[Congressional Record Volume 146, Number 100 (Thursday, July 27, 2000)]
[Senate]
[Pages S7841-S7908]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. BREAUX:
S. 2944. A bill to clarify that certain penalties provided for in the
Oil Pollution Act of 1990 are the exclusive criminal penalties for any
action or activity that may arise or occur in connection with certain
discharges of oil or a hazardous substance; to the Committee on
Environment and Public Works.
Strict Criminal Liability Reform for Oil Spill Incidents
Mr. BREAUX. Mr. President, I am pleased to introduce legislation to
address a long-standing problem which adversely affects the safe and
reliable maritime transport of oil products. The legislation I am
introducing today will eliminate the application and use of strict
criminal liability statutes, statutes that do not require a showing of
criminal intent or even the slightest degree of negligence, for
maritime transportation-related oil spill incidents.
Through comprehensive Congressional action that led to the enactment
and implementation of the Oil Pollution Act of 1990, commonly referred
to as ``OPA90'', the United States has successfully reduced the number
of oil spills in the maritime environment and has established a
cooperative public/private partnership to respond effectively in the
diminishing number of situations when an oil spill occurs. Nonetheless,
over the past decade, the use of the unrelated strict criminal
liability statutes that I referred to above has undermined the spill
prevention and response objectives of OPA90, the very objectives that
were established by the Congress to preserve the environment, safeguard
the public welfare, and promote the safe transportation of oil. The
legislation I am introducing today will restore the delicate balance of
interests reached in OPA90, and will reaffirm OPA90's preeminent role
as the statute providing the exclusive criminal penalties for oil spill
incidents.
As stated in the Coast Guard's own environmental enforcement
directive, a company, its officers, employees, and mariners, in the
event of an oil spill ``could be convicted and sentenced to a criminal
fine even where [they] took all reasonable precautions to avoid the
discharge''. Accordingly, responsible operators in my home state of
Louisiana and elsewhere in the United States who transport oil are
unavoidably exposed to potentially immeasurable criminal fines and, in
the worst case scenario, jail time. Not only is this situation unfairly
targeting an industry that plays an extremely important role in our
national economy, but it also works contrary to the public welfare.
Most liquid cargo transportation companies on the coastal and inland
waterway system of the United States have embraced safe operation and
risk management as two of their most important and fundamental values.
For example, members of the American Waterways Operators (AWO) from
Louisiana and other states have implemented stronger safety programs
that have significantly reduced personal injuries to mariners. Tank
barge fleets have been upgraded through construction of new state-of-
the-art double hulled tank barges while obsolete single skin barges are
being retired far in advance of the OPA90 timetable. Additionally, AWO
members have dedicated significant time and financial resources to
provide continuous and comprehensive education and training for vessel
captains, crews and shoreside staff, not only in the operation of
vessels but also in preparation for all contingencies that could occur
in the transportation of oil products. This commitment to marine safety
and environmental protection by responsible members of the oil
transportation industry is real. The industry continues to work closely
with the Coast Guard to upgrade regulatory standards in such key areas
as towing vessel operator qualifications and navigation equipment on
towing vessels.
Through the efforts of AWO and other organizations, the maritime
transportation industry has achieved an outstanding compliance record
with the numerous laws and regulations enforced by the Coast Guard. Let
me be clear: responsible carriers, and frankly their customers, have a
``zero tolerance'' policy for oil spills. Additionally, the industry is
taking spill response preparedness seriously. Industry representatives
and operators routinely participate in Coast Guard oil spill crisis
management courses, PREP Drills, and regional spill response drills.
Yet despite all of the modernization, safety, and training efforts of
the marine transportation industry, their mariners and shoreside
employees cannot escape the threat of criminal liability in the event
of an oil spill, even where it is shown that they ``took all reasonable
precautions to avoid [a] discharge''.
As you know, in response to the tragic Exxon Valdez spill, Congress
enacted OPA90. OPA90 mandated new, comprehensive, and complex
regulatory and enforcement requirements for the transportation of oil
products and for oil spill response. Both the federal government and
maritime industry have worked hard to accomplish the legislation's
primary objective--to provide greater environmental safeguards in oil
transportation by creating a comprehensive prevention, response,
liability, and compensation regime to deal with vessel and facility oil
pollution. And OPA90 is working in a truly meaningful sense. To prevent
oil spill incidents from occurring in the first place, OPA90 provides
an enormously powerful deterrent, through both its criminal and civil
liability provisions. Moreover, OPA90 mandates prompt reporting of
spills, contingency planning, and both cooperation and coordination
with federal, state, and local authorities in connection with managing
the spill response. Failure to report and cooperate as required by
OPA90 may impose automatic civil penalties, criminal liability and
unlimited civil liability. As a result, the number of domestic oil
spills has been dramatically reduced over the past decade since OPA90
was enacted. In those limited situations in which oil spills
unfortunately occurred, intensive efforts commenced immediately with
federal, state and local officials working in a joint, unified manner
with the industry, as contemplated by OPA90, to clean up and report
spills as quickly as possible and to mitigate to the greatest extent
any impact on the environment. OPA90 has provided a comprehensive and
cohesive ``blueprint'' for proper planning, training, and resource
identification to respond to an oil spill incident, and to ensure that
such a response is properly and cooperatively managed.
OPA90 also provides a complete statutory framework for proceeding
against individuals for civil and/or criminal penalties arising out of
oil spills in the marine environment. When Congress crafted this Act,
it carefully balanced the imposition of stronger criminal and civil
penalties with the need to promote enhanced cooperation among all of
the parties involved in the spill prevention and response effort. In so
doing, the Congress clearly enumerated the circumstances in which
criminal penalties could be imposed for actions related to maritime oil
spills, and added and/or substantially increased criminal penalties
under the related laws which comprehensively govern the maritime
transportation of oil and other petroleum products.
The legislation we are introducing today will not change in any way
the tough criminal sanctions that were imposed in OPA90. However,
responsible, law-abiding members of the maritime industry in Louisiana
and elsewhere are concerned by the willingness of the Department of
Justice and other federal agencies in the post-OPA90 environment to use
strict criminal liability statutes in oil spill incidents. As you know,
strict liability imposes criminal sanctions without requiring a showing
of criminal knowledge, intent or even negligence. These federal actions
imposing strict liability have created an atmosphere of extreme
uncertainty for the maritime transportation industry about how to
respond to and cooperate with the Coast Guard and other federal
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agencies in cleaning up an oil spill. Criminal culpability in this
country, both historically and as reflected in the comprehensive OPA90
legislation itself, typically requires wrongful actions or omissions by
individuals through some degree of criminal intent or through the
failure to use the required standard of care. However, Federal
prosecutors have been employing other antiquated, seemingly unrelated
``strict liability'' statutes that do not require a showing of
``knowledge'' or ``intent'' as a basis for criminal prosecution for oil
spill incidents. Such strict criminal liability statutes as the
Migratory Bird Treaty Act and the Refuse Act, statutes that were
enacted at the turn of the century to serve other purposes, have been
used to harass and intimidate the maritime industry, and, in effect,
have turned every oil spill into a potential crime scene without regard
to the fault or intent of companies, corporate officers and employees,
and mariners.
The Migratory Bird Treaty Act (MBTA) (16 U.S.C. 703 et seq.) provides
that ``it shall be unlawful at any time, by any means or in any manner,
to pursue, hunt, take, capture, kill, attempt to take, capture, or
kill, . . . any migratory bird . . .'', a violation of which is
punishable by imprisonment and/or fines. Prior to the Exxon Valdez oil
spill in 1989, the MBTA was primarily used to prosecute the illegal
activities of hunters and capturers of migratory birds, as the Congress
originally intended when it enacted the MBTA in 1918. In the Exxon
Valdez case itself, and prior to the enactment of OPA90, the MBTA was
first used to support a criminal prosecution against a vessel owner in
relation to a maritime oil spill, and this ``hunting statute'' has been
used ever since against the maritime industry. The ``Refuse Act'' (33
U.S.C. 407, 411) was enacted over 100 years ago at a time well before
subsequent federal legislation essentially replaced it with
comprehensive requirements and regulations specifically directed to the
maritime transportation of oil and other petroleum products. Such
strict liability statutes are unrelated to the regulation and
enforcement of oil transportation activities, and in fact were not
included within the comprehensive OPA90 legislation as statutes in
which criminal liability could be found. With the prosecutorial use of
strict liability statutes, owners and mariners engaged in the
transportation of oil cannot avoid exposure to criminal liability,
regardless of how diligently they adhere to prudent practice and safe
environmental standards. Although conscientious safety and training
programs, state-of-the-art equipment, proper operational procedures,
preventative maintenance programs, and the employment of qualified and
experienced personnel will collectively prevent most oil spills from
occurring, unfortunately spills will still occur on occasion.
To illustrate this point, please permit me to present a scenario that
highlights the dilemma faced by the maritime oil transportation
industry in Louisiana. Imagine, if you will, that a company is
operating a towing vessel in compliance with Coast Guard regulations on
the Mississippi River on a calm, clear day with several fully laden
tank barges in tow. Suddenly, in what was charted and previously
identified to be a clear portion of the waterway, one of the tank
barges strikes an unknown submerged object which shears through its
hull and causes a significant oil spill in the river. Unfortunately, in
addition to any other environmental damage that may occur, the oil
spill kills one or more migratory birds. As you know, under OPA90 the
operator must immediately undertake coordinated spill response actions
with the Coast Guard and other federal, state, and local agencies to
safeguard the vessel and its crew, clean up the oil spill, and
otherwise mitigate any damage to the surrounding environment. The
overriding objectives at this critical moment are to assure personnel
and public safety and to clean up the oil spill as quickly as possible
without constraint. However, in the current atmosphere the operator
must take into consideration the threat of strict criminal liability
under the Migratory Bird Treaty Act and the Refuse Act, together with
their attendant imprisonment and fines, despite the reasonable care and
precautions taken in the operation and navigation of the tow and in the
spill response effort. Indeed, in the Coast Guard's own environmental
enforcement directive, the statement is made that ``[t]he decision to
commit the necessary Coast Guard resources to obtain the evidence that
will support a criminal prosecution must often be made in the very
early stages of a pollution incident.'' Any prudent operator will
quickly recognize the dilemma in complying with the mandate to act
cooperatively with all appropriate public agencies in cleaning up the
oil spill, while at the same time those very agencies may be conducting
a criminal investigation of that operator. Vessel owners and their
employees who have complied with federal laws and regulations and have
exercised all reasonable care should not continue to face a substantial
risk of imprisonment and criminal fines under such strict liability
statutes. Criminal liability, when appropriately imposed under OPA90,
should be employed only where a discharge is caused by conduct which is
truly ``criminal'' in nature, i.e., where a discharge is caused by
reckless, intentional or other conduct deemed criminal by OPA90.
As this scenario demonstrates, the unjustified use of strict
liability statutes is plainly undermining the very objectives which
OPA90 sought to achieve, namely to enhance the prevention of and
response to oil spills in Louisiana and elsewhere in the United States.
As we are well aware, tremendous time, effort, and resources have been
expended by both the federal government and the maritime industry to
eliminate oil spills to the maximum extent possible, and to plan for
and undertake an immediate and effective response to mitigate any
environmental damage from spills that do occur. Clearly unwarranted and
improper prosecutorial use of strict liability statutes is having a
``chilling'' effect on these cooperative spill prevention and response
efforts. Indeed, even if we were to believe that criminal prosecution
only follows intentional criminal conduct, the mere fact that strict
criminal liability statutes are available at the prosecutor's
discretion will intimidate even the most innocent and careful operator.
With strict liability criminal enforcement, responsible members of the
maritime transportation industry are faced with an extreme dilemma in
the event of an oil spill--provide less than full cooperation and
response as criminal defense attorneys will certainly direct, or
cooperate fully despite the risk of criminal prosecution that could
result from any additional actions or statements made during the course
of the spill response. Consequently, increased criminalization of oil
spill incidents introduces uncertainty into the response effort by
discouraging full and open communication and cooperation, and leaves
vessel owners and operators criminally vulnerable for response actions
taken in an effort to ``do the right thing''.
In the maritime industry's continuing effort to improve its risk
management process, it seeks to identify and address all foreseeable
risks associated with the operation of its business. Through fleet
modernization, personnel training, and all other reasonable steps to
address identified risks in its business, the industry still cannot
manage or avoid the increased risks of strict criminal liability
(again, a liability that has no regard to fault or intent). The only
method available to companies and their officers to avoid the risk of
criminal liability completely is to divest themselves from the maritime
business of transporting oil and other petroleum products, in effect to
get out of the business altogether. Furthermore, strict liability
criminal laws provide a strong disincentive for trained, highly
experienced mariners to continue the operation of tank vessels, and for
talented and capable individuals from even entering into that maritime
trade. An earlier editorial highlighted the fact that tugboat captains
``are reporting feelings of intense relief and lightening of their
spirits when they are ordered to push a cargo of grain or other dry
cargo, as compared to the apprehension they feel when they are staring
out of their wheelhouses at tank barges'', and ``that the reason for
this is very obvious in the way that they find themselves instantly
facing criminal charges . . . in the event of a collision or grounding
and oil or chemicals end up in the water''. Certainly, the federal
government does not want to create a situation where the least
experienced
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mariners are the only available crew to handle the most hazardous
cargoes, or the least responsible operators are the only available
carriers. Thus, the unavoidable risk of such criminal liability
directly and adversely affects the safe transportation of oil products,
an activity essential for the public, the economy, and the nation.
Therefore, despite the commitment and effort to provide trained and
experienced vessel operators and employees, to comply with all safety
and operational mandates of Coast Guard laws and regulations, and to
provide for the safe transportation of oil as required by OPA90,
maritime transportation companies in Louisiana, and elsewhere still
cannot avoid criminal liability in the event of an oil spill.
Responsible, law-abiding companies have unfortunately been forced to
undertake the only prudent action that they could under the
circumstances, namely the development of criminal liability action
plans and retention of criminal counsel in an attempt to prepare for
the unavoidable risks of such liability.
These are only preliminary steps and do not begin to address the many
implications of the increasing criminalization of oil spills. The
industry is now asking what responsibility does it have to educate its
mariners and shoreside staff about the potential personal exposure they
may face and wonder how to do this without creating many undesirable
consequences? How should the industry organize spill management teams
and educate them on how to cooperate openly and avoid unwitting
exposure to criminal liability? Mr. President, I have thought about
these issues a great deal and simply do not know how to resolve these
dilemmas under current, strict liability law. In the event of an oil
spill, a responsible party not only must manage the cleanup of the oil
and the civil liability resulting from the spill itself, but also must
protect itself from the criminal liability that now exists due to the
available and willing use of strict liability criminal laws by the
federal government. Managing the pervasive threat of strict criminal
liability, by its very nature, prevents a responsible party from
cooperating fully and completely in response to an oil spill situation.
The OPA90 ``blueprint'' is no longer clear. Is this serving the
objectives of OPA90? Does this really serve the public welfare of our
nation? Is this what Congress had in mind when it mandated its spill
response regime? Is this in the interest of the most immediate, most
effective oil spill cleanup in the unfortunate event of a spill? We
think not.
To restore the delicate balance of interests reached in the enactment
of OPA90 a decade ago, we intend to work with the Congress to reaffirm
the OPA90 framework for criminal prosecutions in oil spill incidents.
The enactment of the legislation we are introducing today will ensure
increased cooperation and responsiveness desired by all those
interested in oil spill response issues without diluting the deterrent
effect and stringent criminal penalties imposed by OPA90 itself.
I look forward to continuing the effort to upgrade the safety of
marine operations in the navigable waterways of the United States, and
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. 2944
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. AFFIRMATION OF PENALTIES UNDER OIL POLLUTION ACT
OF 1990.
(a) In General.--Notwithstanding any other provision or
rule of law, section 4301(c) and 4302 of the Oil Pollution
Act of 1990 (Public Law 101-380; 104 Stat. 537) and the
amendments made by those sections provide the exclusive
criminal penalties for any action or activity that may arise
or occur in connection with a discharge of oil or a hazardous
substance referred to in section 311(b)(3) of the Federal
Water Pollution Control Act (33 U.S.C. 1321(b)(3)).
(b) Rule of Construction.--Nothing in this section shall be
construed to limit, or otherwise exempt any person from,
liability for conspiracy to commit any offense against the
United States, for fraud and false statements, or for the
obstruction of justice.
______
By Mr. KENNEDY (for himself, Mr. Torricelli and Mr. Harkin):
S. 2946. A bill to amend title I of the Employee Retirement Income
Security Act of 1974 to ensure that employees are not improperly
disqualified from benefits under pension plans and welfare plans based
on a miscategorization of their employee status; to the Committee on
Health, Education, Labor, and Pensions.
employee benefits eligibility fairness act of 2000
Mr. KENNEDY. Mr. President, contingent workers in our society face
significant problems, and they deserve our help in meeting them. These
men and women--temporary and part-time workers, contract workers, and
independent contractors--continue to suffer unfairly, even in our
prosperous economy. A new report from the General Accounting Office
emphasizes that contingent workers often lack income security and
retirement security.
We know that for most workers today, a single lifetime job is a relic
of the past. The world is long gone in which workers stay with their
employer for many years, and then retire on a company pension. Since
1982 the number of temporary help jobs has grown 577 percent.
The GAO report shows that 30 percent of the workforce--39 million
working Americans--now get their paychecks from contingent jobs.
Contingent workers have lower incomes than traditional, full-time
workers and many are living in poverty. For example, 30 percent of
agency temporary workers have family incomes below $15,000. By
comparison, only 8 percent of standard full-time workers have family
incomes below $15,000.
Contingent workers are less likely to be covered by employer health
and retirement benefits than are standard, full-time workers. Even when
employers do sponsor a plan, contingent workers are less likely to
participate in the plan, either because they are excluded or because
the plan is too expensive. Only 21 percent of part-time workers are
included in an employer-sponsored pension plan. By comparison, 64
percent of standard full-time workers are included in their employer's
pension plan.
Non-standard or alternative work arrangements can meet the needs of
working families and employers alike, but these arrangements should not
be used to divide the workforce into ``haves'' and ``have-nots.''
Flexible work arrangements, for example, can give working parents more
time to care for their children, but many workers are not in their
contingent jobs by choice. More than half of temporary workers would
prefer a permanent job instead of their contingent job, but temporary
work is all they can find.
As the GAO report makes clear, employers have economic incentives to
cut costs by miscategorizing their workers as temporary or contract
workers. Too often, contingent arrangements are set-up by employers for
the purpose of excluding workers from their employee benefit programs
and evading their responsibilities to their workers. Millions of
employees have been miscategorized by their employers, and as a result
they have been denied the benefits and protections that they rightly
deserve and worked hard to earn.
All workers deserve a secure retirement at the end of their working
years. Social Security has been and will continue to be the best
foundation for that security. But the foundation is just that--the
beginning of our responsibility, not the end of it. We cannot expect
Americans to work hard all their lives, only to face poverty and hard
times when they retire.
That is why I am introducing, with Senators Torricelli and Harkin,
the Employee Benefits Eligibility Fairness Act of 2000 to help
contingent workers obtain the retirement benefits they deserve. This
legislation clarifies employers' responsibilities under the law so that
they cannot exclude contingent workers from employee benefit plans
based on artificial labels or payroll practices.
This is an issue of basic fairness for working men and women. It is
unfair for individuals who work full-time, on an indefinite long-term
basis for an employer to be excluded from the employer's pension plan,
merely because the employer classifies the workers as ``temporary''
when in fact they are not. The employer-employee relationship should be
determined on the facts of
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the working arrangement, not on artificial labels, not on artificial
accounting practices, not artificial payroll practices.
It is long past time for Congress to recognize the plight of
contingent workers and see that they get the employee benefits they
deserve. These important changes are critical to improving the security
of working families, and I look forward to their enactment.
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. 2946
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 ``Employee Benefits
Eligibility Fairness Act of 2000''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress makes the following findings:
(1) The intent of the Employee Retirement Income Security
Act of 1974 to protect the pension and welfare benefits of
workers is frustrated by the practice of mislabeling
employees to improperly exclude them from employee benefit
plans. Employees are wrongly denied benefits when they are
mislabeled as temporary employees, part-time employees,
leased employees, agency employees, staffing firm employees,
and contractors. If their true employment status were
recognized, mislabeled employees would be eligible to
participate in employee benefit plans because such plans are
offered to other employees performing the same or
substantially the same work and working for the same
employer.
(2) Mislabeled employees are often paid through staffing,
temporary, employee leasing, or other similar firms to give
the appearance that the employees do not work for their
worksite employer. Employment contracts and reports to
government agencies also are used to give the erroneous
impression that mislabeled employees work for staffing,
temporary, employee leasing, or other similar firms, when the
facts of the work arrangement do not meet the common law
standard for determining the employment relationship.
Employees are also mislabeled as contractors and paid from
non-payroll accounts to give the appearance that they are not
employees of their worksite employer. These practices violate
the Employee Retirement Income Security Act of 1974.
(3) Employers are amending their benefit plans to add
provisions that exclude mislabeled employees from
participation in the plan even in the event that such
employees are determined to be common law employees and
otherwise eligible to participate in the plan. These plan
provisions violate the Employee Retirement Income Security
Act of 1974.
(4) As a condition of employment or continued employment,
mislabeled employees are often required to sign documents
that purport to waive their right to participate in employee
benefit plans. Such documents inaccurately claim to limit the
authority of the courts and applicable Federal agencies to
correct the mislabeling of employees and to enforce the terms
of plans providing for their participation. This practice
violates the Employee Retirement Income Security Act of 1974.
(b) Purpose.--The purpose of this Act is to clarify
applicable provisions of the Employee Retirement Income
Security Act of 1974 to ensure that employees are not
improperly excluded from participation in employee benefit
plans as a result of mislabeling of their employment status.
SEC. 3. ADDITIONAL STANDARDS RELATING TO MINIMUM
PARTICIPATION REQUIREMENTS.
(a) Required Inclusion of Service.--Section 202(a)(3) of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1052(a)(3)) is amended by adding at the end the
following new subparagraph:
``(E) For purposes of this section, in determining `years
of service' and `hours of service', service shall include all
service for the employer as an employee under the common law,
irrespective of whether the worker--
``(i) is paid through a staffing firm, temporary help firm,
payroll agency, employment agency, or other such similar
arrangement,
``(ii) is paid directly by the employer under an
arrangement purporting to characterize an employee under the
common law as other than an employee, or
``(iii) is paid from an account not designated as a payroll
account.''
(b) Exclusion Precluded When Related to Certain Purported
Categorizations.--Section 202 of such Act (29 U.S.C. 1052) is
amended further by adding at the end the following new
subsection:
``(c)(1) Subject to paragraph (2), a pension plan shall be
treated as failing to meet the requirements of this section
if any individual who--
``(A) is an employee under the common law, and
``(B) performs the same work (or substantially the same
work) for the employer as other employees who generally are
not excluded from participation in the plan,
is excluded from participation in the plan, irrespective of
the placement of such employee in any category of workers
(such as temporary employees, part-time employees, leased
employees, agency employees, staffing firm employees,
contractors, or any similar category) which may be specified
under the plan as ineligible for participation.
``(2) Nothing in paragraph (1) shall be construed to
preclude the exclusion from participation in a pension plan
of individuals who in fact do not meet a minimum service
period or minimum age which is required under the terms of
the plan and which is otherwise in conformity with the
requirements of this section.''
SEC. 4. WAIVERS OF PARTICIPATION INEFFECTIVE IF RELATED TO
MISCATEGORIZATION OF EMPLOYEE.
Section 202 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1052) (as amended by section 3) is amended
further by adding at the end the following new subsection:
``(d) Any waiver or purported waiver by an employee of
participation in a pension plan or welfare plan shall be
ineffective if related, in whole or in part, to the a
miscategorization of the employee in 1 or more ineligible
plan categories.''
SEC. 5. OBJECTIVE ELIGIBILITY CRITERIA IN PLAN INSTRUMENTS.
Section 402 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1102) is amended by adding at the end the
following new subsection:
``(c)(1) The written instrument pursuant to which an
employee benefit plan is maintained shall set forth
eligibility criteria which--
``(A) include and exclude employees on a uniform basis;
``(B) are based on reasonable job classifications; and
``(C) are based on objective criteria stated in the
instrument itself for the inclusion or exclusion (other than
the mere listing of an employee as included or excluded).
``(2) No plan instrument may permit an employer or plan
sponsor to exclude an employee under the common law from
participation irrespective of the placement of such employee
in any category of workers (such as temporary employees,
leased employees, agency employees, staffing firm employees,
contractors, or any similar category) if the employee--
``(A) is an employee of the employer under the common law,
``(B) performs the same work (or substantially the same
work) for the employer as other employees who generally are
not excluded from participation in the plan, and
``(C) meets a minimum service period or minimum age which
is required under the terms of the plan.''
SEC. 6. ENFORCEMENT.
Section 502(a)(3)(B) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1132(a)(3)(B)) is amended--
(1) by striking ``or'' in clause (i) and inserting a comma,
(2) by striking the semicolon at the end of clause (ii) and
inserting ``, or'', and
(3) by adding at the end the following: ``(iii) to provide
relief to employees who have been miscategorized in violation
of sections 202 and 402;''.
SEC. 7. EFFECTIVE DATE.
The amendments made by this Act shall apply with respect to
plan years beginning on or after the date of the enactment of
this Act.
______
By Mr. CAMPBELL:
S. 2950. A bill to authorize the Secretary of the Interior to
establish the Sand Creek Massacre Historic Site in the State of
Colorado; to the Committee on Energy and Natural Resources.
introduction of legislation to create the sand creek national historic
site
Mr. CAMPBELL. Mr. President, today I introduce the Sand Creek
Massacre National Historic Site Establishment Act of 2000, legislation
which will finally recognize and memorialize the hallowed ground on
which hundreds of peaceful Cheyenne and Arapaho Indians were massacred
by members of the Colorado Militia.
The legislation I introduce today follows The Sand Creek Massacre
Historic Site Study Act of 1998, legislation I introduced and Congress
approved to study the suitability of creating an enduring memorial to
the slain innocents who were camped peacefully near Sand Creek, in
Kiowa County, in Colorado on November 28, 1868.
Much has been written about the horrors visited upon the plains
Indians in the territories of the Western United States in the latter
half of the 19th century. However, what has been lost for more than a
century is a comprehensive understanding of the events of that day in a
grove of cottonwood trees along Sand Creek now SE Colorado. In some
cases denial of the events of the day or a sense that ``the Indians had
it coming'' has prevailed.
This legislation finally recognizes a shameful event in our country's
history based on scientific studies, and
[[Page S7845]]
makes it clear America has the strength and resolve to face its past
and learn the painful lessons that come with intolerance.
The indisputable facts are these: 700 members of the Colorado
Militia, commanded by Colonel John Chivington struck at dawn that
November day, attacking a camp of Cheyenne and Arapaho Indians settled
under the U.S. Flag and a white flag which the Indian Chiefs Black
Kettle and White Antelope were told by the U.S. would protect them from
military attack.
By day's end, almost 150 Indians, many of them women, children and
the elderly, lay dead. Chivington's men reportedly desecrated the
bodies of the dead after the massacre, and newspaper reports from
Denver at the time told of the troops displaying Indian body parts in a
gruesome display as they rode through the streets of Colorado's largest
city following the attack.
The perpetrators of this horrible attack which left Indian women and
even babies dead, were never brought to justice even after a
congressional investigation concerning this brutality.
The legislation I introduce today authorizes the National Park
Service to enter into negotiations with willing sellers only, in an
attempt to secure property inside a boundary which encompasses
approximately 12,470 acres as identified by the National Park Service,
for a lasting memorial to events of that fateful day.
This legislation has been developed over the course of the last 18
months. It represents a remarkable effort which brought divergent
points of view together to define the events of that day and to plan
for the future protection of this site. The National Park Service, with
the cooperation of the Kiowa County Commissioners, the Cheyenne and
Arapaho Tribes of Oklahoma, the Northern Cheyenne Tribe and the
Northern Arapaho Tribe, the State of Colorado and many local landowners
and volunteers have completed extensive cultural, geomorphological and
physical studies of the area where the massacre occurred.
All of those involved in this project agree, not acting now is not a
option. This legislation does not compel any private property owner to
sell his or her property to the federal government. It allows the
National Park Service to negotiate with willing sellers to secure
property at fair market value, for a national memorial. This process
could take years. However, several willing sellers have come forward
and are willing to negotiate with the NPS. The property they own has
been identified by the NPS as suitable for a memorial. Additional
acquisitions of property from willing sellers could come in the future.
However, the Sand Creek National Historic Site could never extend
beyond the 12,470 acres identified by the site resource study already
completed.
This legislation has come to being because all of those involved have
exhibited an extraordinary ability to put aside their differences, look
with equal measure at the scientific evidence and the oral traditions
of the Tribes, and come up with a plan that equally honors the memory
of those killed and the rights of the private property owners who have
been faithful and responsible stewards of this site. We have a window
of opportunity here that will not always be available. I encourage my
colleagues to respect the memory of those so brutally killed and
support the creation of a National Historic Site on this hallowed
ground in Kiowa County, in Colorado.
I ask unanimous consent that the bill and other research material
associated with the studies of the Sand Creek site be printed in the
Record for my colleagues or the public to review.
______
By Mr. TORRICELLI:
S. 2953. A bill to amend title 38, United States Code, to improve
outreach programs carried out by the Department of Veterans Affairs to
provide for more fully informing veterans of benefits available to them
under laws administered by the Secretary of Veterans Affairs; to the
Committee on Veterans' Affairs.
The Veterans' Right to Know Act
Mr. TORRICELLI: Mr. President, I rise today to introduce the
Veterans' Right to Know Act which will assist millions of brave
Americans who have served this nation in times of war. This legislation
would ensure that all veterans are fully informed of the various
benefits that they have earned through their brave and dedicated
service to their country.
Throughout the history of the United States, the interests of our
nation have been championed by ordinary citizens who willingly defend
our nation when called upon. During the times of crisis which
threatened the very existence of our Republic, we persevered because
young men and women from all walks of life took up arms to defend the
ideals by which this nation was founded. Whether it was winning our
freedom from an oppressive empire, preserving our Union, defeating
fascism or battling the spread of communism, the American people have
time and time again answered the call to defend liberty, justice and
democracy at home and throughout the world.
Our government owes a debt of gratitude to each and every one of our
veterans, and we must make a concerted effort to show our appreciation
for their valiant service. The Department of Veterans Affairs (VA)
provides the necessary health care services and benefits to our war
heroes; however, over half of the veterans in the United States are not
fully aware of the benefits or pensions to which they are entitled.
The bill I introduced today is straightforward and it does not call
for the creation of new benefits. Rather, it seeks to ensure that our
veterans are well informed of the benefits they are entitled to as a
result of their service or injuries sustained during their service to
their country.
This legislation would require the VA to inform veterans about their
eligibility for benefits and health care services whenever they first
apply for any benefit with the VA. Furthermore, many times, widows and
surviving family members of veterans are not aware of the special
benefits available to them when their family member passes. My bill
would help these individuals in their time of loss by instructing the
VA to inform them of the benefits for which they are eligible on the
passing of their loved one.
My legislation also seeks to reach out to those veterans who are not
currently enrolled in the VA system by calling upon the Secretary of
Veterans Affairs to prepare an annual outreach plan that will encourage
eligible veterans to register with the VA as well as keeping current
enrollees aware of any changes to benefits or eligibility requirements.
This bill will help ensure that our government and its services for
veterans are there for the men and women who have served this nation in
the armed forces. I am hopeful that my colleagues in the Senate will
recognize the tremendous service that our veterans have given and
support this reasonable measure to ensure that our veterans receive the
benefits they deserve.
______
By Mr. HOLLINGS (for himself, Ms. Snowe, Mr. Kerrey, Mr. Stevens,
Mr. Breaux, and Mr. Cleland):
S. 2954. A bill to establish the Dr. Nancy Foster Marine Biology
Scholarship Program; to the Committee on Commerce, Science, and
Transportation.
The Nancy Foster Scholarship Act
Mr. HOLLINGS. Mr. President, I rise today to introduce the Nancy
Foster Scholarship Act, legislation to create a scholarship program in
marine biology or oceanography in honor of Dr. Nancy Foster, head of
the National Ocean Service at the National Oceanic and Atmospheric
Administration (NOAA) until her passing on Tuesday, June 27, 2000. I am
proud to introduce legislation to commemorate the life and work of such
a wonderful leader, mentor, and coastal advocate. I thank my colleagues
Senators Snowe, Kerry, Stevens, Breaux, and Cleland for joining me in
recognizing Dr. Foster's strong commitment to improving the
conservation and scientific understanding of our precious coastal
resources.
My legislation would create a Nancy Foster Marine Biology Scholarship
Program within the Department of Commerce. This Program would provide
scholarship funds to outstanding women and minority graduate students
to support and encourage independent graduate level research in marine
biology. It is my hope that this scholarship program will promote the
development of future leaders of Dr. Foster's caliber.
[[Page S7846]]
Dr. Foster was the first woman to direct a NOAA line office, and
during her 23 years at NOAA rose to one of the most senior levels a
career professional can achieve. She directed the complete
modernization of NOAA's essential nautical mapping and charting
programs, and created a ground-breaking partnership with the National
Geographic Society to launch a 5-year undersea exploration program
called the Sustainable Seas Expedition. Dr. Foster was a strong and
enthusiastic mentor to young people and a staunch ally to her
colleagues, and for this reason, I believe the legislation I am
introducing today to be the most appropriate way for us all to ensure
that her deep commitment to marine science continues on in others.
Mr. President, we will all feel Dr. Foster's loss deeply for years to
come. The creation of a scholarship program in her honor is one small
way we can thank a person who did so much for us all.
______
By Mr. DeWINE (for himself, Mr. Hatch, Mr. Voinovich, and Mr. Leahy);
S. 2955. A bill to amend the Internal Revenue Code of 1986 to provide
relief for the payment of asbestos-related claims; to the Committee on
Finance.
asbestos-related claims relief legislation
Mr. HATCH. Mr. President, I rise today as an original cosponsor of
the bill introduced today by my friend and colleague from Ohio, Senator
DeWine, that would provide relief for payment of asbestos-related
claims.
I urge my colleagues on the Finance Committee to take a close look at
the serious problem this bill addresses. Certain manufacturers who were
required by government specification to use asbestos in their products
are facing a severe financial crisis arising from claims made by
individuals who are suffering health problems from asbestos-related
diseases. These claims have put several of these companies into
bankruptcy, and several more appear to be on the brink of insolvency.
Thousands of jobs may be at stake, as may be the proper compensation of
the victims of the illnesses.
A major part of the underlying justification for this measure is that
the federal government shares some culpability in the harm caused by
the asbestos-related products manufactured by these companies. For
example, from World War II through the Vietnam War, the government
required that private contractors and shipyard workers use asbestos to
insulate navy ships from so-called ``secondary fires.'' Because of
sovereign immunity, however, the government has not had to share in
paying the damages, leaving American companies to bear the full and
ongoing financial load of compensation.
The legislation we are introducing today is a step toward recognizing
that the federal government is partially responsible for payment of
these claims. It does so through two income tax provisions, both of
which directly benefit the victims of the illnesses.
The first provision exempts from income tax the income earned by a
designated or qualified settlement fund established for the principal
purpose of resolving and satisfying present and future claims relating
to asbestos illnesses. The effect of this provision, Mr. President, is
to increase the amount of money available for the payment of these
claims.
