much as $663 million was spent on food 
borne illness in Maryland alone. Overall, as many as 33 million people 
per year become ill and over 9000 die as a result of food borne 
illness. It is our children and our seniors who suffer the most. Most 
of the food-related deaths occur in these two populations.
  These incidents have scared us and have jump-started the efforts to 
do more to protect our nation's food supply. Now, I believe in free 
trade, but I also believe in fair trade. FDA's current system of 
testing import samples at ports of entry does not protect Americans. It 
is ineffective and resource-intensive. Less than 2% of imported food is 
being inspected under the current system. At the same time, the 
quantity of the imported foods continues to increase.
  What this law does is simple: It improves food safety and aims at 
preventing food borne illness of all imported foods regulated by the 
FDA. This bill takes a long overdue, big first step.
  First, it requires that FDA make equivalence determinations on 
imported food. This was developed with the FDA by Senator Kennedy and 
myself in consultation with the consumer groups.
  Today, FDA has no authority to protect Americans against imported 
food that is unsafe until it is too late. Last year, the GAO found that 
FDA lacks the authority to require that food coming into the U.S. is 
produced, prepared, packed or held under conditions that provide the 
same level of food safety protection as those in the U.S. This means 
that currently, food offered for import to the U.S., can be imported 
under any conditions, even if those conditions are unsanitary. The 
Imported Food Safety Act of 1999, will allow FDA to look at the 
production at its source. This means that FDA will be able to take 
preventive measures. FDA will be able to be proactive, rather than just 
reactive.
  That means that when you pack your childrens' lunches for school or 
sit down at the dinner table, you can rest assured that your food will 
be safe. Whether your strawberries were grown in a foreign country or 
on the Eastern Shore, in Maryland, those strawberries will be held to 
the same standard. You won't have to worry or wonder where your food is 
coming from. You won't have to worry that your children or families are 
going to get sick. You will know that the food coming into this country 
will be subject to equivalent standards.
  Secondly, this bill contains strong enforcement measures. Last year, 
the

[[Page S6053]]

Permanent Subcommittee on Investigations, under the leadership of 
Senator Sue Collins, held numerous hearings on the safety of imported 
food. These enforcement measures are largely a product of those facts 
uncovered during those hearings. Senator Collins developed these 
enforcement provisions and introduced a bill which focuses on 
enforcement. I refer those with special interest in enforcement to also 
consider her bill.
  Finally, this bill covers emergency situations by allowing FDA to ban 
imported food that has been connected to outbreaks of food borne 
illness. When our children, parents and communities are getting 
seriously sick, the Secretary of Health and Human Services can 
immediately issue an emergency ban. We don't have to wait till someone 
else gets seriously sick or dies. We no longer have to go through the 
current bureaucratic mechanism that is inefficient and resource 
intensive. We can stop the food today, to protect our citizens.
  My goal is to strengthen the food supply, whatever the source of the 
food may be. This bill won't create trade barriers. It just calls for 
free trade of safe food. It calls for international concern and 
consensus on guaranteeing standards for public health.
  This bill is important because it will save lives and makes for a 
safer world. Everyone should have security in knowing that the food 
they eat is fit to eat. I'd like to thank FDA for their advice and 
consultation in developing this legislation. I also want to thank the 
Consumer Federation of America for their insight and recommendations.
  I look forward to working on a bipartisan basis to enact this 
legislation. I pledge my commitment to fight for ways to make America's 
food supply safer. This bill is an important step in that direction.
  Mr. President, I ask unanimous consent that the statement of Ms. 
Carol Tucker Foreman, Distinguished Fellow and Director of the Food 
Policy Institute, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Statement of Carol Tucker Foreman, Distinguished Fellow and Director of 
                       the Food Policy Institute

       I am here today on behalf of the Consumer Federation of 
     America and the National Consumers' League to endorse the 
     Imported Food Safety Act of 1999. I thank Senators Mikulski, 
     Kennedy and Durbin and Congresswoman Eshoo for introducing 
     this very important legislation.
       It will improve the Food and Drug Administration's capacity 
     to protect American consumers from food-borne illness caused 
     by adulterated imported food.
       Food-borne illness is a serious public health problem in 
     the U.S. Food poisoning kills 9,000 Americans each year and 
     causes as many as 33 million illnesses. It costs us at least 
     $5 billion each year in medical costs and time lost from 
     work. The human toll is incalculable.
       Americans eat from a global plate. We want a wide variety 
     of foods available on a year round basis. Health experts urge 
     us to eat more fruits and vegetables. Imports make fresh 
     fruits available to us even in the middle of February.
       But no one wants imported foods served with a side helping 
     of food poisoning. We want all our food, domestic and 
     imported, to be safe.
       We have not had that assurance. In recent years there have 
     been a number of incidents of food-borne illness arising from 
     imported food products. Last year, the Senate Permanent 
     Subcommittee on Investigations revealed serious problems with 
     the Food and Drug Administration's capacity to protect 
     Americans from unsafe food.
       The General Accounting Office reported that FDA can't 
     protect us because the agency has no authority to require 
     that foods coming into the United States be produced and 
     packaged under circumstances that provide the same level of 
     health protection required for domestic food producers and 
     processors.
       Most American consumers, and frankly most food producers 
     and processors as well, would be shocked to learn that 
     imported food is not required to be produced in a manner that 
     provides the same level of health protection as domestic 
     products and that FDA has no authority to check, in advance, 
     for adequate public health safeguards. FDA can act only after 
     the fact--after adulterated food has been found or someone 
     has gotten sick.
       The USDA inspects meat, poultry and egg products. GAO noted 
     that USDA has the necessary power to protect consumers. The 
     Department has the authority to require that meat and poultry 
     produced abroad and imported into the U.S. be produced in a 
     system that provides a level of health protection equivalent 
     to that imposed on U.S. producers. That level of protection 
     may include limits on bacteria that cause human illness. In 
     addition, USDA has federally sworn inspectors who examine the 
     foreign systems and check food at the docks.
       The Food and Drug Administration has jurisdiction over all 
     other food products, including the fresh fruits and 
     vegetables that are so susceptible to contamination. FDA has 
     no similar authority, no inspectors who visit foreign plants 
     and virtually no inspectors to check food at the docks. Last 
     year, FDA checked only two percent of the food imported into 
     the U.S. In fact, FDA has established only a limited number 
     of performance standards for domestically produced foods.
       That point bears repeating. If you eat meat and poultry 
     produced in another country and imported into the U.S., you 
     can do so knowing they were produced under circumstances at 
     least as clean and sanitary as meat, poultry and eggs 
     produced in the U.S. If you consume fresh fruits and 
     vegetables produced in another country, you have no such 
     assurance, even though you will cook your meat, poultry and 
     eggs but may well eat the fruits and vegetables raw, 
     increasing the chance that you will consume disease causing 
     bacteria.
       In a recent study, the Center for Science in the Public 
     Interest surveyed 225 food-borne illness outbreaks that 
     occurred between 1990 and 1998. Foods regulated by the FDA 
     caused over twice as many outbreaks as foods regulated by the 
     USDA. Fruits, vegetables and salads caused 48 outbreaks. 
     Seafood, both finfish and shellfish, caused 32 outbreaks.
       USDA's more rigorous system of inspection has certainly not 
     stopped foreign produced meat products from entering the 
     country. We import hundreds of millions of pounds of meat 
     each year from Australia, to Argentina and Denmark and a host 
     of other countries. Neither foreign nor domestic producers 
     have suffered any loss of trade.
       The Imported Food Safety Act sets up a system for the 
     Secretary of Health and Human Services to use in establishing 
     equivalency; gives FDA more authority to visit other 
     countries; provides important enforcement authority and 
     controls over imported foods; prohibits port shopping and 
     increases penalties for importing contaminated foods and 
     authorizes new funding for FDA to carry out these functions.
       Americans do care about food safety. The Food Marketing 
     Institute, the nation's super market trade association, 
     recently released its annual survey of trends among super 
     market shoppers. Ninety percent of those surveyed said food 
     safety was very important or somewhat important to them in 
     making food selections. The Imported Food Safety Act will 
     increase assurance among consumers that the food supply is 
     safe.
       The Imported Food Safety Act is an important part of a 
     package of food safety legislation which Congress should 
     address this year. Other parts of the package include 
     legislation to promote the use of specific microbial 
     standards for both domestic and foreign produce, introduced 
     by Senator Harkin; require registration of importers, 
     introduced by Senator Dorgan. Congress should act now before 
     confidence is diminished.

  Mr. KENNEDY. Mr. President, it is a privilege to be a sponsor of this 
important bill, and I commend Senator Mikulski for her leadership on 
this legislation to close the critical gaps in our imported food safety 
laws.
  Citizens deserve to know that the food they eat is safe and 
wholesome, regardless of its source. The United States has one of the 
safest food supplies in the world. Yet every year, millions of 
Americans become sick, and thousands die, from eating contaminated 
food. Billions of dollars a year in medical costs and lost productivity 
are caused by food-borne illnesses. Often, the source of the problem is 
imported food.
  We've heard recently about the thousands of cases of illness from 
Cyclospora in raspberries from Guatemala. But this high profile case is 
by no means the only case.
  In 1997, school children in five states contracted Hepatitis A from 
frozen strawberries served in the school cafeterias. Fecal 
contamination is a potential source of Hepatitis A, and the 
strawberries the children ate came from a farm in Mexico where workers 
had little access to sanitary facilities.
  Earlier this year, cases of typhoid fever in Florida were linked to a 
frozen tropical fruit product from Guatemala. Again, poor sanitary 
conditions appear to be at the root of the problem.
  Gastrointestinal illness has been linked to soft cheeses from Europe. 
Bacterial food poisoning has been attributed to canned mushrooms from 
the Far East.
  The emergence of highly virulent strains of bacteria, and an increase 
in the number of organisms that are resistant to antibiotics, make 
microbial contamination of food a major public health challenge.
  Ensuring the safety of imported food is a huge task. Americans now 
enjoy a wide variety of foods from around the world and have access to 
fresh fruits

[[Page S6054]]

and vegetables year round. In 1997, the Food Safety Inspection Service 
of the Department of Agriculture handled 118,000 entries of imported 
meat and poultry. The FDA handled far more-- 2.7 million entries of 
other imported food. Current FDA procedures and resources allowed for 
less than two percent of those 2.7 million imports to be physically 
inspected. Clearly, we need to do better.
  The authority of the FDA is not sufficient to prevent contaminated 
food imports from reaching our shores. The Agency has no legal 
authority to require that food imported into the United States is 
prepared, packed and stored under conditions that provide the same 
level of public health protection as similar food produced in the U.S. 
Under current procedures, the FDA takes random samples of imports as 
they arrive at the border. The imports often continue on their way to 
stores in all parts of the country while testing is being done, and it 
is often difficult to recall the food if a problem is found. 
Unscrupulous importers make the most of the loopholes in the law, 
including substituting cargo, falsifying laboratory results, and 
attempting to bring a refused shipment in again, at a later date or at 
a different port.
  The legislation we are introducing today will give the Secretary of 
Health and Human Services the additional authority needed to assure 
that food imports are as safe as food grown and prepared in this 
country.
  It will give the FDA greater authority to deal with outbreaks of 
food-borne illness and to bar further imports of dangerous foods until 
improvements at the source can guarantee the safety of future 
shipments. This authority covers foods that have repeatedly been 
associated with food-borne disease, have repeatedly been found to be 
adulterated, or have been linked to a catastrophic outbreak of food-
borne illness.
  It will close loopholes in the law and give the FDA better tools to 
deal with unscrupulous importers.
  It will authorize the Centers for Disease Control and Prevention to 
target resources toward enhanced surveillance and prevention activities 
to deal with food-borne illnesses, including new diagnostic tests, 
better training of health professionals, and increased public awareness 
about food safety.
  Too many citizens today are at unnecessary risk of food-borne 
illness. The measure we are proposing is designed to reduce that risk 
as much as possible, both immediately and for the long term. We know 
that there are powerful special interests that put profits ahead of 
safety, but Americans need and deserve laws that better protect their 
food supply. This is essential legislation, and I look forward to 
working with my colleagues to see that it is enacted as soon as 
possible.
                                 ______
                                 
      By Mr. KYL (for himself, Mr. Kerrey, Mr. Nickles, Mr. Breaux, Mr. 
        Mack, Mr. Robb, and Mr. Gramm):
  S. 1128. A bill to amend the Internal Revenue Code of 1986 to repeal 
the Federal estate and gift taxes and the tax on generation-skipping 
transfers, to provide for a carryover basis at death, and to establish 
a partial capital gains exclusion for inherited assets; to the 
Committee on Finance.


                   estate tax elimination act of 1999

  Mr. KYL. Mr. President, I rise today with my colleagues, Senators Bob 
Kerrey, Don Nickles, John Breaux, sConnie Mack, Chuck Robb, and Phil 
Gramm to introduce a bill that attempts to forge bipartisan consensus 
with regard to the future of the federal estate tax. The legislation we 
are offering today is titled the Estate Tax Elimination Act of 1999.

  Mr. President, we know that many Americans are troubled by the estate 
tax's complexity and high rates, and by the mere fact that it is 
triggered by a person's death rather than the realization of income. 
For a long time, I have advocated its repeal, because I believe death 
should not be a taxable event.
  Other people agree that the tax is problematic, but are concerned the 
appreciated value of certain assets might escape taxation forever if 
the estate tax is repealed while the step-up in basis allowed under 
Section 1014 of the Internal Revenue Code remains in effect.
  The legislation we are introducing today attempts to reconcile these 
positions by eliminating both the estate tax and the step-up, and 
attributing a carryover basis to inherited property so that all gains 
are taxed at the time the property is sold and income is realized. This 
is an explicit trade-off: estate-tax repeal for implementation of a 
carryover basis. Both must occur, or this plan will not work.
  The concept of a carryover basis is not new. It exists in current law 
with respect to gifts, Section 1015 of the Internal Revenue Code, and 
property transferred in cases of divorce, Section 1041, and in 
connection with involuntary conversions of property relating to theft, 
destruction, seizure, requisition, or condemnation.
  In the latter case, when an owner receives compensation for 
involuntarily converted property, a taxable gain normally results to 
the extent that the value of the compensation exceeds the basis of the 
converted property. However, Section 1033 of the Internal Revenue Code 
allows the taxpayer to defer the recognition of the gain until the 
property is sold. The Kyl-Kerrey bill would treat the transfer of 
property at death--perhaps the most involuntary conversion of all--the 
same way, deferring recognition of any gain until the inherited 
property is sold.
  Our bill would also establish a limited capital-gains exclusion for 
inherited property to ensure that small estates, which are currently 
exempt from tax by virtue of the unified credit and the step-up in 
basis, do not find themselves with a new tax liability when the 
proposed law takes effect.
  Mr. President, I have asked the Joint Tax Committee to review the 
proposal and provide an official revenue estimate. We are awaiting the 
results of that review now.
  I hope the members of the Finance Committee will take a serious and 
careful look at this bipartisan proposal. With it, we ought to be able 
to finally eliminate the estate tax--and do it this year.
  Mr. President, I ask unanimous consent that a section-by-section 
analysis of the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   S. __, the Estate Tax Elimination Act Section-by-Section Analysis

     Section 1. Short title
       Designates the bill, the ``Estate Tax Elimination Act of 
     1999.''
     Section 2. Repeal of certain Federal transfer taxes
       Repeals Subtitle B of the Internal Revenue Code (IRC), thus 
     eliminating the federal estate, gift, and generation-skipping 
     transfer taxes as of the date of enactment.
     Section 3. Termination of a step-up in basis at death
       Amends IRC Section 1014 to eliminate the step-up in basis 
     at death with respect to property acquired from a decedent 
     dying after the date of enactment. The basis for such 
     property is to be determined pursuant a new IRC Section 1022 
     (section 4 of the bill).
     Section 4. Carryover basis at death
       Establishes a new IRC Section 1022 to provide for carryover 
     basis for certain property acquired from a decedent.
       (a) If property is classified as carryover basis property, 
     its new basis in the hands of the acquiring person will be 
     its initial basis, increased by its allowable share of the 
     decedent's exclusion allowance determined under (c) below.
       (b) Carryover basis property means property which has been 
     acquired from a decedent who died after the date of 
     enactment, and which is not any of the following:

       (1) Property acquired from the decedent and sold, 
     exchanged, or otherwise disposed of by the acquiring person 
     before the decedent's death;
       (2) An item of income in respect of a decedent;
       (3) Life-insurance proceeds under IRC Section 2042;
       (4) Foreign personal holding company stock as described in 
     IRC Section 1014(b)(5); or
       (5) Property transferred to a surviving spouse, the value 
     of which would have been deductible from the value of the 
     taxable estate of the decedent under IRC Section 2056.
       (6) Tangible personal property (e.g., household effects) 
     valued at $50,000 or less which was a capital asset in the 
     hands of the decedent and for which the executor has made an 
     election on a required information return.
       (c) The decedent's general exclusion allowance is equal to 
     the lesser of:
       (1) an applicable amount for the year of the decedent's 
     death as follows:
         $650,000 in 1999
         $675,000 in 2000 and 2001
         $700,000 in 2002 and 2003
         $850,000 in 2004
         $950,000 in 2005
         $1 million in 2006 and thereafter.
     or the aggregate net appreciation (fair market value, less 
     initial basis) of all carryover basis property.

