[Congressional Record Volume 146, Number 61 (Wednesday, May 17, 2000)]
[Senate]
[Pages S4103-S4115]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DOMENICI:
  S. 2573. A bill to coordinate and facilitate the development by the 
Department of Defense of directed energy technologies, systems, and 
weapons, and for other purposes; to the Committee on Armed Services.


       directed energy coordination and consolidation act of 2000

 Mr. DOMENICI. Mr. President, I rise today to offer the 
Directed Energy Coordination and Consolidation Act of 2000. While 
enactment of the provisions in this bill will greatly enhance and 
accelerate some of the research, development, test and evaluation 
activities in my home state of New Mexico, I firmly believe taking this 
action is also in our national interest.
  Last year's Defense Authorization Act required the Defense Department 
to convene the High Energy Laser Executive Review Panel (HELERP). This 
Panel was to make recommendations on a management structure for all 
defense high energy laser weapons programs. The authorization language 
also instructed the Panel to address issues in science and technology 
funding, the industrial base for these technologies, and possible 
cooperation with other agencies.
  Mr. President, let me briely outline some conclusions and 
recommendations made by the Panel. The findings include the following:
  Laser systems are ready for some of today's most challenging weapons 
applications, both offensive and defensive; laser weapons would offer 
the U.S. an asymmetric technological edge over adversaries for the 
foreseeable future; funding for laser Science and Technology programs 
should be increased to support acquisition programs and develop new 
technologies for future applications; the laser industrial supplier 
base is fragile in several critical laser technologies and lacks an 
adequate incentive to make investments required to support current and 
anticipated defense needs; DoD should leverage relevant research being 
supported by the Department of Energy and other agencies, as well as 
the private sector and academia; and, lastly, as in other critical high 
tech areas, it is increasingly difficult to attract and retain people 
with the skills necessary for directed energy technology development.
  In sum, the Panel found that these technologies have matured 
sufficiently to offer solutions to some of the most daunting defense 
challenges the U.S. currently confronts. However, other findings 
indicated that science and technology funding is inadequate to realize 
these aims, the industrial base is steadily eroding, and this field 
cannot recruit and retain adequate talent to remain viable. We have the 
means, but we're not making the investments required to achieve our 
goals.
  As requested by Congress last year, the High Energy Laser Master Plan 
approved by the Defense Department in March of this year proposes a 
different management structure. The Services all approved of this 
defense-wide management structure for making decisions regarding the 
specific technologies to pursue for specific defense applications and 
resource allocation.
  Mr. President, this legislation echoes the findings of the High 
Energy Laser Executive Review Panel and codifies the proposed 
management structure outlined by the Panel. Furthermore, in accordance 
with the Panel's findings, the bill authorizes $150 million in defense-
wide research and development funding for directed energy technologies. 
Up to $50 million of those funds can be utilized to leverage the 
directed energy expertise and technologies developed within our DOE 
laboratories. Lastly, this legislation requires that microwave 
technology investment decisions also be coordinated within this 
management structure.

[[Page S4104]]

  The bill would relocate the Joint Technology Office (JTO) proposed in 
the Master Plan from the Pentagon to Albuquerque, New Mexico, by 
January 1, 2001. This Office is currently being established at the 
Pentagon. However, the Pentagon is not a focal point for technology 
developments in directed energy. Albuquerque offers a sensible location 
for the JTO.
  Support for Albuquerque as a location is offered by the findings of 
the 912c Tri-Service Armament Panel Report. This Panel Report was an 
outgrowth of the July 1999 DoD ``Plan to Streamline DoD's Science and 
Technology, Engineering, and Test and Evaluation Infrastructure.'' This 
Army, Navy and Air Force Senior Steering Group proposed that all DoD 
Directed Energy Science and Technology and Test and Evaluation be 
consolidated at Kirtland Air Force Base. The Steering Group recommended 
creation of a DoD Directed Energy Center of Excellence at Kirtland that 
would be responsible for identifying, advocating, developing, and 
transitioning directed energy technology to meet all DoD requirements.
  Now that the High Energy Laser Master Plan has proposed an 
appropriate management structure, the time is right to take action. New 
Mexico is already a focal point for a lot of the research, development, 
test and evaluation activities in this field. Kirtland boasts 
tremendous assets to facilitate this research. White Sands is the 
premiere directed energy testing range. Co-locating the Joint 
Technology Office among a critical mass of directed energy activities--
both Army and Air Force--is not only sensible, it should also serve to 
facilitate this work.
  No doubt that the activities of the Air Force's Directed Energy 
Directorate at Kirtland will be enhanced by this legislation. However, 
each of the Services will be required to compete within this management 
structure.
  Let me be clear. Implementation of this management structure, 
regardless of the location of the Joint Technology Office will have no 
impact on the existing laser programs, such as the Tactical High Energy 
Laser (THEL), Airborne Laser (ABL) or Space-based Laser (SBL). The 
objective is to grow all directed energy programs desired by any one of 
the Services, depending on specific applications pursued.
  Any new programs will be competed--with one exception. The 
legislation includes a $20 million allocation for the Advanced Tactical 
Laser program under the Joint Non-Lethal Weapons Program Office in 
order to take a first initial step in addressing some of the industrial 
base concerns.
  American dominance relies heavily on our technological superiority. 
Unlike other instances where the Department of Defense is using 
outsourcing or privatization to reduce costs, the attrition within the 
research community will require significant renewed investments over a 
long period of time to rebuild in the future. We are steadily 
approaching this situation in the field of directed energy. The lack of 
emphasis on and investment in revolutionary technologies, such as 
directed energy, unnecessarily limits the myriad possibilities for 
effective, surgical defense against a range of missile threats and vast 
potential for numerous defense applications.
  Mr. President, in order to better leverage the federal Government's 
investment, ensure adequate stability in the industrial base, and 
promote educational opportunities in directed energy technologies, the 
Directed Energy Coordination and Consolidation Act of 2000 will take a 
critical first step. I ask my colleagues to join me in ensuring that we 
rigorously pursue directed energy solutions to our nation's defense 
needs.
  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. 2573

       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 ``Directed Energy Coordination 
     and Consolidation Act of 2000''.

     SEC. 2. COORDINATION AND FACILITATION OF DEVELOPMENT OF 
                   DIRECTED ENERGY TECHNOLOGIES, SYSTEMS, AND 
                   WEAPONS.

       (a) Findings.--Congress makes the following findings:
       (1) Directed energy systems are available to address many 
     current challenges with respect to military weapons, 
     including offensive weapons and defensive weapons.
       (2) Directed energy weapons offer the potential to maintain 
     an asymmetrical technological edge over adversaries of the 
     United States for the foreseeable future.
       (3) It is in the national interest that funding for 
     directed energy science and technology programs be increased 
     in order to support priority acquisition programs and to 
     develop new technologies for future applications.
       (4) It is in the national interest that the level of 
     funding for directed energy science and technology programs 
     correspond to the level of funding for such large-scale 
     demonstration programs in order to ensure the growth of 
     directed energy science and technology programs and to ensure 
     the successful development of other weapons systems utilizing 
     directed energy systems.
       (5) The industrial base for several critical directed 
     energy technologies is in fragile condition and lacks 
     appropriate incentives to make the large-scale investments 
     that are necessary to address current and anticipated 
     Department of Defense requirements for such technologies.
       (6) It is in the national interest that the Department of 
     Defense utilize and expand upon directed energy research 
     currently being conducted by the Department of Energy, other 
     Federal agencies, the private sector, and academia.
       (7) It is increasingly difficult for the Federal Government 
     to recruit and retain personnel with skills critical to 
     directed energy technology development.
       (8) The implementation of the recommendations contained in 
     the High Energy Laser Master Plan of the Department of 
     Defense will address these critical issues and is in the 
     national interest.
       (9) Implementation of the management structure outlined in 
     the Master Plan will facilitate the development of 
     revolutionary capabilities in directed energy weapons by 
     achieving a coordinated and focused investment strategy under 
     a new management structure featuring a joint technology 
     office with senior-level oversight provided by a technology 
     council and a board of directors.
       (b) Coordination and Oversight Under High Energy Laser 
     Master Plan.--(1) Subchapter II of Chapter 8 of title 10, 
     United States Code, is amended by adding at the end the 
     following new section:

     ``Sec. 204. Joint Technology Office

       ``(a) Establishment.--(1) There is in the Department of 
     Defense a Joint Technology Office (in this section referred 
     to as the `Office').
       ``(2) The Office shall be part of the National Directed 
     Energy Center at Kirtland Air Force Base, New Mexico.
       ``(3) The Office shall be under the authority, direction, 
     and control of the Deputy Under Secretary of Defense for 
     Science and Technology.
       ``(b) Staff.--(1) The head of the Office shall be a 
     civilian employee of the Department of Defense in the Senior 
     Executive Service who is designated by the Secretary of 
     Defense for that purpose. The head of the Office shall be 
     known as the `Director of the Joint Technology Office'.
       ``(2) The Secretary of Defense shall provide the Office 
     such civilian and military personnel and other resources as 
     are necessary to permit the Office to carry out its duties 
     under this section.
       ``(c) Duties.--The duties of the Office shall be to--
       ``(1) develop and oversee the management of a Department of 
     Defense-wide program of science and technology relating to 
     directed energy technologies, systems, and weapons;
       ``(2) serve as a point of coordination for initiatives for 
     science and technology relating to directed energy 
     technologies, systems, and weapons from throughout the 
     Department of Defense;
       ``(3) develop and manage a program (to be known as the 
     `National Directed Energy Technology Alliance') to foster the 
     exchange of information and cooperative activities on 
     directed energy technologies, systems, and weapons between 
     and among the Department of Defense, other Federal agencies, 
     institutions of higher education, and the private sector; and
       ``(4) carry out such other activities relating to directed 
     energy technologies, systems, and weapons as the Deputy Under 
     Secretary of Defense for Science and Technology considers 
     appropriate.
       ``(d) Coordination Within Department of Defense.--(1) The 
     Director of the Office shall assign to appropriate personnel 
     of the Office the performance of liaison functions with the 
     other Defense Agencies and with the military departments.
       ``(2) The head of each military department and Defense 
     Agency having an interest in the activities of the Office 
     shall assign personnel of such department or Defense Agency 
     to assist the Office in carrying out its duties. In providing 
     such assistance, such personnel shall be known collectively 
     as `Technology Area Working Groups'.
       ``(e) Technology Council.--(1) There is established in the 
     Department of Defense a council to be known as the 
     `Technology Council' (in this section referred to as the 
     `Council').
       ``(2) The Council shall be composed of 7 members as 
     follows:

[[Page S4105]]