The second provision allows taxpayers with specified liability losses
attributable to asbestos to carry back those losses to the tax year in
which the taxpayer, or its predecessor company, was first involved in
producing or distributing products containing asbestos.
This provision is a matter of fairness, Mr. President. Because of the
long latency period related to asbestos-related diseases, which can be
as long as 40 years, many of these claims are just now arising. Current
law provides for the carryback of this kind of liability losses, but
only for a ten-year period.
Many of the companies involved earned profits and paid taxes on those
profits in the years the asbestos-related products were made or
distributed. However, it is now clear, many years after the taxes were
paid, that there were no profits earned at all, since millions of
dollars of health claims relating to those products must now be paid.
It is only fair, and it is sound tax policy, to allow relief for
situations like these. Again, it should be emphasized that the primary
beneficiaries of this tax change will not be the corporations, but the
victims of the illnesses, because the taxpayer would be required to
devote the entire amount of the tax reduction to paying the claims.
This is not the only time the federal government has been at least
partially responsible for health problems of citizens that arose many
years after the event that initially triggered the problem. During the
Cold War, America conducted above ground atomic tests during which the
wind blew the fallout into communities and ranches of Utah, New Mexico
and Arizona. The government also demanded quantities of uranium, which
is harmful to those who mined and milled it. The incidence of cancers
and other debilitating diseases caused by this activity among the
``downwinders,'' miners and millers has been acknowledged by the
federal government.
The least we can do for those manufacturers forced to use asbestos
instead of other materials is provide some tax relief for their
compensation funds.
This legislation has substantial bipartisan backing. It is sponsored
in the House by both the Chairman and Ranking Minority Member of the
Judiciary Committee. It is backed by the by the U.S. Chamber of
Commerce and by at least one related labor union. This bill addresses a
very serious problem and is the right thing to do. I hope we can pass
it expeditiously.
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. 2955
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. EXEMPTION FOR ASBESTOS-RELATED SETTLEMENT FUNDS.
(a) Exemption for Asbestos-Related Settlement Funds.--
Subsection (b) of section 468B of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
paragraph:
``(6) Exemption from tax for asbestos-related designated
settlement funds.--Notwithstanding paragraph (1), no tax
shall be imposed under this section or any other provision of
this subtitle on any designated settlement fund established
for the principal purpose of resolving and satisfying present
and future claims relating to asbestos.''
(b) Conforming Amendments.--
(1) Paragraph (1) of section 468B(b) of the Internal
Revenue Code of 1986 is amended by striking ``There'' and
inserting ``Except as provided in paragraph (6), there''.
(2) Subsection (g) of section 468B of such Code is amended
by inserting ``(other than subsection (b)(6))'' after
``Nothing in any provision of law''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after the date of
enactment of this Act.
SEC. 2. MODIFY TREATMENT OF ASBESTOS-RELATED NET OPERATING
LOSSES.
(a) Asbestos-Related Net Operating Losses.--Subsection (f)
of section 172 of the Internal Revenue Code of 1986 is
amended by redesignating paragraphs (4), (5), and (6) as
paragraphs (5), (6), and (7), respectively, and by inserting
after paragraph (3) the following new paragraph:
``(4) Special rules for asbestos liability losses.--
``(A) In general.--At the election of the taxpayer, the
portion of any specified liability loss that is attributable
to asbestos may, for purposes of subsection (b)(1)(C), be
carried back to the taxable year in which the taxpayer,
including any predecessor corporation, was first involved in
the production or distribution of products containing
asbestos and each subsequent taxable year.
``(B) Coordination with credits.--If a deduction is
allowable for any taxable year by reason of a carryback
described in subparagraph (A)--
``(i) the credits allowable under part IV (other than
subpart C) of subchapter A shall be determined without regard
to such deduction, and
``(ii) the amount of taxable income taken into account with
respect to the carryback under subsection (b)(2) for such
taxable year shall be reduced by an amount equal to--
``(I) the increase in the amount of such credits allowable
for such taxable year solely by reason of clause (i), divided
by
``(II) the maximum rate of tax under section 1 or 11
(whichever is applicable) for such taxable year.
``(C) Carryforwards taken into account before asbestos-
related deductions.--For purposes of this section--
``(i) in determining whether a net operating loss
carryforward may be carried under subsection (b)(2) to a
taxable year, taxable income for such year shall be
determined
[[Page S7847]]
without regard to the deductions referred to in paragraph
(1)(A) with respect to asbestos, and
``(ii) if there is a net operating loss for such year after
taking into account such carryforwards and deductions, the
portion of such loss attributable to such deductions shall be
treated as a specified liability loss that is attributable to
asbestos.
``(D) Limitation.--The amount of reduction in income tax
liability arising from the election described in subparagraph
(A) that exceeds the amount of reduction in income tax
liability that would have resulted if the taxpayer utilized
the 10-year carryback period under subsection (b)(1)(C) shall
be devoted by the taxpayer solely to asbestos claimant
compensation and related costs, through a designated
settlement fund or otherwise.
``(E) Consolidated groups.--For purposes of this paragraph,
all members of an affiliated group of corporations that join
in the filing of a consolidated return pursuant to section
1501 (or a predecessor section) shall be treated as 1
corporation.
``(F) Predecessor corporation.--For purposes of this
paragraph, a predecessor corporation shall include a
corporation that transferred or distributed assets to the
taxpayer in a transaction to which section 381(a) applies or
that distributed the stock of the taxpayer in a transaction
to which section 355 applies.''
(b) Conforming Amendment.--Paragraph (7) of section 172(f)
of the Internal Revenue Code of 1986, as redesignated by this
section, is amended by striking ``10-year''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after the date of
enactment of this Act.
______
By Mr. CAMPBELL:
S. 2956. A bill to establish the Colorado Canyons National
Conservation Area and the Black Ridge Canyons Wilderness, and for other
purposes; to the Committee on Energy and Natural Resources.
colorado canyons preservation act of 2000
Mr. CAMPBELL. Mr. President, today I introduce legislation which
would preserve over 130,000 acres of land in Western Colorado. This
legislation is supported locally by property owners, county
commissioners, environmentalists, and recreational groups. My bill is a
Senate companion to H.R. 4275 which was introduced by my colleague and
fellow Coloradan Representative Scott McInnis.
The areas proposed for Wildernesss Protection are the Black Ridge and
Ruby Canyons of the Grand Valley and Rabbit Valley near Grand Junction,
Colorado. They contain unique and valuable scenic, recreational,
multiple use, paleontological, natural, and wildlife components. This
historic rural western setting provides extensive opportunities for
recreational activities, and are publicly used for hiking, camping, and
grazing. This area is truly worthy of additional protection as a
national conservation area.
This legislation has the support of the administration and should
easily be signed into law. The only issue confronting us is the limited
amount of time left in the 106th Congress. I hope we will be able to
move this legislation quickly through the process and that it will not
get bogged down in partisan politics. It simply is the right thing to
do.
I ask unanimous consent that the bill be printed in the Record
following my remarks.
Thank you, Mr. President. I yield the floor.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2956
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 ``Colorado Canyons National
Conservation Area and Black Ridge Canyons Wilderness Act of
2000''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds that certain areas located in
the Grand Valley in Mesa County, Colorado, and Grand County,
Utah, should be protected and enhanced for the benefit and
enjoyment of present and future generations. These areas
include the following:
(1) The areas making up the Black Ridge and Ruby Canyons of
the Grand Valley and Rabbit Valley, which contain unique and
valuable scenic, recreational, multiple use opportunities
(including grazing), paleontological, natural, and wildlife
components enhanced by the rural western setting of the area,
provide extensive opportunities for recreational activities,
and are publicly used for hiking, camping, and grazing, and
are worthy of additional protection as a national
conservation area.
(2) The Black Ridge Canyons Wilderness Study Area has
wilderness value and offers unique geological,
paleontological, scientific, and recreational resources.
(b) Purpose.--The purpose of this Act is to conserve,
protect, and enhance for the benefit and enjoyment of present
and future generations the unique and nationally important
values of the public lands described in section 4(b),
including geological, cultural, paleontological, natural,
scientific, recreational, environmental, biological,
wilderness, wildlife education, and scenic resources of such
public lands, by establishing the Colorado Canyons National
Conservation Area and the Black Ridge Canyons Wilderness in
the State of Colorado and the State of Utah.
SEC. 3. DEFINITIONS.
In this Act:
(1) Conservation area.--The term ``Conservation Area''
means the Colorado Canyons National Conservation Area
established by section 4(a).
(2) Council.--The term ``Council'' means the Colorado
Canyons National Conservation Area Advisory Council
established under section 8.
(3) Management plan.--The term ``management plan'' means
the management plan developed for the Conservation Area under
section 6(h).
(4) Map.--The term ``Map'' means the map entitled
``Proposed Colorado Canyons National Conservation Area and
Black Ridge Canyons Wilderness Area'' and dated July 18,
2000.
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Interior, acting through the Director of the Bureau of
Land Management.
(6) Wilderness.--The term ``Wilderness'' means the Black
Ridge Canyons Wilderness so designated in section 5.
SEC. 4. COLORADO CANYONS NATIONAL CONSERVATION AREA.
(a) In General.--There is established the Colorado Canyons
National Conservation Area in the State of Colorado and the
State of Utah.
(b) Areas Included.--The Conservation Area shall consist of
approximately 122,300 acres of public land as generally
depicted on the Map.
SEC. 5. BLACK RIDGE CANYONS WILDERNESS DESIGNATION.
Certain lands in Mesa County, Colorado, and Grand County,
Utah, which comprise approximately 75,550 acres as generally
depicted on the Map, are hereby designated as wilderness and
therefore as a component of the National Wilderness
Preservation System. Such component shall be known as the
Black Ridge Canyons Wilderness.
SEC. 6. MANAGEMENT.
(a) Conservation Area.--The Secretary shall manage the
Conservation Area in a manner that--
(1) conserves, protects, and enhances the resources of the
Conservation Area specified in section 2(b); and
(2) is in accordance with--
(A) the Federal Land Policy and Management Act of 1976 (43
U.S.C. 1701 et seq.); and
(B) other applicable law, including this Act.
(b) Uses.--The Secretary shall allow only such uses of the
Conservation Area as the Secretary determines will further
the purposes for which the Conservation Area is established.
(c) Withdrawals.--Subject to valid existing rights, all
Federal land within the Conservation Area and the Wilderness
and all land and interests in land acquired for the
Conservation Area or the Wilderness by the United States are
withdrawn from--
(1) all forms of entry, appropriation, or disposal under
the public land laws;
(2) location, entry, and patent under the mining laws; and
(3) the operation of the mineral leasing, mineral
materials, and geothermal leasing laws, and all amendments
thereto.
Nothing in this subsection shall be construed to affect
discretionary authority of the Secretary under other Federal
laws to grant, issue, or renew rights-of-way or other land
use authorizations consistent with the other provisions of
this Act.
(d) Off-Highway Vehicle Use.--
(1) In general.--Except as provided in paragraph (2), use
of motorized vehicles in the Conservation Area--
(A) before the effective date of a management plan under
subsection (h), shall be allowed only on roads and trails
designated for use of motor vehicles in the management plan
that applies on the date of the enactment of this Act to the
public lands in the Conservation Area; and
(B) after the effective date of a management plan under
subsection (h), shall be allowed only on roads and trails
designated for use of motor vehicles in that management plan.
(2) Administrative and emergency response use.--Paragraph
(1) shall not limit the use of motor vehicles in the
Conservation Area as needed for administrative purposes or to
respond to an emergency.
(e) Wilderness.--Subject to valid existing rights, lands
designated as wilderness by this Act shall be managed by the
Secretary, as appropriate, in accordance with the Wilderness
Act (16 U.S.C. 1131 et seq.) and this Act, except that, with
respect to any wilderness areas designated by this Act, any
reference in the Wilderness Act to the effective date of the
Wilderness Act shall be deemed to be a reference to the date
of the enactment of this Act.
(f) Hunting, Trapping, and Fishing.--
(1) In general.--Hunting, trapping, and fishing shall be
allowed within the Conservation Area and the Wilderness in
accordance
[[Page S7848]]
with applicable laws and regulations of the United States and
the States of Colorado and Utah.
(2) Area and time closures.--The head of the Colorado
Division of Wildlife (in reference to land within the State
of Colorado), the head of the Utah Division of Wildlife (in
reference to land within the State of Utah), or the Secretary
after consultation with the Colorado Division of Wildlife (in
reference to land within the State of Colorado) or the head
of the Utah Division of Wildlife (in reference to land within
the State of Utah), may issue regulations designating zones
where, and establishing limited periods when, hunting,
trapping, or fishing shall be prohibited in the Conservation
Area or the Wilderness for reasons of public safety,
administration, or public use and enjoyment.
(g) Grazing.--
(1) In general.--Except as provided by paragraph (2), the
Secretary shall issue and administer any grazing leases or
permits in the Conservation Area and the Wilderness in
accordance with the same laws (including regulations) and
Executive orders followed by the Secretary in issuing and
administering grazing leases and permits on other land under
the jurisdiction of the Bureau of Land Management.
(2) Grazing in wilderness.--Grazing of livestock in the
Wilderness shall be administered in accordance with the
provisions of section 4(d)(4) of the Wilderness Act (16
U.S.C. 1133(d)(4)), in accordance with the guidelines set
forth in Appendix A of House Report 101-405 of the 101st
Congress.
(h) Management Plan.--
(1) In general.--Not later than 3 years after the date of
the enactment of this Act, the Secretary shall develop a
comprehensive management plan for the long-range protection
and management of the Conservation Area and the Wilderness
and the lands described in paragraph (2)(E).
(2) Purposes.--The management plan shall--
(A) describe the appropriate uses and management of the
Conservation Area and the Wilderness;
(B) take into consideration any information developed in
studies of the land within the Conservation Area or the
Wilderness;
(C) provide for the continued management of the utility
corridor, Black Ridge Communications Site, and the Federal
Aviation Administration site as such for the land designated
on the Map as utility corridor, Black Ridge Communications
Site, and the Federal Aviation Administration site;
(D) take into consideration the historical involvement of
the local community in the interpretation and protection of
the resources of the Conservation Area and the Wilderness, as
well as the Ruby Canyon/Black Ridge Integrated Resource
Management Plan, dated March 1998, which was the result of
collaborative efforts on the part of the Bureau of Land
Management and the local community; and
(E) include all public lands between the boundary of the
Conservation Area and the edge of the Colorado River and, on
such lands, the Secretary shall allow only such recreational
or other uses as are consistent with this Act.
(i) No Buffer Zones.--The Congress does not intend for the
establishment of the Conservation Area or the Wilderness to
lead to the creation of protective perimeters or buffer zones
around the Conservation Area or the Wilderness. The fact that
there may be activities or uses on lands outside the
Conservation Area or the Wilderness that would not be allowed
in the Conservation Area or the Wilderness shall not preclude
such activities or uses on such lands up to the boundary of
the Conservation Area or the Wilderness consistent with other
applicable laws.
(j) Acquisition of Land.--
(1) In general.--The Secretary may acquire non-federally
owned land within the exterior boundaries of the Conservation
Area or the Wilderness only through purchase from a willing
seller, exchange, or donation.
(2) Management.--Land acquired under paragraph (1) shall be
managed as part of the Conservation Area or the Wilderness,
as the case may be, in accordance with this Act.
(k) Interpretive Facilities or Sites.--The Secretary may
establish minimal interpretive facilities or sites in
cooperation with other public or private entities as the
Secretary considers appropriate. Any facilities or sites
shall be designed to protect the resources referred to in
section 2(b).
(l) Water Rights.--
(1) Findings.--Congress finds that--
(A) the lands designated as wilderness by this Act are
located at the headwaters of the streams and rivers on those
lands, with few, if any, actual or proposed water resource
facilities located upstream from such lands and few, if any,
opportunities for diversion, storage, or other uses of water
occurring outside such lands that would adversely affect the
wilderness or other values of such lands;
(B) the lands designated as wilderness by this Act
generally are not suitable for use for development of new
water resource facilities, or for the expansion of existing
facilities;
(C) it is possible to provide for proper management and
protection of the wilderness and other values of such lands
in ways different from those utilized in other legislation
designating as wilderness lands not sharing the attributes of
the lands designated as wilderness by this Act.
(2) Statutory construction.--
(A) Nothing in this Act shall constitute or be construed to
constitute either an express or implied reservation of any
water or water rights with respect to the lands designated as
a national conservation area or as wilderness by this Act.
(B) Nothing in this Act shall affect any conditional or
absolute water rights in the State of Colorado existing on
the date of the enactment of this Act.
(C) Nothing in this subsection shall be construed as
establishing a precedent with regard to any future national
conservation area or wilderness designations.
(D) Nothing in this Act shall be construed as limiting,
altering, modifying, or amending any of the interstate
compacts or equitable apportionment decrees that apportion
water among and between the State of Colorado and other
States.
(3) Colorado water law.--The Secretary shall follow the
procedural and substantive requirements of the law of the
State of Colorado in order to obtain and hold any new water
rights with respect to the Conservation Area and the
Wilderness.
(4) New projects.--
(A) As used in this paragraph, the term ``water resource
facility'' means irrigation and pumping facilities,
reservoirs, water conservation works, aqueducts, canals,
ditches, pipelines, wells, hydropower projects, and
transmission and other ancillary facilities, and other water
diversion, storage, and carriage structures. Such term does
not include any such facilities related to or used for the
purpose of livestock grazing.
(B) Except as otherwise provided by section 6(g) or other
provisions of this Act, on and after the date of the
enactment of this Act, neither the President nor any other
officer, employee, or agent of the United States shall fund,
assist, authorize, or issue a license or permit for the
development of any new water resource facility within the
wilderness area designated by this Act.
(C) Except as provided in this paragraph, nothing in this
Act shall be construed to affect or limit the use, operation,
maintenance, repair, modification, or replacement of water
resource facilities in existence on the date of the enactment
of this Act within the boundaries of the Wilderness.
(5) Boundaries along colorado river.--(A) Neither the
Conservation Area nor the Wilderness shall include any part
of the Colorado River to the 100-year high water mark.
(B) Nothing in this Act shall affect the authority that the
Secretary may or may not have to manage recreational uses on
the Colorado River, except as such authority may be affected
by compliance with paragraph (3). Nothing in this Act shall
be construed to affect the authority of the Secretary to
manage the public lands between the boundary of the
Conservation Area and the edge of the Colorado River.
(C) Subject to valid existing rights, all lands owned by
the Federal Government between the 100-year high water mark
on each shore of the Colorado River, as designated on the Map
from the line labeled ``Line A'' on the east to the boundary
between the States of Colorado and Utah on the west, are
hereby withdrawn from--
(i) all forms of entry, appropriation, or disposal under
the public land laws;
(ii) location, entry, and patent under the mining laws; and
(iii) the operation of the mineral leasing, mineral
materials, and geothermal leasing laws.
SEC. 7. MAPS AND LEGAL DESCRIPTIONS.
(a) In General.--As soon as practicable after the date of
the enactment of this Act, the Secretary shall submit to
Congress a copy of the Map and a legal description of the
Conservation Area and of the Wilderness.
(b) Force and Effect.--The Map and legal descriptions shall
have the same force and effect as if included in this Act,
except that the Secretary may correct clerical and
typographical errors in the Map and the legal descriptions.
(c) Public Availability.--Copies of the Map and the legal
descriptions shall be on file and available for public
inspection in--
(1) the Office of the Director of the Bureau of Land
Management;
(2) the Grand Junction District Office of the Bureau of
Land Management in Colorado;
(3) the appropriate office of the Bureau of Land Management
in Colorado, if the Grand Junction District Office is not
deemed the appropriate office; and
(4) the appropriate office of the Bureau of Land Management
in Utah.
(d) Map Controlling.--Subject to section 6(l)(3), in the
case of a discrepancy between the Map and the descriptions,
the Map shall control.
SEC. 8. ADVISORY COUNCIL.
(a) Establishment.--Not later than 6 months after the date
of the enactment of this Act, the Secretary shall establish
an advisory council to be known as the ``Colorado Canyons
National Conservation Area Advisory Council''.
(b) Duty.--The Council shall advise the Secretary with
respect to preparation and implementation of the management
plan, including budgetary matters, for the Conservation Area
and the Wilderness.
(c) Applicable Law.--The Council shall be subject to--
(1) the Federal Advisory Committee Act (5 U.S.C. App.); and
(2) the Federal Land Policy and Management Act of 1976 (43
U.S.C. 1701 et seq.).
[[Page S7849]]
(d) Members.--The Council shall consist of 10 members to be
appointed by the Secretary including, to the extent
practicable:
(1) A member of or nominated by the Mesa County Commission.
(2) A member nominated by the permittees holding grazing
allotments within the Conservation Area or the Wilderness.
(3) A member of or nominated by the Northwest Resource
Advisory Council.
(4) Seven members residing in, or within reasonable
proximity to, Mesa County, Colorado, with recognized
backgrounds reflecting--
(A) the purposes for which the Conservation Area or
Wilderness was established; and
(B) the interests of the stakeholders that are affected by
the planning and management of the Conservation Area and the
Wilderness.
SEC. 9. PUBLIC ACCESS.
(a) In General.--The Secretary shall continue to allow
private landowners reasonable access to inholdings in the
Conservation Area and Wilderness.
(b) Glade Park.--The Secretary shall continue to allow
public right of access, including commercial vehicles, to
Glade Park, Colorado, in accordance with the decision in
Board of County Commissioners of Mesa County v. Watt (634 F.
Supp. 1265 (D.Colo.; May 2, 1986)).
______
By Mr. ROTH:
S. 2957. A bill to amend title XVIII of the Social Security Act to
preserve coverage of drugs and biologicals under part B of the medicare
program; to the Committee on Finance.
medicare self-administered medications act
Mr. ROTH. Mr. President, today I am introducing a bill to address a
serious problem regarding Medicare's treatment of self-injectable
drugs. Section 1862(s) of the Social Security Act defines covered
``medical and other health services'' for purposes of coverage under
Medicare Part B. Included in the definition are:
(2)(A) services and supplies (including drugs and
biologicals which cannot, as determined in accordance with
regulations, be self-administered) furnished as incident to a
physician's professional service, of kinds which are commonly
furnished in physicians' offices and are commonly either
rendered without charge or included in the physicians' bills
. . .
Regulations at 42 C.F.R. 410.29 provide further limitations on drugs
and biologicals, but they do not define the phrase ``cannot be self-
administered.'' Individual Medicare carriers have reportedly applied
different policies when considering whether a drug or biological can or
cannot be self-administered. Some carriers have based the determination
on the typical means of administration while others have assessed the
individual patient's ability to administer the drug.
On August 13, 1997, HCFA issued a memorandum to Medicare carriers
which was intended to clarify program policy. The memorandum stated
that the inability to self-administer is to be based on the typical
means of administration of the drug, not on the individual patient's
ability to administer the drug. The memorandum stated that: ``The
individual patient's mental or physical ability to administer any drug
is not a consideration for this purpose.''
As a result of this memorandum, certain patients, for example
patients with multiple sclerosis or some forms of cancer, no longer had
Medicare coverage for certain drugs. However, implementation of this
policy directive has been halted for FY2000. On November 29, 1999, the
President signed into law the Consolidated Appropriations Act for 2000.
Section 219 of General Provisions in Title II, Department of Health and
Human Services contains a provision relating to the memorandum. The
provision prohibits the use of any funds to carry out the August 13,
1997, transmittal or to promulgate any regulation or other transmittal
or policy directive that has the effect of imposing (or clarifying the
imposition of ) a restriction on the coverage of injectable drugs
beyond those applied on the day before issuance of the transmittal.
The definition of covered services continues to be of concern to
policymakers. On March 23, 2000, the House Commerce Committee,
Subcommittee on Health & Environment held a hearing on this issue. I
understand that there was a very productive discussion of other policy
options during the question and answer period. One witness, Dr. Earl
Steinberg of Johns Hopkins University, suggested having the
beneficiary's physician determine whether a medication can or cannot be
self-injected. The bill I am introducing today follows that expert
advice and introduces the judgment of the physician into the decision
process.
On May 17, 2000 I sent a letter to HCFA Administrator DeParle,
requesting her serious attention to this problem. I went further to ask
her to propose an administrative remedy for the inequity that existed.
In her reply, she stated that she was ``very troubled by the
predicament of beneficiaries whose drugs are not covered under the
law.'' But it is clear from Administrator DeParle's letter, that
without legislative authority there is only a limited amount HCFA will
do to address this problem.
The bill I am introducing today allows a Medicare beneficiary's own
physician to make the determination of whether the beneficiary can or
cannot administer their medication. I would ask for my colleagues'
support in this legislation. This issue is of vital importance to some
of our most gravely ill Medicare beneficiaries. These beneficiaries,
many with advanced cases of multiple sclerosis or cancer, deserve our
help and they deserve it today. I ask consent that the full text be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2957
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 ``Medicare Self-Administered
Medications Act of 2000''.
SEC. 2. PRESERVATION OF COVERAGE OF DRUGS AND BIOLOGICALS
UNDER PART B OF THE MEDICARE PROGRAM.
(a) In General.--Section 1861(s)(2) of the Social Security
Act (42 U.S.C. 1395x(s)(2)) is amended, in each of
subparagraphs (A) and (B), by striking ``(including drugs and
biologicals which cannot, as determined in accordance with
regulations, be self-administered)'' and inserting
``(including drugs and biologicals for which the usual method
of administration of the form of drug or biological is not
patient self-administration or, in the case of injectable
drugs and biologicals, for which the physician determines
that self-administration is not medically appropriate)''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to drugs and biologicals administered on or after
October 1, 2000.
______
By Mr. SANTORUM:
S. 2958. A bill to establish a national clearinghouse for youth
entrepreneurship education, and for other purposes; to the Committee on
Health, Education, Labor, and Pensions.
youth entrepreneurship clearinghouse and curriculum-based youth
entrepreneurship
Mr. SANTORUM. Mr. President, today I am introducing legislation to
empower at-risk youths and their communities. My legislation would
establish a national youth entrepreneurship clearinghouse and permit
curriculum-based youth entrepreneurship education as an allowable use
of funds. Only curriculum-based youth entrepreneurship programs that
demonstrate success in equipping disadvantaged youth with applied math
and other analytical skills would be eligible for assistance under this
measure. Students who participate in these programs learn basic
entrepreneurial skills and gain a better understanding of the
relationship between the subjects they learn in their classrooms and
the business world. By teaching students practical skills needed to
establish and maintain thriving entrepreneurial projects, the programs
empower students and prepare them for future endeavors as contributing
members of their communities. My legislation will instill pride in at-
risk youths by providing them with the opportunity to improve their
surroundings, while they explore and learn about the many career
choices available to them in the business world.
I am pleased that this measure was included in the Elementary and
Secondary Education Reauthorization bill passed by the House of
Representatives, and it is my hope that we can facilitate its passage
in the Senate and move closer to providing significant and meaningful
initiatives for our children in need.
______
By Mr. WYDEN:
S. 2960. A bill to provide for qualified withdrawals from the Capital
Construction Fund (CCF) for fishermen leaving the industry and for the
rollover of Capital Construction Funds to
[[Page S7850]]
individual retirement plans; to the Committee on Finance.
the capital construction fund reform act
Mr. WYDEN. Mr. President, I am pleased today to introduce the Capital
Construction Fund Reform Act of 2000.
The Capital Construction Fund (CCF) was originally created by the
Merchant Marine Act as a way to encourage the construction and use of
American-owned vessels in U.S. waters. For fishermen, the Capital
Construction Fund authorizes the accumulation of funds, free from
taxes, for the purpose of buying or refitting commercial fishing
vessels. The program has been a success in promoting the domestic
fishing industry. However, the usefulness of the CCF has not kept up
with the times. Today it is actually exacerbating the problems facing
U.S. fisheries by forcing fishermen to keep their money in fishing
vessels, rather than allowing them to retire from fishing and pursue
other interests.
Our nation's fisheries are collapsing. Over the past year, fisheries
in New England, Alaska and the West Coast have been officially declared
disasters by the Secretary of Commerce. Plainly speaking, there are too
many boats and not enough fish. Along the West Coast, a mere 200 of the
1400 boats currently fishing could catch the entire allowable harvest
of groundfish. That means we could buyout 85 percent of the boats and
still not reduce capacity in our fisheries. Since 1995, Congress has
appropriated $140 million to buy fishing vessels and permits back from
fishermen. Clearly, more needs to be done. This legislation empowers
the fisherman to make his own choices to stay or leave the fishery with
his own money.
In these times when we ought to be reducing the number of boats in
our fisheries, it does not make sense for federal policy to encourage
fishermen to build more of them. Yet current law prohibits fishermen
from getting their own money out of CCF accounts for any purpose other
than building boats. If they do, they lose up to 70 percent of their
money in taxes and penalties. When fishermen have already been hit with
increasingly severe harvest restrictions over the past few years, it is
just not fair to hold their own money hostage.
That is why I'm introducing a bill that makes it easier for fishermen
to withdraw their funds from the Capital Construction Fund if they
retire from the fishery. My bill would allow fund holders to roll their
funds over into an Individual Retirement Account (IRA) or other
retirement fund. It would also allow them to use their own money to
participate in buyback programs. This bill also eliminates the tax-
penalty for withdrawals for those folks wishing to leave the industry.
Mr. President, this bill enjoys wide support from a variety of
organizations with an interest in our nation's fisheries. Environmental
groups, trawlers, small boat operators and processors alike have
expressed their enthusiasm for this legislation. I urge my colleagues
to support the swift adoption of this bill so that our fisherman can
start making their own choices about their businesses and lives.
I ask unanimous consent that my statement and the bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2960
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE
The Act may be cited as ``The Capital Construction Fund
(CCF) Qualified Withdrawal Act of 2000''.
SECTION 2. EXPANSION OF PURPOSES OF THE CAPITAL CONSTRUCTION
FUND BY AMENDING THE MERCHANT MARINE ACT OF
1936
Section 607(a) of the Merchant Marine Act, 1936 (46 U.S.C.
App. 1177(a)) is amended by striking ``of this section.'' and
inserting ``of this section. Any agreement entered into under
this section may be modified for the purpose of encouraging
the sustainability of the fisheries of the United States by
making the termination and withdrawal of a capital
construction fund account a qualified withdrawal if done in
exchange for the retirement of the related commercial fishing
vessels and related commercial fishing permits.''
SECTION 3. NEW QUALIFIED WITHDRAWALS
(a) Amendments to Merchant Marine Act of 1936.--Section
607(f)(1) of the Merchant Marine Act of 1936 (46 U.S.C. App.
1177(f)(1)) is amended:
(1) in subparagraph (B) by striking ``vessel, or'' and
inserting ``vessel,''
(2) in subparagraph (C) by striking ``vessel.'' and
inserting ``vessel,''
(3) by inserting after subparagraph (C) the following new
subparagraphs:
``(D) the payment of an industry fee authorized by the
fishing capacity reduction program, 16 U.S.C. 1861,
``(E) in the case of any such person or shareholder for
whose benefit such fund was established, a rollover
contribution (within the meaning of section 408(d)(3) of the
Internal Revenue Code of 1986) to such person's individual
retirement plan (as defined in section 7701(a)(37) of such
Code), or
``(F) (i) for the payment to a corporation or person
terminating a capital construction fund and retiring related
commercial fishing vessels and permits.
(ii) The Secretary by regulation shall establish procedures
to ensure that any person making a qualified withdrawal
authorized by (F)(i) retires the related commercial use of
fishing vessels and commercial fishery permits.''
(b) Amendments to Internal Revenue Code of 1986.--Section
7518(e)(1) of the Internal Revenue Code of 1986 (relating to
purposes of qualified withdrawals) is amended by inserting
after subparagraph (C) the following new subparagraphs:
``(D) the payment of an industry fee authorized by the
fishing capacity reduction program, 16 U.S.C. 1861.
``(E) in the case of any such person or shareholder for
whose benefit such fund was established, a rollover
contribution (within the meaning of section 408(d)(3) of the
Internal Revenue Code of 1986) to such person's individual
retirement plan (as defined in section 7701(a)(37) of such
Code), or
``(F)(i) for the payment to a corporation or person
terminating a capital construction fund and retiring related
commercial fishing vessels and permits.
(ii) The Secretary by regulation shall establish procedures
to ensure that any person making a qualified withdrawal
authorized by (F)(i) retires the related commercial use of
fishing vessels and commercial fishery permits.''
______
By Mr. SMITH of New Hampshire:
S. 2962. A bill to amend the Clean Air Act to address problems
concerning methyl tertiary butyl ether, and for other purposes; to the
Committee on Environment and Public Works.
THE FEDERAL REFORMULATED FUELS ACT OF 2000
Mr. SMITH of New Hampshire. Mr. President, today I have introduced
legislation, S. 2962, which I believe will deal once and for all with
the MTBE problem that is facing us all across America, specifically New
England. In the Northeast, as well as California and other areas of the
country, we are beginning to see evidence of MTBE in ground water. This
is a serious environmental problem that must be addressed. It is
certainly a problem in New Hampshire.
I rise today to speak for my constituents in New Hampshire who are
now having their wells, several a week by the way, being contaminated
by MTBE. This is my home State. This is a serious problem there. I am
here to offer this legislation to help my constituents in New Hampshire
get relief from MTBE, which is a pollutant in their wells. But I am
also here to speak for all Americans across the country who have MTBE
in their wells, whether they be in California or New Hampshire.
MTBE has done more damage to our drinking water than we would care to
know. MTBE has been a component of our fuel supply for over two
decades. In 1990, we amended the Clean Air Act to include a clean
gasoline program. Unfortunately, we did not look at the science that
was probably more evident than not. Because we did not look at that
science, we have now created another environmental problem of a huge
magnitude, which is probably going to cost billions of dollars to clean
up. If there is a moral here, or lesson, it should be: Use good
science. Look carefully before you leap into some of these
environmental dilemmas.
That program in the 1990 Clean Air Act amendment mandated use of 2
percent oxygen in the gas, by weight. In other words, 2 percent of the
weight of a gallon of gasoline should be oxygen. That was put in the
fuel.
MTBE was one of two options that could be used. The problem with MTBE
is that it has this ability to migrate through the ground very quickly
and then into the water table. What is MTBE? It is an ether, and in the
event of a leak or gas spill, the MTBE will separate from the gas and
migrate through the ground very quickly. The real problem starts when
MTBE finds its way into the ground water, which it frequently does.
[[Page S7851]]
Several States have had gasoline leaks, or spills, that led to the
closure of wells because of MTBE. It smells. It tastes horrible. It is
not the kind of thing you want to see come out of your shower or your
faucet when you are ready to use your water. This is a serious problem.
Some have made light of it, frankly, in this body, in the sense that
maybe it is not such a serious problem and maybe we should look at some
other alternatives other than banning it. But we need to ban MTBE. The
legislation I am introducing today will do that. It does it in a
responsible manner, which I will explain.
Several States have had these leaks or spills, as I said. So this
bill will address the problems associated with MTBE, but--and this is a
very important point--will not reduce any of the environmental benefits
of the clean air program. That cannot be said with every option that
has been presented on this issue. Again, we can ban MTBE, but we will
not reduce any environmental benefit that the MTBE has brought to clean
the air and that is important.
