[Congressional Record Volume 145, Number 81 (Wednesday, June 9, 1999)]
[Senate]
[Pages S6791-S6799]
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, Mr. Cleland, and Mr. Gregg):
S. 1189. A bill to allow Federal securities enforcement actions to be
predicated on State securities enforcement actions, to prevent
migration of rogue securities brokers between and among financial
services industries, and for other purposes; to the Committee on
Banking, Housing, and Urban Affairs.
microcap fraud prevention act of 1999
Ms. COLLINS. Mr. President, today I am introducing the Microcap Fraud
Prevention Act of 1999 which will equip Federal law enforcement
authorities with new tools to prosecute the fight against microcap
securities fraud that costs unwary investors an estimated $6 billion
annually.
While cold-calling families at dinnertime and high-pressure sales
remain a favorite tactic of microcap con artists, the Internet is
providing a new and inviting frontier for the commission of microcap
frauds. I find it particularly disturbing that despite the best efforts
of regulatory authorities, microcap scam artists often commit repeat
offenses. Similarly, under current law, persons barred from other
segments of the financial industry, such as banking or insurance, can
easily bring their deceptive practices into our securities markets.
I am very pleased to have the cosponsorship of two of my
distinguished colleagues in introducing this important legislation.
Senator Cleland and Senator Gregg are united with me in a commitment to
ensure that security regulators have the necessary authority to crack
down on securities fraud. Senator Cleland has a longstanding interest
in protecting investors from securities scams. Senator Gregg also has
been a leader in this arena in his position as the chairman of the
subcommittee with jurisdiction over the SEC's budgets.
In drafting this legislation, I was also pleased to have the
invaluable assistance of the Securities and Exchange Commission and the
North American Securities Administrators Association which represents
State securities regulators. In fact, Richard H. Walker, the SEC's
Director of Enforcement, and Peter C. Hildreth, the President of NASAA,
have submitted letters endorsing my legislation. I ask unanimous
consent that these letters be printed in the Record following my
statement.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Ms. COLLINS. Mr. President, the Collins-Cleland-Gregg legislation is
the product of hearings of the Permanent Subcommittee on Investigations
which I chair. We first started looking at this issue in 1997 and held
our first hearing in September of that year. Those hearings revealed
that microcap securities fraud is pervasive, so much so that regulators
estimated that it cost investors $6 billion in losses annually,
according to an article in the Wall Street Journal.
The damage from these microcap scams, however, is not confined to
investor losses. They also damage the reputation of legitimate small
companies and limit their ability to raise capital through the
securities markets. Ironically, the strong performance of the
securities markets over the past several years has provided an ideal
breeding ground for these microcap scams as more and more Americans
invest in stocks. In fact, according to the SEC, in 1980, only 1 in 18
individual Americans participated in the securities markets. Today, 1
in 3 Americans participate in the securities markets. There has been a
tremendous growth in more and more American households investing in
equities.
In a typical microcap fraud, an unscrupulous broker, often acting
through an intermediary, purchases large blocks of shares in a small
company with dubious business and financial prospects. The company
stock may be nearly worthless, but the brokers repeatedly cold call
customers, promise glowing returns and drive up the stock through high-
pressure sales tactics. Inevitably, after the manipulators sell their
shares at a profit, the artificially inflated price plummets, leaving
thousands of unsophisticated investors with worthless stock and heavy
losses. The manipulators then count their ill-gotten gains and move on
to their next target.
The subcommittee's investigation demonstrated that the rapid growth
of the Internet has also provided a new frontier for the commission of
microcap securities frauds. At hearings held by the subcommittee last
March, expert witnesses testified that while the Internet provides
many, many benefits to online investors, such as lower trading costs
and a wealth of investment information, the medium is inviting to con
men as well.
Specifically, the Internet makes it easier and cheaper for microcap
scam artists to contact potential victims and to perpetrate pump-and-
dump schemes or related securities frauds. Rather than having to cold
call potential victims one at a time, con men with home computers and
Internet access can reach millions of potential investors with the
click of a mouse. At a very low cost, these cybercrooks can deceive
many more victims using professionally designed web sites, online
financial newsletters or bulk e-mail. SEC officials testified that the
agency now receives hundreds of e-mail complaints per day, an estimated
70 percent of which involve potential Internet securities frauds.
For example, a constituent of mine from Ellsworth, ME, who appeared
at the subcommittee's hearings, testified that he lost more than
$20,000 in a sophisticated Internet securities scam. My constituent has
an engineering degree, and he has been investing for nearly 10 years.
This demonstrates the potential risk that Internet fraud poses to even
experienced investors. Although the SEC has brought charges against the
alleged perpetrators of this scam, it is, unfortunately, very unlikely
that my constituent will ever be able to recover his losses.
Whether they use cold calls, the Internet, or both, microcap scam
artists rarely strike only once. The subcommittee's investigations have
found that when regulators close down one microcap scam, often after
very lengthy proceedings, it is very common
[[Page S6792]]
for the perpetrators to pop up in connection with yet another
securities fraud.
Moreover, individuals who have committed consumer frauds in other
financial services industries, such as insurance or banking, frequently
move on to work in the securities industry. Our regulatory system must
be able to prevent these individuals who have violated the law from
migrating freely from one financial sector to another.
I commend the actions of the Securities and Exchange Commission and
the State securities regulators in aggressively fighting microcap
securities fraud, but they are simply overwhelmed with the magnitude of
the problem.
The SEC has established a special unit to monitor the Internet for
potential microcap or similar stock securities scams and has initiated
83 enforcement actions against approximately 250 individuals and
companies who have allegedly committed Internet securities frauds.
Similarly, in July of 1998, the State securities regulators,
represented by NASAA, announced that the State securities regulators
had filed 100 enforcement actions in a ``sweep'' against illegal boiler
room operations. Approximately 64 of these enforcement actions involved
brokers peddling microcap stocks. Despite these commendable efforts,
however, the SEC and State regulators face significant challenges just
to keep up with the explosive growth of microcap securities fraud,
particularly on the Internet.
The legislation that I am introducing today is designed to bolster
the SEC's ability to protect investors from ever-increasing microcap
frauds while ensuring that legitimate small companies can continue to
raise capital through securities offerings. To accomplish these
objectives, the bill will streamline the microcap fraud investigative
process and provide the SEC with the tools it needs to suspend or ban
rogue brokers, particularly those who have a history of committing
fraudulent offenses.
Specifically, our legislation will do the following:
First, it will allow the SEC to bring enforcement actions against
securities fraud violators on the basis of enforcement actions brought
by State securities regulators. Currently, State regulators can rely on
SEC-initiated enforcement actions, but the SEC does not have reciprocal
authority. Consequently, the SEC must often conduct duplicative
investigations before the agency can bring enforcement actions against
microcap securities frauds first identified at the State level but
which operate on a nationwide basis. With the new authority proposed by
our legislation, the SEC and the State regulators will be able to
maximize the impact of their limited enforcement resources.
Second, our legislation would permit the SEC to keep out of the
securities business unscrupulous individuals from other sectors of the
financial services industry. As I stated previously, persons with
histories of violations too often roam freely throughout the financial
services industry and commit new frauds. The bill would allow the SEC
to prevent individuals who have ripped off consumers in insurance or
banking scams from similarly defrauding America's small investors.
