[Congressional Record Volume 145, Number 98 (Tuesday, July 13, 1999)]
[Senate]
[Pages S8373-S8386]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. TORRICELLI:
  S. 1353. A bill to combat criminal misuse of explosives; to the 
Committee on the Judiciary.


         dangerous explosives background checks requirement act

  Mr. TORRICELLI. Mr. President, every year, thousands of people are 
killed or maimed because of the use or misuse of illegal explosive 
devices, and millions of dollars in property is lost. Between 1991 and 
1995, there were more than 14,000 actual and attempted criminal 
bombings. Three hundred and twenty-six people were killed in those 
incidents and another 2,970 injured. More than $6 million in property 
damage resulted.
  One bombing in particular, is carved into the national memory. On the 
morning of April 19, 1995, in one horrible moment, an explosion 
devastated the Alfred P. Murrah Federal Building in Oklahoma City, OK, 
and took the lives of 168 Americans. This tragedy, together with the 
bombing of the World Trade Center in New York, took the lives of many 
innocent men, women, and children, left others permanently scarred, and 
caused great suffering for the families of the victims--as well as all 
of America. These crimes were intended to tear the very fabric of our 
society; instead, their tragic consequences served to strengthen our 
resolve to stand firm against the insanity of terrorism and the 
criminal use of explosives.
  In the wake of the Oklahoma City bombing, I was stunned--as were 
many--to learn how few restrictions on the use and sale of explosives 
really exist. I soon after introduced legislation to take a first step 
towards protecting the American people from those who would use 
explosives to do them harm. That bill, the Explosives Protection Act, 
would bring explosives law into line with gun laws. Specifically, it 
would take the list of categories of people who cannot obtain firearms 
and would add any of those categories not currently covered under the 
explosives law.
  Today, I am taking the next step by introducing the Dangerous 
Explosives Background Check Requirement Act requiring background checks 
before the sale of explosives material identical to those already 
mandated for firearms sales. Current law prohibits felons and others 
from possessing explosives, but does little to actually stop these 
materials from getting into the wrong hands. This failure defies logic 
when we already have a system in place to facilitate background checks 
and assure that persons who are legally prohibited from purchasing 
explosives are not able to do so.
  In November, 1998, the National Instant Criminal Background Check 
System (NICS) became operational. NICS is a new national database 
accessible to licensed firearms dealers that allows them to perform 
over-the-counter background checks on potential firearms purchasers. 
NICS, which checks national criminal history databases as well as 
information on other prohibited categories, such as illegal aliens and 
persons under domestic violence restraining orders, has already 
processed more than 3.7 million background checks and has stopped more 
than 39,000 felons and other prohibited persons from getting guns. In 
so doing, it has undoubtedly saved lives and prevented crimes from 
occurring.
  Once again, it is time to bring the explosives law into line with gun 
laws by taking advantage of the success of the NICS system and 
expanding its use to include explosives purchases. In so doing, we will 
make it harder for many of the most dangerous or least accountable 
members of society to obtain materials which can result in a great loss 
of life. My hope is that this bill will, in some small way, prevent 
future bombings--whether by terrorists of symbolic targets, malcontents 
of random ones, or even spouses involved in marital disputes.
  I hope we can quickly move to get this passed and protect Americans 
from future acts of explosive destruction. I ask unanimous consent that 
a copy of the legislation appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1353

       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 ``Dangerous Explosives 
     Background Checks Requirement Act''.

     SEC. 2. PERMITS AND BACKGROUND CHECKS FOR PURCHASES OF 
                   EXPLOSIVES.

       (a) Permits for Purchase of Explosives in General.--
       (1) In general.--Section 842 of title 18, United States 
     Code, is amended--
       (A) in subsection (a)(3), by striking subparagraphs (A) and 
     (B) and inserting the following:
       ``(A) to transport, ship, cause to be transported, or 
     receive any explosive materials; or
       ``(B) to distribute explosive materials to any person other 
     than a licensee or permittee.''; and
       (B) in subsection (b)--
       (i) by adding ``or'' at the end of paragraph (1);
       (ii) by striking ``; or'' at the end of paragraph (2) and 
     inserting a period; and
       (iii) by striking paragraph (3).
       (2) Regulations.--
       (A) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     promulgate final regulations with respect to the amendments 
     made by paragraph (1).
       (B) Notice to states.--On the promulgation of final 
     regulations under subparagraph (A), the Secretary of the 
     Treasury shall notify the States of the regulations in order 
     that the States may consider legislation to amend relevant 
     State laws relating to explosives.
       (b) Background Checks.--Section 842 of title 18, United 
     States Code, is amended by adding at the end the following:
       ``(p) Background Checks.--
       ``(1) Definitions.--In this subsection:
       ``(A) Chief law enforcement officer.--The term `chief law 
     enforcement officer' means the chief of police, the sheriff, 
     or an equivalent officer or the designee of such an 
     individual.
       ``(B) System.--The term `system' means the national instant 
     criminal background

[[Page S8374]]

     check system established under section 103 of the Brady 
     Handgun Violence Prevention Act (18 U.S.C. 922 note).
       ``(2) Prohibition.--A licensed importer, licensed 
     manufacturer, or licensed dealer shall not transfer explosive 
     materials to a permitee unless--
       ``(A) before the completion of the transfer, the licensee 
     contacts the system;
       ``(B)(i) the system provides the licensee with a unique 
     identification number; or
       ``(ii) 5 days on which State offices are open have elapsed 
     since the licensee contacted the system, and the system has 
     not notified the licensee that the receipt of explosive 
     materials by the transferee would violate subsection (i);
       ``(C) the transferor has verified the identity of the 
     transferee by examining a valid identification document (as 
     defined in section 1028) of the transferee containing a 
     photograph of the transferee; and
       ``(D) the transferor has examined the permit issued to the 
     transferee under section 843 and recorded the permit number 
     on the record of the transfer.
       ``(3) Identification number.--If receipt of explosive 
     materials would not violate section 842(i) or State law, the 
     system shall--
       ``(A) assign a unique identification number to the 
     transfer; and
       ``(B) provide the licensee with the number.
       ``(4) Exceptions.--Paragraph (2) shall not apply to a 
     transfer of explosive materials between a licensee and 
     another person if, on application of the transferor, the 
     Secretary has certified that compliance with paragraph (2)(A) 
     is impracticable because--
       ``(A) the ratio of the number of law enforcement officers 
     of the State in which the transfer is to occur to the number 
     of square miles of land area of the State does not exceed 
     0.0025;
       ``(B) the business premises of the licensee at which the 
     transfer is to occur are extremely remote in relation to the 
     chief law enforcement officer; and
       ``(C) there is an absence of telecommunications facilities 
     in the geographical area in which the business premises are 
     located.
       ``(5) Inclusion of identification number.--If the system 
     notifies the licensee that the information available to the 
     system does not demonstrate that the receipt of explosive 
     materials by the transferee would violate subsection (i) or 
     State law, and the licensee transfers explosive materials to 
     the transferee, the licensee shall include in the record of 
     the transfer the unique identification number provided by the 
     system with respect to the transfer.
       ``(6) Penalties.--If the licensee knowingly transfers 
     explosive materials to another person and knowingly fails to 
     comply with paragraph (2) with respect to the transfer, the 
     Secretary may, after notice and opportunity for a hearing--
       ``(A) suspend for not more than 6 months or revoke any 
     license issued to the licensee under section 843; and
       ``(B) impose on the licensee a civil penalty of not more 
     than $5,000.
       ``(7) No liability.--Neither a local government nor an 
     employee of the Federal Government or of any State or local 
     government, responsible for providing information to the 
     system shall be liable in an action at law for damages--
       ``(A) for failure to prevent the transfer of explosive 
     materials to a person whose receipt or possession of the 
     explosive material is unlawful under this section; or
       ``(B) for preventing such a transfer to a person who may 
     lawfully receive or possess explosive materials.
       ``(8) Determination of ineligibility.--
       ``(A) Written reasons provided on request.--If the system 
     determines that an individual is ineligible to receive 
     explosive materials and the individual requests the system to 
     provide the reasons for the determination, the system shall 
     provide such reasons to the individual, in writing, not later 
     than 5 business days after the date of the request.
       ``(B) Correction of erroneous system information.--
       ``(i) In general.--If the system informs an individual 
     contacting the system that receipt of explosive materials by 
     a prospective transferee would violate subsection (i) or 
     applicable State law, the prospective transferee may request 
     the Attorney General to provide the prospective transferee 
     with the reasons for the determination.
       ``(ii) Treatment of requests.--On receipt a request under 
     subparagraph (A), the Attorney General shall immediately 
     comply with the request.
       ``(iii) Submission of additional information.--

       ``(I) In general.--A prospective transferee may submit to 
     the Attorney General information to correct, clarify, or 
     supplement records of the system with respect to the 
     prospective transferee.
       ``(II) Action by the attorney general.--After receipt of 
     information under clause (i), the Attorney General shall--

       ``(aa) immediately consider the information;
       ``(bb) investigate the matter further; and
       ``(cc) correct all erroneous Federal records relating to 
     the prospective transferee and give notice of the error to 
     any Federal department or agency or any State that was the 
     source of such erroneous records.''.
       (c) Remedy for Erroneous Denial of Explosive Materials.--
       (1) In general.--Chapter 40 of title 18, United States 
     Code, is amended by inserting after section 843 the 
     following:

     ``Sec. 843A. Remedy for erroneous denial of explosive 
       materials

       ``(a) In General.--Any person denied explosive materials 
     under section 842(p)--
       ``(1) due to the provision of erroneous information 
     relating to the person by any State or political subdivision 
     of a State or by the national instant criminal background 
     check system referred to in section 922(t); or
       ``(2) who was not prohibited from receiving explosive 
     materials under section 842(i);

     may bring an action against an entity described in subsection 
     (b) for an order directing that the erroneous information be 
     corrected or that the transfer be approved, as the case may 
     be.
       ``(b) Entities Described.--An entity referred to in 
     subsection (a) is the State or political subdivision 
     responsible for providing the erroneous information referred 
     to in subsection (a)(1) or denying the transfer of explosives 
     or the United States, as the case may be.
       ``(c) Attorney's Fees.--In any action brought under this 
     section, the court, in its discretion, may allow the 
     prevailing party a reasonable attorney's fee as part of the 
     costs.''.
       (2) Technical amendment.--The analysis for chapter 40 of 
     title 18, United States Code, is amended by inserting after 
     the item relating to section 843 the following:

``843A. Remedy for erroneous denial of explosive materials.''.
       (d) Licenses and User Permits.--Section 843(a) of title 18, 
     United States Code, is amended--
       (1) by inserting ``, including fingerprints and a 
     photograph of the applicant'' before the period at the end of 
     the first sentence; and
       (2) by striking the second sentence and inserting the 
     following: ``Each applicant for a license shall pay for each 
     license a fee established by the Secretary in an amount not 
     to exceed $300. Each applicant for a permit shall pay for 
     each permit a fee established by the Secretary in an amount 
     not to exceed $100.''.
       (e) Penalties.--Section 844(a) of title 18, United States 
     Code, is amended--
       (1) by inserting ``(1) after ``(a)''; and
       (2) by adding at the end the following:
       ``(2) Background checks.--A person who violates section 
     842(p) shall be fined under this title, imprisoned not more 
     than 5 years, or both.''.
       (f) Effective Date.--The amendments made by subsections 
     (a), (b), (c), and (e) take effect 18 months after the date 
     of enactment of this Act.
                                 ______
                                 
      By Mr. KOHL (for himself and Mr. Feingold):
  S. 1354: A bill to provide for the eventual termination of milk 
marketing orders; to the Committee on Agriculture, Nutrition, and 
Forestry.


                       consumer dairy relief act

  Mr. KOHL. Mr. President, today I am introducing the Consumers Dairy 
Relief Act, a bill that will save American consumers $500 million a 
year on their milk, cheese and dairy purchases. This legislation 
terminates the Federal Milk Marketing Orders by the year 2001.
  Consumers are paying far more than necessary for their dairy 
purchases because our current system encourages milk production in high 
cost areas. Our nation's milk pricing laws, which were designed in the 
1930's, are seriously outdated and long overdue to be reformed. Dairy 
farmers in Wisconsin have suffered under the present system for too 
long. Wisconsin loses, 1,500 dairy farmers a year, not because they are 
inefficient, but because a federal law discriminates against them by 
preventing them from competing on a level playing field.
  Opponents of this legislation will tell you that we need to keep the 
present system in order to maintain a fresh milk supply in their 
states. While that may have been true in the 1930's, when we lacked the 
refrigeration technology necessary to store and transport milk, it is 
certainly not true today. We can now easily and safely transport 
perishable milk and cheese products between regions of the United 
States. In fact, the industry has actually perfected the system to such 
a degree that we now export cheese to countries around the world.
  Mr. President, as the United States expands its role in the export 
dairy market and enters into more trade agreements, our domestic 
agricultural policy is coming under intense scrutiny. Another reason to 
eliminate our antiquated milk pricing system is that it will give us 
another negotiating tool to use during the next round of WTO 
discussions scheduled to take place in Seattle this fall.
  Our trading partners are growing increasingly concerned about the 
intervention of the federal government in the pricing of milk. Earlier 
this month, The Dutch Ministry of Agriculture, Nature Management and 
Fisheries said

[[Page S8375]]

they want to put the issue of USDA's Federal Milk Marketing Orders and 
dairy compacts on the table for discussion at the next round of 
Agricultural discussions in Seattle this fall.
  By passing this legislation and reforming our milk pricing laws, we 
can eliminate another hurdle currently in the way of negotiating 
agricultural trade agreements that would open up new markets for our 
farmers.
  Mr. President, if the Senate decides to discuss reforming our milk 
pricing system, we must give serious consideration to eliminating the 
present system. Today I have touched on a few of the reasons we need to 
scrap our current milk pricing system. There are many others, but I 
will save those for another time.
  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. 1354

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

     SECTION 1. EVENTUAL TERMINATION OF MILK MARKETING ORDERS.