Briefly, this bill will allow the Governor of any State to waive the
gasoline oxygen requirement of the Clean Air Act--waive it. But it will
preserve the environmental benefits. It will also grant the State and
the Federal Government authority to ban MTBE. It authorizes an
additional $200 million out of the Leaking Underground Storage Tank
Fund to clean up MTBE where these wells have been contaminated because
of these leaking tanks. In other words, if we could repair those
leaking tanks, we are going to cut back on the amount of problems we
are going to have in the future. So it is important we have this as
part of the legislation to get the money there to fix these tanks, to
cut back on the amount of MTBE that gets into the ground water. If it
does not leak out of the tank, the gasoline tank, it will not get into
the ground water. But it is leaking out of tanks and we have to fix it.
The bill also authorizes an extensive study of numerous environmental
consequences of our current fuel use. It was my hope to have marked up
and sent to the floor from the Environment and Public Works Committee,
which I chair, a bill this past week. In fact, it was our goal to do it
yesterday, but we could not get the parties together who I needed to
make this bill a reality, in the sense that it would pass. We could
have introduced a bill, could have marked a bill, perhaps, but it would
not have passed because we would not have the support. This problem is
too serious to play politics.
MTBE is a pollutant in our wells. We need to get it out. We have to
have legislation to do it and it has to pass. There is no point
introducing a bill that will not pass. There are people who are dug in
on all sides of this issue for various reasons. But the point is, we
need to compromise. We all cannot get what we want, but the end result
must be that we get MTBE out of our ground water. That is the bottom
line.
So I agreed, reluctantly, but I agreed, in the interests of working
together with my colleagues, to hold off until September in order to
resolve the few remaining issues, but I intend to hold that markup in
September. In fact, the specific date is September 7. In that
legislation that we mark up, we will ban MTBE.
The issues that are in this legislation include the treatment of
ethanol. I am pleased with the recent progress we have made on this.
But there is a serious problem that we have to deal with, those who
advocate more ethanol in fuel. I expect these issues to be resolved. We
are working behind the scenes very hard to resolve these issues before
the September 7 markup. It will give the staff something to do during
the August recess. I know they will work out the details. But I thank
the many Senators on both sides of the aisle I have been working with
very closely to resolve these issues. This is a tough, tough issue, and
it is hard to get agreement. Everybody is not going to get what they
want, but the bottom line is, we have to get MTBE out of the water.
Let me address the ethanol issue for a moment. Some weeks ago I
circulated a draft that included a clean alternative fuels program.
This is a very complex issue. What are alternative fuels? It could be
premium gasoline. It could be natural gas. It could be electricity. It
could be fuel cells. It could be ethanol. But if you say ``renewable
fuels,'' then you are talking for the most part only ethanol. So when
we are talking alternative fuels, what alternatives do we have to MTBE
that would help us meet these requirements in the Clean Air Act? This
has proven to be a good step toward addressing the ethanol question.
The program will also enhance the development of cleaner and more
efficient cars which will help with the Clean Air Act issues as well.
There has been growing support for this alternative fuels approach
since the time we first brought this up. We do not want to create more
MTBE problems. We do not want to create dirtier air by eliminating MTBE
because we created dirty water by putting MTBEs in gasoline.
So last week in an effort, again, to reach out, I received a letter
supporting that approach from 32 States represented by air quality
planners in the northeastern States and the Governors' Ethanol
Coalition. So for the first time we now have ethanol, and the
Northeast, you have specific problems here with the MTBE issue,
talking, working together, and, as we said, from this letter of support
from 32 States, they support this approach.
We have not dotted every ``i'' and crossed every ``t'' yet, but in
concept they support the approach.
The bill I am offering today, while that bill does not include the
exact language they are talking about in that letter--and I want to
make that clear--it is a bridge. It is a bridge from where my
legislation is to where they are. Actually, simultaneously to the bill
I have introduced, I have also offered an amendment No. 4026, which
crosses that bridge. I have introduced what I would like to have, what
I believe is the most cost-effective method to deal with this problem,
but I recognize that even though it is the least costly, it does not
have the amount of support I need to pass it. So I have offered another
amendment to my own bill, which is my way of saying: OK, you offered me
the bridge. I am willing to walk across it and meet you at least
halfway.
I will describe this bill in a little more detail first. This is a
complex issue. The Environmental and Public Works Committee has been
struggling with this, certainly in the last 7 or 8 months I have been
chairman of the committee, and I am sure they were struggling with it
many months before that. I have tried to craft a solution that is
direct and balanced. I believe I have accomplished that. That is my
goal. It is not to ramrod anything through to make anybody angry. It is
a legitimate attempt to get a consensus to deal with a serious
environmental problem, not to deal with everybody's own opinions.
If anybody comes to the table and says: If I do not get this, I will
leave the table--I tell the people who say that: Don't bother coming to
the table; you are wasting my time and yours. If you want to, talk,
compromise, and reach a rational conclusion. I am willing to talk, and
Senators on all sides of this have done just that. We have talked to
many industry folks and environmental people as well on this very
issue.
The bill waives the oxygen mandate. The Reformulated Gasoline
Program, or RFG, requires at least 2 percent of gasoline by weight to
be oxygen. MTBE and ethanol are the principal additives that help
satisfy this mandate. It is ethanol or MTBE. They will bring us to that
2 percent oxygenate requirement. Because MTBE is rarely used outside
the Reformulated Gas Program, a sensible starting point was to allow
each State, if they wish, to waive the oxygen requirement.
What about the so-called environmental backsliding; in other words,
slipping back and allowing more dirty air? There is concern that if the
Governors waive this mandate that this will affect the environmental
benefit--clean air--of the Reformulated Gas Program.
Let me be very clear: My bill ensures there will be no environmental
backsliding. We are not walking away from the requirements of the Clean
Air Act. If this bill is adopted, the environment--at least the air--
will not know the difference. There will be no negative impact on the
air, and the water will be cleaner.
Phaseout of MTBE: Eliminating the 2 percent oxygen mandate alone does
not
[[Page S7852]]
mean the elimination of MTBE. MTBE is an effective octane booster, and
refiners still may want to use it. Since only a very small amount of
MTBE will cause a tremendous amount of damage, it is important to
consider the fate of MTBE.
This bill will give the EPA Administrator the authority to ban it
immediately. If EPA does not do so in 4 years, then this bill will, by
law, ban MTBE. The EPA has 4 years to ban it. If they do not, the bill
will.
EPA could, however, overturn the ban if it deemed it was not
necessary to protect air quality, water quality, or human health. If it
gets to the point that it is not a problem, then EPA does not have to
ban it. Notwithstanding EPA's decision, the bill gives the States the
authority to ban the additive.
Since there is already massive contamination caused by MTBE, this
bill will authorize, as I said, $200 million to be given to the States
from the Leaking Underground Storage Tank Program for the purpose of
cleaning up MTBE-caused contamination.
Since a Federal mandate caused this pollution--remember that a
Federal mandate caused this pollution. This is not the fault of the oil
companies. It is not the fault of the MTBE producers. They did what
they were asked to do. They produced this additive to clean up the air.
Since a Federal mandate caused the pollution, it would be irresponsible
for the Federal Government not to bear some of the financial burden
associated with the cleanup. Unfortunately, that is the case.
I do not like to spend taxpayers' dollars, but this was a mandate,
and because of that mandate, we have a problem.
It is also important to point out that although it is not part of my
legislation, it is reasonable to think of some way of perhaps trying to
work with the MTBE producers to help them through this transition if,
in fact, MTBE is banned. I certainly am willing to work with them to
come up with some solution, some help in terms of their movement from
one industry to another, or whatever the case may be.
Finally, the bill authorizes a comprehensive study of the
environmental consequences of our current fuel supply. In order to be
better informed to make future environmental decisions regarding fuel
policy, the bill directs EPA to undertake a study of our motor fuel.
I will talk a little bit about the cost, a very important point.
Lately, we have heard a great deal about gasoline prices, certainly
fuel oil prices, as well, in New England. These concerns underscore the
question of the costs associated with limiting MTBE use.
MTBE, like it or not, is clean, it is cheap, and it helps to clean up
our air. Placing it in our fuel supply and keeping the fuel supply
clean will have a cost. We have to replace it. We cannot backslide. We
do not want to dirty the air while we take MTBE out.
It is my belief the Senate is not prepared to reduce our clean air
standards or allow for the continued contamination of our drinking
water.
We have two issues: Contaminated drinking water and do we backslide
off the clean air provision. I believe my colleagues in the Senate are
willing to work with me to clean up the water to get the MTBE out of
our wells and to preserve the integrity of the Clean Air Act and not
backslide or move back from the cleaner air we have accomplished by
using MTBE.
The question, though, becomes: What is the most effective and cost
friendly option for achieving this goal? I have a chart which will help
illustrate the options. Each one of these options--the red line, yellow
line, green line, and the blue line--bans MTBE, but it is a little more
complicated than that.
One option is simply the elimination of MTBE with no other changes in
the law. That is the red line. These show costs. This is the highest
cost option because it is about an 8-cent increase in gas prices per
gallon. This is a ban of MTBE, and it replaces it with ethanol in the
Reformulated Gas Program. One might think: That is fine, it is ethanol,
produced by corn, a nice natural product; what is wrong with that?
Let's do it.
The problem is, in areas in the Northeast, such as New Hampshire, and
in other States such as Texas, these States would have to use ethanol
to meet that oxygenate requirement because there is no other option. In
order to meet the 2-percent oxygenate requirement if MTBE is removed,
they have to use ethanol.
One may say: What is wrong with that? Ethanol makes gas evaporate
more quickly and those fumes would add to smog and haze in New England
and it would be serious. Obviously, California would have the same
problem.
Refiners would have to make gas less evaporative and thereby
increasing the cost. In other words, they would have to do something to
deal with that rapid evaporation and it would cost more to do that.
This is not an option for New England nor California nor any other
State that has this particular problem.
If we are going to be responsible, then we should work with our
colleagues who have these problems. I happen to have that problem
because I am from New Hampshire, and as the chairman of the committee,
I need to work with all regions of the country to get a compromise that
is acceptable to everybody so that we do not have more environmental
problems in New England or California or some other place by simply
banning MTBE and letting ethanol take over. Some want that.
Obviously, the ethanol producers would love it, but that does not
help us. We do not want to create more problems. That is not a
responsible approach, I say with all due respect.
The next line is the orange line in terms of cost.
That is the Clinton administration's position. That represents the
cost of eliminating the oxygen mandate, but replacing it with a
national ethanol mandate. You have no other alternative other than
ethanol.
The cost of mandating a threefold increase in ethanol sales is very
expensive. So the options represented by the orange line shown on the
chart cost less than what is shown with the red line because it does
not mandate that the reformulated gas contain ethanol. It does not
mandate it, but that is what is going to happen. But, shown with this
orange line on the chart, it simply mandates the total ethanol market.
So you are mandating the market here, and that is no good. That does
not work. Unlike what is shown with the red line, there would be no
regional constraint. It would not be acceptable.
Now, what is shown on the chart with the blue line is legislation
that I am introducing today, without the amendment initially. In my
view, that is the cheapest and most responsible way to deal with this
problem. However, for reasons which I respect--I might not agree with
them, but I respect them--it does not have enough support, either, to
pass the Senate. I recognize that, but I want everybody to know where I
am coming from.
I believe we should use the cheapest alternative that gets the job
done. That is my view. But I understand, as I said before, I am willing
to build that bridge to go from what is shown with the blue line to
what is shown with the green line. I will not go to what is shown with
the orange or red lines, but I am willing to go from what is shown with
the blue line to what is shown with the green line.
As I have said, what is shown with the blue line is the bill I have
introduced. That bill will cost more to make clean gas without MTBE,
but because we place the fewest requirements on the refiners on how to
achieve that clean gas, this bill would cost the economy less than all
other options. It is very important for me to repeat that. We place the
fewest requirements on the refiners on how to achieve the clean gas. We
want clean gas achieved. That is the goal. This bill would cost the
economy less than all of those other options.
While my bill addresses all of the concerns with MTBE, I am also
sensitive to the concerns of the Senators who understand that this bill
might have an impact on ethanol. So in order to address these concerns,
I have prepared an amendment to my own legislation, amendment No. 4026,
which I have already sent to the desk.
This amendment seeks to address the concerns over ethanol that
Members have. I am hoping that over the course of the next 30 days we
will be able to build this bridge from what is shown by the blue line
to what is shown by the
[[Page S7853]]
green line, to get to what I think is an acceptable and responsible
approach.
I indicated earlier there is a lot of interest. Thirty-two States
have expressed interest in this, in my letter. This amendment seeks to
address the concerns of the ethanol industry by establishing a segment
of the fuel market that must be comprised of either ethanol or fuel
used to power superclean vehicles.
About 10 days ago, I had the opportunity to ride in a fuel-celled
bus. It had hydrogen cells. I had never experienced anything like it:
No fumes, no smell, very little sound, and no pollutants whatsoever. I
road several miles in it.
The current occupant of the Chair, the Senator from Utah, Senator
Bennett, drives a hybrid car which is part electric, part gas. You see,
we are moving in the right direction. Hybrid cars, fuel cells--they are
the future. The more we do that, the less we need of any type of
gasoline, whether it is ethanol or just oil based. It does not matter.
The point is, we are moving in the right direction. That is what we
want to encourage. This bill will establish a segment of the fuel
market that must be comprised of either ethanol or fuel used to power
those clean vehicles. We do not want to stop them from having that
option.
If we just go with the renewables that the administration wants, all
they can use is ethanol. What we want them to do is use ethanol, if
they wish, but to use hybrid cars if they wish. Encourage that,
encourage fuel cells, whatever, or premium gas, but let the market deal
with it.
So there are a lot of exciting things happening. This amendment is
going to create competition. There is nothing wrong with competition,
good old competition. You pick winners and losers--no guarantees--with
competition between the ethanol industry and the clean vehicle market.
So why mandate ethanol and exclude clean vehicles? It does not make any
sense.
So the estimated cost of this approach is represented by the green
line on the chart. This is a very good approach that I believe is a
compromise that gets us there. It costs us a little more, but it gets
us there. Because we can't get there with what is represented by the
blue line, I am willing to go here, with what is represented by the
green line.
Mr. President, I know my time is pretty close to expiring, I am sure.
To those who will ask, why does this have to be so complicated, I did
not create the issue. I have spent the last 6 months trying to
understand it and learn about it. I think I am getting there, with a
lot of help. It is a complex issue, with many competing interests. That
is the thing. But a simple ban of MTBE does not get everybody there--
all the regions of the country. It does not get it done.
So a simple ban of MTBE makes gas more expensive and air more dirty.
It is not acceptable. We cannot do that. A stand-alone mandate of
ethanol does not get you there, either. Smog concerns, cost concerns--
particularly in New Hampshire, and other areas of the Northeast, as
well as California--that does not get you there.
Simply eliminating the reformulated gas mandate does not work,
either. That is another option. MTBE would continue to be used and the
potential adverse impact on ethanol would be there.
I am committed, I say to my colleagues, to a solution that, one,
cleans up our Nation's drinking water, and, two, preserves the
environmental benefits of the reformulated gasoline program, which is
the most cost-effective option for the whole Nation. And that is shown
right there with the green line. That is the one we can get it done
with. I wish it were here with what is depicted with the blue line, but
this will get us there with what is depicted with the green line; and
we will do it.
So I am convinced this is the right approach. I look forward to
working with my colleagues. This is an honest attempt to sit down with
everybody and get to a resolution, because to continue to argue about
this and debate this, while more and more wells every day get polluted
with MTBE, is irresponsible. It is totally irresponsible.
We should not be talking about somebody's profit at the expense of
somebody's well being polluted. Let's compromise. We will work with
you. You can make some profit, but you are not going to make so much
profit that we have to stand around and have our wells polluted. That
is simply wrong. It is unacceptable. It is irresponsible. I am not
going to stand for it. I don't think anybody would who had these kinds
of problems. It is irresponsible. So we are going to work together.
I am very encouraged by the folks, especially the ethanol Senators,
who I have talked with, and their staffs. We have talked to folks in
the oil industry. They are not real thrilled about some of this, but,
again, this is a solution that we must find. We cannot continue to say
we will talk about it next week or we will deal with it in conference
or we will deal with it next year. We need to deal with it now. This is
a responsible effort to do that.
So, again, I look forward to working with my colleagues, and I look
forward to that markup on September 7. I intend to be ready for it, and
to send that bill out of the EPW Committee and on to the calendar in
the Senate.
Mr. President, I ask unanimous consent that the bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2962
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Reformulated Fuels
Act of 2000''.
SEC. 2. WAIVER OF OXYGEN CONTENT REQUIREMENT FOR REFORMULATED
GASOLINE.
Section 211(k)(1) of the Clean Air Act (42 U.S.C.
7545(k)(1)) is amended--
(1) by striking ``Within 1 year after the enactment of the
Clean Air Act Amendments of 1990,'' and inserting the
following:
``(A) In general.--Not later than November 15, 1991,''; and
(2) by adding at the end the following:
``(B) Waiver of oxygen content requirement.--
``(i) Authority of the governor.--
``(I) In general.--Notwithstanding any other provision of
this subsection, a Governor of a State, upon notification by
the Governor to the Administrator during the 90-day period
beginning on the date of enactment of this subparagraph, may
waive the application of paragraphs (2)(B) and (3)(A)(v) to
gasoline sold or dispensed in the State.
``(II) Opt-in areas.--A Governor of a State that submits an
application under paragraph (6) may, as part of that
application, waive the application of paragraphs (2)(B) and
(3)(A)(v) to gasoline sold or dispensed in the State.
``(ii) Treatment as reformulated gasoline.--In the case of
a State for which the Governor invokes the waiver described
in clause (i), gasoline that complies with all provisions of
this subsection other than paragraphs (2)(B) and (3)(A)(v)
shall be considered to be reformulated gasoline for the
purposes of this subsection.
``(iii) Effective date of waiver.--A waiver under clause
(i) shall take effect on the earlier of--
``(I) the date on which the performance standard under
subparagraph (C) takes effect; or
``(II) the date that is 270 days after the date of
enactment of this subparagraph.
``(C) Maintenance of toxic air pollutant emission
reductions.--
``(i) In general.--As soon as practicable after the date of
enactment of this subparagraph, the Administrator shall--
``(I) promulgate regulations consistent with subparagraph
(A) and paragraph (3)(B)(ii) to ensure that reductions of
toxic air pollutant emissions achieved under the reformulated
gasoline program under this section before the date of
enactment of this subparagraph are maintained in States for
which the Governor waives the oxygenate requirement under
subparagraph (B)(i); or
``(II) determine that the requirement described in clause
(iv)--
``(aa) is consistent with the bases for a performance
standard described in clause (ii); and
``(bb) shall be deemed to be the performance standard under
clause (ii) and shall be applied in accordance with clause
(iii).
``(ii) Performance standard.--The Administrator, in
regulations promulgated under clause (i)(I), shall establish
an annual average performance standard based on--
``(I) compliance survey data;
``(II) the annual aggregate reductions in emissions of
toxic air pollutants achieved under the reformulated gasoline
program during calendar years 1998 and 1999, determined on
the basis of the volume of reformulated gasoline containing
methyl tertiary butyl ether that is sold throughout the
United States; and
``(III) such other information as the Administrator
determines to be appropriate.
``(iii) Applicability.--
``(I) In general.--The performance standard under clause
(ii) shall be applied on an annual average refinery-by-
refinery basis to all reformulated gasoline that is sold or
introduced into commerce by the refinery in a
[[Page S7854]]
State for which the Governor waives the oxygenate requirement
under subparagraph (B)(i).
``(II) More stringent requirements.--The performance
standard under clause (ii) shall not apply to the extent that
any requirement under section 202(l) is more stringent than
the performance standard.
``(III) State standards.--The performance standard under
clause (ii) shall not apply in any State that has received a
waiver under section 209(b).
``(IV) Credit program.--The Administrator shall provide for
the granting of credits for exceeding the performance
standard under clause (ii) in the same manner as provided in
paragraph (7).
``(iv) Statutory performance standard.--
``(I) In general.--Subject to subclause (III), if the
regulations under clause (i)(I) have not been promulgated by
the date that is 270 days after the date of enactment of this
subparagraph, the requirement described in subclause (II)
shall be deemed to be the performance standard under clause
(ii) and shall be applied in accordance with clause (iii).
``(II) Toxic air pollutant emissions.--The aggregate
emissions of toxic air pollutants from baseline vehicles when
using reformulated gasoline shall be 27.5 percent below the
aggregate emissions of toxic air pollutants from baseline
vehicles when using baseline gasoline.
``(III) Subsequent regulations.--The Administrator may
modify the performance standard established under subclause
(I) through promulgation of regulations under clause
(i)(I).''.
SEC. 3. SALE OF GASOLINE CONTAINING MTBE.
Section 211(c) of the Clean Air Act (42 U.S.C. 7545(c)) is
amended--
(1) in paragraph (1)(A)--
(A) by inserting ``fuel or fuel additive or'' after
``Administrator any''; and
(B) by striking ``air pollution which'' and inserting ``air
pollution, or water pollution, that'';
(2) in paragraph (4)(B), by inserting ``or water quality
protection,'' after ``emission control,''; and
(3) by adding at the end the following:
``(5) Determination by the administrator whether to ban use
of mtbe.--
``(A) In general.--Not later than 4 years after the date of
enactment of this paragraph, the Administrator shall ban use
of methyl tertiary butyl ether in gasoline unless the
Administrator determines that the use of methyl tertiary
butyl ether in accordance with paragraph (6) poses no
substantial risk to water quality, air quality, or human
health.
``(B) Regulations concerning phase-out.--The Administrator
may establish by regulation a schedule to phase out the use
of methyl tertiary butyl ether in gasoline during the period
preceding the effective date of the ban under subparagraph
(A).
``(6) Limitations on sale of gasoline containing mtbe.--
``(A) In general.--Subject to subparagraph (B), if the
Administrator makes the determination described in paragraph
(5), for the fourth full calendar year that begins after the
date of enactment of this paragraph and each calendar year
thereafter--
``(i) the quantity of gasoline sold or introduced into
commerce during the calendar year by a refiner, blender, or
importer of gasoline shall contain on average not more than 1
percent by volume methyl tertiary butyl ether; and
``(ii) no person shall sell or introduce into commerce any
gasoline that contains more than a specified percentage by
volume methyl tertiary butyl ether, as determined by the
Administrator by regulation.
``(B) Regulations concerning trading.--
``(i) In general.--The Administrator may promulgate
regulations that provide for the granting of an appropriate
amount of credits to a person that refines, blends, or
imports, and certifies to the Administrator, gasoline or a
slate of gasoline that has a methyl tertiary butyl ether
content that is less than the maximum methyl tertiary butyl
ether content specified in subparagraph (A)(i).
``(ii) Use of credits.--The regulations promulgated under
clause (i) shall provide that a person that is granted
credits may use the credits, or transfer all or a portion of
the credits to another person, for the purpose of complying
with the maximum methyl tertiary butyl ether content
requirement specified in subparagraph (A)(i).
``(iii) Maximum annual limitation.--The regulations
promulgated under clause (i) shall ensure that the total
quantity of gasoline sold or introduced into commerce during
any calendar year by all refiners, blenders, or importers
contains on average not more than 1 percent by volume methyl
tertiary butyl ether.
``(C) Temporary waiver of limitations.--
``(i) In general.--If the Administrator, in consultation
with the Secretary of Energy, finds, on the Administrator's
own motion or on petition of any person, that there is an
insufficient domestic capacity to produce or import gasoline,
the Administrator may, in accordance with section 307,
temporarily waive the limitations imposed under subparagraph
(A).
``(ii) Duration of reduction.--
``(I) In general.--A waiver under clause (i) shall remain
in effect for a period of 15 days unless the Administrator,
in consultation with the Secretary of Energy, finds, before
the end of that period, that there is sufficient domestic
capacity to produce or import gasoline.
``(II) Extension.--Upon the expiration of the 15-day period
under subclause (I), the waiver may be extended for an
additional 15-day period in accordance with clause (i).
``(iii) Deadline for action on petitions.--The
Administrator shall act on any petition submitted under
clause (i) within 7 days after the date of receipt of the
petition.
``(iv) Inapplicability of certain requirements.--Section
307(d) of this Act and sections 553 through 557 of title 5,
United States Code, shall not apply to any action on a
petition submitted under clause (i).
``(v) State authority.--At the option of a State, a waiver
under clause (i) shall not apply to any area with respect to
which the State has exercised authority under any other
provision of law (including subparagraph (D)) to limit the
sale or use of methyl tertiary butyl ether.
``(D) State petitions to eliminate use of mtbe.--
``(i) In general.--A State may submit to the Administrator
a petition requesting authority to eliminate the use of
methyl tertiary butyl ether in gasoline sold or introduced
into commerce in the State in order to protect air quality,
water quality, or human health.
``(ii) Deadline for action on petitions.--The Administrator
shall grant or deny any petition submitted under clause (i)
within 180 days after the date of receipt of the petition.''.
SEC. 4. CONVENTIONAL GASOLINE.
(a) In General.--Section 211(k)(1) of the Clean Air Act (42
U.S.C. 7545(k)(1)) (as amended by section 2) is amended by
adding at the end the following:
``(D) Conventional gasoline.--
``(i) In general.--Not later than October 1, 2007--
``(I) the Administrator shall determine whether the use of
conventional gasoline during the period of calendar years
2005 and 2006 resulted in a greater volume of emissions of
criteria air pollutants listed under section 108, and
precursors of those pollutants, determined on the basis of a
weighted average of those pollutants and precursors, than the
volume of such emissions during the period of calendar years
1998 and 1999; and
``(II) if the Administrator determines that a significant
increase in emissions occurred, the Administrator shall
promulgate such regulations concerning the use of
conventional gasoline as are appropriate to eliminate that
increase.
``(ii) Applicability to certain states.--The Administrator
shall make the determination under clause (i)(I) without
regard to, and the regulations promulgated under clause
(i)(II) shall not apply to, any State that has received a
waiver under section 209(b).''.
(b) Elimination of Ethanol Waiver.--Section 211(h) of the
Clean Air Act (42 U.S.C. 7545(h)) is amended--
(1) by striking paragraph (4); and
(2) by redesignating paragraph (5) as paragraph (4).
SEC. 5. PUBLIC HEALTH AND ENVIRONMENTAL IMPACTS OF FUELS AND
FUEL ADDITIVES.
Section 211(b)(2) of the Clean Air Act (42 U.S.C.
7545(b)(2)) is amended--
(1) by striking ``may also'' and inserting ``shall, on a
regular basis,''; and
(2) by striking subparagraph (A) and inserting the
following:
``(A) to conduct tests to determine potential public health
and environmental effects of the fuel or additive (including
carcinogenic, teratogenic, or mutagenic effects); and''.
SEC. 6. COMPREHENSIVE FUEL STUDY.
Section 211 of the Clean Air Act (42 U.S.C. 7545) is
amended--
(1) by redesignating subsection (o) as subsection (p); and
(2) by inserting after subsection (n) the following:
``(o) Comprehensive Fuel Study.--
``(1) In general.--Not later than 5 years after the date of
enactment of this paragraph and every 5 years thereafter, the
Administrator shall submit to Congress a report--
``(A) describing reductions in emissions of criteria air
pollutants listed under section 108, or precursors of those
pollutants, that result from implementation of this section;
``(B) describing reductions in emissions of toxic air
pollutants that result from implementation of this section;
``(C) in consultation with the Secretary of Energy,
describing reductions in greenhouse gas emissions that result
from implementation of this section; and
``(D)(i) describing regulatory options to achieve
reductions in the risk to public health and the environment
posed by fuels and fuel additives--
``(I) taking into account the production, handling, and
consumption of the fuels and fuel additives; and
``(II) focusing on options that reduce the use of compounds
or associated emission products that pose the greatest risk;
and
``(ii) making recommendations concerning any statutory
changes necessary to implement the regulatory options
described under clause (i).
``(2) Life cycle emissions analysis.--In determining
criteria air pollutant and greenhouse gas emission reductions
under paragraph (1), the Administrator shall take into
account the emissions resulting from the various fuels and
fuel additives used in the
[[Page S7855]]
implementation of this section over the entire life cycle of
the fuels and fuel additives.''.
SEC. 7. ADDITIONAL OPT-IN AREAS UNDER REFORMULATED GASOLINE
PROGRAM.
Section 211(k)(6) of the Clean Air Act (42 U.S.C.
7545(k)(6)) is amended--
(1) by striking ``(6) Opt-in areas.--(A) Upon'' and
inserting the following:
``(6) Opt-in areas.--
``(A) Classified areas.--
``(i) In general.--Upon'';
(2) in subparagraph (B), by striking ``(B) If'' and
inserting the following:
``(ii) Effect of insufficient domestic capacity to produce
reformulated gasoline.--If'';
(3) in subparagraph (A)(ii) (as so redesignated)--
(A) in the first sentence, by striking ``subparagraph (A)''
and inserting ``clause (i)''; and
(B) in the second sentence, by striking ``this paragraph''
and inserting ``this subparagraph''; and
(4) by adding at the end the following:
``(B) Nonclassified areas.--
``(i) In general.--In accordance with section 110, a State
may submit to the Administrator, and the Administrator may
approve, a State implementation plan revision that provides
for application of the prohibition specified in paragraph (5)
in any portion of the State that is not a covered area or an
area referred to in subparagraph (A)(i).
``(ii) Period of effectiveness.--Under clause (i), the
State implementation plan shall establish a period of
effectiveness for applying the prohibition specified in
paragraph (5) to a portion of a State that--
``(I) commences not later than 1 year after the date of
approval by the Administrator of the State implementation
plan; and
``(II) ends not earlier than 4 years after the date of
commencement under subclause (I).''.
SEC. 8. LEAKING UNDERGROUND STORAGE TANKS.
(a) Use of LUST Funds for Remediation of MTBE
Contamination.--Section 9003(h) of the Solid Waste Disposal
Act (42 U.S.C. 6991b(h)) is amended--
(1) in paragraph (7)(A), by striking ``paragraphs (1) and
(2) of this subsection,'' and inserting ``paragraphs (1),
(2), and (12),''; and
(2) by adding at the end the following:
``(12) Remediation of mtbe contamination.--
``(A) In general.--The Administrator and the States may use
funds made available under subparagraph (B) to carry out
corrective actions with respect to a release of methyl
tertiary butyl ether that presents a risk to human health,
welfare, or the environment.
``(B) Applicable authority.--Subparagraph (A) shall be
carried out--
``(i) in accordance with paragraph (2); and
``(ii) in the case of a State, in a manner consistent with
a cooperative agreement entered into by the Administrator and
the State under paragraph (7).
``(C) Authorization of appropriations.--There is authorized
to be appropriated from the Leaking Underground Storage Tank
Trust Fund to carry out subparagraph (A) $200,000,000 for
fiscal year 2001, to remain available until expended.''.
(b) Release Prevention.--Subtitle I of the Solid Waste
Disposal Act (42 U.S.C. 6991 et seq.) is amended--
(1) by redesignating section 9010 as section 9011; and
(2) by inserting after section 9009 the following:
``SEC. 9010. RELEASE PREVENTION.
``(a) Implementation of Preventative Measures.--The
Administrator (or a State pursuant to section 9003(h)(7)) may
use funds appropriated from the Leaking Underground Storage
Tank Trust Fund for--
``(1) necessary expenses directly related to the
implementation of section 9003(h);
``(2) enforcement of--
``(A) this subtitle;
``(B) a State program approved under section 9004; or
``(C) State requirements regulating underground storage
tanks that are similar or identical to this subtitle; and
``(3) inspection of underground storage tanks.
``(b) Authorization of Appropriations.--There are
authorized to be appropriated from the Leaking Underground
Storage Tank Trust Fund to carry out subsection (a)--
``(1) $50,000,000 for fiscal year 2001; and
``(2) $30,000,000 for each of fiscal years 2002 through
2005.''.
(c) Technical Amendments.--
(1) Section 1001 of the Solid Waste Disposal Act (42 U.S.C.
prec. 6901) is amended by striking the item relating to
section 9010 and inserting the following:
``Sec. 9010. Release prevention.
``Sec. 9011. Authorization of appropriations.''.
(2) Section 9001(3)(A) of the Solid Waste Disposal Act (42
U.S.C. 6991(3)(A)) is amended by striking ``sustances'' and
inserting ``substances''.
(3) Section 9003(f)(1) of the Solid Waste Disposal Act (42
U.S.C. 6991b(f)(1)) is amended by striking ``subsection (c)
and (d) of this section'' and inserting ``subsections (c) and
(d)''.
(4) Section 9004(a) of the Solid Waste Disposal Act (42
U.S.C. 6991c(a)) is amended in the first sentence by striking
``referred to'' and all that follows and inserting ``referred
to in subparagraph (A) or (B), or both, of section
9001(2).''.
(5) Section 9005 of the Solid Waste Disposal Act (42 U.S.C.
6991d) is amended--
(A) in subsection (a), by striking ``study taking'' and
inserting ``study, taking'';
(B) in subsection (b)(1), by striking ``relevent'' and
inserting ``relevant''; and
(C) in subsection (b)(4), by striking ``Evironmental'' and
inserting ``Environmental''.
______
By Mr. BRYAN (for himself, Mr. Graham, and Mr. Gorton):
S. 2963. A bill to amend title XIX of the Social Security Act to
require the Secretary of Health and Human Services to make publicly
available medicaid drug pricing information; to the Committee on
Finance.
consumer awareness of market-based drug prices act of 2000
Mr. BRYAN. Mr. President, in a very few hours we will, each of us, be
returning to our respective States for the summer recess. Most of us
will have town hall meetings or other fora in which we will have a
chance to interact with our constituents.
Much that occurs on this floor, although very important, does not
connect with the American people. Some of it seems pretty esoteric,
pretty dry stuff. I am going to be discussing this afternoon an issue
that does connect with the American people. Whether you live in Maine
or California or Washington State or Florida or, as I do, the great
State of Nevada--and which I am privileged to represent--people are
talking about the price of prescription drugs.
The reason for that is that the marvels of modern medicine have made
it possible, through prescription drugs, to address a number of the
maladies that affect all of us as part of humankind. The cost of those
prescription drugs are literally going through the ceiling. I will
comment more specifically upon that in a moment.
For literally millions of people in this country, the cost of
prescription drugs has been so prohibitive that medications that would
address a medical problem that those individuals face are simply beyond
the pale. So for many, it is fair to say, the choice is a Hobson's
choice.
Do they eat in the evening, or do they take the prescription
medication that has been prescribed by their physician? It would be my
fondest hope and expectation, before this Congress adjourns sine die--
that is, at the end of this legislative year--that we could enact
prescription drug legislation. That would be my No. 1 priority. But I
think all of us recognize there are some things we can do as part of
whatever plan we might subscribe to, and Senator Graham and I this
afternoon are offering a piece of legislation entitled the Consumer
Awareness of Market-Based Drug Prices Act of 2000.
This is a piece of legislation that deals with the price of drugs. We
know what the cost is, but we are talking about the price. We have a
lot of information on the cost. We know, for example, that we are
spending on drugs in this country, prescription medications--in the
last available year, 1999--almost $122 billion. We also know quite a
bit about how much we in the Federal Government are spending for
prescription drugs.
For example, the States and the Federal Government spent $17 billion
in fiscal year 1999 for drugs, just under the Medicaid program alone.
Those costs are going to escalate rather dramatically. What is missing,
however, is some critically important information--information that
would be important to consumers and those who negotiate on behalf of
consumers, because what we don't know, what we don't have much
information about is drug prices. The reason for that is some statutory
prohibitions I am going to talk about and which this legislation
specifically addresses.