Third, our legislation will broaden the current penny stock bar to
include fraudulent violations in the microcap markets. Under current
law, the SEC can suspend or bar individuals who commit serious penny
stock frauds involving stocks that cost less than $5. You may be
surprised to learn, however, that the law permits such violators to
participate in micro-cap securities offerings, because even though the
total capitalization of these companies is small, each of their shares
costs more than $5. Our bill will close this loophole by allowing the
SEC to suspend or bar individuals who have committed serious penny
stock fraud from participating in both the penny stock and micro-cap
securities markets either as registered brokers or in related
positions, such as promoters.
Fourth, our proposal will expand the statutory officer and director
bar to include all publicly traded companies. Current law applies only
to companies that report to the SEC, leaving the door open for
violators to serve as officers or directors of all other companies. Our
proposal would extend the bar to include all publicly traded
businesses, including ``Pink Sheet'' or Over The Counter (``OTC'')
Bulletin Board companies, which are often the vehicles for micro-cap
fraud schemes.
Finally, our bill will strengthen the SEC's ability to take
enforcement actions against repeat violators. Currently, the SEC must
request that the Justice Department initiate criminal contempt
proceedings against individuals who violate SEC orders or court
injunctions, which can be a very burdensome and timely process. Our
legislation would allow the SEC to seek immediate civil penalties for
repeat violators without the need to file criminal contempt
proceedings.
Our Nation is blessed with the strongest and safest security markets
in the world. This is a tribute to both the industry and its
regulators. Unfortunately, as our markets bring benefits to more and
more Americans, they also attract those who would exploit unsuspecting
investors through manipulative practices.
By virtue of their small size and relative obscurity, microcap
securities are the most susceptible to manipulation. By giving the SEC
the tools it needs to combat this fraud, this legislation will benefit
not only individual investors, but also the vast majority of legitimate
small businesses who contribute so much to our Nation's growth and
prosperity.
I urge my colleagues to join in supporting the Microcap Fraud
Prevention Act of 1999.
I ask unanimous consent that a section-by-section analysis of the
legislation be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 2.)
Ms. COLLINS. Thank you, Mr. President.
Exhibit No. 1
Securities and Exchange Commission,
Washington, DC, May 24, 1999.
Hon. Susan M. Collins,
Chairman, Permanent Subcommittee on Investigations, Committee
on Governmental Affairs, U.S. Senate, Washington, DC.
Dear Chairman Collins: I commend both you and your
Subcommittee for addressing the important issue of fraud in
the market for microcap securities. As I said in my March 23,
1999 testimony before your Subcommittee, fighting fraud in
this market has been one of the Commission's more significant
challenges this decade. The hearings you held help to focus
the issues and educate investors, and the principles in the
bill you plan to introduce will help leverage the
Commission's resources to combat microcap fraud.
As you know, Chairman Levitt testified on microcap fraud
before your Subcommittee in September 1997. He noted then
that with our resources remaining relatively constant, we
must ``rely increasingly on innovative and efficient ways of
minimizing fraud and of maximizing the deterrence achievable
with the Commission's limited resources.'' In my own view,
the concepts underlying ``The Microcap Fraud Prevention Act
of 1999'' would be of great assistance to us in this regard.
Most importantly, the bill would give us valuable new tools
to close off participation in the microcap market by those
who would prey on innocent investors.
In recent years, the Commission has made significant
inroads in the fight against microcap fraud. I appreciate
your efforts to address this serious problem through hearings
and legislation that support our enforcement efforts. I
believe your bill would significantly advance the cause and
help make our markets safer for investors. My staff and I
look forward to continuing to work with you and your
Subcommittee on this legislation.
Very truly yours,
Richard H. Walker,
Director,
Division of Enforcement.
____
North American Securities,
Administrators Association, Inc.,
Washington, DC, May 17, 1999.
Hon. Susan M. Collins,
U.S. Senate,
Washington, DC.
Dear Chairman Collins: On behalf of the membership of North
American Securities Administrators Association, Inc.
(``NASAA'') \1\, I commend you for recognizing and
confronting the problem of fraud in the microcap securities
market. At your invitation NASAA testified before you and the
members of the Permanent Subcommittee on Investigations, and
took part in your fact-finding mission. We appreciate your
efforts to protect the investing public from frauds and for
introducing legislation to enhance enforcement efforts in
this area.
As you know, several years ago, state securities
administrators recognized the problem of fraud in the
microcap market. Since then the states have led enforcement
efforts and filed numerous actions against microcap firms.
There are systematic problems in this area, but they can be
addressed effectively if state and federal regulators and
policymakers work together on meaningful solutions.
[[Page S6793]]
NASAA wholeheartedly supports the intent of The Microcap
Fraud Prevention Act of 1999. It would be an important step
in combating abuses in the microcap market and maintaining
continued public confidence in our markets.
I pledge the support of NASAA's membership to continue to
work with you to secure passage of this important
legislation.
Sincerely,
Peter C. Hildreth,
New Hampshire Securities Director,
NASAA President.
Exhibit No. 2
S. 1189, Microcap Fraud Prevention Act of 1999--Section-by-Section
Summary
sec. 1. short title: ``microcap fraud prevention act of 1999''
Explanation: The purpose of the bill is to protect
investors against fraud in the micro-cap securities market,
and for other purposes.
sec. 2. amendments to the securities exchange act of 1934
This section amends the Securities Exchange Act of 1934 to
grant the SEC authority to take actions against registered
persons who have violated the law. It allows SEC enforcement
actions to be predicated on state enforcement actions and
take steps to prevent the entry into the securities industry
of individuals who have committed fraud in other sectors of
the financial services industry.
Explanation: Currently, state securities laws do not allow
state regulators to obtain civil relief having nation-wide
effect. Rather, state regulators only have jurisdiction to
prohibit defendants from doing business in their state.
Wrongdoers are thus free to perpetrate fraud in any other
state where they have not been separately barred. This
section amends Exchange Act section 15(b)(4)(G) to allow the
SEC to bring a follow-up administrative proceeding to suspend
or bar regulated persons who either (1) have been barred by a
state securities administrator from operating within that
state or (2) is subject to a final order for fraudulent,
manipulative, or deceitful conduct.
The SEC would not have the authority to follow-up on ex
parte temporary restraining orders. Such orders are imposed
immediately by state regulators and do not provide alleged
violators with a chance to present a defense until after the
order has already been entered. The SEC would have the
ability to act on these state actions if, after adjudication,
the defendant were ultimately found to have committed a
violation or reached a settlement agreement.