       (a) Termination.--Notwithstanding the implementation of the 
     final decision for the consolidation and reform of Federal 
     milk marketing orders, as required by section 143 of the 
     Federal Agriculture Improvement and Reform Act of 1996 (7 
     U.S.C. 7253), effective January 1, 2001, section 8c of the 
     Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
     amendments by the Agricultural Marketing Agreement Act of 
     1937, is amended by striking paragraphs (5) and (18).
       (b) Prohibition on Subsequent Orders Regarding Milk.--
     Section 8c(2) of the Agricultural Adjustment Act (7 U.S.C. 
     608c(2)), reenacted with amendments by the Agricultural 
     Marketing Agreement Act of 1937, is amended in the first 
     sentence--
       (1) in subparagraph (A), by striking ``Milk, fruits'' and 
     inserting ``Fruits''; and
       (2) in subparagraph (B), by inserting ``milk,'' after 
     ``honey,''.
       (c) Conforming Amendments.--
       (1) Section 2(3) of the Agricultural Adjustment Act (7 
     U.S.C. 602(3), reenacted with amendments by the Agricultural 
     Marketing Agreement Act of 1937, is amended by striking ``, 
     other than milk and its products,''.
       (2) Section 8c of the Agricultural Adjustment Act (7 U.S.C. 
     608c), reenacted with amendments by the Agricultural 
     Marketing Agreement Act of 1937, is amended--
       (A) in paragraph (6), by striking ``, other than milk and 
     its products,'';
       (B) in paragraph (7)(B), by striking ``(except for milk and 
     cream to be sold for consumption in fluid form)'';
       (C) in paragraph (11)(B), by striking ``Except in the case 
     of milk and its products, orders'' and inserting ``Orders'';
       (D) in paragraph (13)(A), by striking ``, except to a 
     retailer in his capacity as a retailer of milk and its 
     products''; and
       (E) in paragraph (17), by striking the second proviso.
       (3) Section 8d(2) of the Agricultural Adjustment Act (7 
     U.S.C. 608d(2)), reenacted with amendments by the 
     Agricultural Marketing Agreement Act of 1937, is amended by 
     striking the second sentence.
       (4) Section 10(b)(2) of the Agricultural Adjustment Act (7 
     U.S.C. 610(b)), reenacted with amendments by the Agricultural 
     Marketing Agreement Act of 1937, is amended--
       (A) by striking clause (i);
       (B) by redesignating clauses (ii) and (iii) as clauses (i) 
     and (ii), respectively; and
       (C) in the first sentence of clause (i) (as so 
     redesignated), by striking ``other commodity'' and inserting 
     ``commodity''.
       (5) Section 11 of the Agricultural Adjustment Act (7 U.S.C. 
     611), reenacted with amendments by the Agricultural Marketing 
     Agreement Act of 1937, is amended in the first sentence by 
     striking ``and milk, and its products,''.
       (6) Section 715 of the Agriculture, Rural Development, Food 
     and Drug Administration, and Related Agencies Appropriations 
     Act, 1994 (7 U.S.C. 608d note; Public Law 103-111; 107 Stat. 
     1079), is amended by striking the third proviso.
       (d) Effective Date.--The amendments made by this section 
     take effect on January 1, 2001.
                                 ______
                                 
      By Mr. DODD (for himself, Mr. Kennedy, Mr. Leahy, and Mrs. 
        Murray):
  S. 1355. A bill to establish demonstration projects to provide family 
income to respond to significant transitions, and for other purposes; 
to the Committee on Health, Education, Labor, and Pensions.


    The Family Income to Respond to Significant Transitions (FIRST) 
                             Insurance Act

  Ms. DODD. Mr. President. These last several weeks have been filled 
with profound questions about the strength of the American family and 
the priority we place on our children and on meeting the 
responsibilities of parenthood.
  In my view, we must start at the very beginning. We know that some of 
the key moments of parenthood are in the first days and weeks of a 
child's life. These are the moments when parents fall in love with 
their children--when they learn the feel of their soft hair, the joy of 
their touch and the immense peacefulness of their sleeping faces.
  These emotional bonds carry parents and children through all the 
challenging years that intervene between infancy and adulthood--from 
the terrible twos to adolescence.
  Research tells us this bonding with parents is critical to a child's 
emotional, cognitive, and physical development. Scientists have 
produced vivid pictures of children's functioning brains--so not only 
do we know, we can also see that there is a difference between the way 
the brain of a neglected child and the brain of a nurtured child works.
  Parents bonding with their children is not something one can mandate 
by law--but we must make sure that our policies support parents in 
these early days. And frankly, today as we sit on the cusp of the next 
millennium, we offer parents very limited support at this most critical 
time.
  Today's working parents have less time to spend with their infants 
than past generations. Compared to 30 years ago, there has been an 
average decrease of 22 hours per week in time that parents spend with 
their children. That is nearly one day out of every week--or 52 days a 
year.
  More parents work today than every before--fully 46 percent of 
workers are parents. Nearly one in five employed parents. Nearly one in 
five employed parents are single, and among these 27 percent are single 
fathers. The number of parents who were employed increased from 18.3 
million in 1985 to 24.1 million in 1997.
  One could argue whether these trends are going in the right 
direction. But no one can argue that they are the facts--the reality in 
which American families live everyday. And, my view, that reality is 
where public policy must operate.
  Since 1986, I've worked, with many of my colleagues, to help working 
Americans meet these demands and care for new children and their close 
family members. In 1993, the Family and Medical Leave Act was finally 
signed into law, establishing a key safety net for America's families. 
I couldn't have done it without the support of my colleagues here in 
the Senate and the House, and without the support of the President.
  But let's face it--the FMLA is like 911 for working Americans. It 
provides up to 12 weeks of unpaid leave to qualifying employees for the 
birth or adoption of a child, their own illness or the serious illness 
of a parent, child or spouse without fear of losing their jobs or 
health insurance. But the fact remains this leave is unpaid--and that 
is a high bar for most American families.
  While millions of Americans--many estimate over twenty million 
families--have benefitted from the law and have taken the time they 
needed, for many it has been at major financial cost. In fact, taking 
an unpaid leave often drives employees earning low wages into poverty. 
Twenty-one percent of low-wage earners who take a leave without full 
wage replacement wind up on public assistance; 40 percent cut their 
leaves short because of financial concerns; 39 percent put off paying 
bills; and, 25 percent borrow money.
  And there are many more families who do not take a needed leave 
because they can't afford it. Nearly two-thirds of employees who need 
to take a family or medical leave, but do not do so, report that the 
reason they did not take the leave was that they could not afford it. 
These are families with brand new children or where a spouse, parent or 
child is seriously ill.
  Many employers do provide workers with some pay during these 
difficult times--but the benefit of these policies is not distributed 
equally. Employees with less education, lower income, female employees, 
employees from racial minority groups and younger employees are less 
likely to receive any income during leaves.
  Our nation is a leader in so many areas. And yet not when it comes to 
helping families balance the responsibilities of work and home. Nearly 
every industrialized nation other than

[[Page S8376]]

the United States, as well as most developing nations, provide parents 
with paid leave for infant care.
  I believe that we should learn from these nations, our own 
experiences, and the calls of American families and provide parents 
with the means to access desperately needed leave to care for new 
babies. This effort cannot be out of reach for a nation as rich and 
prosperous as our own.
  The bi-partisan Commission on Leave, established as a part of the 
Family and Medical Leave Act and which I chaired, recommended further 
consideration and exploration of paid leave policies. Specifically, and 
I quote from the unanimous recommendations of the Commission, ``the 
Commission recommends that the development of a uniform system of wage 
replacement for periods of family and medical leave be given serious 
consideration by employers, employee representatives and others.'' The 
Commission went on to recommend that we should look to expanding 
employer-provided systems of paid leave, and expanding state systems 
like unemployment insurance or temporary disability insurance, in 
states with those systems.
  Mr. President, this is not a pie in the sky idea. Many states have 
already recognized the need for such support for new parents. 
California, New Jersey, three other states and Puerto Rico have in 
place temporary disability insurance programs, that at a minimal cost 
to employees and employers, provide support to mothers who are 
temporarily disabled after pregnancy and childbirth as well as other 
workers temporarily disabled.
  Other states are moving to provide income to families through 
different mechanisms. Massachusetts, Vermont, Washington and several 
other states are all considering legislation to expand their state 
unemployment compensation systems to provide partial wage replacement 
to workers taking family or medical leave. Just a few weeks ago, 
President Clinton announced his support of these bold initiatives and 
directed the Department of Labor to work with the states to allow for 
this expansion of these state unemployment insurance systems.
  But I believe there is more for the federal government to do. We 
should be a partner in these state efforts and help spur the 
development of the unemployment insurance model as well as other 
financial mechanism that will, I hope, make paid leave a reality for 
all new parents in America.
  I am proposing today legislation that would establish a federal 
demonstration program--which I am calling FIRST (Family Income to 
Respond to Significant Transitions) Insurance.
  FIRST Insurance would support state demonstration projects that 
provide partial or full wage replacement to new parents who take time 
off from work for the birth or adoption of a child. States could also 
choose to expand these benefits to support other care giving needs, 
such as taking time to care for an ill parent, spouse or child, or to 
support parents who choose to stay home with an infant.
  These would be state or community-based projects, entirely 
voluntary--in no way mandated by federal law. Clearly, there is already 
much going on in this area. Thousands of employers offer their 
employees and their families paid leave. There are private insurance 
systems that cover wages in various circumstances including the birth 
of a new child. There are state and local dollars that supplement the 
incomes of new families as well as protect families at other times of 
economic crisis. These federal dollars would leverage these state, 
private and other dollars to expand access to paid leave to more 
parents.
  The demonstrations funded will form the basis of a large-scale 
investigation of the most effective way to provide support to families 
at these critical times in a family's life. Key questions to be 
answered include the costs of these projects, the reach and the impact 
on families and children. The demonstrations will also allow 
comparisons of different mechanisms to provide leave--including 
expansion of state unemployment insurance systems, temporary disability 
programs, and other viable mechanisms.
  Mr. President, when a person is injured on the job, or when someone 
loses their job because of a plant closing or some other factor beyond 
their control, our nation rightly protects their families from the risk 
of catastrophic financial loss. That's the purpose of workman's 
compensation and unemployment insurance.
  If we can protect families at times like this, shouldn't we protect 
them at another time of crucial family need as they struggle to meet 
the joyful challenge of raising a newborn?
  Mr. President, this initiative is just one part of a better deal we 
owe to America's families. Just as the horrible tragedy in Littleton, 
Colorado was a wake up call to parents across the country, it must be a 
wake up call to us to re-examine our policies around children, families 
and parenthood.
  There is much to be done--child care, education, expanding the basic 
protection of the Family and Medical Leave Act to more workers, 
intelligent gun control policies, and better alternatives for our youth 
out of school. But I believe a key piece is supporting parents in the 
very first days, weeks and months of a child's life--and hope that we 
can work together to make sure these all important days are possible 
for all parents.
  Mr. President, I ask unanimous consent that this measure be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows.

                                S. 1355

       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 ``Family Income to Respond to 
     Significant Transitions Insurance Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) nearly every industrialized nation other than the 
     United States, and most developing nations, provide parents 
     with paid leave for infant care;
       (2)(A) parents' interactions with their infants have a 
     major influence on the physical, cognitive, and social 
     development of the infants; and
       (B) optimal development of an infant depends on a strong 
     attachment between an infant and the infant's parents;
       (3) nearly \2/3\ of employees, who need to take family or 
     medical leave, but do not take the leave, report that they 
     cannot afford to take the leave;
       (4) although some employees in the United States receive 
     wage replacement during periods of family or medical leave, 
     the benefit of wage replacement is not shared equally in the 
     workforce, as demonstrated by the fact that--
       (A) employees with less education and lower income are less 
     likely to receive wage replacement than employees with more 
     education and higher salaries; and
       (B) female employees, employees from racial minority 
     groups, and younger employees are slightly less likely to 
     receive wage replacement than male employees, white 
     employees, and older employees, respectively;
       (5) in order to cope financially with taking family or 
     medical leave, of persons taking that leave without full wage 
     replacement--
       (A) 40 percent cut their leave short;
       (B) 39 percent put off paying bills;
       (C) 25 percent borrowed money; and
       (D) 9 percent obtained public assistance;
       (6) taking family or medical leave often drives employees 
     earning low wages into poverty, and 21 percent of such low-
     wage employees who take family or medical leave without full 
     wage replacement resort to public assistance;
       (7) studies document shortages in the supply of infant 
     care, and that the shortages are expected to worsen as 
     welfare reform measures are implemented; and
       (8) compared to 30 years ago, families have experienced an 
     average decrease of 22 hours per week in time that parents 
     spend with their children.

     SEC. 3. PURPOSES.