So the questions are: What do consumers know about drug prices today?
What do employers who purchase prescription drugs on behalf of their
employees know about prices? What do health plans negotiating on behalf
of their enrollees know about prices? What do physicians who prescribe
drugs for their patients know about prices?
The answer is simply, very, very little; almost nothing. What little
is known is essentially worthless information. We have the average
wholesale price, but this is a truly meaningless figure.
[[Page S7856]]
During the course of my discussion this afternoon on the floor of the
Senate, we are going to be talking about three kinds of prices: The
average wholesale price, average manufacturer price, and the best
price.
Just talking about the average wholesale price, that is a public list
price set by manufacturers, the pharmaceutical industry; that is
neither average nor wholesale and is a price set by the pharmaceutical
companies. The best analogy I can give you is that it would be
analogous to the price that appears as the sticker price on the window
of a new car. Nobody pays that price. It really is not very helpful in
terms of what you need to know when negotiating to purchase a car. And
now there are a number of web sites and publications and manuals--a
whole host of things that tell consumers this is what the manufacturer
paid, these are the hold-backs by the dealers, these are the discounts
and the commissions; here is the price on which you want to focus your
attention. You can get that information if you are purchasing an
automobile, and you can get that information when you purchase a whole
host of other things. But that information is not available if you are
talking about finding out the price of prescription drugs, and that is
because of some statutory limitations.
It is somewhat analogous to the statement Sir Winston Churchill made
in 1939 in describing the Soviet Union. He went on to say: ``A riddle,
wrapped up in a mystery, inside an enigma.'' That is a pretty fair
characterization of what we know about the prices of prescription
medications as sold by the manufacturer.
There are many different approaches as we deal with this prescription
drug issue and want to extend it as either part of Medicare or some
alternative approach. I have been privileged to serve on the Finance
Committee, which has been the vortex for this debate and discussion. I
listened closely to my colleagues wax eloquently on the subject of
prescription drugs, and, whether you are to the left or to the right of
the political spectrum, or whether you consider yourself in the
mainstream, a moderate, all of us worship at the shrine of competition.
Everybody says what we need to do is to inject more competition into
the system. I happen to subscribe to that because I do believe that by
allowing the synergy of the free marketplace to work, it will be the
most efficient and the most cost-effective way to deliver services. But
there is an impediment to the operation of the free marketplace.
What does the free marketplace need to work? How do we ensure
competition? Well, some of you may recall that course from school,
Econ. 201; that is what it was called at the University of Nevada where
I was enrolled. Basic economic theory dictates that the availability of
real market-based information is critical to a free market and that
price transparency is necessary. That is precisely what we do not have
in this system we have created today.
The market today lacks market-based price information. A market
simply cannot work without the availability of that price information.
I emphasize the availability of that information. The information that
is available to the public verges on the absurd. There is a complete
void of useful information about prices. So, in effect, the employers
and health plans negotiating on behalf of consumers are negotiating in
the dark. They are at a serious disadvantage. It is as if they are
blindfolded going into that negotiating arena. They don't know where
the end of the tunnel is. They do not know what the real prices are. So
one can fairly ask, how can even the most conscientious, effective
employer or health plan operator negotiate good prices on behalf of
consumers if they don't have the most basic information about market
prices? They undoubtedly pay higher prices than they otherwise would,
and ultimately these higher prices are translated into higher prices to
the consumers; they are passed on. That is the nature of the system.
So what type of price information would be available, or should be
available, that would be useful and helpful information? The average
manufacturer price for a drug would be a useful thing for purchasers to
know; that is, the average price at which a manufacturer sold a
particular drug. That is what is actually paid for retail drugs. By
law, by act of Congress, that is kept confidential, and that is one of
the changes this legislation seeks to accomplish. That is confidential.
You can't get that information.
The average price actually paid to a manufacturer by a wholesaler is
supposed to be similar to the average manufacturer's price, but, in
point of fact, it diverges widely. The average wholesale price, to
refresh your memory, is a list price that is meaningless, a price
assigned by the pharmaceutical industry. In theory, these prices should
be tracking; in point of fact, they widely diverge. So it is the
average manufactured price, the price that is actually paid, that is
what we really want to know, and that is what we don't know.
The other price we don't know, and also by law is kept confidential,
is the best price. That is the lowest price available to the private
sector for a particular medication--whether it be Mevacor, Claritin, or
any one of the other medications so many of us use today. That
information is not available. So the average wholesale price--an
utterly meaningless number, a fiction, if you will--is available. The
average manufacturer price is not; nor is the best price.
Knowledge about the average manufacturer price and the best price
would certainly enable us to have lower prices for health plans, lower
prices for employers, and lower prices for the consumers. But the
public is denied this information.
Let me emphasize--because a number of you might be thinking: There we
go again with a vast new bureaucracy to collect this data with all of
the burdens that are imposed upon the free market and the limitations
that would be generated.
My friends, that is not the case because under the law, the Secretary
of Health and Human Services currently collects the average
manufacturer price and the best price.
In other words, we have this information. It is not something we
don't know about, or we have to create some new mechanism to gather. We
have that information. It is there. But we are precluded by law from
sharing that information with those who negotiate with the
pharmaceutical industry to negotiate the best possible price for
employees, members of health plans, or other organizations that provide
prescription drugs to their clients, patient customer base--however you
characterize it. There is good information. All purchasers could use it
to benefit those for whom they negotiate.
It is clear that we need to increase the level of knowledge consumers
have about drug prices in today's marketplace. Transparency--that is
the ability to see what these prices are and promote the fair market--
will lower prices.
That is why my colleague, Senator Graham, and I are introducing this
legislation. We are not talking about mandating negotiated prices. We
are simply talking about making the data that is collected available to
those who are negotiating for prescription drugs. It would simply
require the Secretary, who already collects this information, to
provide the average manufacturer price of drugs and the best price
available in the market.
These prices are collected to implement the Medicare prescription
drug rebate system. The rebates are based on those prices. But because
Medicaid is prohibited by law from disclosing the average manufacturer
price, or the best price, the market doesn't get the advantage of this
information, and we are prohibited from knowing the price that Medicaid
pays for each drug.
Let me say say parenthetically that it is generally agreed that the
price Medicaid pays is in point of fact the best price. So this would
be a very relevant piece of information. We can't say for sure even
with respect to a federally funded program what we are spending on a
particular drug. We don't know what Medicaid pays for Claritin,
Mevacor, or Prilosec. We just do not know that. We know the total price
we are paying for drugs generally, and what we are spending for drugs.
But we do not know what we are paying for them separately. This
information needs to be made available because making price information
available will help purchasers and consumers alike.
Today, anyone can get on the Internet to find the lowest price
available
[[Page S7857]]
for a given airline flight. I think the question needs to be asked: Why
shouldn't the public have access to price information on something that
is so critical and that may be necessary to save one's life, or to
prevent the onset of some debilitating disease, or to ameliorate its
impact, the information with respect to the average manufacturer price
and the best price?
The bottom line is today there are no sources of good price
information for consumers and purchasers, thus keeping prices
artificially higher than they would otherwise be.
The legislation which we introduce today would be extremely helpful
in correcting this. The market-based price information this bill would
provide would help all purchasers, employers, and pharmacy benefit
managers who are at a disadvantage without true price information.
Employers are struggling with increasing premiums. In large part,
premiums are increasing because of rising drug expenditures. And, yet,
employers don't have the information they need to assess whether the
premium increases are appropriate. The answer to that is because
without knowing the prices and the rebates that the pharmacy benefit
managers are negotiating, they are not able to determine if the
pharmacy benefit managers are passing along the rebates to them in the
form of lower costs and lower premiums.
Further, neither the PBMs nor the employers know if the drug
companies are being candid with them. When they try to negotiate lower
prices with the manufacturer, they are told, no, we can't give you that
price because it is lower than the best price. The employers and the
PBMs have no way of knowing in point of fact whether it is true. The
battleground is really a negotiation of what these prices are. That is
the information we don't know. In effect, those who negotiate with the
pharmaceutical industry go into that combat with one arm tied behind
their backs and blindfolded as to what the average manufacturer price
and the best price is.
Let me say that this piece of legislation is going to provoke an
outcry. You don't have to have a degree from Oxford. You don't have to
have a Ph.D. from some of our most distinguished institutions in
America. Who would one think would dislike this information? My
friends, the pharmaceutical industry doesn't want you to know.
Undoubtedly, the provision that is in the law today was crafted for
their benefit. It certainly was not crafted for the benefit of employer
groups, or health care providers who negotiate pharmaceutical benefits.
It certainly was not put in to protect consumers. It is not in their
best interests.
I am sure we are going to have a predictable outcry that some
horrendous draconian thing will occur if we make these prices
available.
My view is that transparency is essential. Make the prices available,
and let this free marketplace that we all talk about that has produced
such an extraordinary standard of living for us be the envy of the
world. Nobody is suggesting that the free market could not, nor would,
in my judgment, provide some of the dynamics that would help to keep
the costs down. Let an honest negotiating process occur.
The lack of market-based information has an effect on the Federal
budget--not only for consumers in terms of the medications they pay for
but all taxpayers.
Whether in Congress--and I profoundly hope we will in fact--makes
that prescription drug benefit a part of Medicare, or a subsequent
Congress, this is an idea whose time has come. It will occur. It may
not occur in my time. I leave at the end of this year. But it is going
to occur. There are dramatic cost implications. Without the benefit of
this information, it will be very difficult indeed.
Let's just talk for a moment in terms of prices, information that is
made available, and the generic formulas that we use for reimbursement.
Although the average wholesale price is not a true market measure
price--this is set by the industry--it is used to determine Medicare
reimbursement for the few drugs that are currently covered by Medicare.
The prescription Medicare benefit is very limited. I would like to
see the Medicare prescription benefit extended through Medicare as an
option, as we have a voluntary option under Part B. I don't want
anybody to be confused, but there are some drugs that are covered in
concert with the physician's prescriptions.
The average wholesale price minus 5 percent--what is wrong with that?
What is wrong with that is this average wholesale price is a fix. It
means nothing. It is the price that the drug companies get together and
tell us is the average wholesale price. Yet that is the reimbursement
mechanism that is used for Medicare.
Medicaid, which is a program, as we all know, that involves
participation by the Federal and the State governments and made
available to the poorest of our citizens, represents a rather
substantial cost to the taxpayer. My recollection is that cost is in
the neighborhood of about $17 billion a year.
Here is how that formula worked. This is the Medicaid benefit: The
average wholesale price minus 10 percent. Remember, this is a price set
by the pharmaceutical industry; it is not a market-driven price.
Multiply that times the units--whatever the number of prescriptions,
say an allergy drug or a drug for elevated cholesterol level--times
15.1 percent of the average manufacturer price. This is the one we are
precluded from knowing. Or take the average manufacturer price, minus
the best price. This information we don't know, and we should be able
to get this information.
What can happen with respect to the Medicare reimbursements--because
the physicians who prescribe this medication get the average wholesale
price minus 5 percent, we do not know what the physicians are actually
paying the pharmaceutical industry for the drugs. According to the
Justice Department, the Health and Human Services Office of the
Inspector General, and our colleague in the other body who chairs the
Commerce Committee, the average wholesale price has been manipulated in
order to reap greater Medicare reimbursements.
The way that works, the doctor prescribes something covered by
Medicare and reimburses the average wholesale price minus 5 percent. In
point of fact, your physician may be paying much, much less to the
pharmaceutical industry. So the spread is the physician's profit, and
there is potential for abuse.
I am not suggesting in any way that a physician should not be
compensated for his care. I am proud to say my son is a physician, a
cardiologist. But you ought not to be able to manipulate the wholesale
price--which is this fiction we have talked about--and then allow the
physician to seek payment from the pharmaceutical industry at a price
that is substantially less than what Medicare is paying. That gouges
the American taxpayer. That is the issue that concerns us.
As I have indicated, drug companies have artificially inflated this
average wholesale price, which results in these inflated Medicare
reimbursements to physicians, and the manufacturer then in turn
provides the discounts, and the physicians can keep the difference. If
the average wholesale price of the drug is $100, minus 5 percent would
be $95, and if the physician actually only pays $50, the physician is
getting $45 as part of that spread. That is much less than he is
actually paying. Medicare, conversely, is reimbursing the physician at
a far greater price than the physician is actually paying for that
medication.
The need for better information has never been greater. Medicare drug
benefit is critical and should be enacted this year. I truly hope it
will be. Accurate market-based price information will ensure the best
use of the taxpayer dollars financing this benefit and the lowest
possible beneficiary coinsurance; that is, the amount, the coinsurance,
the beneficiary has to pay.
This should be an easy call. Transparency promotes a fair market. We
are all for that, I believe. Price information leads to price
competition. I think we are all for that. That competition leads to
lower prices for employers, for health plans, and for consumers. I
think we are all for that.
So at a time when drug prices are increasing at two to three times
the rate of the overall rate of inflation, referred to as the Consumer
Price Index, at a time when the same drugs prescribed by veterinarians,
for use by pets--the identical medication--are priced lower than the
same drug prescribed by prescriptions for doctors' use for people,
[[Page S7858]]
at a time when the primary information consumers have about
prescription drugs is through the $2 billion annually spent by the
industry on direct-to-consumer advertising, and those ads never mention
price --these are the things we are bombarded with on television; we
see full pages in the leading newspapers in the country--at a time when
Americans are traveling to foreign countries--to Canada and Mexico, in
particular--to obtain lower prices, why shouldn't we be doing whatever
we can to encourage competition in the United States and to lower the
price of drugs sold in this country?
I think it is a no-brainer. I think we should set the market forces
in action. We simply need to allow the public to have access to readily
available market-based information. This is commonsense, easy-to-
understand, easy-to-implement legislation. We should pass it this year.
There is no new bureaucracy created. We can have the information at
HHS. All this legislation would do is require it be made available. The
potential benefits are enormous.
It will be interesting to see how this debate unfolds on this
legislation because my colleagues have not heard the last of me on this
issue. This makes a lot of sense, whether we do or do not succeed this
year in extending a prescription benefit as part of Medicare. We ought
to do it. We can do it. We should do it. I hope my colleagues will join
me in a bipartisan effort to do so.
I yield the floor.
______
By Ms. COLLINS (for herself and Ms. Landrieu):
S. 2964. A bill to amend the Internal Revenue Code of 1986 to provide
new tax incentives to make health insurance more affordable for small
businesses, and for other purposes; to the Committee on Finance.
access to affordable health care act
Ms. COLLINS. Mr. President, today I am introducing legislation, the
Access to Affordable Health Care Act, that is designed to make health
insurance more affordable both for individuals and for small businesses
that provide health care coverage for their employees.
In the past few years, Congress has taken some major steps to expand
access to affordable health coverage for all Americans. In 1996, the
Health Insurance Portability and Accountability Act--also known as
Kassebaum-Kennedy--was signed into law which assures that American
workers and their families will not lose their health care coverage if
they change jobs, lose their jobs, or become ill.
One of the first bills I sponsored on coming to the Senate was
legislation to establish the State Children's Health Insurance Program,
which was enacted as part of the Balanced Budget Act. States have
enthusiastically responded to this program, which now provides
affordable health insurance coverage to over two million children
nationwide, including 9,365 in Maine's expanded Medicaid and CubCare
programs.
Despite these efforts, the number of uninsured Americans continues to
rise. At a time when unemployment is low and our nation's economy is
thriving, more than 44 million Americans--including 200,000 Mainers--do
not have health insurance. Clearly, we must make health insurance more
available and more affordable.
Most Americans under the age of 65 get their health coverage through
the workplace. It is therefore a common assumption that people without
health insurance are unemployed. The fact is, however, that most
uninsured Americans are members of families with at least one full-time
worker. According to the Health Insurance Association of America,
almost seven out of ten uninsured Americans live in a family whose head
of household works full-time.
In my state of Maine, small business is not just a segment of the
economy--it is the economy. I am, therefore, particularly concerned
that uninsured, working Americans are most often employees of small
businesses. Nearly half of the uninsured workers nationwide are in
businesses with fewer than 25 employees.
According to a recent National Federation of Independent Businesses
survey of over 4,000 of its members, the cost of health insurance is
the number one problem facing small businesses. And it has been since
1986. It is time for us to listen and to lend a hand to these small
businesses.
Small employers generally face higher costs for health insurance than
larger firms, which makes them less likely to offer coverage. Premiums
are generally higher for small businesses because they do not have as
much purchasing power as large companies, which limits their ability to
bargain for lower rates. They also have higher administrative costs
because they have fewer employees among whom to spread the fixed costs
of a health benefits plan. Moreover, they are not as able to spread
risks of medical claims over as many employees as can large firms.
As a consequence, according to the Congressional Budget Office (CBO),
only 42 percent of small businesses with fewer than 50 employees offer
health insurance to their employees. By way of contrast, more than 95
percent of businesses with 100 or more employees offer insurance.
Moreover, the smaller the business, the less likely it is to offer
health insurance to its employees. According to the Employee Benefit
Research Institute (EBRI), only 27 percent of workers in firms with
fewer than 10 employees received health insurance from their employers
in their own name, compared with 66 percent of workers in firms with
1,000 or more employees. Small businesses want to provide health
insurance for their employees, but the cost is often prohibitive.
Simply put, the biggest obstacle to health care coverage in the
United States today is cost. While American employers everywhere--from
giant multinational corporations to the small corner store--are facing
huge hikes in their health insurance costs, these rising costs are
particularly problematic for small businesses and their employees. Many
small employers are facing premium increases of 20 percent or more,
causing them either to drop their health benefits or pass the
additional costs on to their employees through increased deductibles,
higher copays or premium hikes. This, too, is troubling and will likely
add to the ranks of the uninsured since it will cause some employees--
particularly lower-wage workers who are disproportionately affected by
increased costs--to drop or turn down coverage when it is offered to
them.
The legislation I am introducing today, the Access to Affordable
Health Care Act, would help small employers cope with these rising
costs. My bill would provide new tax credits for small businesses to
help make health insurance more affordable. It would encourage those
small businesses that do not currently offer health insurance to do so
and would help businesses that do offer insurance to continue coverage
even in the face of rising costs.
Under my proposal, employers with fewer than ten employees would
receive a tax credit of 50 percent of the employer contribution to the
cost of employee health insurance. Employers with ten to 25 employees
would receive a 30 percent credit. Under my bill, the credit would be
based on an employer's yearly qualified health insurance expenses of up
to $2,000 for individual coverage and $4,000 for family coverage.
The legislation I am introducing today would also make health
insurance more affordable for individuals and families who must
purchase health insurance on their own. The Access to Affordable Health
Care Act would provide an above-the-line tax deduction for individuals
who pay at least 50 percent of the cost of their health and long-term
care insurance. Regardless of whether an individual takes the standard
deduction or itemizes, he or she would be provided relief by the new
above-the-line deduction.
My bill also would allow self-employed Americans to deduct the full
amount of their health care premiums. Some 25 million Americans are in
families headed by a self-employed individual--of these, five million
are uninsured. Establishing parity in the tax treatment of health
insurance costs between the self-employed and those working for large
businesses is not just a matter of equity. It will also help to reduce
the number of uninsured, but working Americans. My bill will make
health insurance more affordable for the 82,000 people in Maine who are
self-employed. They include our lobstermen, our hairdressers, our
electricians, our plumbers, and the many owners of mom-and-pop stores
that dot communities throughout the state.
[[Page S7859]]
Mr. President, the Access to Affordable Health Care Act would help
small businesses afford health insurance for their employees, and it
would also make coverage more affordable for working Americans who must
purchase it on their own. I urge my colleagues to join me as cosponsors
of this important legislation.
______
By Mr. HOLLINGS (for himself, Mr. Graham, Mr. Breaux, and Mr.
Cleland):
S. 2965. A bill to amend the Merchant Marine Act, 1936, to establish
a program to ensure greater security for United States seaports, and
for other purposes; to the Committee on Commerce, Science, and
Transportation.
the port and maritime security act of 2000
Mr. HOLLINGS. Mr. President, I rise today, to introduce the Port and
Maritime Security Act of 2000. This legislation is long overdue. It is
needed to facilitate future technological and advances and increases in
international trade, and ensure that we have the sort of security
control necessary to ensure that our borders are protected from drug
smuggling, illegal aliens, trade fraud, threats of terrorism as well as
potential threats to our ability to mobilize U.S. military force.
The Department of Transportation recently commenced an evaluation of
our marine transportation needs for the 21st Century. In September
1999, Transportation Secretary Slater issued a preliminary report of
the Marine Transportation System (MTS) Task Force--An Assessment of the
U.S. Marine Transportation System. The report reflected a highly
collaborative effort among public sector agencies, private sector
organizations and other stakeholders in the MTS.
The report indicates that the United States has more than 1,000
harbor channels and 25,000 miles of inland, intracoastal, and coastal
waterways in the United States which serve over 300 ports, with more
than 3,700 terminals that handle passenger and cargo movements. These
waterways and ports link to 152,000 miles of railways, 460,000 miles of
underground pipelines and 45,000 miles of interstate highways.
Annually, the U.S. marine transportation system moves more than 2
billion tons of domestic and international freight, imports 3.3 billion
tons of domestic oil, transports 134 million passengers by ferry,
serves 78 million Americans engaged in recreational boating, and hosts
more than 5 million cruise ship passengers.
The MTS provides economic value, as waterborne cargo contributes more
than $742 billion to U.S. gross domestic product and creates employment
for more than 13 million citizens. While these figures reveal the
magnitude of our waterborne commerce, they don't reveal the spectacular
growth of waterborne commerce, or the potential problems in coping with
this growth. It is estimated that the total volume of domestic and
international trade is expected to double over the next twenty years.
The doubling of trade also brings up the troubling issue of how the
U.S. is going to protect our maritime borders from crime, threats of
terrorism, or even our ability to mobilize U.S. armed forces.
Security at our maritime borders is given substantially less federal
consideration than airports or land borders. In the aviation industry,
the Federal Aviation Administration (FAA) is intimately involved in
ensuring that security measures are developed, implemented, and funded.
The FAA works with various Federal officials to assess threats directed
toward commercial aviation and to target various types of security
measures as potential threats change. For example, during the Gulf War,
airports were directed to ensure that no vehicles were parked within a
set distance of the entrance to a terminal.
Currently, each air carrier, whether a U.S. carrier or foreign air
carrier, is required to submit a proposal on how it plans to meet its
security needs. Air carriers also are responsible for screening
passengers and baggage in compliance with FAA regulations. The types of
machines used in airports are all approved, and in many instances paid
for by the FAA. The FAA uses its laboratories to check the machinery to
determine if the equipment can detect explosives that are capable of
destroying commercial aircrafts. Clearly, we learned from the Pan Am
103 disaster over Lockerbie, Scotland in 1988. Congress passed
legislation in 1990 ``the Aviation Security Improvement Act,'' which
was carefully considered by the Commerce Committee, to develop the
types of measures I noted above. We also made sure that airports, the
FAA, air carriers and law enforcement worked together to protect the
flying public.
Following the crash of TWA flight 800 in 1996, we also leaped to
spend money, when it was first thought to have been caused by a
terrorist act. The FAA spent about $150 million on additional screening
equipment, and we continue today to fund research and development for
better, and more effective equipment. Finally, the FAA is responsible
for ensuring that background checks (employment records/criminal
records) of security screeners and those with access to secured
airports are carried out in an effective and thorough manner. The FAA,
at the direction of Congress, is responsible for certifying screening
companies, and has developed ways to better test screeners. This is all
done in the name of protecting the public. Seaports deserve no less
consideration.
At land borders, there is a similar investment in security by the
federal government. In TEA-21, approved $140 million a year for five
years for the National Corridor Planning and Development and
Coordinated Border Infrastructure Program. Eligible activities under
this program include improvements to existing transportation and
supporting infrastructure that facilitate cross-border vehicles and
cargo movements; construction of highways and related safety
enforcement facilities that facilitate movements related to
international trade; operational improvements, including improvements
relating to electronic data interchange and use of telecommunications,
to expedite cross border vehicle and cargo movements; and planning,
coordination, design and location studies. By way of contrast, at U.S.
seaports, the federal government invests nothing in infrastructure,
other than the human presence of the U.S. Coast Guard, U.S. Customs
Service, and the Immigration and Naturalization Service, and whatever
equipment those agencies have to accomplish their mandates. Physical
infrastructure is provided by state-controlled port authorities, or by
private sector marine terminal operators. There are no controls, or
requirements in place, except for certain standards promulgated by the
Coast Guard for the protection of cruise ship passenger terminals.
Essentially, where sea ports are concerned we have abrogated the
federal responsibility of border control to the state and private
sector.
I think that the U.S. Coast Guard and Customs Agency are doing an
outstanding job, but they are outgunned. There is simply too much money
in the illegal activities they are seeking to curtail or eradicate, and
there is too much traffic coming into, and out of the United States.
For instance, in the latest data available, 1999, we had more than 10
million TEU's imported into the United States. For the uninitiated, a
TEU refers to a twenty-foot equivalent unit shipping container. By way
of comparison, a regular truck measures 48-feet in length. So in
translation, we imported close to 5 million truckloads of cargo.
According to the Customs Service, seaports are able to inspect between
1 percent and 2 percent of the containers, so in other words, a drug
smuggler has a 98 percent chance of gaining illegal entry.
It is amazing to think, that when you or I walk through an
international airport we will walk through a metal detector, and our
bags will be x-rayed, and Customs will interview us, and may check our
bags. However, at a U.S. seaport you could import a 48 foot truck load
of cargo, and have at least a 98 percent chance of not even being
inspected. It just doesn't seem right.
For instance, in my own state, the Port of Charleston which is the
fourth largest container port in the United States, Customs officials
have no equipment even capable of x-raying intermodal shipping
containers. Customs, which is understaffed to start with, must
physically open containers, and request the use of a canine unit from
local law enforcement to help with drug or illegal contraband
detection. This is simply not sufficient.
The need for the evaluation of higher scrutiny of our system of
seaport security came at the request of Senator
[[Page S7860]]
Graham, and I would like to at this time commend him for his persistent
efforts to address this issue. Senator Graham has had problems with
security at some of the Florida seaports, and although the state has
taken some steps to address the issue, there is a great need for
considerable improvement. Senator Graham laudably convinced the
President to appoint a Commission, designed similarly to the Aviation
Security Commission, to review security at U.S. seaports.
The Commission visited twelve major U.S. seaports, as well as two
foreign ports. It compiled a record of countless hours of testimony and
heard from, and reviewed the security practices of the shipping
industry. It also met with local law enforcement officials to discuss
the issues and their experiences as a result of seaport related crime.
Unfortunately, the report will not be publicly available until sometime
in the fall; however, Senator Graham's staff and my staff have worked
closely with the Commission, to develop legislation--the bill that we
are introducing--to address the Commission's concerns.
For instance, the Commission found that twelve U.S. seaports
accounted for 56 percent of the number of cocaine seizures, 32 percent
of the marijuana seizures, and 65 percent of heroin seizures in
commercial cargo shipments and vessels at all ports of entry
nationwide. Yet, we have done relatively little, other than send in an
undermanned contingency of Coast Guards and Customs officials to do
whatever they can.
Drugs are not the only criminal problem confronting U.S. seaports.
For example, alien smuggling has become increasingly lucrative
enterprise. To illustrate, in August of 1999, I.N.S. officials found
132 Chinese men hiding aboard a container ship docked in Savannah,
Georgia. The INS district director was quoted as saying; ``This was a
very sophisticated ring, and never in my 23 years with the INS have I
seen anything as large or sophisticated''. According to a recent GAO
report on INS efforts on alien smuggling (RPT-Number: B-283952),
smugglers collectively may earn as much as several billion dollars per
year bringing in illegal aliens.
Another problem facing seaports is cargo theft. Cargo theft does not
always occur at seaports, but in many instances the theft has occurred
because of knowledge of cargo contents. International shipping provides
access to a lot of information and a lot of cargo to many different
people along the course of its journey. We need to take steps to ensure
that we do not facilitate theft. Losses as a result of cargo theft have
been estimated as high as $12 billion annually, and it has been
reported to have increased by as much as 20 percent recently. The FBI
has become so concerned that it recently established a multi-district
task force, Operation Sudden Stop, to crack down on cargo crime.
The other issues facing seaport security may be less evident, but
potentially of greater threat. As a nation in general, we have been
relatively lucky to have been free of some of the terrorist threats
that have plagued other nations. However, we must not become
complacent. U.S. seaports are extremely exposed. On a daily basis many
seaports have cargo that could cause serious illness and death to
potentially large populations of civilians living near seaports if
targeted by terrorism.
The sheer magnitude of most seaports, their historical proximity to
established population bases, the open nature of the facility, and the
massive quantities of hazardous cargoes being shipped through a port
could be extremely threatening to the large populations that live in
areas surrounding our seaports. The same conditions in U.S. seaports,
that could expose us to threats from terrorism, could also be used to
disrupt our abilities to mobilize militarily. During the Persian Gulf
War, 95 percent of our military cargo was carried by sea. Disruption of
sea service, could have resulted in a vastly different course of
history. We need to ensure that it does not happen to any future
military contingencies.
As I mentioned before, our seaports are international borders, and
consequently we should treat them as such. However, I am realistic
about the possibilities for increasing seaport security, the realities
of international trade, and the many functional differences inherent in
the different seaport localities. Seaports by their very nature, are
open and exposed to surrounding areas, and as such it will be
impossible to control all aspects of security, however, sensitive or
critical safety areas should be protected. I also understand that U.S.
seaports have different security needs in form and scope. For instance,
a seaport in Alaska, that has very little international cargo does not
need the same degree of attention that a seaport in a major
metropolitan center, which imports and exports thousands of
international shipments. However, the legislation we are introducing
today will allow for public input and will consider local issues in the
implementation of new guidelines on port security, so as to address
such details.
Substantively, the Port and Maritime Security Act establishes a
multi-pronged effort to address security needs at U.S. Seaports, and in
some cases formalizes existing practices that have proven effective.
The bill authorizes the Coast Guard to establish a task force on port
security in consultation with U.S. Customs and the Maritime
Administration.
The purpose of the task force is to implement the provisions of the
act; to coordinate programs to enhance the security and safety of U.S.
seaports; to provide long-term solutions for seaport safety issues; to
coordinate with local port security committees established by the Coast
Guard to implement the provisions of the bill; and to ensure that the
public and local port security committees are kept informed about
seaport security enhancement developments.
The bill requires the U.S. Coast Guard to establish local port
security committees at each U.S. seaport. The membership of these
committees is to include representatives of the port authority, labor
organizations, the private sector, and federal, state, and local
government officials. These committees will be chaired by the U.S.
Coast Guard's Captain-of-the-Port, and will implement the provisions
and requirements of the bill locally, to ensure that local
considerations are considered in the establishment of security
guidelines.
The bill requires the task force, in consultation with the U.S.
Customs Service and MarAd, to develop a system of providing port
security threat assessments for U.S. seaports, and to revise this
assessment at least triennially. The threat assessment shall be
performed with the assistance of local officials, through local port
security committees, and ensure the port is made aware of and
participates in the analysis of security concerns.
The bill also requires the task force to develop voluntary minimum
security guidelines that are linked to the U.S. Coast Guard Captain-of-
the-Port controls, to include a model port concept, and to include
recommended ``best practices'' guidelines for use of maritime terminal
operators. Local port security committees are to participate in the
formulation of security guidelines, and the Coast Guard is required to
pursue the international adoption of similar security guidelines.
Additionally, the Maritime Administration (MarAd) is required to pursue
the adoption of proper private sector accreditation of ports that
adhere to guidelines (similar to a underwriters lab approval, or ISO
9000 accreditations).
The bill authorizes MarAd to provide Title XI loan guarantees to
cover the costs of port security infrastructure improvements, such as
cameras and other monitoring equipment, fencing systems and other types
of physical enhancements. The bill authorizes $10 million, annually for
four years, to cover costs, as defined by the Credit Reform Act, which
could guarantee up to $400 million in loans for security enhancements.
The bill also establishes a matching grant program to develop and
transfer technology to enhance security at U.S. seaports. The U.S.
Customs Service may award up to $12 million annually for four years for
this technology program, which is required to be awarded on a
competitive basis. Long-term technology development is needed to ensure
that we can develop non-intrusive technology that will allow trade to
expand, but also allow us greater ability to detect criminal threat.
The bill also authorizes additional funding for the U.S. Customs
Service to carry out the requirements of the
[[Page S7861]]
bill, and more generally, to enhance seaport security. The bill
requires a report to be attached on security and a revision of 1997
document entitled ``Port Security: A National Planning Guide.'' The
report and revised guide are to be submitted to Congress and are to
include a description of activities undertaken under the Port and
Maritime Security Act of 2000, in addition to analysis of the effect of
those activities on port security and preventing acts of terrorism and
crime.
The bill requires the Attorney General, to the extent feasible, to
coordinate reporting of seaport related crimes and to work with state
law enforcement officials to harmonize the reporting of data on cargo
theft. Better data will be crucial in identifying the extent and
location of criminal threats and will facilitate law enforcement
efforts combating crime. The bill also requires the Secretaries of
Agriculture, Treasury, and Transportation, as well as the Attorney
General to work together to establish shared dockside inspection
facilities at seaports for federal and state agencies, and authorizes
$3 million, annually for four years, to carry out this section. The
bill also requires the Customs Service to improve reporting of imports
at seaports, and to eliminate user fees for domestic U.S.- flag
carriers carrying in-bond domestic cargo.
Finally, the bill reauthorizes an extension of tonnage duties through
2006, and makes available $40,000,000 from the collections of these
duties to carry out the Port and Maritime Security Act. These fees
currently are set at certain levels, and are scheduled to be reduced in
2002. The legislation reauthorizes and extends the current fee level
for an additional four years, but dedicates its use to enhancing our
efforts to fight crime at U.S. seaports and to facilitating improved
protection of our borders, as well as to enhance our efforts to ward
off potential threats of terrorism.
Mr. GRAHAM. Mr. President, I rise today, joined by Senators Hollings,
Breaux, and Cleland, to introduce the Port and Maritime Security Act of
2000, a bill that would significantly improve the overall security and
cargo processing operations at U.S. seaports.
For some time, I have very been concerned that seaports--unlike our
airports, lack the advanced security procedures and equipment that are
necessary to prevent acts of terrorism, cargo theft and drug
trafficking. In addition, although seaports conduct the vast majority
of our international trade, the activities of law enforcement and trade
processing agencies--such as the Coast Guard, Customs, the Department
of Agriculture, the FBI, and state and local agencies--are often
uncoordinated and fragmented. Taken together, the lack of security and
interagency coordination at U.S. seaports present an extremely
attractive target for criminals and a variety of criminal activities.
Before discussing the specifics of this legislation, it is important
to describe the circumstances that have caused the security crisis at
our seaports. Today, U.S. seaports conduct 95 percent of the Nation's
international trade. Over the next twenty years, the total volume of
imported and exported goods at seaports is expected to increase three-
fold.
In addition, the variety of trade and commerce that are carried out
at seaports has greatly expanded. Bulk cargo, containerized cargo,
passenger cargo and tourism, intermodal transportation systems, and
complex domestic and international trade relationships have
significantly changed the nature and conduct of seaport commerce. This
continuing expansion of activity at seaports has increased the
opportunities for a variety of illegal activities, including drug
trafficking, cargo theft, auto theft, illegal immigration, and the
diversion of cargo, such as food, to avoid safety inspections.