[[Page S6055]]

       Except that, if the decedent had a deceased spouse whose 
     own exclusion allowance was less than the applicable amount 
     for that spouse, the decedent's applicable amount will be 
     increased by the unallocated portion of the deceased spouse's 
     applicable amount.
       (2) As per current law, family-owned businesses and farms 
     would be eligible for an additional exclusion, which combined 
     with the general exclusion allowance could total up to $1.3 
     million.
       (3) The executor will allocate the exclusion-allowance 
     amount to the carryover basis property on a required 
     information return. Any allocation may be changed at any time 
     up to the 30th day after the initial-basis finality date, 
     which means the last day on which the initial basis of 
     property may be changed in an administrative or judicial 
     proceeding under new IRC Section 7480. The basis adjustment 
     for any property shall not exceed the net appreciation in 
     such property and may not increase the basis of such property 
     above its fair market value.
       In the case of any carryover basis property which was a 
     personal or household effect, the basis of such property in 
     the hands of the acquiring person shall not exceed its fair 
     market value for purposes of determining loss.
       A nonresident, not a citizen of the United States, is 
     ineligible for a basis adjustment based upon a decedent's 
     exclusion allowance.
       (d) Establishes a new IRC Section 7480 to provide 
     procedures for receiving a binding determination of the 
     initial basis of carryover basis property.
       (e) Establishes a new IRC Section 6039H to require an 
     executor to file an information return providing all of the 
     necessary information with respect to carryover basis 
     property. An executor is required to furnish, in writing, the 
     adjusted basis of such item to each person acquiring an item 
     or carryover basis property from a decedent.
                                 ______
                                 
      By Mr. DOMENICI:
  S. 1129. A bill to facilitate the acquisition of inholdings in 
Federal land management units and the disposal of surplus public land, 
and for other purposes; to the Committee on Energy and Natural 
Resources.


               federal land transaction facilitation act

  Mr. DOMENICI. Mr. President, today I introduce the Federal Land 
Transaction Facilitation Act, which addresses longstanding problems 
encountered by Federal land managers first, in disposing of surplus 
federal property, and secondly, in acquiring private inholdings within 
federally designated areas. This legislation builds on existing laws 
and provides resources dedicated to the consolidation of federal agency 
land holdings.
  I first introduced this bill prior to the end of the 105th Congress, 
as Title II to the Valles Caldera Preservation Act. This portion of 
that legislation was independent of the proposed acquisition of land in 
New Mexico, and perhaps more important. Again this year, Congress will 
commit large sums of federal taxpayer dollars to purchase new property. 
Before we do, however, it seems prudent to provide a framework for the 
orderly disposal of unneeded federal property that also commits 
resources to meet our current obligations to those who hold land 
surrounded by federal property.
  Currently, one-third of the land area in New Mexico is owned by the 
Federal government. On average, across the eleven Western States, the 
Federal government owns approximately one half of the land. I agree 
that this public land is an important natural resource that requires 
our most thoughtful consideration in the way it is managed and used by 
the public.
  To best conserve our existing national treasures for future use and 
enjoyment, we must devise, with the concurrence of other members of 
Congress and the President, a definite plan and timetable to dispose of 
surplus land through sale or exchange into private, or State and local 
government ownership.
  The Federal Land Transaction Facilitation Act provides for the 
orderly disposition of unneeded Federal property on a state by state 
basis. It also addresses the problem of what are known as 
``inholdings'' within federally managed areas. These interrelated 
problems give rise to an interrelated solution proposed in this 
legislation.
  There are currently more than 45 million acres of privately owned 
land trapped within the boundaries of Federal land management units, 
including national parks, national forests, national monuments, 
national wildlife refuges, and wilderness areas. In many cases, the 
location of these tracts, referred to as inholdings, makes the exercise 
of private property rights difficult for the land owner. In addition, 
management of the public land is made more cumbersome for the Federal 
managers.
  There are also cases where inholders have been waiting generations 
for the federal government to set aside funding and prioritize the 
acquisition of their property. With rapidly growing public demand for 
the use of public land, it is increasingly difficult for federal 
managers to address problems created by inholdings in many areas.
  This legislation directs the Department of the Interior to identify 
inholdings existing within Federal land management units that 
landowners that have indicated a desire to sell to the Federal 
government. Inholdings will only be considered for acquisition by the 
Secretary of Interior if, after public notice, landowners indicate 
their willingness to sell. The Secretary will then establish a priority 
for their acquisition considering, among other factors, those which 
have existed as inholdings for the longest time.
  Additionally, this legislation authorizes the use of the proceeds 
generated from sale of land no longer needed by the Bureau of Land 
Management (BLM) to purchase these inholdings from willing sellers. 
This will enhance the ability of the Federal land management agencies 
to work cooperatively with private land owners, and with State and 
local governments, to consolidate the ownership of public and private 
land in a manner that would allow for better overall resource 
management.
  There is an abundance of public domain land that the BLM has 
determined it no longer needs to fulfil its mission. Under the Federal 
Land Policy and Management Act of 1976 (FLPMA), the BLM has identified 
an estimated four to six million acres of public domain land for 
disposal, with public input and consultation with State and local 
governments as required by law.
  Let me state this very clearly--the BLM already has authority under 
an existing law, FLPMA, to exchange or sell land out of Federal 
ownership. Through its public process for land use planning, when the 
agency has determined that certain land would be more useful to the 
public under private or local governmental control, it is already 
authorized to dispose of this land, either by sale or exchange. This 
legislation maintains every aspect of existing law. It also provides an 
orderly process, and sufficient resources, for the BLM to exercise it.
  The sale or exchange of land which I have often referred to as 
``surplus,'' would be beneficial to local communities, adjoining land 
owners, and BLM land mangers, alike. First, it would allow for the 
reconfiguration of land ownership patterns to better facilitate 
resource management. Second, it would contribute to administrative 
efficiency within federal land management units, by allowing for better 
allocation of fiscal and human resources within the agency. Finally, in 
certain locations, the sale of public land which has been identified 
for disposal is the best way for the public to realize a fair value for 
this land.
  The problem is that an orderly process for the efficient disposition 
of lands identified for disposal does not currently exist. This 
legislation corrects that problem by directing the BLM to fulfil all 
legal requirements for the transfer of land out of Federal ownership, 
and providing a dedicated source of funding generated from the sale of 
this land to continue this process.
  I want to make it clear that this program will in no way detract from 
other programs with similar purposes. The bill clearly states that 
proceeds generated from the disposal of public land, and dedicated to 
the acquisition of inholdings, will supplement, and not replace, funds 
appropriated for that purpose through the Land and Water Conservation 
Fund. In addition, the bill states that the BLM should rely on non-
Federal entities to conduct appraisals and other research required for 
the sale or exchange of this land, allowing for the least disruption of 
existing land and resource management programs.
  This bill has been a long time in the making. For over a year, now, I 
have been working with and talking to knowledgeable people, both inside 
and outside of the current administration, to develop many of the ideas 
embodied in this bill. Prior to adjournment of the 105th Congress, my 
staff and I worked closely with the administration on this legislation. 
I have since received additional comments from the

[[Page S6056]]

Interior Department, and have included many of their suggestions into 
this bill.
  I feel comfortable in stating that by working together, we have 
reached agreement in principle on the best way to proceed with these 
very important issues involving the management of public land 
resources, namely, the disposition of surplus public land in 
combination with a program to address problems associated with 
inholdings within our Federal land management units.
  I look forward to hearings on this matter, and anticipate that most 
of my fellow Senators will agree that Federal Land Transaction 
Facilitation Act logically addresses this management issue. I believe 
that in the end, we will be able to stand together and tell the 
American people that we truly have accomplished a great and innovative 
thing with this legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1129

       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 ``Federal Land Transaction 
     Facilitation Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the Bureau of Land Management has authority under the 
     Federal Land Policy and Management Act of 1976 (43 U.S.C. 
     1701 et seq.) to sell land identified for disposal under its 
     land use planning;
       (2) the Bureau of Land Management has authority under that 
     Act to exchange Federal land for non-Federal land if the 
     exchange would be in the public interest;
       (3) through land use planning under that Act, the Bureau of 
     Land Management has identified certain tracts of public land 
     for disposal;
       (4) the land management agencies of the Department of the 
     Interior have authority under existing law to acquire land 
     consistent with land use plans and the mission of each 
     agency;
       (5) the sale or exchange of land identified for disposal 
     and the acquisition of certain non-Federal land from willing 
     landowners would--
       (A) allow for the reconfiguration of land ownership 
     patterns to better facilitate resource management;
       (B) contribute to administrative efficiency within Federal 
     land management units; and
       (C) allow for increased effectiveness of the allocation of 
     fiscal and human resources within the Federal land management 
     agencies;
       (6) a more expeditious process for disposal and acquisition 
     of land, established to facilitate a more effective 
     configuration of land ownership patterns, would benefit the 
     public interest;
       (7) many private individuals own land within the boundaries 
     of Federal land management units and desire to sell the land 
     to the Federal Government;
       (8) such land lies within national parks, national 
     monuments, national wildlife refuges, and other areas 
     designated for special management;
       (9) Federal land management agencies are facing increased 
     workloads from rapidly growing public demand for the use of 
     public land, making it difficult for Federal managers to 
     address problems created by the existence of inholdings in 
     many areas;
       (10) in many cases, inholders and the Federal Government 
     would mutually benefit from Federal acquisition of the land 
     on a priority basis;
       (11) proceeds generated from the disposal of public land 
     may be properly dedicated to the acquisition of inholdings 
     and other land that will improve the resource management 
     ability of the Bureau of Land Management and adjoining 
     landowners;
       (12) using proceeds generated from the disposal of public 
     land to purchase inholdings and other such land from willing 
     sellers would enhance the ability of the Federal land 
     management agencies to--
       (A) work cooperatively with private landowners and State 
     and local governments; and
       (B) promote consolidation of the ownership of public and 
     private land in a manner that would allow for better overall 
     resource management;
       (13) in certain locations, the sale of public land that has 
     been identified for disposal is the best way for the public 
     to receive fair market value for the land; and
       (14) to allow for the least disruption of existing land and 
     resource management programs, the Bureau of Land Management 
     may use non-Federal entities to prepare appraisal documents 
     for agency review and approval consistent with applicable 
     provisions of the Uniform Standards for Federal Land 
     Acquisition.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Exceptional resource.--The term ``exceptional 
     resource'' means a resource of scientific, historic, 
     cultural, or recreational value that has been documented by a 
     Federal, State, or local governmental authority, and for 
     which extraordinary conservation and protection is required 
     to maintain the resource for the benefit of the public.
       (2) Federally designated area.--The term ``Federally 
     designated area'' means land administered by the Secretary in 
     Alaska and the eleven contiguous Western States (as defined 
     in section 103 of the Federal Land Policy and Management Act 
     of 1976 (43 U.S.C. 1702)) that on the date of enactment of 
     this Act was within the boundary of--
       (A) a national monument, area of critical environmental 
     concern, national conservation area, national riparian 
     conservation area, national recreation area, national scenic 
     area, research natural area, national outstanding natural 
     area, or a national natural landmark managed by the Bureau of 
     Land Management;
       (B) a unit of the National Park System;
       (C) a unit of the National Wildlife Refuge System; or
       (D) a wilderness area designated under the Wilderness Act 
     (16 U.S.C. 1131 et seq.), the Wild and Scenic Rivers Act (16 
     U.S.C. 1271 et seq.), or the National Trails System Act (16 
     U.S.C. 1241 et seq.).
       (3) Inholding.--The term ``inholding'' means any right, 
     title, or interest, held by a non-Federal entity, in or to a 
     tract of land that lies within the boundary of a federally 
     designated area.
       (4) Public land.--The term ``public land'' means public 
     lands (as defined in section 103 of the Federal Land Policy 
     and Management Act of 1976 (43 U.S.C. 1702)).
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.

     SEC. 4. IDENTIFICATION OF INHOLDINGS.

       (a) In General.--The Secretary shall establish a procedure 
     to--
       (1) identify, by State, inholdings within federally 
     designated areas for which the landowner has indicated a 
     desire to sell the land or an interest in land to the Federal 
     Government; and
       (2) establish the date on which the land or interest in 
     land identified became an inholding.
       (b) Notice of Policy.--The Secretary shall provide, in the 
     Federal Register and through such other means as the 
     Secretary may determine to be appropriate, periodic notice to 
     the public of the policy under subsection (a), including any 
     information required by the Secretary to consider an 
     inholding for acquisition under section 6.
       (c) Identification.--An inholding--
       (1) shall be considered for identification under this 
     section only if the Secretary receives notification of a 
     desire to sell from the landowner in response to public 
     notice given under subsection (b); and
       (2) shall be deemed to have been established as of the 
     later of--
       (A) the earlier of--
       (i) the date on which the land was withdrawn from the 
     public domain; or
       (ii) the date on which the land was established or 
     designated for special management; or
       (B) the date on which the inholding was acquired by the 
     current owner.
       (d) Application to the Secretary of Agriculture.--If funds 
     become available under section 6(c)(2)(E)--
       (1) this section shall apply to the Secretary of 
     Agriculture; and
       (2) private land within an area described in that section 
     shall be deemed to be an inholding for the purposes of this 
     Act.
       (e) No Obligation To Convey or Acquire.--The identification 
     of an inholding under this section creates no obligation on 
     the part of a landowner to convey the inholding or any 
     obligation on the part of the United States to acquire the 
     inholding.

     SEC. 5. DISPOSAL OF PUBLIC LAND.

       (a) In General.--The Secretary shall establish a program, 
     using funds made available under section 6, to complete 
     appraisals and satisfy other legal requirements for the sale 
     or exchange of public land identified for disposal under 
     approved land use plans (as in effect on the date of 
     enactment of this Act) under section 202 of the Federal Land 
     Policy and Management Act of 1976 (43 U.S.C. 1712).
       (b) Sale of Public Land.--
       (1) In general.--The sale of public land so identified 
     shall be conducted in accordance with sections 203 and 209 of 
     the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
     1713, 1719).
       (2) Exceptions to competitive bidding requirements.--The 
     exceptions to competitive bidding requirements under section 
     203(f) of the Federal Land Policy and Management Act of 1976 
     (43 U.S.C. 1713(f)) shall apply to this section in cases in 
     which the Secretary determines it to be necessary.
       (c) Report in Public Land Statistics.--The Secretary shall 
     provide in the annual publication of Public Land Statistics, 
     a report of activities under this section.
       (d) Termination of Authority.--The authority provided under 
     this section shall terminate 10 years after the date of 
     enactment of this Act.

     SEC. 6. FEDERAL LAND DISPOSAL ACCOUNT.

       (a) Deposit of Proceeds.--Notwithstanding any other law 
     (except a law that specifically provides for a proportion of 
     the proceeds to be distributed to any trust funds of any 
     States), the gross proceeds of the sale or exchange of public 
     land under this Act shall be deposited in a separate account 
     in the Treasury of the United States to be known as the 
     ``Federal Land Disposal Account''.

[[Page S6057]]

       (b) Availability.--Amounts in the Federal Land Disposal 
     Account shall be available to the Secretary, without further 
     Act of appropriation, to carry out this Act.
       (c) Use of the Federal Land Disposal Account.--
       (1) In general.--Funds in the Federal Land Disposal Account 
     shall be expended in accordance with this subsection.
       (2) Fund allocation.--
       (A) Purchase of land.--Except as authorized under 
     subparagraph (C), funds shall be used to purchase--
       (i) inholdings; and
       (ii) land adjacent to federally designated areas that 
     contains exceptional resources.
       (B) Inholdings.--Not less than 80 percent of the funds 
     allocated for the purchase of land within each State shall be 
     used to acquire--
       (i) inholdings identified under section 4; and
       (ii) National Forest System land as authorized under 
     subparagraph (E).
       (C) Administrative and other expenses.--An amount not to 
     exceed 20 percent of the funds in the Federal Land Disposal 
     Account shall be used for administrative and other expenses 
     necessary to carry out the land disposal program under 
     section 5.
       (D) Same state purchases.--Of the amounts not used under 
     subparagraph (C), not less than 80 percent shall be expended 
     within the State in which the funds were generated. Any 
     remaining funds may be expended in any other State.
       (E) Purchase of national forest system land.--Beginning 5 
     years after the date of enactment of this Act, if, for any 
     fiscal year, the Secretary determines that funds allocated 
     for the acquisition of inholdings under this section exceed 
     the availability of inholdings within a State, the Secretary 
     may use the excess funds to purchase land, on behalf of the 
     Secretary of Agriculture, within the boundaries of a national 
     recreation area, national scenic area, national monument, 
     national volcanic area, or any other area designated for 
     special management by an Act of Congress within the National 
     Forest System.
       (3) Priority.--The Secretary may develop and use criteria 
     for priority of acquisition that are based on--
       (A) the date on which land or interest in land became an 
     inholding;
       (B) the existence of exceptional resources on the land; and
       (C) management efficiency.
       (4) Basis of sale.--Any acquisition of land under this 
     section shall be--
       (A) from a willing seller;
       (B) contingent on the conveyance of title acceptable to the 
     Secretary (and the Secretary of Agriculture, in the case of 
     an acquisition of National Forest System land) using title 
     standards of the Attorney General; and
       (C) at not less than fair market value consistent with 
     applicable provisions of the Uniform Appraisal Standards for 
     Federal Land Acquisitions.
       (d) Contaminated Sites and Sites Difficult and Uneconomic 
     to Manage.--Funds in the Federal Land Disposal Account shall 
     not be used to purchase land or an interest in land that, as 
     determined by the Secretary--
       (1) contains a hazardous substances or is otherwise 
     contaminated; or
       (2) because of the location or other characteristics of the 
     land, would be difficult or uneconomic to manage as Federal 
     land.
       (e) Investment.--Amounts in the Federal Land Disposal 
     Account shall earn interest at a rate determined by the 
     Secretary of the Treasury based on the current average market 
     yield on outstanding marketable obligations of the United 
     States of comparable maturities.
       (f) Land and Water Conservation Fund Act.--Funds made 
     available under this section shall be supplemental to any 
     funds appropriated under the Land and Water Conservation Fund 
     Act (16 U.S.C. 460l-4 et seq.).
       (g) Termination.--On termination of activities under 
     section 5--
       (1) the Federal Land Disposal Account shall be terminated; 
     and
       (2) any remaining balance in the account shall become 
     available for appropriation under section 3 of the Land and 
     Water Conservation Fund Act (16 U.S.C.460l-6).

     SEC. 7. SPECIAL PROVISIONS.