       The purposes of this Act are--
       (1) to establish a demonstration program that supports the 
     efforts of States and political subdivisions to provide 
     partial or full wage replacement, often referred to as FIRST 
     insurance, to new parents so that the new parents are able to 
     spend time with a new infant or newly adopted child, and to 
     other employees; and
       (2) to learn about the most effective mechanisms for 
     providing the wage replacement assistance.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of Labor, acting after consultation with the Secretary of 
     Health and Human Services.
       (2) Son or daughter; state.--The terms ``son or daughter'' 
     and ``State'' have the meanings given the terms in section 
     101 of the Family and Medical Leave Act of 1993 (29 U.S.C. 
     2611).

     SEC. 5. DEMONSTRATION PROJECTS.

       (a) Grants.--The Secretary shall make grants to eligible 
     entities to pay for the Federal share of the cost of carrying 
     out projects that assist families by providing,

[[Page S8377]]

     through various mechanisms, wage replacement for eligible 
     individuals that are responding to caregiving needs resulting 
     from the birth or adoption of a son or daughter or other 
     family caregiving needs. The Secretary shall make the grants 
     for periods of 5 years.
       (b) Eligible Entities.--To be eligible to receive a grant 
     under this section, an entity shall be a State or political 
     subdivision of a State.
       (c) Use of Funds.--
       (1) In general.--An entity that receives a grant under this 
     section may use the funds made available through the grant to 
     provide partial or full wage replacement as described in 
     subsection (a) to eligible individuals--
       (A) directly;
       (B) through an insurance program, such as a State temporary 
     disability insurance program or the State unemployment 
     compensation benefit program;
       (C) through a private disability or other insurance plan, 
     or another mechanism provided by a private employer; or
       (D) through another mechanism.
       (2) Administrative costs.--No entity may use more than 10 
     percent of the total funds made available through the grant 
     during the 5-year period of the grant to pay for the 
     administrative costs relating to a project described in 
     subsection (a).
       (d) Eligible Individuals.--To be eligible to receive wage 
     replacement under subsection (a), an individual shall--
       (1) meet such eligibility criteria as the eligible entity 
     providing the wage replacement may specify in an application 
     described in subsection (e); and
       (2) be--
       (A) an individual who is taking leave, under the Family and 
     Medical Leave Act of 1993 (29 U.S.C. 2601 et seq.), other 
     Federal, State, or local law, or a private plan, for a reason 
     described in subparagraph (A) or (B) of section 102(a)(1) of 
     the Family and Medical Leave Act of 1993 (29 U.S.C. 
     2612(a)(1));
       (B) at the option of the eligible entity, an individual 
     who--
       (i) is taking leave, under that Act, other Federal, State, 
     or local law, or a private plan, for a reason described in 
     subparagraph (C) or (D) of section 102(a)(1) of the Family 
     and Medical Leave Act of 1993 (29 U.S.C. 2612(a)(1)); or
       (ii) leaves employment because the individual has elected 
     to care for a son or daughter under age 1; or
       (C) at the option of the eligible entity, an individual 
     with other characteristics specified by the eligible entity 
     in an application described in subsection (e).
       (e) Application.--To be eligible to receive a grant under 
     this section, an entity shall submit an application to the 
     Secretary, at such time, in such manner, and containing such 
     information as the Secretary may require, including, at a 
     minimum--
       (1) a plan for the project to be carried out with the 
     grant;
       (2) information demonstrating that the applicant consulted 
     representatives of employers and employees, including labor 
     organizations, in developing the plan;
       (3) estimates of the costs and benefits of the project;
       (4)(A) information on the number and type of families to be 
     covered by the project, and the extent of such coverage in 
     the area served under the grant; and
       (B) information on any criteria or characteristics that the 
     entity will use to determine whether an individual is 
     eligible for wage replacement under subsection (a), as 
     described in paragraphs (1) and (2)(C) of subsection (d);
       (5) if the project will expand on State and private systems 
     of wage replacement for eligible individuals, information on 
     the manner in which the project will expand on the systems;
       (6) information demonstrating the manner in which the wage 
     replacement assistance provided through the project will 
     assist families in which an individual takes leave as 
     described in subsection (d)(1); and
       (7) an assurance that the applicant will participate in 
     efforts to evaluate the effectiveness of the project.
       (f) Selection Criteria.--In selecting entities to receive 
     grants for projects under this section, the Secretary shall--
       (1) take into consideration--
       (A) the scope of the proposed projects;
       (B) the cost-effectiveness, feasibility, and financial 
     soundness of the proposed projects;
       (C) the extent to which the proposed projects would expand 
     access to wage replacement in response to family caregiving 
     needs, particularly for low-wage employees, in the area 
     served by the grant; and
       (D) the benefits that would be offered to families and 
     children through the proposed projects; and
       (2) to the extent feasible, select entities proposing 
     projects that utilize diverse mechanisms, including expansion 
     of State unemployment compensation benefit programs, and 
     establishment or expansion of State temporary disability 
     insurance programs, to provide the wage replacement.
       (g) Federal Share.--
       (1) In general.--The Federal share of the cost described in 
     subsection (a) shall be--
       (A) 50 percent for the first year of the grant period;
       (B) 40 percent for the second year of that period;
       (C) 30 percent for the third year of that period; and
       (D) 20 percent for each subsequent year.
       (2) Non-federal share.--The non-Federal share of the cost 
     may be in cash or in kind, fairly evaluated, including plant, 
     equipment, and services and may be provided from State, 
     local, or private sources, or Federal sources other than this 
     Act.
       (h) Supplement Not Supplant.--Funds appropriated pursuant 
     to the authority of this Act shall be used to supplement and 
     not supplant other Federal, State, and local public funds and 
     private funds expended to provide wage replacement.
       (i) Effect on Existing Rights.--Nothing in this Act shall 
     be construed to supersede, preempt, or otherwise infringe on 
     the provisions of any collective bargaining agreement or any 
     employment benefit program or plan that provides greater 
     rights to employees than the rights established under this 
     Act.

     SEC. 6. EVALUATIONS AND REPORTS.

       (a) Available funds.--The Secretary shall use not more than 
     2 percent of the funds made available under section 5 to 
     carry out this section.
       (b) Evaluations.--The Secretary shall, directly or by 
     contract, evaluate the effectiveness of projects carried out 
     with grants made under section 5, including conducting--
       (1) research relating to the projects, including research 
     comparing--
       (A) the scope of the projects, including the type of 
     insurance or other wage replacement mechanism used, the 
     method of financing used, the eligibility requirements, the 
     level of the wage replacement benefit provided (such as the 
     percentage of salary replaced), and the length of the benefit 
     provided, for the projects;
       (B) the utilization of the projects, including the 
     characteristics of individuals who benefit from the projects, 
     particularly low-wage workers, and factors that determine the 
     ability of eligible individuals to obtain wage replacement 
     through the projects; and
       (C) the costs of and savings achieved by the projects, 
     including the cost-effectiveness of the projects and their 
     benefits for children and families;
       (2) analysis of the overall need for wage replacement; and
       (3) analysis of the impact of the projects on the overall 
     availability of wage replacement.
       (c) Reports.--
       (1) Initial report.--Not later than 3 years after the 
     beginning of the grant period for the first grant made under 
     section 5, the Secretary shall prepare and submit to Congress 
     a report that contains information resulting from the 
     evaluations conducted under subsection (b).
       (2) Subsequent reports.--Not later than 4 years after the 
     beginning of that grant period, and annually thereafter, the 
     Secretary shall prepare and submit to Congress a report that 
     contains--
       (A) information resulting from the evaluations conducted 
     under subsection (b); and
       (B) usage data for the demonstration projects, for the most 
     recent year for which data are available.

     SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     Act $400,000,000 for fiscal year 2000 and such sums as may be 
     necessary for each subsequent fiscal year.

  Mr. KENNEDY. Mr. President, I am honored to join as a cosponsor of 
Senator Dodd's ``Family Income to Respond to Significant Transitions'' 
(FIRST) Insurance Demonstration Project Act. From his work on the 
Family and Medical Leave Act of 1993 to his countless efforts to 
improve the quality and accessibility of child care, Senator Dodd has 
been a tireless advocate for families and children, and I commend his 
leadership on this important new initiation.
  Millions of families have benefited from the Family and Medical Leave 
Act, but we must do more to support working families. Nearly two-thirds 
of employees cannot afford to take family or medical leave when a new 
child is born or a family member becomes ill. According to a survey by 
the National Partnership for Women and Families, 64 percent of 
Americans believe that the time pressures on working families are 
getting worse, not better. Two-thirds of women and men under the age of 
45 believe that they will need to take a family or medical leave in the 
next 10 years. But, many of these families won't be able to afford it.
  We should stop paying lip service to family values and find a way to 
help families afford family leave when they need it. This bill will 
provide grants to states and local communities to experiment with 
methods of wage replacement for workers who take family leave. States 
will use the grants for demonstration projects implementing wage 
replacement strategies to allow more employees to spend time with their 
families when family needs require it.
  Under the Family and Medical Leave Act, businesses with 50 or more 
employees must provide up to 12 weeks of unpaid leave to employees to 
care for a newborn or newly-adopted child, or to care for a child, a 
spouse, or a parent who is ill. The Act has helped millions of workers 
care for their families, but too many obstacles prevent too many

[[Page S8378]]

workers from taking leave. Forty-one million people, nearly half the 
private workforce, are not protected by the law because their company 
is too small to be covered, or because they haven't worked there long 
enough to qualify for the leave.
  Others are covered and entitled to a leave, but cannot benefit from 
the Act because they cannot afford to take an unpaid leave of absence. 
Although some workers are fortunate enough to receive wage replacement 
during periods of family or medical leave, most hard-working low-wage 
earners do not receive this benefit. Low-income employees are less 
likely to receive wage replacement than more highly educated, well-paid 
employees. Women, minorities, and younger employees are less likely 
than men, white Americans, and older workers to receive wage 
replacement benefits when taking family leave.
  As a result, 40 percent employees without full wage replacement cut 
their leaves short, 39 percent put-off paying bills, 25 percent borrow 
money, and 9 percent turn to public assistance to cover their loss 
wages. Taking unpaid leave often drives low-wage earners into poverty. 
Workers who need to care for an ill family member, an elderly parent, 
or a new baby should not be plunged into poverty.
  Our bill will help families take needed leave by allowing states to 
implement alternative funding programs. For example, states may choose 
to expand state or private Temporary Disability Insurance plans to 
provide partial or full replacement of wages for those taking time off 
form work to care for a new child. States may also expand their 
Unemployment Insurance Compensation to make leave from work 
economically feasible. The FIRST Act is an important step in the right 
direction. This bill will provide states with $400 million for fiscal 
year 2000 to fund demonstration programs, assisting states which are 
already working to establish wage replacement leave programs.
  I am proud that Massachusetts is moving forward to address this 
problem. A bill to establish a Family and Employment Security Trust 
Fund has already been introduced, providing family leave replacement 
through the unemployment insurance system. Thousands of workers in 
Massachusetts will be able to care for their families without falling 
into poverty--including low-income employees living from paycheck to 
paycheck. Groups in Maryland, Vermont, and Washington are taking the 
lead with similar legislation.
  We need to put families first and this bill does that. I urge my 
colleagues to support this needed initiative.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself and Mr. Schumer):
  S. 1356. A bill to amend the Marine Protection, Research, and 
Sanctuaries Act of 1972 to clarify the limitation on the dumping of 
dredged material in Long Island Sound; to the Committee on Environment 
and Public Works.


              the long island sound protection act of 1999

  Mr. MOYNIHAN. Mr. President, I rise today to introduce a bill that 
will protect the natural beauty and resources of the Long Island Sound 
from current dredging policies that allow large amounts of material to 
be dumped into the estuary without stringent environmental review. The 
Long Island Sound Protection Act of 1999 would require all large 
dredging projects in the Sound to comply with sediment testing 
provisions of the Marine Protection Research and Sanctuaries Act, 
commonly known as the Ocean Dumping Act.
  Under the Ocean Dumping Act, any Long Island Sound dredging project 
that disposes of more than 25,000 tons of dredged material must undergo 
toxicity and bioaccumulation tests before it is safe to dump. However, 
smaller nonfederal projects need only comply with the Clean Water Act, 
which does not require testing. In recent years, the Army Corps of 
Engineers has begun an unfortunate practice of avoiding the more 
rigorous requirements of the Ocean Dumping Act by individually 
permitting smaller projects that are clearly a part of larger dredging 
operations. Individually permitted, these projects need only comply 
with the Clean Water Act, even though they are dumped together in the 
Long Island Sound and have the same cumulative effect as one large 
project would to the local ecosystem. The Long Island Sound Protection 
Act would end this practice of stacking permits and would ensure that 
at least one environmentally acceptable disposal site is designated by 
the Environmental Protection Agency within a two-year period.
  Dredging projects are critical to the people and businesses who rely 
extensively on the Sound to transport goods, services, and people every 
day. However, the health of the Long Island Sound ecosystem is also 
important to the 8 million people living within the boundaries of the 
Long Island Sound watershed, with more than $5 billion generated 
annually from boating, commercial and sport fishing, swimming, and 
beachgoing. The Long Island Sound is also an estuary of national 
significance that my State, in cooperation with the Environmental 
Protection Agency, has worked diligently to restore under the 1992 Long 
Island Sound Comprehensive Conservation and Management Plan. This bill 
would remove one of the barriers to achieving the laudable goals of 
this Plan.
  A clean and safe Sound is important to us all. I urge my colleagues 
to join me in supporting this important legislation.
  Mr. President, I ask unanimous consent that my bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1356

       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 ``Long Island Sound Protection 
     Act''.

     SEC. 2. LONG ISLAND SOUND PROTECTION.