In the face of these new challenges, it appears that the U.S. port
management system has fallen behind the rest of the world. We lack a
comprehensive, nationwide strategy to address the security issues that
face our seaport system.
Therefore, in 1998, I asked the President to establish a Federal
commission to evaluate both the nature and extent of crime and the
overall state of security in seaports and to develop recommendations
for improving the response of Federal, State and local agencies to all
types of seaport crime. In response to my request, President Clinton
established the Interagency Commission on Crime and Security in U.S.
Seaports on April 27, 1999.
Over the past year, the Commission has conducted on-site surveys of
twelve (12) U.S. seaports, including the Florida ports of Miami and
Port Everglades. At each location, interviews and focus group sessions
were held with representatives of Government agencies and the trade
community. The focus group meetings with Federal agencies, State and
local government officials, and the trade community were designed to
solicit their input regarding issues involving crime, security,
cooperation, and the appropriate government response to these issues.
The Commission also visited two large foreign ports--Rotterdam and
Felixstowe--in order to assess their security procedures and use their
standards and procedures as a ``benchmark'' for operations at U.S.
ports.
In February of this year, the Commission issued preliminary findings
which outlined many of the common security problems that were
discovered in U.S. seaports. Among other conclusions, the Commission
found that: (1) intelligence and information sharing among law
enforcement agencies needs to be improved at many ports; (2) many ports
do not have any idea about the threats they face, because vulnerability
assessments are not performed locally; (3) a lack of minimum security
standards at ports and at terminals, warehouses, and trucking firms,
leaves many ports and port users vulnerable to theft, pilferage, and
unauthorized access by criminals; and (4) advanced equipment, such as
small boats, cameras, vessel tracking devices, and large scale x-rays,
are lacking at many high-risk ports. Although the Commission's final
report will not be released until later this summer, I have worked
closely with them to draft this legislation.
The legislation Senator Hollings and I are introducing today will
begin to address the problems of our seaports by directing the
Commandant of the Coast Guard, in consultation with the Customs Service
and the Maritime Administration, to establish a Task Force on Port
Security. The new Task Force on Port Security will be responsible for
implementing all of the provisions of our legislation. It will have a
balanced representation, including Federal, State, local, and private
sector representatives familiar with port operations, including port
labor.
To ensure full implementation of this legislation, the bill requires
the U.S. Coast Guard to establish local port security committees at
each U.S. seaport. Membership of these committees will include
representatives of the local port authority, labor organizations, the
private sector, and Federal, State, and local government officials. The
committees will be chaired by the local U.S. Coast Guard Captain-of-
the-Port.
In addition, our bill requires the Task Force on Port Security to
develop a system of providing port security threat assessments for U.S.
seaports, and to revise these assessments at least every three years.
The local port security committees will participate in the analysis of
threat and security concerns.
Perhaps most important, the bill requires the Task Force to develop
voluntary minimum security guidelines for seaports, develop a ``model
port'' concept for all seaports, and include recommended ``best
practices'' guidelines for use by maritime terminal operators. Again,
local port security committees are to participate in the formulation of
these security guidelines, and the Coast Guard is required to pursue
the international adoption--through the International Maritime
Organization and other organizations--of similar security guidelines.
Some States and localities have already conducted seaport security
reviews, and have implemented strategies to correct the security
shortfalls that they have discovered. In 1999, Florida initiated
comprehensive security review of seaports within the state. Led by
James McDonough, Director of the governor's Office of Drug Control, the
review found that 150 to 200 metric tons of cocaine--or fifty percent
of the U.S. total-flow into Florida annually through ports throughout
the state.
[[Page S7862]]
Both the Florida Legislature and the Florida National Guard
recognized the need to address this growing problem and acted
decisively. Legislation was introduced in the Florida Senate that
called for the development and implementation of statewide port
security plans, including requirements for minimum security standards
and compliance inspections. In fiscal year 2001, the Florida National
Guard will commit $1 million to provide counter-narcotics support at
selected ports-of-entry to both strengthen U.S. Customs Service
interdiction efforts and enhance overall security at these ports.
In a July 21, 2000, editorial in the Tallahassee Democrat, Mr.
McDonough identifies the evaluation of Florida's seaports and the
implementation of security standards as a priority initiative in
stemming the flow of drugs into Florida.
We realize that U.S. seaports are a joint federal, state, and local
responsibility, and we seek to support comprehensive port security
efforts such as the one in Florida. Therefore, our bill provides
significant incentives for both port infrastructure improvements and
research and development on new port security equipment.
The bill authorizes the Maritime Administration to provide title XI
loan guarantees to cover the costs of port security infrastructure
improvements, such as cameras and other monitoring equipment, fencing
systems, as well as other physical security enhancements. The
authorization level of $10 million annually, for four years, could
guarantee up to $400 million in loans for seaport security
enhancements.
In addition, the legislation will also establish a matching grant
program to develop and transfer technology to enhance security at U.S.
seaports. The U.S. Customs Service may award up to $12 million
annually, for four years, for this competitive grant program.
We also must improve the reporting on, and response to, seaport
crimes as they take place. Therefore, the bill requires the Attorney
General to coordinate reports of seaport related crimes and to work
with State law enforcement officials to harmonize the reporting of data
of cargo theft. To facilitate this coordination, the bill authorizes $2
million annually, for four years, to modify the Justice Department's
National Incident-Based Reporting System. It also authorizes grants to
states to help them modify their reporting systems to capture crime
data more accurately.
In order to pay for all of these important initiatives, the bill
would reauthorize an extension of tonnage duties through 2006. It would
also make available $40,000,000 from the collection of these duties to
carry out all of the provisions of the Port and Maritime Security Act.
Currently, the collection of tonnage duties is not directed towards a
specific program. Implementing the provisions of the Port and Maritime
Security Act of 2000 will produce concrete improvements in the
efficiency, safety, and security of our nation's seaports, and will
result in a demonstrable benefit for those who currently pay tonnage
duties.
Seaports play one of the most critical roles in expanding our
international trade and protecting our borders from international
threats. The ``Port and Maritime Security Act'' recognizes these
important responsibilities of our seaports, and devotes the necessary
resources to move ports into the 21st century. I urge my colleagues to
look towards the future by supporting this critical legislation--and by
taking action to protect one of our most valuable tools in promoting
economic growth.
Mr. President, I ask unanimous consent to print the July 21, 2000
editorial from The Tallahasee Democrat in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Tallahassee Democrat, July 21, 2000]
Florida's Drug War: Looking Back--And Ahead
(By James R. McDonough)
The recent signing of anti-drug legislation by Gov. Jeb
Bush should come as welcome news to Debbie Alumbaugh and
parents like her.
In 1998, Michael Tiedemann, the Fort Pierce woman's 15-
year-old son, choked to death on his vomit after getting sick
from ingesting GHB and another drug. GHB is one of several
``club'' or ``designer'' drugs that are a growing problem in
Tallahassee, as pointed out recently in a letter to the
Democrat by Rosalind Tompkins, director of the newly created
Anti-Drug Anti-Violence Alliance. The new law won't bring
Michael back, but it lessens the chance that GHB and other
dangerous substances will fall into other young hands. Gov.
Bush, who has made reducing drug abuse one of his top
priorities, approved the following anti-drug measures passed
during the 2000 session:
A controlled substance act, which is aimed at GHB, ecstasy
and other club drugs, and more established drugs such as
methamphetamine. The new law addresses the trafficking, sale,
purchase, manufacture and possession of these drugs.
A nitrous oxide criminalization act that addresses the
illegal possession, sale, purchase or distribution of this
substance.
A money-laundering bill designed to tighten security at
Florida's seaports. The measure also creates a contraband
interdiction team that will search vehicles for illegal
drugs.
A bill that applies the penalties under Florida's ``10/20/
Life'' law to juveniles who carry a gun while trafficking in
illegal drugs.
Gov. Bush also approved a budget that includes an estimated
$270 million for drug abuse prevention and treatment. This is
a big step in the right direction, as these services,
especially drug prevention programs aimed at children, are
critical.
Considering the above legislation--along with the
publication of the Florida Drug Control Strategy, a statewide
crackdown on rave clubs, a survey that shows significant
reductions in youth use of marijuana, cocaine and inhalants,
and a decline in heroin and cocaine overdose deaths--the past
year has shown some progress toward reducing drug abuse.
Even with additional dollars for drug abuse treatment, the
number of treatment beds still falls far short of demand. The
wait time to enter a treatment program is measured in weeks.
This is unacceptable when you consider the damage done to the
individual and to society as an addict awaits treatment. We
must continue to narrow the treatment gap until those who
need this vital help can get it in a timely manner.
Our efforts cannot be solely focused on the demand for
drugs. A sound drug control strategy must also address
supply. The Office of Drug Control has several initiatives to
stem the flow of drugs into Florida.
An intelligence effort to determine the types of drugs
entering our state, the way in which they enter, who brings
them in and the amounts. This includes the expansion of a
drug supply database, all of which go to better inform
counter-drug operations.
An evaluation of Florida's seaports and the implementation
of standards for security against drug smuggling and money
laundering.
The addition of a third High Intensity Drug Trafficking
Area--a formal designation that creates a multi-agency anti-
drug task force--covering Northeast Florida.
A systematic counter-drug effort aimed at interdicting and
deterring drug trafficking on Florida's roads and highways.
Development of intelligence-driven multi-jurisdictional
counter-drug operations that combine the efforts of law
enforcement agencies at the federal, state and local levels.
Our efforts will continue. As history has taught us, the
struggle against drugs is one that never ends. The minute we
believe we have put the matter to rest and relax our guard,
drug use immediately begins to resurge. Conversely, if we
address the problem in a rational, balanced way, drug abuse
abates. The fact is that government can only do so much in
countering illegal drugs. Because substance abuse has such as
pervasive impact on the family and on society, addressing the
problem falls to the entire community: government, educators,
community and business leaders, clergy, coaches and, most
importantly, parents.
______
By Mr. JEFFORDS (for himself, Mr. Baucus, Mr. Edwards, and Mr.
Roth):
S. 2966. A bill to amend the Fair Labor Standards Act of 1938 to
prohibit retaliation and confidentiality policies relating to
disclosure of employee wages, and for other purposes; to the Committee
on Health, Education, Labor, and Pensions.
the wage awareness protection act
Mr. JEFFORDS. Mr. President, it is with great pride that I introduce
the Wage Awareness Protection Act.
We have made great strides in the fight against workplace
discrimination. The enactment of the Civil Rights Act more than 30
years ago served to codify this Nation's commitment to the basic
principles of equal opportunity and fairness in the workplace. At the
time, we enacted not one, but two laws, aimed at ensuring that women
receive equal pay for equal work: the Equal Pay Act (``EPA'') of 1963,
and to Title VII of the 1964 Civil Rights Act. More recently, Congress
reaffirmed this commitment by passing the Civil Rights Act of 1991,
which expanded the 1964 Civil Rights Act and gave victims of
intentional discrimination the ability to recover compensatory and
punitive damages.
[[Page S7863]]
Certainly a lot has changed since we first enacted these laws. It
should come as no surprise that more women are participating in the
labor force than ever before, with women now making up an estimated 46
percent of the workforce. Women are also spending more time in school
and are now earning over half of all bachelor's and master's degrees.
In addition, women are breaking down longstanding barriers in certain
industries and occupations.
Despite these advances, the unfortunate reality is that pay
discrimination has continued to persist in some workplaces. In a recent
hearing before the Committee on Health, Education, Labor and Pensions,
we heard testimony that a principal reason why gender-based wage
discrimination has continued is that many female employees are simply
unaware that they are being paid less than their male counterparts.
These unwitting victims of wage discrimination are often kept in the
dark by employer policies that prohibit employees from sharing salary
information. Employees are warned that they will be reprimanded or
terminated if they discuss salary information with their co-workers.
I believe that a fundamental barrier to uncovering and resolving
gender-based pay discrimination is fear of employer retaliation.
Employees who suspect wage discrimination should be able to share their
salary information with co-workers. I am not alone in my belief.
According to a recent Business and Professional Women/USA survey,
Americans overwhelmingly support anti-retaliation legislation. And, 65
percent of those polled, said they believe legislation should protect
those who suspect wage discrimination from employer retaliation for
discussing salary information with co-workers.
The Worker Awareness Protection Act will prohibit employers from
having blanket wage confidentiality policies preventing employees from
sharing their salary information. In addition, this new legislation
will bolster the Equal Pay Act's retaliation provisions including
providing workers with protection from employer retaliation for
voluntarily discussing their own salary information with coworkers. I
am excited about this legislation. It is my hope that it will help
point the way to elimination of any pernicious discriminatory pay
practices.
I urge all my colleagues to join me in supporting this bill.
I ask unanimous consent that a copy of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2966
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 ``Wage Awareness Protection
Act''.
SEC. 2. PROHIBITED ACTS.
(a) Prohibition on Retaliation and Confidentiality
Policies.--Section 6(d) of the Fair Labor Standards Act of
1938 (29 U.S.C. 206(d)) is amended--
(1) by redesignating paragraph (4) as paragraph (6); and
(2) by inserting after paragraph (3) the following:
``(4) It shall be unlawful for any person--
``(A) to discharge or in any other manner discriminate
against any employee because such employee--
``(i) has made a charge, assisted, or participated in any
manner in an investigation, hearing, or other proceeding
under this subsection; or
``(ii) has inquired about, discussed, or otherwise
disclosed the wages of the employee, or another employee who
is not covered by a confidentiality policy that is lawful
under subparagraph (B); or
``(B) to make or enforce a written or oral confidentiality
policy that prohibits an employee from inquiring about,
discussing, or otherwise disclosing the wages of the employee
or another employee, except that nothing in this subparagraph
shall be construed--
``(i) to prohibit an employer from making or enforcing such
a confidentiality policy, for an employee who regularly, in
the course of carrying out the employer's business, obtains
information about the wages of other employees, that
prohibits the employee from inquiring about, discussing, or
otherwise disclosing the wages of another employee, except
that an employee may discuss or otherwise disclose the
employee's own wages; and
``(ii) to require the employer to disclose an employee's
wages.
``(5) For purposes of sections 16 and 17, a violation of
paragraph (4) shall be treated as a violation of section
15(a)(3), rather than as a violation of this section.''.
(b) Conforming Amendment.--Section 6(d)(3) of the Fair
Labor Standands Act of 1938 (29 U.S.C. 206(d)(3) is amended
by inserting ``(other than paragraph (4))'' after ``this
subsection''.
______
By Mr. MURKOWSKI (for himself, Mr. Gorton, Mr. Kerrey, and Mr.
Jeffords):
S. 2967. A bill to amend the Internal Revenue Code of 1986 to
facilitate competition in the electric power industry; to the Committee
on Finance.
the electric power industry tax modernization act
Mr. MURKOWSKI. Mr. President, today I am joined by Senators, Gorton,
Kerrey and Jeffords in introducing the Electric Power Industry Tax
Modernization Act, legislation that will facilitate the opening up of
the nation's energy grid to electricity competition. This landmark
legislation demonstrates the good faith of the most important players
in the industry--the investor owned utilities (IOUs) and the municipal
utilities.
In the Energy Committee, which I currently Chair, we have held more
than 18 days of hearings and heard testimony from more than 160
witnesses on electricity restructuring. Although those 160 witnesses
had many differing views, every witness agreed that the tax laws must
be rewritten to reflect the new reality of a competitive electricity
market.
Already, 24 states have implemented laws deregulating their
electricity markets. And the other 36 states are all considering
deregulation schemes. Faced with that reality, the federal tax laws
must be updated to ensure that tax laws which made sense when
electricity was a regulated monopoly are not allowed to interfere with
opening up the nation's electrical infrastructure to competition.
Last October I held a hearing in the Finance Committee Subcommittee
on Long Term Growth to examine all of the tax issues that confront the
industry. At the end of the hearing I urged all parties to sit down at
the negotiating table and hammer out a consensus that will resolve the
tax issues.
The bill we are introducing today reflects the compromise that has
been reached between the IOUs and the municipal utilities.
One of the major problems that the current tax rules create is to
undermine the efficiency of the entire electric system in a deregulated
environment because these rules effectively preclude public power
entities from participating in State open access restructuring plans,
without jeopardizing the exempt status of their bonds.
No one wants to see bonds issued to finance public power become
retroactively taxable because a municipality chooses to participate in
a state open access plan. That would cause havoc in the financial
markets and could undermine the financial stability of many
municipalities.
The bill we are introducing overcomes this problem by allowing
municipal systems to elect to terminate the issuance of new tax-exempt
bonds for generation facilities in return for grandfathering existing
bonds. In addition, the bill allows tax-exempt bonds to be issued to
finance some new transmission facilities.
I recognize that in making these two changes in the tax law, the
municipal utilities have given up a substantial financing tool that has
been at the heart of the controversy between the municipal utilities
and the IOUs.
At the same time, the bill updates the tax code to reflect the fact
that the regulated monopoly model no longer exists. For example, the
bill modifies the current rules regarding the treatment of nuclear
decommissioning costs to make certain that utilities will have the
resources to meet those future costs and clarifies the tax treatment of
these funds if a nuclear facility is sold.
The bill also provides tax relief for utilities that spin off or sell
transmission facilities to independent participants in FERC approved
regional transmission organizations.
Another section of the bill changes the tax rules regarding
contributions in aid of construction for electric transmission and
distribution facilities. This is an especially important provision;
however when this bill is considered in the Finance Committee, I intend
to modify this proposal so that it is expanded to all contributions in
aid of construction, not just for electric transmission and
distribution.
The IOUs and the Municipal utilities are to be commended for coming
up
[[Page S7864]]
with this agreement. However, there is one other element of the tax
code that needs to be addressed if we are going to open the entire grid
to competition. And that sector is the cooperative sector.
Currently, coops may not participate in wheeling power through their
lines because of concern that they will violate the so-called 85-15
test. I urge the coops to sit down with the other utilities and reach
an accord so that when we consider this legislation, the coops' will be
included in a tax bill.
Mr. GORTON. Mr. President, today I am extremely pleased to co-sponsor
the Electric Power Industry Tax Modernization Act. This legislation,
when enacted, will contribute to a more reliable and efficient electric
power industry that will provide benefits for all Americans connected
to the interstate power grid.
I have been working for three years to resolve the tax problems for
consumer-owned municipal utilities, those that are often referred to as
Public Power. Nearly half the citizens of my state are served by Public
Power.
These problems are due to outdated tax statutes that were written in
a different era-an era where the emerging competition in the wholesale
electricity market was not envisioned. The negative effects of these
outdated tax provisions have impacted not only consumers of Public
Power, but also tens of millions of other customers. Public Power is
often prevented from sharing the use of their transmission systems
solely due to these tax provisions. These outdated tax provisions are
negatively impacting the reliability of entire regions of our nation,
adding stress to an already stressed system.
In addition to Public Power, other types of utilities are prevented
from adapting to this new era of emerging competition by other
constraints in this outdated area of the tax law. All of these
uncertainties have led to a condition where investment has slowed in
this critical area of the economy, just as we need more investment to
assure sufficient power plants and transmission lines to feed a growing
economy that is increasingly dependent on reliable and affordable
electricity.
This compromise bill includes the essence of my legislation, S. 386,
The Bond Fairness and Protection Act that I introduced last year with
Senator Kerrey from Nebraska, a bill that includes an additional 32 co-
sponsors in the Senate. This legislative language will allow Public
Power to move into the future with certainty, and protects the millions
of American citizens who hold current investments in Public Power debt.
The bill also includes legislative language that resolves conflicts
for investor-owned utilities. These changes are also needed to solve
problems in other parts of the outdated tax code as it pertains to
electricity. The new provisions will also help contribute to a more
reliable and orderly electricity system in our nation.
I look forward to gaining additional support for this bill among the
other members of the Senate, and I look forward to the Finance
Committee's consideration of this legislation in September. As soon as
this legislation can be enacted, American electricity consumers will
begin to enjoy a more certain and reliable future regarding their
electricity needs.
Mr. KERREY. Mr. President, today I wish to join my colleagues,
Senator Murkowski, Gorton, and Jeffords in introducing legislation that
will help ensure that customers receive reliable and affordable
electricity. The Electric Power Industry Tax Modernization Act is the
culmination of months-long discussions between shareholder-owned
utilities and publicly-owned utilities. Without the diligence and
patience exhibited by these groups, it is doubtful that Congress could
be in the position to act on this issue. Additionally, I would like to
recognize the efforts of Senator Murkowski and Senator Gorton, whose
efforts at getting these groups to sit down and discuss these issues
was invaluable to the final agreement.
Mr. President, this legislation will ensure that Nebraskans continue
to benefit from the publicly-owned power they currently receive.
Nebraska has 154 not-for-profit community-based public power systems.
It is the only state which relies entirely on public power for
electricity. This system has served my state well as Nebraskans enjoy
some of the lowest electricity rates in the nation.
In closing, I would urge my colleagues to join this bipartisan effort
to address the changes steaming from electrical restructuring.
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. 2967
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 ``Electric Power Industry Tax
Modernization Act''.
SEC. 2. TAX-EXEMPT BOND FINANCING OF CERTAIN ELECTRIC
FACILITIES.
(a) Rules Applicable to Electric Output Facilities.--
Subpart A of part IV of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to tax exemption
requirements for State and local bonds) is amended by
inserting after section 141 the following new section:
``SEC. 141A. ELECTRIC OUTPUT FACILITIES.
``(a) Election To Terminate Tax-Exempt Bond Financing for
Certain Electric Output Facilities.--
``(1) In general.--A governmental unit may make an
irrevocable election under this paragraph to terminate
certain tax-exempt financing for electric output facilities.
If the governmental unit makes such election, then--
``(A) except as provided in paragraph (2), on or after the
date of such election the governmental unit may not issue
with respect to an electric output facility any bond the
interest on which is exempt from tax under section 103, and
``(B) notwithstanding paragraph (1) or (2) of section
141(a) or paragraph (4) or (5) of section 141(b), no bond
which was issued by such unit with respect to an electric
output facility before the date of enactment of this
subsection (or which is described in paragraph (2)(B), (D),
(E) or (F)) the interest on which was exempt from tax on such
date, shall be treated as a private activity bond.
``(2) Exceptions.--An election under paragraph (1) does not
apply to any of the following bonds:
``(A) Any qualified bond (as defined in section 141(e)).
``(B) Any eligible refunding bond (as defined in subsection
(d)(6)).
``(C) Any bond issued to finance a qualifying transmission
facility or a qualifying distribution facility.
``(D) Any bond issued to finance equipment or facilities
necessary to meet Federal or State environmental requirements
applicable to an existing generation facility.
``(E) Any bond issued to finance repair of any existing
generation facility. Repairs of facilities may not increase
the generation capacity of the facility by more than 3
percent above the greater of its nameplate or rated capacity
as of the date of enactment of this section.
``(F) Any bond issued to acquire or construct (i) a
qualified facility, as defined in section 45(c)(3), if such
facility is placed in service during a period in which a
qualified facility may be placed in service under such
section, or (ii) any energy property, as defined in section
48(a)(3).
``(3) Form and effect of election.--
``(A) In general.--An election under paragraph (1) shall be
made in such a manner as the Secretary prescribes and shall
be binding on any successor in interest to, or any related
party with respect to, the electing governmental unit. For
purposes of this paragraph, a governmental unit shall be
treated as related to another governmental unit if it is a
member of the same controlled group.
``(B) Treatment of electing governmental unit.--A
governmental unit which makes an election under paragraph (1)
shall be treated for purposes of section 141 as a person
which is not a governmental unit and which is engaged in a
trade or business, with respect to its purchase of
electricity generated by an electric output facility placed
in service after such election, if such purchase is under a
contract executed after such election.
``(4) Definitions.--For purposes of this subsection:
``(A) Existing generation facility.--The term `existing
generation facility' means an electric generation facility in
service on the date of the enactment of this subsection or
the construction of which commenced before June 1, 2000.
``(B) Qualifying distribution facility.--The term
`qualifying distribution facility' means a distribution
facility over which open access distribution services
described in subsection (b)(2)(C) are provided.
``(C) Qualifying transmission facility.--The term
`qualifying transmission facility' means a local transmission
facility (as defined in subsection (c)(3)(A)) over which open
access transmission services described in subparagraph (A),
(B), or (E) of subsection (b)(2) are provided.
``(b) Permitted Open Access Activities and Sales
Transactions Not a Private Business Use for Bonds Which
Remain Subject to Private Use Rules.--
``(1) General rule.--For purposes of this section and
section 141, the term `private business use' shall not
include a permitted
[[Page S7865]]
open access activity or a permitted sales transaction.
``(2) Permitted open access activities.--For purposes of
this section, the term `permitted open access activity' means
any of the following transactions or activities with respect
to an electric output facility owned by a governmental unit:
``(A) Providing nondiscriminatory open access transmission
service and ancillary services--
``(i) pursuant to an open access transmission tariff filed
with and approved by FERC, but, in the case of a voluntarily
filed tariff, only if the governmental unit voluntarily files
a report described in paragraph (c) or (h) of section 35.34
of title 18 of the Code of Federal Regulations or successor
provision (relating to whether or not the issuer will join a
regional transmission organization) not later than the later
of the applicable date prescribed in such paragraphs or 60
days after the date of the enactment of this section,
``(ii) under an independent system operator agreement,
regional transmission organization agreement, or regional
transmission group agreement approved by FERC, or
``(iii) in the case of an ERCOT utility (as defined in
section 212(k)(2)(B) of the Federal Power Act (16 U.S.C.
824k(k)(2)(B)), pursuant to a tariff approved by the Public
Utility Commission of Texas.
``(B) Participation in--
``(i) an independent system operator agreement,
``(ii) a regional transmission organization agreement, or
``(iii) a regional transmission group,
which has been approved by FERC, or by the Public Utility
Commission of Texas in the case of an ERCOT utility (as so
defined). Such participation may include transfer of control
of transmission facilities to an organization described in
clause (i), (ii), or (iii).
``(C) Delivery on a nondiscriminatory open access basis of
electric energy sold to end-users served by distribution
facilities owned by such governmental unit.
``(D) Delivery on a nondiscriminatory open access basis of
electric energy generated by generation facilities connected
to distribution facilities owned by such governmental unit.
``(E) Other transactions providing nondiscriminatory open
access transmission or distribution services under Federal,
State, or local open access, retail competition, or similar
programs, to the extent provided in regulations prescribed by
the Secretary.
``(3) Permitted sales transaction.--For purposes of this
subsection, the term `permitted sales transaction' means any
of the following sales of electric energy from existing
generation facilities (as defined in subsection (a)(4)(A)):
``(A) The sale of electricity to an on-system purchaser, if
the seller provides open access distribution service under
paragraph (2)(C) and, in the case of a seller which owns or
operates transmission facilities, if such seller provides
open access transmission under subparagraph (A), (B), or (E)
of paragraph (2).
``(B) The sale of electricity to a wholesale native load
purchaser or in a wholesale stranded cost mitigation sale--
``(i) if the seller provides open access transmission
service described in subparagraph (A), (B), or (E) of
paragraph (2), or
``(ii) if the seller owns or operates no transmission
facilities and transmission providers to the seller's
wholesale native load purchasers provide open access
transmission service described in subparagraph (A), (B), or
(E) of paragraph (2).
``(4) Definitions and special rules.--For purposes of this
subsection:
``(A) On-system purchaser.--The term `on-system purchaser'
means a person whose electric facilities or equipment are
directly connected with transmission or distribution
facilities which are owned by a governmental unit, and such
person--
``(i) purchases electric energy from such governmental unit
at retail and either was within such unit's distribution area
in the base year or is a person as to whom the governmental
unit has a service obligation, or
``(ii) is a wholesale native load purchaser from such
governmental unit.
``(B) Wholesale native load purchaser.--The term `wholesale
native load purchaser' means a wholesale purchaser as to whom
the governmental unit had--
``(i) a service obligation at wholesale in the base year,
or
``(ii) an obligation in the base year under a requirements
contract, or under a firm sales contract which has been in
effect for (or has an initial term of) at least 10 years,
but only to the extent that in either case such purchaser
resells the electricity at retail to persons within the
purchaser's distribution area.
``(C) Wholesale stranded cost mitigation sale.--The term
`wholesale stranded cost mitigation sale' means 1 or more
wholesale sales made in accordance with the following
requirements:
``(i) A governmental unit's allowable sales under this
subparagraph during the recovery period may not exceed the
sum of its annual load losses for each year of the recovery
period.
``(ii) The governmental unit's annual load loss for each
year of the recovery period is the amount (if any) by which--
``(I) sales in the base year to wholesale native load
purchasers which do not constitute a private business use,
exceed
``(II) sales during that year of the recovery period to
wholesale native load purchasers which do not constitute a
private business use.
``(iii) If actual sales under this subparagraph during the
recovery period are less than allowable sales under clause
(i), the amount not sold (but not more than 10 percent of the
aggregate allowable sales under clause (i)) may be carried
over and sold as wholesale stranded cost mitigation sales in
the calendar year following the recovery period.
``(D) Recovery period.--The recovery period is the 7-year
period beginning with the start-up year.
``(E) Start-up year.--The start-up year is whichever of the
following calendar years the governmental unit elects:
``(i) The year the governmental unit first offers open
transmission access.
``(ii) The first year in which at least 10 percent of the
governmental unit's wholesale customers' aggregate retail
native load is open to retail competition.
``(iii) The calendar year which includes the date of the
enactment of this section, if later than the year described
in clause (i) or (ii).
``(F) Permitted sales transactions under existing
contracts.--A sale to a wholesale native load purchaser
(other than a person to whom the governmental unit had a
service obligation) under a contract which resulted in
private business use in the base year shall be treated as a
permitted sales transaction only to the extent that sales
under the contract exceed the lesser of--
``(i) in any year, the private business use which resulted
during the base year, or
``(ii) the maximum amount of private business use which
could occur (absent the enactment of this section) without
causing the bonds to be private activity bonds.
This subparagraph shall only apply to the extent that the
sale is allocable to bonds issued before the date of the
enactment of this section (or bonds issued to refund such
bonds).
``(G) Joint action agencies.--A joint action agency, or a
member of (or a wholesale native load purchaser from) a joint
action agency, which is entitled to make a sale described in
subparagraph (A) or (B) in a year, may transfer the
entitlement to make that sale to the member (or purchaser),
or the joint action agency, respectively.
``(c) Certain Bonds for Transmission and Distribution
Facilities Not Tax Exempt.--
``(1) General rule.--For purposes of this title, no bond
the interest on which is exempt from taxation under section
103 may be issued on or after the date of the enactment of
this subsection if any of the proceeds of such issue are used
to finance--
``(A) any transmission facility which is not a local
transmission facility, or
``(B) a start-up utility distribution facility.
``(2) Exceptions.--Paragraph (1) shall not apply to--
``(A) any qualified bond (as defined in section 141(e)),
``(B) any eligible refunding bond (as defined in subsection
(d)(6)), or
``(C) any bond issued to finance--
``(i) any repair of a transmission facility in service on
the date of the enactment of this section, so long as the
repair does not increase the voltage level over its level in
the base year or increase the thermal load limit of the
transmission facility by more than 3 percent over such limit
in the base year,
``(ii) any qualifying upgrade of a transmission facility in
service on the date of the enactment of this section, or
``(iii) a transmission facility necessary to comply with an
obligation under a shared or reciprocal transmission
agreement in effect on the date of the enactment of this
section.
``(3) Local transmission facility definitions and special
rules.--For purposes of this subsection--
``(A) Local transmission facility.--The term `local
transmission facility' means a transmission facility which is
located within the governmental unit's distribution area or
which is, or will be, necessary to supply electricity to
serve retail native load or wholesale native load of 1 or
more governmental units. For purposes of this subparagraph,
the distribution area of a public power authority which was
created in 1931 by a State statute and which, as of January
1, 1999, owned at least one-third of the transmission circuit
miles rated at 230kV or greater in the State, shall be
determined under regulations of the Secretary.
``(B) Retail native load.--The term `retail native load' is
the electric load of end-users served by distribution
facilities owned by a governmental unit.
``(C) Wholesale native load.--The term `wholesale native
load' is--
``(i) the retail native load of a governmental unit's
wholesale native load purchasers, and
``(ii) the electric load of purchasers (not described in
clause (i)) under wholesale requirements contracts which--
``(I) do not constitute private business use under the
rules in effect absent this subsection, and
``(II) were in effect in the base year.
``(D) Necessary to serve load.--For purposes of determining
whether a transmission or distribution facility is, or will
be, necessary to supply electricity to retail native load or
wholesale native load--
``(i) electric reliability standards or requirements of
national or regional reliability organizations, regional
transmission organizations, and the Electric Reliability
Council of Texas shall be taken into account, and
[[Page S7866]]
``(ii) transmission, siting, and construction decisions of
regional transmission organizations or independent system
operators and State and Federal agencies shall be presumptive
evidence regarding whether transmission facilities are
necessary to serve native load.
``(E) Qualifying upgrade.--The term `qualifying upgrade'
means an improvement or addition to transmission facilities
in service on the date of the enactment of this section which
is ordered or approved by a regional transmission
organization, by an independent system operator, or by a
State regulatory or siting agency.
``(4) Start-up utility distribution facility defined.--For
purposes of this subsection, the term `start-up utility
distribution facility' means any distribution facility to
provide electric service to the public that is placed in
service--
``(A) by a governmental unit which did not operate an
electric utility on the date of the enactment of this
section, and
``(B) before the date on which such governmental unit
operates in a qualified service area (as such term is defined
in section 141(d)(3)(B)).
A governmental unit is deemed to have operated an electric
utility on the date of the enactment of this section if it
operates electric output facilities which were operated by
another governmental unit to provide electric service to the
public on such date.
``(d) Definitions; Special Rules.--For purposes of this
section--
``(1) Base year.--The term `base year' means the calendar
year which includes the date of the enactment of this section
or, at the election of the governmental unit, either of the 2
immediately preceding calendar years.
``(2) Distribution area.--The term `distribution area'
means the area in which a governmental unit owns distribution
facilities.
``(3) Electric output facility.--The term `electric output
facility' means an output facility that is an electric
generation, transmission, or distribution facility.
``(4) Distribution facility.--The term `distribution
facility' means an electric output facility that is not a
generation or transmission facility.
``(5) Transmission facility.--The term `transmission
facility' means an electric output facility (other than a
generation facility) that operates at an electric voltage of
69kV or greater, except that the owner of the facility may
elect to treat any output facility that is a transmission
facility for purposes of the Federal Power Act as a
transmission facility for purposes of this section.
``(6) Eligible refunding bond.--The term `eligible
refunding bond' means any State or local bond issued after an
election described in subsection (a) that directly or
indirectly refunds any tax-exempt bond (other than a
qualified bond) issued before such election, if the weighted
average maturity of the issue of which the refunding bond is
a part does not exceed the remaining weighted average
maturity of the bonds issued before the election. In applying
such term for purposes of subsection (c)(2)(B), the date of
election shall be deemed to be the date of the enactment of
this section.
``(7) FERC.--The term `FERC' means the Federal Energy
Regulatory Commission.
``(8) Government-owned facility.--An electric output
facility shall be treated as owned by a governmental unit if
it is an electric output facility that either is--
``(A) owned or leased by such governmental unit, or
``(B) a transmission facility in which the governmental
unit acquired before the base year long-term firm capacity
for the purposes of serving customers to which the unit had
at that time either--
``(i) a service obligation, or
``(ii) an obligation under a requirements contract.
``(9) Repair.--The term `repair' shall include replacement
of components of an electric output facility, but shall not
include replacement of the facility.