       ``(A) The Deputy Under Secretary of Defense for Science and 
     Technology, who shall be chairperson of the Council.
       ``(B) The senior science and technology executive of the 
     Department of the Army.
       ``(C) The senior science and technology executive of the 
     Department of the Navy.
       ``(D) The senior science and technology executive of the 
     Department of the Air Force.
       ``(E) The senior science and technology executive of the 
     Defense Advanced Research Projects Agency.
       ``(F) The senior science and technology executive of the 
     Ballistic Missile Defense Organization.
       ``(G) The senior science and technology executive of the 
     Defense Threat Reduction Agency.
       ``(3) The duties of the Council shall be--
       ``(A) to review and recommend priorities among programs, 
     projects, and activities proposed and evaluated by the Office 
     under this section;
       ``(B) to make recommendations to the Board regarding 
     funding for such programs, projects, and activities; and
       ``(C) to otherwise review and oversee the activities of the 
     Office under this section.
       ``(f) Technology Board of Directors.--(1) There is 
     established in the Department of Defense a board to be known 
     as the `Technology Board of Directors' (in this section 
     referred to as the `Board').
       ``(2) The Board shall be composed of 8 members as follows:
       ``(A) The Under Secretary of Defense for Acquisition and 
     Technology, who shall serve as chairperson of the Board.
       ``(B) The Director of Defense Research and Engineering, who 
     shall serve as vice-chairperson of the Board.
       ``(C) The senior acquisition executive of the Department of 
     the Army.
       ``(D) The senior acquisition executive of the Department of 
     the Navy.
       ``(E) The senior acquisition executive of the Department of 
     the Air Force.
       ``(F) The Director of the Defense Advanced Research 
     Projects Agency.
       ``(G) The Director of the Ballistic Missile Defense 
     Organization.
       ``(H) The Director of the Defense Threat Reduction Agency.
       ``(3) The duties of the Board shall be--
       ``(A) to review and make funding recommendations regarding 
     the programs, projects, and activities proposed and evaluated 
     by the Office under this section; and
       ``(B) to otherwise review and oversee the activities of the 
     Office under this section.''.
       (2) The table of sections at the beginning of subchapter II 
     of chapter 8 of such title is amended by adding at the end 
     the following new section:

``204. Joint Technology Office.''.
       (3) The Secretary of Defense shall locate the Joint 
     Technology Office under section 204 of title 10, United 
     States Code (as added by this subsection), at the National 
     Directed Energy Center at Kirtland Air Force Base, New 
     Mexico, not later than January 1, 2001.
       (c) Technology Area Working Groups under High Energy Laser 
     Master Plan.--(1) The Secretary of Defense shall provide for 
     the implementation of the portion of the High Energy Laser 
     Master Plan relating to technology area working groups.
       (2) In carrying out activities under this subsection, the 
     Secretary of Defense shall require the Secretary of the 
     military department concerned to provide within such 
     department, with such department acting as lead agent, 
     technology area working groups as follows:
       (A) Within the Department of the Army--
       (i) a technology area working group on solid state lasers; 
     and
       (ii) a technology area working group on advanced 
     technology.
       (B) Within the Department of the Navy, a technology area 
     working group on free electron lasers.
       (C) Within the Department of the Air Force--
       (i) a technology area working group on chemical lasers;
       (ii) a technology areas working group on beam control;
       (iii) a technology area working group on lethality/
     vulnerability; and
       (iv) a technology area working group on high power 
     microwaves.
       (d) Enhancement of Industrial Base.--(1) The Secretary of 
     Defense shall develop and undertake initiatives, including 
     investment initiatives, for purposes of enhancing the 
     industrial base for directed energy technologies and systems.
       (2) Initiatives under paragraph (1) shall be designed to--
       (A) stimulate the development by institutions of higher 
     education and the private sector of promising directed energy 
     technologies and systems; and
       (B) stimulate the development of a workforce skilled in 
     such technologies and systems.
       (3) Of the amounts authorized to be appropriated by 
     subsection (h), $20,000,000 shall be available for the 
     initiation of development of the Advanced Tactical Laser (L) 
     under the direction of the Joint Non-Lethal Weapons 
     Directorate.
       (e) Enhancement of Test and Evaluation Capabilities.--(1) 
     The Secretary of Defense shall evaluate and implement 
     proposals for modernizing the High Energy Laser Test Facility 
     at White Sands Missile Range, New Mexico, in order to enhance 
     the test and evaluation capabilities of the Department of 
     Defense with respect to directed energy weapons.
       (2) Of the amounts authorized to be appropriated or 
     otherwise made available to the Department of Defense for 
     each of fiscal years 2001 and 2002, not more than $2,000,000 
     shall be made available in each such fiscal year for purposes 
     of the deployment and test at the High Energy Laser Test 
     Facility at White Sands Missile Range of free electron laser 
     technologies under development at Los Alamos National 
     Laboratory, New Mexico.
       (f) Cooperative Programs and Activities.--(1) The Secretary 
     of Defense shall evaluate the feasibility and advisability of 
     entering into cooperative programs or activities with other 
     Federal agencies, institutions of higher education, and the 
     private sector, including the national laboratories of the 
     Department of Energy, for the purpose of enhancing the 
     programs, projects, and activities of the Department of 
     Defense relating to directed energy technologies, systems, 
     and weapons.
       (2) The Secretary shall enter into any cooperative program 
     or activity determined under the evaluation under paragraph 
     (1) to be feasible and advisable for the purpose set forth in 
     that paragraph.
       (3) Of the amounts authorized to be appropriated by 
     subsection (h), $50,000,000 shall be available for 
     cooperative programs and activities entered into under 
     paragraph (2).
       (g) Participation of Joint Technology Council in 
     Activities.--The Secretary of Defense shall, to the maximum 
     extent practicable, carry out activities under subsections 
     (c), (d), (e), and (f), through the Joint Technology Council 
     established pursuant to section 204 of title 10, United 
     States Code (as added by subsection (b) of this section).
       (h) Funding for Fiscal Year 2001.--(1)(A) There is hereby 
     authorized to be appropriated for the Department of Defense 
     for fiscal year 2001, $150,000,000 for science and technology 
     activities relating to directed energy technologies, systems, 
     and weapons.
       (B) Amounts authorized to be appropriated for fiscal year 
     2001 by subparagraph (A) are in addition to any other amounts 
     authorized to be appropriated for such fiscal year for the 
     activities referred to in that subparagraph.
       (2) The Director of the Joint Technology Office established 
     pursuant to section 204 of title 10, United States Code, 
     shall allocate amounts appropriated pursuant to the 
     authorization of appropriations in paragraph (1) among 
     appropriate program elements of the Department of Defense in 
     accordance with such procedures as the Director shall 
     establish.
       (3) In establishing procedures for purposes of the 
     allocation of funds under paragraph (2), the Director shall 
     provide for the competitive selection of programs, projects, 
     and activities to be the recipients of such funds.
       (i) Directed Energy Defined.--In this section, the term 
     ``directed energy'', with respect to technologies, systems, 
     or weapons means technologies, systems, or weapons that 
     provide for the directed transmission of energies across the 
     energy and frequency spectrum, including high energy lasers 
     and high power microwaves.
                                 ______
                                 
      By Mr. HELMS:
  S. 2575. A bill to suspend temporarily the duty on mixtures of 
Bromoxynil Octanoate and Heptanoate; to the Committee on Finance.
  S. 2576. A bill to suspend temporarily the duty on Bromoxynil 
Octanoate technical; to the Committee on Finance.
  S. 2577. A bill to reduce temporarily the duty on Fipronil technical; 
to the Committee on Finance.
  S. 2578. A bill to suspend temporarily the duty on Isoxaflutole; to 
the Committee on Finance.
  S. 2579. A bill to suspend temporarily the duty on Cyclanilide 
technical; to the Committee on Finance.


    legislation to suspend temporarily the duty on certain chemicals

 Mr. HELMS. Mr. President, I ask unanimous consent that the 
text of five bills be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                S. 2575

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

     SECTION 1. TEMPORARY SUSPENSION OF DUTY.

       (a) In General.--Subchapter II of chapter 99 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     inserting in numerical sequence the following new heading:

       

[[Page S4106]]



``   9902.38.01    Mixtures of 3,5-   Free............  No change.......  No change.......  On or before 12/
                    dibromo-4-                                                               31/2003........  ''
                    hydoxybenzonitri                                                                           .
                    l ester and
                    inerts (CAS No.
                    1689-84-5)
                    (provided for in
                    subheading
                    3808.30.15).....

       (b) Effective Date.--The amendment made by this section 
     applies with respect to goods entered, or withdrawn from 
     warehouse for consumption, on or after the 15th day after the 
     date of the enactment of this Act.
                                  ____
                                  

                                S. 2576

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

     SECTION 1. TEMPORARY SUSPENSION OF DUTY.

       (a) In General.--Subchapter II of chapter 99 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     inserting in numerical sequence the following new heading:

       

``   9902.29.01    3,5-dibromo-4-     Free............  No change.......  No change.......  On or before 12/
                    hydoxybenzonitri                                                         31/2003........  ''
                    l (CAS No. 1689-                                                                           .
                    99-2) (provided
                    for in
                    subheading
                    2926.90.25).....

       (b) Effective Date.--The amendment made by this section 
     applies with respect to goods entered, or withdrawn from 
     warehouse for consumption, on or after the 15th day after the 
     date of the enactment of this Act.
                                  ____
                                  

                                S. 2577

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

     SECTION 1. REDUCTION OF DUTY ON FIPRONIL TECHNICAL.

       (a) In General.--Subchapter II of chapter 99 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     striking heading 9902.29.47 and inserting the following new 
     heading:

       

``   9902.29.47    5-amino-1-(2,6-    5%..............  No change.......  No change.......  On or before 12/
                    dichloro-4-                                                              31/2003........  ''
                    (trifluoromethyl                                                                           .
                    )phynyl)-4-
                    ((1,r,s,)-
                    trifluoromethyl)
                    sulfinyl)-1-h-
                    pyrazole-3-
                    carbonitrile:
                    fipronil 90mp.
                    (CAS No. 120068-
                    37-3) (provided
                    for in
                    subheading
                    2933.19.23).....

       (b) Effective Date.--The amendment made by subsection (a) 
     applies to goods entered, or withdrawn from warehouse for 
     consumption, on or after the 15th day after the date of the 
     enactment of this Act.
                                  ____
                                  

                                S. 2578

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

     SECTION 1. SUSPENSION OF DUTY ON ISOXAFLUTOLE.

       (a) In General.--Subchapter II of chapter 99 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     striking heading 9902.29.70 and inserting the following new 
     heading:

       

``   9902.29.70    4-(2-              Free............  No change.......  No change.......  On or before 12/
                    methanesulphonyl-                                                        31/2003........  ''
                    4-                                                                                         .
                    triflouromethylb
                    enzoyl)-5-
                    cyclopropyl
                    isoxazole (CAS
                    No. 141112-29-0)
                    (provided for in
                    subheading
                    2934.90.15).....