       Section 106 of the Marine Protection, Research, and 
     Sanctuaries Act (33 U.S.C. 1416) is amended--
       (1) by striking ``(f) In'' and inserting the following:
       ``(f) Long Island Sound.--
       ``(1) In general.--In''; and
       (2) by adding at the end the following:
       ``(2) Multiple projects.--
       ``(A) In general.--Paragraph (1) shall apply to a project 
     described in paragraph (1) if--
       ``(i) 1 or more projects of that type produce, in the 
     aggregate, dredged material in excess of 25,000 cubic yards; 
     and
       ``(ii)(I) the project or projects are carried out in a 
     proximate geographical area; or
       ``(II) the aggregate quantity of dredged material produced 
     by the project or projects is transported, for dumping 
     purposes, by the same barge.
       ``(B) Regulations.--As soon as practicable, but not later 
     than 60 days after the date of enactment of this paragraph, 
     the Administrator shall promulgate regulations that define 
     the term `proximate geographical area' for purposes of 
     subparagraph (A)(i).
       ``(3) Designated site.--Not later than 2 years after the 
     date of enactment of this paragraph, the Administrator shall 
     designate under section 102(c) at least 1 site for the 
     dumping of dredged material generated in the vicinity of Long 
     Island Sound.
       ``(4) Prohibition on dumping of dredged material.--Except 
     at the site or sites designated under paragraph (3) (if the 
     site or sites are located in Long Island Sound), no dredged 
     material shall be dumped in Long Island Sound after the date 
     on which the Administrator designates at least 1 site under 
     paragraph (3).''.
                                 ______
                                 
      By Mr. JEFFORDS:
  s. 1357. A. bill to amend the Internal Revenue Code of 1986 to 
enhance the portability of retirement benefits, and for other purposes; 
to the Committee on Finance.


                 the retirement account portability act

  Mr. JEFFORDS. Mr. President, today I am introducing S. 1357, the 
Retirement Account Portability (RAP) Act. This bill is a close 
companion to H.R. 738, the bill introduced by Congressman Earl Pomeroy 
of North Dakota. It was also included as title III of the Pension 
Coverage and Portability Act, S. 741, introduced earlier this year by 
myself and Senators Graham and Grassley. Generally this bill is 
intended to be a further iteration of the concepts embodied in both of 
those bills.
  The RAP Act standardizes the rules in the Internal Revenue Code (IRC) 
which regulate how portable a worker's retirement savings account is, 
and while it does not make portability of pension benefits perfect, it 
greatly improves the status quo. No employer will be ``required'' to 
accept rollovers from other plans, however. A rollover will occur when 
the employee offers, and the employer agrees to accept, a rollover from 
another plan.

[[Page S8379]]

  Under current law, it is not possible for an individual to move an 
accumulated retirement savings account from a section 401(k) (for-
profit) plan to a section 457 (state and local government) deferred 
compensation plan, to an Individual Retirement Account (IRA), then to a 
section 403(b) (non-profit organization or public school) deferred 
annuity plan and ultimately back into a section 401(k) plan, without 
violating various restrictions on the movement of their money. The RAP 
Act will make it possible for workers to take their retirement savings 
with them when they change jobs regardless of the type of employer for 
which they work.
  This bill will also help make IRAs more portable and will improve the 
use of conduit IRAs. Conduit IRAs are individual retirement accounts to 
which certain distributions from a qualified retirement plan or from 
another individual retirement account have been transferred. RAP 
changes the rules regulating these IRAs so that workers leaving the 
for-profit, non-profit or governmental field can use a conduit IRA as a 
parking spot for a pre-retirement distribution. These special accounts 
are needed by many workers until they have another employer-sponsored 
plan in which to rollover their savings.
  In many instances, this bill will allow an individual to rollover an 
IRA consisting exclusively of tax-deductible contributions into a 
retirement plan at his or her new place of employment, thus helping the 
individual consolidate retirement savings in a single account. Under 
certain circumstances, the RAP Act will also allow workers to rollover 
any after-tax contributions made at his or her previous workplace, into 
a new retirement plan. Under the provisions of the bill as drafted, 
after-tax contributions will be rollable from a plan to an IRA and from 
an IRA to an IRA, but not from a IRA to a plan, nor on a direct plan to 
plan basis. I am open to recommendations on how we can improve the 
treatment of after-tax rollovers and I look forward to hearing from my 
colleagues and the public on that topic.
  Current law requires a worker who changes jobs to face a deadline of 
60 days within which to roll over any retirement savings benefits 
either into an Individual Retirement Account, or into the retirement 
plan of his or her new employer. Failure to meet the deadline can 
result in both income and excise taxes being imposed on the account. We 
believe that this deadline should be waived under certain circumstances 
and we have outlined them in the bill. Consistent with the Pomeroy 
bill, in case of a Presidentially-declared natural disaster or military 
service in a combat zone, the Treasury Department will have the 
authority to disallow imposition of any tax penalty for the account 
holder. Consistent with the additional changes incorporated by 
Congressman Pomeroy this year, however, we have included a waiver of 
tax penalties in the case of undue hardship, such as a serious personal 
injury or illness and we have given the Department of the Treasury the 
authority to waive the deadline.

  The Retirement Account Portability Act will also change two 
complicated rules which harm both plan sponsors and plan participants; 
one dealing with certain business sales (the so-called ``same desk'' 
rule) and the other dealing with retirement plan distribution options. 
Each of these rules has impeded true portability of pensions and we 
believe they ought to be changed.
  In addition, this bill will extend the Pension Benefit Guaranty 
Corporation's (PBGC) Missing Participant program to defined benefit 
multiemployer pension plans. Under current law, the PBGC has 
jurisdiction over both single-employer and multiemployer defined 
benefit pension plans. A few years ago, the agency initiated a program 
to locate missing participants from terminated, single-employer plans. 
The program attempts to locate individuals who are due a benefit, but 
who have not filed for benefits owed to them, or who have attempted to 
find their former employer but failed to receive their benefits. This 
bill expands the missing participant program to multiemployer pension 
plans.
  I know of no reason why individuals covered by a multiemployer 
pension plans should not have the same protections as participants of 
single-employer pension plans and this change will help more former 
employees receive all the benefits to which they are entitled. This 
bill does not expand the missing participants program to defined 
contribution plans. Supervision of defined contribution plans is 
outside the statutory jurisdiction of the PBGC and I have not heard 
strong arguments for including those plans within the jurisdiction of 
the agency. I would be pleased to hear the recommendations of any of my 
colleagues on this matter.
  In a particularly important provision, the Retirement Account 
Portability bill will allow public school teachers and other state and 
local employees who move between different states and localities to use 
their savings in their section 403(b) plan or section 457 deferred 
compensation arrangement to purchase ``service credit'' in the defined 
benefit plan in which they are currently participating, and thus obtain 
greater pension benefits in the plan in which they conclude their 
career.
  As a final note, this bill, this bill does not reduce the vesting 
schedule from the current five year cliff vesting (or seven year 
graded) to a three year cliff or six year graded vesting schedule that 
has been contained in other bills. I support the shorter vesting 
schedules, but I feel that the abbreviated schedule makes a dramatic 
change to tax law without removing some of the disincentives to 
maintaining a pension plan that businesses--especially small 
businesses--desperately need. More discussion of this matter is needed.
  Mr. President, 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. 1357

       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.

       (a) Short Title.--This Act may be cited as the ``Retirement 
     Account Portability 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.

     SEC. 2. ROLLOVERS ALLOWED AMONG VARIOUS TYPES OF PLANS.

       (a) Rollovers From and to Section 457 Plans.--
       (1) Rollovers from section 457 plans.--
       (A) In general.--Section 457(e) (relating to other 
     definitions and special rules) is amended by adding at the 
     end the following:
       ``(16) Rollover amounts.--
       ``(A) General rule.--In the case of an eligible deferred 
     compensation plan, if--
       ``(i) any portion of the balance to the credit of an 
     employee in such plan is paid to such employee in an eligible 
     rollover distribution (within the meaning of section 
     402(c)(4) without regard to subparagraph (C) thereof),
       ``(ii) the employee transfers any portion of the property 
     such employee receives in such distribution to an eligible 
     retirement plan described in section 402(c)(8)(B), and
       ``(iii) in the case of a distribution of property other 
     than money, the amount so transferred consists of the 
     property distributed,
     then such distribution (to the extent so transferred) shall 
     not be includible in gross income for the taxable year in 
     which paid.
       ``(B) Certain rules made applicable.--The rules of 
     paragraphs (2) through (7) (other than paragraph (4)(C)) and 
     (9) of section 402(c) and section 402(f) shall apply for 
     purposes of subparagraph (A).
       ``(C) Reporting.--Rollovers under this paragraph shall be 
     reported to the Secretary in the same manner as rollovers 
     from qualified retirement plans (as defined in section 
     4974(c)).''
       (B) Deferral limit determined without regard to rollover 
     amounts.--Section 457(b)(2) (defining eligible deferred 
     compensation plan) is amended by inserting ``(other than 
     rollover amounts)'' after ``taxable year''.
       (C) Direct rollover.--Paragraph (1) of section 457(d) is 
     amended by striking ``and'' at the end of subparagraph (A), 
     by striking the period at the end of subparagraph (B) and 
     inserting ``, and'', and by inserting after subparagraph (B) 
     the following:
       ``(C) the plan meets requirements similar to the 
     requirements of section 401(a)(31).

     Any amount transferred in a direct trustee-to-trustee 
     transfer in accordance with section 401(a)(31) shall not be 
     includible in gross income for the taxable year of 
     transfer.''
       (D) Withholding.--
       (i) Paragraph (12) of section 3401(a) is amended by adding 
     at the end the following:
       ``(E) under or to an eligible deferred compensation plan 
     which, at the time of such payment, is a plan described in 
     section 457(b); or''.

[[Page S8380]]

       (ii) Paragraph (5) of section 3405(e) is amended by adding 
     at the end the following: ``Such term shall include an 
     eligible deferred compensation plan described in section 
     457(b).''
       (iii) Paragraph (3) of section 3405(c) is amended to read 
     as follows:
       ``(3) Eligible rollover distribution.--For purposes of this 
     subsection, the term `eligible rollover distribution' has the 
     meaning given such term by section 402(f)(2)(A).''
       (iv) Liability for withholding.--Subparagraph (B) of 
     section 3405(d)(2) is amended by striking ``or'' at the end 
     of clause (ii), by striking the period at the end of clause 
     (iii) and inserting ``, or'', and by adding at the end the 
     following:
       `(iv) section 457(b).''
       (2) Rollovers to section 457 plans.--
       (A) Section 402(c)(8)(B) (defining eligible retirement 
     plan) is amended by striking ``and'' at the end of clause 
     (iii), by striking the period at the end of clause (iv) and 
     inserting ``, and'', and by adding at the end the following:
       ``(v) an eligible deferred compensation plan described in 
     section 457(b) of an eligible employer described in section 
     457(e)(1)(A).''
       (B) Paragraph (9) of section 402(c) is amended by striking 
     ``except that'' and all that follows and inserting ``except 
     that only an account or annuity described in clause (i) or 
     (ii) of paragraph (8)(B) shall be treated as an eligible 
     retirement plan with respect to such distribution.''
       (C) Subsection (a) of section 457 (relating to year of 
     inclusion in gross income) is amended by striking ``or 
     otherwise made available''.
       (3) Minimum distributions.--Paragraph (2) of section 457(d) 
     is amended to read as follows:
       ``(2) Minimum distribution requirements.--A plan meets the 
     distribution requirements of this paragraph if the plan meets 
     the requirements of section 401(a)(9).''
       (4) Conforming amendment.--Paragraph (9) of section 457(e) 
     is amended to read as follows:
       ``(9) Benefits not treated as failing to meet distribution 
     requirements of subsection (d).--A plan shall not be treated 
     as failing to meet the distribution requirements of 
     subsection (d) by reason of a distribution of the total 
     amount payable to a participant under the plan if--
       ``(A) such amount does not exceed the dollar limit under 
     section 411(a)(11)(A), and
       ``(B) such amount may be distributed only if--
       ``(i) no amount has been deferred under the plan with 
     respect to such participant during the 2-year period ending 
     on the date of the distribution, and
       ``(ii) there has been no prior distribution under the plan 
     to such participant to which this paragraph applied.''
       (b) Allowance of Rollovers From and to 403(b) Plans.--
       (1) Rollovers from section 403(b) plans.--Section 
     403(b)(8)(A)(ii) (relating to rollover amounts) is amended by 
     striking ``such distribution'' and all that follows and 
     inserting ``such distribution to an eligible retirement plan 
     described in section 402(c)(8)(B), and''.
       (2) Rollovers to section 403(b) plans.--Section 
     402(c)(8)(B) (defining eligible retirement plan), as amended 
     by subsection (a), is amended by striking ``and'' at the end 
     of clause (iv), by striking the period at the end of clause 
     (v) and inserting ``, and'', and by adding at the end the 
     following:
       ``(vi) an annuity contract described in section 403(b).''
       (3) Conforming amendment.--Subparagraph (B) of section 
     403(b)(8) is amended by striking ``Rules similar to the'' and 
     inserting ``The''.
       (c) Expanded Explanation to Recipients of Rollover 
     Distributions.--Paragraph (1) of section 402(f) (relating to 
     written explanation to recipients of distributions eligible 
     for rollover treatment) is amended by striking ``and'' at the 
     end of subparagraph (C), by striking the period at the end of 
     subparagraph (D) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(E) of the provisions under which distributions from the 
     eligible retirement plan receiving the distribution may be 
     subject to restrictions and tax consequences which are 
     different from those applicable to distributions from the 
     plan making such distribution.''
       (d) Conforming Amendments.--
       (1) Section 72(o)(4) is amended by striking ``and 
     408(d)(3)'' and inserting ``403(b)(8), 408(d)(3), and 
     457(e)(16)''.
       (2) Section 219(d)(2) is amended by striking ``or 
     408(d)(3)'' and inserting ``408(d)(3), or 457(e)(16)''.
       (3) Section 401(a)(31)(B) is amended by striking ``and 
     403(a)(4)'' and inserting ``, 403(a)(4), 403(b)(8), and 
     457(e)(16)''.
       (4) Subparagraph (A) of section 402(f)(2) is amended by 
     striking ``or paragraph (4) of section 403(a)'' and inserting 
     ``, paragraph (4) of section 403(a), subparagraph (A) of 
     section 403(b)(8), or subparagraph (A) of section 
     457(e)(16)''.
       (5) Paragraph (1) of section 402(f) is amended by striking 
     ``from an eligible retirement plan''.
       (6) Subparagraphs (A) and (B) of section 402(f)(1) are 
     amended by striking ``another eligible retirement plan'' and 
     inserting ``an eligible retirement plan''.
       (7) Subparagraph (B) of section 403(b)(8) is amended by 
     striking ``shall apply for purposes of subparagraph (A)'' and 
     inserting ``and section 402(f) shall apply for purposes of 
     subparagraph (A), except that section 402(f) shall be applied 
     to the payor in lieu of the plan administrator''.
       (8) Subparagraph (B) of section 403(b)(8) is amended by 
     inserting ``and (9)'' after ``through (7)''.
       (9) Section 408(a)(1) is amended by striking ``or 
     403(b)(8)'' and inserting ``, 403(b)(8), or 457(e)(16)''.
       (10) Subparagraphs (A) and (B) of section 415(b)(2) are 
     each amended by striking ``and 408(d)(3)'' and inserting 
     ``403(b)(8), 408(d)(3), and 457(e)(16)''.
       (11) Section 415(c)(2) is amended by striking ``and 
     408(d)(3)'' and inserting ``408(d)(3), and 457(e)(16)''.
       (12) Section 4973(b)(1)(A) is amended by striking ``or 
     408(d)(3)'' and inserting ``408(d)(3), or 457(e)(16)''.
       (e) Effective Date; Special Rule.--
       (1) Effective date.--The amendments made by this section 
     shall apply to distributions after December 31, 1999.
       (2) Special rule.--Notwithstanding any other provision of 
     law, subsections (h)(3) and (h)(5) of section 1122 of the Tax 
     Reform Act of 1986 shall not apply to any distribution from 
     an eligible retirement plan described in clause (iii) or (iv) 
     of section 402(c)(8)(B) of the Internal Revenue Code of 1986 
     on behalf of an individual if there was a rollover to such 
     plan on behalf of such individual which is permitted solely 
     by reason of any amendment made by this section.