Currently, the Securities Exchange Act does not permit the
SEC to take administrative actions to bar or suspend from the
securities industry individuals who have committed serious
violations--i.e. fraud--in other financial industries, such
as the insurance or banking sectors. This section amends
Exchange Act 15(b)(4)(G) to authorize the SEC (1) to take
administrative action seeking bars or suspensions against a
broker-dealer or associated person based on orders issued by
federal regulators of other financial services industries and
(2) to allow the SEC to take follow-up actions when a foreign
financial regulatory authority has previously found
violations in other financial sectors. To ensure parity and
close off any remaining loopholes, corresponding changes have
also been made to Exchange Act sections 15B(c), 15C(c), and
17A(c) to extend this provision to those who seek to
associate with municipal securities dealers, government
securities dealers, and transfer agents.
sec. 3. amendments to the investment advisers act of 1940
This section amends Investment Advisers Act section 203 to
allow the SEC to bring a follow-up administrative proceeding
to suspend or bar investment advisors who are subject to
certain federal, state, or foreign orders. This sections also
amends section 203(f) of the act to permit the SEC to bar a
person associated with an investment adviser on the basis of
a felony conviction.
Explanation: This section makes the same changes to the
Investment Adviser Act that Section 2 of the bill makes to
the Exchange Act. Both allow SEC enforcement actions to be
predicated on certain federal, state, or foreign enforcement
actions against individuals found to have committed
fraudulent or similar acts in the financial services sector.
sec. 4. amendments to the investment company act of 1940
This section amends Investment Company Act section 9(b)(4)
to allow the SEC to bring a follow-up administrative
proceeding to suspend or bar individuals covered by the
Investment Company Act who are subject to certain federal,
state, or foreign orders.
Explanation: This section makes the same changes to the
Investment Company Act that Section 2 of the bill makes to
the Exchange Act. Both allow SEC enforcement actions to be
predicated on certain federal, state, or foreign enforcement
actions against individuals found to have committed
fraudulent or similar acts in the financial services sector.
sec. 5. conforming amendments
This section amends various provisions of the Securities
Exchange Act of 1934 to authorize the SEC to take
administrative actions against individuals--based on the
findings of certain federal, state, or foreign enforcement
actions--who seek to associate with municipal securities
dealers, government securities brokers and dealers, and
clearing agencies. The section also amends the Securities
Exchange Act of 1934, so that actions by state securities
commissions and other regulators can trigger a statutory
disqualification. This section will focus statutory
disqualifications on serious violations of state law,
particularly fraud and similar offenses.
Explanation: This section seeks to prevent individuals who
have committed fraud in other financial services sectors from
entering the securities industry. The section also expands
the definition of violations that trigger automatic statutory
bars from the securities industry.
Sec. 6. broadening of penny stock bar
This section amends Exchange Act section 15(b)(6) to expand
the penny stock bar to cover a broader category of offerings.
Expanation: This section would extend the penny stock bar
to all offerings other than those involving securities traded
on the NYSE, AMEX, NASDAQ, NMS, or investment company
securities. While there is no formal definition of ``micro-
cap'' security, this statutory amendment would cover what are
generally referred to as ``micro-cap'' securities.
sec. 7. court authority to prohibit offerings of non-covered securities
This section amends Exchange Act section 21(d)(5) to
provide federal court judges the authority to impose the
remedy outlined in Section 9 of the bill.
Explanation: This section would allow the SEC to obtain all
necessary relief more efficiently and expeditiously by
requesting, in appropriate cases, a district court to issue a
penny stock bar order. This authority would be provided as an
alternative to the SEC's current ability to seek such orders
only through administrative proceedings.
sec. 8. broadening of officer and director bar
This section amends Exchange Act section 21(d)(2) in order
to broaden the scope of the officer and director bar.
Explanation: Current law allows persons barred from serving
as an officer or director of companies that report to the SEC
to serve as officers or directors of other companies. This
section removes the limitation to SEC reporting companies,
and instead covers all publicly traded companies--those
registered pursuant to Exchange Act section 12, those
required to file reports pursuant to Exchange Act section
15(d), and those whose securities are ``quoted in any
quotation medium.''
sec. 9. violations of court ordered bars
This section adds section 21(i) to the Exchange Act to give
the SEC a more direct remedy against recidivist violators of
prior bar orders.
Explanation: This section makes it a stand-alone violation
of the securities laws for a person to engage in conduct that
violated a prior order barring him from acting as an officer,
director or promoter. It allows the SEC to take direct
enforcement action (seeking per-day money penalties, among
other remedies) against a recidivist without the need for
criminal authorities to bring a contempt proceeding.
______
By Mr. DORGAN (for himself, Mr. Wellstone, Ms. Snowe, and Mr.
Johnson):
S. 1191. A bill to amend the Federal Food, Drug, and Cosmetic Act to
provide for facilitating the importation into the United States of
certain drugs that have been approved by the Food and Drug
Administration, and for other purposes; to the Committee on Health,
Education, Labor, and Pensions.
INTERNATIONAL PRESCRIPTION DRUG PARITY ACT
Mr. DORGAN. Mr. President, I rise to introduce a piece of legislation
on behalf of myself, Mr. Wellstone, Ms. Snowe, and Mr. Johnson. These
three Senators, and I hope others as well, have joined me in
introducing this bill, the International Prescription Drug Parity Act,
today.
This piece of legislation deals with the question of prescription
drugs. By consent of the Chair, I would like to show on the floor of
the Senate today examples of the issue that is addressed by this piece
of legislation.
With your consent, I will show two bottles of the drug Claritin, a
medication most people are familiar with. Claritin is a popular anti-
allergy drug. These two bottles contain the same pills, produced by the
same company, in the same strength, in the same quantity. One
difference: a big difference in price. This bottle is purchased in the
United States--in North Dakota, to be exact. This bottle of 10
[[Page S6794]]
milligram, 100 tablets cost North Dakotans $218, wholesale price. This
bottle--same drug, same company, same strength, same quantity--was
purchased in Canada. They didn't pay $218 in Canada; they paid $61. Why
the difference for the same drug, same dosage, same quantity, same
company? In Canada, it costs $61; U.S. consumers pay $218.
Here is another example--and I have a lot of examples. But with the
consent of the Chair, I will only use two today.
This is Cipro, a prescription drug to treat infections. Both bottles
are made by the same company. We have the same number of pills, 500
milligram, 100 tablets--same drug, same company, same pill. In North
Dakota, the wholesale price for this bottle is $399; in Canada, it is
$171. The North Dakotan pays--or the U.S. consumer pays because this is
true all over our country--$399, or 233 percent more than for the same
drug in Canada. The question is, Why? The question is, With a global
economy, why would a pharmacist simply not drive up to Canada and buy
the same drugs and offer them for a lower price to their customers? The
answer to that is, there is a law that restricts the importation of
drugs into this country, except by the manufacturers of the drug
themselves. That is kind of a sweetheart law, it seems to me. We want
to change that.
If the manufacturer that produces these pills has been inspected by
the Food and Drug Administration and the same drugs are marketed
everywhere, why on Earth, in a global economy, cannot our consumers
access a lesser price? Incidentally, this pricing inequity does not
just exist with Canada; it is the same with Mexico, Germany, France,
Italy, England, Germany--you name it. It is true around the world. We
pay a much higher price for most prescription drugs than consumers
anywhere else in the world. The United States is the consumer that pays
a much higher price for the same pill, in the same bottle, produced by
the same manufacturer.
With our bill we say, let's decide that what is good for the goose is
good for the gander. If the pharmaceutical companies can access the raw
materials which they use to produce their medicine from all around the
world and produce a pill and put it in a bottle, it seems to me that
the customer here in the United States ought to also benefit from free
trade, as long as the drug is FDA approved and comes from a plant that
is inspected by the FDA.