       (a) In General.--Nothing in this Act provides an exemption 
     from any limitation on the acquisition of land or interest in 
     land under any Federal Law in effect on the date of enactment 
     of this Act.
       (b) Other Law.--This Act shall not apply to land eligible 
     for sale under--
       (1) Public Law 96-568 (commonly known as the ``Santini-
     Burton Act'') (94 Stat. 3381); or
       (2) the Southern Nevada Public Land Management Act of 1998 
     (112 Stat. 2343).
       (c) Exchanges.--Nothing in this Act precludes, preempts, or 
     limits the authority to exchange land under--
       (1) the Federal Land Policy and Management Act of 1976 (43 
     U.S.C. 1701 et seq.); or
       (2) the Federal Land Exchange Facilitation Act of 1988 (102 
     Stat. 1086) or the amendments made by that Act.
       (d) No New Right or Benefit.--Nothing in this Act creates a 
     right or benefit, substantive or procedural, enforceable at 
     law or in equity by a party against the United States, its 
     agencies, its officers, or any other person.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Ashcroft, Mr. Bond, Mr. Burns, 
        Mr. Gorton, and Mr. Inhofe):
  S. 1130. A bill to amend title 49, United States Code, with respect 
to liability of motor vehicle rental or leasing companies for the 
negligent operation of rented or leased motor vehicles; to the 
Committee on Commerce, Science, and Transportation.


               motor vehicle rental fairness act of 1999

  Mr. McCAIN. Mr. President, I rise to introduce the Motor Vehicle 
Rental Fairness Act of 1999. The measure is short, simple and 
important. It will assure that companies who rent or lease motor 
vehicles are not held liable for accidents caused by their customers 
when there is no way the companies could prevent these accidents.
  Normally under our system of jurisprudence, defendants in lawsuits 
are held liable based upon their action or inaction. Unfortunately, a 
small number of states ignore this general principle. This minority of 
states subject rental and leasing companies to unlimited liability for 
accidents caused by their customers that involve the company's 
vehicles--despite the fact that the company was not at fault. This type 
of vicarious liability, liability without fault, holds these companies 
liable even when they have not been negligent in any way and the 
vehicle operated perfectly.
  The measure I am introducing prevents states from holding companies 
liable for accidents based solely upon their ownership of the vehicles. 
The bill makes clear that rental companies would still be liable if the 
vehicle did not operate properly. It makes clear that companies are not 
excused from meeting state minimum insurance requirements on their 
motor vehicles. Minimum insurance requirements ensure that people 
involved in accidents with vehicles owned by rental companies have 
recourse to recover some damages.
  The reason most often cited for imposing vicarious liability is to 
ensure that an innocent third party can recover damages in an accident. 
Unfortunately, this quest for a financially responsible defendant has 
lead to absurd results. If a vehicle is purchased from a bank or 
finance company, then there is no vicarious liability. However, if that 
same vehicle is leased, vicarious liability applies.
  This problem attracted my attention because of the impact the 
policies of a small number of states have on interstate commerce. 
Settlements and judgments from vicarious liability claims against 
rental companies cost the industry over $100 million annually. And let 
me be clear, it is the consumer who is paying this cost.
  For these reasons, this bill and the reforms it implements are long 
overdue. Everyone, companies and individuals alike should be held 
liable only for harm they caused or could have prevented. The only way 
these companies can prevent this harm would be to go out of business. 
This is an absurd expectation that will be remedied by this bill.
  I look forward to hearings on this matter and working with my 
colleagues to ensure its passage. I ask unanimous consent that a copy 
of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1130

       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 ``Motor Vehicle Rental 
     Fairness Act of 1999''.

     SEC. 2. FINDING.

       The Congress finds that the vicarious liability laws, the 
     ultimate insurer laws, and the common law in a small minority 
     of States--
       (1) impose a disproportionate and undue burden on 
     interstate commerce by increasing rental rates for motor 
     vehicle rental and leasing customers throughout the United 
     States; and
       (2) pose a significant competitive barrier to entry for 
     smaller motor vehicle rental and leasing companies attempting 
     to compete in these markets,

     in contravention of a fundamental principle of fairness that 
     there should be no liability in the absence of fault.

     SEC. 3. LIMITATION ON LIABILITY.

       (a) In General.--Part C of subtitle VI of title 49, United 
     States Code, is amended by adding at the end thereof the 
     following:

[[Page S6058]]

    ``CHAPTER 333. LIABILITY FOR COMPANIES THAT RENT OR LEASE MOTOR 
                               VEHICLES.

``Sec.
``33301. Limitation of liability

     ``Sec.  33301. Limitation of liability

       ``(a) In General.--Notwithstanding any State statutory or 
     common law, no State or political subdivision of a State may 
     hold any business entity engaged in the trade or business of 
     renting or leasing motor vehicles liable to others for harm 
     caused by a person to himself or herself, to another person, 
     or to property resulting from that person's operation of a 
     rented or leased motor vehicle solely because that business 
     entity is the owner of the motor vehicle.
       ``(b) Application with Certain Other Laws.--
       ``(1) Negligence.--Subsection (a) does not apply to 
     liability imposed under a State's statutory or common law 
     based on negligence of a motor vehicle owner.
       ``(2) Financial responsibility laws.--Nothing in this 
     section supersedes the law of any State or political 
     subdivision thereof--
       ``(A) imposing financial responsibility or insurance 
     standards on the owner of a motor vehicle for the privilege 
     of registering and operating a motor vehicle; or
       ``(B) imposing liability on business entities engaged in 
     the trade or business of renting or leasing motor vehicles 
     for failure of such entity to meet financial responsibility 
     or liability insurance requirements under State law.
       ``(c) Definitions.--In this section:
       ``(1) Business entity.--The term `business entity' means a 
     sole proprietorship, corporation, trust, limited liability 
     company, company, association, firm, partnership, society, 
     joint stock company, or other legal entity, and includes a 
     department, agency, or instrumentality of the government of 
     the United States, a State, or a political subdivision of a 
     State.
       ``(2) Motor vehicle.--The term `motor vehicle' has the 
     meaning given that term by section 13102(14).
       ``(3) Owner.--In this section, the term ``owner'' means--
       ``(A) a person who is a record or beneficial owner or long-
     term lessee of a motor vehicle;
       ``(B) a person entitled to the use and possession of a 
     motor vehicle subject to a security interest in another 
     person;
       ``(C) a lessee or bailee of a motor vehicle in the trade or 
     business of renting or leasing motor vehicles, having the use 
     or possession thereof, under a lease, bailment, or otherwise.
       ``(4) Person.--The term `person' has the meaning given to 
     it by section 1 of title 1, but also includes a government 
     entity.
       ``(5) Government entity.--The term `government entity' 
     means an agency, instrumentality, or other entity of Federal, 
     State, or local government (including multijurisdictional 
     agencies, instrumentalities, and entities).''.
       (b) Conforming Amendment.--The analysis for part C of 
     subtitle VII of title 49, United States Code, is amended by 
     inserting after the item relating to chapter 331, the 
     following:

``333. Liability for companies that rent or lease motor veh33301''.....

     SEC. 4. EFFECTIVE DATE.

       Section 33301 of title 49, United States Code, as added by 
     section 3 of this Act, applies to any civil action commenced 
     on or after the date of enactment of this Act.

 Mr. ASHCROFT. Mr. President, I rise today in support of the 
legislation being introduced by the distinguished Chairman of the 
Senate Commerce Committee--the senior Senator from Arizona. I strongly 
support the reforms to state vicarious liability laws contained in the 
``Motor Vehicle Rental Fairness Act of 1999'' and urge my colleagues to 
support this important bill and move it swiftly towards enactment.
  I commend the chairman for taking the lead on this important 
legislation. His bill, of which I am proud to be an original co-
sponsor, seeks to put a halt to an absurd aberration in our legal 
system. Under the vicarious liability laws of a very small number of 
states, companies that rent or lease motor vehicles are held strictly 
liable if their renters or lessees are negligent and cause an accident. 
The company does not have to be negligent in any way. The vehicle may 
operate perfectly and be maintained properly. These states simply hold 
the company liable because of their ownership of the vehicle.
  The only way for these companies to avoid this liability would be to 
stop renting or leasing these vehicles. This is not an acceptable 
resolution to this problem. The American justice system should be based 
on the general principle that a defendant should be held liable only 
for harm he or she could prevent--not merely because the defendant has 
a ``deep pocket.''
  Vicarious liability laws undermine competition in these states and 
have driven smaller rental and leasing companies out of business. In 
fact, vicarious liability acts as a tax on all rental and leasing 
companies--and their customers--nationwide because these companies must 
try to recover their losses from vicarious claims through rental rates 
nationwide.
  It is time to put a stop to this legal disconnect. Hold these 
companies liable if they are negligent. Hold them liable if they fail 
to properly maintain one of the vehicles they rent or lease. But do not 
hold them liable simply for being in business--for fulfilling the needs 
of our traveling constituents.
  Mr. President, I look forward to hearings on the Senator from 
Arizona's legislation at the earliest possible date and hope to move 
this legislation through this body as quickly as possible.
                                 ______
                                 
      By Mr. EDWARDS (for himself and Mr. Hagel):
  S. 1131. A bill to promote research into, and the development of an 
ultimate cure for, the disease known as Fragile X; to the Committee on 
Health, Education, Labor, and Pensions.


              fragile x research breakthrough act of 1999

  Mr. EDWARDS. Mr. President, I rise today with my colleague, Senator 
Hagel, to introduce the Fragile X Research Breakthrough Act of 1999.
  Most of my colleagues have probably never heard of Fragile X. But it 
is the leading known cause of mental retardation. And the measure we 
introduce today could help put us on the path to treat and ultimately, 
we hope, cure the disorder. This measure will launch a concerted and 
aggressive federal effort to deal with Fragile X.
  Fragile X--which is a genetic defect that results in mental 
retardation--was only recently discovered. Given its prevalence, it's 
surprising that it took us so long to discover this problem.
  One in 2,000 males and one in 4,000 females have the gene defect. One 
in every 260 women is a carrier. Current studies estimate that as many 
as 90,000 Americans suffer from Fragile X. Yet up to 80 to 90 percent 
of them are undiagnosed. It does not affect one racial or ethnic group 
more than another.
  Scientists have only known exactly what causes Fragile X since 1991. 
Fragile X occurs when a specific gene, which should hold a string of 
molecules that repeat six to fifty times, over-expands. It causes the 
gene to hold anywhere from 200 to 1,000 copies of the same sequence, 
repeating over and over, much like a record skipping out of control. 
The result of this error is that instructions needed for the creation 
of a specific protein in the brain are lost. Consequently, the Fragile 
X protein is either low or absent in the affected person. The lower the 
level of the protein, the more severe the resulting disabilities.

  People with Fragile X have effects ranging from mild learning 
disabilities to severe mental retardation. Behavioral problems 
associated with Fragile X include aggression, anxiety, and seizures. 
The effects on both the victims of the disorder and their families are 
profound, taking a huge emotional and financial toll. People with 
Fragile X have a normal life expectancy but usually incur special costs 
that add up to over $2 million on average over their lifetime. Because 
it is inherited, many families have more than one child with Fragile X.
  But although Fragile X is now known in the scientific community, it 
is still neither widely studied by scientists nor known by the public 
at large.
  That's shocking, considering its devastating effect. Let me give you 
an example. In 1989 Katie Clapp gave birth to her first child, Andy. 
She and her husband, Dr. Michael Tranfaglia were thrilled. There were 
some concerns initially because Andy was missing one kidney and had 
some other medical problems. But they were quickly remedied, and 
Michael knew from his training as a medical doctor that Andy could do 
fine with one kidney. Testing did not reveal any other problems, so the 
couple breathed easy.
  But soon Andy started showing other signs of problems. He had 
difficulty feeding and was inconsolable except when held by his mother. 
He was not as responsive as other children his age, except to scream 
when put down. Over the first year of life, he began to miss 
achievement milestones, such as sitting up and walking. Michael was in 
his residency training at the University of North Carolina hospital, so 
a

[[Page S6059]]

wealth of medical resources were within his reach. Andy was seen by 
neurologists and geneticists, but there were no answers.
  When Andy was two years old, Katie became pregnant with a second 
child. She wanted to be sure that her next baby would be born free of 
Andy's problems. So Andy was tested some more for genetics 
abnormalities, but nothing showed up. Yet Andy's problems were becoming 
more and more apparent, and causing greater difficulties for the 
family.
  Finally, when he was three and a half years old, Andy went to a new 
physician, a developmental pediatrician. During the initial visit with 
the doctor, Michael and Katie got their first indication that there 
might be a name for the problem they had been living with. The doctor 
suggested that Andy be tested for something called Fragile X. The test 
was performed, and came back positive. Katie Clapp and Michael 
Tranfaglia soon learned that not only did Andy have this inherited 
genetic disorder, but that their baby daughter Laura was also 
afflicted.
  Recent advances in Fragile X research now make it possible to test 
definitively for the disorder through DNA analysis. Yet many doctors 
are still not familiar with Fragile X, and subtle symptoms in early 
childhood can make it difficult to detect.
  But there is good news. Because scientists have identified the 
missing protein that causes the disorder, there is hope for a cure. And 
because Fragile X is the only single-gene disease known to directly 
impact human intelligence, understanding the disease can give us 
insight into human intelligence and learning and into dealing with 
other single gene defects. Understanding Fragile X may also unlock some 
of the mysteries of autism, schizophrenia, and other neurological 
disorders. But we need to fund research efforts into this devastating 
disease.
  Mr. President, my proposal seeks to capitalize on the good news. It 
would:
  Expand and coordinate research into Fragile X under the direction of 
the National Institute of Child Health and Human Development--a 
division of the National Institutes of Health;
  Establish at least three Fragile X centers, which would receive 
grants for research and development aimed at improving the diagnosis 
and treatment of, and finding a cure for, Fragile X;
  Allow patients with Fragile X to participate in clinical trials;
  Coordinate activities and exchange of information between the centers 
for better understanding of the disorder, and
  Encourage wide scale research into Fragile X by allowing qualified 
health professionals who conduct research into the disorder to be 
repaid for principal and interest on educational loans under the 
National Health Service Corps Loan Repayment Program.
  Today, in our country, thousands of children have Fragile X, but 
their parent have never heard of the disease. These parents know 
something is wrong, but they cannot give the problem a name, and 
neither can any doctor they have consulted. Like Katie and Michael, 
they may know their child has a disability, but they do not know why. 
They do not know that if they have more children, those children may 
also be at risk. They do not know there are treatments for the problem.
  They do not know that someone is working on a cure.
  The same holds true for many adults in our society. They are living 
in group homes and in institutions around the country. They have been 
cared for during entire lifetimes by devoted family members. Yet they 
have never had a diagnosis beyond ``mental retardation.''
  This summer in North Carolina, we are hosting a very special 
gathering of very special people. The Special Olympics World games will 
begin with an opening ceremony in Raleigh on June 26th, and the Games 
will run through July 4th. Among the participants will be many athletes 
who have Fragile X. Some of them know it, but many others, along with 
their families, do not even know that their particular disorder has a 
name. And with a name comes knowledge, and with knowledge comes hope 
for a better future--even for a cure.
  The job of these extraordinary athletes this summer is to make the 
most of their abilities and to achieve personal goals and triumphs. Our 
role in the games is to support their efforts, and to cheer them on. 
But our responsibility does not end there. It is our responsibility to 
make the most of the knowledge we now have, to expand that knowledge, 
and to give these folks the best chance possible. I ask all of my 
colleagues to join me in supporting this important research. Thank you.
  Mr. President, I ask unanimous consent that a copy of the legislation 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1131

       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 ``Fragile X Research 
     Breakthrough Act of 1999''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Fragile X is the most common inherited cause of mental 
     retardation. It affects 1 in every 2,000 boys and 1 in every 
     4,000 girls. One in 260 women is a carrier.
       (2) Most children with Fragile X require a lifetime of 
     special care at a cost of over $2,000,000 per child.
       (3) Relatively newly-discovered and relatively unknown, 
     even in the medical profession, Fragile X is caused by the 
     absence of a single protein that can be produced 
     synthetically but that cannot yet be effectively assimilated.
       (4) Fragile X research, both basic and applied, is vastly 
     underfunded in view of its prevalence, the potential for the 
     development of a cure, the established benefits of currently 
     available interventions, and the significance that Fragile X 
     research has for related disorders.
       (5) Fragile X is a powerful research model for other forms 
     of X-linked mental retardation, as well as neuropsychiatric 
     disorders, including autism, schizophrenia, mood disorders, 
     and pervasive developmental disorder. Individuals with 
     Fragile X are a homogeneous study population for advancing 
     understanding of these disorders.

     SEC. 3. NATIONAL INSTITUTE OF CHILD HEALTH AND HUMAN 
                   DEVELOPMENT; RESEARCH ON FRAGILE X.

       Subpart 7 of part C of title IV of the Public Health 
     Service Act (42 U.S.C. 285g et seq.) is amended by adding at 
     the end the following:

     ``SEC. 452E. FRAGILE X.

       ``(a) Expansion and Coordination of Research Activities.--
     The Director of the Institute, after consultation with the 
     advisory council for the Institute, shall expand, intensify, 
     and coordinate the activities of the Institute with respect 
     to research on the disease known as Fragile X.
       ``(b) Research Centers.--
       ``(1) In general.--The Director of the Institute, after 
     consultation with the advisory council for the Institute, 
     shall make grants to, or enter into contracts with, public or 
     nonprofit private entities for the development and operation 
     of centers to conduct research for the purposes of improving 
     the diagnosis and treatment of, and finding the cure for, 
     Fragile X.
       ``(2) Number of centers.--In carrying out paragraph (1), 
     the Director of the Institute shall, to the extent that 
     amounts are appropriated, provide for the establishment of at 
     least 3 Fragile X research centers.
       ``(3) Activities.--
       ``(A) In general.--Each center assisted under paragraph (1) 
     shall, with respect to Fragile X--
       ``(i) conduct basic and clinical research, which may 
     include clinical trials of--

       ``(I) new or improved diagnostic methods; and
       ``(II) drugs or other treatment approaches; and

       ``(ii) conduct research to find a cure.
       ``(B) Fees.--A center may use funds provided under 
     paragraph (1) to provide fees to individuals serving as 
     subjects in clinical trials conducted under subparagraph (A).
       ``(4) Coordination among centers.--The Director of the 
     Institute shall, as appropriate, provide for the coordination 
     of the activities of the centers assisted under this section, 
     including providing for the exchange of information among the 
     centers.
       ``(5) Certain administrative requirements.--Each center 
     assisted under paragraph (1) shall use the facilities of a 
     single institution, or be formed from a consortium of 
     cooperating institutions, meeting such requirements as may be 
     prescribed by the Director of the Institute.
       ``(6) Duration of support.--Support may be provided to a 
     center under paragraph (1) for a period of not to exceed 5 
     years. Such period may be extended for 1 or more additional 
     periods, each of which may not exceed 5 years, if the 
     operations of such center have been reviewed by an 
     appropriate technical and scientific peer review group 
     established by the Director and if such group has recommended 
     to the Director that such period be extended.
       ``(7) Authorization of appropriations.--For the purpose of 
     carrying out this subsection, there are authorized to be 
     appropriated $10,000,000 for fiscal year 2000, and such sums 
     as may be necessary for each subsequent fiscal year.''.

[[Page S6060]]

     SEC. 4. NATIONAL INSTITUTE OF CHILD HEALTH AND HUMAN 
                   DEVELOPMENT; LOAN REPAYMENT PROGRAM REGARDING 
                   RESEARCH ON FRAGILE X.

       Part G of title IV of the Public Health Service Act (42 
     U.S.C. 288 et seq.) is amended by inserting after section 
     487E the following:

     ``SEC. 487F. LOAN REPAYMENT PROGRAM REGARDING RESEARCH ON 
                   FRAGILE X.