``(10) Service obligation.--The term `service obligation'
means an obligation under State or Federal law (exclusive of
an obligation arising solely from a contract entered into
with a person) to provide electric distribution services or
electric sales service, as provided in such law.
``(e) Savings Clause.--Subsection (b) shall not affect the
applicability of section 141 to (or the Secretary's authority
to prescribe, amend, or rescind regulations respecting) any
transaction which is not a permitted open access transaction
or permitted sales transaction.''.
(b) Repeal of Exception for Certain Nongovernmental
Electric Output Facilities.--Section 141(d)(5) of the
Internal Revenue Code of 1986 is amended by inserting
``(except in the case of an electric output facility which is
a distribution facility),'' after ``this subsection''.
(c) Conforming Amendment.--The table of sections for
subpart A of part IV of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after
the item relating to section 141 the following new item:
Sec. 141A. Electric output facilities.
(d) Effective Date; Applicability.--
(1) Effective date.--The amendments made by this section
shall take effect on the date of the enactment of this Act,
except that a governmental unit may elect to apply paragraphs
(1) and (2) of section 141A(b), as added by subsection (a),
with respect to permitted open access activities entered into
on or after April 14, 1996.
(2) Certain existing agreements.--The amendment made by
subsection (b) (relating to repeal of the exception for
certain nongovernmental output facilities) does not apply to
any acquisition of facilities made pursuant to an agreement
that was entered into before the date of the enactment of
this Act.
(3) Applicability.--References in this Act to sections of
the Internal Revenue Code of 1986, shall be deemed to include
references to comparable sections of the Internal Revenue
Code of 1954.
SEC. 3. INDEPENDENT TRANSMISSION COMPANIES.
(a) Sales or Dispositions To Implement Federal Energy
Regulatory Commission or State Electric Restructuring
Policy.--
(1) In general.--Section 1033 of the Internal Revenue Code
of 1986 (relating to involuntary conversions) is amended by
redesignating subsection (k) as subsection (l) and by
inserting after subsection (j) the following new subsection:
``(k) Sales or Dispositions To Implement Federal Energy
Regulatory Commission or State Electric Restructuring
Policy.--
``(1) In general.--For purposes of this subtitle, if a
taxpayer elects the application of this subsection to a
qualifying electric transmission transaction and the proceeds
received from such transaction are invested in exempt utility
property, such transaction shall be treated as an involuntary
conversion to which this section applies.
``(2) Extension of replacement period.--In the case of any
involuntary conversion described in paragraph (1), subsection
(a)(2)(B) shall be applied by substituting `4 years' for `2
years' in clause (i) thereof.
``(3) Qualifying electric transmission transaction.--For
purposes of this subsection, the term `qualifying electric
transmission transaction' means any sale or other disposition
of property used in the trade or business of electric
transmission, or an ownership interest in a person whose
primary trade or business consists of providing electric
transmission services, to another person that is an
independent transmission company.
``(4) Independent transmission company.--For purposes of
this subsection, the term `independent transmission company'
means--
``(A) a regional transmission organization approved by the
Federal Energy Regulatory Commission,
``(B) a person--
``(i) who the Federal Energy Regulatory Commission
determines in its authorization of the transaction under
section 203 of the Federal Power Act (16 U.S.C. 823b) is not
a market participant within the meaning of such Commission's
rules applicable to regional transmission organizations, and
``(ii) whose transmission facilities to which the election
under this subsection applies are placed under the
operational control of a Federal Energy Regulatory
Commission-approved regional transmission organization within
the period specified in such order, but not later than the
close of the replacement period, or
``(C) in the case of facilities subject to the exclusive
jurisdiction of the Public Utility Commission of Texas, a
person which is approved by that Commission as consistent
with Texas State law regarding an independent transmission
organization.
``(5) Exempt utility property.--For purposes of this
subsection, the term `exempt utility property' means--
``(A) property used in the trade or business of generating,
transmitting, distributing, or selling electricity or
producing, transmitting, distributing, or selling natural
gas, or
``(B) stock in a person whose primary trade or business
consists of generating, transmitting, distributing, or
selling electricity or producing, transmitting, distributing,
or selling natural gas.
``(6) Special rules for consolidated groups.--
``(A) Investment by qualifying group members.--
``(i) In general.--This subsection shall apply to a
qualifying electric transmission transaction engaged in by a
taxpayer if the proceeds are invested in exempt utility
property by a qualifying group member.
``(ii) Qualifying group member.--For purposes of this
subparagraph, the term `qualifying group member' means any
member of a consolidated group within the meaning of section
1502 and the regulations promulgated thereunder of which the
taxpayer is also a member.
``(B) Coordination with consolidated return provisions.--A
sale or other disposition of electric transmission property
or an ownership interest in a qualifying electric
transmission transaction, where an election is made under
this subsection, shall not result in the recognition of
income or gain under the consolidated return provisions of
subchapter A of chapter 6. The Secretary shall prescribe such
regulations as may be necessary to provide for the treatment
of any exempt utility property received in a qualifying
electric transmission transaction as successor assets subject
to the application of such consolidated return provisions.
``(7) Election.--Any election made by a taxpayer under this
subsection shall be made by a statement to that effect in the
return for the taxable year in which the qualifying electric
transmission transaction takes
[[Page S7867]]
place in such form and manner as the Secretary shall
prescribe, and such election shall be binding for that
taxable year and all subsequent taxable years.''.
(2) Savings clause.--Nothing in section 1033(k) of the
Internal Revenue Code of 1986, as added by subsection (a),
shall affect Federal or State regulatory policy respecting
the extent to which any acquisition premium paid in
connection with the purchase of an asset in a qualifying
electric transmission transaction can be recovered in rates.
(3) Effective date.--The amendments made by this subsection
shall apply to transactions occurring after the date of the
enactment of this Act.
(b) Distributions of Stock To Implement Federal Energy
Regulatory Commission or State Electric Restructuring Policy.
(1) In general.--Section 355(e)(4) of the Internal Revenue
Code of 1986 is amended by redesignating subparagraphs (C),
(D), and (E) as subparagraphs (D), (E), and (F),
respectively, and by inserting after subparagraph (B) the
following new subparagraph:
``(C) Distributions of stock to implement federal energy
regulatory commission or state electric restructuring
policy.--
``(i) In general.--Paragraph (1) shall not apply to any
distribution that is a qualifying electric transmission
transaction. For purposes of this subparagraph, a `qualifying
electric transmission transaction' means any distribution of
stock in a corporation whose primary trade or business
consists of providing electric transmission services, where
such stock is later acquired (or where the assets of such
corporation are later acquired) by another person that is an
independent transmission company.
``(ii) Independent transmission company.--For purposes of
this subsection, the term `independent transmission company'
means--
``(I) a regional transmission organization approved by the
Federal Energy Regulatory Commission,
``(II) a person who the Federal Energy Regulatory
Commission determines in its authorization of the transaction
under section 203 of the Federal Power Act (16 U.S.C. 824b)
is not a market participant within the meaning of such
Commission's rules applicable to regional transmission
organizations, and whose transmission facilities transferred
as a part of such qualifying electric transmission
transaction are placed under the operational control of a
Federal Energy Regulatory Commission-approved regional
transmission organization within the period specified in such
order, but not later than the close of the replacement period
(as defined in section 1033(k)(2)), or
``(III) in the case of facilities subject to the exclusive
jurisdiction of the Public Utility Commission of Texas, a
person that is approved by that Commission as consistent with
Texas State law regarding an independent transmission
organization.''.
(2) Effective date.--The amendments made by this subsection
shall apply to distributions occurring after the date of the
enactment of this Act.
SEC. 4. CERTAIN AMOUNTS RECEIVED BY ELECTRIC UTILITIES
EXCLUDED FROM GROSS INCOME AS CONTRIBUTIONS TO
CAPITAL.
(a) In General.--Subsection (c) of section 118 of the
Internal Revenue Code of 1986 (relating to contributions to
the capital of a corporation) is amended--
(1) by striking ``Water and Sewage Disposal'' in the
heading and inserting ``Certain'',
(2) by striking ``water or,'' in the matter preceding
subparagraph (A) of paragraph (1) and inserting ``electric
energy, water, or'',
(3) by striking ``water or'' in paragraph (1)(B) and
inserting ``electric energy (but not including assets used in
the generation of electricity), water, or'',
(4) by striking ``water or'' in paragraph (2)(A)(ii) and
inserting ``electric energy (but not including assets used in
the generation of electricity), water, or'',
(5) by inserting ``such term shall include amounts paid as
customer connection fees (including amounts paid to connect
the customer's line to an electric line or a main water or
sewer line) and'' after ``except that'' in paragraph (3)(A),
and
(6) by striking ``water or'' in paragraph (3)(C) and
inserting ``electric energy, water, or''.
(b) Effective Date.--The amendments made by this section
shall apply to amounts received after the date of the
enactment of this Act.
SEC. 5. TAX TREATMENT OF NUCLEAR DECOMMISSIONING FUNDS.
(a) Increase in Amount Permitted To Be Paid Into Nuclear
Decommissioning Reserve Fund.--Subsection (b) of section 468A
of the Internal Revenue Code of 1986 (relating to special
rules for nuclear decommissioning costs) is amended to read
as follows:
``(b) Limitation on Amounts Paid Into Fund.--
``(1) In general.--The amount which a taxpayer may pay into
the Fund for any taxable year during the funding period shall
not exceed the level funding amount determined pursuant to
subsection (d), except--
``(A) where the taxpayer is permitted by Federal or State
law or regulation (including authorization by a public
service commission) to charge customers a greater amount for
nuclear decommissioning costs, in which case the taxpayer may
pay into the Fund such greater amount, or
``(B) in connection with the transfer of a nuclear
powerplant, where the transferor or transferee (or both) is
required pursuant to the terms of the transfer to contribute
a greater amount for nuclear decommissioning costs, in which
case the transferor or transferee (or both) may pay into the
Fund such greater amount.
``(2) Contributions after funding period.--Notwithstanding
any other provision of this section, a taxpayer may make
deductible payments to the Fund in any taxable year between
the end of the funding period and the termination of the
license issued by the Nuclear Regulatory Commission for the
nuclear powerplant to which the Fund relates provided such
payments do not cause the assets of the Fund to exceed the
nuclear decommissioning costs allocable to the taxpayer's
current or former interest in the nuclear powerplant to which
the Fund relates. The foregoing limitation shall be applied
by taking into account a reasonable rate of inflation for the
nuclear decommissioning costs and a reasonable after-tax rate
of return on the assets of the Fund until such assets are
anticipated to be expended.''.
(b) Deduction for Nuclear Decommissioning Costs When
Paid.-- Paragraph (2) of section 468A(c) of the Internal
Revenue Code of 1986 (relating to income and deductions of
the taxpayer) is amended to read as follows:
``(2) Deduction of nuclear decommissioning costs.--In
addition to any deduction under subsection (a), nuclear
decommissioning costs paid or incurred by the taxpayer during
any taxable year shall constitute ordinary and necessary
expenses in carrying on a trade or business under section
162.''.
(c) Level Funding Amounts.--Subsection (d) of section 468A
of the Internal Revenue Code of 1986 is amended to read as
follows:
``(d) Level Funding Amounts.--
``(1) Annual amounts.--For purposes of this section, the
level funding amount for any taxable year shall equal the
annual amount required to be contributed to the Fund in each
year remaining in the funding period in order for the Fund to
accumulate the nuclear decommissioning costs allocable to the
taxpayer's current or former interest in the nuclear
powerplant to which the Fund relates. The annual amount
described in the preceding sentence shall be calculated by
taking into account a reasonable rate of inflation for the
nuclear decommissioning costs and a reasonable after-tax rate
of return on the assets of the Fund until such assets are
anticipated to be expended.
``(2) Funding period.--The funding period for a Fund shall
end on the last day of the last taxable year of the expected
operating life of the nuclear powerplant.
``(3) Nuclear decommissioning costs.--For purposes of this
section--
``(A) In general.--The term `nuclear decommissioning costs'
means all costs to be incurred in connection with entombing,
decontaminating, dismantling, removing, and disposing of a
nuclear powerplant, and shall include all associated
preparation, security, fuel storage, and radiation monitoring
costs. Such term shall include all such costs which, outside
of the decommissioning context, might otherwise be capital
expenditures.
``(B) Identification of costs.--The taxpayer may identify
nuclear decommissioning costs by reference either to a site-
specific engineering study or to the financial assurance
amount calculated pursuant to section 50.75 of title 10 of
the Code of Federal Regulations.''.
(d) Effective Date.--The amendments made by this section
shall apply to amounts paid after June 30, 2000, in taxable
years ending after such date.
______
By Mr. ALLARD:
S. 2968. A bill to empower communities and individuals by
consolidating and reforming the programs of the Department of Housing
and Urban Development; to the Committee on Banking, Housing, and Urban
Affairs.
local housing opportunities act
Mr. ALLARD. Mr. President, today I am introducing the ``Local Housing
Opportunities Act'', legislation to empower communities and individuals
by consolidating and reforming HUD programs. I ask unanimous consent
that the following section-by-section description of the bill be
printed in the Record and that the text of the bill be printed in the
Record following the description.
In 1994, there were 240 separate programs at the Department of
Housing and Urban Development (HUD). By 1997, the number of programs
had grown to 328. Many of these programs have never been authorized by
Congress, and operate under questionable legal authority. While the
number of HUD programs has grown, HUD's workforce has declined from
12,000 employees in 1995 to 9,000 employees today. As a result, scarce
resources are diverted away from core housing and enforcement programs,
dramatically increasing the risks of mismanagement and fraud. HUD
remains the only Cabinet level agency designated by the General
Accounting Office (GAO) as ``High Risk''. In order to promote the
interests of taxpayers and improve the delivery of services to
beneficiaries, Congress should transfer more programs to
[[Page S7868]]
the States and localities and enact legislation to consolidate,
terminate, and streamline HUD programs.
Section-by-Section Description
I. Prohibition of Unauthorized Programs at the Department
of Housing and Urban Development--Prohibits HUD from carrying
out any program that is not explicitly authorized in statute
by the Congress. This provision takes effect one year after
the effective date to give the Congress sufficient time to
authorize those programs that it wishes to maintain. Within
60 days of the date of enactment the Department of Housing
and Urban Development shall provide a report detailing every
HUD program along with the statutory authorization for that
program. This report shall be provided annually to the Senate
Committee on Banking, Housing and Urban Affairs, the Senate
Subcommittee on Housing and Transportation, the House
Committee on Banking and Financial Services, and the House
Subcommittee on Housing and Community Opportunity.
II. Elimination of Certain HUD Programs--Terminates certain
programs as recommended by the HUD Secretary in the ``HUD
2020 Program Repeal and Streamlining Act''. The Department
has determined that these programs are unnecessary, outdated,
or inactive.
Community Investment Corporation Demonstration--never
funded, superseded by the Community Development Financial
Institutions program administered by the Department of the
Treasury.
New Towns Demonstration Program for Emergency Relief of Los
Angeles--not funded since FY 1993.
Solar Assistance Financing Entity--not funded in recent
years.
Urban Development Action Grants--discontinued program, not
funded in recent years.
Certain Special Purpose Grants--not funded since FY 1993
and FY 1995.
Moderate Rehabilitation Assistance in Disasters--no
additional assistance for the Moderate Rehabilitation program
has been provided (other than for the homeless under the
McKinney Act) since FY 1989.
Rent Supplement Program--not funded for many years.
National Home Ownership Trust Demonstration--authority
expired at the end of FY 1994.
Repeal of HOPE I, II, and III--all HOPE funds have been
awarded, no additional funding has been requested since FY
1995, and no future funding is anticipated.
Energy Efficiency Demonstration Program, section 961 of
NAHA--never funded.
Technical Assistance and Training for IHAs--no funds have
been provided for this program since FY 1994.
Termination of the investor mortgages portion of the
Section 203(k) rehabilitation mortgage insurance program as
recommended by the HUD IG. Investor rehabilitation mortgages
constitute approximately 20% of the loans insured under this
program, and recent IG audits have found this portion of the
program to be particularly vulnerable to fraud and abuse by
investor-owners. The larger portion of the program for owner/
occupants is retained.
Certificate and Voucher Assistance for Rental
Rehabilitation Projects--rental rehabilitation program has
been repealed, section 289 of NAHA.
Single Family Loan Insurance for Home Improvement Loans in
Urban Renewal Areas--unnecessary.
Single Family and Multifamily Mortgage Insurance for
Miscellaneous Special Situations, section 223 (a)(1)-(6) and
(8)--obsolete.
Single Family Mortgage Insurance for so-called ``Modified''
Graduated Payment Mortgages, section 245 (b)--insurance
authority terminated in 1987 but provision never repealed.
War Housing Insurance--authority for new insurance
terminated in 1954, but provision never repealed.
Insurance for Investments (Yield Insurance)--program never
implemented, but authority and provision never repealed.
National Defense Housing--authority for new insurance
terminated in 1954, but provision never repealed.
Rural Homeless Housing Assistance--not funded since FY
1994, all HUD homeless assistance will be part of the
McKinney Homeless Assistance Performance Fund created under
this legislation.
Innovative Homeless Initiatives Demonstration--not funded
since FY 1995, all HUD homeless assistance will be part of
the McKinney Homeless Assistance Performance Fund created
under this legislation.
During the remainder of 2000, the Senate Housing and
Transportation Subcommittee will hold hearings on this
discussion draft. At that time the Subcommittee will solicit
the recommendations of the Department, the IG, the GAO, and
other organizations for other HUD programs that can be
streamlined or eliminated. This legislation also provides for
the creation of a ``HUD Consolidation Task Force'' which will
report to the Congress with recommendations on how to reduce
the number of programs at HUD through consolidation,
termination, or transfer to other levels of government.
III. HUD Consolidation Task Force--Mandates the creation of
a task force that will focus exclusively on legislative and
regulatory options to reduce the number of HUD programs. The
task force will consist of three individuals: the Comptroller
General of the United States, the HUD Secretary, and the HUD
Inspector General. Within six months of the enactment of this
legislation, the task force will produce a report outlining
options to reduce the number of HUD programs through
consolidation, elimination, and transfer to other levels of
government. The report will be provided to the Senate and
House Housing Subcommittees as well as the Senate and House
Banking Committees.
I. Community Development Block Grant Authorization (CDBG)
and Prohibition of Set-Asides and Earmarks--Restores local
control over the CDBG program by prohibiting Congressional
set-asides and earmarks not specifically authorized in
statute. The original intent of CDBG was that program dollars
would be allocated directly to cities and states according to
formula. In FY 1999 over 10 percent of the funds were
earmarked for specific projects (the earmarks have increased
steadily in recent years). CDBG was last authorized in 1994,
this legislation would authorize the program through FY 2005,
with an initial authorization of $4,850,000,000 in FY 2001.
II. Community Notification of Opt-Outs--Requires that when
HUD receives notice of a Section 8 opt-out that it forward
that notice within 10 days to the top elected official for
the unit of local government where the property is located.
This supplements the requirement in Section 8 (c)(8)(A) of
the Housing Act of 1937 that HUD and tenants be notified one
year in advance if a Section 8 opt-out is anticipated.
III. Urban Homestead Requirement--Directs that HUD-held
properties that have not been disposed of within six months
following acquisition by HUD or a determination that they are
substandard or unoccupied, shall be made available upon
written request for sale or donation to local governments or
Community Development Corporations (CDCs).
IV. Permanent ``Moving To Work'' Authorization--Continues
the deregulation of Public Housing Authorities (PHAs) by
opening the ``Moving To Work'' program to all PHAs. This
program was authorized as a demonstration in the 1996 VA/HUD
Appropriation bill and granted up to 30 PHAs the option to
receive HUD funds as a block grant. The program provides
autonomy from HUD micro-management and the freedom to
innovate with reforms such as work requirements, time limits,
job training, and Home ownership assistance. The Secretary
shall approve an application under this program for all but
the lowest performing PHAs unless the Secretary makes a
written determination, within 60 days after receiving the
application, that the application fails to comply with the
statutory provisions authorizing the ``Moving to Work''
program.
Consolidate HUD Homeless Assistance Funds into the
``McKinney Homeless Assistance Performance Fund''--Combines
HUD's McKinney programs (Supportive Housing Program, Shelter
Plus Care, Section 8 Moderate Rehabilitation for Single Room
Occupancy Dwellings, Safe Havens, Rural Homeless Housing
Assistance, and the Emergency Shelter Grants), into a single
McKinney Homeless Assistance Performance Fund ( and
authorizes funding through FY 2003, at an initial level of
$1,050,000,000 in FY 2001). Distributes funds according to
the CDBG block grant formula with 70 percent to units of
local government and 30 percent to states.
Eligible units of local government include metropolitan
cities, urban counties, and consortia. The formula is to be
reviewed after one year with a statutory requirement that HUD
provide alternative formulas for the Congress to consider.
State funds are available for use in areas throughout the
entire state. Codifies and requires a Continuum of Care
system by grant recipients. The Continuum of Care submission
is linked with the Consolidated Plan. Every three dollars of
federal block grant money is to be matched with one dollar of
state or local money. Funds qualifying for the match are the
same as those currently permitted under the Emergency Shelter
Grants program, and would include salaries paid to staff,
volunteer labor, and the value of a lease on a building.
There is a five year transition period--state and local
governments would receive no less than 90 percent of prior
award amounts (average for FY 96-99) in the first year after
enactment, 85 percent in the second year after enactment, 80
percent in the third and fourth year after enactment, and 75
percent in the fifth year after enactment. Eligible projects
and activities include emergency assistance, safe haven
housing, transitional housing, permanent housing, supportive
services for persons with disabilities, single room occupancy
housing, prevention, outreach and assessment, acquisition and
rehabilitation of property, new construction, operating
costs, leasing, tenant assistance, supportive services,
administrative (generally limited to 10 percent of funds),
capacity building, targeting to subpopulations of persons
with disabilities. Performance measures and benchmarks are
included, along with periodic performance reports, reviews,
and audits.
I. Mutual and Self-Help Housing Technical Assistance and
Training Grants Program--Reauthorizes technical assistance
grants to facilitate the construction of self-help housing in
rural areas. Program beneficiaries are required to contribute
a significant amount of sweat equity to the construction of
the homes that they will own. Authorizes funding of $40
million for FY 2001 and 2002, and $45 million for FY 2003-
2005.
II. Improve the Rural Housing Repair Loan Program for the
Elderly--Increases the amount for which a promissory note is
considered a sufficient security for housing repairs from
$2,500 to $7,500.
[[Page S7869]]
III. Enhance Efficiency of Rural Housing Preservation
Grants--Eliminates the existing statutory requirement that
prohibits a State from obligating more than 50 percent of its
Housing Preservation Grants allocation to any one grantee.
Many states receive only a small amount from this formula
program. In many cases the money can only be most effectively
invested in one project.
IV. Project Accounting Records and Practices--Requires
section 515 rural housing borrowers to maintain records in
accordance with GAAP (Generally Accepted Accounting
Principles).
V. Operating Assistance for Migrant Farmworker Projects
Authority--Permits rural housing operating assistance
payments in migrant and seasonal farm labor housing
complexes.
I. Authorization of Appropriations for Rental Vouchers for
Relocation of Witnesses and Victims of Crime--Authorizes
specific funding for vouchers for victims and witnesses of
crime. These vouchers were authorized in the Quality Housing
and Work Responsibility Act of 1998 (QHWRA). No funds have
yet been appropriated and HUD has yet to write regulations.
The current authorization directs the Secretary to make
available such sums as may be necessary for the relocation of
families residing in public housing who are victims of a
crime of violence reported to an appropriate law enforcement
authority, and requires that PHAs notify tenants of the
availability of such funds. This legislation would authorize
a funding level in each of FY 2001-2005 of $25,000,000.
II. Revise the HUD Lease Addendum--Prohibits the HUD lease
addendum from overriding local law. Participating housing
providers and residents sign a three-party lease along with
the public housing authority. The law requires the attachment
of a HUD Lease Addendum (HUD Form 52647.3) which overrides
some local market provisions and practices, holding the
voucher resident to a non-standard lease contract. The use of
federally promulgated forms that counter local practice
incurs additional training, legal and management costs. The
voucher lease addendum shall be nullified to the extent that
it conflicts with State or local law.
III. Reduce the Burden of Housing Quality Standard
Inspections--Provides the option that Housing Quality
Standard inspections be conducted on a property basis rather
than a unit basis. Currently each individual unit that is
rented under the program must be inspected for compliance
with HUD's Housing Quality Standards. Individual inspections
are a time-consuming administrative headache for PHAs and
Section 8 landlords, result in slow unit turnover, and
significant lost revenue. This legislation provides the
Section 8 landlord with the option to have annual inspections
conducted on a property or building basis, rather than a unit
basis.
IV. HUD Report to the Congress on Ways to Improve the
Voucher Program--Requires that the HUD Secretary solicit
comments and recommendations for improvement in the voucher
program through notice in the Federal Register. Six months
after enactment, the Secretary shall submit to the House and
Senate Housing Subcommittees and the House and Senate Banking
Committees a summary of the recommendations received by the
Secretary regarding suggestions for improvement in the
voucher program.
I. Reauthorize the Self-Help Homeownership Opportunity
Program (SHOP)--Reauthorizes the SHOP program which provides
funding for land and infrastructure purchases to facilitate
self-help housing. Utilized by Habitat for Humanity and the
Housing Assistance Council. Reauthorize through FY 2005,
beginning with $25 million in FY 2001. Adds new language
allowing an additional year to use funds for local groups
building five or more homes (increase from two years to three
years), and also making it possible for local and national
non-profit organizations using SHOP funds to advance their
own money to purchase property, pending the environmental
review approvals, to be repaid from federal funds after the
environmental reviews have been approved.
II. Capacity Building for Community Development and
Affordable Housing Program--Reauthorizes and increases grants
to non-profits to expand affordable housing capacity.
Presently authorized for The Enterprise Foundation, Local
Initiatives Support Corporation, Habitat for Humanity,
Youthbuild USA, and the National Community Development
Initiative. Expands access to this program to include the
``National Association of Housing Partnerships'' and
authorizes a funding level of $40 million for each of FY
2001-2003. Amounts must be matched three to one from other
sources.
III. Work Requirement for Public Housing Residents:
Coordinate Federal Housing Assistance with State Welfare
Reform Work Programs--Requires that able-bodied and non-
elderly public housing residents be in compliance with the
work requirements of welfare reform in their state. Those
unable to comply would be provided the opportunity to engage
in community service or participate in an economic self-
sufficiency program. There is substantial overlap in families
receiving welfare and those benefitting from assisted
housing. Among families with children, it is estimated that
72 percent of those who live in public housing receive some
type of welfare. These families are currently subject to
Welfare Reform work requirements and this provision simply
applies the requirement to the remaining able-bodied
recipients of federal housing assistance. Public housing was
originally conceived as temporary assistance for working low-
income families to help them during times of financial
distress. Recent housing legislation has recognized this fact
by placing increasing emphasis on self-sufficiency. These
efforts should be coordinated with the self sufficiency
efforts of Welfare Reform. PHAs shall monitor compliance with
the state work requirement. There shall be an exception for
the elderly and disabled, and as with Welfare Reform, there
will be a broad definition of work including; employment,
community service, vocational and job training, work
associated with self help housing construction, refurbishing
publicly assisted housing, the provision of certain child
care services, and participation in education programs or
economic self-sufficiency programs. This work requirement
will replace the 8 hour per month ``Community Service''
Requirement that exists in current law for residents of
public housing. Public Housing Authorities shall not be
prohibited by this legislation from implementing more
stringent work requirements and States electing the housing
assistance block grant would be excluded from this
requirement and be free to design their own self-sufficiency
requirements.
IV. Flexible Use of CDBG Funds to Maintain Properties--
Amends Section 105(a)(23) of the Housing and Community
Development Act, which currently authorizes use of CDBG
funding for activities necessary to make essential repairs
and payment of operating expenses needed to maintain the
habitability of housing units acquired through tax
foreclosure proceedings in order to prevent abandonment and
deterioration of such housing in primarily low- and moderate-
income neighborhoods. This language is amended to permit the
use of CDBG funds for property upkeep in instances in which a
court has wrested effective control of a distressed
residential property from the owner and appointed a
responsible third party (often a non-profit organization or
other owner/manager of properties in the area) to operate the
property on an interim basis as administrator, although legal
title remains with the original owner.
IV. Allows Vouchers in Grandfamily Housing Assisted with
HOME Dollars--Permits flexible use of Section 8 vouchers in
Grandfamily Housing assisted with HOME dollars. Current law
restricts the level of Section 8 assistance that may be used
in projects assisted with HOME funds. This legislation
creates an exception to the general rule for projects
designed to benefit Grandfamilies, by permitting the use of
Section 8 vouchers at the Fair Market Rent (FMR) level by
Grandparents choosing to live in low income housing projects
assisted with HOME dollars. This change is designed to assist
low-income, elderly residents and their grandchildren for
whom they provide full-time care and custody.
V. Simplified FHA Downpayment Calculation.--Makes permanent
the temporary simplified FHA downpayment calculation provided
in section 203(b) of the National Housing Act. The current
downpayment calculation on FHA loans is needlessly complex.
Recent appropriations bills have included a simplified pilot
program that replaces the current multi-part formula with a
single calculation based solely on the appraised value of the
property. The simplified formula yields substantially the
same downpayment result as the multi-part formula.
VI. Authorize the Use of Section 8 Funds for Downpayment
Assistance--Permits tenants to receive up to one year's worth
of Section 8 assistance in a lump sum to be used toward the
down payment on a home. This compliments innovative programs
that allow the use of Section 8 assistance for mortgage
payments.
VII. Reauthorize the Neighborhood Reinvestment Corporation
through 2003--Reauthorizes the Neighborhood Reinvestment
Corporation, a congressionally chartered, public non-profit
corporation established in 1978 to revitalize declining
lower-income communities and provide affordable housing.
Funding is authorized at $90 million in FY 2001, and $95
million in each of FY 2002 and 2003.
Provides States the option to receive certain federal
assisted housing funds (tenant assistance programs) in the
form of a block grant. Modeled on Welfare Reform, this would
give States the freedom to innovate absent HUD micro-
management. States accepted into the program would sign a
five year performance agreement with the federal
government that details how the State intends to combine
and use housing assistance funds from programs included in
the performance agreement to advance low income housing
priorities, improve the quality of low income housing,
reduce homelessness, and encourage economic opportunity
and self-sufficiency. States electing the block grant
would determine how funds are distributed to state
agencies, Public Housing Authorities, project owners, and
tenants. During the first year of the performance
agreement States would receive the highest of the prior
three years funding for each program included in the
performance agreement. There would then be an annual
inflation adjustment in each future year until Congress
(following consultation with HUD) enacts a formula that
reflects the relative low-income/affordable housing needs
of each State. A performance agreement submitted to the
Secretary would have to be approved by the Secretary
unless the Secretary makes a written determination, within
60 days after
[[Page S7870]]
receiving the performance agreement, that the performance
agreement fails to comply with provisions of the Act.
Eligible programs for inclusion in the block grant shall
include: the voucher program for rental assistance under
section 8(o) of the United States Housing Act of 1937; the
programs for project-based assistance under section 8 of
the United States Housing Act of 1937; the program for
housing for the elderly under section 202 of the Housing
Act of 1959; the program for housing for persons with
disabilities under section 811 of the Cranston-Gonzales
National Affordable Housing Act. The distribution of block
granted funds within the State from programs included in
the performance agreement shall be determined by the
Legislature and the Governor of the State. In a State in
which the constitution or state law designates another
individual, entity, or agency to be responsible for
housing, such other individual, entity, or agency shall
work in consultation with the Governor and Legislature to
determine the local distribution of funds. Existing
contracts involving federal housing dollars shall be
honored by the States until their expiration. States shall
at such point handle the renewal of all contracts. A State
may not use more than 3 percent of the total amount of
funds allocated to such State under the programs included
in the performance agreement for administrative purposes.
Performance criteria shall include at a minimum a measure
of; the improvement in housing conditions, the number of
units that pass housing quality inspections, the number of
residents that find employment and move to self-
sufficiency, the level of crime against residents, the
level of homelessness, the level of poverty, the cost of
assisted housing units provided, the level of assistance
provided to people with disabilities and to the elderly,
success in maintaining the stock of affordable housing,
and increasing homeownership. If at the end of the 5-year
term of the performance agreement a State has failed to
meet at least 80 percent of the performance goals
submitted in the performance agreement, the Secretary
shall terminate the performance agreement and the State or
community shall be required to comply with the program
requirement, in effect at the time of termination, of each
program included in the performance agreement. To reward
States that make significant progress in meeting
performance goals, the HUD Secretary shall annually set
aside sufficient funds to grant a reward of up to 5
percent of the funds allocated to participating States.
Sense of the Congress Supporting Tax Incentives
Sense of the Congress That the Low Income Housing Tax Credit State
Ceilings and the Private Activity Bond Caps Should Be Increased
It is the sense of the Congress that the Low Income Housing
Tax Credit and Private Activity Bonds have been valuable
resources in the effort to increase affordable housing.
It is the sense of the Congress that the Low Income Housing
Tax Credit and Private Activity Bonds effectively utilize the
ability of the states to deliver resources to the areas of
greatest need within their jurisdictions.
It is the sense of the Congress that the value of the Low
Income Housing Tax Credit and the Private Activity Bonds have
been eroded by inflation.
Therefore, be it resolved, That the Low Income Housing Tax
Credit State Ceilings should be increased by forty percent in
the year 2000, and that the level of the state ceilings
should be adjusted annually to account for increases in the
cost-of-living, and
That the Private Activity Bond Caps should be increased by
fifty percent in the year 2000, and that the value of the
caps should be adjusted annually to account for increases in
the cost-of-living.
I. Tighten Language on Lobbying Restrictions on HUD
employees--Prohibits employees at HUD from lobbying, or
attempting to influence legislation before the Congress. This
language is based on current restrictions on Department of
Interior employees. No federally appropriated funds may be
used for any activity that in any way tends to promote public
support or opposition to legislation, a nomination, or a
treaty. The President, the Vice President and Senate
confirmed agency officials are exempt from these provisions.
However, these individuals may not delegate their authority
to any other employees of the Department. Provides civil
money penalties against non-exempt employees who
independently violate the statute, and against exempt
employees who have delegated their lobbying authority.
II. The Department of Housing and Urban Development shall
promulgate regulations under the provisions of this Act
within 6 months of the enactment of this Act.
____
S. 2968
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Local
Housing Opportunities Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Effective date.
TITLE I--PROGRAM CONSOLIDATION
Sec. 101. Prohibition of unauthorized programs at the Department.
Sec. 102. Elimination and consolidation of HUD programs.
Sec. 103. HUD consolidation task force.
TITLE II--COMMUNITY EMPOWERMENT
Sec. 201. Reauthorization of community development block grants and
prohibition of set-asides.
Sec. 202. Community notification of opt-outs.
Sec. 203. Urban homestead requirement.
Sec. 204. Authorization of Moving to Work program.
TITLE III--HOMELESS ASSISTANCE REFORM
Sec. 301. Consolidation of HUD homeless assistance funds.
Sec. 302. Establishment of the McKinney Homeless Assistance Performance
Fund.
Sec. 303. Repeal and savings provisions.
Sec. 304. Implementation.
TITLE IV--RURAL HOUSING
Sec. 401. Mutual and self-help housing technical assistance and
training grants authorization.
Sec. 402. Enhancement of the Rural Housing Repair loan program for the
elderly.