The drug industry will say that safety is an issue. It is no issue
with respect to my bill. Safety is not an issue here at all. I am
saying--and my colleagues are as well--if medicine approved by the FDA
and produced in a plant inspected by the FDA is to be marketed around
the world, but the American is to pay the highest price--in some cases
by multiples of four and five --let us use the global economy to let
U.S. pharmacists and prescription drug distributors access that
medicine wherever it exists at a lower price, and pass along those
savings to American consumers.
Back in 1991, the General Accounting Office studied 121 drugs and
found that, on average, prescription drugs in the United States are
priced 34 percent higher than the exact same products in Canada. I just
did a comparison of the retail prices on both sides of the border of 12
of the most prescribed drugs, and discovered that, on average, U.S.
prices exceeded the Canadian prices by 205 percent.
I mentioned before that Claritin costs the American consumer 358
percent more. We American consumers pay 358 percent more than the
consumer does north of the border. And incidentally, the Canadian
prices have been adjusted to U.S. dollars. Does this make sense? Of
course not. Studies show that the same drug that costs $1 in our
country costs 71 cents in Germany, 65 cents in the United Kingdom, 57
cents in France, and 51 cents in Italy. All we are saying is that if
this global economy is good for companies that produce the drugs, it
ought to be good for the consumer.
In 1997, the top 10 pharmaceutical companies had an average profit
margin of 28 percent. The Wall Street Journal reported that profit
margins in the drug industry are the ``envy of the corporate world.''
The manufacturers produce wonderful medicines, and I am all for it. But
I want them at an affordable price for the American consumer. I am flat
sick and tired of the American consumer being the consumer of last
resort who pays a much higher price than anybody else in the world for
the same drug, in the same bottle, produced by the same company. It
doesn't make sense.
Mr. President, how much time have I consumed?
The PRESIDING OFFICER. The Senator has consumed 7 minutes.
Mr. DORGAN. Let me go for another minute, and then I will yield to my
colleague from Minnesota, who will have 7 minutes remaining on the 15
minutes.
As I have indicated, Senator Johnson from South Dakota and Senator
Snowe from Maine are also cosponsors. We expect other cosponsors to
join us. Frankly, the reason we have introduced this legislation is
that there is an unfair pricing practice that exists with respect to
prescription drugs in this country. It is fundamentally unfair for a
pharmaceutical manufacturer to say that we will produce a drug, and, by
the way, when we decide to sell it we will sell it all around the
world, but we will choose to sell it to the American consumer at a much
higher price than any other customer in the world.
That is unfair to the American consumer.
What prevents the local corner pharmacist from going elsewhere to buy
these prescription drugs in France or in Canada or elsewhere? A law
that says you can't import a drug into this country unless it is
imported by the manufacturer. What a ridiculous piece of legislation
that was passed over a decade ago.
If this global economy works, let's make it work for the consumers
and not just for the big companies.
Our legislation only pertains to this circumstance: If the drug has
been approved by the FDA and the facility where that drug is bought are
inspected by the FDA, then those drugs have a right to come into this
country not just by the manufacturer but by local pharmacists and
distributors who want to access that drug at a less expensive price in
other parts of the world and pass along the savings to American
consumers. That makes good sense to me.
I have a lot more to say, but I will say it at a later time. I yield
my remaining time to my colleague, Senator Wellstone from Minnesota,
who is joined by Senator Johnson of South Dakota and Senator Snowe of
Maine as cosponsors of this legislation.
The PRESIDING OFFICER. The Senator from Minnesota.
Mr. WELLSTONE. Mr. President, let me first of all say to my colleague
from North Dakota that I am really pleased to join him in this effort,
along with Senator Snowe and Senator Johnson.
The International Prescription Drug Parity Act makes prescription
drugs more affordable for millions of Americans by applying the
principles of free trade and competition.
I want to give special thanks to a wonderful grassroots citizen
organization from Minnesota called the Minnesota Senior Federation. If
we had organizations such as this all around the country, we would have
such effective citizen politics, and I guarantee we would be passing
legislation that would make an enormous positive difference in the
lives of the people in our country.
This legislation provides relief from price gouging of American
consumers by our own pharmaceutical industry. Those who really pay the
price are those who are chronically ill. Many of those who are
clinically ill are the elderly. It is not uncommon anywhere in our
country to run across an elderly couple or single individual who is
paying up to 30, 40, or 50 percent of their monthly budget just for
prescription drug costs.
In my State of Minnesota, only 35 percent of senior citizens have any
prescription drug cost coverage at all.
This legislation is very simple. I say to Senator Dorgan that what I
liked the best about this legislation, and the reason I think it will
command widespread support, is its eloquent simplicity.
We are just saying that if you have drugs which are FDA approved and
manufactured in our country, and now they are in Canada, for example,
and cost half of what they cost senior citizens to pay for that drug in
our own country, it shouldn't just be the pharmaceutical companies that
can bring
[[Page S6795]]
those drugs back in. You ought to enable pharmacists or distributors to
go to Canada and purchase these drugs which have been FDA approved, and
then bring them back to our country and sell these drugs at a discount
rate for our citizens in our country.
This is the best of competition. This is the best of what we mean by
free trade.
I want to be clear. This legislation will amend the Food, Drug and
Cosmetic Act. The FDA Commissioner was in Minnesota 2 weeks ago and
senior citizens were pressing her on this question. She was cautious.
But what she was saying was that we would need some legislation; we
would need some change to be able to do what Senator Dorgan is talking
about. We would amend this piece of legislation to allow American
pharmacists and distributors to import prescription drugs into the
United States as long as these drugs meet strict FDA standards. That is
it. The FDA isn't directly involved, but the FDA is critically involved
in the sense that these drugs have to meet all the FDA standards.
This piece of legislation is simple. It is straightforward. It is
very proconsumer, very pro-senior citizen, very procompetition, very
pro-free trade. As I think about the gatherings that I go to in my
State--I bet this applies to New Jersey, I see Senator Torricelli here,
and Senator Reed of Rhode Island--anywhere in the country. You can't go
to a community meeting, and you can't go in into a cafe and meet with
people without having people talk about the price of prescription
drugs. It is just prohibitively expensive. This piece of legislation
will make an enormous difference.
It could be that there is some opposition to this piece of
legislation. I can see some vested economic interests who may figure
out reasons to be opposed to it, but I will say that this piece of
legislation would go a long way in dealing with the problem of price
gouging right now and making sure that these prescription drugs that
can be so important to the health of senior citizens, the people in the
disabilities community and other citizens as well that they will be
able to purchase these drugs, and they will be able to afford these
drugs, which can make an enormous difference in improving the quality
of their health.
I introduce this legislation, along with Senator Dorgan, and we are
joined by Senator Johnson and Senator Snowe. I believe we will have
strong bipartisan support for this bill.
Mr. President, how much time do we have left?
The PRESIDING OFFICER. The Senators have a total of 9 minutes 54
seconds.