       ``(a) In General.--The Secretary, in consultation with the 
     Director of the National Institute of Child Health and Human 
     Development, shall establish a program under which the 
     Federal Government enters into contracts with qualified 
     health professionals (including graduate students) who agree 
     to conduct research regarding Fragile X in consideration of 
     the Federal Government's agreement to repay, for each year of 
     such service, not more than $35,000 of the principal and 
     interest of the educational loans owed by such health 
     professionals.
       ``(b) Applicability of Certain Provisions.--With respect to 
     the National Health Service Corps Loan Repayment Program 
     established in subpart III of part D of title III, the 
     provisions of such subpart (including section 338B(g)(3)) 
     shall, except as inconsistent with subsection (a) of this 
     section, apply to the program established in such subsection 
     in the same manner and to the same extent as such provisions 
     apply to the National Health Service Corps Loan Repayment 
     Program established in such subpart.
       ``(c) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there are authorized to be 
     appropriated $2,000,000 for fiscal year 2000, and such sums 
     as may be necessary for each subsequent fiscal year. Amounts 
     appropriated for a fiscal year under the preceding sentence 
     shall remain available until the expiration of the second 
     fiscal year beginning after the fiscal year for which the 
     amounts were appropriated.''.

  Mr. HAGEL. Mr. President, I rise this morning to join my colleague 
and friend, the distinguished junior Senator from North Carolina, 
Senator Edwards, in introducing the Fragile X Breakthrough Act of 1999.
  Although many of you may not have heard of Fragile X, it is the 
leading cause of inherited mental retardation. It affects tens of 
thousands of children in this country every year. Fragile X is caused 
by a defective gene that fails to product specific protein necessary 
for proper brain function. Those afflicted with this condition often 
suffer mild to severe mental retardation, anxiety, seizures, and a 
variety of learning disorders. Most children with Fragile X will 
require a lifetime of specialized care at a cost of over $2 million 
each.
  For those afflicted and their families--like John and Megan Massey 
from Scottsbluff, Nebraska, whose two sons Jack and Jacob suffer from 
this disease--it is a frustrating, life-crippling, and heart-wrenching 
condition. But there is hope. In 1991, medical researchers were able to 
identify the specific gene that fails to produce the necessary protein 
and is responsible for Fragile X. Since then, researchers have been 
able to develop a synthetic version of this protein, and are now 
working on a way to deliver it to the brain's flawed cells.
  Congress has an unprecedented opportunity to play a key role in 
solving the mystery of this disease, and encouraging the development of 
a treatment and eventual cure. The Fragile X Breakthrough Act is a 
practical, pro-active, and cost-effective vehicle by which Congress can 
accomplish these goals.
  The National Institute of Child and Human Development (NICHD) is 
required by law to establish research centers in order to conduct 
clinical and scientific research aimed at helping infants and children. 
In accordance with that charge, the Fragile X Breakthrough Act 
authorizes $10 million for the NICHD, to make grants or enter into 
contracts with public or private entities to develop and operate three 
Fragile X research centers. It also provides $2 million for a program 
that encourages physicians to conduct Fragile X research, by offering 
to repay a portion of their educational loans. These proposals closely 
follow the recommendations that emerged from an international 
scientific conference held by the NICHD and the Fragile X Foundation 
(FRAXA) in December of 1998.
  We are closing in on one of the principal genetic causes of mental 
retardation. Let's give the NICHD the authority and funding to 
accelerate Fragile X research, so that the final, critical 
breakthroughs can be made. Let's give these children the chance to lead 
normal, productive lives. If not for Jacob and Jack Massey, then for 
those children who will inevitably follow.
                                 ______
                                 
      By Mr. BREAUX (for himself and Mr. Hatch):
  S. 1132. A bill to amend the Internal Revenue Code of 1986 to allow 
the reinvestment of employee stock ownership plan dividends without the 
loss of any dividend reduction; to the Committee on Finance.


    esop dividend reinvestment and participant security act of 1999

  Mr. BREAUX. Mr. President, I rise today to introduce a measure that 
will not only promote employee ownership, but also enhance retirement 
savings. The ``ESOP Dividend Reinvestment and Participant Security Act 
of 1999'' will grant many workers their long-sought desire to share in 
the growth of their company while not sacrificing one nickel of their 
retirement security. This legislation will permit employees to reinvest 
dividends paid on employer securities held in an ESOP without going 
through the administrative complexity that companies currently face in 
order to encourage workers to keep their dividends in the plan.
  Under current law, an employer may deduct the dividends paid on 
employer securities in an ESOP only if the dividends are used to repay 
an ESOP loan or they are paid in cash to participants. This runs 
counter to one of the most important themes expressed by this 
administration as well as many others since the passage of ERISA--what 
to do about ``leakage'' in our retirement programs, or assets coming 
out of plans prematurely. In short, we need to encourage our nation's 
workers to keep their money in their retirement plans and not let small 
amounts drip out over time so that little is left by the time they 
enter retirement. The bill I am introducing today addresses this issue 
and would bolster the retirement security of ESOP participants because 
it would encourage both employees and employers to reinvest their 
dividends in the company.
  Not only does the current approach of denying a deduction for 
reinvested dividends discourage the accumulation of assets for 
retirement, it also thwarts one of the primary purposes of an ESOP--
providing an efficient means for employees to build an ownership 
interest in their company. Congress has steadfastly maintained the ESOP 
dividend deductibility rules for over 15 years in order to encourage 
employers to establish ESOPs that hold dividend-paying company stock. 
These rules clearly are intended to provide ESOP participants a broader 
opportunity to share in the company's growth and to ultimately use such 
growth to provide retirement assets. Unfortunately, our present rules 
fall short of the mark.
  This bill fulfills the promise inherent in the original ESOP dividend 
deduction provision. The ``ESOP Dividend Reinvestment and Participant 
Security Act of 1999'' would give employees the ability to retain the 
dividends paid on employer stock in the ESOP and to reinvest these 
amounts in the employer stock for continuing growth and accumulation. 
No employee would then be forced to receive dividends that could 
instead be used to build retirement savings. And, all employees could 
receive the benefit of participating in their company's growth.
  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. 1132

       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 ``ESOP Dividend Reinvestment 
     and Participant Security Act of 1999''.

     SEC. 2. ESOP DIVIDENDS MAY BE REINVESTED WITHOUT LOSS OF 
                   DIVIDEND DEDUCTION.

       (a) In General.--Section 404(k)(2)(A) of the Internal 
     Revenue Code of 1986 (defining applicable dividends) is 
     amended by striking ``or'' at the end of clause (ii), by 
     redesignating clause (iii) as clause (iv), and by inserting 
     after clause (ii) the following new clause:
       ``(iii) is, at the election of such participants or their 
     beneficiaries--

       ``(I) payable as provided in clause (i) or (ii), or
       ``(II) paid to the plan and reinvested in qualifying 
     employee securities, or''.

       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.
                                 ______
                                 
      By Mr. GRAMS:
  S. 1133. A bill to amend the Poultry Products Inspection Act to cover 
birds

[[Page S6061]]

of the order Ratitae that are raised for use as human food; to the 
Committee on Agriculture, Nutrition, and Forestry.


         poultry products inspection act amendments legislation

 Mr. GRAMS. Mr. President, I rise today to introduce a bill to 
amend the Poultry Products Inspection Act to include birds of the 
Ratitae order, such as ostriches, emus, and rheas, in the mandatory 
USDA meat inspection program. Currently producers of ratitae 
participate in a voluntary inspection program, but costs are borne by 
the producers and can add as much as $2 per pound to the price of the 
product. The USDA currently absorbs the cost of inspection for the more 
traditional agricultural products, such as turkey, poultry, and beef.
  I introduce this legislation to encourage agricultural 
entrepreneurship and diversification, and to level the economic playing 
field for those farmers willing to take innovative risks to bring new 
products to American and global consumers. Ratite meat is reported to 
be high in protein and low in fat and cholesterol, and byproducts from 
the animals are being studied by universities and medical labs for 
their potential uses. I would also note that farmers engaged in 
producing ratite meat can now be found all over the country, not just 
in Minnesota.
  With the increasing focus in our country on food safety, I believe 
this bill is a small but important step toward both encouraging 
development of alternative agricultural products and ensuring the 
safety of the food our citizens consume.
  I ask my colleagues to join with me in support of this bill to help 
family farms diversify into new products that will provide them with 
new income sources and give American consumers more variety at the 
grocery store.
                                 ______
                                 
      By Mr. ROTH:
  S. 1134. An original bill to amend the Internal Revenue Code of 1986 
to allow tax-free expenditures from education individual retirement 
accounts for elementary and secondary school expenses, to increase the 
maximum annual amount of contributions to such accounts, and for other 
purposes; from the Committee on Finance; placed on the calendar.


                    affordable education act of 1999

  Mr. ROTH. 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. 1134

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

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

         (a) Short Title.--This Act may be cited as the 
     ``Affordable Education Act of 1999''.
         (b) Amendment of 1986 Code.--Except as otherwise 
     expressly provided, whenever in this Act an amendment or 
     repeal is expressed in terms of an amendment to, or repeal 
     of, a section or other provision, the reference shall be 
     considered to be made to a section or other provision of the 
     Internal Revenue Code of 1986.
         (c) Table of Contents.--The table of contents for this 
     Act is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

                 TITLE I--EDUCATION SAVINGS INCENTIVES

Sec. 101. Modifications to education individual retirement accounts.
Sec. 102. Modifications to qualified tuition programs.

                    TITLE II--EDUCATIONAL ASSISTANCE

Sec. 201. Extension of exclusion for employer-provided educational 
              assistance.
Sec. 202. Elimination of 60-month limit on student loan interest 
              deduction.
Sec. 203. Exclusion of certain amounts received under the National 
              Public Health Service Corps Scholarship Program and the 
              F. Edward Hebert Armed Forces Health Professions 
              Scholarship and Financial Assistance Program.

  TITLE III--LIBERALIZATION OF TAX-EXEMPT FINANCING RULES FOR PUBLIC 
                          SCHOOL CONSTRUCTION

Sec. 301. Additional increase in arbitrage rebate exception for 
              governmental bonds used to finance educational 
              facilities.
Sec. 302. Treatment of qualified public educational facility bonds as 
              exempt facility bonds.
Sec. 303. Federal guarantee of school construction bonds by Federal 
              Housing Finance Board.

                      TITLE IV--REVENUE PROVISIONS

Sec. 401. Modification to foreign tax credit carryback and carryover 
              periods.
Sec. 402. Limitation on use of non-accrual experience method of 
              accounting.
Sec. 403. Returns relating to cancellations of indebtedness by 
              organizations lending money.
Sec. 404. Extension of Internal Revenue Service user fees.
Sec. 405. Property subject to a liability treated in same manner as 
              assumption of liability.
Sec. 406. Charitable split-dollar life insurance, annuity, and 
              endowment contracts.
Sec. 407. Transfer of excess defined benefit plan assets for retiree 
              health benefits.
Sec. 408. Limitations on welfare benefit funds of 10 or more employer 
              plans.
Sec. 409. Modification of installment method and repeal of installment 
              method for accrual method taxpayers.
Sec. 410. Inclusion of certain vaccines against streptococcus 
              pneumoniae to list of taxable vaccines.
                 TITLE I--EDUCATION SAVINGS INCENTIVES

     SEC. 101. MODIFICATIONS TO EDUCATION INDIVIDUAL RETIREMENT 
                   ACCOUNTS.

         (a) Maximum Annual Contributions.--
         (1) In general.--Section 530(b)(1)(A)(iii) (defining 
     education individual retirement account) is amended by 
     striking ``$500'' and inserting ``the contribution limit for 
     such taxable year''.
         (2) Contribution limit.--Section 530(b) (relating to 
     definitions and special rules) is amended by adding at the 
     end the following new paragraph:
         ``(4) Contribution limit.--The term `contribution limit' 
     means $500 ($2,000 in the case of any taxable year beginning 
     after December 31, 1999, and ending before January 1, 
     2004).''
         (3) Conforming amendment.--Section 4973(e)(1)(A) is 
     amended by striking ``$500'' and inserting ``the contribution 
     limit (as defined in section 530(b)(4)) for such taxable 
     year''.
         (b) Tax-Free Expenditures for Elementary and Secondary 
     School Expenses.--
         (1) In general.--Section 530(b)(2) (defining qualified 
     higher education expenses) is amended to read as follows:
         ``(2) Qualified education expenses.--
         ``(A) In general.--The term `qualified education 
     expenses' means--
         ``(i) qualified higher education expenses (as defined in 
     section 529(e)(3)), and
         ``(ii) qualified elementary and secondary education 
     expenses (as defined in paragraph (5)).
     Such expenses shall be reduced as provided in section 
     25A(g)(2).
         ``(B) Qualified state tuition programs.--Such term shall 
     include any contribution to a qualified State tuition program 
     (as defined in section 529(b)) on behalf of the designated 
     beneficiary (as defined in section 529(e)(1)); but there 
     shall be no increase in the investment in the contract for 
     purposes of applying section 72 by reason of any portion of 
     such contribution which is not includible in gross income by 
     reason of subsection (d)(2).''
         (2) Qualified elementary and secondary education 
     expenses.--Section 530(b) (relating to definitions and 
     special rules), as amended by subsection (a)(2), is amended 
     by adding at the end the following new paragraph:
         ``(5) Qualified elementary and secondary education 
     expenses.--
         ``(A) In general.--The term `qualified elementary and 
     secondary education expenses' means--
         ``(i) expenses for tuition, fees, academic tutoring, 
     special needs services, books, supplies, computer equipment 
     (including related software and services), and other 
     equipment which are incurred in connection with the 
     enrollment or attendance of the designated beneficiary of the 
     trust as an elementary or secondary school student at a 
     public, private, or religious school, and
         ``(ii) expenses for room and board, uniforms, 
     transportation, and supplementary items and services 
     (including extended day programs) which are required or 
     provided by a public, private, or religious school in 
     connection with such enrollment or attendance.
         ``(B) Special rule for homeschooling.--Such term shall 
     include expenses described in subparagraph (A)(i) in 
     connection with education provided by homeschooling if the 
     requirements of any applicable State or local law are met 
     with respect to such education.
         ``(C) School.--The term `school' means any school which 
     provides elementary education or secondary education 
     (kindergarten through grade 12), as determined under State 
     law.''
         (3) Special rules for applying exclusion to elementary 
     and secondary expenses.--Section 530(d)(2) (relating to 
     distributions for qualified higher education expenses) is 
     amended by adding at the end the following new subparagraph:
         ``(E) Special rules for elementary and secondary 
     expenses.--

[[Page S6062]]

         ``(i) In general.--The aggregate amount of qualified 
     elementary and secondary education expenses taken into 
     account for purposes of this paragraph with respect to any 
     education individual retirement account for all taxable years 
     shall not exceed the sum of the aggregate contributions to 
     such account for taxable years beginning after December 31, 
     1999, and before January 1, 2004, and earnings on such 
     contributions.
         ``(ii) Special operating rules.--For purposes of clause 
     (i)--

         ``(I) the trustee of an education individual retirement 
     account shall keep separate accounts with respect to 
     contributions and earnings described in clause (i), and
         ``(II) if there are distributions in excess of qualified 
     elementary and secondary education expenses for any taxable 
     year, such excess distributions shall be allocated first to 
     contributions and earnings not described in clause (i).''

         (4) Conforming amendments.--Section 530 is amended--
         (A) by striking ``higher'' each place it appears in 
     subsections (b)(1) and (d)(2), and
         (B) by striking ``higher'' in the heading for subsection 
     (d)(2).
         (c) Waiver of Age Limitations for Children With Special 
     Needs.--Section 530(b)(1) (defining education individual 
     retirement account) is amended by adding at the end the 
     following flush sentence:
       ``The age limitations in the preceding sentence and 
     paragraphs (5) and (6) of subsection (d) shall not apply to 
     any designated beneficiary with special needs (as determined 
     under regulations prescribed by the Secretary).''
         (d) Entities Permitted To Contribute to Accounts.--
     Section 530(c)(1) (relating to reduction in permitted 
     contributions based on adjusted gross income) is amended by 
     striking ``The maximum amount which a contributor'' and 
     inserting ``In the case of a contributor who is an 
     individual, the maximum amount the contributor''.
         (e) Time When Contributions Deemed Made.--
         (1) In general.--Section 530(b) (relating to definitions 
     and special rules), as amended by subsection (b)(2), is 
     amended by adding at the end the following new paragraph:
         ``(6) Time when contributions deemed made.--An individual 
     shall be deemed to have made a contribution to an education 
     individual retirement account on the last day of the 
     preceding taxable year if the contribution is made on account 
     of such taxable year and is made not later than the time 
     prescribed by law for filing the return for such taxable year 
     (not including extensions thereof).''
         (2) Extension of time to return excess contributions.--
     Subparagraph (C) of section 530(d)(4) (relating to additional 
     tax for distributions not used for educational expenses) is 
     amended--
         (A) by striking clause (i) and inserting the following 
     new clause:
         ``(i) such distribution is made before the 1st day of the 
     6th month of the taxable year following the taxable year, 
     and'', and
         (B) by striking ``due date of return'' in the heading and 
     inserting ``june''.
         (f) Coordination With Hope and Lifetime Learning Credits 
     and Qualified Tuition Programs.--
         (1) In general.--Section 530(d)(2)(C) is amended to read 
     as follows:
         ``(C) Coordination with hope and lifetime learning 
     credits and qualified tuition programs.--
         ``(i) Credit coordination.--

         ``(I) In general.--Except as provided in subclause (II), 
     subparagraph (A) shall not apply for any taxable year to any 
     qualified higher education expenses with respect to any 
     individual if a credit is allowed under section 25A with 
     respect to such expenses for such taxable year.
         ``(II) Special coordination rule.--In the case of any 
     taxable year beginning after December 31, 1999, and before 
     January 1, 2004, subclause (I) shall not apply, but the total 
     amount of qualified higher education expenses otherwise taken 
     into account under subparagraph (A) with respect to an 
     individual for such taxable year shall be reduced (after the 
     application of the reduction provided in section 25A(g)(2)) 
     by the amount of such expenses which were taken into account 
     in determining the credit allowed to the taxpayer or any 
     other person under section 25A with respect to such expenses.