       (b) Effective Date.--The amendment made by subsection (a) 
     applies with respect to articles entered, or withdrawn from 
     warehouse for consumption, on or after the 15th day after the 
     date of the enactment of this Act.
                                  ____


                                S. 2579

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

     SECTION 1. SUSPENSION OF DUTY ON CYCLANILIDE TECHNICAL.

       (a) In General.--Subchapter II of chapter 99 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     striking heading 9902.29.64 and inserting in numerical 
     sequence the following new heading:

       

``   9902.29.64    1-(2,4-            Free............  No change.......  No change.......  On or before 12/
                    dichlorophenylam                                                         31/2003........  ''
                    inocarbonyl)-                                                                              .
                    cyclopropanecarb
                    oxylic acid.
                    (CAS No. 113136-
                    77-9) (provided
                    for in
                    subheading
                    2924.29.47).....

       (b) Effective Date.--The amendment made by subsection (a) 
     applies with respect to articles entered, or withdrawn from 
     warehouse for consumption, on or after the 15th day after the 
     date of the enactment of this Act.
                                 ______
                                 
      By Mr. JOHNSON (for himself, Mr. Bingaman, Mr. Daschle, and Mr. 
        Inouye):
  S. 2580. A bill to provide for the issuance of bonds to provide 
funding for the construction of schools of the Bureau of Indian Affairs 
of the Department of the Interior, and for other purposes; to the 
Committee on Indian Affairs.


                     indian school construction act

  Mr. JOHNSON. Mr. President, I, along with Senators Bingaman, Daschle, 
and Inouye, am introducing legislation to establish an innovative 
funding mechanism to enhance the ability of Indian tribes to construct, 
repair, and maintain quality educational facilities. Representatives

[[Page S4107]]

from tribal schools in my State of South Dakota have been working with 
tribes nationwide to develop an initiative which I believe will be a 
positive first step toward addressing the serious crisis we are facing 
in Indian education.
  Mr. President, over 50 percent of the American Indian population in 
this country is age 24 or younger. Consequently, the need for improved 
educational programs and facilities, and for training the American 
Indian workforce is pressing. American Indians have been, and continue 
to be, disproportionately affected by both poverty and low educational 
achievement. The high school completion rate for Indian people aged 20 
to 24 was 12.5 percent below the national average. American Indian 
students, on average, have scored far lower on the National Assessment 
for Education Progress indicators than all other students.
  By ignoring the most fundamental aspect of education; that is, safe, 
quality educational facilities, there is little hope of breaking the 
cycle of low educational achievement, and the unemployment and poverty 
that result from neglected academic potential.
  The Indian School Construction Act establishes a bonding authority to 
use existing tribal education funds for bonds in the municipal finance 
market which currently serves local governments across the Nation. 
Instead of funding construction projects directly, these existing funds 
will be leveraged through bonds to fund substantially more tribal 
school, construction, maintenance and repair projects.
  The Bureau of Indian Affairs estimates the tribal school construction 
and repair backlog at over $1 billion. Confounding this backlog, 
inflation and facility deterioration severely increases this amount. 
The administration's school construction request for fiscal year 2001 
was over $62 million. In this budgetary climate, I believe every avenue 
for efficiently stretching the Federal dollar should be explored.
  Tribal schools in my State and around the country address the unique 
learning needs and styles of Indian students, with sensitivity to 
Native cultures, ultimately promoting higher academic achievement. 
There are strong historical and moral reasons for continued support of 
tribal schools. In keeping with our special trust responsibility to 
sovereign Indian nations, we need to promote the self-determination and 
self-sufficiency of Indian communities. Education is absolutely vital 
to this effort. Allowing the continued deterioration and decay of 
tribal schools through lack of funding would violate the Government's 
commitment and responsibility to Indian nations and only slow the 
progress of self-sufficiency.
  Mr. President, I urge my colleagues to closely examine the Indian 
School Construction Act and join me in working to make this innovative 
funding mechanism a reality. I ask unanimous consent that the text of 
the legislation be added at the end of my remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2580

       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 ``Indian School Construction 
     Act''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Bureau.--The term ``Bureau'' means the Bureau of Indian 
     Affairs of the Department of the Interior.
       (2) Indian.--The term ``Indian'' means any individual who 
     is a member of a tribe.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (4) Tribal school.--The term ``tribal school'' means an 
     elementary school, secondary school, or dormitory that is 
     operated by a tribal organization for the education of Indian 
     children and that receives financial assistance for its 
     operation under a contract, grant, or agreement with the 
     Bureau under section 102, 103(a), or 208 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450f, 
     450h(a), and 458d).
       (5) Tribe.--The term ``tribe'' means any Indian tribe, 
     band, nation, or other organized group or community, 
     including a Native village, Regional Corporation, or Village 
     Corporation (as defined in or established pursuant to the 
     Alaska Native Claims Settlement Act), that is recognized as 
     eligible for the special programs and services provided by 
     the United States to Indians because of their status as 
     Indians.

     SEC. 3. ISSUANCE OF BONDS.

       (a) In General.--The Secretary shall establish a pilot 
     program under which eligible tribes have the authority to 
     issue tribal school modernization bonds to provide funding 
     for the improvement, repair, and new construction of tribal 
     schools.
       (b) Eligibility.--
       (1) In general.--To be eligible to issue bonds under the 
     program under subsection (a), a tribe shall prepare and 
     submit to the Secretary a plan of construction that meets the 
     requirements of paragraph (2).
       (2) Plan of construction.--A plan of construction meets the 
     requirements of this paragraph if such plan--
       (A) contains a description of the improvements, repairs, or 
     new construction to be undertaken with funding provided under 
     the bond;
       (B) demonstrates that a comprehensive survey has been 
     undertaken concerning the construction or renovation needs of 
     the tribal school involved;
       (C) contains assurances that funding under the bond will be 
     used only for the activities described in the plan; and
       (D) contains any other reasonable and related information 
     determined appropriate by the Secretary.
       (3) Priority.--In determining whether a tribe is eligible 
     to participate in the program under this section, the 
     Secretary shall give priority to tribes that, as demonstrated 
     by the relevant plans of construction, will fund projects 
     described in the Replacement School Construction priority 
     list of the Bureau of Indian Affairs, as maintained under the 
     Indian Self-Determination and Education Assistance Act.
       (4) Approval.--Except as provided in paragraph (3), the 
     Secretary shall approve the issuance of qualified tribal 
     school modernization bonds by tribes with approved plans of 
     construction on the basis of the order in which such plans 
     were received by the Secretary. Such approval shall not be 
     unreasonably withheld.
       (c) Permissible Activities.--In addition to the use of 
     funds permitted under subsection (a), a tribe may use amounts 
     received through the issuance of a bond to--
       (1) enter into contracts with architects, engineers, and 
     construction firms in order to determine the needs of the 
     tribal school and for the design and engineering of the 
     school;
       (2) enter into contracts with financial advisors, 
     underwriters, attorneys, trustees, and other professionals 
     who would be able to provide assistance to the tribe in 
     issuing bonds; and
       (3) carry out other activities determined appropriate by 
     the Secretary.
       (d) Bond Trustee.--
       (1) In general.--Notwithstanding any other provision of 
     law, any tribal school construction bond issued by a tribe 
     under this section shall be subject to a trust agreement 
     between the tribe and a trustee.
       (2) Trustee.--Any bank or trust company that meets 
     requirements established by the Secretary by regulation may 
     be designated as a trustee under paragraph (1).
       (3) Content of trust agreement.--A trust agreement entered 
     into by a tribe under this subsection shall specify that the 
     trustee, with respect to bonds issued under this section 
     shall--
       (A) act as a repository for the proceeds of the bond;
       (B) make payments to bondholders;
       (C) from any amounts in excess of the amounts necessary to 
     make payments to bondholders, in accordance with the 
     requirements of paragraph (4), make direct payments to 
     contractors with the governing body of the tribe for facility 
     improvement, repair, or new construction pursuant to this 
     section; and
       (D) invest in the tribal school modernization escrow 
     account established under subsection (f)(2) such amounts of 
     the proceeds as the trustee determines not to be necessary to 
     make payments under subparagraphs (B) and (C).
       (4) Requirements for making direct payments.--
       (A) In general.--Notwithstanding any other provision of 
     law, only the trustee shall make the direct payments referred 
     to in paragraph (3)(C) in accordance with requirements that 
     the tribe shall prescribe in the agreement entered into under 
     paragraph (3). The tribe shall require the trustee, prior to 
     making a payment to a contractor under paragraph (3)(C), to 
     inspect the project that is the subject of the contract, or 
     provide for an inspection of that project by a local 
     financial institution, to ensure the completion of the 
     project.
       (B) Contracts.--Each contract referred to in paragraph 
     (3)(C) shall specify, or be renegotiated to specify, that 
     payments under the contract shall be made in accordance with 
     this subsection.
       (e) Payments of Principal and Interest.--
       (1) Principal.--Qualified tribal school modernization bonds 
     shall be issued under this section as interest only for a 
     period of 15 years from the date of issuance. Upon the 
     expiration of such 15-year period, the entire outstanding 
     principal under the bond shall become due and payable.
       (2) Interest.--Interest on a qualified tribal school 
     modernization bond shall be in the form of a tax credit under 
     section 1400F of the Internal Revenue Code of 1986.
       (f) Bond Guarantees.--
       (1) In general.--Payment of the principal portion of a 
     qualified tribal school modernization bond issued under this 
     section shall be guaranteed by amounts deposited in the 
     tribal school modernization escrow account established under 
     paragraph (2).
       (2) Establishment of account.--

[[Page S4108]]

       (A) In general.--Notwithstanding any other provision of 
     law, subject to the availability of amounts made available 
     under an appropriations Act, beginning in fiscal year 2001, 
     the Secretary may deposit not more than $30,000,000 of 
     unobligated funds into a tribal school modernization escrow 
     account.
       (B) Payments.--The Secretary shall use any amounts 
     deposited in the escrow account under subparagraph (A) and 
     subsection (d)(3)(D) to make payments to holders of qualified 
     tribal school modernization bonds issued under this section.
       (g) Limitations.--
       (1) Obligation of tribes.--Notwithstanding any other 
     provision of law, a tribe that issues a qualified tribal 
     school modernization bond under this section shall not be 
     obligated to repay the principal on the bond.
       (2) Land and facilities.--Any land or facilities purchased 
     or improved with amounts derived from qualified tribal school 
     modernization bonds issued under this section shall not be 
     mortgaged or used as collateral for such bonds.

     SEC. 4. EXPANSION OF INCENTIVES FOR TRIBAL SCHOOLS.

       Chapter 1 of the Internal Revenue Code of 1986 is amended 
     by adding at the end the following new subchapter:

         ``Subchapter X--Tribal School Modernization Provisions

``Sec. 1400F. Credit to holders of qualified tribal school 
              modernization bonds.