Mr. DORGAN. Mr. President, if I might just make a comment to the
Senator from Minnesota, all of us have the experience of going around
our States and talking to especially senior citizens, who take a
substantial amount of prescription drugs--many of them wonderful,
lifesaving drugs but at a substantial cost. Many of them have no health
insurance coverage for these costs.
Let me say at the outset, lest anyone think I don't appreciate what
goes on, that the research done at the Federal level and the research
done by the pharmaceutical companies have produced lifesaving,
remarkable medicines. I commend all of those folks for that, including
these companies. I am only debating the price issue here.
I ran into a woman one day. She was in her eighties. She had heart
disease, diabetes, and was living on somewhere around $400 a month of
total income. She said to me: Mr. Senator, I can't afford to take the
drugs the doctor says I must take for my heart difficulties and for my
diabetes. What I do is buy the drugs, and then I cut the pills in half
and take half of the dose so it lasts twice as long. It is the only
way. Even then I can hardly afford to pay for food.
That is what the problem is here. The problem is that these
pharmaceutical drugs are overpriced relative to what every other
consumer in the rest of the world is paying for them. I am talking of
other consumers in France, in Germany, Italy, England, Canada, and
Mexico--you name it. That doesn't make any sense to me. Why should our
senior citizens--all consumers for that matter--be paying 300-percent
more for the same drug in virtually the same bottle produced by the
same company inspected by the FDA than a consumer 20 miles north in
Canada is paying?
I just came from a meeting near the border of North Dakota and
Canada. I was talking to people, again, about that disparity. The
Senator from Minnesota has exactly the same situation.
The pharmacists at the corner drugstore are saying: Why can't I go up
there and buy some of these medications? I know that it is the same
pill which comes from the same plant.
The reason is the law prevents him from bringing it back, and we want
to change that.
Mr. WELLSTONE. Mr. President, I say to my colleagues, when we talk
about citizens becoming frustrated and sometimes angry, either two
things are going on.
First of all, you can find people to talk to everywhere, especially
senior citizens who are paying 30, 40, or 50 percent of their monthly
budget just for these costs. They cut the pill in half and take only
half of what they need, or they cut down on food. It is drugs versus
food, or versus something else. They should not be faced with those
choices.
But what adds insult to injury is to then know that the same drug
manufactured quite often in the same place with the same FDA approval
purchased in Canada costs half the price.
We are simply saying let our pharmacists and let our distributors in
our country be able to purchase those prescription drugs in Canada and
bring them back and sell them at a discount to our consumers. That is
what this legislation says.
If you want to talk about a piece of legislation that speaks to the
interests and circumstances of people's lives, I think this legislation
will make an enormous difference.
I am prepared to fight very hard to make sure that we pass this
legislation.
______
By Mrs. FEINSTEIN (for herself, Mr. Reid, Mrs. Boxer, and Mr.
Bryan):
S. 1192. A bill to designate national forest land managed by the
Forest Service in the Lake Tahoe Basin as the ``Lake Tahoe National
Scenic Forest and Recreation Area,'' and to promote environmental
restoration around the Lake Tahoe Basin; to the Committee on Energy and
Natural Resources.
THE LAKE TAHOE RESTORATION ACT
Mrs. FEINSTEIN. Mr. President, I want to begin by thanking Senator
Harry Reid who has worked so hard with me on the Lake Tahoe Restoration
Act. I would also like to thank my friends and colleagues Senator
Barbara Boxer and Senator Dick Bryan for cosponsoring this important
legislation.
This legislation really comes directly out of the Tahoe Summit. I am
one that spent her childhood at lake Tahoe, but I had not been back for
a number of years. When I went there for the Tahoe Summit in 1997 with
the President, I saw things I had never seen before at Lake Tahoe.
I saw the penetration of MTBE in the water. I saw the gasoline spread
over the water surface. I saw that in fact 30 percent of the South Lake
Tahoe water supply has been eliminated by MTBE. I saw 25 percent of the
magnificent forest that surrounds the lake dead or dying. I saw land
erosion problems on a major level that were bringing all kinds of
sediment into the lake and which had effectively cut its clarity by
thirty feet since the last time I had visited. And then I learned that
the experts believe that in ten years the clouding of the amazing
crystal water clarity would be impossible to reverse and in thirty
years it would be lost forever.
For me, that was a call to action, and today I am proud to introduce
the Lake Tahoe Restoration Act. This legislation will designate federal
lands in the Lake Tahoe Basin as a National Scenic Forest and
Recreation area and will authorize $300 million of Federal monies on a
matching basis over ten years for environmental restoration projects to
preserve the region's water quality and forest health.
Lake Tahoe is the crown jewel of the Sierra Nevada and its clear,
blue water is simply remarkable. Some people may not know that Lake
Tahoe contributes $1.6 billion dollars every year
[[Page S6796]]
to the economy from tourism alone. However, one in every seven trees in
the forest surrounding Emerald Bay is either dead or dying. Insect
infestations and drought have killed over 25 percent of the trees in
the forests surrounding Lake Tahoe, creating a severe risk of wildfire.
The Tahoe Regional Planning Agency estimates that restoring the lake
and its surrounding forests will cost $900 million dollars over the
next ten years. This is not a cursory evaluation but a careful
evaluation made by this agency over several years.
Local governments and businesses in Lake Tahoe have agreed to raise
$300 million locally in the next ten years for this effort. The Tahoe
Transportation and Water Quality Coalition, a coalition of 18
businesses and environmental groups, including Placer County, El Dorado
County, the City of South Lake Tahoe, Douglass County in Nevada and
Washoe County in Nevada have all agreed. This is an extraordinary
commitment for a region with only 50,000 year round residents.
The Governors of California and Nevada have pledged to provide
another $300 million, but only if the Federal government will step up
and provide $300 million of its own because we must remember that 77
percent of the forest is owned by the Federal Government.
President Clinton took an important first step in 1997 when he held
an environmental summit at Lake Tahoe and promised $50 million over two
years for restoration activities around the lake. These commitments
included: $4.5 million to reduce fire risk at the lake; $3.5 million
for public transportation; $4 million for acquisition of
environmentally sensitive land; $1.3 million dollars to decommission
old, unused logging roads that are a major source of sediment into Lake
Tahoe; $7.5 million to replace an aging waste water pipeline that
threatens to leak sewage into the lake; and $3 million for scientific
research.
Unfortunately, the President's commitments lasted for only two years,
so important areas like land acquisition and road decommissioning were
not funded at the levels the President tried to accomplish. So what is
needed is a more sustained, long-term effort, and one that will meet
the federal government's $300 million dollar responsibility to save the
environment at Lake Tahoe.
The Lake Tahoe Restoration Act will build upon the President's
commitment to Lake Tahoe and authorize full funding for a new
environmental restoration program at the lake.
The bill designates U.S. Forest Service lands in the Lake Tahoe basin
as the Lake Tahoe National Scenic Forest and Recreation Area. This
designation, which is unique to Lake Tahoe, is strongly supported by
local business, environmental, and community leaders. The designation
will recognize Lake Tahoe as a priceless scenic and recreational
resource.