         ``(ii) Coordination with qualified tuition programs.--If 
     the aggregate distributions to which subparagraph (A) and 
     section 529(c)(3)(B) apply exceed the total amount of 
     qualified higher education expenses otherwise taken into 
     account under subparagraph (A) (after the application of 
     clause (i)) with respect to an individual for any taxable 
     year, the taxpayer shall allocate such expenses among such 
     distributions for purposes of determining the amount of the 
     exclusion under subparagraph (A) and section 529(c)(3)(B).''
         (2) Conforming amendments.--
         (A) Subsection (e) of section 25A is amended to read as 
     follows:
         ``(e) Election Not To Have Section Apply.--A taxpayer may 
     elect not to have this section apply with respect to the 
     qualified tuition and related expenses of an individual for 
     any taxable year.''
         (B) Section 135(d)(2)(A) is amended by striking 
     ``allowable'' and inserting ``allowed''.
         (C) Section 530(b)(2)(A) is amended by striking ``, 
     reduced as provided in section 25A(g)(2)''.
         (D) Section 530(d)(2)(D) is amended--
         (i) by striking ``or credit'', and
         (ii) by striking ``credit or'' in the heading.
         (E) Section 4973(e)(1) is amended by adding ``and'' at 
     the end of subparagraph (A), by striking subparagraph (B), 
     and by redesignating subparagraph (C) as subparagraph (B).
         (g) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 102. MODIFICATIONS TO QUALIFIED TUITION PROGRAMS.

         (a) Eligible Educational Institutions Permitted To 
     Maintain Qualified Tuition Programs.--
       (1) In general.--Section 529(b)(1) (defining qualified 
     State tuition program) is amended by inserting ``or by 1 or 
     more eligible educational institutions'' after ``maintained 
     by a State or agency or instrumentality thereof ''.
         (2) Private qualified tuition programs limited to benefit 
     plans.--Clause (ii) of section 529(b)(1)(A) is amended by 
     inserting ``in the case of a program established and 
     maintained by a State or agency or instrumentality thereof,'' 
     before ``may make''.
         (3) Conforming amendments.--
         (A) Sections 72(e)(9), 135(c)(2)(C), 135(d)(1)(D), 529, 
     530(b)(2)(B), 4973(e), and 6693(a)(2)(C) are each amended by 
     striking ``qualified State tuition'' each place it appears 
     and inserting ``qualified tuition''.
         (B) The headings for sections 72(e)(9) and 135(c)(2)(C) 
     are each amended by striking ``qualified state tuition'' and 
     inserting ``qualified tuition''.
         (C) The headings for sections 529(b) and 530(b)(2)(B) are 
     each amended by striking ``Qualified state tuition'' and 
     inserting ``Qualified tuition''.
         (D) The heading for section 529 is amended by striking 
     ``state''.
         (E) The item relating to section 529 in the table of 
     sections for part VIII of subchapter F of chapter 1 is 
     amended by striking ``State''.
         (b) Exclusion From Gross Income of Education 
     Distributions From Qualified Tuition Programs.--
         (1) In general.--Section 529(c)(3)(B) (relating to 
     distributions) is amended to read as follows:
         ``(B) Distributions for qualified higher education 
     expenses.--
         ``(i) In general.--For purposes of this paragraph--

         ``(I) no amount shall be includible in gross income under 
     subparagraph (A) by reason of a distribution which consists 
     of providing a benefit to the distributee which, if paid for 
     by the distributee, would constitute payment of a qualified 
     higher education expense, and
         ``(II) the amount which (determined without regard to 
     subclause (I)) would be includible in gross income under 
     subparagraph (A) by reason of any other distribution shall 
     not be so includible in an amount which bears the same ratio 
     to the amount which would be so includible as the qualified 
     higher education expenses bear to such aggregate 
     distributions.

         ``(ii) Nonapplication of clause.--In the case of any 
     taxable year beginning before January 1, 2004, clause (i) 
     shall not apply with respect to any distribution in such 
     taxable year under a qualified tuition program established 
     and maintained by 1 or more eligible educational 
     institutions.
         ``(iii) In-kind distributions.--Any benefit furnished to 
     a designated beneficiary under a qualified tuition program 
     shall be treated as a distribution to the beneficiary for 
     purposes of this paragraph.
         ``(iv) Coordination with hope and lifetime learning 
     credits.--

         ``(I) In general.--Except as provided in subclause (II), 
     clause (i) shall not apply for any taxable year to any 
     qualified higher education expenses with respect to any 
     individual if a credit is allowed under section 25A with 
     respect to such expenses for such taxable year.
         ``(II) Special coordination rule.--In the case of any 
     taxable year beginning after December 31, 1999, and before 
     January 1, 2004, subclause (I) shall not apply, but the total 
     amount of qualified higher education expenses otherwise taken 
     into account under clause (i) with respect to an individual 
     for such taxable year shall be reduced (after the application 
     of the reduction provided in section 25A(g)(2)) by the amount 
     of such expenses which were taken into account in determining 
     the credit allowed to the taxpayer or any other person under 
     section 25A with respect to such expenses.

         ``(v) Coordination with education iras.--If the aggregate 
     distributions to which clause (i) and section 530(d)(2)(A) 
     apply exceed the total amount of qualified higher education 
     expenses otherwise taken into account under clause (i) (after 
     the application of clause (iv)) with respect to an individual 
     for any taxable year, the taxpayer shall allocate such 
     expenses among such distributions for purposes of determining 
     the amount of the exclusion under clause (i) and section 
     530(d)(2)(A).''
         (2) Conforming amendments.--
         (A) Section 135(d)(2)(B) is amended by striking ``section 
     530(d)(2)'' and inserting ``sections 529(c)(3)(B)(i) and 
     530(d)(2)''.
         (B) Section 221(e)(2)(A) is amended by inserting ``529,'' 
     after ``135,''.
         (c) Beneficiary May Change Program.--Section 529(c)(3)(C) 
     (relating to change in beneficiaries) is amended--
         (1) by striking ``transferred to the credit'' in clause 
     (i) and inserting ``transferred--

[[Page S6063]]

         ``(I) to another qualified tuition program for the 
     benefit of the designated beneficiary, or
         ``(II) to the credit'',

         (2) by adding at the end the following new clause:
         ``(iii) Limitation on certain rollovers.--Clause (i)(I) 
     shall only apply to the first 3 transfers with respect to a 
     designated beneficiary.'', and
         (3) by inserting ``or programs'' after ``beneficiaries'' 
     in the heading.
         (d) Member of Family Includes First Cousin.--Section 
     529(e)(2) (defining member of family) is amended by striking 
     ``and'' at the end of subparagraph (B), by striking the 
     period at the end of subparagraph (C) and by inserting ``; 
     and'', and by adding at the end the following new 
     subparagraph:
         ``(D) any first cousin of such beneficiary.''
         (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.
                    TITLE II--EDUCATIONAL ASSISTANCE

     SEC. 201. EXTENSION OF EXCLUSION FOR EMPLOYER-PROVIDED 
                   EDUCATIONAL ASSISTANCE.

         (a) In General.--Section 127(d) (relating to termination 
     of exclusion for educational assistance programs) is amended 
     by striking ``May 31, 2000'' and inserting ``June 30, 2004''.
         (b) Repeal of Limitation on Graduate Education.--
         (1) In general.--The last sentence of section 127(c)(1) 
     is amended by striking ``, and such term also does not 
     include any payment for, or the provision of any benefits 
     with respect to, any graduate level course of a kind normally 
     taken by an individual pursuing a program leading to a law, 
     business, medical, or other advanced academic or professional 
     degree''.
         (2) Effective date.--The amendment made by paragraph (1) 
     shall apply with respect to expenses relating to courses 
     beginning after December 31, 1999.

     SEC. 202. ELIMINATION OF 60-MONTH LIMIT ON STUDENT LOAN 
                   INTEREST DEDUCTION.

         (a) In General.--Section 221 (relating to interest on 
     education loans) is amended by striking subsection (d) and by 
     redesignating subsections (e), (f), and (g) as subsections 
     (d), (e), and (f), respectively.
         (b) Conforming Amendment.--Section 6050S(e) is amended by 
     striking ``section 221(e)(1)'' and inserting ``section 
     221(d)(1)''.
         (c) Effective Date.--The amendments made by this section 
     shall apply with respect to any loan interest paid after 
     December 31, 1999.

     SEC. 203. EXCLUSION OF CERTAIN AMOUNTS RECEIVED UNDER THE 
                   NATIONAL PUBLIC HEALTH SERVICE CORPS 
                   SCHOLARSHIP PROGRAM AND THE F. EDWARD HEBERT 
                   ARMED FORCES HEALTH PROFESSIONS SCHOLARSHIP AND 
                   FINANCIAL ASSISTANCE PROGRAM.

         (a) In General.--Section 117(c) (relating to the 
     exclusion from gross income amounts received as a qualified 
     scholarship) is amended--
         (1) by striking ``Subsections (a)'' and inserting the 
     following:
         ``(1) In general.--Except as provided in paragraph (2), 
     subsections (a)'', and
         (2) by adding at the end the following new paragraph:
         ``(2) Exceptions.--Paragraph (1) shall not apply to any 
     amount received by an individual under--
         ``(A) the National Public Health Service Corps 
     Scholarship Program under section 338A(g)(1)(A) of the Public 
     Health Service Act, or
         ``(B) the Armed Forces Health Professions Scholarship and 
     Financial Assistance program under subchapter I of chapter 
     105 of title 10, United States Code.''
         (b) Effective Date.--The amendments made by subsection 
     (a) shall apply to amounts received in taxable years 
     beginning after December 31, 1993.
  TITLE III--LIBERALIZATION OF TAX-EXEMPT FINANCING RULES FOR PUBLIC 
                          SCHOOL CONSTRUCTION

     SEC. 301. ADDITIONAL INCREASE IN ARBITRAGE REBATE EXCEPTION 
                   FOR GOVERNMENTAL BONDS USED TO FINANCE 
                   EDUCATIONAL FACILITIES.

         (a) In General.--Section 148(f)(4)(D)(vii) (relating to 
     increase in exception for bonds financing public school 
     capital expenditures) is amended by striking ``$5,000,000'' 
     the second place it appears and inserting ``$10,000,000''.
         (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to obligations issued in calendar years beginning 
     after December 31, 1999.

     SEC. 302. TREATMENT OF QUALIFIED PUBLIC EDUCATIONAL FACILITY 
                   BONDS AS EXEMPT FACILITY BONDS.

         (a) Treatment as Exempt Facility Bond.--Subsection (a) of 
     section 142 (relating to exempt facility bond) is amended by 
     striking ``or'' at the end of paragraph (11), by striking the 
     period at the end of paragraph (12) and inserting ``, or'', 
     and by adding at the end the following new paragraph:
         ``(13) qualified public educational facilities.''
         (b) Qualified Public Educational Facilities.--Section 142 
     (relating to exempt facility bond) is amended by adding at 
     the end the following new subsection:
         ``(k) Qualified Public Educational Facilities.--
         ``(1) In general.--For purposes of subsection (a)(13), 
     the term `qualified public educational facility' means any 
     school facility which is--
         ``(A) part of a public elementary school or a public 
     secondary school, and
         ``(B) owned by a private, for-profit corporation pursuant 
     to a public-private partnership agreement with a State or 
     local educational agency described in paragraph (2).
         ``(2) Public-private partnership agreement described.--A 
     public-private partnership agreement is described in this 
     paragraph if it is an agreement--
         ``(A) under which the corporation agrees--
         ``(i) to do 1 or more of the following: construct, 
     rehabilitate, refurbish, or equip a school facility, and
         ``(ii) at the end of the term of the agreement, to 
     transfer the school facility to such agency for no additional 
     consideration, and
         ``(B) the term of which does not exceed the term of the 
     issue to be used to provide the school facility.
         ``(3) School facility.--For purposes of this subsection, 
     the term `school facility' means--
         ``(A) school buildings,
         ``(B) functionally related and subordinate facilities and 
     land with respect to such buildings, including any stadium or 
     other facility primarily used for school events, and
         ``(C) any property, to which section 168 applies (or 
     would apply but for section 179), for use in the facility.
         ``(4) Public schools.--For purposes of this subsection, 
     the terms `elementary school' and `secondary school' have the 
     meanings given such terms by section 14101 of the Elementary 
     and Secondary Education Act of 1965 (20 U.S.C. 8801), as in 
     effect on the date of the enactment of this subsection.
         ``(5) Annual aggregate face amount of tax-exempt 
     financing.--
         ``(A) In general.--An issue shall not be treated as an 
     issue described in subsection (a)(13) if the aggregate face 
     amount of bonds issued by the State pursuant thereto (when 
     added to the aggregate face amount of bonds previously so 
     issued during the calendar year) exceeds an amount equal to 
     the greater of--
         ``(i) $10 multiplied by the State population, or
         ``(ii) $5,000,000.
         ``(B) Allocation rules.--
         ``(i) In general.--Except as otherwise provided in this 
     subparagraph, the State may allocate the amount described in 
     subparagraph (A) for any calendar year in such manner as the 
     State determines appropriate.
         ``(ii) Rules for carryforward of unused limitation.--A 
     State may elect to carry forward an unused limitation for any 
     calendar year for 3 calendar years following the calendar 
     year in which the unused limitation arose under rules similar 
     to the rules of section 146(f), except that the only purpose 
     for which the carryforward may be elected is the issuance of 
     exempt facility bonds described in subsection (a)(13).''
         (c) Exemption From General State Volume Caps.--Paragraph 
     (3) of section 146(g) (relating to exception for certain 
     bonds) is amended--
         (1) by striking ``or (12)'' and inserting ``(12), or 
     (13)'', and
         (2) by striking ``and environmental enhancements of 
     hydroelectric generating facilities'' and inserting 
     ``environmental enhancements of hydroelectric generating 
     facilities, and qualified public educational facilities''.
         (d) Exemption From Limitation on Use for Land 
     Acquisition.--Section 147(h) (relating to certain rules not 
     to apply to mortgage revenue bonds, qualified student loan 
     bonds, and qualified 501(c)(3) bonds) is amended by adding at 
     the end the following new paragraph:
         ``(3) Exempt facility bonds for qualified public-private 
     schools.--Subsection (c) shall not apply to any exempt 
     facility bond issued as part of an issue described in section 
     142(a)(13) (relating to qualified public educational 
     facilities).''
         (e) Conforming Amendment.--The heading for section 147(h) 
     is amended by striking ``Mortgage Revenue Bonds, Qualified 
     Student Loan Bonds, and Qualified 501(c)(3) Bonds'' and 
     inserting ``Certain Bonds''.
         (f) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after December 31, 1999.

     SEC. 303. FEDERAL GUARANTEE OF SCHOOL CONSTRUCTION BONDS BY 
                   FEDERAL HOUSING FINANCE BOARD.

         (a) In General.--Section 149(b)(3) (relating to 
     exceptions) is amended by adding at the end the following new 
     subparagraph:
         ``(E) Certain guaranteed school construction bonds.--Any 
     bond issued as part of an issue 95 percent or more of the net 
     proceeds of which are used for public school construction 
     shall not be treated as federally guaranteed for any calendar 
     year by reason of any guarantee by the Federal Housing 
     Finance Board (through any Federal Home Loan Bank) under the 
     Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), as in 
     effect on the date of the enactment of this subparagraph, to 
     the extent the face amount of such bond, when added to the 
     aggregate face amount of such bonds previously so guaranteed 
     for such year, does not exceed $500,000,000.''
         (b) Effective Date.--The amendment made by this section 
     shall apply to bonds issued after December 31, 1999.
                      TITLE IV--REVENUE PROVISIONS

     SEC. 401. MODIFICATION TO FOREIGN TAX CREDIT CARRYBACK AND 
                   CARRYOVER PERIODS.

         (a) In General.--Section 904(c) (relating to limitation 
     on credit) is amended--

[[Page S6064]]

         (1) by striking ``in the second preceding taxable 
     year,'', and
         (2) by striking ``or fifth'' and inserting ``fifth, 
     sixth, or seventh''.
         (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to credits arising in taxable years beginning 
     after December 31, 2001.

     SEC. 402. LIMITATION ON USE OF NON-ACCRUAL EXPERIENCE METHOD 
                   OF ACCOUNTING.

         (a) In General.--Section 448(d)(5) (relating to special 
     rule for services) is amended--
         (1) by inserting ``in fields described in paragraph 
     (2)(A)'' after ``services by such person'', and
         (2) by inserting ``certain personal'' before ``services'' 
     in the heading.
         (b) Effective Date.--
         (1) In general.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.
         (2) Change in method of accounting.--In the case of any 
     taxpayer required by the amendments made by this section to 
     change its method of accounting for its first taxable year 
     ending after the date of the enactment of this Act--
         (A) such change shall be treated as initiated by the 
     taxpayer,
         (B) such change shall be treated as made with the consent 
     of the Secretary of the Treasury, and
         (C) the net amount of the adjustments required to be 
     taken into account by the taxpayer under section 481 of the 
     Internal Revenue Code of 1986 shall be taken into account 
     over a period (not greater than 4 taxable years) beginning 
     with such first taxable year.

     SEC. 403. RETURNS RELATING TO CANCELLATIONS OF INDEBTEDNESS 
                   BY ORGANIZATIONS LENDING MONEY.

         (a) In General.--Paragraph (2) of section 6050P(c) 
     (relating to definitions and special rules) is amended by 
     striking ``and'' at the end of subparagraph (B), by striking 
     the period at the end of subparagraph (C) and inserting ``, 
     and'', and by inserting after subparagraph (C) the following 
     new subparagraph:
         ``(D) any organization a significant trade or business of 
     which is the lending of money.''
         (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to discharges of indebtedness after December 31, 
     1999.

     SEC. 404. EXTENSION OF INTERNAL REVENUE SERVICE USER FEES.

         (a) In General.--Chapter 77 (relating to miscellaneous 
     provisions) is amended by adding at the end the following new 
     section:

     ``SEC. 7527. INTERNAL REVENUE SERVICE USER FEES.

         ``(a) General Rule.--The Secretary shall establish a 
     program requiring the payment of user fees for--
         ``(1) requests to the Internal Revenue Service for ruling 
     letters, opinion letters, and determination letters, and
         ``(2) other similar requests.
         ``(b) Program Criteria.--
         ``(1) In general.--The fees charged under the program 
     required by subsection (a)--
         ``(A) shall vary according to categories (or 
     subcategories) established by the Secretary,
         ``(B) shall be determined after taking into account the 
     average time for (and difficulty of) complying with requests 
     in each category (and subcategory), and
         ``(C) shall be payable in advance.
         ``(2) Exemptions, etc.--The Secretary shall provide for 
     such exemptions (and reduced fees) under such program as the 
     Secretary determines to be appropriate.
         ``(3) Average fee requirement.--The average fee charged 
     under the program required by subsection (a) shall not be 
     less than the amount determined under the following table:

                                                                Average
``Category                                                          Fee
  Employee plan ruling and opinion............................$250 ....