     ``SEC. 1400F. CREDIT TO HOLDERS OF QUALIFIED TRIBAL SCHOOL 
                   MODERNIZATION BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a qualified tribal school modernization bond on a 
     credit allowance date of such bond which occurs during the 
     taxable year, there shall be allowed as a credit against the 
     tax imposed by this chapter for such taxable year an amount 
     equal to the sum of the credits determined under subsection 
     (b) with respect to credit allowance dates during such year 
     on which the taxpayer holds such bond.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified tribal school modernization bond is 25 
     percent of the annual credit determined with respect to such 
     bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified tribal school modernization bond is 
     the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (1), the applicable credit rate with respect to an issue is 
     the rate equal to an average market yield (as of the day 
     before the date of issuance of the issue) on outstanding 
     long-term corporate debt obligations (determined under 
     regulations prescribed by the Secretary).
       ``(4) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under part IV of 
     subchapter A (other than subpart C thereof, relating to 
     refundable credits).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year.
       ``(d) Qualified Tribal School Modernization Bond; Other 
     Definitions.--For purposes of this section--
       ``(1) Qualified tribal school modernization bond.--
       ``(A) In general.--The term `qualified school modernization 
     bond' means, subject to subparagraph (B), any bond issued as 
     part of an issue under section 3 of the Indian School 
     Construction Act if--
       ``(i) 95 percent or more of the proceeds of such issue are 
     to be used for the construction, rehabilitation, or repair of 
     a tribal school facility or for the acquisition of land on 
     which such a facility is to be constructed with part of the 
     proceeds of such issue,
       ``(ii) the bond is issued by an Indian tribe,
       ``(iii) the issuer designates such bond for purposes of 
     this section, and
       ``(iv) the term of each bond which is part of such issue 
     does not exceed 15 years.
       ``(B) National limitation on amount of bonds designated.--
     There is a national qualified tribal school modernization 
     bond limitation for each calendar year. Such limitation is--
       ``(i) $200,000,000 for 2001,
       ``(ii) $200,000,000 for 2002, and
       ``(iii) zero after 2002.
       ``(2) Credit allowance date.--The term `credit allowance 
     date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(3) Bond.--The term `bond' includes any obligation.
       ``(4) Tribe.--The term `tribe' has the meaning given such 
     term by section 2 of the Indian School Construction Act.
       ``(e) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(f) Bonds Held by Regulated Investment Companies.--If any 
     qualified tribal school modernization bond is held by a 
     regulated investment company, the credit determined under 
     subsection (a) shall be allowed to shareholders of such 
     company under procedures prescribed by the Secretary.
       ``(g) Credits May Be Stripped.--Under regulations 
     prescribed by the Secretary--
       ``(1) In general.--There may be a separation (including at 
     issuance) of the ownership of a qualified tribal school 
     modernization bond and the entitlement to the credit under 
     this section with respect to such bond. In case of any such 
     separation, the credit under this section shall be allowed to 
     the person who on the credit allowance date holds the 
     instrument evidencing the entitlement to the credit and not 
     to the holder of the bond.
       ``(2) Certain rules to apply.--In the case of a separation 
     described in paragraph (1), the rules of section 1286 shall 
     apply to the qualified tribal school modernization bond as if 
     it were a stripped bond and to the credit under this section 
     as if it were a stripped coupon.
       ``(h) Treatment for Estimated Tax Purposes.--Solely for 
     purposes of sections 6654 and 6655, the credit allowed by 
     this section to a taxpayer by reason of holding a qualified 
     tribal school modernization bonds on a credit allowance date 
     shall be treated as if it were a payment of estimated tax 
     made by the taxpayer on such date.
       ``(i) Credit May Be Transferred.--Nothing in any law or 
     rule of law shall be construed to limit the transferability 
     of the credit allowed by this section through sale and 
     repurchase agreements.
       ``(j) Credit Treated as Allowed Under Part IV of Subchapter 
     A.--For purposes of subtitle F, the credit allowed by this 
     section shall be treated as a credit allowable under part IV 
     of subchapter A of this chapter.
       ``(k) Reporting.--Issuers of qualified tribal school 
     modernization bonds shall submit reports similar to the 
     reports required under section 149(e).''.

     SEC. 5. SOVEREIGN IMMUNITY.

       This Act and the amendments made by this Act shall not be 
     construed to impact, limit, or affect the sovereign immunity 
     of the Federal Government or any State or tribal government.
                                 ______
                                 
      By Mr. SESSIONS (for himself, Mr. Hollings, Mr. Lott, Mr. Shelby, 
        Mr. Cochran, Mr. Cleland, Mr. Coverdell, Mr. Thurmond, Mr. 
        Helms, Mr. Edwards, Mr. Inhofe, and Mrs. Hutchison):
  S. 2581. A bill to provide for the preservation and restoration of 
historic buildings at historically women's public colleges or 
universities; to the Committee on Energy and Natural Resources.


historically women's public colleges or universities historic building 
                    restoration and preservation act

 Mr. SESSIONS. Mr. President, I rise today to introduce 
legislation to help preserve the heritage of historic women's colleges 
and universities. The United States is presently at mid-point in 
observing the centennial of the creation of seven unique educational 
institutions.
  There were seven historic women's public colleges or universities 
founded in the United States between 1884 and 1908 to provide 
industrial education for women. They include: the University of 
Montevallo in Montevallo, Alabama; the Mississippi University for Women 
in Columbus, Mississippi; the Georgia College and State University in 
Milledgeville, Georgia; the University of North Carolina at Greensboro; 
Winthrop University in Rock Hill, South Carolina; the Texas Woman's 
University in Denton, Texas; and the University of Science and Arts of 
Oklahoma, in Chickasha, Oklahoma.
  These seven public universities all were originally created to 
provide industrial and vocational education for women who at the time 
could not attend other public academic institutions. Following the 
industrial revolution, the United States found it desirable to promote 
agricultural, mechanical, and industrial education. Unfortunately, in 
seven States, the public agricultural and mechanical institutions

[[Page S4109]]

created during this period were closed to women. A number of 
educational advocates for women, notably Miss Julia Tutwiler, a native 
of Alabama, had learned extensively about European industrial and 
vocational education and tirelessly advocated the creation of 
industrial and technical educational opportunities for women. In these 
States, through major and extended efforts by women like Miss Tutwiler 
and by agrarian organizations, separate public educational institutions 
were created by the respective State legislatures to provide industrial 
and technical education for women. These schools subsequently became 
coeducational but retain significant historical and academic features 
of those pioneering efforts to educate women.
  Currently these public institutions have critical capital needs 
related to their historic educational structures. Under this 
legislation, each school would receive $2 million in federal matching 
funding each year of the fiscal years 2001-2005. These funds, along 
with school funds, would be used for the preservation and restoration 
of historic buildings at these colleges and universities.
  These historically women's public colleges and universities have 
contributed significantly to the effort to attain equal opportunity 
through postsecondary education for women, low-income individuals, and 
educationally disadvantaged Americans. I believe it is our duty to do 
all we can to preserve these historic institutions and I ask my 
colleagues for their support.
  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. 2581

       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 ``Historically Women's Public 
     Colleges or Universities Historic Building Restoration and 
     Preservation Act''.

     SEC. 2. PRESERVATION AND RESTORATION GRANTS FOR HISTORIC 
                   BUILDINGS AND STRUCTURES AT HISTORICALLY 
                   WOMEN'S PUBLIC COLLEGES OR UNIVERSITIES.

       (a) Authority To Make Grants.--
       (1) In general.--From amounts made available under 
     paragraph (2), the Secretary of Interior (referred to in this 
     Act as the ``Secretary'') shall award grants in accordance 
     with this section to historically women's public colleges or 
     universities (defined as public institutions of higher 
     learning as established in the United States between 1884 and 
     1908 to provide industrial education for women) for the 
     preservation and restoration of historic buildings and 
     structures on their campuses.
       (2) Source of funding.--Grants under paragraph (1) shall be 
     awarded from amounts appropriated to carry out the National 
     Historic Preservation Act (16 U.S.C. 470 et seq.) for fiscal 
     years 2001 through 2005.
       (b) Grant Conditions.--Grants made under subsection (a) 
     shall be subject to the condition that the grantee agree, for 
     the period of time specified by the Secretary, that--
       (1) no alteration will be made in the property with respect 
     to which the grant is made without the concurrence of the 
     Secretary; and
       (2) reasonable public access to the property for which the 
     grant is made will be permitted by the grantee for 
     interpretive and educational purposes.
       (c) Matching Requirement.--Except as provided by paragraph 
     (2), the Secretary may obligate funds made available under 
     this section for a grant only if the grantee agrees to 
     provide for activities under the grant, from funds derived 
     from non-Federal sources, an amount equal to 20 percent of 
     the costs of the program to be funded under the grant with 
     the Secretary providing 80 percent of such costs under the 
     grant.
       (d) Funding Provisions.--
       (1) Amounts to be made available.--Not more than 
     $14,000,000 for each of the fiscal years 2001 through 2005 
     may be made available under this section.
       (2) Allocations for fiscal year 2001.--
       (A) In general.--Of the amounts made available under this 
     section for fiscal year 2001--
       (i) $2,000,000 shall be available only for grants under 
     subsection (a) to Mississippi University for Women in 
     Columbus, Mississippi;
       (ii) $2,000,000 shall be available only for grants under 
     subsection (a) to Georgia College and State University in 
     Milledgeville, Georgia;
       (iii) $2,000,000 shall be available only for grants under 
     subsection (a) to the University of North Carolina at 
     Greensboro in Greensboro, North Carolina;
       (iv) $2,000,000 shall be available only for grants under 
     subsection (a) to Winthrop University in Rock Hill, South 
     Carolina;
       (v) $2,000,000 shall be available only for grants under 
     subsection (a) to the University of Montevallo in Montevallo, 
     Alabama;
       (vi) $2,000,000 shall be available only for grants under 
     subsection (a) to the Texas Woman's University in Denton, 
     Texas; and
       (vii) $2,000,000 shall be available only for grants under 
     subsection (a) to the University of Science and Arts of 
     Oklahoma in Chickasha, Oklahoma.
       (B) Less than $14,000,000 available.--If less than 
     $14,000,000 is made available under this section for fiscal 
     year 2001, then the amount made available to each of the 7 
     institutions under subparagraph (A) shall be reduced by a 
     uniform percentage.
       (3) Allocations for fiscal years 2002-2005.--Any funds 
     which are made available during fiscal years 2002 through 
     2005 under subsection (a)(2) shall be distributed by the 
     Secretary in accordance with the provisions of subparagraphs 
     (A) and (B) of paragraph (2) to those grantees named in 
     paragraph (2)(A) which remain eligible and desire to 
     participate, on a uniform basis, in such fiscal years.
       (e) Regulations.--The Secretary shall promulgate such 
     regulations as are necessary to carry out this Act.
 Mr. CLELAND. Mr. President, forty-six years ago today, the 
U.S. Supreme Court in its Brown vs. Board of Education of Topeka 
decision overturned an 1896 ruling that education should be ``separate 
but equal'' thus outlawing racial segregation in the state school 
system. It is important to note that when the ``separate but equal'' 
ruling first went into effect in 1896, there were very few colleges and 
universities that women could attend. This means that ``separate but 
equal'' meant for men only.
  Some forty-one years before colleges like the Georgia College and 
State University was founded in 1889, Elizabeth Cady Stanton, an 
eminent women's rights leader, drafted a Declaration of Sentiments that 
pointed to other areas of life where American women were not treated 
equally. Some of the facts at that time were:
  Women were not allowed to vote;
  Women had to submit to laws they had no voice in formulating;
  Married women had no property rights;
  Divorce and child custody laws favored men, giving no rights to 
women;
  Most occupations were closed to women, including medicine and law; 
and
  Women had no means to gain an education since no college or 
university would accept women students.
  Through the efforts of Ms. Stanton and others, colleges and 
universities began to be established with the mission of preparing the 
women of our nation to become self-sufficient by affording them an 
opportunity for an education. Today, many of these colleges and 
universities are continuing to provide educational opportunities to 
women to enable them to continue making significant contributions to 
our country by becoming writers, educators, scientists, heads of state, 
politicians, civil rights crusaders, artists, entertainers, and 
business leaders. However, some of the historic buildings that were 
built between 1884 and 1908 as institutions of higher learning for 
women are beginning to crumble and decay.
  I am proud to be a cosponsor of legislation introduced today by 
Senator Sessions which was crafted to allow the preservation and 
restoration of treasured historic school buildings. The legislation 
will provide seven colleges and universities with $10 million each for 
five years to help ensure that some historically significant buildings 
that were built between 1884 and 1908 at women's public colleges and 
universities continue to serve as national symbols of women's early 
civil rights and as important monuments to the power that knowledge has 
brought to America's women. I'd like to note that the amounts needed to 
fully rejuvenate the buildings to their former glory is far greater 
than those provided by this legislation.
  The list of institutions that need this assistance is quite 
impressive. One of the seven universities included in this bill is the 
Georgia College and State University which is located in Georgia's 
antebellum capital, Milledgeville. The University was chartered in 1889 
as the Georgia Normal and Industrial College and its early emphasis was 
on preparing young women for teaching or industrial careers. From the 
beginning of this prestigious school, the jewels of the university 
campus have been the former State Governor's mansion and the old 
Baldwin County Court House. General Sherman, while occupying the