The legislation explicitly says that nothing in the bill gives the
U.S. Forest Service regulatory authority over private or non-federal
land. The bill also requires the Forest Service to develop an annual
priority list of environmental restoration projects and authorizes $200
million over ten years to the forest service to implement these
projects on federal lands. The list must include projects that will
improve water quality, forest health, soil conservation, air quality,
and fish and wildlife habitat around the lake.
In developing the environmental restoration priority list, the Forest
Service must rely on the best available science, and consider projects
that local governments, businesses, and environmental groups have
targeted as top priorities. The Forest Service also must consult with
local community leaders.
The bill requires the Forest Service to give special attention on its
priority list to four key activities: acquisition of environmentally
sensitive land from willing sellers, erosion and sediment control, fire
risk reduction, and traffic and parking management, including promotion
of public transportation.
The Lake Tahoe Restoration Act also requires that $100 million of the
$300 million over ten years be in payments to local governments for
erosion control activities on non-federal lands. These payments will
help local governments conduct soil conservation and erosion mitigation
projects, restore wetlands and stream environmental zones, and plant
native vegetation to filter out sediment and debris.
I have been working on the Lake Tahoe Restoration Act for over a
year, in conjunction with Senator Reid and over a dozen community
groups at Lake Tahoe. The Lake Tahoe Transportation and Water Quality
Coalition, a local consensus group of 18 businesses and environmental
groups, has worked extremely hard on this bill, and I am grateful for
their input and support.
Thanks in large part to their work, the bill has strong, bi-partisan
support from nearly every major group in the Tahoe Basin. The bill is
supported by the League to Save Lake Tahoe, the South Lake Tahoe
Chamber of Commerce, and the Lake Tahoe Gaming Alliance, to name just a
few. Major environmental groups also support the bill, including the
Sierra Club, Wilderness Society, and California League of Conservation
Voters.
The bottom line is that time is running out for Lake Tahoe. We have
ten years to do something major or the water quality deterioration is
irreversible.
We have a limited period of time, or the 25 percent of the dead and
dying trees and the combustible masses that it produced are sure to
catch fire, and a major forest fire will result.
Mr. President, this crown jewel deserves the attention, and the fact
that the federal government owns 77 percent of that troubled area makes
the responsibility all so clear.
I am hopeful that the United States Senate will move quickly to
consider the Lake Tahoe Restoration Act. I urge my colleagues in the
Senate to join me in preserving this national treasure for generations
to come.
______
By Mr. LAUTENBERG:
S. 1193. A bill to improve the safety of animals transported on
aircraft, and for other purposes; to the Committee on Commerce,
Science, and Transportation.
THE SAFE AIR TRAVEL FOR ANIMALS ACT
Mr. LAUTENBERG. Mr. President, I have a piece of legislation which I
rise to introduce. This legislation is designed to protect a segment of
our population that can't protect itself. I am talking about pets--
dogs, cats, and others that travel by air. I want to put this into
perspective. Over 70 million households in America have pets--70
million. So it affects a significant portion of our population. Pets
become family members and they become a source of significant affection
and attachment. In some cases, they are the vision for those who are
sightless. They establish precious relationships.
Over the last 5 years, there have been over 2,500 documented
instances of dogs and cats experiencing severe injury in air travel,
and 108 cats and dogs have died just as a result of exposure to
excessive temperatures.
Pets aren't baggage. They are part of a family, in many instances,
and they ought to be treated that way when they accompany their masters
when they fly. Over 500,000 pets a year are transported by air across
this country. News reports have detailed stories of pets being left out
on hot days, sitting on tarmacs while flights were delayed, or stuffed
into cargo holds with little or no airflow, causing them to injure
themselves in the desperation to escape this entrapment and very
difficult environment.
Some pets have actually had heavy baggage placed directly on top of
their carriers. It is unacceptable. We can and must prevent these
inhumane practices.
So today I am introducing The Safe Air Travel for Animals Act. This
bill responds to the tragic stories we have heard involving the death
or injury of many beloved pets while traveling by airplane.
The legislation has three goals. First, it ensures that airlines are
held accountable for mistreatment of our pets, to ensure that animals
are not treated like a set of golf clubs or other baggage. This
legislation will put airlines on a tight leash.
Second, the bill provides consumers with the right to know if an
airline has a record of mistreatment or accidents with pets.
Third, the bill addresses the problems of the aircraft themselves,
making sure that the cargo hold is as safe as it possibly can be for
animal travel.
Airlines need to be held accountable for the harm they permit to
happen to
[[Page S6797]]
our pets. Right now, airlines are only liable to owners for up to
$1,250 for losing, injuring, or killing a pet.
That is no different from what they would be liable for if they lost
your suitcase. Under my bill, that limit for liability will be double.
Now, anyone who owns a pet knows how expensive veterinary bills can
be. If an animal is injured or dies as a result of flying, my bill
would require the airlines to pay for the costs of veterinary care.
Mr. President, my bill also provides consumers with the right to know
about the conditions they face when they transport their animals by
plane. My bill requires airlines to immediately report any incidents
involving loss, injury or death of animals.
Most importantly, the bill puts this information into the hands of
the flying public. Pet owners should know which airlines are doing a
good job, and which need to do better. Just as consumers favor airlines
with solid, on-time records, they will also favor the airlines that
have a good safety record with our pets. And, an airline that does a
good job will want this information in the hands of consumers.
Finally, the bill addresses the problem of the aircraft themselves.
The airline industry is undergoing a retrofitting process, as required
by the FAA, of all ``class D'' cargo holds, to prevent fires.
These are special holds that have the facility to turn off the oxygen
in the event of smoke or fire. But that also means that that is an
execution for the pets that are in those holds.
I believe that the industry should use this opportunity to see what
improvements can be made to allow for better oxygen flow and
temperature control to protect our pets.
Mr. President, we must do more to prevent unnecessary deaths caused
by lack of oxygen flow or exposure to heat.
With this bill, travelers will feel more secure about using air
travel to transport their pets.
I hope that my colleagues will join me in support of this
legislation.
______
By Mr. COVERDELL:
S. 1196. A bill to improve the quality, timeliness, and credibility
of forensic science services for criminal justice purposes; to the
Committee on the Judiciary.
THE NATIONAL FORENSIC SCIENCE IMPROVEMENT ACT
Mr. COVERDELL. Mr. President, today I introduce the National Forensic
Science Improvement Act, a bill designed to address the growing backlog
in our nation's crime labs. Across the country, state and local crime
labs, Medical Examiners' and Coroners' offices face alarming shortages
in forensic science resources. While other areas of our criminal
justice system such as the courts and prison systems have benefitted
from federal assistance, the highly technical and expensive forensic
sciences have received little attention. Mr. President, my bill will
help correct this problem.
There are 600 qualified state and local crime laboratories in the
United States which deliver 90% of the total forensic science services
in this country. In a 1996 national survey of 299 crime labs it was
found that 8 out of 10 labs have experienced a growth in the caseload
which exceeds the growth in budget and/or staff. Mr. President, I need
go no further to demonstrate that this is a national problem. Without
the swift processing of evidence our criminal justice system cannot
operate as it is intended. I believe it is time to take a step to
address specifically the problems our crime labs face.