  Exempt organization ruling..................................$350 ....

  Employee plan determination.................................$300 ....

  Exempt organization determination...........................$275 ....

  Chief counsel ruling........................................$200.....

         ``(c) Termination.--No fee shall be imposed under this 
     section with respect to requests made after September 30, 
     2009.''
         (b) Conforming Amendments.--
         (1) The table of sections for chapter 77 is amended by 
     adding at the end the following new item:

``Sec. 7527. Internal Revenue Service user fees.''

         (2) Section 10511 of the Revenue Act of 1987 is repealed.
         (c) Effective Date.--The amendments made by this section 
     shall apply to requests made after the date of the enactment 
     of this Act.

     SEC. 405. PROPERTY SUBJECT TO A LIABILITY TREATED IN SAME 
                   MANNER AS ASSUMPTION OF LIABILITY.

         (a) Repeal of Property Subject to a Liability Test.--
         (1) Section 357.--Section 357(a)(2) (relating to 
     assumption of liability) is amended by striking ``, or 
     acquires from the taxpayer property subject to a liability''.
         (2) Section 358.--Section 358(d)(1) (relating to 
     assumption of liability) is amended by striking ``or acquired 
     from the taxpayer property subject to a liability''.
         (3) Section 368.--
         (A) Section 368(a)(1)(C) is amended by striking ``, or 
     the fact that property acquired is subject to a liability,''.
         (B) The last sentence of section 368(a)(2)(B) is amended 
     by striking ``, and the amount of any liability to which any 
     property acquired from the acquiring corporation is 
     subject,''.
         (b) Clarification of Assumption of Liability.--
         (1) In general.--Section 357 is amended by adding at the 
     end the following new subsection:
         ``(d) Determination of Amount of Liability Assumed.--
         ``(1) In general.--For purposes of this section, section 
     358(d), section 362(d), section 368(a)(1)(C), and section 
     368(a)(2)(B), except as provided in regulations--
         ``(A) a recourse liability (or portion thereof) shall be 
     treated as having been assumed if, as determined on the basis 
     of all facts and circumstances, the transferee has agreed to, 
     and is expected to, satisfy such liability (or portion), 
     whether or not the transferor has been relieved of such 
     liability, and
         ``(B) except to the extent provided in paragraph (2), a 
     nonrecourse liability shall be treated as having been assumed 
     by the transferee of any asset subject to such liability.
         ``(2) Exception for nonrecourse liability.--The amount of 
     the nonrecourse liability treated as described in paragraph 
     (1)(B) shall be reduced by the lesser of--
         ``(A) the amount of such liability which an owner of 
     other assets not transferred to the transferee and also 
     subject to such liability has agreed with the transferee to, 
     and is expected to, satisfy, or
         ``(B) the fair market value of such other assets 
     (determined without regard to section 7701(g)).
         ``(3) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out the purposes of 
     this subsection and section 362(d). The Secretary may also 
     prescribe regulations which provide that the manner in which 
     a liability is treated as assumed under this subsection is 
     applied, where appropriate, elsewhere in this title.''
         (2) Limitation on basis increase attributable to 
     assumption of liability.--Section 362 is amended by adding at 
     the end the following new subsection:
         ``(d) Limitation on Basis Increase Attributable to 
     Assumption of Liability.--
         ``(1) In general.--In no event shall the basis of any 
     property be increased under subsection (a) or (b) above the 
     fair market value of such property (determined without regard 
     to section 7701(g)) by reason of any gain recognized to the 
     transferor as a result of the assumption of a liability.
         ``(2) Treatment of gain not subject to tax.--Except as 
     provided in regulations, if--
         ``(A) gain is recognized to the transferor as a result of 
     an assumption of a nonrecourse liability by a transferee 
     which is also secured by assets not transferred to such 
     transferee, and
         ``(B) no person is subject to tax under this title on 
     such gain,
     then, for purposes of determining basis under subsections (a) 
     and (b), the amount of gain recognized by the transferor as a 
     result of the assumption of the liability shall be determined 
     as if the liability assumed by the transferee equaled such 
     transferee's ratable portion of such liability determined on 
     the basis of the relative fair market values (determined 
     without regard to section 7701(g)) of all of the assets 
     subject to such liability.''
         (c) Application to Provisions Other Than Subchapter C.--
         (1) Section 584.--Section 584(h)(3) is amended--
         (A) by striking ``, and the fact that any property 
     transferred by the common trust fund is subject to a 
     liability,'' in subparagraph (A), and
         (B) by striking clause (ii) of subparagraph (B) and 
     inserting:
         ``(ii) Assumed liabilities.--For purposes of clause (i), 
     the term `assumed liabilities' means any liability of the 
     common trust fund assumed by any regulated investment company 
     in connection with the transfer referred to in paragraph 
     (1)(A).
         ``(C) Assumption.--For purposes of this paragraph, in 
     determining the amount of any liability assumed, the rules of 
     section 357(d) shall apply.''
         (2) Section 1031.--The last sentence of section 1031(d) 
     is amended--
         (A) by striking ``assumed a liability of the taxpayer or 
     acquired from the taxpayer property subject to a liability'' 
     and inserting ``assumed (as determined under section 357(d)) 
     a liability of the taxpayer'', and
         (B) by striking ``or acquisition (in the amount of the 
     liability)''.
         (d) Conforming Amendments.--
         (1) Section 351(h)(1) is amended by striking ``, or 
     acquires property subject to a liability,''.
         (2) Section 357 is amended by striking ``or acquisition'' 
     each place it appears in subsection (a) or (b).
         (3) Section 357(b)(1) is amended by striking ``or 
     acquired''.
         (4) Section 357(c)(1) is amended by striking ``, plus the 
     amount of the liabilities to which the property is 
     subject,''.
         (5) Section 357(c)(3) is amended by striking ``or to 
     which the property transferred is subject''.
         (6) Section 358(d)(1) is amended by striking ``or 
     acquisition (in the amount of the liability)''.

[[Page S6065]]

         (e) Effective Date.--The amendments made by this section 
     shall apply to transfers after October 19, 1998.

     SECTION 406. CHARITABLE SPLIT-DOLLAR LIFE INSURANCE, ANNUITY, 
                   AND ENDOWMENT CONTRACTS.

         (a) In General.--Subsection (f) of section 170 (relating 
     to disallowance of deduction in certain cases and special 
     rules) is amended by adding at the end the following new 
     paragraph:
         ``(10) Split-dollar life insurance, annuity, and 
     endowment contracts.--
         ``(A) In general.--Nothing in this section or in section 
     545(b)(2), 556(b)(2), 642(c), 2055, 2106(a)(2), or 2522 shall 
     be construed to allow a deduction, and no deduction shall be 
     allowed, for any transfer to or for the use of an 
     organization described in subsection (c) if in connection 
     with such transfer--
         ``(i) the organization directly or indirectly pays, or 
     has previously paid, any premium on any personal benefit 
     contract with respect to the transferor, or
         ``(ii) there is an understanding or expectation that any 
     person will directly or indirectly pay any premium on any 
     personal benefit contract with respect to the transferor.
         ``(B) Personal benefit contract.--For purposes of 
     subparagraph (A), the term `personal benefit contract' means, 
     with respect to the transferor, any life insurance, annuity, 
     or endowment contract if any direct or indirect beneficiary 
     under such contract is the transferor, any member of the 
     transferor's family, or any other person (other than an 
     organization described in subsection (c)) designated by the 
     transferor.
         ``(C) Application to charitable remainder trusts.--In the 
     case of a transfer to a trust referred to in subparagraph 
     (E), references in subparagraphs (A) and (F) to an 
     organization described in subsection (c) shall be treated as 
     a reference to such trust.
         ``(D) Exception for certain annuity contracts.--If, in 
     connection with a transfer to or for the use of an 
     organization described in subsection (c), such organization 
     incurs an obligation to pay a charitable gift annuity (as 
     defined in section 501(m)) and such organization purchases 
     any annuity contract to fund such obligation, persons 
     receiving payments under the charitable gift annuity shall 
     not be treated for purposes of subparagraph (B) as indirect 
     beneficiaries under such contract if--
         ``(i) such organization possesses all of the incidents of 
     ownership under such contract,
         ``(ii) such organization is entitled to all the payments 
     under such contract, and
         ``(iii) the timing and amount of payments under such 
     contract are substantially the same as the timing and amount 
     of payments to each such person under such obligation (as 
     such obligation is in effect at the time of such transfer).
         ``(E) Exception for certain contracts held by charitable 
     remainder trusts.--A person shall not be treated for purposes 
     of subparagraph (B) as an indirect beneficiary under any life 
     insurance, annuity, or endowment contract held by a 
     charitable remainder annuity trust or a charitable remainder 
     unitrust (as defined in section 664(d)) solely by reason of 
     being entitled to any payment referred to in paragraph (1)(A) 
     or (2)(A) of section 664(d) if--
         ``(i) such trust possesses all of the incidents of 
     ownership under such contract, and
         ``(ii) such trust is entitled to all the payments under 
     such contract.
         ``(F) Excise tax on premiums paid.--
         ``(i) In general.--There is hereby imposed on any 
     organization described in subsection (c) an excise tax equal 
     to the premiums paid by such organization on any life 
     insurance, annuity, or endowment contract if the payment of 
     premiums on such contract is in connection with a transfer 
     for which a deduction is not allowable under subparagraph 
     (A), determined without regard to when such transfer is made.
         ``(ii) Payments by other persons.--For purposes of clause 
     (i), payments made by any other person pursuant to an 
     understanding or expectation referred to in subparagraph (A) 
     shall be treated as made by the organization.
         ``(iii) Reporting.--Any organization on which tax is 
     imposed by clause (i) with respect to any premium shall file 
     an annual return which includes--

         ``(I) the amount of such premiums paid during the year 
     and the name and TIN of each beneficiary under the contract 
     to which the premium relates, and
         ``(II) such other information as the Secretary may 
     require.

     The penalties applicable to returns required under section 
     6033 shall apply to returns required under this clause. 
     Returns required under this clause shall be furnished at such 
     time and in such manner as the Secretary shall by forms or 
     regulations require.
         ``(iv) Certain rules to apply.--The tax imposed by this 
     subparagraph shall be treated as imposed by chapter 42 for 
     purposes of this title other than subchapter B of chapter 42.
         ``(G) Special rule where state requires specification of 
     charitable gift annuitant in contract.--In the case of an 
     obligation to pay a charitable gift annuity referred to in 
     subparagraph (D) which is entered into under the laws of a 
     State which requires, in order for the charitable gift 
     annuity to be exempt from insurance regulation by such State, 
     that each beneficiary under the charitable gift annuity be 
     named as a beneficiary under an annuity contract issued by an 
     insurance company authorized to transact business in such 
     State, the requirements of clauses (i) and (ii) of 
     subparagraph (D) shall be treated as met if--
         ``(i) such State law requirement was in effect on 
     February 8, 1999,
         ``(ii) each such beneficiary under the charitable gift 
     annuity is a bona fide resident of such State at the time the 
     obligation to pay a charitable gift annuity is entered into, 
     and
         ``(iii) the only persons entitled to payments under such 
     contract are persons entitled to payments as beneficiaries 
     under such obligation on the date such obligation is entered 
     into.
         ``(H) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations to 
     prevent the avoidance of such purposes.''
         (b) Effective Date.--
         (1) In general.--Except as otherwise provided in this 
     section, the amendment made by this section shall apply to 
     transfers made after February 8, 1999.
         (2) Excise tax.--Except as provided in paragraph (3) of 
     this subsection, section 170(f)(10)(F) of the Internal 
     Revenue Code of 1986 (as added by this section) shall apply 
     to premiums paid after the date of the enactment of this Act.
         (3) Reporting.--Clause (iii) of such section 
     170(f)(10)(F) shall apply to premiums paid after February 8, 
     1999 (determined as if the tax imposed by such section 
     applies to premiums paid after such date).

     SEC. 407. TRANSFER OF EXCESS DEFINED BENEFIT PLAN ASSETS FOR 
                   RETIREE HEALTH BENEFITS.

         (a) Extension.--
         (1) In general.--Section 420(b)(5) (relating to 
     expiration) is amended by striking ``in any taxable year 
     beginning after December 31, 2000'' and inserting ``made 
     after September 30, 2009''.
         (2) Conforming amendments.--
         (A) Section 101(e)(3) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1021(e)(3)) is amended by 
     striking ``1995'' and inserting ``2001''.
         (B) Section 403(c)(1) of such Act (29 U.S.C. 1103(c)(1)) 
     is amended by striking ``1995'' and inserting ``2001''.
         (C) Paragraph (13) of section 408(b) of such Act (29 
     U.S.C. 1108(b)(13)) is amended--
         (i) by striking ``in a taxable year beginning before 
     January 1, 2001'' and inserting ``made before October 1, 
     2009'', and
         (ii) by striking ``1995'' and inserting ``2001''.
         (b) Application of Minimum Cost Requirements.--
         (1) In general.--Section 420(c)(3) is amended to read as 
     follows:
         ``(3) Minimum cost requirements.--
         ``(A) In general.--The requirements of this paragraph are 
     met if each group health plan or arrangement under which 
     applicable health benefits are provided provides that the 
     applicable employer cost for each taxable year during the 
     cost maintenance period shall not be less than the higher of 
     the applicable employer costs for each of the 2 taxable years 
     immediately preceding the taxable year of the qualified 
     transfer.
         ``(B) Applicable employer cost.--For purposes of this 
     paragraph, the term `applicable employer cost' means, with 
     respect to any taxable year, the amount determined by 
     dividing--
         ``(i) the qualified current retiree health liabilities of 
     the employer for such taxable year determined--

         ``(I) without regard to any reduction under subsection 
     (e)(1)(B), and
         ``(II) in the case of a taxable year in which there was 
     no qualified transfer, in the same manner as if there had 
     been such a transfer at the end of the taxable year, by

         ``(ii) the number of individuals to whom coverage for 
     applicable health benefits was provided during such taxable 
     year.
         ``(C) Election to compute cost separately.--An employer 
     may elect to have this paragraph applied separately with 
     respect to individuals eligible for benefits under title 
     XVIII of the Social Security Act at any time during the 
     taxable year and with respect to individuals not so eligible.
         ``(D) Cost maintenance period.--For purposes of this 
     paragraph, the term `cost maintenance period' means the 
     period of 5 taxable years beginning with the taxable year in 
     which the qualified transfer occurs. If a taxable year is in 
     2 or more overlapping cost maintenance periods, this 
     paragraph shall be applied by taking into account the highest 
     applicable employer cost required to be provided under 
     subparagraph (A) for such taxable year.''
         (2) Conforming amendments.--
         (A) Section 420(b)(1)(C)(iii) is amended by striking 
     ``benefits'' and inserting ``cost''.
         (B) Section 420(e)(1)(D) is amended by striking ``and 
     shall not be subject to the minimum benefit requirements of 
     subsection (c)(3)'' and inserting ``or in calculating 
     applicable employer cost under subsection (c)(3)(B)''.
         (c) Effective Date.--The amendments made by this section 
     shall apply to qualified transfers occurring after December 
     31, 2000, and before October 1, 2009.

     SEC. 408. LIMITATIONS ON WELFARE BENEFIT FUNDS OF 10 OR MORE 
                   EMPLOYER PLANS.

         (a) Benefits to Which Exception Applies.--Section 
     419A(f)(6)(A) (relating to exception for 10 or more employer 
     plans) is amended to read as follows:

[[Page S6066]]

         ``(A) In general.--This subpart shall not apply to a 
     welfare benefit fund which is part of a 10 or more employer 
     plan if the only benefits provided through the fund are 1 or 
     more of the following:
         ``(i) Medical benefits.
         ``(ii) Disability benefits.
         ``(iii) Group term life insurance benefits which do not 
     provide for any cash surrender value or other money that can 
     be paid, assigned, borrowed, or pledged for collateral for a 
     loan.
     The preceding sentence shall not apply to any plan which 
     maintains experience-rating arrangements with respect to 
     individual employers.''
         (b) Limitation on Use of Amounts for Other Purposes.--
     Section 4976(b) (defining disqualified benefit) is amended by 
     adding at the end the following new paragraph:
         ``(5) Special rule for 10 or more employer plans exempted 
     from prefunding limits.--For purposes of paragraph (1)(C), 
     if--
         ``(A) subpart D of part I of subchapter D of chapter 1 
     does not apply by reason of section 419A(f)(6) to 
     contributions to provide 1 or more welfare benefits through a 
     welfare benefit fund under a 10 or more employer plan, and
         ``(B) any portion of the welfare benefit fund 
     attributable to such contributions is used for a purpose 
     other than that for which the contributions were made,
     then such portion shall be treated as reverting to the 
     benefit of the employers maintaining the fund.''
         (c) Effective Date.--The amendments made by this section 
     shall apply to contributions paid or accrued after the date 
     of the enactment of this Act, in taxable years ending after 
     such date.

     SEC. 409. MODIFICATION OF INSTALLMENT METHOD AND REPEAL OF 
                   INSTALLMENT METHOD FOR ACCRUAL METHOD 
                   TAXPAYERS.

         (a) Repeal of Installment Method for Accrual Basis 
     Taxpayers.--
         (1) In general.--Subsection (a) of section 453 (relating 
     to installment method) is amended to read as follows:
         ``(a) Use of Installment Method.--
         ``(1) In general.--Except as otherwise provided in this 
     section, income from an installment sale shall be taken into 
     account for purposes of this title under the installment 
     method.
         ``(2) Accrual method taxpayer.--The installment method 
     shall not apply to income from an installment sale if such 
     income would be reported under an accrual method of 
     accounting without regard to this section. The preceding 
     sentence shall not apply to a disposition described in 
     subparagraph (A) or (B) of subsection (l)(2).''
         (2) Conforming amendments.--Sections 453(d)(1), 
     453(i)(1), and 453(k) are each amended by striking ``(a)'' 
     each place it appears and inserting ``(a)(1)''.
         (b) Modification of Pledge Rules.--Paragraph (4) of 
     section 453A(d) (relating to pledges, etc., of installment 
     obligations) is amended by adding at the end the following: 
     ``A payment shall be treated as directly secured by an 
     interest in an installment obligation to the extent an 
     arrangement allows the taxpayer to satisfy all or a portion 
     of the indebtedness with the installment obligation.''
         (c) Effective Date.--The amendments made by this section 
     shall apply to sales or other dispositions occurring on or 
     after the date of the enactment of this Act.