Sec. 403. Enhancement of efficiency of rural housing preservation
grants.
Sec. 404. Project accounting records and practices.
Sec. 405. Operating assistance for migrant farm worker projects.
TITLE V--VOUCHER REFORM
Sec. 501. Authorization of appropriations for rental vouchers for
relocation of witnesses and victims of crime.
Sec. 502. Revisions to the lease addendum.
Sec. 503. Report regarding housing voucher program.
Sec. 504. Conducting quality standard inspections on a property basis
rather than a unit basis.
TITLE VI--PROGRAM MODERNIZATION
Sec. 601. Assistance for self-help housing providers.
Sec. 602. Local capacity building for community development and
affordable housing.
Sec. 603. Work requirement for public housing residents: coordination
of Federal housing assistance with State welfare reform
work programs.
Sec. 604. Simplified FHA downpayment calculation.
Sec. 605. Flexible use of CDBG funds.
Sec. 606. Use of section 8 assistance in grandfamily housing assisted
with HOME funds.
Sec. 607. Section 8 homeownership option downpayment assistance.
Sec. 608. Reauthorization of Neighborhood Reinvestment Corporation.
TITLE VII--STATE HOUSING BLOCK GRANT
Sec. 701. State control of public and assisted housing funds.
TITLE VIII--PRIVATE SECTOR INCENTIVES
Sec. 801. Sense of Congress regarding low-income housing tax credit
State ceilings and private activity bond caps.
TITLE IX--ENFORCEMENT
Sec. 901. Prohibition on use of appropriated funds for lobbying by the
department.
Sec. 902. Regulations.
SEC. 2. DEFINITIONS.
In this Act--
(1) the term ``Committees'' means--
(A) the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Subcommittee on Housing and Transportation
of that Committee; and
(B) the Committee on Banking and Financial Services of the
House of Representatives and the Subcommittee on Housing and
Community Opportunity of that Committee;
(2) the term ``Department'' means the Department of Housing
and Urban Development; and
(3) the term ``Secretary'' means the Secretary of Housing
and Urban Development.
SEC. 3. EFFECTIVE DATE.
Except as otherwise expressly provided in this Act or an
amendment made by this Act, this Act and the amendments made
by this Act shall take effect on October 1, 2001.
TITLE I--PROGRAM CONSOLIDATION
SEC. 101. PROHIBITION OF UNAUTHORIZED PROGRAMS AT THE
DEPARTMENT.
(a) In General.--Beginning on the effective date of this
Act, the Secretary may not carry out any program that is not
explicitly authorized by Federal law.
(b) Report.--Not later than 60 days after the date of
enactment of this Act, the Secretary shall submit to the
Committees a report, which shall include a detailed
description of each program carried out by the Department,
and the statutory authorization for that program or, if no
explicit authorization exists, an explanation of the legal
authority under which the program is being carried out.
SEC. 102. ELIMINATION AND CONSOLIDATION OF HUD PROGRAMS.
(a) Community Investment Corporation Demonstration.--
Section 853 of the Housing and Community Development Act of
1992 (42 U.S.C. 5305 note) is repealed.
(b) New Towns Demonstration Program for Emergency Relief of
Los Angeles.--
[[Page S7871]]
Title XI of the Housing and Community Development Act of 1992
(42 U.S.C. 5318 note) is repealed.
(c) Solar Assistance Financing Entity.--Section 912 of the
Housing and Community Development Act of 1992 (42 U.S.C.
5511a) is repealed.
(d) Urban Development Action Grants.--
(1) UDAG repeal.--Section 119 of the Housing and Community
Development Act of 1974 (42 U.S.C. 5318) is repealed.
(2) Conforming amendments.--Title I of the Housing and
Community Development Act of 1974 (42 U.S.C. 5301 et seq.) is
amended--
(A) in section 104(d)(1), by striking ``or 119'' and ``or
section 119'';
(B) in section 104(d)(2), by striking ``or 119'';
(C) in section 104(d)(2)(C), by striking ``or 119'';
(D) in section 107(e)(1), by striking ``, section
106(a)(1), or section 119'' and inserting ``or section
106(a)(1),'';
(E) in section 107(e)(2), by striking ``section 106(a)(1),
or section 119'' and inserting ``or section 106(a)(1)''; and
(F) in section 113(a)--
(i) in paragraph (2), by adding ``and'' at the end;
(ii) by striking paragraph (3); and
(iii) by redesignating paragraph (4) as paragraph (3).
(e) Special Purpose Grants.--Section 107 of the Housing and
Community Development Act of 1974 (42 U.S.C. 5307) is
amended--
(1) in subsection (a)(1)--
(A) by striking subparagraphs (C), (D), and (G);
(B) by redesignating subparagraphs (E), (F), (H), and (I)
as subparagraphs (C), (D), (E), and (F), respectively; and
(C) in subparagraph (D) (as redesignated) by striking
``(6)'' and inserting ``(5)''; and
(2) in subsection (b)--
(A) in paragraph (4), by adding ``and'' at the end;
(B) by striking paragraphs (5) and (7);
(C) by redesignating paragraph (6) as paragraph (5); and
(D) in paragraph (5) (as redesignated) by striking ``;
and'' and inserting a period.
(f) Moderate Rehabilitation Assistance in Disasters.--
Section 932 of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 1437c note) is repealed.
(g) Rent Supplement Program.--
(1) Repeal.--Section 101 of the Housing and Urban
Development Act of 1965 (12 U.S.C. 1701s) is repealed.
(2) References.--Any reference in any provision of law to
section 101 of the Housing and Urban Development Act of 1965
(12 U.S.C. 1701s) shall be construed to refer to that section
as in existence immediately before the effective date of this
Act.
(h) National Homeownership Trust Demonstration.--Subtitle A
of title III of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 12851 et seq.) is repealed.
(i) Hope Programs.--
(1) Repeal of hope i program.--
(A) Hope i program repeal.--Title III of the United States
Housing Act of 1937 (42 U.S.C. 1437aaa et seq.) is repealed.
(B) Conforming amendments.--
(i) United states housing act of 1937.--Section 8(b) of the
United States Housing Act of 1937 (42 U.S.C. 1437f(b)) is
amended--
(I) in paragraph (1), by striking ``(1) In general.--'';
and
(II) by striking paragraph (2).
(ii) Housing and community development act of 1974.--
Section 213(e) of the Housing and Community Development Act
of 1974 (42 U.S.C. 1439(e)) is amended by striking ``(b)(1)''
and inserting ``(b)''.
(2) Repeal of hope ii and iii programs.--
(A) Hope ii.--Subtitle B of title IV of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 12871 et
seq.) is repealed.
(B) Hope iii.--
(i) In general.--Subtitle C of title IV of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 12891 et
seq.) is repealed.
(ii) Closeout authority.--Notwithstanding the repeal made
by clause (i), the Secretary may continue to exercise the
authority under sections 445(b), 445(c)(3), 445(c)(4), and
446(4) of title IV of the Cranston-Gonzalez National
Affordable Housing Act (as amended by subparagraph (C) of
this paragraph) after the effective date of this Act, to the
extent necessary to terminate the programs under subtitle C
of title IV of that Act.
(C) Amendment of hope iii program authority for closeout.--
(i) Sale and resale proceeds.--Section 445 of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 12895) is
amended--
(I) in subsection (b), by striking ``costs'' and all that
follows through ``expenses,'';
(II) in subsection (c)(3), by striking ``the Secretary
or''; and
(III) in subsection (c)(4)--
(aa) in the first sentence, by striking ``Fifty percent of
any'' and inserting ``Any''; and
(bb) by striking the second and third sentences.
(ii) Eligibility of private property.--Section 446(4) of
the Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12896(4)) is amended to read as follows:
``(4) The term `eligible property' means a single family
property containing not more than 4 units (excluding public
housing under the United States Housing Act of 1937, or
Indian housing under the Native American Housing Assistance
and Self-Determination Act of 1996).''.
(3) Conforming amendments.--
(A) In general.--Title IV of the Cranston-Gonzalez National
Affordable Housing Act is amended--
(i) by striking sections 401 and 402 (42 U.S.C. 1437aaa
note; 12870);
(ii) in section 454(b)(2) (42 U.S.C. 12899c(b)(2)), by
striking ``to be used for the purposes of providing
homeownership under subtitle B and subtitle C of this
title''; and
(iii) in section 455 (42 U.S.C. 12899d), by striking
subsection (d) and redesignating subsections (e) through (g)
as subsections (d) through (f), respectively.
(B) Department of housing and urban development act.--
Section 7(r)(2) of the Department of Housing and Urban
Development Act (42 U.S.C. 3535(r)(2)) is amended--
(i) in subparagraph (A), by striking ``titles I and II''
and inserting ``title I''; and
(ii) in subparagraph (K), by striking ``titles II, III, and
IV'' and inserting ``title II''.
(j) Energy Efficiency Demonstration.--Section 961 of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
12712 note) is repealed.
(k) Technical Assistance and Training for IHAs.--Section
917 of the Housing and Community Development Act of 1992
(Public Law 102-550; 106 Stat. 3882) is repealed.
(l) Elimination of Investor-Owners Under the Section 203(k)
Program.--Section 203(g)(2) of the National Housing Act (12
U.S.C. 1709(g)(2)) is amended--
(1) in subparagraph (D), by adding ``or'' at the end;
(2) by striking subparagraph (E); and
(3) by redesignating subparagraph (F) as subparagraph (E).
(m) Certificate and Voucher Assistance for Rental
Rehabilitation Projects.--Section 8(u) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(u)) is repealed.
(n) Mortgage and Loan Insurance Programs.--
(1) In general.--Sections 220(h), 245(b), and titles VI,
VII, and IX of the National Housing Act are repealed.
(2) Additional amendments.--The National Housing Act is
amended--
(A) in section 1 (12 U.S.C. 1702), by striking ``VI, VII,
VIII, IX'' each place it appears and inserting ``VIII,'';
(B) in section 203(k)(5) (12 U.S.C. 1709(k)(5)), by
striking the second sentence; and
(C) in section 223 (12 U.S.C. 1715n)--
(i) by striking subsection (a) and inserting the following:
``(a) In General.--Notwithstanding any of the provisions of
this Act and without regard to limitations upon eligibility
contained in any section or title of this Act, other than the
limitation in section 203(g), the Secretary is authorized
upon application by the mortgagee, to insure or make
commitments to insure under any section or title of this Act
any mortgage--
``(1) given to refinance an existing mortgage insured under
this Act, except that the principal amount of any such
refinancing mortgage shall not exceed the original principal
amount or the unexpired term of such existing mortgage and
shall bear interest at such rate as may be agreed upon by the
mortgagor and the mortgagee, except that--
``(A) the principal amount of any such refinancing mortgage
may equal the outstanding balance of an existing mortgage
insured pursuant to section 245, if the amount of the monthly
payment due under the refinancing mortgage is less than that
due under the existing mortgage for the month in which the
refinancing mortgage is executed;
``(B) a mortgagee may not require a minimum principal
amount to be outstanding on the loan secured by the existing
mortgage;
``(C) in any case involving the refinancing of a loan in
which the Secretary determines that the insurance of a
mortgage for an additional term will inure to the benefits of
the applicable insurance fund, taking into consideration the
outstanding insurance liability under the existing insured
mortgage, such refinancing mortgage may have a term not more
than twelve years in excess of the unexpired term of such
existing insured mortgage; and
``(D) any multifamily mortgage that is refinanced under
this paragraph shall be documented through amendments to the
existing insurance contract and shall not be structured
through the provisions of a new insurance contract; or
``(2) executed in connection with the sale by the
Government of any housing acquired pursuant to section 1013
of the Demonstration Cities and Metropolitan Development Act
of 1966.''; and
(ii) in subsection (d)(5), by striking ``A loan'' and all
that follows through ``and loans'' and inserting ``Loans''.
(o) Transition Rules.--
(1) Effect on contracts.--The repeal of program authorities
under this section shall not affect any legally binding
obligation entered into before the effective date of this
Act.
(2) Savings provisions.--
(A) In general.--Except as otherwise provided in this Act,
any funds or obligation authorized by, activity conducted
under, or mortgage or loan insured under, a provision of law
repealed by this section shall continue to be governed by the
provision as in existence immediately before the effective
date of this Act.
[[Page S7872]]
(B) Insurance.--The insurance authorities repealed by
subsection (n)(1) and the provisions of the National Housing
Act applicable to a mortgage or loan insured under any of
such authorities, as such authorities and provisions existed
immediately before repeal, shall continue to apply to a
mortgage or loan insured under any of such authorities prior
to repeal, and a mortgage or loan for which, prior to the
date of repeal, the Secretary has issued a firm commitment
for insurance under any of such authorities or a Direct
Endorsement underwriter has approved, in a form acceptable to
the Secretary, a mortgage or loan for insurance under such
authorities.
SEC. 103. HUD CONSOLIDATION TASK FORCE.
(a) In General.--There is established a task force to be
known as the ``HUD Consolidation Task Force'', which shall--
(1) consist of the Comptroller General of the United
States, the Secretary, and the Inspector General of the
Department; and
(2) conduct an analysis of legislative and regulatory
options to reduce the number of programs carried out by the
Department through consolidation, elimination, and transfer
to other departments and agencies of the Federal government
and to State and local governments.
(b) Report.--Not later than 6 months after the effective
date of this Act, the HUD Consolidation Task Force shall
submit to the Committees a report, which shall include the
results of the analysis under subsection (a)(2).
TITLE II--COMMUNITY EMPOWERMENT
SEC. 201. REAUTHORIZATION OF COMMUNITY DEVELOPMENT BLOCK
GRANTS AND PROHIBITION OF SET-ASIDES.
(a) Reauthorization.--The last sentence of section 103 of
the Housing and Community Development Act of 1974 (42 U.S.C.
5303) is amended to read as follows: ``For purposes of
assistance under section 106, there is authorized to be
appropriated $4,850,000,000 for fiscal year 2001 and such
sums as may be necessary for each of fiscal years 2002
through 2005.''.
(b) Prohibition of Set-Asides.--Section 103 of the Housing
and Community Development Act of 1974 (42 U.S.C. 5303) is
amended--
(1) by inserting ``(a) In General.--'' after ``Sec. 103.'';
and
(2) by adding at the end the following:
``(b) Prohibition of Set-Asides.--Except as provided in
paragraphs (1) and (2) of section 106(a) and in section 107,
amounts appropriated pursuant to subsection (a) of this
section or otherwise to carry out this title (other than
section 108) shall be used only for formula-based grants
allocated pursuant to section 106 and may not be otherwise
used unless the provision of law providing for such other use
specifically refers to this subsection and specifically
states that such provision modifies or supersedes the
provisions of this subsection.
``(c) Point of Order.--Notwithstanding any other provision
of law, it shall not be in order in the Senate to consider
any measure or amendment that provides for a set-aside
prohibited under subsection (b). The point of order provided
by this subsection may only be waived or suspended by a vote
of three-fifths of the members of the Senate duly chosen and
sworn.''.
SEC. 202. COMMUNITY NOTIFICATION OF OPT-OUTS.
Section 8(c)(8)(A) of the Housing Act of 1937 (42 U.S.C.
1437f(c)(8)(A)) is amended by adding at the end the
following: ``Upon receipt of a written notice under this
subparagraph, the Secretary shall forward a copy of the
notice to the top elected official for the unit of local
government in which the property is located.''.
SEC. 203. URBAN HOMESTEAD REQUIREMENT.
(a) Disposition of Unoccupied and Substandard Public
Housing.--
(1) Publication in federal register.--
(A) In general.--Subject to subparagraph (B), beginning 6
months after the effective date of this Act, and every 6
months thereafter, the Secretary shall publish in the Federal
Register a list of each unoccupied multifamily housing
project, substandard multifamily housing project, and other
residential property that is owned by the Secretary.
(B) Exception for certain projects and properties.--
(i) Projects.--A project described in subparagraph (A)
shall not be included in a list published under subparagraph
(A) if less than 6 months have elapsed since the later of--
(I) the date on which the project was acquired by the
Secretary; or
(II) the date on which the project was determined to be
unoccupied or substandard.
(ii) Properties.--A property described in subparagraph (A)
shall not be included in a list published under subparagraph
(A) if less than 6 months have elapsed since the date on
which the property was acquired by the Secretary.
(b) Transfer of Unoccupied and Substandard HUD-Held Housing
to Local Governments and Community Development
Corporations.--Section 204 of the Departments of Veterans
Affairs and Housing and Urban Development, and Independent
Agencies Appropriations Act, 1997 (12 U.S.C. 1715z-11a) is
amended--
(1) by striking ``Flexible Authority.--'' and inserting the
following: ``(a) Flexible Authority for Disposition of
Multifamily Projects.--''; and
(2) by adding at the end the following:
``(b) Transfer of Unoccupied and Substandard Housing to
Local Governments and Community Development Corporations.--
``(1) Definitions.--In this subsection:
``(A) Community development corporation.--The term
`community development corporation' means a nonprofit
organization whose primary purpose is to promote community
development by providing housing opportunities for low-income
families.
``(B) Cost recovery basis.--The term `cost recovery basis'
means, with respect to any sale of a residential property by
the Secretary, that the purchase price paid by the purchaser
is equal to or greater than or equal to the costs incurred by
the Secretary in connection with such property during the
period beginning on the date on which the Secretary acquires
title to the property and ending on the date on which the
sale is consummated.
``(C) Multifamily housing project.--The term `multifamily
housing project' has the meaning given the term in section
203 of the Housing and Community Development Amendments of
1978.
``(D) Qualified hud property.--The term `qualified HUD
property' means any property that is owned by the Secretary
and is--
``(i) an unoccupied multifamily housing project;
``(ii) a substandard multifamily housing project; or
``(iii) an unoccupied single family property that--
``(I) has been determined by the Secretary not to be an
eligible property under section 204(h) of the National
Housing Act (12 U.S.C. 1710(h)); or
``(II) is an eligible property under such section 204(h),
but--
``(aa) is not subject to a specific sale agreement under
such section; and
``(bb) has been determined by the Secretary to be
inappropriate for continued inclusion in the program under
such section 204(h) pursuant to paragraph (10) of such
section.
``(E) Residential property.--The term `residential
property' means a property that is a multifamily housing
project or a single family property.
``(F) Secretary.--The term `Secretary' means the Secretary
of Housing and Urban Development.
``(G) Severe physical problems.--The term `severe physical
problems' means, with respect to a dwelling unit, that the
unit--
``(i) lacks hot or cold piped water, a flush toilet, or
both a bathtub and a shower in the unit, for the exclusive
use of that unit;
``(ii) on not less than 3 separate occasions during the
preceding winter months, was uncomfortably cold for a period
of more than 6 consecutive hours due to a malfunction of the
heating system for the unit;
``(iii) has no functioning electrical service, exposed
wiring, any room in which there is not a functioning
electrical outlet, or has experienced 3 or more blown fuses
or tripped circuit breakers during the preceding 90-day
period;
``(iv) is accessible through a public hallway in which
there are no working light fixtures, loose or missing steps
or railings, and no elevator; or
``(v) has severe maintenance problems, including water
leaks involving the roof, windows, doors, basement, or pipes
or plumbing fixtures, holes or open cracks in walls or
ceilings, severe paint peeling or broken plaster, and signs
of rodent infestation.
``(H) Single family property.--The term `single family
property' means a 1- to 4-family residence.
``(I) Substandard.--The term `substandard' means, with
respect to a multifamily housing project, that 25 percent or
more of the dwelling units in the project have severe
physical problems.
``(J) Unit of general local government.--The term `unit of
general local government' has the meaning given that term in
section 102(a) of the Housing and Community Development Act
of 1974.
``(K) Unoccupied.--The term `unoccupied' means, with
respect to a residential property, that the unit of general
local government having jurisdiction over the area in which
the project is located has certified in writing that the
property is not inhabited.
``(2) Transfer authority.--Notwithstanding the authority
under subsection (a) and the last sentence of section 204(g)
of the National Housing Act (12 U.S.C. 1710(g)), the
Secretary of Housing and Urban Development shall transfer
ownership of any qualified HUD property included in the most
recent list published by the Secretary under subsection (a)
to a unit of general local government having jurisdiction for
the area in which the property is located or to a community
development corporation which operates within such a unit of
general local government in accordance with this subsection,
but only to the extent that units of general local government
and community development corporations submit a written
request for the transfer.
``(3) Timing.--The Secretary shall establish procedures
that provide for--
``(A) time deadlines for transfers under this subsection;
``(B) notification to units of general local government and
community development corporations of qualified HUD
properties in their jurisdictions;
``(C) such units and corporations to express interest in
the transfer under this subsection of such properties;
``(D) a right of first refusal for transfer of qualified
HUD properties to such units and corporations, under which
the Secretary shall accept an offer to purchase such a
property made by such unit or corporation during a period
established by the Secretary,
[[Page S7873]]
but in the case of an offer made by a community development
corporation only if the offer provides for purchase on a cost
recovery basis; and
``(E) a written explanation, to any unit of general local
government or community development corporation making an
offer to purchase a qualified HUD property under this
subsection that is not accepted, of the reason that such
offer was not acceptable.
``(4) Other disposition.--With respect to any qualified HUD
property, if the Secretary does not receive an acceptable
offer to purchase the property pursuant to the procedure
established under paragraph (3), the Secretary shall dispose
of the property to the unit of general local government in
which property is located or to community development
corporations located in such unit of general local government
on a negotiated, competitive bid, or other basis, on such
terms as the Secretary deems appropriate.
``(5) Satisfaction of indebtedness.--Before transferring
ownership of any qualified HUD property pursuant to this
subsection, the Secretary shall satisfy any indebtedness
incurred in connection with the property to be transferred,
by canceling the indebtedness.
``(6) Determination of status of properties.--To ensure
compliance with the requirements of this subsection, the
Secretary shall take the following actions:
``(A) Upon enactment.--Not later than 60 days after the
effective date of the Local Housing Opportunities Act, the
Secretary shall assess each residential property owned by the
Secretary to determine whether the property is a qualified
HUD property.
``(B) Upon acquisition.--Upon acquiring any residential
property, the Secretary shall promptly determine whether the
property is a qualified HUD property.
``(C) Updates.--The Secretary shall periodically reassess
the residential properties owned by the Secretary to
determine whether any such properties have become qualified
HUD properties.
``(7) Tenant leases.--This subsection shall not affect the
terms or the enforceability of any contract or lease entered
into with respect to any residential property before the date
that such property becomes a qualified HUD property.
``(8) Use of property.--Property transferred under this
subsection shall be used only for appropriate neighborhood
revitalization efforts, including homeownership, rental
units, commercial space, and parks, consistent with local
zoning regulations, local building codes, and subdivision
regulations and restrictions of record.
``(9) Inapplicability to properties made available for
homeless.--Notwithstanding any other provision of this
subsection, this subsection shall not apply to any property
that the Secretary determines is to be made available for use
by the homeless pursuant to subpart E of part 291 of title
24, Code of Federal Regulations (as in effect on January 1,
2000), during the period that the properties are so
available.
``(10) Protection of existing contracts.--This subsection
may not be construed to alter, affect, or annul any legally
binding obligations entered into with respect to a qualified
HUD property before the property becomes a qualified HUD
property.''.
(c) Procedures.--Not later than 6 months after the date of
enactment of this Act, the Secretary shall establish, by
rule, regulation, or order, such procedures as may be
necessary to carry out this section and the amendments made
by this section.
SEC. 204. AUTHORIZATION OF MOVING TO WORK PROGRAM.
Section 204 of the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies
Appropriations Act, 1996 (as contained in section 101(e) of
the Omnibus Consolidated Rescissions and Appropriations Act
of 1996) (42 U.S.C. 1437f note) is amended--
(1) in the section heading, by striking ``demonstration''
and inserting ``program'';
(2) in subsection (a), by striking ``this demonstration''
and inserting ``this section'';
(3) in subsection (b)--
(A) in the first sentence--
(i) by striking ``demonstration''; and
(ii) by striking ``up to 30'';
(B) in the third sentence, by striking ``Under the
demonstration, notwithstanding'' and inserting
``Notwithstanding''; and
(C) by striking the second sentence;
(4) in subsection (c)--
(A) in the matter preceding paragraph (1), by striking
``demonstration'' and inserting ``program under this
section'';
(B) in paragraph (3)--
(i) in subparagraph (A), by striking ``demonstration'';
(ii) in subparagraph (B), by striking ``demonstration'' and
inserting ``section''; and
(iii) in subparagraph (E), by striking ``demonstration
program'' and inserting ``program under this section''; and
(C) in paragraph (4), by striking ``demonstration'' and
inserting ``program under this section'';
(5) by striking subsection (d) and inserting the following:
``(d) Approval of Applications.--Not later than 60 days
after receiving an application submitted in accordance with
subsection (c), the Secretary shall approve the application,
unless the Secretary makes a written determination that the
applicant has a most recent score under the public housing
management assessment program under section 6(j)(2) of the
United States Housing Act of 1937 (or any successor
assessment program for public housing agencies), that is
among the lowest 20 percent of the scores of all public
housing agencies.'';
(6) in subsection (e)--
(A) in paragraph (1), by striking ``this demonstration''
and inserting ``the program under this section''; and
(B) in paragraph (2), by striking ``demonstration'' and
inserting ``program under this section'';
(7) in subsection (f), by striking ``demonstration under
this part'' and inserting ``program under this section'';
(8) in subsection (g)--
(A) in paragraph (1), by striking ``this demonstration''
and inserting ``the program under this section''; and
(B) in paragraph (2), by striking ``demonstration'' and
inserting ``program under this section'';
(9) in subsection (h), by striking ``demonstration'' each
place it appears and inserting ``program under this
section'';
(10) in subsection (i), by striking ``demonstration'' and
inserting ``program under this section''; and
(11) in subsection (j), by striking ``demonstration'' and
inserting ``program''.
TITLE III--HOMELESS ASSISTANCE REFORM
SEC. 301. CONSOLIDATION OF HUD HOMELESS ASSISTANCE FUNDS.
The purposes of this title are to facilitate the effective
and efficient management of the homeless assistance programs
of the Department by--
(1) reducing and preventing homelessness by supporting the
creation and maintenance of community-based, comprehensive
systems dedicated to returning families and individuals to
self-sufficiency;
(2) reorganizing the homeless housing assistance
authorities under the Stewart B. McKinney Homeless Assistance
Act into a McKinney Homeless Assistance Performance Fund;
(3) assisting States and local governments, in partnership
with private nonprofit service providers, to use homeless
funding more efficiently and effectively;
(4) simplifying and making more flexible the provision of
Federal homeless assistance;
(5) maximizing the ability of a community to implement a
coordinated, comprehensive system for providing assistance to
homeless families and individuals;
(6) making more efficient and equitable the manner in which
homeless assistance is distributed;
(7) reducing the Federal role in local decisionmaking for
homeless assistance programs;
(8) reducing the costs to governmental jurisdictions and
private nonprofit organizations in applying for and using
assistance; and
(9) advancing the goal of meeting the needs of the homeless
population through mainstream programs and establishing
continuum of care systems necessary to achieve that goal.
SEC. 302. ESTABLISHMENT OF THE MCKINNEY HOMELESS ASSISTANCE
PERFORMANCE FUND.
Title IV of the Stewart B. McKinney Homeless Assistance Act
(42 U.S.C. 11361 et seq.) is amended to read as follows:
``TITLE IV--McKINNEY HOMELESS ASSISTANCE PERFORMANCE FUND
``SEC. 401. DEFINITIONS.
``In this title:
``(1) Allocation unit of general local government.--
``(A) In general.--The term `allocation unit of general
local government' means a metropolitan city or an urban
county.
``(B) Consortia.--The term `allocation unit of general
local government' may include a consortium of geographically
contiguous metropolitan cities and urban counties, if the
Secretary determines that the consortium--
``(i) has sufficient authority and administrative
capability to carry out the purposes of this title on behalf
of its member jurisdictions; and
``(ii) will, according to a written certification by the
State (or States, if the consortium includes jurisdictions in
more than 1 State), direct its activities to the
implementation of a continuum of care system within the State
or States.
``(2) Applicant.--The term `applicant' means a grantee
submitting an application under section 403.
``(3) Consolidated plan.--The term `consolidated plan'
means the single comprehensive plan that the Secretary
prescribes for submission by jurisdictions (which shall be
coordinated and consistent with any 5-year comprehensive plan
of the public housing agency required under section 14(e) of
the United States Housing Act of 1937) that consolidates and
fulfills the requirements of--
``(A) the comprehensive housing affordability strategy
under title I of the Cranston-Gonzalez National Affordable
Housing Act;
``(B) the community development plan under section 104 of
the Housing and Community Development Act of 1974; and
``(C) the submission requirements for formula funding
under--
``(i) the Community Development Block Grant program
(authorized by title I of the Housing and Community
Development Act of 1974);
``(ii) the HOME program (authorized by title II of the
Cranston-Gonzalez National Affordable Housing Act);
[[Page S7874]]
``(iii) the McKinney Homeless Assistance Performance Fund
(authorized under this title); and
``(iv) the AIDS Housing Opportunity Act (authorized by
subtitle D of title VIII of the Cranston-Gonzalez National
Affordable Housing Act).
``(4) Continuum of care system.--The term `continuum of
care system' means a system developed by a State or local
homeless assistance board that includes--
``(A) a system of outreach and assessment, including drop-
in centers, 24-hour hotlines, counselors, and other
activities designed to engage homeless individuals and
families, bring them into the continuum of care system, and
determine their individual housing and service needs;
``(B) emergency shelters with essential services to ensure
that homeless individuals and families receive shelter;
``(C) transitional housing with appropriate supportive
services to help ensure that homeless individuals and
families are prepared to make the transition to increased
responsibility and permanent housing;
``(D) permanent housing, or permanent supportive housing,
to help meet the long-term housing needs of homeless
individuals and families;
``(E) coordination between assistance provided under this
title and assistance provided under other Federal, State, and
local programs that may be used to assist homeless
individuals and families, including both targeted homeless
assistance programs and other programs administered by the
Departments of Veterans Affairs, Labor, Health and Human
Services, and Education; and
``(F) a system of referrals for subpopulations of the
homeless (such as homeless veterans, families with children,
battered spouses, persons with mental illness, persons who
have chronic problems with alcohol, drugs, or both, persons
with other chronic health problems, and persons who have
acquired immunodeficiency syndrome and related diseases) to
the appropriate agencies, programs, or services (including
health care, job training, and income support) necessary to
meet their needs.
``(5) Grantee.--The term `grantee' means--
``(A) an allocation unit of general local government or
insular area that administers a grant under section
408(b)(1); or
``(B) an allocation unit of general local government or
insular area that designates a public agency or a private
nonprofit organization (or a combination of such
organizations) to administer grant amounts under section
408(b)(2).
``(6) Homeless individual.--The term `homeless individual'
has the same meaning as in section 103 of this Act.
``(7) Insular area.--The term `insular area' means the
Virgin Islands, Guam, American Samoa, and the Northern
Mariana Islands.
``(8) Low-demand services and referrals.--The term `low-
demand services and referrals' means the provision of health
care, mental health, substance abuse, and other supportive
services and referrals for services in a noncoercive manner,
which may include medication management, education,
counseling, job training, and assistance in obtaining
entitlement benefits and in obtaining other supportive
services, including mental health and substance abuse
treatment.
``(9) Metropolitan city.--The term `metropolitan city' has
the same meaning as in section 102(a) of the Housing and
Community Development Act of 1974.
``(10) Person with disabilities.--The term `person with
disabilities' means a person who--
``(A) has a disability as defined in section 223 of the
Social Security Act;
``(B) is determined to have, as determined by the
Secretary, a physical, mental, or emotional impairment
which--
``(i) is expected to be of long-continued and indefinite
duration;
``(ii) substantially impedes his or her ability to live
independently; and
``(iii) is of such a nature that such ability could be
improved by more suitable housing conditions;
``(C) has a developmental disability, as defined in section
102 of the Developmental Disabilities Assistance and Bill of
Rights Act; or
``(D) has the disease of acquired immunodeficiency syndrome
or any conditions arising from the etiologic agent for
acquired immunodeficiency syndrome, except that this
subparagraph shall not be construed to limit eligibility
under subparagraphs (A) through (C) or the provisions
referred to in subparagraphs (A) through (C).
``(11) Private nonprofit organization.--The term `private
nonprofit organization' means a private organization--
``(A) no part of the net earnings of which inures to
benefits of any member, founder, contributor, or individual;
``(B) that has a voluntary board;
``(C) that has an accounting system, or has designated a
fiscal agent in accordance with requirements established by
the Secretary; and
``(D) that practices nondiscrimination in the provision of
assistance.
``(12) Project sponsor.--The term `project sponsor' means
an entity that--
``(A) provides housing or assistance for homeless
individuals or families by carrying out activities under this
title; and
``(B) meets such minimum standards as the Secretary
considers appropriate.
``(13) Recipient.--The term `recipient' means a grantee
(other than a State when it is distributing grant amounts to
State recipients) and a State recipient.
``(14) Secretary.--The term `Secretary' means the Secretary
of Housing and Urban Development.
``(15) State.--The term `State' means each of the several
States and the Commonwealth of Puerto Rico. The term includes
an agency or instrumentality of a State that is established
pursuant to legislation and designated by the chief executive
officer to act on behalf of the jurisdiction with regard to
provisions of this title.
``(16) State recipient.--The term `State recipient' means
the following entities receiving amounts from the State under
section 408(c)(2)(B):
``(A) A unit of general local government within the State.
``(B) In the case of an area of the State with significant
homeless needs, if no State recipient is identified, 1 or
more private nonprofit organizations serving that area.
``(17) Unit of general local government.--The term `unit of
general local government' means--
``(A) a city, town, township, county, parish, village, or
other general purpose political subdivision of a State;
``(B) the District of Columbia; and
``(C) any agency or instrumentality thereof that is
established pursuant to legislation and designated by the
chief executive officer to act on behalf of the jurisdiction
with regard to provisions of this title.
``(18) Urban county.--The term `urban county' has the same
meaning as in section 102(a) of the Housing and Community
Development Act of 1974.
``(19) Very low-income families.--The term `very low-income
families' has the same meaning as in section 104 of the
Cranston-Gonzalez National Affordable Housing Act.
``SEC. 402. AUTHORIZATIONS.
``(a) In General.--The Secretary may make grants to carry
out activities to assist homeless individuals and families in
support of continuum of care systems in accordance with this
title.
``(b) Funding Amounts.--There are authorized to be
appropriated to carry out this title, to remain available
until expended--
``(1) $1,050,000,000 for fiscal year 2001;
``(2) $1,070,000,000 for fiscal year 2002; and
``(3) $1,090,000,000 for fiscal year 2003.
``SEC. 403. APPLICATION.
``(a) In General.--Each applicant shall submit the
application required under this section in such form and in
accordance with such procedures as the Secretary shall
prescribe. If the applicant is a State or unit of general
local government, the application shall be submitted as part
of the homeless assistance component of the consolidated
plan.
``(b) Continuum of Care Submission.--
``(1) In general.--The allocation unit of general local
government, insular area, or State shall prepare, and submit
those portions of the application related to the development
and implementation of the continuum of care system, as
described in paragraph (2) or (3), as applicable.