The National Forensic Science Improvement Act has been endorsed by
organizations such as the National Governors Association, the National
Association of Attorneys General, the Association of State Criminal
Investigative Agencies and the International Association of Chiefs of
Police who see it as a flexible approach to a problem that indeed has
far-ranging consequences. Mr. President, it is my belief that Congress
must work to ensure justice in this country is neither delayed nor
denied. Right now across the country backlogs in crime labs are denying
the swift administration of justice and with this bill we have a ready
solution.
In crafting this bill I have worked closely with the Georgia Bureau
of Investigation which is suffering heavily under a growing caseload.
At its headquarters in Decatur, GA the GBI has a number of cataloging
systems that are not yet computerized. Further, they lack the funding
to create computer networks that would connect not only their forensic
equipment with internal computers, but would also allow them to share
information with crime labs across the country. While the Governor has
taken steps to provide the GBI with more funding for forensic sciences,
it remains clear that federal assistance is needed.
Last year the Senate passed the Crime Identification Technology Act.
This important measure, which I supported, was a good step towards
improving the technology employed by law enforcement across the
country. I believe my bill is the next logical step in this body's
effort to improve the manner in which justice is administered in this
country.
______
By Mr. ROTH (for himself, Mr. Smith of New Hampshire, Mr. Levin,
and Mr. Schumer):
S. 1197. A bill to prohibit the importation of products made with dog
or cat fur, to prohibit the sale, manufacture, offer for sale,
transportation, and distribution of products made with dog or cat fur
in the United States, and for other purposes; to the Committee on
Commerce, Science, and Transportation.
DOG AND CAT PROTECTION ACT OF 1999
Mr. ROTH. Mr. President, I rise today to introduce legislation that
runs to the heart of who we are and what we hold dear and meaningful in
our lives.
There is a special relationship between men, women, children, and
their family pets--particularly their dogs and cats.
I have been profoundly affected in my life because of the animals
that transcended emotional boundaries to become true and meaningful
friends--even a part of the family. I can name every dog I've owned
since I was a boy.
I can tell you their qualities, their peculiarities, their
preferences and dislikes. Even now, my wife Jane and I--our children
and grandchildren--are surrounded by the most loyal St. Bernards in the
world. They--as all the pets we've had--speak volumes about strong and
lasting friendship.
You can understand, given this background, that I am outraged to
learn that there are clothing articles imported into America that are
made from the fur of these precious animals.
I'm outraged to learn that dog and cat fur is being used in a wide
variety of products, including fur coats and jackets.
I'm outraged to learn from the Humane Society of the United States
that more than two million dogs and cats are killed annually as part of
the fur trade, and that many retailers in the U.S. who sell these items
are doing so unaware of their content.
To respond to this growing problem, I'm introducing legislation
today, the Dog and Cat Protection Act of 1999, to prohibit the domestic
sale, manufacture, transportation, and distribution of products made
with cat or dog fur.
My legislation requires all fur products to be labelled, closing a
loophole in the current law, and it will ban deceptive or misleading
labelling of these products so consumers and retailers can buy with
confidence, knowing that they are not supporting this tragic process.
With this legislation, our message will be clear: No matter where in
the world this merchandise is made, there will be no legitimate market
for it here--not in the United States.
This is important legislation. It will provide uniformity of
regulations and prevent conflicts between states. It will give the
Justice Department the ability to enforce the law and prosecute those
who may try to get around it.
And the U.S. Customs Service would be able to function as the first
line of defense. I appreciate the work being done by the Humane Society
of the United States and many other important organizations to heighten
our awareness of these kinds of issues.
And I look forward to working with my colleagues to see this
legislation enacted into law. Thank you, Mr. President.
I ask unanimous consent that the text of the bill be printed in the
Record.
[[Page S6798]]
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1197
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 ``Dog and Cat Protection Act
of 1999''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress makes the following findings:
(1) An estimated 2,000,000 dogs and cats are slaughtered
and sold annually as part of the international fur trade.
Internationally, dog and cat fur is used in a wide variety of
products, including fur coats and jackets, fur-trimmed
garments, hats, gloves, decorative accessories, stuffed
animals, and other toys.
(2) As demonstrated by forensic tests, dog and cat fur
products are being imported into the United States, in some
cases with deceptive labeling to conceal the use of dog or
cat fur.
(3) Dog and cat fur, when dyed, is not easily
distinguishable to persons who are not experts from other
furs such as fox, rabbit, coyote, wolf, and mink. Dog and cat
fur is generally less expensive than other types of fur and
may be used as a substitute for more expensive types of furs.
(4) Foreign fur producers use dogs and cats bred for their
fur, and also use strays and stolen pets.
(5) The methods of housing, transporting, and slaughtering
dogs and cats for fur production are generally unregulated
and inhumane.
(b) Purposes.--The purposes of this Act are--
(1) to prohibit the sale, manufacture, offer for sale,
transportation, and distribution in the United States of dog
and cat fur products;
(2) to require accurate labeling of fur species so that
consumers in the United States can make informed choices; and
(3) to prohibit the trade in, both imports and exports of,
dog and cat fur products, to ensure that the United States
market does not encourage the slaughter of dogs or cats for
their fur, and to ensure that the purposes of this Act are
not undermined.
SEC. 3. DEFINITIONS.
In this Act:
(1) Dog fur.--The term ``dog fur'' means the pelt or skin
of any animal of the species canis familiaris.
(2) Cat fur.--The term ``cat fur'' means the pelt or skin
of any animal of the species felis catus.
(3) United states.--The term ``United States'' means the
customs territory of the United States, as defined in general
note 2 of the Harmonized Tariff Schedule of the United
States.
(4) Commerce.--The term ``commerce'' means transportation
for sale, trade, or use between any State, territory, or
possession of the United States, or the District of Columbia,
and any place outside thereof.
(5) Dog or cat fur product.--The term ``dog or cat fur
product'' means any item of merchandise which consists, or is
composed in whole or in part, of any dog fur, cat fur, or
both.
(6) Person.--The term ``person'' includes any individual,
partnership, corporation, association, organization, business
trust, government entity, or other entity.
(7) Interested party.--The term ``interested party'' means
any person having a contractual, financial, humane, or other
interest.
(8) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(9) Duly authorized officer.--The term ``duly authorized
officer'' means any United States Customs officer, any agent
of the Federal Bureau of Investigation, or any agent or other
person authorized by law or designated by the Secretary to
enforce the provisions of this Act.
SEC. 4. PROHIBITIONS.
(a) Prohibition on Manufacture, Sale, and Other
Activities.--No person in the United States or subject to the
jurisdiction of the United States may introduce into
commerce, manufacture for introduction into commerce, sell,
trade, or advertise in commerce, offer to sell, or transport
or distribute in commerce, any dog or cat fur product.
(b) Imports and Exports.--No dog or cat fur product may be
imported into, or exported from, the United States.
SEC. 5. LABELING.
Section 2(d) of the Fur Products Labeling Act (15 U.S.C.
69(d)) is amended by striking ``; except that such term shall
not include such articles as the Commission shall exempt by
reason of the relatively small quantity or value of the fur
or used fur contained therein''.
SEC. 6. ENFORCEMENT.