     SEC. 410. INCLUSION OF CERTAIN VACCINES AGAINST STREPTOCOCCUS 
                   PNEUMONIAE TO LIST OF TAXABLE VACCINES.

         (a) In General.--Section 4132(a)(1) (defining taxable 
     vaccine) is amended by adding at the end the following new 
     subparagraph:
         ``(L) Any conjugate vaccine against streptococcus 
     pneumoniae.''
         (b) Effective Date.--
         (1) Sales.--The amendment made by this section shall 
     apply to vaccine sales beginning on the day after the date on 
     which the Centers for Disease Control makes a final 
     recommendation for routine administration to children of any 
     conjugate vaccine against streptococcus pneumoniae.
         (2) Deliveries.--For purposes of paragraph (1), in the 
     case of sales on or before the date described in such 
     paragraph for which delivery is made after such date, the 
     delivery date shall be considered the sale date.
                                 ______
                                 
      By Mr. WYDEN:
  S. 1135. A bill to amend the Communications Act of 1934 to provide 
that the lowest unit rate for campaign advertising shall not be 
available for communication in which a candidate attacks an opponent of 
the candidate unless the candidate does so in person; to the Committee 
on Commerce, Science, and Transportation.


            POLITICAL CANDIDATE PERSONAL RESPONSIBILITY ACT

  Mr. WYDEN. Mr. President, today I am introducing legislation, along 
with Congressman Walden in the House of Representatives, that would 
fight the scourge of negative political campaigns with the simple yet 
powerful tool of accountability. If candidates choose to run for office 
by disparaging their opponents rather than standing on their own 
records and beliefs, they should at least be expected to take 
responsibility for the ad campaigns that they run. Under this 
legislation, there would be meaningful financial penalty--in the form 
of higher advertising rates--for those who fail to do so.
  For me, this bill arises out of unpleasant personal experience. I was 
elected to this body in a special election against the man I am now 
proud to call my friend and colleague, Gordon Smith. That campaign was 
the nastiest, most negative, least edifying political season that my 
state has ever been through. The unabashedly negative ads that both of 
our campaigns put on the air were a sour departure from Oregon's 
tradition of responsible, thoughtful politics.
  I eventually became so disgusted with what my own campaign had 
become, that with only a few weeks before the election, I got rid of 
all my ads, destroyed negative mailings that were about to be sent out, 
asked others who were airing negative ads on my behalf to desist, and 
started over with a campaign that was 100 percent positive. I didn't 
know if it would be a smart campaign strategy or a kind of political 
suicide, and I didn't much care. Win or lose, I wanted to be proud of 
the way that I had conducted myself.
  What I learned all too well in that campaign is that negative 
politics corrupts everything that it touches. It harms not only its 
target, but its sponsor as well. Negative ads are one of the biggest 
reasons for the cynicism and even disgust that so many Americans feel 
toward the political process. They cheapen the very institution of 
democracy.
  There's no way, of course, to mandate a sense of shame or legislate 
an end to negative ads. But in an era when elections are determined 
more and more by television and radio advertising, it is not too much 
to ask that candidates be held responsible for the statements they make 
in their ads.
  Under current campaign law, broadcasters are required to give 
qualified candidates for federal office their lowest price for ads, 
what is known as the lowest unit broadcast rate. In order to qualify 
for this rate, candidates must comply with federal campaign finance 
laws, and include proper disclaimers in the ad, among other 
regulations. The Political Candidate Personal Responsibility Act would 
attach two additional requirements to the discounted ad rate. The first 
requirement is that for both television and radio advertisements, the 
lowest unit rate will only be available if a candidate, when referring 
to his or her opponent, makes the reference him or her self. Radio 
advertisements must also contain a statement by the candidate in which 
the candidate identifies him or herself and the office for which the 
person is running. The second requirement is that in any television or 
radio ad where a candidate makes reference to his or her opponent, the 
candidate must appear or be heard for at least 75 percent of the 
broadcast time. If a candidate chooses to air an advertisement that 
does not comply with these requirements, he or she will be ineligible 
to receive the lowest unit rate for a period of 45 days in a primary 
and 60 days in a general election.
  In other words, if you want the benefits of discounted broadcast 
time, you can't make disparaging statements that you aren't willing to 
say yourself. No more hiding behind grainy photographs, ominous music, 
and anonymous announcers.
  Ultimately, one of our greatest responsibilities as elected officials 
is to encourage greater public participation in all levels of the 
political process. Campaign activities should not only represent the 
views of the candidates, but they should also encourage voters to 
participate in the democratic process. The growing negative trend of 
campaign advertisements degrades the process and discourages people 
from becoming involved.
  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. 1135

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

[[Page S6067]]

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Political Candidate Personal 
     Responsibility Act of 1999''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Local broadcasters are currently required to offer the 
     ``lowest unit charge'' for advertising to candidates for all 
     political offices 45 days before a primary election, and 60 
     days before a general election.
       (2) The ``lowest unit charge'' requirement represents a 
     federally mandated subsidy for political candidates.
       (3) Campaigns for Federal office are too frequently 
     dominated by negative and attack-oriented television and 
     radio advertising.
       (4) The Government should take action to ensure that it 
     does not subsidize negative and attack oriented advertising 
     where the candidate fails to demonstrate personal 
     responsibility for the tenor of the candidate's advertising.

     SEC. 3. LIMITATION ON AVAILABILITY OF LOWEST UNIT CHARGE FOR 
                   FEDERAL CANDIDATES ATTACKING OPPOSITION.

       (a) In General.--Section 315(b) of the Communications Act 
     of 1934 (47 U.S.C. 315(b)) is amended--
       (1) by striking ``(b) The charges'' and inserting ``(b)(1) 
     The charges'';
       (2) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively; and
       (3) by adding at the end the following new paragraph:
       ``(2)(A) In the case of a candidate for Federal office, 
     such candidate shall not be entitled to receive the rate 
     under paragraph (1)(A) for the use of any broadcasting 
     station unless the candidate certifies that the candidate 
     (and any authorized committee of the candidate) shall not 
     make any direct reference to another candidate for the same 
     office, in any broadcast using the rights and conditions of 
     access under this Act, unless--
       ``(i) such reference meets the requirements of subparagraph 
     (C), and
       ``(ii) a communication which contains such reference--
       ``(I) in the case of a television broadcast, contains a 
     clearly identifiable photographic or similar image of the 
     candidate that is prominently displayed during at least 75 
     percent of the broadcast time, and
       ``(II) in the case of a radio broadcast, contains the voice 
     of the candidate during at least 75 percent of the broadcast 
     time.
       ``(B) If a candidate for Federal office (or any authorized 
     committee of such candidate) makes a reference described in 
     subparagraph (A) in any broadcast that does not meet the 
     requirements of subparagraph (C) or makes a communication 
     that does not meet the requirements of subparagraph (A)(ii), 
     such candidate shall not be entitled to receive the rate 
     under paragraph (1)(A) for such broadcast or any other 
     broadcast during any portion of the 45-day and 60-day periods 
     described in paragraph (1)(A), that occur on or after the 
     date of such broadcast, for election to such office.
       ``(C) A candidate meets the requirements of this 
     subparagraph with respect to any reference to another 
     candidate if--
       ``(i) in the case of a television broadcast, the reference 
     (and any statement relating to the other candidate) is made 
     by the candidate in a personal appearance on the screen, and
       ``(ii) in the case of a radio broadcast, the reference (and 
     any statement relating to the other candidate) is made by the 
     candidate in a personal audio statement during which the 
     candidate and the office for which the candidate is running 
     are identified by such candidate.
       ``(D) For purposes of this paragraph, the terms `authorized 
     committee' and `Federal office' have the meanings given such 
     terms by section 301 of the Federal Election Campaign Act of 
     1971 (2 U.S.C. 431).''
       (b) Conforming Amendment.--Section 315(b)(1)(A) of the 
     Communications Act of 1934 (47 U.S.C. 315(b)(1)(A)), as 
     redesignated by subsection (a)(2), is amended by inserting 
     ``subject to paragraph (2),'' before ``during the forty-five 
     days''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to broadcasts made after the date of enactment of 
     this Act.
                                 ______
                                 
      By Mr. MACK (for himself and Mr. Graham):
  S. 1136. A bill to amend the Internal Revenue Code of 1986 to provide 
that an organization shall be exempt from income tax if it is created 
by a State to provide property and casualty insurance coverage for 
property for which such coverage is otherwise unavailable; to the 
Committee on Finance.


  exemption from income tax for state created organizations providing 
                    property and casualty insurance

  Mr. MACK. Mr. President, today Senator Graham and I introduce 
legislation that would help protect Florida from economic devastation 
in the event of a catastrophic windstorm or other peril.
  Our legislation would amend Section 501(c) of the Internal Revenue 
Code to grant tax-exempt status to the Florida Windstorm Underwriting 
Association (FWUA), the Florida Residential Property and Casualty Joint 
Underwriting Association (JUA) and similar state-chartered, not-for-
profit insurers serving markets in which commercial insurance is not 
available. The FWUA and JUA are non-profit entities established by the 
state to provide property and casualty insurance coverage in those 
markets not adequately served by other insurers.
  In most years, Florida is not hit by a major hurricane or natural 
catastrophe. In those years, the FWUA and JUA take in more premiums 
than are paid out in claims or expenses. Since these entities are not-
for-profit, state law prevents those funds from being distributed--they 
are instead literally saved for a severely rainy or windy day. 
Nonetheless, the Internal Revenue Code requires 35% of those funds to 
be sent to Washington as federal income taxes rather than used to fund 
reserves. Designating the FWUA and JUA as tax-exempt will help Florida 
to accumulate the necessary reserves to pay claims brought on by a 
catastrophe. This bill gives the two Florida catastrophe funds the same 
tax-exempt status that is already enjoyed by a number of not-for-profit 
insurance provers.
  State law authorizes the FWUA and the JUA to assess property 
insurance policyholders throughout Florida to pay for losses generated 
by catastrophic storms or other perils. Thus, the benefits of the tax 
exemption would reduce the frequency and severity of assessments levied 
against individual policyholders. Greater funds would be available to 
cover losses which otherwise would be paid for by higher assessments on 
Florida policyholders--cutting taxes for the approximately 5,000,000 
property owners in the state of Florida.
  This legislation has the bipartisan support of the entire Florida 
Congressional delegation in addition to strong backing from Governor 
Jeb Bush, the State Insurance Commissioner, the Florida Senate 
President and Florida's House Speaker. And this change in the tax code 
would result in only a negligible loss of federal tax revenue, 
according to Joint Tax.
  Our legislation is extremely important to homeowners and businesses 
throughout the state of Florida, all of whom are subject to assessment 
if reserves are not sufficient to pay claims in the event of a severe 
hurricane or other catastrophe. With hundreds of miles of magnificent 
coastline, Florida remains sensitive to the perils of nature. Enactment 
of our legislation permits Florida to prepare for the next Hurricane 
Andrew while alleviating some of the economic hardship exacted on 
Florida property owners.
  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. 1136

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

     SECTION 1. EXEMPTION FROM INCOME TAX FOR STATE-CREATED 
                   ORGANIZATIONS PROVIDING PROPERTY AND CASUALTY 
                   INSURANCE FOR PROPERTY FOR WHICH SUCH COVERAGE 
                   IS OTHERWISE UNAVAILABLE.

       (a) In General.--Subsection (c) of section 501 of the 
     Internal Revenue Code of 1986 (relating to exemption from tax 
     on corporations, certain trusts, etc.) is amended by adding 
     at the end the following new paragraph:
       ``(28)(A) Any association created before January 1, 1999, 
     by State law and organized and operated exclusively to 
     provide property and casualty insurance coverage for property 
     located within the State for which the State has determined 
     that coverage in the authorized insurance market is limited 
     or unavailable at reasonable rates, if--
       ``(i) no part of the net earnings of which inures to the 
     benefit of any private shareholder or individual,
       ``(ii) except as provided in clause (v), no part of the 
     assets of which may be used for, or diverted to, any purpose 
     other than--
       ``(I) to satisfy, in whole or in part, the liability of the 
     association for, or with respect to, claims made on policies 
     written by the association,
       ``(II) to invest in investments authorized by applicable 
     law, or
       ``(III) to pay reasonable and necessary administration 
     expenses in connection with the establishment and operation 
     of the association and the processing of claims against the 
     association,
       ``(iii) the State law governing the association permits the 
     association to levy assessments on property and casualty 
     insurance policyholders with insurable interests in

[[Page S6068]]

     property located in the State to fund deficits of the 
     association, including the creation of reserves,
       ``(iv) the plan of operation of the association is subject 
     to approval by the chief executive officer or other executive 
     branch official of the State, by the State legislature, or 
     both, and
       ``(v) the assets of the association revert upon dissolution 
     to the State, the State's designee, or an entity designated 
     by the State law governing the association, or State law does 
     not permit the dissolution of the association.
       ``(B) Subparagraph (A) shall not apply to an association 
     for any taxable year if the association's surplus income for 
     such year exceeds 5 percent of the total insured value of 
     properties insured by the association as of the close of the 
     taxable year unless the association pays a tax equal to 35 
     percent of such excess for such year. Such tax shall be 
     treated as imposed by chapter 42 for purposes of this 
     title.''
       (b) Transitional Rule.--No income or gain shall be 
     recognized by an association as a result of a change in 
     status to that of an association described by section 
     501(c)(28) of the Internal Revenue Code of 1986, as amended 
     by subsection (a).
       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     1998.

 Mr. GRAHAM. Mr. President, as we prepare for next week's start 
of the 1999 Hurricane Season, I am pleased to join my colleague, 
Senator Mack, in introducing legislation that will help protect Florida 
from economic devastation in the event of a catastrophic disaster.
  Our legislation would amend Section 501(c) of the Internal Revenue 
Code to grant tax-exempt status to state chartered, not-for-profit 
insurers serving markets in which commercial insurance is not 
available. In our state, this legislation will primarily assist the 
Florida Windstorm Underwriting Association (FWUA) and the Florida 
Residential Property and Casualty Joint Underwriting Association (JUA).
  The Florida Windstorm Association was created in 1970. Twenty-two 
years later, in 1992, the legislature authorized the Joint Underwriting 
Association. These organizations operate as residual market mechanisms. 
They provide residential property and casualty insurance coverage for 
those residents who need, but are unable to procure through the 
voluntary market.
  The JUA was created in direct response to $16 billion in covered 
losses during Hurricane Andrew. The destructive force of Andrew 
rendered a number of property insurance companies insolvent. Other 
firms recovered from the catastrophe by withdrawing from Florida 
markets.
  During those fortunate years when we are not impacted by major 
hurricanes or other natural catastrophes, the FWUA and JUA take in more 
premiums that are paid out in claims and expenses. Florida law prevents 
those funds from being distributed so that needed reserves will 
accumulate in preparation for inevitable disasters.
  Unfortunately, the Internal Revenue Service penalizes Florida for 
this responsible, forward thinking practice. It requires that 35% of 
those funds be sent to Washington as federal income taxes rather than 
used to fund reserves. Designating state chartered, non profit insurers 
as tax-exempt will help Florida accumulate the necessary reserves to 
pay claims brought on by a catastrophe.
  State law also authorizes the FWUA and the JUA to assess property 
insurance policyholders for losses generated by natural disasters. Tax 
exemptions should reduce the frequency and severity of assessments 
levied against individual policyholders, because it would make more 
funds available to cover losses which otherwise would be paid for by 
higher assessments on policyholders.
  Mr. President, even seven years later, Hurricane Andrew is still a 
nightmarish memory for Floridians. The 1999 Hurricane season will begin 
on June 1, 1999. The National Weather Service expects this hurricane 
season--which begins next Tuesday, to be another active storm season. 
It is imperative that the federal government avoids the comfortable 
habit of ignoring lessons presented by Andrew and other recent 
catastrophes.
  This legislation has bipartisan support in the state's Congressional 
delegation. It is backed by our state governor, our insurance 
Commissioner, our state Senate President and House Speaker.
  Also, Mr. President, the Joint Committee on Taxation has ruled that 
this legislation will have a negligible effect on the federal budget.
  Our legislation is extremely important to homeowners and businesses 
throughout Florida, all whom are subject to assessment if reserves are 
not sufficient to pay claims in the event of a catastrophe. Florida 
remains sensitive to the perils of nature. Enactment of this 
legislation will permit our state to prepare for the next Hurricane 
Andrew while alleviating some of the economic hardship exacted on 
Florida property owners.
                                 ______
                                 
      By Mr. REID (for himself and Mr. Frist):
  S. 1139. A bill to amend title 49, United States Code, relating to 
civil penalties for unruly passengers of air carriers and to provide 
for the protection of employees providing air safety information, and 
for other purposes; to the Committee on Commerce, Science, and 
Transportation.


  increase of civil penalties on unruly airline passengers legislation

  Mr. REID. Mr. President, years ago, when air travel was in its 
infancy, the greatest threat to passenger safety was mechanical 
failure.
  Over the last half-century, the dedication of the men and women who 
service our airlines, coupled with advances in technology and know-how, 
have made air travel the safest method of transportation we have.
  But it's not always the most convenient way to travel. As air travel 
has become safer, it has also become more popular--and more crowded.
  As all of my colleagues in this chamber well know, air travel is an 
increasingly stressful and chaotic experience, at times trying even the 
most patient among us.
  I commend my colleagues for introducing the passenger's bill of 
rights earlier this Congress, which hopefully will alleviate some of 
the stress of air travel.
  I rise today to address a different aspect of that stress, and that 
is the safety hazard created to all passengers when a passenger who 
can't control his behavior or emotions, or simply refuses to do so, 
acts in a way that jeopardizes the safety of the flight.
  Over the last few years, the number of reported incidents in which 
unruly airline passengers have interfered with flight crews, or even 
physically assaulted them, has increased dramatically and dangerously.
  One airline alone reports that the number of incidents caused by 
violent or unruly passengers more than tripled in only three years--
from 296 cases in 1994 to 921 cases in 1997.
  In 1996, the Federal Aviation Administration imposed civil penalties 
against 121 unruly passengers. In 1997, that number jumped to 195--a 
sixty percent increase in only one year.
  These incidents represent a serious threat to the safety of both 
flight crews and passengers alike.
  Today I, along with my colleague Senator Frist, am introducing a bill 
that addresses this problem.
  Briefly, my bill will allow the Secretary of Transportation to 
increase the civil penalty from its current level of $1,100, up to 
$25,000, on any airline passenger who interferes with the duties or 
responsibilities of the flight crew or cabin crew or takes any action 
that poses an imminent threat to the safety of the aircraft or other 
individuals on the aircraft.
  We need not only to punish passengers who threaten the safety of 
their passengers. We also need to give airlines the power to prevent 
particularly violent or disruptive passengers from committing similar 
acts in the future.
  When someone drives in an unsafe manner on our roads, local police 
have the power to fine them. When that someone commits the same 
offenses repeatedly, or drives in a way that is especially dangerous, 
local authorities have the power to revoke or suspend their driver's 
licenses--to take those drivers off the road.
  I think we need to do something similar with air travelers who commit 
particularly dangerous acts, or who insist on repeatedly disrupting 
airline flight crews. We need them off of our airlines, so that they do 
not have the opportunity to jeopardize the lives of other passengers in 
the future.
  The bill I am introducing today gives the Secretary of Transportation 
the authority to raise the civil penalty up to $25,000.