[[Page S4110]]

city of Milledgeville, slept in the mansion and refused to allow it to 
be burned because he was so impressed with its stateliness. The stately 
court house and former Governor's mansion, while continuing to be used 
by the university, are in dire need of repair. The $10 million included 
in the bill for the Georgia College and State University will go a long 
way toward helping to pay the estimated $27 million repair cost for 
these, and other treasured campus buildings.
  Today the Georgia College and State University's enrollment has grown 
to an impressive 5,200 students. The institution is now offering more 
than 65 baccalaureate and 35 graduate degree programs and awards more 
than 1,100 degrees annually, of which 300 are graduate degrees.
  It seems that we are living in a disposable world. We have disposable 
towels, disposable cameras, and disposable contact lenses. Let us not 
dispose of these buildings or the history they represent. I believe 
that the college and university campus buildings that are to be 
preserved and restored by this legislation will continue to serve our 
nation well by continuing to provide quality education for the leaders 
of tomorrow.
                                 ______
                                 
      By Mr. LIEBERMAN (for himself, Mr. Levin, Mr. Daschle, Mr. 
        McCain, Mr. Jeffords, Mr. Feingold, Mr. Durbin, Mr. Cleland, 
        Mr. Kerry, Mr. Torricelli, Mr. Kennedy, Mr. Akaka, and Mr. 
        Bryan):
  S. 2582. A bill to amend section 527 of the Internal Revenue Code of 
1986 to better define the term political organization; to the Committee 
on Finance.
  S. 2583. A bill to amend the Internal Revenue Code of 1986 to 
increase disclosure for certain political organizations exempt from tax 
under section 527; to the Committee on Finance.


           legislation regarding section 527 of the tax code

  Mr. LIEBERMAN. Mr. President, I rise today to introduce two bills 
aimed at curtailing the newest threat to the integrity of our nation's 
election process: the proliferation of so-called stealth PACs operating 
under Section 527 of the tax code. These groups exploit a recently 
discovered loophole in the tax code that allows organizations seeking 
to influence federal elections to fund their election work with 
undisclosed and unlimited contributions at the same time as they claim 
exemption from both federal taxation and the federal election laws.
  Section 527 of the tax code offers tax exemption to organizations 
primarily involved in election-related activities, like campaign 
committees, party committees and PACs. It defines the type of 
organization it covers as one whose function is, among other things, 
``influencing or attempting to influence the selection, nomination, 
election, or appointment of any individual to any Federal, State, or 
local public office . . . .'' Because the Federal Election Campaign Act 
(``FECA'') uses near identical language to define the entities it 
regulates--organizations that spend or receive money ``for the purpose 
of influencing any election for Federal office''--Section 527 formerly 
had been generally understood to apply only to those organizations that 
register as political committees under, and comply with, FECA, unless 
they focus on State or local activities or do not meet certain other 
specific FECA requirements).
  Nevertheless, a number of groups engaged in what they term issue 
advocacy campaigns and other election-related activity recently began 
arguing that the near identical language of FECA and Section 527 
actually mean two different things. In their view, they can gain 
freedom from taxation by claiming that they are seeking to influence 
the election of individuals to Federal office, but may evade regulation 
under FECA, by asserting that they are not seeking to influence an 
election for Federal office. As a result--because, unlike other tax-
exempt groups like 501(c)(3)s and (c)(4)s, Section 527 groups don't 
even have to publicly disclose their existence--these groups gain both 
the public subsidy of tax exemption and the ability to shield from the 
American public the identity of those spending their money to try to 
influence our elections. Indeed, according to news reports, newly-
formed 527 organizations pushing the agenda of political parties are 
using the ability to mask the identities of their contributors as a 
means of courting wealthy donors seeking anonymity in their efforts to 
influence our elections.
  Because Section 527 organizations are not required to publicly 
disclose their existence, it is impossible to know the precise scope of 
this problem. The IRS's private letter rulings, though, make clear that 
organizations intent on running what they call issue ad campaigns and 
engaging in other election-related activity are free to assert Section 
527 status, and news reports provide specific examples of groups taking 
advantage of these rulings. Roll Call reported the early signs of this 
phenomenon in late 1997, when it published an article on the decision 
of Citizens for Reform and Citizens for the Republic Education Fund, 
two Triad Management Services organizations that ran $2 million issue 
ad campaigns during the 1996 elections, to switch from 501(c)(4) status 
(which imposes limits on a group's political activity) to 527 status 
after the 1996 campaigns. A more recent Roll Call report recounted the 
efforts of a team of GOP lawyers and consultants to shop an 
organization called Citizens for the Republican Congress to donors as a 
way to bankroll up to $35 million in pro-Republican issue ads in the 30 
most competitive House races. And Common Cause's recent report Under 
The Radar: The Attack Of The ``Stealth PACs'' On Our Nation's Elections 
offers details on 527 groups set up by politicians (Congressmen J.C. 
Watts and Tom DeLay), industry groups (the pharmaceutical industry-
funded Citizens for Better Medicare) and ideological groups from all 
sides of the political spectrum (the Wyly Brothers' Republicans for 
Clean Air, Ben & Jerry's Business Leaders for Sensible Priorities and a 
527 set up by the Sierra Club). The advantages conferred by assuming 
the 527 form--the anonymity provided to both the organization and its 
donors, the ability to engage in unlimited political activity without 
losing tax-exempt status, and the exemption from the gift tax imposed 
on very large donors--leave no doubt that these groups will proliferate 
as the November election approaches.

  And none of us should doubt that the proliferation of these groups--
with their potential to serve as secret slush funds for candidates and 
parties, their ability to run difficult-to-trace attack ads, and their 
promise of anonymity to those seeking to spend huge amounts of money to 
influence our elections--poses a real and significant threat to the 
integrity and fairness of our elections. We all know that the identity 
of the messenger has a lot of influence on how we view a message. In 
the case of a campaign, an ad or piece of direct mail attacking one 
candidate or lauding another carries a lot more weight when it is run 
or sent by a group called ``Citizens for Good Government'' or 
``Committee for our Children'' than when a candidate, party or someone 
with a financial stake in the election publicly acknowledges 
sponsorship of the ad or mailing. Without a rule requiring a group 
involved in elections to disclose who is behind it and where the group 
gets its money, the public is deprived of vital information that allows 
it to judge the group's credibility and its message, throwing into 
doubt the very integrity of our elections. With this incredibly 
powerful tool in their hands, can anyone doubt that come November, we 
will see more and more candidates, parties and groups with financial 
interests in the outcome of our elections taking advantage of the 527 
loophole to run more and more attack ads and issue more and more 
negative mailings in the name of groups with innocuous-sounding names?
  But the risk posed by the 527 loophole goes even farther than 
depriving the American people of critical information. I believe that 
it threatens the very heart of our democratic political process. 
Allowing these groups to operate in the shadows poses a real risk of 
corruption and makes it difficult for us to vigilantly guard against 
that risk. The press has reported that a growing number of 527 groups 
have connections to--or even have been set up by--candidates and 
elected officials. Allowing wealthy individuals to give to these 
groups--and allowing elected officials to solicit money for these 
groups--without ever having to disclose their dealings to the public, 
at a minimum,

[[Page S4111]]

leads to an appearance of corruption and sets the conditions that would 
allow actual corruption to thrive. If politicians are allowed to 
continue secretly seeking money--particularly sums of money that exceed 
what the average American makes in a year--there is no telling what 
will be asked for in return.