     SEC. 3. ROLLOVERS OF IRAS INTO WORKPLACE RETIREMENT PLANS.

       (a) In General.--Subparagraph (A) of section 408(d)(3) 
     (relating to rollover amounts) is amended by adding ``or'' at 
     the end of clause (i), by striking clauses (ii) and (iii), 
     and by adding at the end the following:
       ``(ii) the entire amount received (including money and any 
     other property) is paid into an eligible retirement plan for 
     the benefit of such individual not later than the 60th day 
     after the date on which the individual receives the payment 
     or distribution.

     For purposes of clause (ii), the term `eligible retirement 
     plan' means an eligible retirement plan described in clause 
     (iii), (iv), (v), or (vi) of section 402(c)(8)(B).''
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 403(b) is amended by striking 
     ``section 408(d)(3)(A)(iii)'' and inserting ``section 
     408(d)(3)(A)(ii)''.
       (2) Clause (i) of section 408(d)(3)(D) is amended by 
     striking ``(i), (ii), or (iii)'' and inserting ``(i) or 
     (ii)''.
       (3) Subparagraph (G) of section 408(d)(3) is amended to 
     read as follows:
       ``(G) Simple retirement accounts.--In the case of any 
     payment or distribution out of a simple retirement account 
     (as defined in subsection (p)) to which section 72(t)(6) 
     applies, this paragraph shall not apply unless such payment 
     or distribution is paid into another simple retirement 
     account.''
       (c) Effective Date; Special Rule.--
       (1) Effective date.--The amendments made by this section 
     shall apply to distributions after December 31, 1999.
       (2) Special rule.--Notwithstanding any other provision of 
     law, subsections (h)(3) and (h)(5) of section 1122 of the Tax 
     Reform Act of 1986 shall not apply to any distribution from 
     an eligible retirement plan described in clause (iii) or (iv) 
     of section 402(c)(8)(B) of the Internal Revenue Code of 1986 
     on behalf of an individual if there was a rollover to such 
     plan on behalf of such individual which is permitted solely 
     by reason of the amendments made by this section.

     SEC. 4. ROLLOVERS OF AFTER-TAX CONTRIBUTIONS; HARDSHIP 
                   EXCEPTION.

       (a) After-Tax Contributions.--
       (1) Rollovers.--Subsection (c) of section 402 (relating to 
     rules applicable to rollovers from exempt trusts) (as amended 
     by section 2) is amended by striking paragraph (2) and 
     redesignating paragraphs (3) through (10) as paragraphs (2) 
     through (9), respectively.
       (2) Direct transfers.--Paragraph (31) of section 401(a) 
     (relating to optional direct transfer of eligible rollover 
     distributions) is amended by striking subparagraph (B) and 
     redesignating subparagraphs (C) and (D) as subparagraphs (B) 
     and (C), respectively.
       (3) Annuities.--Subparagraph (B) of section 408(d)(3) 
     (relating to rollover contributions) is amended by striking 
     ``which was not includible in his gross income because of the 
     application of this paragraph'' and inserting ``to which this 
     paragraph applied''.
       (4) Eligible retirement plan.--Paragraph (7)(B) of section 
     402(c) (as redesignated by subsection (a)(1) and as amended 
     by section 2) is amended--
       (A) by striking ``The term'' and inserting ``Except as 
     provided in this subparagraph, the term'', and
       (B) by adding at the end the following:

     ``Arrangements described in clauses (iii), (iv) (v), and (vi) 
     shall not be treated as eligible retirement plans for 
     purposes of receiving a rollover contribution of an eligible 
     rollover distribution to the extent that such eligible 
     rollover distribution is not includible in gross income 
     (determined without regard to paragraph (1)).''
       (5) Taxation of distributions.--Paragraph (2) of section 
     408(d) is amended--
       (A) by striking ``For purposes'' and inserting the 
     following:
       ``(A) In general.--Except as provided in this paragraph, 
     for purposes'',
       (B) by striking ``(A) all'' and inserting ``(i) all'';
       (C) by striking ``(B) all'' and inserting ``(ii) all'';
       (D) by striking ``(C) the'' and inserting ``(iii) the'',

[[Page S8381]]

       (E) by striking ``subparagraph (C)'' and inserting ``clause 
     (iii)'', and
       (F) by inserting at the end the following:
       ``(B) Application of section 72.--For purposes of applying 
     section 72, if--
       ``(i) a distribution is made from an individual retirement 
     plan, and
       ``(ii) a rollover contribution described in paragraph (3) 
     is made to an eligible retirement plan described in section 
     402(c)(7)(B)(iii), (iv), (v), or (vi) with respect to all or 
     part of such distribution,
     the includible amount in the individual's individual 
     retirement plans shall be reduced by the amount described in 
     subparagraph (C). As of the close of the calendar year in 
     which the taxable year begins, the reduction of all amounts 
     described in subparagraph (C)(i) shall be applied prior to 
     the computations described in subparagraph (A)(iii). The 
     amount of any distribution with respect to which there is a 
     rollover contribution described in clause (ii) shall not be 
     treated as a distribution for purposes of subparagraph (A).
       ``(C) Amount described.--The amount described in this 
     subparagraph is the sum of--
       ``(i) the amount of the rollover contribution described in 
     subparagraph (B)(ii), and
       ``(ii) in the case of any portion of the distribution with 
     respect to which there is not a rollover contribution 
     described in paragraph (3), the amount of such portion that 
     is included in gross income under section 72.
       ``(D) Includible amount.--For purposes of this paragraph, 
     the term `includible amount' shall mean the amount that is 
     not investment in the contract (as defined in section 72).''
       (6) Transfers to iras.--Subparagraph (C) of section 
     402(c)(5) (as redesignated by subsection (a)(1)) is amended 
     by inserting after ``other than money'' the following: ``or 
     where the amount of the distribution exceeds the amount of 
     the rollover contribution''.
       (b) Hardship Exception to 60-Day Rule.--
       (1) Plan rollovers.--Paragraph (2) of section 402(c) (as so 
     redesignated) is amended to read as follows:
       ``(2) Transfer must be made within 60 days of receipt.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     paragraph (1) shall not apply to any transfer of a 
     distribution made after the 60th day following the day on 
     which the distributee received the property distributed.
       ``(B) Hardship exception.--The Secretary may waive the 60-
     day requirement under subparagraph (A) where the failure to 
     waive such requirement would be against equity or good 
     conscience, including casualty, disaster, or other events 
     beyond the reasonable control of the individual subject to 
     such requirement.''
       (2) IRA rollovers.--Paragraph (3) of section 408(d) 
     (relating to rollover contributions) is amended by adding at 
     the end the following new subparagraph:
       ``(H) Waiver of 60-day requirement.--The Secretary may 
     waive the 60-day requirement under subparagraphs (A) and (D) 
     where the failure to waive such requirement would be against 
     equity or good conscience, including casualty, disaster, or 
     other events beyond the reasonable control of the individual 
     subject to such requirement.''
       (c) Conforming Amendments.--
       (1) Paragraph (4) of section 402(c) (as redesignated by 
     subsection (a)(1)) is amended by striking ``(8)(B)'' and 
     inserting ``(7)(B)''.
       (2) Subparagraph (B) of section 403(a)(4) is amended by 
     striking ``(2) through (7)'' and inserting ``(2) through 
     (6)''.
       (3) Section 403(b)(8)(A)(ii) (as amended by section 2) is 
     amended by striking ``section 402(c)(8)(B)'' and inserting 
     ``section 402(c)(7)(B)''.
       (4) Subparagraph (B) of section 403(b)(8) (as amended by 
     section 2) is amended by striking ``(2) through (7) and (9) 
     of section 402(c)'' and inserting ``(2) through (6) and (8) 
     of section 402(c)''.
       (5) Subparagraph (A) of section 408(d)(3) (as amended by 
     section 3) is amended by striking ``402(c)(8)'' and inserting 
     ``402(c)(7)''.
       (6) Paragraph (16) of section 457(e) (as added by section 
     2) is amended--
       (A) in subparagraph (A)(i) by striking ``402(c)(4)'' and 
     inserting ``402(c)(3)'',
       (B) in subparagraph (A)(ii) by striking ``402(c)(8)(B)'' 
     and inserting ``402(c)(7)(B)'', and
       (C) in subparagraph (B) by striking ``paragraphs (2) 
     through (7) (other than paragraph (4)(C)) and (9) of section 
     402(c)'' and inserting ``paragraphs (2) through (6) (other 
     than paragraph (3)(C)) and (8) of section 402(c)''.
       (d) Effective Date.--
       (1) In general.--Except as provided by paragraph (2), the 
     amendments made by this section shall apply to distributions 
     made after December 31, 1999.
       (2) Hardship exception.--The amendments made by subsection 
     (b) shall apply to 60-day periods ending after the date of 
     the enactment of this Act.

     SEC. 5. EXTENSION OF MISSING PARTICIPANTS PROGRAM TO 
                   MULTIEMPLOYER PLANS.

       (a) In General.--Section 4050 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1350) is amended by 
     redesignating subsection (c) as subsection (d) and by 
     inserting after subsection (b) the following new subsection:
       ``(c) Multiemployer Plans.--The corporation shall prescribe 
     rules similar to the rules in subsection (a) for 
     multiemployer plans covered by this title that terminate 
     under section 4041A.''
       (b) Conforming Amendment.--Section 206(f) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1056(f)) is 
     amended by striking ``the plan shall provide that,''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions made after final regulations 
     implementing subsection (c) of section 4050 of the Employee 
     Retirement Income Security Act of 1974 (as added by 
     subsection (a)) are prescribed.

     SEC. 6. RATIONALIZATION OF RESTRICTIONS ON DISTRIBUTIONS FROM 
                   DEFINED CONTRIBUTION PLANS.