[[Page S6069]]

  Second, and most important, my bill would also give the Secretary of 
Transportation the authority to impose a ban of up to one year on all 
commercial air travel on passengers guilty of such incidents.
  The bill enforces this ban by making airlines which provides air 
transportation to a banned traveler liable to the Government for a 
civil penalty of up to $25,000.
  Third, this bill would give whistleblower protection to flight 
attendants who report unsafe behavior by co-workers.
  Fourth, this bill will make the investigation of in-flight incidents 
easier by giving the Attorney General the authority to deputize local 
law enforcement officials to investigate incidents when the plane 
lands, wherever it lands.
  Mr. President, everyone in this body travels extensively by air. 
Every time we get into an airline, we put our lives in the hands of the 
hardworking men and women who staff our airlines.
  When we, or any other American, gets on an airplane, we should be 
able to sit back and relax, confident in the knowledge that those men 
and women can perform the jobs they were trained to do without 
interference by unreasonable or violent passengers.
  We should also be able to board an airline secure in the knowledge 
that the man or woman sitting in the seat next to us, doesn't have an 
extensive history of violent or disruptive behavior on airplanes.
  We should also have the security of knowing that if a passenger does 
choose to commit a particularly unruly or violent act that threatens 
the safety of other passengers or the flight crew, that passenger won't 
be able to get on another airplane tomorrow and do the same thing to 
another unsuspecting planeload of passengers.
  I urge my colleagues to join me in supporting this important bill.
  Mr. President, 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:
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. PENALTIES FOR UNRULY PASSENGERS.

       (a) In General.--Chapter 463 of title 49, United States 
     Code, is amended by adding at the end the following:

     ``Sec.   46317. Interference with cabin or flight crew

       ``(a) General Rule.--
       ``(1) In general.--An individual who interferes with the 
     duties or responsibilities of the flight crew or cabin crew 
     of a civil aircraft or takes any action that poses an 
     imminent threat to the safety of the aircraft or other 
     individuals on the aircraft is liable to the United States 
     Government for a civil penalty of not more than $25,000.
       ``(2) Additional penalties.--In addition or as an 
     alternative to the penalty under paragraph (1), the Secretary 
     of Transportation (referred to in this section as the 
     `Secretary') may prohibit the individual from flying as a 
     passenger on an aircraft used to provide air transportation 
     for a period of not more than 1 year.
       ``(b) Notification of Air Carriers.--Not later than 10 days 
     after issuing an order prohibiting an individual from flying 
     under subsection (a)(2), the Secretary shall notify all air 
     carriers of--
       ``(1) the prohibition; and
       ``(2) the period of the prohibition.
       ``(c) Responsibility of Air Carriers.--After a notification 
     of an order issued under subsection (a)(2), an air carrier 
     who provides air transportation for the individual prohibited 
     from flying during the period of the prohibition under that 
     subsection is liable to the United States Government for a 
     civil penalty of not more than $25,000.
       ``(d) Compromise and Setoff.--
       ``(1) Compromise.--The Secretary may compromise the amount 
     of a civil penalty imposed under this section.
       ``(2) Setoff.--The United States Government may deduct the 
     amount of a civil penalty imposed or compromised under this 
     section from amounts the Government owes the person liable 
     for the penalty.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 463 of title 49, United States Code, is amended by 
     adding at the end the following:

``46317. Interference with cabin or flight crew.''.

     SEC. 2. PROTECTION OF EMPLOYEES PROVIDING AIR SAFETY 
                   INFORMATION.

       (a) In General.--Chapter 421 of title 49, United States 
     Code, is amended by adding at the end the following:

           ``SUBCHAPTER III--WHISTLEBLOWER PROTECTION PROGRAM

     ``Sec. 42121. Protection of employees providing air safety 
       information

       ``(a) Discrimination Against Airline Employees.--No air 
     carrier or contractor or subcontractor of an air carrier may 
     discharge an employee of the air carrier or the contractor or 
     subcontractor of an air carrier or otherwise discriminate 
     against any such employee with respect to compensation, 
     terms, conditions, or privileges of employment because the 
     employee (or any person acting pursuant to a request of the 
     employee)--
       ``(1) provided, caused to be provided, or is about to 
     provide or cause to be provided, to the Federal Government 
     information relating to any violation or alleged violation of 
     any order, regulation, or standard of the Federal Aviation 
     Administration or any other provision of Federal law relating 
     to air carrier safety under this subtitle or any other law of 
     the United States;
       ``(2) has filed, caused to be filed, or is about to file or 
     cause to be filed, a proceeding relating to any violation or 
     alleged violation of any order, regulation, or standard of 
     the Federal Aviation Administration or any other provision of 
     Federal law relating to air carrier safety under this 
     subtitle or any other law of the United States;
       ``(3) testified or will testify in such a proceeding; or
       ``(4) assisted or participated or is about to assist or 
     participate in such a proceeding.
       ``(b) Department of Labor Complaint Procedure.--
       ``(1) Filing and notification.--
       ``(A) In general.--In accordance with this paragraph, a 
     person may file (or have a person file on behalf of that 
     person) a complaint with the Secretary of Labor if that 
     person believes that an air carrier or contractor or 
     subcontractor of an air carrier discharged or otherwise 
     discriminated against that person in violation of subsection 
     (a).
       ``(B) Requirements for filing complaints.--A complaint 
     referred to in subparagraph (A) may be filed not later than 
     90 days after an alleged violation occurs. The complaint 
     shall state the alleged violation.
       ``(C) Notification.--Upon receipt of a complaint submitted 
     under subparagraph (A), the Secretary of Labor shall notify 
     the air carrier, contractor, or subcontractor named in the 
     complaint and the Administrator of the Federal Aviation 
     Administration of the--
       ``(i) filing of the complaint;
       ``(ii) allegations contained in the complaint;
       ``(iii) substance of evidence supporting the complaint; and
       ``(iv) opportunities that are afforded to the air carrier, 
     contractor, or subcontractor under paragraph (2).
       ``(2) Investigation; preliminary order.--
       ``(A) In general.--
       ``(i) Investigation.--Not later than 60 days after receipt 
     of a complaint filed under paragraph (1) and after affording 
     the person named in the complaint an opportunity to submit to 
     the Secretary of Labor a written response to the complaint 
     and an opportunity to meet with a representative of the 
     Secretary to present statements from witnesses, the Secretary 
     of Labor shall conduct an investigation and determine whether 
     there is reasonable cause to believe that the complaint has 
     merit and notify in writing the complainant and the person 
     alleged to have committed a violation of subsection (a) of 
     the Secretary's findings.
       ``(ii) Order.--Except as provided in subparagraph (B), if 
     the Secretary of Labor concludes that there is reasonable 
     cause to believe that a violation of subsection (a) has 
     occurred, the Secretary shall accompany the findings referred 
     to in clause (i) with a preliminary order providing the 
     relief prescribed under paragraph (3)(B).
       ``(iii) Objections.--Not later than 30 days after the date 
     of notification of findings under this paragraph, the person 
     alleged to have committed the violation or the complainant 
     may file objections to the findings or preliminary order and 
     request a hearing on the record.
       ``(iv) Effect of filing.--The filing of objections under 
     clause (iii) shall not operate to stay any reinstatement 
     remedy contained in the preliminary order.
       ``(v) Hearings.--Hearings conducted pursuant to a request 
     made under clause (iii) shall be conducted expeditiously and 
     governed by the Federal Rules of Civil Procedure. If a 
     hearing is not requested during the 30-day period prescribed 
     in clause (iii), the preliminary order shall be deemed a 
     final order that is not subject to judicial review.
       ``(B) Requirements.--
       ``(i) Required showing by complainant.--The Secretary of 
     Labor shall dismiss a complaint filed under this subsection 
     and shall not conduct an investigation otherwise required 
     under subparagraph (A) unless the complainant makes a prima 
     facie showing that any behavior described in paragraphs (1) 
     through (4) of subsection (a) was a contributing factor in 
     the unfavorable personnel action alleged in the complaint.
       ``(ii) Showing by employer.--Notwithstanding a finding by 
     the Secretary that the complainant has made the showing 
     required under clause (i), no investigation otherwise 
     required under subparagraph (A) shall be conducted if the 
     employer demonstrates, by clear and convincing evidence, that 
     the employer would have taken the same unfavorable personnel 
     action in the absence of that behavior.
       ``(iii) Criteria for determination by secretary.--The 
     Secretary may determine that a violation of subsection (a) 
     has occurred only if the complainant demonstrates that any 
     behavior described in paragraphs (1)

[[Page S6070]]

     through (4) of subsection (a) was a contributing factor in 
     the unfavorable personnel action alleged in the complaint.
       ``(iv) Prohibition.--Relief may not be ordered under 
     subparagraph (A) if the employer demonstrates by clear and 
     convincing evidence that the employer would have taken the 
     same unfavorable personnel action in the absence of that 
     behavior.
       ``(3) Final order.--
       ``(A) Deadline for issuance; settlement agreements.--
       ``(i) In general.--Not later than 120 days after conclusion 
     of a hearing under paragraph (2), the Secretary of Labor 
     shall issue a final order that--

       ``(I) provides relief in accordance with this paragraph; or
       ``(II) denies the complaint.

       ``(ii) Settlement agreement.--At any time before issuance 
     of a final order under this paragraph, a proceeding under 
     this subsection may be terminated on the basis of a 
     settlement agreement entered into by the Secretary of Labor, 
     the complainant, and the air carrier, contractor, or 
     subcontractor alleged to have committed the violation.
       ``(B) Remedy.--If, in response to a complaint filed under 
     paragraph (1), the Secretary of Labor determines that a 
     violation of subsection (a) has occurred, the Secretary of 
     Labor shall order the air carrier, contractor, or 
     subcontractor that the Secretary of Labor determines to have 
     committed the violation to--
       ``(i) take action to abate the violation;
       ``(ii) reinstate the complainant to the former position of 
     the complainant and ensure the payment of compensation 
     (including back pay) and the restoration of terms, 
     conditions, and privileges associated with the employment; 
     and
       ``(iii) provide compensatory damages to the complainant.
       ``(C) Costs of complaint.--If the Secretary of Labor issues 
     a final order that provides for relief in accordance with 
     this paragraph, the Secretary of Labor, at the request of the 
     complainant, shall assess against the air carrier, 
     contractor, or subcontractor named in the order an amount 
     equal to the aggregate amount of all costs and expenses 
     (including attorney and expert witness fees) reasonably 
     incurred by the complainant (as determined by the Secretary 
     of Labor) for, or in connection with, the bringing of the 
     complaint that resulted in the issuance of the order.
       ``(4) Frivolous complaints.--A complaint brought under this 
     section that is found to be frivolous or to have been brought 
     in bad faith shall be governed by Rule 11 of the Federal 
     Rules of Civil Procedure.
       ``(5) Review.--
       ``(A) Appeal to court of appeals.--
       ``(i) In general.--Not later than 60 days after a final 
     order is issued under paragraph (3), a person adversely 
     affected or aggrieved by that order may obtain review of the 
     order in the United States court of appeals for the circuit 
     in which the violation allegedly occurred or the circuit in 
     which the complainant resided on the date of that violation.
       ``(ii) Requirements for judicial review.--A review 
     conducted under this paragraph shall be conducted in 
     accordance with chapter 7 of title 5. The commencement of 
     proceedings under this subparagraph shall not, unless ordered 
     by the court, operate as a stay of the order that is the 
     subject of the review.
       ``(B) Limitation on collateral attack.--An order referred 
     to in subparagraph (A) shall not be subject to judicial 
     review in any criminal or other civil proceeding.
       ``(6) Enforcement of order by secretary of labor.--
       ``(A) In general.--If an air carrier, contractor, or 
     subcontractor named in an order issued under paragraph (3) 
     fails to comply with the order, the Secretary of Labor may 
     file a civil action in the United States district court for 
     the district in which the violation occurred to enforce that 
     order.
       ``(B) Relief.--In any action brought under this paragraph, 
     the district court shall have jurisdiction to grant any 
     appropriate form of relief, including injunctive relief and 
     compensatory damages.
       ``(7) Enforcement of order by parties.--
       ``(A) Commencement of action.--A person on whose behalf an 
     order is issued under paragraph (3) may commence a civil 
     action against the air carrier, contractor, or subcontractor 
     named in the order to require compliance with the order. The 
     appropriate United States district court shall have 
     jurisdiction, without regard to the amount in controversy or 
     the citizenship of the parties, to enforce the order.
       ``(B) Attorney fees.--In issuing any final order under this 
     paragraph, the court may award costs of litigation (including 
     reasonable attorney and expert witness fees) to any party if 
     the court determines that the awarding of those costs is 
     appropriate.
       ``(c) Mandamus.--Any nondiscretionary duty imposed by this 
     section shall be enforceable in a mandamus proceeding brought 
     under section 1361 of title 28.
       ``(d) Nonapplicability To Deliberate Violations.--
     Subsection (a) shall not apply with respect to an employee of 
     an air carrier, or contractor or subcontractor of an air 
     carrier who, acting without direction from the air carrier 
     (or an agent, contractor, or subcontractor of the air 
     carrier), deliberately causes a violation of any requirement 
     relating to air carrier safety under this subtitle or any 
     other law of the United States.
       ``(e) Contractor Defined.--In this section, the term 
     `contractor' means a company that performs safety-sensitive 
     functions by contract for an air carrier.''.
       (b) Conforming Amendment.--The analysis for chapter 421 of 
     title 49, United States Code, is amended by adding at the end 
     the following:

           ``SUBCHAPTER III--WHISTLEBLOWER PROTECTION PROGRAM

``42121. Protection of employees providing air safety information.
       (c) Civil Penalty.--Section 46301(a)(1)(A) of title 49, 
     United States Code, is amended by striking ``subchapter II of 
     chapter 421,'' and inserting ``subchapter II or III of 
     chapter 421,''.

     SEC. 3. DEPUTIZING OF STATE AND LOCAL LAW ENFORCEMENT 
                   OFFICERS.

       (a) Definitions.--In this section:
       (1) Aircraft.--The term ``aircraft'' has the meaning given 
     that term in section 40102 of title 49, United States Code.
       (2) Air transportation.--The term ``air transportation'' 
     has the meaning given that term in section 40102 of title 49, 
     United States Code.
       (3) Attorney general.--The term ``Attorney General'' means 
     the Attorney General of the United States.
       (b) Establishment of a Program To Deputized Local Law 
     Enforcement Officers.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Attorney General shall--
       (A) establish a program under which the Attorney General 
     may deputize State and local law enforcement officers as 
     Deputy United States Marshals for the limited purpose of 
     enforcing Federal laws that regulate security on board 
     aircraft, including laws relating to violent, abusive, or 
     disruptive behavior by passengers of air transportation; and
       (B) encourage the participation of law enforcement officers 
     of State and local governments in the program established 
     under subparagraph (A).
       (2) Consultation.--In establishing the program under 
     paragraph (1), the Attorney General shall consult with 
     appropriate officials of--
       (A) the Federal Government (including the Administrator of 
     the Federal Aviation Administration or a designated 
     representative of the Administrator); and
       (B) State and local governments in any geographic area in 
     which the program may operate.
       (3) Training and background of law enforcement officers.--
       (A) In general.--Under the program established under this 
     subsection, to qualify to serve as a Deputy United States 
     Marshal under the program, a State or local law enforcement 
     officer shall--
       (i) meet the minimum background and training requirements 
     for a law enforcement officer under part 107 of title 14, 
     Code of Federal Regulations (or equivalent requirements 
     established by the Attorney General); and
       (ii) receive approval to participate in the program from 
     the State or local law enforcement agency that is the 
     employer of that law enforcement officer.
       (B) Training not federal responsibility.--The Federal 
     Government shall not be responsible for providing to a State 
     or local law enforcement officer the training required to 
     meet the training requirements under subparagraph (A)(i). 
     Nothing in this subsection may be construed to grant any such 
     law enforcement officer the right to attend any institution 
     of the Federal Government established to provide training to 
     law enforcement officers of the Federal Government.
       (c) Powers and Status of Deputized Law Enforcement 
     Officers.--
       (1) In general.--Subject to paragraph (2), a State or local 
     law enforcement officer that is deputized as a Deputy United 
     States Marshal under the program established under subsection 
     (b) may arrest and apprehend an individual suspected of 
     violating any Federal law described in subsection (b)(1)(A), 
     including any individual who violates a provision subject to 
     a civil penalty under section 46301 of title 49, United 
     States Code, or section 46302, 46303, 46504, 46505, or 46507 
     of that title, or who commits an act described in section 
     46506 of that title.
       (2) Limitation.--The powers granted to a State or local law 
     enforcement officer deputized under the program established 
     under subsection (b) shall be limited to enforcing Federal 
     laws relating to security on board aircraft in flight.
       (3) Status.--A State or local law enforcement officer that 
     is deputized as a Deputy United States Marshal under the 
     program established under subsection (b) shall not--
       (A) be considered to be an employee of the Federal 
     Government; or
       (B) receive compensation from the Federal Government by 
     reason of service as a Deputy United States Marshal in the 
     program.
       (d) Statutory Construction.--Nothing in this section may be 
     construed to--
       (1) grant a State or local law enforcement officer that is 
     deputized under the program under subsection (b) the power to 
     enforce any Federal law that is not described in subsection 
     (c); or
       (2) limit the authority that a State or local law 
     enforcement officer may otherwise exercise in the capacity 
     under any other applicable State or Federal law.
       (e) Regulations.--The Attorney General may promulgate such 
     regulations as may be necessary to carry out this section.

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