(a) In General.--The Secretary, either independently or in
cooperation with the States, political subdivisions thereof,
and interested parties, is authorized to carry out operations
and measures to eradicate and prevent the activities
prohibited by section 4.
(b) Inspections.--A duly authorized officer may, upon his
own initiative or upon the request of any interested party,
detain for inspection and inspect any product, package,
crate, or other container, including its contents, and all
accompanying documents to determine compliance with this Act.
(c) Seizures and Arrests.--If a duly authorized officer has
reasonable cause to believe that there has been a violation
of this Act or any regulation issued under this Act, such
officer may search and seize, with or without a warrant, the
item suspected of being the subject of the violation, and may
arrest the owner of the item. An item so seized shall be held
by any person authorized by the Secretary pending disposition
of civil or criminal proceedings.
(d) Burden of Proof.--The burden of proof shall lie with
the owner to establish that the item seized is not a dog or
cat fur product subject to forfeiture and civil penalty under
section 7.
(e) Action by U.S. Attorney.--Upon presentation by a duly
authorized officer or any interested party of credible
evidence that a violation of this Act or any regulation
issued under this Act has occurred, the United States
Attorney with jurisdiction over the suspected violation shall
investigate the matter and shall take appropriate action
under this Act.
(f) Citizen Suits.--Any person may commence a civil suit to
compel the Secretary to implement and enforce this Act, or to
enjoin any person from taking action in violation of any
provision of this Act or any regulation issued under this
Act.
(g) Reward.--The Secretary may pay a reward to any person
who furnishes information which leads to an arrest, criminal
conviction, civil penalty assessment, or forfeiture of
property for any violation of this Act or any regulation
issued under this Act.
(h) Regulations.--
(1) In general.--The Secretary shall issue final
regulations, after notice and opportunity for public comment,
to implement this Act within 180 days after the date of
enactment of this Act.
(2) Fees.--The Secretary may charge reasonable fees for
expenses to the Government connected with permits or
certificates authorized by this Act, including expenses for--
(A) processing applications;
(B) reasonable inspections; and
(C) the transfer, handling, or storage of evidentiary items
seized and forfeited under this Act.
All fees collected pursuant to this paragraph shall be
deposited in the Treasury in an account specifically
designated for enforcement of this Act and available only for
that purpose.
SEC. 7. PENALTIES.
(a) Civil Penalty.--Any person who violates any provision
of this Act or any regulation issued under this Act may be
assessed a civil penalty of not more than $25,000 for each
violation.
(b) Criminal Penalty.--Any person who knowingly violates
any provision of this Act or any regulation issued under this
Act shall, upon conviction for each violation, be imprisoned
for not more than 1 year, fined in accordance with title 18,
United States Code, or both.
(c) Forfeiture.--Any dog or cat fur product that is the
subject of a violation of this Act or any regulation issued
under this Act shall be subject to seizure and forfeiture to
the same extent as any merchandise imported in violation of
the customs laws.
(d) Injunction.--Any person who violates any provision of
this Act or any regulation issued under this Act may be
enjoined from further sales of any fur products.
(e) Applicability.--The penalties in this section apply to
violations occurring on or after the date of enactment of
this Act.
______
By Mr. SHELBY (for himself, Mr. Bond, and Mr. Lott):
S. 1198. A bill to amend chapter 8 of title 5, United States Code, to
provide for a report by the General Accounting Office to Congress on
agency regulatory actions, and for other purposes; to the Committee on
Governmental Affairs.
congressional accountability for regulatory information act of 1999
Mr. SHELBY. 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. 1198
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 ``Congressional Accountability
for Regulatory Information Act of 1999''.
SEC. 2. FINDINGS.
Congress finds that--
(1) many Federal regulations have improved the quality of
life of the American public, however, uncontrolled increases
in regulatory costs and lost opportunities for better
regulation cannot be continued;
(2) the legislative branch has a responsibility to ensure
that laws passed by Congress are properly implemented by the
executive branch; and
(3) in order for the legislative branch to fulfill its
responsibilities to ensure that laws passed by Congress are
implemented in an efficient, effective, and fair manner, the
Congress requires accurate and reliable information on which
to base decisions.
SEC. 3. REPORTS ON REGULATORY ACTIONS BY THE GENERAL
ACCOUNTING OFFICE.
(a) In General.--Section 801(a)(2) of title 5, United
States Code, is amended by striking
[[Page S6799]]
subparagraph (B) and inserting the following:
``(B)(i) After an agency publishes a regulatory action, a
committee of either House of Congress with legislative or
oversight jurisdiction relating to the action may request the
Comptroller General to review the action under clause (ii).
``(ii) Of requests made under clause (i), the Comptroller
General shall provide a report on each regulatory action
selected under clause (iv) to the committee which requested
the report (and the committee of jurisdiction in the other
House of Congress) not later than 180 calendar days after the
committee request is received. The report shall include an
independent analysis of the regulatory action by the
Comptroller General using any relevant data or analyses
available to or generated by the General Accounting Office.
``(iii) The independent analysis of the regulatory action
by the Comptroller General under clause (ii) shall include--
``(I) an analysis by the Comptroller General of the
potential benefits of the regulatory action, including any
beneficial effects that cannot be quantified in monetary
terms and the identification of those likely to receive the
benefits;
``(II) an analysis by the Comptroller General of the
potential costs of the regulatory action, including any
adverse effects that cannot be quantified in monetary terms
and the identification of those likely to bear the costs;
``(III) an analysis by the Comptroller General of any
alternative regulatory approaches, which have been
identified, that could achieve the same goal in a more cost-
effective manner or that could provide greater net benefits,
and, if applicable, a brief explanation of any statutory
reasons why such alternatives could not be adopted;
``(IV) an analysis of the extent to which the regulatory
action would affect State or local governments; and
``(V) a summary of how the results of the Comptroller
General's analysis differ, if at all, from the results of the
analyses of the agency in promulgating the regulatory action.
``(iv) In consultation with the Majority and Minority
Leaders of the Senate and the Speaker and Minority Leader of
the House of Representatives, the Comptroller General shall
develop procedures for determining the priority and number of
those requests for review under clause (i) that will be
reported under clause (ii).
``(C) Federal agencies shall cooperate with the Comptroller
General by promptly providing the Comptroller General with
such records and information as the Comptroller General
determines necessary to carry out this section.''.
(b) Definitions.--Section 804 of title 5, United States
Code, is amended--
(1) by redesignating paragraphs (2) and (3) as paragraphs
(3) and (5), respectively;
(2) by inserting after paragraph (1) the following:
``(2) The term `independent analysis' means a substantive
review of the agency's underlying assessments and assumptions
used in developing the regulatory action and any additional
analysis the Comptroller General determines to be
necessary.''; and
(3) by inserting after paragraph (3) (as redesignated by
paragraph (1) of this subsection) the following:
``(4) The term `regulatory action' means--
``(A) notice of proposed rule making;
``(B) final rule making, including interim final rule
making; or
``(C) a rule.''.
SEC. 4. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the General
Accounting Office to carry out chapter 8 of title 5, United
States Code, $5,200,000 for each of fiscal years 2000 through
2003.
SEC. 5. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take
effect 180 days after the date of enactment of this Act.
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