       (a) Distributions Permitted on Severance From Employment.--
       (1) 401(k) plans.--Section 401(k)(2)(B)(i)(I) (relating to 
     qualified cash or deferred arrangements) is amended by 
     striking ``separation from service'' and inserting 
     ``severance from employment''.
       (2) 403(b) contracts.--
       (A) Clause (ii) of section 403(b)(7)(A) is amended by 
     striking ``separates from service'' and inserting ``severs 
     from employment''.
       (B) Paragraph (11) of section 403(b) is amended--
       (i) by striking ``separation from service'' in the heading 
     and inserting ``severance from employment'', and
       (ii) by striking ``separates from service'' and inserting 
     ``severs from employment''.
       (3) 457 plans.--Clause (ii) of section 457(d)(1)(A) is 
     amended by striking ``is separated from service'' and 
     inserting ``has a severance from employment''.
       (b) Business Sale Requirements Deleted.--
       (1) In general.--Section 401(k)(2)(B)(i)(II) (relating to 
     qualified cash or deferred arrangements) is amended by 
     striking ``an event'' and inserting ``a plan termination''.
       (2) Conforming amendments.--Section 401(k)(10) is amended--
       (A) by striking subparagraph (A) and inserting the 
     following:
       ``(A) In general.--A plan termination is described in this 
     paragraph if the termination of the plan does not involve the 
     establishment or maintenance of another defined contribution 
     plan (other than an employee stock ownership plan as defined 
     in section 4975(e)(7)).'',
       (B) in subparagraph (B)--
       (i) by striking ``An event'' and inserting ``A 
     termination'', and
       (ii) by striking ``the event'' and inserting ``the 
     termination'',
       (C) by striking subparagraph (C), and
       (D) by striking ``or disposition of assets or subsidiary'' 
     in the heading.
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions after December 31, 1999.

     SEC. 7. TRANSFEREE DEFINED CONTRIBUTION PLAN NEED NOT HAVE 
                   SAME DISTRIBUTION OPTIONS AS TRANSFEROR DEFINED 
                   CONTRIBUTION PLAN.

       (a) In General.--Section 411(d)(6) (relating to accrued 
     benefit not to be decreased by amendment) is amended by 
     adding at the end the following new subparagraph:
       ``(D) Plan transfers.--A defined contribution plan (in this 
     subparagraph referred to as the `transferee plan') shall not 
     be treated as failing to meet the requirements of this 
     paragraph merely because the transferee plan does not provide 
     some or all of the forms of distribution previously available 
     under another defined contribution plan (in this subparagraph 
     referred to as the `transferor plan') to the extent that--
       ``(i) the forms of distribution previously available under 
     the transferor plan applied to the account of a participant 
     or beneficiary under the transferor plan that was transferred 
     from the transferor plan to the transferee plan pursuant to a 
     direct transfer rather than pursuant to a distribution from 
     the transferor plan,
       ``(ii) the terms of both the transferor plan and the 
     transferee plan authorize the transfer described in clause 
     (i),
       ``(iii) the transfer described in clause (i) was made 
     pursuant to a voluntary election by the participant or 
     beneficiary whose account was transferred to the transferee 
     plan,
       ``(iv) the election described in clause (iii) was made 
     after the participant or beneficiary received a notice 
     describing the consequences of making the election,
       ``(v) if the transferor plan provides for an annuity as the 
     normal form of distribution under the plan in accordance with 
     section 417, the transfer is made with the consent of the 
     participant's spouse (if any), and such consent meets 
     requirements similar to the requirements imposed by section 
     417(a)(2), and
       ``(vi) the transferee plan allows the participant or 
     beneficiary described in clause (iii) to receive any 
     distribution to which the participant or beneficiary is 
     entitled under transferee plan in the form of a single sum 
     distribution.''
       (b) Amendment to ERISA.--Section 204(g) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1054(g)) is 
     amended by adding at the end the following new paragraph:
       ``(4) A defined contribution plan (in this paragraph 
     referred to as the `transferee plan') shall not be treated as 
     failing to meet the requirements of this subsection merely 
     because the transferee plan does not provide some or all of 
     the forms of distribution previously available under another 
     defined contribution plan (in this paragraph referred to as 
     the `transferor plan') to the extent that--
       ``(A) the forms of distribution previously available under 
     the transferor plan applied

[[Page S8382]]

     to the account of a participant or beneficiary under the 
     transferor plan that was transferred from the transferor plan 
     to the transferee plan pursuant to a direct transfer rather 
     than pursuant to a distribution from the transferor plan,
       ``(B) the terms of both the transferor plan and the 
     transferee plan authorize the transfer described in 
     subparagraph (A),
       ``(C) the transfer described in subparagraph (A) was made 
     pursuant to a voluntary election by the participant or 
     beneficiary whose account was transferred to the transferee 
     plan,
       ``(D) the election described in subparagraph (C) was made 
     after the participant or beneficiary received a notice 
     describing the consequences of making the election,
       ``(E) if the transferor plan provides for an annuity as the 
     normal form of distribution under the plan in accordance with 
     section 205, the transfer is made with the consent of the 
     participant's spouse (if any), and such consent meets 
     requirements similar to the requirements imposed by section 
     205(c)(2), and
       ``(F) the transferee plan allows the participant or 
     beneficiary described in subparagraph (C) to receive any 
     distribution to which the participant or beneficiary is 
     entitled under transferee plan in the form of a single sum 
     distribution.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to transfers after December 31, 1999.

     SEC. 8. EMPLOYERS MAY DISREGARD ROLLOVERS FOR PURPOSES OF 
                   CASH-OUT AMOUNTS.

       (a) Amendments to 1986 Code.--
       (1) Section 411(a)(11) (relating to restrictions on certain 
     mandatory distributions) is amended by adding at the end the 
     following:
       ``(D) Special rule for rollover contributions.--A plan 
     shall not fail to meet the requirements of this paragraph if, 
     under the terms of the plan, the present value of the 
     nonforfeitable accrued benefit is determined without regard 
     to that portion of such benefit which is attributable to 
     rollover contributions (and earnings allocable thereto). For 
     purposes of this subparagraph, the term `rollover 
     contributions' means any rollover contribution under sections 
     402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 
     457(e)(16).''
       (2) Clause (i) of section 457(e)(9)(A) is amended by 
     striking ``such amount'' and inserting ``the portion of such 
     amount which is not attributable to rollover contributions 
     (as defined in section 411(a)(11)(D))''.
       (b) Amendment to ERISA.--Section 203(e) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1053(e)) is 
     amended by adding at the end the following:
       ``(4) A plan shall not fail to meet the requirements of 
     this subsection if, under the terms of the plan, the present 
     value of the nonforfeitable accrued benefit is determined 
     without regard to that portion of such benefit which is 
     attributable to rollover contributions (and earnings 
     allocable thereto). For purposes of this paragraph, the term 
     `rollover contributions' means any rollover contribution 
     under sections 402(c), 403(a)(4), 403(b)(8), 
     408(d)(3)(A)(ii), and 457(e)(16) of the Internal Revenue Code 
     of 1986.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions after December 31, 1999.

     SEC. 9. PURCHASE OF SERVICE CREDIT IN GOVERNMENTAL DEFINED 
                   BENEFIT PLANS.

       (a) 403(b) Plans.--Subsection (b) of section 403 is amended 
     by adding at the end the following new paragraph:
       ``(13) Trustee-to-trustee transfers to purchase permissive 
     service credit.--No amount shall be includible in gross 
     income by reason of a direct trustee-to-trustee transfer to a 
     defined benefit governmental plan (as defined in section 
     414(d)) if such transfer is--
       ``(A) for the purchase of permissive service credit (as 
     defined in section 415(n)(3)(A)) under such plan, or
       ``(B) a repayment to which section 415 does not apply by 
     reason of subsection (k)(3) thereof.''
       (b) 457 Plans.--
       (1) Subsection (e) of section 457 is amended by adding at 
     the end the following new paragraph:
       ``(17) Trustee-to-trustee transfers to purchase permissive 
     service credit.--No amount shall be includible in gross 
     income by reason of a direct trustee-to-trustee transfer to a 
     defined benefit governmental plan (as defined in section 
     414(d)) if such transfer is--
       ``(A) for the purchase of permissive service credit (as 
     defined in section 415(n)(3)(A)) under such plan, or
       ``(B) a repayment to which section 415 does not apply by 
     reason of subsection (k)(3) thereof.''
       (2) Section 457(b)(2), as amended by section 2, is amended 
     by striking ``(other than rollover amounts)'' and inserting 
     ``(other than rollover amounts and amounts received in a 
     transfer referred to in subsection (e)(17))''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to trustee-to-trustee transfers after December 
     31, 1999.

     SEC. 10. PROVISIONS RELATING TO PLAN AMENDMENTS.

       (a) In General.--If this section applies to any plan or 
     contract amendment--
       (1) such plan or contract shall be treated as being 
     operated in accordance with the terms of the plan during the 
     period described in subsection (b)(2)(A), and
       (2) such plan shall not fail to meet the requirements of 
     section 411(d)(6) of the Internal Revenue Code of 1986 or 
     section 204(g) of the Employee Retirement Income Security Act 
     of 1974 by reason of such amendment.
       (b) Amendments to Which Section Applies.--
       (1) In general.--This section shall apply to any amendment 
     to any plan or annuity contract which is made--
       (A) pursuant to any amendment made by this Act or pursuant 
     to any guidance issued by the Secretary of the Treasury (or 
     the Secretary's delegate) under any such amendment, and
       (B) on or before the last day of the first plan year 
     beginning on or after January 1, 2002.

     In the case of a governmental plan (as defined in section 
     414(d) of the Internal Revenue Code of 1986), this paragraph 
     shall be applied by substituting ``2004'' for ``2002''.
       (2) Conditions.--This section shall not apply to any 
     amendment unless--
       (A) during the period--
       (i) beginning on the date the legislative amendment or 
     guidance described in paragraph (1)(A) takes effect (or in 
     the case of a plan or contract amendment not required by such 
     legislative amendment or guidance, the effective date 
     specified by the plan), and
       (ii) ending on the date described in paragraph (1)(B) (or, 
     if earlier, the date the plan or contract amendment is 
     adopted),
     the plan or contract is operated as if such plan or contract 
     amendment were in effect, and
       (B) such plan or contract amendment applies retroactively 
     for such period.
                                 ______
                                 
      By Mr. JEFFORDS (for himself, Mr. Reed, Mr. Enzi, and Mr. Leahy):
  S. 1358. A bill to amend title XVIII of the Social Security Act to 
provide more equitable payments to home health agencies under the 
Medicare Program; to the Committee on Finance.


         THE PRESERVING ACCESS TO CARE IN THE HOME ACT OF 1999

  Mr. JEFFORDS. Mr. President, I rise today to introduce the Preserving 
Access to Care in the Home Act of 1999, also known as the PATCH Act. 
This important bill has been crafted to protect access to care for 
those most in need, relieve the cash flow problems faced by agencies, 
and improve the interaction between home health agencies and HCFA. I 
want to recognize Senator Reed, Senator Enzi, and Senator Leahy. These 
cosponsors have shown tremendous effort and dedication in dealing with 
the crisis in home health care.
  Abraham Lincoln said ``The legitimate object of government is to do 
for a community of people, whatever they need to have done, but cannot 
do at all, or cannot so well do for themselves, in their separate and 
individual capacities.'' This is the essence of home health care.
  Home health care means so much to so many people: it means that 
people recovering from surgery can go home sooner--it means that 
someone recovering from an accident can get physical therapy in their 
home, it means our seniors can stay at home, and out of nursing homes. 
It is smart policy from human and financial standpoints.
  My own State of Vermont is a model for providing high-quality, 
comprehensive care with a low price tag. For the past eight years, the 
average Medicare expenditure for home health care in Vermont has been 
the lowest in the nation. Vermont's home care system was designed to 
efficiently meet the needs of frail and elderly citizens in our largely 
rural State, but the Health Care Financing Administration's (HCFA) 
reimbursement system was not. HCFA's interim payment system (IPS) has 
been implemented in a manner that inadequately reimburses agencies for 
the care that they provide.
  The Balanced Budget Act (BBA) did a lot of good, providing health 
care coverage for millions of low income children, providing targeted 
tax relief for families and students, tax incentives to encourage 
pensions savings, and extending the life of Medicare. However, as with 
most things in life, it was not perfect.
  The BBA failed to recognize how the new home health reimbursement 
would affect small rural home health care providers. The IPS has caused 
such significant cash flow problems, that many agencies are struggling 
to meet their payroll needs. Home health care agencies are now facing 
the prospect of 15 percent budget cut next year. This budget cut, on 
top of already stretched budgets, would be disastrous for providers and 
patients alike.
  The PATCH Act will rectify these problems.

[[Page S8383]]

  First, the PATCH Act eliminates the 15-percent cut scheduled for next 
year. The actual savings under IPS have exceeded initial expectations, 
so the 15-percent cut is unnecessary to achieve the savings originally 
projected as needed.
  Second, the PATCH Act clarifies the definition of ``homebound'' so 
that coverage decisions are based on the condition of the individual 
and not on an arbitrary number of absences from the home. Many seniors 
have found themselves virtual prisoners in their homes, threatened with 
loss of coverage if they attend adult day care, weekly religious 
services, or even visit family members in the hospital. This makes no 
sense because all of these activities are steps on the road to 
successful and healthy recovery. Often, home care professionals want 
patients to get outside a little bit, as part of their care plan. This 
helps fight off depression. Eligibility for home care should depend on 
the health of the patient.
  Third, the PATCH Act creates an ``outlier'' provision so that 
medically complex patients suffering from multiple ailments are not 
excluded by the Medicare program. Agencies will receive reimbursements 
for reasonable costs so that they can continue to provide care for 
these complex patients without going bankrupt. Home health agencies can 
provide care to long-term chronic care patients at a lower cost than 
nursing homes, or hospitals.
  Next, the PATCH Act also matches the rate of review to the rate of 
denial and provides a reward to agencies for ``good behavior'' and 
incentive to submit ``good claims.'' Conducting high cost, intense 
audits on all agencies, regardless of the past efficiency of the 
agency, is expensive and unproductive. Many agencies are finding 
themselves swamped by pre-payment reviews for claims that they submit. 
These reviews require that health professionals spend a substantial 
amount of their time filling out forms instead of providing urgently 
needed care to the elderly. Matching the rate of review to the rate of 
denial adds to the efficiency of home health agencies, and the 
efficiency of the regulatory. If the finalized denial rate of claims 
for a home health agency is less than 5 percent then (a) there will be 
no prepayment reviews, and (b) the post-payment review shall not exceed 
10 percent of the claims.
  Finally, the bill restores the periodic interim payment system (PIP) 
and provides guidelines to HCFA on the development of a prospective 
payment system (PPS) that will be fair to Vermont's low-cost, rural 
providers.
  The sooner you can return patients to their homes, the sooner they 
can recover. The familiar environment of the home, family, and friends 
is more nurturing to recovering patients than the often stressful and 
unfamiliar surroundings of a hospital. Home health allows them to 
receive treatment for their medical conditions while being integrated 
back into independence. Home health is also a great avenue for 
education. It empowers families to assist in the care of their loved 
ones. This, too, results in lower costs because family members, in 
addition to health professionals, provide some of the care. Access to 
care in the home must be saved.
  I look forward to turning this legislation into law. The women and 
men who provide home care are on the front line every day and deserve 
nothing but our best efforts.
                                 ______
                                 
      By Mr. HOLLINGS:
  S. 1359. A bill to amend chapter 51 of title 49, United States Code, 
to extend the coverage of the rules governing the transportation of 
hazardous materials, and for other purposes; to the Committee on 
Commerce, Science, and Transportation.