  In the hopes of forestalling the conversion of yet another loophole 
into yet another sinkhole for the integrity of our elections, I am 
joined today by a distinguished bipartisan coalition in introducing two 
bills addressing the 527 problem. Our first bill--I think of it as our 
aspirational bill--would completely close the Section 527 loophole, by 
making clear that tax exemption under Section 527 is available only to 
organizations regulated under FECA (unless an organization focuses 
exclusively on State or local elections or does not meet certain other 
explicit FECA requirements). If this bill were enacted, groups no 
longer would be able to tell one thing to the IRS to get a tax benefit 
and then deny the same thing to the FEC in order to evade FECA 
regulation.
  Recognizing that a complete closing of the 527 loophole may not be 
possible to achieve this Congress, however, we are offering a narrower 
alternative--a pragmatic bill--aimed at forcing Section 527 
organizations to emerge from the shadows and let the public know who 
they are, where they get their money and how they spend it. The bill 
would require 527 organizations to disclose their existence to the IRS, 
to file publicly available tax returns and to file with the IRS and 
make public reports specifying annual expenditures of at least $500 and 
identifying those who contribute at least $200 annually to the 
organization. Although this won't solve the whole problem, at least it 
will make sure that no group can hide in the shadows as it spends 
millions to influence the way we vote and who we choose to run this 
country.
  No doubt opponents of this legislation will claim that our proposal 
infringes on their First Amendment rights to free speech and 
association. But, Mr. President, nothing in our bills infringes on 
those cherished freedoms in the slightest bit. Our bills do not 
prohibit anyone from speaking, nor do they force any group that does 
not currently have to comply with FECA or disclose information about 
itself to do either of those things. Our bills speak only to what a 
group must do if it wants the public subsidy of tax exemption--
something the Supreme Court has made clear no one has a constitutional 
right to have. As the Court explained in Regan v. Taxation with 
Representation of Washington, 461 U.S. 540, 544, 545, 549 (1983), 
``[b]oth tax exemptions and tax-deductibility are a form of subsidy 
that is administered through the tax system,'' and ``Congressional 
selection of particular entities or persons for entitlement to this 
sort of largesse is obviously a matter of policy and discretion . . .'' 
Under our bills, any group not wanting to disclose information about 
itself or abide by the election laws would be able to continue doing 
whatever it is doing now--it would just have to do so without the 
public subsidy of tax exemption conferred by Section 527.
  Mr. President, we have become so used to our campaign finance 
system's long, slow descent into the muck that it sometimes is hard to 
ignite the kind of outrage that should result when a new loophole 
starts to shred the spirit of yet another law aimed at protecting the 
integrity of our system. But this new 527 loophole should outrage us, 
and we must act to stop it. The bipartisan coalition joining with me 
today is doing just that. I hope all of our colleagues will join us in 
supporting these proposals, and ask unanimous consent that the text of 
both bills be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                S. 2582

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

     SECTION 1. DEFINITION OF POLITICAL ORGANIZATION.

       (a) Definition of Political Organization.--Paragraph (1) of 
     section 527(e) of the Internal Revenue Code of 1986 (relating 
     to political organizations) is amended to read as follows:
       ``(1) Political organization.--
       ``(A) In general.--The term `political organization' means 
     a party, committee, association, fund, or other organization 
     (whether or not incorporated)--
       ``(i) organized and operated primarily for the purpose of 
     directly or indirectly accepting contributions or making 
     expenditures, or both, for an exempt function, and
       ``(ii) which is a political committee described in section 
     301(4) of the Federal Election Campaign Act of 1971 (2 U.S.C. 
     431(4)).
       ``(B) Exceptions.--Subparagraph (A)(ii) shall not apply in 
     the case of--
       ``(i) an organization described in subparagraph (C),
       ``(ii) any committee, club, association, or other group of 
     persons (other than a separate segregated fund established 
     under section 316 of the Federal Election Campaign Act of 
     1971 (2 U.S.C. 441b)) which accepts contributions or makes 
     expenditures (as defined in this subsection) during a 
     calendar year in an aggregate amount of less than $1,000, or
       ``(iii) any local committee of a political party which is 
     not a political committee (as so defined).
       ``(C) Certain organizations.--An organization is described 
     in this subparagraph if--
       ``(i) the activities of the organization are for the 
     primary purpose of influencing or attempting to influence--

       ``(I) the selection, nomination, election, or appointment 
     of any individual to any State or local public office,
       ``(II) the appointment of any individual to any Federal 
     public office, or
       ``(III) the selection, nomination, election, or appointment 
     of any individual to any office in a political organization, 
     and

       ``(ii) the organization does not engage in any activity 
     that is for the purpose of directly or indirectly influencing 
     or attempting to influence the selection, nomination, or 
     election of any individual to any Federal public office or 
     the election of Presidential or Vice Presidential electors.
     The preceding sentence shall apply whether or not an 
     individual described in subclause (I), (II), or (III) of 
     clause (i) or in clause (ii) of such sentence is selected, 
     nominated, elected, or appointed to such office.''.
       (b) Effective Date.--This section and the amendment made by 
     this section take effect on the date that is 30 days after 
     the date of enactment of this Act.
                                  ____


                                S. 2583

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

     SECTION 1. REQUIRED NOTIFICATION OF SECTION 527 STATUS.

       (a) In General.--Section 527 of the Internal Revenue Code 
     of 1986 (relating to political organizations) is amended by 
     adding at the end the following new subsection:
       ``(i) Organizations Must Notify Secretary That They Are 
     Section 527 Organizations.--
       ``(1) In general.--Except as provided in paragraph (5), an 
     organization shall not be treated as an organization 
     described in this section--
       ``(A) unless it has given notice to the Secretary, 
     electronically and in writing, that it is to be so treated, 
     or
       ``(B) if the notice is given after the time required under 
     paragraph (2), the organization shall not be so treated for 
     any period before such notice is given.
       ``(2) Time to give notice.--The notice required under 
     paragraph (1) shall be transmitted not later than 24 hours 
     after the date on which the organization is established.
       ``(3) Contents of notice.--The notice required under 
     paragraph (1) shall include information regarding--
       ``(A) the name and address of the organization (including 
     any business address, if different) and its electronic 
     mailing address,
       ``(B) the purpose of the organization,
       ``(C) the names and addresses of its officers, highly 
     compensated employees, contact person, custodian of records, 
     and members of its Board of Directors,
       ``(D) the name and address of, and relationship to, any 
     related entities (within the meaning of section 168(h)(4)), 
     and
       ``(E) such other information as the Secretary may require 
     to carry out the internal revenue laws.
       ``(4) Effect of failure.--In the case of an organization 
     failing to meet the requirements of paragraph (1) for any 
     period, the taxable income of such organization shall be 
     computed by taking into account any exempt function income 
     (and any deductions directly connected with the production of 
     such income).
       ``(5) Exceptions.--This subsection shall not apply to any 
     organization--
       ``(A) to which this section applies solely by reason of 
     subsection (f)(1), or
       ``(B) which reasonably anticipates that it will not have 
     gross receipts of $25,000 or more for any taxable year.
       ``(6) Coordination with other requirements.--This 
     subsection shall not apply to any person required (without 
     regard to this subsection) to report under the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 431 et seq.) as a 
     political committee.''.
       (b) Disclosure Requirements.--
       (1) Inspection at internal revenue service offices.--
       (A) In general.--Section 6104(a)(1)(A) of the Internal 
     Revenue Code of 1986 (relating to public inspection of 
     applications) is amended--
       (i) by inserting ``or a political organization is exempt 
     from taxation under section 527 for any taxable year'' after 
     ``taxable year'',

[[Page S4112]]

       (ii) by inserting ``or notice of status filed by the 
     organization under section 527(i)'' before ``, together'',
       (iii) by inserting ``or notice'' after ``such application'' 
     each place it appears,
       (iv) by inserting ``or notice'' after ``any application'',
       (v) by inserting ``for exemption from taxation under 
     section 501(a)'' after ``any organization'' in the last 
     sentence, and
       (vi) by inserting ``or 527'' after ``section 501'' in the 
     heading.
       (B) Conforming amendment.--The heading for section 6104(a) 
     of such Code is amended by inserting ``or notice of status'' 
     before the period.
       (2) Inspection of notice on internet and in person.--
     Section 6104(a) of such Code is amended by adding at the end 
     the following new paragraph:
       ``(3) Information available on internet and in person.--
       ``(A) In general.--The Secretary shall make publicly 
     available, on the Internet and at the offices of the Internal 
     Revenue Service--
       ``(i) a list of all political organizations which file a 
     notice with the Secretary under section 527(i), and
       ``(ii) the name, address, electronic mailing address, 
     custodian of records, and contact person for such 
     organization.
       ``(B) Time to make information available.--The Secretary 
     shall make available the information required under 
     subparagraph (A) not later than 5 business days after the 
     Secretary receives a notice from a political organization 
     under section 527(i).''.
       (3) Inspection by committee of congress.--Section 
     6104(a)(2) of such Code is amended by inserting ``or notice 
     of status of any political organization which is exempt from 
     taxation under section 527 for any taxable year'' after 
     ``taxable year''.
       (4) Public inspection made available by organization.--
     Section 6104(d) of such Code (relating to public inspection 
     of certain annual returns and applications for exemption) is 
     amended--
       (A) by striking ``and Applications for Exemption'' and 
     inserting ``, Applications for Exemption, and Notices of 
     Status'' in the heading,
       (B) by inserting ``or notice of status under section 
     527(i)'' after ``section 501'' and by inserting ``or any 
     notice materials'' after ``materials'' in paragraph 
     (1)(A)(ii),
       (C) by inserting or ``or such notice materials'' after 
     ``materials'' in paragraph (1)(B), and
       (D) by adding at the end the following new paragraph:
       ``(6) Notice materials.--For purposes of paragraph (1), the 
     term `notice materials' means the notice of status filed 
     under section 527(i) and any papers submitted in support of 
     such notice and any letter or other document issued by the 
     Internal Revenue Service with respect to such notice.''.
       (c) Failure to Make Public.--Section 6652(c)(1)(D) of the 
     Internal Revenue Code of 1986 (relating to public inspection 
     of applications for exemption) is amended--
       (1) by inserting ``or notice materials (as defined in such 
     section)'' after ``section)'', and
       (2) by inserting ``and notice of status'' after 
     ``exemption'' in the heading.
       (d) Effective Date.--
       (1) In general.--Except as provided in paragraphs (2) and 
     (3), the amendments made by this section shall take effect on 
     the date of the enactment of this section.
       (2) Organizations already in existence.--In the case of an 
     organization established before the date of the enactment of 
     this section, the time to file the notice under section 
     527(i)(2) of the Internal Revenue Code of 1986, as added by 
     this section, shall be 30 days after the date of the 
     enactment of this section.
       (3) Information availability.--The amendment made by 
     subsection (b)(2) shall take effect on the date that is 45 
     days after the date of the enactment of this section.

     SEC. 2. DISCLOSURES BY POLITICAL ORGANIZATIONS.

       (a) Required Disclosure of 527 Organizations.--Section 527 
     of the Internal Revenue Code of 1986 (relating to political 
     organizations), as amended by section 1(a), is amended by 
     adding at the end the following new section:
       ``(j) Required Disclosure of Expenditures and 
     Contributions.--
       ``(1) Denial of exemption.--An organization shall not be 
     treated as an organization described in this section unless 
     it makes the required disclosures under paragraph (2).
       ``(2) Required disclosure.--A political organization which 
     accepts a contribution, or makes an expenditure, for an 
     exempt function during any calendar year shall file with the 
     Secretary either--
       ``(A)(i) in the case of a calendar year in which a 
     regularly scheduled election is held--
       ``(I) quarterly reports, beginning with the first quarter 
     of the calendar year in which a contribution is accepted or 
     expenditure is made, which shall be filed not later than the 
     15th day after the last day of each calendar quarter, except 
     that the report for the quarter ending on December 31 of such 
     calendar year shall be filed not later than January 31 of the 
     following calendar year,
       ``(II) a pre-election report, which shall be filed not 
     later than the 12th day before (or posted by registered or 
     certified mail not later than the 15th day before) any 
     election with respect to which the organization makes a 
     contribution or expenditure, and which shall be complete as 
     of the 20th day before the election, and
       ``(III) a post-general election report, which shall be 
     filed not later than the 30th day after the general election 
     and which shall be complete as of the 20th day after such 
     general election, and
       ``(ii) in the case of any other calendar year, a report 
     covering the period beginning January 1 and ending June 30, 
     which shall be filed no later than July 31 and a report 
     covering the period beginning July 1 and ending December 31, 
     which shall be filed no later than January 31 of the 
     following calendar year, or
       ``(B) monthly reports for the calendar year, beginning with 
     the first month of the calendar year in which a contribution 
     is accepted or expenditure is made, which shall be filed not 
     later than the 20th day after the last day of the month and 
     shall be complete as if the last day of the month, except 
     that, in lieu of filing the reports otherwise due in November 
     and December of any year in which a regularly scheduled 
     general election is held, a pre-general election report shall 
     be filed in accordance with subparagraph (A)(i)(II), a post-
     general election report shall be filed in accordance with 
     subparagraph (A)(i)(III), and a year end report shall be 
     filed not later than January 31 of the following calendar 
     year.
       ``(3) Contents of report.--A report required under 
     paragraph (2) shall contain the following information:
       ``(A) The amount of each expenditure made to a person if 
     the aggregate amount of expenditures to such person during 
     the calendar year equals or exceeds $500 and the name and 
     address of the person (in the case of an individual, include 
     the occupation and name of employer of such individual).
       ``(B) The name and address (in the case of an individual, 
     include the occupation and name of employer of such 
     individual) of all contributors which contributed an 
     aggregate amount of $200 or more to the organization during 
     the calendar year and the amount of the contribution.
     Any expenditure or contribution disclosed in a previous 
     reporting period is not required to be included in the 
     current reporting period.
       ``(4) Contracts to spend or contribute.--For purposes of 
     this subsection, a person shall be treated as having made an 
     expenditure or contribution if the person has contracted or 
     is otherwise obligated to make the expenditure or 
     contribution.
       ``(5) Coordination with other requirements.--This 
     subsection shall not apply--
       ``(A) to any person required (without regard to this 
     subsection) to report under the Federal Election Campaign Act 
     of 1971 (2 U.S.C. 431 et seq.) as a political committee,
       ``(B) to any State or local committee of a political party 
     or political committee of a State or local candidate,
       ``(C) to any organization which reasonably anticipates that 
     it will not have gross receipts of $25,000 or more for any 
     taxable year,
       ``(D) to any organization to which this section applies 
     solely by reason of subsection (f)(1), or
       ``(E) with respect to any expenditure which is an 
     independent expenditure (as defined in section 301 of such 
     Act).
       ``(6) Election.--For purposes of this subsection, the term 
     `election' means--
       ``(A) a general, special, primary, or runoff election for a 
     Federal office,
       ``(B) a convention or caucus of a political party which has 
     authority to nominate a candidate for Federal office,
       ``(C) a primary election held for the selection of 
     delegates to a national nominating convention of a political 
     party, or
       ``(D) a primary election held for the expression of a 
     preference for the nomination of individuals for election to 
     the office of President.''.
       (b) Public Disclosure of Reports.--
       (1) In general.--Section 6104(d) of the Internal Revenue 
     Code of 1986 (relating to public inspection of certain annual 
     returns and applications for exemption), as amended by 
     section 1(b)(4), is amended--
       (A) by inserting ``Reports,'' after ``Returns,'' in the 
     heading,
       (B) in paragraph (1)(A), by striking ``and'' at the end of 
     clause (i), by inserting ``and'' at the end of clause (ii), 
     and by inserting after clause (ii) the following new clause:
       ``(iii) the reports filed under section 527(j) (relating to 
     required disclosure of expenditures and contributions) by 
     such organization,'', and
       (C) in paragraph (1)(B), by inserting ``, reports,'' after 
     ``return''.
       (2) Disclosure of contributors allowed.--Section 
     6104(d)(3)(A) of such Code (relating to nondisclosure of 
     contributors, etc.) is amended by inserting ``or a political 
     organization exempt from taxation under section 527'' after 
     ``509(a))''.
       (3) Disclosure by internal revenue service.--Section 
     6104(d) of such Code is amended by adding at the end the 
     following new paragraph:
       ``(6) Disclosure of reports by internal revenue service.--
     Any report filed by an organization under section 527(j) 
     (relating to required disclosure of expenditures and 
     contributions) shall be made available to the public at such 
     times and in such places as the Secretary may prescribe.''.
       (c) Failure to Make Public.--Section 6652(c)(1)(C) of the 
     Internal Revenue Code of 1986 (relating to public inspection 
     of annual returns) is amended--
       (1) by inserting ``or report required under section 
     527(j)'' after ``filing)'',
       (2) by inserting ``or report'' after ``1 return'', and

[[Page S4113]]

       (3) by inserting ``and reports'' after ``returns'' in the 
     heading.
       (d) Effective Date.--The amendment made by subsection (a) 
     shall apply to expenditures made and contributions received 
     after the date of enactment of this Act, except that such 
     amendment shall not apply to expenditures made, or 
     contributions received, after such date pursuant to a 
     contract entered into on or before such date.

     SEC. 3. RETURN REQUIREMENTS RELATING TO SECTION 527 
                   ORGANIZATIONS.

       (a) Return Requirements.--
       (1) Organizations required to file.--Section 6012(a)(6) of 
     the Internal Revenue Code of 1986 (relating to political 
     organizations required to make returns of income) is amended 
     by inserting ``or which has gross receipts of $25,000 or more 
     for the taxable year (other than an organization to which 
     section 527 applies solely by reason of subsection (f)(1) of 
     such section)'' after ``taxable year''.
       (2) Information required to be included on return.--Section 
     6033 of such Code (relating to returns by exempt 
     organizations) is amended by redesignating subsection (g) as 
     subsection (h) and inserting after subsection (f) the 
     following new subsection:
       ``(g) Returns Required by Political Organizations.--In the 
     case of a political organization required to file a return 
     under section 6012(a)(6)--
       ``(1) such organization shall file a return--
       ``(A) containing the information required, and complying 
     with the other requirements, under subsection (a)(1) for 
     organizations exempt from taxation under section 501(a), and
       ``(B) containing such other information as the Secretary 
     deems necessary to carry out the provisions of this 
     subsection, and
       ``(2) subsection (a)(2)(B) (relating to discretionary 
     exceptions) shall apply with respect to such return.''.
       (b) Public Disclosure of Returns.--
       (1) Returns made available by secretary.--
       (A) In general.--Section 6104(b) of the Internal Revenue 
     Code of 1986 (relating to inspection of annual information 
     returns) is amended by inserting ``6012(a)(6),'' before 
     ``6033''.
       (B) Contributor information.--Section 6104(b) of such Code 
     is amended by inserting ``or a political organization exempt 
     from taxation under section 527'' after ``509(a)''.
       (2) Returns made available by organizations.--
       (A) In general.--Paragraph (1)(A)(i) of section 6104(d) of 
     such Code (relating to public inspection of certain annual 
     returns, reports, applications for exemption, and notices of 
     status) is amended by inserting ``or section 6012(a)(6) 
     (relating to returns by political organizations)'' after 
     ``organizations)''.
       (B) Conforming amendments.--
       (i) Section 6104(d)(1) of such Code is amended in the 
     matter preceding subparagraph (A) by inserting ``or an 
     organization exempt from taxation under section 527(a)'' 
     after ``501(a)''.
       (ii) Section 6104(d)(2) of such Code is amended by 
     inserting ``or section 6012(a)(6)'' after ``section 6033''.
       (c) Failure to File Return.--Section 6652(c)(1) of the 
     Internal Revenue Code of 1986 (relating to annual returns 
     under section 6033) is amended--
       (1) by inserting ``or section 6012(c)(6) (relating to 
     returns by political organizations)'' after 
     ``organizations)'' in subparagraph (A)(i),
       (2) by inserting ``or section 6012(c)(6)'' after ``section 
     6033'' in subparagraph (A)(ii),
       (3) by inserting ``or section 6012(c)(6)'' after ``section 
     6033'' in the third sentence of subparagraph (A), and
       (4) by inserting ``or 6012(c)(6)'' after ``section 6033'' 
     in the heading.
       (d) Effective Date.--The amendments made by this section 
     shall apply to returns for taxable years beginning after June 
     30, 2000.

  Mr. JEFFORDS. Mr. President, I would first like to thank Senator 
Lieberman for his hard work in focusing the attention of the nation on 
the problems Section 527 organizations are creating in our campaign 
finance system. Today, I join Senator Lieberman and others in 
introducing two legislative vehicles to address the problems these 
organizations are bringing to our already troubled campaign finance 
system.
  Many years ago, James Madison said, ``A popular government without 
popular information is but a prologue to a tragedy or a farce or 
perhaps both. Knowledge will forever govern ignorance and a people who 
mean to be their own governors must arm themselves with the power which 
knowledge gives.''
  In clearer terms, Francis Bacon conveys the same principle in the 
saying, ``Knowledge is Power.''
  Mr. President, most people don't know what a section 527 organization 
is, and that is understandable as it is a highly complex issue. But 
what many people do understand is that our campaign finance system is 
broken and that we must do something to fix it.
  I have long believed in Justice Brandeis' statement that, ``Sunlight 
is said to be the best of disinfectants.'' People deserve to know 
before they step into the voting booth which individuals or 
organizations are sponsoring the advertisements, mailings, and phone 
banks they may see or hear from during an election. We need to shine 
some sunlight on these secretive Section 527 organizations so that 
people will know who or what is trying to influence their vote.
  Mr. President, the passage of either of these important pieces of 
legislation would help arm the people with the knowledge they need in 
order to exercise their civic duty and sustain our popular government.
  We must close the loophole allowing so-called ``Stealth PAC's'' 
organized under Section 527 of the tax code, to hide their donors, 
activities, even their very existence from public view. Doing so would 
be an important first step in helping restore the public's confidence 
in our political system.
  Mr. President, passage of this legislation would be one small step in 
eventually achieving our ultimate goal, which is enactment of 
meaningful campaign finance reform that includes increasing disclosure 
requirements and the banning of soft money. It is time to work 
together. It is time to act. It is time to pass campaign finance 
reform.
  Mr. LEVIN. Mr. President, I am pleased to be joining Senators 
Lieberman, Daschle, McCain, Feingold, and others today in sponsoring 
this legislation to close the Section 527 loophole in our campaign 
finance and tax laws.
  Section 527 of the IRS Code was originally created by Congress in the 
1970's to provide a category of tax exempt organizations for political 
parties and political committees. While contributions to a political 
party or political committee are not tax deductible to the contributor, 
Congress did provide a tax exemption to the political organization for 
the money contributed. At the time Congress established the tax 
exemption, it assumed that since the sole stated purpose of such 
organizations is to influence elections, the organizations would be 
filing a more complete disclosure with the FEC under the campaign 
finance laws and consequently it wasn't necessary to require disclosure 
with the IRS. Once a federal court ruled in 1996 that coverage under 
the federal election laws required advocating the election or defeat of 
a specific candidate and not just seeking to influence the outcome of 
an election, the backbone of disclosure for Section 527 political 
organizations dissolved. Section 527 organizations could get the tax 
exemption for a political organization without having to follow the 
requirements--both the disclosure requirements and the contribution 
limits--of the federal election laws. Thus, an organization can state 
openly to the IRS that it is spending money for the sole purpose of 
influencing an election and get a tax exemption under Section 527, yet 
it can avoid registering with the Federal Election Commission because 
it can argue that its influence is not directed at a specific 
candidate. That's the kind of Alice-in-Wonderland logic we've got with 
this loophole.
  Today we are offering two alternative solutions to the Section 527 
problem. One bill would apply filing requirements to Section 527 
organizations that are required of other tax exemption organizations in 
the Tax Code and add new requirements to disclose contributions to the 
public; the other would require a Section 527 organization to comply 
with the federal election laws, as was originally contemplated when 
Congress created Section 527 in the first place. Given the limited 
number of legislative days remaining, we think it wise to pass, at a 
minimum, the bill requiring disclosure under tax code, although as a 
long-term solution, we favor the bill requiring disclosure and limits 
under the federal campaign laws.
  Mr. President, the Section 527 loophole in our federal campaign laws 
is a bipartisan problem that requires and deserves a bipartisan 
solution. Supporters of both parties have Section 527 organizations. 
This is a loophole in our laws that you can drive not only a truck 
through, but a convoy of trucks. And that's what's happening as we 
speak. Individuals and organizations that want to affect our federal 
elections but don't want to be restricted by our federal election laws 
are making tracks to Section 527 and establishing Section 527 
organizations to run their election ads--without disclosure, without 
contribution limits.
  Now those ads--like other sham issue ads--can't say ``vote for'' or 
``don't