       POSTAL HAZARDOUS MATERIALS SAFETY ENHANCEMENT ACT OF 1999

  Mr. HOLLINGS. Mr. President, I rise to introduce a bill to insure the 
safe transportation of hazardous materials (hazmat) via the United 
States Postal Service and its contract carriers.
  The Hazardous Materials Transportation Safety Improvement Act of 
1990, P.L. 103-311, specifically exempted the U.S. Postal Service from 
Department of Transportation (DOT) hazmat enforcement. Although they 
are exempt from DOT hazmat enforcement, the U.S. Postal Service self-
governs hazardous materials transportation through internal regulations 
and inspections.
  The National Transportation Safety Board has made numerous 
recommendations over the years to subject the U.S. Postal Service to 
DOT inspections and increased enforcement efforts. In addition, they 
have also recommended that the Postal Service be subject to enforcement 
obligations similar to those observed by other package and express mail 
operations. Due to the fact that only a small percentage of mail is 
transported exclusively by the U.S. Postal Service and most of it is 
contracted out to other carriers, it makes sense that all mail and 
package transporters be subject to the same DOT regulations and 
inspections.
  We all remember the horrifying crash of ValuJet Airlines, flight 592, 
into the Everglades in May of 1996. Although the cause of the ValuJet 
accident was not attributed to the U.S. Postal Service, the situation 
in which it occurred demonstrated the importance of accurate labeling 
in the transportation of hazardous materials. Following the ValuJet 
accident, the NTSB made multiple recommendations to the U.S. Postal 
Service about increased safety in the transport of hazmat. However, in 
the year following the ValuJet incident there were thirteen additional 
hazardous materials incidents that occurred when U.S. mail was 
transported via air. There should be a better safety net for the public 
and the employees who are charged with the safe transport of the 
packages, mail and express items.
  Similarly, the frightening success of the Unabomber throughout the 
1980's and 1990's underscores the need for tougher controls over 
hazardous materials sent via the U.S. Postal Service. Ted Kaczynski 
repeatedly sent explosive devices in packages through the mail system 
resulting in three deaths and 29 injuries. These packages, which 
weighed on average between five and ten pounds, were never inspected 
for hazardous contents. Largely in response to the Unabomber, the U.S. 
Postal Service implemented new requirements addressing package mail, 
however if a hazmat package is not identified at the source, it is 
important that the Department of Transportation hazmat inspectors have 
the authority to inspect packages carried by surface and air carriers.
  These accidents clearly demonstrate that the shipment of undeclared 
hazardous materials is a serious problem that needs more attention. 
While the U.S. Postal Service has worked hard to train its employees to 
recognize hazmat shipments, much of the transportation of postal 
material is done via contract carriers who are not U.S. Postal Service 
employees. Efforts to address this issue have been hindered by the 
exclusion of DOT inspectors from regulating hazardous materials shipped 
via the U.S. Postal Service.
  Mr. President, I believe that the U.S. Postal Service and the DOT 
hazmat inspectors are faced with an enormous task--keeping our mail and 
our transportation systems safe. My bill would provide for increased 
authority in hazmat inspections by authorizing DOT inspectors to work 
in tandem with U.S. Postal Inspectors. The safety of our transportation 
system is dependent on the safety of the cargo it is carrying--all 
hazmat packages should be adequately inspected and if found unsafe, 
they should be treated appropriately, expeditiously and equally.
  I ask unanimous consent that the full text of the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1359

       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 ``Postal Hazardous Materials 
     Safety Enhancement Act''.

     SEC. 2. APPLICATION OF HAZMAT REQUIREMENTS.

       (a) In General.--Section 5102(9)(B) of title 49, United 
     States Code, is amended to read as follows:
       ``(B) for purposes of sections 5123 and 5124 of this title, 
     does not include a department, agency, or instrumentality of 
     the Government.''
       (b) Coordination.--In carrying out the provisions of 
     chapter 51 of title 49, United States Code, the Secretary of 
     Transportation shall consult with the Postmaster General in 
     order to coordinate, to the greatest extent feasible, the 
     enforcement of that chapter.

[[Page S8384]]

     SEC. 3 TRANSPORTATION OF HAZARDOUS MATERIALS VIA THE UNITED 
                   STATES MAIL.

       (a) In General.--Section 5102 of title 49, United States 
     Code, is amended by--
       (1) redesignating paragraph (13) as paragraph (14); and
       (2) inserting after paragraph (12) the following:
       ``(13) `transportation of hazardous material in commerce' 
     and `transporting hazardous material in commerce' include the 
     transportation of hazardous material in the United States 
     mail.''.
       (b) Repeal of Exception.--Section 5126(b) of such title is 
     amended to read as follows:
       ``(b) Nonapplication.--This chapter does not apply to a 
     pipeline subject to regulation under chapter 601 of this 
     title.''.
                                 ______
                                 
      By Mr. LEAHY:
  S. 1360. A bill to preserve the effectiveness of Secret Service 
protection by establishing a protective function privilege, and for 
other purposes; to the Committee on the Judiciary.


            SECRET SERVICE PROTECTION PRIVILEGE ACT OF 1999

  Mr. LEAHY. Mr. President, I rise today to introduce the Secret 
Service Protective Privilege Act of 1999. This legislation is intended 
to ensure the ability of the United States Secret Service to fulfill 
its vital mission of protecting the life and safety of the President 
and other important persons.

  Almost five months have passed since the impeachment proceedings 
against President Clinton were concluded, and the time has come for 
Congress to repair some of the damage that was done during that 
divisive episode. I refer to the misguided efforts of Independent 
Counsel Kenneth Starr to compel Secret Service agents to answer 
questions about what may have observed or overheard while protecting 
the life of the President.
  Few national interests are more compelling than protecting the life 
of the President of the United States. The Supreme Court has said that 
the nation has ``an overwhelming interest in protecting the safety of 
its Chief Executive and in allowing him to perform his duties without 
interference from threats of physical violence.'' [Watts v. United 
States, 394 U.S. 705, 707 (1969).] What's at stake is not merely the 
safety of one person. What's at stake is the ability of the Executive 
Branch to function in an effective and orderly fashion, and the 
capacity of the United States to respond to threats and crises. Think 
of the shock waves that rocked the world in November 1963 when 
President Kennedy was assassinated. The assassination of a President 
has international repercussions and threatens the security and future 
of the entire nation.
  The threat to our national security and to our democracy extends 
beyond the life of the President to those in direct line of the Office 
of the President--the Vice President, the President-elect, and the Vice 
President elect. By Act of Congress, these officials are required to 
accept the protection of the Secret Service--they may not turn it down. 
This statutory mandate reflects the critical importance that Congress 
has attached to the physical safety of these officials.
  Congress has also charged the Secret Service with responsibility for 
protecting visiting heads of foreign states and foreign governments. 
The assassination of a foreign head of state on American soil could be 
catastrophic from a foreign relations standpoint and could seriously 
threaten national security.
  The Secret Service Protective Privilege Act of 1999 would enhance the 
Secret Service's ability to protect these officials, and the nation, 
from the risk of assassination. It would do this by facilitating the 
relationship of trust between these officials and their Secret Service 
protectors that is essential to the Service's protective strategy.
  The Service uses a ``protective envelope'' method of protection. 
Agents and officers surround the protectee with an all-encompassing 
zone of protection on a 24-hour-a-day basis. In the face of danger, 
they will shield the protectee's body with their own bodies and move 
him to a secure location.
  That is how the Secret Service averted a national tragedy on March 
30, 1981, when John Hinckley attempted to assassinate President Reagan. 
Within seconds of the first shot being fired, Secret Service personnel 
had shielded the President's body and maneuvered him into the waiting 
limousine. One agent in particular, Agent Tim McCarthy, positioned his 
body to intercept a bullet intended for the President. If Agent 
McCarthy had been even a few feet farther from the President, history 
might have gone very differently.
  For the Secret Service to maintain this sort of close, unremitting 
proximity to the President and other protectees, it must have their 
complete, unhesitating trust and confidence. Secret Service personnel 
must be able to remain at the President's side even during confidential 
and sensitive conversations, when they may overhear military secrets, 
diplomatic exchanges, and family and private matters. If our Presidents 
do not have complete trust in the Secret Service personnel who protect 
them, they could try to push away the Service's ``protective envelope'' 
or undermine it to the point where it could no longer be fully 
effective.
  This is more than a theoretical possibility. Consider what former 
President Bush wrote last April, after hearing of the independent 
counsel's efforts to compel Secret Service testimony:

       The bottom line is I hope that [Secret Service] agents will 
     be exempted from testifying before the Grand Jury. What's at 
     stake here it the protection of the life of the President and 
     his family and the confidence and trust that a President must 
     have in the [Secret Service].
       If a President feels that Secret Service agents can be 
     called to testify about what they might have seen or heard 
     then it is likely that the President will be uncomfortable 
     having the agents near by.
       I allowed the agents to have proximity first because they 
     had my full confidence and secondly because I knew them to be 
     totally discreet and honorable. . . .
       . . . I can assure you that had I felt they would be 
     compelled to testify as to what they had seen or heard, no 
     matter what the subject, I would not have felt comfortable 
     having them close in
       . . . I feel very strongly that the [Secret Service] agents 
     should not be made to appear in court to discuss that which 
     they might or might not have seen or heard.
       What's at stake here is the confidence of the President in 
     the discretion of the [Secret Service]. If that confidence 
     evaporates the agents, denied proximity, cannot properly 
     protect the President.

  As President Bush's letter makes plain, requiring Secret Service 
agents to betray the confidence of the people whose lives they protect 
could seriously jeopardize the ability of the Service to perform its 
crucial national security function.
  The possibility that Secret Service personnel might be compelled to 
testify about their protectees could have a particularly devastating 
affect on the Service's ability to protect foreign dignitaries. The 
mere fact that this issue has surfaced is likely to make foreign 
governments less willing to accommodate Secret Service both with 
respect to the protection of the President and Vice President on 
foreign trips, and the protection of foreign heads of state traveling 
in the United States.
  The recent court decisions, which refused to recognize a protective 
function privilege, could have a devastating impact upon the Secret 
Service's ability to provide effective protection. The courts ignored 
the voices of experience--former Presidents, Secret Service Directors, 
and others--who warned of the potentially deadly consequences. The 
courts disregarded the lessons of history. We cannot afford to be so 
cavalier; the stakes are just too high.
  The security of our chief executive officers and visiting foreign 
heads of state is a matter that transcends all partisan politics. I 
urge my colleagues to support this legislation and ask unanimous 
consent that the bill and a summary 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. 1360

       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 ``Secret Service Protective 
     Privilege Act of 1999''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) The physical safety of the Nation's top elected 
     officials is a public good of transcendent importance.
       (2) By virtue of the critical importance of the Office of 
     the President, the President and those in direct line of the 
     Presidency are subject to unique and mortal jeopardy--
     jeopardy that in turn threatens profound disruption to our 
     system of representative government and to the security and 
     future of the Nation.