[[Page S4114]]

elect'', but they can go right up to that line and make essentially the 
same point.
  Mr. President, even if a Member of this body doesn't support campaign 
finance reform, he or she can support this legislation, because it is 
about disclosure and it eliminates an unintended consequence of the 
convergence of two laws--the tax laws and the campaign finance laws. 
Congress never intended to allow Section 527 organizations to escape 
both disclosure and campaign finance limits. Yet that's what's happened 
as a result of recent interpretations by the IRS and a U.S. District 
Judge. Our legislation reverses these interpretations and reinstates 
Congressional intent.
  In late January of this year, the staff of the Joint Committee on 
Taxation released a study of the Disclosure Provisions Relating to Tax-
Exempt Organizations. In that study, the bipartisan staff addressed 
Section 527 organizations and the JCT staff recommended: that 527 
organizations be required to ``disclose information relating to their 
activities to the public . . .''; and that 527 organizations ``be 
required to file an annual return even if the organizations do not have 
taxable income and that the annual return should be expanded to include 
more information regarding the activities of the organization.'' 
[Section 527 organizations currently aren't even required to file a tax 
return.]
  The JCT report said, ``This recommendation is consistent with the 
recommendation that all tax returns relating to tax-exempt 
organizations should be disclosable.''
  As the 2000 campaign evolves and we get closer to November, the 
American public is going to be seeing the consequences--the real life 
consequences of this loophole in our campaign finance laws. Candidates 
from both parties are going to be hit with ads by groups with names 
that sound like responsible civic organizations but which in reality 
are nothing more than well financed political opponents. But the damage 
from such ads will be incurred well before a candidate can even catch 
his or her breath much the less make any headway in identifying the 
source of the money behind the ads. That's why we need this legislation 
now.
                                 ______
                                 
      By Mr. ROBB (for himself and Mr. Warner):
  S. 2584. A bill to provide for the allocation of interest accruing to 
the Abandoned Mine Reclamation Fund, and for other purposes; to the 
Committee on Energy and Natural Resources.


              coal accountability and retired employee act

  Mr. ROBB. Mr. President, I am pleased to introduce the Coal 
Accountability and Retired Employee Act for the 21st Century. This 
legislation would authorize a transfer of interest from the Abandoned 
Mine Reclamation Fund to the United Mine Worker Combined Benefit Fund 
so that we can keep our promise of paying for our retired coal miner's 
health benefits.
  In the 1992 Coal Act, a promise was made to retired coal miners and 
their families that they would have health benefits. In a few short 
months, the available funds for these health benefits will be 
exhausted. We cannot allow this to happen. We made a promise--we must 
keep it.
  Last week, Senator Rockefeller introduced similar legislation to 
authorize a transfer from general revenues to pay for the shortfall in 
the retiree health benefits fund. Senator Rockefeller has been a leader 
on this issue for many years and I strongly support his approach. Last 
year, thanks to the dogged determination of Senator Byrd, we were able 
to postpone the inevitable by getting additional funding. This funding, 
however, will run out in several months. The time has come to make good 
on the promise to the retired coal miners. This legislation will give 
retired coal miners and their families the health benefits they 
deserve.
                                 ______
                                 
      By Mr. GRAHAM (for himself, Mr. Jeffords, Mr. Grassley, and Mr. 
        Rockefeller):
  S. 2585. A bill to amend titles IV and XX of the Social Security Act 
to restore funding for the Social Services Block Grant, to restore the 
ability of the States to transfer up to 10 percent of TANF funds to 
carry out activities under such block grant, and to require an annual 
report on such activities by the Secretary of Health and Human 
Services; to the Committee on Finance.


               protecting the social services block grant

  Mr. GRAHAM. Mr. President, I rise today with my colleagues Senators 
Jeffords, Grassley, and Rockefeller to introduce a bill to restore 
critical funding to the Social Services Block Grant (SSBG).
  Mr. President, the Social Services Block Grant, Title XX of the 
Social Security Act, was created in 1981 by combining funding for 
social services and related staff training, and was intended to be the 
primary source of federal funds for social services. Funds are 
allocated to states on a per capita basis and they can use them to 
address abuse and neglect and to encourage self sufficiency and 
independence.
  Since its creation, SSBG has successfully provided states with funds 
to address the social service needs they see as most pressing. States 
have broad flexibility in determining which services meet the needs of 
their unique populations, who should deliver the services and which 
families and individuals to serve. The array of needed programs covered 
under this important block grant range from adoption services to adult 
protective services--from home delivered meals to day care--from 
education and training programs to residential treatment services.
  In the 1996 welfare law, an agreement was made between Congress and 
the States to decrease the SSBG from $2.8b to $2.38b until welfare 
reform was firmly established. The Finance Committee guaranteed states 
that SSBG would be funded at $2.38 billion per year until FY03 when it 
would be restored to $2.8b. In order to allow them to continue to fund 
critical social service programs, Congress allowed states to transfer 
10 percent of its Temporary Assistance for Needy Families (TANF) block 
grant to SSBG. This was an important promise that has been broken. This 
legislation allows us to return to our promise and an agreement that 
was critical to the success of the new welfare system.
  As members of the Finance Committee, we have an acute understanding 
of the value of the programs over which we have oversight 
responsibilities. We have consistently worked, with some success, to 
ensure the foundation of SSBG.
  This overarching commitment was exemplified during the FY 2000 budget 
process. The Senate showed its bipartisan support for this important 
program by voting 57-39 to restore Title XX funding to its authorized 
level of $2.38 billion. Unfortunately, in the final omnibus 
appropriations bill, Title XX funding was cut from its authorized level 
of $2.38 billion to $1.775 billion. This $600 million cut is having a 
direct impact on the availability of necessary services for the 
nation's neediest citizens.

  This year, the Appropriations Subcommittee on Labor, Health, and 
Human Services and Education has included draconian cuts to this 
critical program by decreasing the funding levels from $1.7 billion to 
$600 million. This level of reduction is simply unacceptable and would 
virtually bankrupt the program.
  Our bill would ensure that Title XX funds would remain available to 
support needed services for children and families in crisis. The block 
grant has also been one of the only funding sources available for 
community-based services for elderly and disabled persons. It is 
unconscionable that this critical source of funding for the most basic 
and necessary of social services has been cut by over $1 billion in a 
short five years, and that the Senate Appropriations Committee would 
suggest a billion dollar cut in one year alone.
  If adequate funding for this program is not restored to SSBG, 
vulnerable children, families, elderly, and disabled persons will be 
without the assistance they need to live independently. Title XX 
provides the support necessary for families in crisis, the elderly, and 
many persons with both physical and mental disabilities to live 
independently in the community. These funds also provide support 
through childcare and counseling, both of which are necessary for 
persons with multiple barriers to employment to successfully leave the 
TANF rolls.
  The importance of the Social Services Block Grant is not only 
recognized

[[Page S4115]]

by state and local governments, but also by non profit providers across 
the country who have joined together with governments in support of 
this block grant. Congress needs to also recognize the Social Services 
Block Grant as the critical safety-net program that it is, and pass our 
bill to restore funding to the levels necessary to keep our promise to 
our neediest citizens.
  I hope that my Senate colleagues will join us in cosponsoring this 
critical piece of legislation.
  Mr. GRASSLEY. Mr. President, I am very pleased to join my esteemed 
colleagues, Senators Graham and Jeffords, in introducing this important 
piece of legislation. Title XX, the Social Services Block Grant, is 
crucial to states. Congress needs to meet its earlier commitment to 
this program and restore funding to the level authorized in 1996.
  The Social Services Block Grant allows states the flexibility to fill 
in the gaps in their human services system. Through this funding, 
states, local governments and non-profit organizations can supplement 
other federal programs and leverage additional funding and resources to 
support an array of social service programs that are critical to those 
in need.
  Millions of elderly people have benefitted from Title XX as have 
hundreds of thousand of individuals with disabilities. States use these 
funds to help support crucial services such as respite care for the 
elderly, adult protective services, supported living and transportation 
for the disabled. In recent years, more than a quarter of these funds 
have been used to support children's services. Child protective 
services, foster care and adoption programs have all been supplemented 
with these funds.
  In my home state of Iowa, Social Services Block Grant funds are used 
to supplement numerous service programs. One program uses these funds 
to help transport individuals with developmental disabilities to their 
jobs and so that they may receive medical treatment. Funds are also 
used to help people with disabilities live in their communities, saving 
significant amounts of money that would otherwise go to caring for them 
in institutions.
  Congress has consistently cut this important program in order to pay 
for other things. It is time that we restore funding to the level we 
authorized in 1996. Without this funding, important services that 
protect children, the elderly and the disabled will not be provided. I 
urge my other colleagues in the Senate to support our efforts to 
restore this program to the necessary level of funding.

                          ____________________