[[Page S8385]]

       (3) The physical safety of visiting heads of foreign states 
     and foreign governments is also a matter of paramount 
     importance. The assassination of such a person while on 
     American soil could have calamitous consequences for our 
     foreign relations and national security.
       (4) Given these grave concerns, Congress has provided for 
     the Secret Service to protect the President and those in 
     direct line of the Presidency, and has directed that these 
     officials may not waive such protection. Congress has also 
     provided for the Secret Service to protect visiting heads of 
     foreign states and foreign governments.
       (5) The protective strategy of the Secret Service depends 
     critically on the ability of its personnel to maintain close 
     and unremitting physical proximity to the protectee.
       (6) Secret Service personnel must remain at the side of the 
     protectee on occasions of confidential conversations and, as 
     a result, may overhear top secret discussions, diplomatic 
     exchanges, sensitive conversations, and matters of personal 
     privacy.
       (7) The necessary level of proximity can be maintained only 
     in an atmosphere of complete trust and confidence between the 
     protectee and his or her protectors.
       (8) If a protectee has reason to doubt the confidentiality 
     of actions or conversations taken in sight or hearing of 
     Secret Service personnel, the protectee may seek to push the 
     protective envelope away or undermine it to the point at 
     which it could no longer be fully effective.
       (9) The possibility that Secret Service personnel might be 
     compelled to testify against their protectees could induce 
     foreign nations to refuse Secret Service protection in future 
     state visits, making it impossible for the Secret Service to 
     fulfill its important statutory mission of protecting the 
     life and safety of foreign dignitaries.
       (10) A privilege protecting information acquired by Secret 
     Service personnel while performing their protective function 
     in physical proximity to a protectee will preserve the 
     security of the protectee by lessening the incentive of the 
     protectee to distance Secret Service personnel in situations 
     in which there is some risk to the safety of the protectee.
       (11) Recognition of a protective function privilege for the 
     President and those in direct line of the Presidency, and for 
     visiting heads of foreign states and foreign governments, 
     will promote sufficiently important interests to outweigh the 
     need for probative evidence.
       (12) Because Secret Service personnel retain law 
     enforcement responsibility even while engaged in their 
     protective function, the privilege must be subject to a 
     crime/treason exception.
       (b) Purposes.--The purposes of this Act are--
       (1) to facilitate the relationship of trust and confidence 
     between Secret Service personnel and certain protected 
     officials that is essential to the ability of the Secret 
     Service to protect these officials, and the Nation, from the 
     risk of assassination; and
       (2) to ensure that Secret Service personnel are not 
     precluded from testifying in a criminal investigation or 
     prosecution about unlawful activity committed within their 
     view or hearing.

     SEC. 3. ESTABLISHMENT OF PROTECTIVE FUNCTION PRIVILEGE.

       (a) Admissibility of Information Acquired by Secret Service 
     Personnel While Performing Their Protective Function.--
     Chapter 203 of title 18, United States Code, is amended by 
     inserting after section 3056 the following:

     ``Sec. 3056A. Testimony by Secret Service personnel; 
       protective function privilege

       ``(a) Definitions.--In this section:
       ``(1) Protectee.--The term `protectee' means--
       ``(A) the President;
       ``(B) the Vice President (or other officer next in the 
     order of succession to the Office of President);
       ``(C) the President-elect;
       ``(D) the Vice President-elect; and
       ``(E) visiting heads of foreign states or foreign 
     governments who, at the time and place concerned, are being 
     provided protection by the United States Secret Service.
       ``(2) Secret service personnel.--The term `Secret Service 
     personnel' means any officer or agent of the United States 
     Secret Service.
       ``(b) General Rule of Privilege.--Subject to subsection 
     (c), testimony by Secret Service personnel or former Secret 
     Service personnel regarding information affecting a protectee 
     that was acquired during the performance of a protective 
     function in physical proximity to the protectee shall not be 
     received in evidence or otherwise disclosed in any trial, 
     hearing, or other proceeding in or before any court, grand 
     jury, department, officer, agency, regulatory body, or other 
     authority of the United States, a State, or a political 
     subdivision thereof.
       ``(c) Exceptions.--There is no privilege under this 
     section--
       ``(1) with respect to information that, at the time the 
     information was acquired by Secret Service personnel, was 
     sufficient to provide reasonable grounds to believe that a 
     crime had been, was being, or would be committed; or
       ``(2) if the privilege is waived by the protectee or the 
     legal representative of a protectee or deceased protectee.
       ``(d) Concurrent Privileges.--The proximity of Secret 
     Service personnel to a protectee engaged in a privileged 
     communication with another shall not, by itself, defeat an 
     otherwise valid claim of privilege.''.
       (b) Technical and Conforming Amendment.--The analysis for 
     chapter 203 of title 18, United States Code, is amended by 
     inserting after the item relating to section 3056 the 
     following:

``3056A. Testimony by Secret Service personnel; protective function 
              privilege.''.

     SEC. 4. APPLICATION.

       This Act and the amendments made by this Act shall apply to 
     any proceeding commenced on or after the date of enactment of 
     this Act.
                                  ____


     Summary of the Secret Service Protective Privilege Act of 1999

  The proposed legislation would add a new section 2056A to title 18, 
United States Code, establishing a protective function privilege. There 
are four subsections.
  Subsection (a) establishes the definitions used in the section.
  Subsection (b) states the general rule that testimony by Secret 
Service personnel or former Secret Service personnel regarding 
information affecting a protectee that was acquired during the 
performance of a protective function in physical proximity to the 
protectee shall not be received in evidence or otherwise disclosed. The 
privilege operates only with respect to the President, the Vice 
President (or other officer next in the order of succession to the 
Office of President), the President-elect, the Vice President-elect, 
and visiting heads of foreign states or foreign governments.
  Subsection (c) creates a crime-fraud exception to the privilege, 
which applies with respect to information that, at the time it was 
acquired by Secret Service personnel, was sufficient to provide 
reasonable grounds to believe that a crime had been, was being, or 
would be committed. This subsection also provides that the privilege 
may be waived by a protectee or by his or her legal representative.
  Subsection (d) provides that the proximity of Secret Service 
personnel to a protectee shall not, by itself, defeat an otherwise 
valid claim of privilege. This addresses the situation in which Secret 
Service personnel overhear confidential communications between the 
protectee and, say, the protectee's spouse or attorney.
                                 ______
                                 
      By Mr. STEVENS (for himself, (Mr. Inouye, Mr. Lott, Mrs. 
        Feinstein, Mr. Akaka, and Mr. Graham):
  S. 1361. A bill to amend the Earthquake Hazards Reduction Act of 1977 
to provide for an expanded Federal program of hazard mitigation, 
relief, and insurance against the risk of catastrophic natural 
disasters, such as hurricanes, earthquakes, and volcanic eruptions, and 
for other purposes; to the Committee on Commerce, Science, and 
Transportation.


         natural disaster protection and insurance act of 1999

  Mr. STEVENS. Mr. President, today I am introducing the Natural 
Disaster Protection and Insurance Act of 1999. This bill will provide 
the Nation with a way of dealing with major national disasters. As many 
of my colleagues are aware I have maintained an interest in this area 
for some time. Over the last decade we have witnessed natural disasters 
and the devastating effect that they can have on our property, economy 
and quality of life.
  Damages from Hurricane Andrew resulted in the insolvency of insurance 
companies and a lack of confidence within the industry to deal with 
similar catastrophes in the future. Major hurricane risk is increasing. 
Some scientists predict that the next decade will bring more favorable 
conditions for a major hurricane hitting the U.S. than existed in the 
period leading up the Hurricane Andrew.
  Over half of the population of the United States resides within the 
coastal zone (approximately 300 km centered at the coastline). 
Infrastructure and population along our coast is growing rapidly and so 
our vulnerability to hurricanes is increasing dramatically.
  My Home State of Alaska has had at least nine major earthquakes of 
7.4 magnitude or more on the Richter scale. Alaska's 1964 Good Friday 
Earthquake was one of the world's most powerful, registering, a 
magnitude of 9.2 on the Richter scale.
  The Alaska quake of 1964 destroyed the economic basis of entire 
communities. Whole fishing fleets, harbors,

[[Page S8386]]

and canneries were lost. The shaking caused tidal waves. Petroleum 
storage tanks ruptured and the contents caught fire. Burning oil ran 
into the bay and was carried to the waterfront by large waves. These 
waves of fire destroyed docks, piers, and small-boat harbors. Total 
property damage was $311 million in 1964 dollars. Experts predict that 
a quake this size in the lower 48 would kill thousands and cost up to 
$200 billion.
  According to Michael J. Armstrong, associate director, mitigation 
directorate of the Federal Emergency Management Agency:

       Earthquakes represent the largest single potential for 
     casualties and damage from a natural hazard facing this 
     country. They represent a national threat, as all but seven 
     States in the U.S. are at some level of risk.
       In our most recent earthquake disaster, Northridge, (CA), a 
     moderate earthquake centered on the fringe of a major 
     metropolitan area caused an estimated $40 billion in damage. 
     A large magnitude earthquake located under one of several 
     urban regions in the United States could cause thousands of 
     casualties and losses approaching $200 billion.
       Accordingly, reducing earthquake losses is a matter of 
     national concern--recent findings show a significantly 
     increased potential for damaging earthquake in southern 
     California, and in northern California on the Hayward Fault. 
     Studies also show higher potential earthquakes for the 
     Pacific Northwest and Coastal South Carolina. This is in 
     addition to areas of earthquake risk that have already been 
     identified, such as the New Madrid Fault Zone in the Central 
     U.S. and Wasatch Front in Utah.

  Before 1989, the United States had never experienced a disaster 
costing more than $1 billion in insured losses. Since then, we have had 
nine disasters that have cost more than $1 billion.
  Today, Senators Inouye, Lott, Bob Graham, Feinstein, Akaka, and I 
introduce this bill to reduce the cost to the Federal Government of 
earthquakes, hurricanes, and other natural disasters.
  First, the bill will reduce Federal costs by expanding the use and 
availability of private insurance.
  Second, the bill will provide incentives to improve State disaster 
strategic planning.
  And, third, the bill will create a national, privately funded 
catastrophic insurance pool to shoulder the risk of very large 
disasters.
  Mr. President, the more private insurance individuals buy, the less 
disaster relief Federal taxpayers must pay. For instance, if this bill 
had been in place before Hurricane Andrew and California's Northridge 
Earthquake, I am advised that it could have reduced Federal costs by at 
least $5 billion.
  I ask my colleagues to join me and the cosponsors in supporting this 
bill. Because major natural catastrophes are increasingly common and 
costly for U.S. citizens, we must be willing to make a commitment now 
to prepare for these future events in advance.
  Mr. GRAHAM. Mr. President, I rise to join the distinguished chairman 
and Ranking Member of the Senate Appropriations Committee in 
introducing legislation that creates a federal complement to efforts of 
state governments, local communities, and the private sector to make 
future disasters cost less.
  Mr. President, I am a life-long Floridian. When children grow up in 
Florida they learn, usually from first hand experience, to expect 
devastating storm activity in their communities. Hurricane Season is an 
annual event. Florida suffers from often violent summer storms, 
tornadoes, and wildfires. With all of this natural disaster activity in 
my state alone, you can image that the costs of paying for the damages 
incurred by these events is quite staggering. These costs require the 
immediate action of Congress.
  In August of 1992, Hurricane Andrew roared ashore in the middle of 
the night and devastated much of South Florida. The total costs of 
cleanup and rebuilding from Hurricane Andrew was $36 billion. This 
includes nearly $16 billion in total insured loses, of which $12 
billion were homeowner policies. After Andrew 10 private insurance 
companies in the State of Florida were rendered insolvent and had to 
leave the state. Nearly 960,000 insurance policies were canceled or not 
renewed.
  There may be more Hurricane Andrew's in our future. The National 
Weather Service has predicted 1999 will be an extremely active 
hurricane season. They have estimated that up to 14 named storms will 
develop in the Atlantic Ocean, 10 of those are expected to become 
hurricanes.
  The rising costs associated with events such as Hurricane Andrew have 
also demonstrated that insurers face the risk of insolvency if they are 
overly concentrated in vulnerable regions of our country. Since 1992, 
insurers have widely avoided writing policies in disaster prone areas 
of Florida. A congressional report on this subject revealed that the 
total supply of available reinsurance is approximately $7 billion. This 
is only 10 percent of the potential loss which might occur from a worst 
case natural disaster scenario.
  Companies that provide insurance of last resort have entered 
disaster-vulnerable insurance markets and filled this vacuum. 
Generally, these products of last resort provide less coverage than a 
commercial property insurance policy, but at much greater price. In 
Florida, such a policy averages in excess of 500 percent as compared to 
a commercial policy.
  State Insurance Commissions and state legislatures have literally 
created rainy day funds in an attempt to prevent an insurance 
availability crisis. This includes: Florida Catastrophe Reinsurance 
Fund, the California Earthquake Authority, and the Hawaii Hurricane 
Relief Fund. In my State of Florida, we have also created programs to 
provide insurance for those who cannot purchase insurance from any 
private source because of the risk involved including the Florida Joint 
Underwriters Associations, and the expansion of the Florida Windstorm 
Underwriters Association.
  Our recent experience tells us that it is time for Congress to help 
reverse the rising costs of natural disasters. The Natural Disaster 
Protection and Insurance Act of 1999 is a step in the right direction. 
This legislation directs the Secretary of the Treasury to carry out a 
program to make reinsurance available for purchase by eligible state 
programs, private insurers and reinsurers by way of auctions. It 
provides a backstop for state-operated insurance programs, and 
complements existing insurance industry efforts without encroaching 
upon the private sector.
  This initiative appropriately allows state and industry leaders to 
assist in addressing local needs. Specifically,
  Contractural coverage would include residential property losses 
resulting from disasters.
  The Treasury Department would be prohibited from offering any 
coverage that competes with or replaces private insurers.
  A portion of the premiums would go to a mitigation fund to support 
state level emergency preparedness.
  This initiative is a bipartisan and bicameral effort. My Florida 
colleague, Congressman Bill McCollum, has joined Representative Lazio 
to lead this effort in the House of Representatives. We have been 
working closely with the Administration, affected state and local level 
organizations, and private realtors and insurers. We all agree that the 
insurance industry cannot endure the ravage of large scale natural 
disasters alone. Action at the federal level is needed to continue 
insuring individual homeowners and business in areas vulnerable to 
catastrophe.
  Mr. President, we have an opportunity today to continue the working 
partnership between the federal government, states, local communities 
and the private sector. The consequences of insurance shortages and 
exposure to known hazards must be addressed immediately. I encourage my 
colleagues to support this initiative.

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