``(2) Submission by allocation unit of general local
government or insular area.--The allocation unit of general
local government or insular area shall develop and submit to
the Secretary--
``(A) a continuum of care system consistent with that
defined under section 401(4), which shall be designed to
incorporate any strengths and fill any gaps in the current
homeless assistance activities of the jurisdiction, and shall
include a description of efforts to address the problems
faced by each of the different subpopulations of homeless
individuals;
``(B) a multiyear strategy for implementing the continuum
of care system, including appropriate timetables and budget
estimates for accomplishing each element of the strategy;
``(C) a 1-year plan, identifying all activities to be
carried out with assistance under this title and with
assistance from other HUD resources allocated in accordance
with the consolidated plan, and describing the manner in
which these activities will further the strategy; and
``(D) any specific performance measures and benchmarks for
use in assessing the performance of the grantee under this
title that are in addition to national performance measures
and benchmarks established by the Secretary.
``(3) Submission by state.--The State shall develop and
submit to the Secretary--
``(A) a continuum of care system consistent with that
defined under section 401(4), which shall be designed to
incorporate any strengths and fill any gaps in the current
homeless assistance activities of the jurisdiction, and shall
include a description of efforts to address the problems
faced by each of the different subpopulations of homeless
individuals;
``(B) a multiyear strategy for implementing the continuum
of care systems in areas of the State outside allocation
units of general local government, including the actions the
State will take to achieve the goals set out in the strategy;
``(C) a 1-year plan identifying--
``(i) in the case of a State carrying out its own
activities under section 408(c)(2)(A), the activities to be
carried out with assistance under this title and describing
the manner in which these activities will further the
strategy; and
[[Page S7875]]
``(ii) in the case of a State distributing grant amounts to
State recipients under section 408(c)(2)(B), the criteria
that the State will use in distributing amounts awarded under
this title, the method of distribution, and the relationship
of the method of distribution to the homeless assistance
strategy; and
``(D) any specific performance measures and benchmarks for
use in assessing the performance of the grantee under this
title that are in addition to national performance measures
and benchmarks established by the Secretary.
``(c) Submission Requirements for Applicants Other Than
States.--Each application from an applicant other than a
State shall include, at a minimum--
``(1) the continuum of care submission described in
subsection (b)(2);
``(2) a determination on whether the assistance under this
title will be administered by the jurisdiction, a public
agency or private nonprofit organization, or the State, as
appropriate under subsections (b) and (c) of section 408;
``(3) certifications or other such forms of proof of
commitments of financial and other resources sufficient to
comply with the match requirements under section 405(a)(1);
``(4) a certification that the applicant is following a
current approved consolidated plan;
``(5) a certification that the grant will be conducted and
administered in conformity with title VI of the Civil Rights
Act of 1964, section 504 of the Rehabilitation Act of 1973,
and the Fair Housing Act, and the grantee will affirmatively
further fair housing; and
``(6) a certification that the applicant will comply with
the requirements of this title and other applicable laws.
``(d) Submission Requirements for States.--Each application
from a State shall include--
``(1) the continuum of care submission described in
subsection (b)(3);
``(2) certifications or other such forms of proof of
commitments of financial and other resources sufficient to
comply with the match requirements under section 405(a)(1);
``(3) a certification that the applicant is following a
current approved consolidated plan;
``(4) a certification that the grant will be conducted and
administered in conformity with title VI of the Civil Rights
Act of 1964, section 504 of the Rehabilitation Act of 1973,
and the Fair Housing Act, and the grantee will affirmatively
further fair housing; and
``(5) a certification that the State and State recipients
will comply with the requirements of this title and other
applicable laws.
``(e) Application Approval.--The application shall be
approved by the Secretary unless the Secretary determines
that the application is substantially incomplete.
``SEC. 404. ELIGIBLE PROJECTS AND ACTIVITIES; CONTINUUM OF
CARE APPROVAL.
``(a) Eligible Projects.--Grants under this title may be
used to carry out activities described in subsection (b) in
support of the following types of projects:
``(1) Emergency assistance.--Assistance designed to prevent
homelessness or to meet the emergency needs of homeless
individuals and families, including 1 or more of the
following:
``(A) Prevention.--Efforts to prevent homelessness of a
very low-income individual or family that has received an
eviction notice, notice of mortgage foreclosure, or notice of
termination of utilities, if--
``(i) the individual or family cannot make the required
payments due to a sudden reduction in income or other
financial emergency; and
``(ii) the assistance is necessary to avoid imminent
eviction, foreclosure, or termination of services.
``(B) Outreach and assessment.--Efforts designed to inform
individuals and families about the availability of services,
to bring them into the continuum of care system, and to
determine which services or housing are appropriate to the
needs of the individual or family.
``(C) Emergency shelter.--The provision of short-term
emergency shelter with essential supportive services for
homeless individuals and families.
``(2) Safe haven housing.--A structure or a clearly
identifiable portion of a structure that--
``(A) provides housing and low-demand services and
referrals for homeless individuals with serious mental
illness--
``(i) who are currently residing primarily in places not
designed for, or ordinarily used as, a regular sleeping
accommodation for human beings; and
``(ii) who have been unwilling or unable to participate in
mental health or substance abuse treatment programs or to
receive other supportive services; except that a person whose
sole impairment is substance abuse shall not be considered an
eligible person;
``(B) provides 24-hour residence for eligible individuals
who may reside for an unspecified duration;
``(C) provides private or semiprivate accommodations;
``(D) may provide for the common use of kitchen facilities,
dining rooms, and bathrooms;
``(E) may provide supportive services to eligible persons
who are not residents on a drop-in basis;
``(F) provides occupancy limited to not more than 25
persons; and
``(G) provides housing for victims of spousal abuse, and
their dependents.
``(3) Transitional housing.--Housing and appropriate
supportive services that are designed to facilitate the
movement of homeless individuals to permanent housing,
generally within 24 months.
``(4) Permanent housing and permanent housing and
supportive services for persons with disabilities.--Permanent
housing for homeless individuals, and permanent housing and
supportive services for homeless persons with disabilities,
the latter of which may be designed to provide housing and
services solely for persons with disabilities, or may provide
housing for such persons in a multifamily housing,
condominium, or cooperative project.
``(5) Single room occupancy housing.--A unit for occupancy
by 1 person, which need not (but may) contain food
preparation or sanitary facilities, or both, and may provide
services such as mental health services, substance abuse
treatment, job training, and employment programs.
``(6) Other projects.--Such other projects as the Secretary
determines will further the purposes of title I of the
Homelessness Assistance and Management Reform Act of 1997.
``(b) Eligible Activities.--Grants under this title may be
used to carry out the following activities in support of
projects described in subsection (a):
``(1) Homelessness prevention activities.--Short-term
mortgage, rental, and utilities payments and other short-term
assistance designed to prevent the imminent homelessness of
the individuals and families described in subsection
(a)(1)(A).
``(2) Outreach and assessment.--Drop-in centers, 24-hour
hotlines, counselors, and other activities designed to engage
homeless individuals and families, bring them into the
continuum of care system, and determine their individual
housing and service needs.
``(3) Acquisition and rehabilitation.--The acquisition,
rehabilitation, or acquisition and rehabilitation of real
property.
``(4) New construction.--The new construction of a project,
including the cost of the site.
``(5) Operating costs.--The costs of operating a project,
including salaries and benefits, maintenance, insurance,
utilities, replacement reserve accounts, and furnishings.
``(6) Leasing.--Leasing of an existing structure or
structures, or units within these structures, including the
provision of long-term rental assistance contracts.
``(7) Tenant assistance.--The provision of security or
utility deposits, rent, or utility payments for the first
month of residence at a new location, and relocation
assistance.
``(8) Supportive services.--The provision of essential
supportive services including case management, housing
counseling, job training and placement, primary health care,
mental health services, substance abuse treatment, child
care, transportation, emergency food and clothing, family
violence services, education services, moving services,
assistance in obtaining entitlement benefits, and referral to
veterans services and referral to legal services.
``(9) Administration.--
``(A) In general.--Expenses incurred in--
``(i) planning, developing, and establishing a program
under this title; and
``(ii) administering the program.
``(B) Limitations.--Not more than the following amounts may
be used for administrative costs under subparagraph (A):
``(i) 10 percent of any grant amounts provided for a
recipient for a fiscal year (including amounts used by a
State to carry out its own activities under section
408(c)(1)(A)).
``(ii) 5 percent of any grant amounts provided to a State
for a fiscal year that the State uses to distribute funds to
a State recipient under section 408(c)(1)(B).
``(10) Capacity building.--
``(A) In general.--Building the capacity of private
nonprofit organizations to participate in the continuum of
care system of the recipient.
``(B) Limitations.--Not more than the following amounts may
be used for capacity building under subparagraph (A):
``(i) 2 percent of any grant amounts provided for a
recipient for a fiscal year (including amounts used by a
State to carry out its own activities under section
408(c)(1)(A)).
``(ii) 2 percent of any grant amounts provided to a State
for a fiscal year that the State uses to distribute funds to
a State recipient under section 408(c)(1)(B).
``(11) Other activities.--Other activities as the Secretary
determines will further the purposes of title I of the
Homelessness Assistance and Management Reform Act of 1997.
``(c) Targeting to Subpopulations of Persons With
Disabilities.--Notwithstanding any other provision of law,
projects for persons with disabilities assisted under this
title may be targeted to specific subpopulations of such
persons, including persons who--
``(1) are seriously mentally ill;
``(2) have chronic problems with drugs, alcohol, or both;
or
``(3) have acquired immunodeficiency syndrome or any
conditions arising from the etiologic agency for acquired
immunodeficiency syndrome.
``SEC. 405. MATCHING REQUIREMENT AND MAINTENANCE OF EFFORT.
``(a) Matching Requirement.--
``(1) In general.--Each recipient shall make contributions
totaling not less than $1 for every $3 made available for the
recipient
[[Page S7876]]
for any fiscal year under this title to carry out eligible
activities. At the end of each program year, each recipient
shall certify to the Secretary that it has complied with this
section, and shall include with the certification a
description of the sources and amounts of the matching
contributions. Contributions under this section may not come
from assistance provided under this title.
``(2) Calculation of amounts.--In calculating the amount of
matching contributions required under paragraph (1), a
recipient may include--
``(A) any funds derived from a source, other than
assistance under this title or amounts subject to subsection
(b);
``(B) the value of any lease on a building; and
``(C) any salary paid to staff or any volunteer labor
contributed to carry out the program.
``(b) Limitation on Use of Funds.--No assistance received
under this title may be used to replace other funds
previously used, or designated for use, by the State, State
recipient (except when a State recipient is a private
nonprofit organization), allocation unit of general local
government or insular area to assist homeless individuals and
families.
``SEC. 406. RESPONSIBILITIES OF RECIPIENTS, PROJECT SPONSORS,
AND OWNERS.
``(a) Use of Assistance Through Private Nonprofit
Organizations.--
``(1) In general.--Each recipient shall ensure that at
least 50 percent of the grant amounts that are made available
to it under this title for any fiscal year are made available
to project sponsors that are private nonprofit organizations.
``(2) Waiver.--The Secretary may waive or reduce the
requirement of paragraph (1), if the recipient demonstrates
to the Secretary that the requirement interferes with the
ability of the recipient to provide assistance under this
title because of the paucity of qualified private nonprofit
organizations in the jurisdiction of the recipient.
``(b) Housing Quality.--Each recipient shall ensure that
housing assisted with grant amounts provided under this title
is decent, safe, and sanitary and complies with all
applicable State and local housing codes, building codes, and
licensing requirements in the jurisdiction in which the
housing is located.
``(c) Prevention of Undue Benefit.--The Secretary may
prescribe such terms and conditions as the Secretary
considers necessary to prevent project sponsors from unduly
benefiting from the sale or other disposition of projects,
other than a sale or other disposition resulting in the use
of the project for the direct benefit of very low-income
families.
``(d) Confidentiality.--Each recipient shall develop and
implement procedures to ensure the confidentiality of records
pertaining to any individual provided services assisted under
this title for family violence prevention or treatment or for
such medical or other conditions as the Secretary may
prescribe, and to ensure that the address or location of any
project providing such services will, except with written
authorization of the person or persons responsible for the
operation of such project, not be made public.
``(e) Employment of Homeless Individuals.--
``(1) In general.--To the maximum extent practicable, the
Secretary shall ensure that recipients, through employment,
volunteer services, or otherwise, provide opportunities for
homeless individuals and families to participate in--
``(A) constructing, renovating, maintaining, and operating
facilities assisted under this title;
``(B) providing services so assisted; and
``(C) providing services for occupants of facilities so
assisted.
``(2) No displacement of employed workers.--In carrying out
paragraph (1), recipients shall not displace employed
workers.
``(f) Occupancy Charge.--Any homeless individual or family
residing in a dwelling unit assisted under this title may be
required to pay an occupancy charge in an amount determined
by the grantee providing the assistance, which may not exceed
an amount equal to 30 percent of the adjusted income (as
defined in section 3(b) of the United States Housing Act of
1937 or any other subsequent provision of Federal law
defining the term for purposes of eligibility for, or rental
charges in, public housing) of the individual or family.
Occupancy charges paid may be reserved, in whole or in part,
to assist residents in moving to permanent housing.
``SEC. 407. ALLOCATION AND DISTRIBUTION OF FUNDS.
``(a) Insular Areas.--
``(1) Allocation.--For each fiscal year, the Secretary
shall allocate assistance under this title to insular areas,
in an amount equal to 0.20 percent of the amounts
appropriated under the first sentence of section 402(b).
``(2) Distribution.--The Secretary shall provide for the
distribution of amounts reserved under paragraph (1) for
insular areas pursuant to specific criteria or a distribution
formula prescribed by the Secretary.
``(b) States and Allocation Units of General Local
Government.--
``(1) In general.--For each fiscal year, of the amounts
appropriated under the first sentence of section 402(b) that
remain after amounts are reserved for insular areas under
subsection (a), the Secretary shall allocate assistance
according to the formula described in paragraph (2).
``(2) Formula.--
``(A) Allocation.--The Secretary shall allocate amounts for
allocation units of general local government and States, in a
manner that ensures that the percentage of the total amount
available under this title for any fiscal year for any
allocation unit of general local government or State is equal
to the percentage of the total amount available for section
106 of the Housing and Community Development Act of 1974 for
the same fiscal year that is allocated for the allocation
unit of general local government or State.
``(B) Minimum allocation.--
``(i) Graduated minimum grant allocations.--A State,
metropolitan city, or urban county shall receive no less
funding in the first fiscal year after the effective date of
this Act than 90 percent of the average of the amounts
awarded annually to that jurisdiction for homeless assistance
programs administered by the Secretary under this title
during fiscal years 1996 through 1999, not less than 85
percent in the second full fiscal year after the effective
date of this Act, not less than 80 percent in the third and
fourth fiscal years after the effective date of this Act, and
not less than 75 percent in the fifth full fiscal year after
the effective date of this Act, but only if the amount
appropriated in each such fiscal year exceeds $1,000,000,000.
If that amount does not exceed $1,000,000,000 in any fiscal
year referred to in the first sentence of this paragraph, the
jurisdiction may receive its proportionate share of the
amount appropriated which may be less than the amount in such
sentence for such fiscal year.
``(ii) Reduction.--In any fiscal year, the Secretary may
provide a grant under this subsection for a State,
metropolitan city, or urban county, in an amount less than
the amount allocated under those paragraphs, if the Secretary
determines that the jurisdiction has failed to comply with
requirements of this title, or that such action is otherwise
appropriate.
``(C) Study; submission of information to congress related
to alternative methods of allocation.--Not later than 1 year
after the effective date of the Local Housing Opportunities
Act, the Secretary shall--
``(i) submit to Congress--
``(I) the best available methodology for determining a
formula relative to the geographic allocation of funds under
this subtitle among entitlement communities and
nonentitlement areas based on the incidence of homelessness
and factors that lead to homelessness;
``(II) proposed alternatives to the formula submitted
pursuant to subclause (I) for allocating funds under this
section, including an evaluation and recommendation on a 75/
25 percent formula and other allocations of flexible block
grant homeless assistance between metropolitan cities and
urban counties and States under subparagraph (A);
``(III) an analysis of the deficiencies in the current
allocation formula described in section 106(b) of the Housing
and Community Development Act of 1974;
``(IV) an analysis of the adequacy of current indices used
as proxies for measuring homelessness; and
``(V) an analysis of the bases underlying each of the
proposed allocation methods;
``(ii) perform the duties required by this paragraph in
ongoing consultation with--
``(I) the Subcommittee on Housing Opportunity and Community
Development of the Committee on Banking, Housing, and Urban
Affairs of the Senate;
``(II) the Subcommittee on Housing and Community
Opportunity of the Committee on Banking and Financial
Services of the House of Representatives;
``(III) organizations representing States, metropolitan
cities, and urban counties;
``(IV) organizations representing rural communities;
``(V) organizations representing veterans;
``(VI) organizations representing persons with
disabilities;
``(VII) members of the academic community; and
``(VIII) national homelessness advocacy groups; and
``(iii) estimate the amount of funds that will be received
annually by each entitlement community and nonentitlement
area under each such alternative allocation system and
compare such amounts to the amount of funds received by each
entitlement community and nonentitlement area in prior years
under this section.
``SEC. 408. ADMINISTRATION OF PROGRAM.
``(a) In General.--The Secretary shall prescribe such
procedures and requirements as the Secretary deems
appropriate for administering grant amounts under this title.
``(b) Allocation Units of General Local Government and
Insular Areas.--
``(1) In general.--Except as provided in paragraph (2), an
allocation unit of general local government or insular area
shall administer grant amounts received under subsection (a)
or (b) of section 407 for any fiscal year.
``(2) Agencies and organizations designated by
jurisdiction.--
``(A) Designation of other entities to administer grant
amounts.--An allocation unit of general local government or
insular area may elect for any fiscal year to designate a
public agency or a private nonprofit organization (or a
collaboration of such organizations) to administer grant
amounts received under subsection (a) or (b) of section 407
instead of the jurisdiction.
[[Page S7877]]
``(B) Provision of grant amounts.--The Secretary may, at
the request of a jurisdiction under subparagraph (A), provide
grant amounts directly to the agency or organization
designated under that subparagraph.
``(c) States.--
``(1) In general.--The State--
``(A) may use not more than 15 percent of the amount made
available to the State under section 407(b)(2) for a fiscal
year to carry out its own homeless assistance program under
this title; and
``(B) shall distribute the remaining amounts to State
recipients.
``(2) Distribution of amounts to state recipients.--
``(A) In general.--
``(i) Options.--States distributing amounts under paragraph
(1)(B) to State recipients that are units of general local
government shall, for each fiscal year, afford each such
recipient the options of--
``(I) administering the grant amounts on its own behalf;
``(II) designating (as provided by subsection (b)(2)) a
public agency or a private nonprofit organization (or a
combination of such organizations) to administer the grant
amounts instead of the jurisdiction; or
``(III) entering into an agreement with the State, in
consultation with private nonprofit organizations providing
assistance to homeless individuals and families in the
jurisdiction, under which the State will administer the grant
amounts instead of the jurisdiction.
``(ii) Effect of designation.--A State recipient
designating an agency or organization as provided by clause
(i)(II), or entering into an agreement with the State under
clause (i)(III), shall remain the State recipient for
purposes of this title.
``(iii) Direct assistance.--The State may, at the request
of the State recipient, provide grant amounts directly to the
agency or organization designated under clause (i)(II).
``(B) Application.--
``(i) In general.--The State shall distribute amounts to
State recipients (or to agencies or organizations designated
under subparagraph (A)(i)(II), as appropriate) on the basis
of an application containing such information as the State
may prescribe, except that each application shall reflect the
State application requirements in section 403(d) and evidence
an intent to facilitate the establishment of a continuum of
care system.
``(ii) Waiver.--The State may waive the requirements in
clause (i) with respect to 1 or more proposed activities, if
the State determines that--
``(I) the activities are necessary to meet the needs of
homeless individuals and families within the jurisdiction;
and
``(II) a continuum of care system is not necessary, due to
the nature and extent of homelessness in the jurisdiction.
``(C) Preference.--In selecting State recipients and making
awards under subparagraph (B), the State shall give
preference to applications that demonstrate higher relative
levels of homeless need and fiscal distress.
``SEC. 409. CITIZEN PARTICIPATION.
``(a) In General.--Each recipient shall ensure that
citizens, appropriate private nonprofit organizations, and
other interested groups and entities participate fully in the
development and carrying out of the program authorized under
this title.
``(b) Allocation Units of General Local Government and
Insular Areas.--The chief executive officer of each
allocation unit of general local government or insular area
shall designate an entity, which shall assist the
jurisdiction--
``(1) by developing the continuum of care system and other
submission requirements, and by submitting the system and
such other submission requirements for its approval under
section 403(b);
``(2) in overseeing the activities carried out with
assistance under this title; and
``(3) in preparing the performance report under section
410(b).
``(c) State Recipients.--The chief executive officer of the
State shall designate an entity which shall assist the
State--
``(1) by developing the continuum of care system and other
submission requirements, and by submitting the system and
such other submission requirements for its approval under
section 403(b);
``(2) in determining the percentage of the grant that the
State should use--
``(A) to carry out its own homeless assistance program
under section 408(c)(1)(A); or
``(B) to distribute amounts to State recipients under
section 408(c)(1)(B);
``(3) in carrying out the responsibilities of the State, if
the State enters into an agreement with a State recipient to
administer the amounts of the State recipient under section
408(c)(2)(A)(i)(III);
``(4) in overseeing the activities carried out with
assistance under this title; and
``(5) in preparing the performance report under section
410(b).
``SEC. 410. PERFORMANCE REPORTS, REVIEWS, AUDITS, AND GRANT
ADJUSTMENTS.
``(a) National Performance Measures and Benchmarks.--The
Secretary shall establish national performance measures and
benchmarks to assist the Secretary, grantees, citizens, and
others in assessing the use of funds made available under
this title.
``(b) Grantee Performance and Evaluation Report.--
``(1) In general.--Each grantee shall submit to the
Secretary a performance and evaluation report concerning the
use of funds made available under this title.
``(2) Timing and contents.--The report under subsection (a)
shall be submitted at such time as the Secretary shall
prescribe and contain an assessment of the performance of the
grantee as measured against any specific performance measures
and benchmarks (developed under section 403), the national
performance measures and benchmarks (as established under
subsection (a)), and such other information as the Secretary
shall prescribe. Such performance measures and benchmarks
shall include a measure of the number of homeless individuals
who transition to self-sufficiency, and a measure of the
number of homeless individuals who have ended a chemical
dependency or drug addiction.
``(3) Availability to public.--Before the submission of a
report under subsection (a), the grantee shall make the
report available to citizens, public agencies, and other
interested parties in the jurisdiction of the grantee in
sufficient time to permit them to comment on the report
before submission.
``(c) Performance Reviews, Audits, and Grant Adjustments.--
``(1) Performance reviews and audits.--The Secretary shall,
not less than annually, make such reviews and audits as may
be necessary or appropriate to determine--
``(A) in the case of a grantee (other than a grantee
referred to in subparagraph (B)), whether the grantee--
``(i) has carried out its activities in a timely manner;
``(ii) has made progress toward implementing the continuum
of care system in conformity with its application under this
title; and
``(iii) has carried out its activities and certifications
in accordance with the requirements of this title and other
applicable laws; and
``(B) in the case of States distributing grant amounts to
State recipients, whether the State--
``(i) has distributed amounts to State recipients in a
timely manner and in conformance with the method of
distribution described in its application;
``(ii) has carried out its activities and certifications in
compliance with the requirements of this title and other
applicable laws; and
``(iii) has made such performance reviews and audits of the
State recipients as may be necessary or appropriate to
determine whether they have satisfied the applicable
performance criteria set forth in subparagraph (A).
``(2) Grant adjustments.--The Secretary may make
appropriate adjustments in the amount of grants in accordance
with the findings of the Secretary under this subsection.
With respect to assistance made available for State
recipients, the Secretary may adjust, reduce, or withdraw
such assistance, or take other action as appropriate in
accordance with the performance reviews and audits of the
Secretary under this subsection, except that amounts already
properly expended on eligible activities under this title
shall not be recaptured or deducted from future assistance to
such recipients.
``SEC. 411. NONDISCRIMINATION IN PROGRAMS AND ACTIVITIES.
``No person in the United States shall, on the ground of
race, color, national origin, religion, or sex, be excluded
from participation in, be denied the benefits of, or be
subjected to discrimination under any program or activity
funded in whole or in part with funds made available under
this title. Any prohibition against discrimination on the
basis of age under the Age Discrimination Act of 1975 or with
respect to an otherwise qualified individual with a
disability, as provided in section 504 of the Rehabilitation
Act of 1973, shall also apply to any such program or
activity.
``SEC. 412. RETENTION OF RECORDS, REPORTS, AND AUDITS.
``(a) Retention of Records.--Each recipient shall keep such
records as may be reasonably necessary--
``(1) to disclose the amounts and the disposition of the
grant amounts, including the types of activities funded and
the nature of populations served with these funds; and
``(2) to ensure compliance with the requirements of this
title.
``(b) Access to Documents by the Secretary.--The Secretary
shall have access for the purpose of audit and examination to
any books, documents, papers, and records of any recipient
that are pertinent to grant amounts received in connection
with this title.
``(c) Access to Documents by the Comptroller General.--The
Comptroller General of the United States, or any duly
authorized representative of the Comptroller General, shall
have access for the purpose of audit and examination to any
books, documents, papers, and records of any recipient that
are pertinent to grant amounts received in connection with
this title.''.
SEC. 303. REPEAL AND SAVINGS PROVISIONS.
(a) Authority To Provide Assistance.--Beginning on the
effective date of this Act, the Secretary may not make
assistance available under title IV of the Stewart B.
McKinney Homeless Assistance Act (as in existence immediately
before such effective date), except pursuant to a legally
binding commitment entered into before that date.
(b) Law Governing.--Any amounts made available under title
IV of the Stewart B.
[[Page S7878]]
McKinney Homeless Assistance Act before the effective date of
this Act shall continue to be governed by the provisions of
that title, as they existed immediately before that effective
date, except that each grantee may, in its discretion,
provide for the use, in accordance with the provisions of
title IV of the Stewart B. McKinney Homeless Assistance Act
(as amended by this title), of any such amounts that it has
not obligated.
(c) Status of Funds.--
(1) In general.--Any amounts appropriated under title IV of
the Stewart B. McKinney Homeless Assistance Act before the
effective date of this Act that are available for obligation
immediately before such effective date, or that become
available for obligation on or after that date, shall be
transferred and added to amounts appropriated for title IV of
the Stewart B. McKinney Homeless Assistance Act (as amended
by this title), and shall be available for use in accordance
with the provisions of such title IV.
(2) Availability.--Any amounts transferred under paragraph
(1) shall remain available for obligation only for the time
periods for which such respective amounts were available
before such transfer.
SEC. 304. IMPLEMENTATION.
(a) Initial Allocation of Assistance.--Not later than the
expiration of the 60-day period following the date of
enactment of an Act appropriating funds to carry out title IV
of the Stewart B. McKinney Homeless Assistance Act (as
amended by this title), the Secretary shall notify each
allocation unit of general local government, insular area,
and State of its allocation under the McKinney Homeless
Assistance Performance Fund.
(b) Issuance of Necessary Regulations.--Notwithstanding
section 7(o) of the Department of Housing and Urban
Development Act (42 U.S.C. 3535(o)), the Secretary shall
issue such regulations as may be necessary to implement any
provision of title I of this Act, and any amendment made by
this title, in accordance with section 552 or 553 of title 5,
United States Code, as determined by the Secretary.
(c) Use of Existing Rules.--In implementing any provision
of this title, the Secretary may, in the discretion of the
Secretary, provide for the use of existing rules to the
extent appropriate, without the need for further rulemaking.
TITLE IV--RURAL HOUSING
SEC. 401. MUTUAL AND SELF-HELP HOUSING TECHNICAL ASSISTANCE
AND TRAINING GRANTS AUTHORIZATION.
Section 513(b) of the Housing Act of 1949 (42 U.S.C.
1483(b)) is amended by striking paragraph (8) and inserting
the following:
``(8) For grants under paragraphs (1)(A) and (2) of section
523(b)--
``(A) $40,000,000 for fiscal year 2001;
``(B) $45,000,000 for fiscal year 2002; and
``(C) $50,000,000 for fiscal year 2003.''.
SEC. 402. ENHANCEMENT OF THE RURAL HOUSING REPAIR LOAN
PROGRAM FOR THE ELDERLY.
Section 504(a) of the Housing Act of 1949 (42 U.S.C.
1474(a)) is amended by striking ``$2,500'' and inserting
``$7,500''.
SEC. 403. ENHANCEMENT OF EFFICIENCY OF RURAL HOUSING
PRESERVATION GRANTS.
Section 533 of the Housing Act of 1949 (42 U.S.C. 1490m) is
amended--
(1) by striking subsection (c);
(2) in subsection (d)(3)(H), by striking ``(e)(1)(B)(iv)''
and inserting ``(d)(1)(B)(iv)''; and
(3) by redesignating subsections (d) through (i) as
subsections (c) through (h), respectively.
SEC. 404. PROJECT ACCOUNTING RECORDS AND PRACTICES.
Section 515 of the Housing Act of 1949 (42 U.S.C. 1485) is
amended by striking subsection (z) and inserting the
following:
``(z) Accounting and Recordkeeping Requirements.--
``(1) Accounting standards.--The Secretary shall require
that borrowers in programs authorized by this section
maintain accounting records in accordance with generally
accepted accounting principles for all projects that receive
funds from loans made or guaranteed by the Secretary under
this section.
``(2) Record retention requirements.--The Secretary shall
require that borrowers in programs authorized by this section
retain for a period of not less than 6 years and make
available to the Secretary in a manner determined by the
Secretary, all records required to be maintained under this
subsection and other records identified by the Secretary in
applicable regulations.
``(aa) Double Damage Remedy for Unauthorized Use of Housing
Projects Assets and Income.--
``(1) Action to recover assets or income.--
``(A) In general.--The Secretary may request the Attorney
General to bring an action in a district court of the United
States to recover any assets or income used by any person in
violation of the provisions of a loan made or guaranteed by
the Secretary under this section or in violation of any
applicable statute or regulation.
``(B) Improper documentation.--For purposes of this
subsection, a use of assets or income in violation of the
applicable loan, loan guarantee, statute, or regulation shall
include any use for which the documentation in the books and
accounts does not establish that the use was made for a
reasonable operating expense or necessary repair of the
project or for which the documentation has not been
maintained in accordance with the requirements of the
Secretary and in reasonable condition for proper audit.
``(C) Definition of person.--In this subsection, the term
`person' means--
``(i) any individual or entity that borrows funds in
accordance with programs authorized by this section;
``(ii) any individual or entity holding 25 percent or more
interest of any entity that borrows funds in accordance with
programs authorized by this section; or
``(iii) any officer, director, or partner of an entity that
borrows funds in accordance with programs authorized by this
section.
``(2) Amount recoverable.--
``(A) In general.--In any judgment favorable to the United
States entered under this subsection, the Attorney General
may recover double the value of the assets and income of the
project that the court determines to have been used in
violation of the provisions of a loan made or guaranteed by
the Secretary under this section or any applicable statute or
regulation, plus all costs related to the action, including
reasonable attorney and auditing fees.
``(B) Application of recovered funds.--Notwithstanding any
other provision of law, the Secretary may apply any recovery
of funds under this subsection to activities authorized under
this section and such funds shall remain available until
expended.
``(3) Time limitation.--Notwithstanding any other statute
of limitations, the Attorney General may bring an action
under this subsection at any time up to and including 6 years
after the date that the Secretary discovered or should have
discovered the violation of the provisions of this section or
any related statutes or regulations.
``(4) Continued availability of other remedies.--The remedy
provided in this subsection is in addition to and not in
substitution of any other remedies available to the Secretary
or the United States.''.
SEC. 405. OPERATING ASSISTANCE FOR MIGRANT FARM WORKER
PROJECTS.
Section 521(a)(5)(A) of the Housing Act of 1949 (42 U.S.C.
1490a(a)(5)(A)) is amended in the last sentence by striking
``project'' and inserting ``tenant or unit''.
TITLE V--VOUCHER REFORM
SEC. 501. AUTHORIZATION OF APPROPRIATIONS FOR RENTAL VOUCHERS
FOR RELOCATION OF WITNESSES AND VICTIMS OF
CRIME.
Section 8(o)(16) of the United States Housing Act of 1937
(42 U.S.C. 1437f(o)(16)) is amended--
(1) in subparagraph (A), by striking ``Of amounts made
available for assistance under this subsection'' and
inserting ``Of the amount made available under subparagraph
(C)'';
(2) in subparagraph (B), by striking ``Of amounts made
available for assistance under this section'' and inserting
``Of the amount made available under subparagraph (C)''; and
(3) by adding at the end the following:
``(C) Authorization of appropriations.--In addition to
amounts made available to carry out this section for each
fiscal year, there is authorized to be appropriated to carry
out this paragraph $25,000,000 for each fiscal year.''.
SEC. 502. REVISIONS TO THE LEASE ADDENDUM.
Section 8(o)(7)(F) of the United States Housing Act of 1937
(42 U.S.C. 1437f(o)(7)(F)) is amended striking the period at
the end and inserting the following: ``, except that--
``(i) the provisions of any such addendum shall supplement
any existing standard rental agreement to the extent that the
addendum does not modify, nullify, or in any way materially
alter any material provision of the rental agreement; and
``(ii) a provision of the addendum shall be nullified only
to extent that the provision conflicts with applicable State
or local law.''.
SEC. 503. REPORT REGARDING HOUSING VOUCHER PROGRAM.
(a) In General.--The Secretary shall publish in the Federal
Register a notice soliciting comments and recommendations
regarding the means by which the voucher program under
section 8(o) of the United States Housing Act of 1937 (42
U.S.C. 1437f(o)) may be changed and enhanced to promote
increased participation by private rental housing owners.
(b) Report.--Not later than 6 months after the effective
date of this Act, the Secretary shall submit to the
Committees a report on the results of the solicitation under
subsection (a), which shall include a summary and analysis of
the recommendations received, especially recommendations
regarding legislative and administrative changes to the
program described in subsection (a).
SEC. 504. CONDUCTING QUALITY STANDARD INSPECTIONS ON A
PROPERTY BASIS RATHER THAN A UNIT BASIS.
Section 8(o)(8) of the United States Housing Act of 1937
(42 U.S.C. 1437f(o)(8)) is amended--
(1) in the paragraph heading, by inserting ``and
properties'' after ``units'';
(2) in subparagraph (A)--
(A) by striking ``Except as provided'' and inserting the
following:
``(i) Inspection requirement.--Except as provided''; and
(B) by adding at the end the following:
``(ii) Inspection and certification on a property-wide
basis.--
``(I) In general.--For purposes of this subparagraph, each
owner shall have the option
[[Page S7879]]
of having the property of the owner inspected and certified
on a property-wide basis, subject to the inspection
guidelines set forth in subparagraphs (C) and (D).
``(II) Certification.--Owners of properties electing a
property-wide inspection and not currently receiving tenant-
based assistance for any dwelling unit in those properties
may elect a property-wide certification by having each
dwelling unit that is to be made available for tenant-based
assistance inspected before any housing assistance payments
are made. Any owner participating in the voucher program
under this subsection as of the effective date of Local
Housing Opportunities Act shall have the option of electing
property-wide certification by sending written notice to the
appropriate administering agency. Any property that is
inspected and certified on a property-wide basis shall not be
required to have units in the property inspected individually
in conjunction with each new rental agreement.'';
(3) in subparagraph (C)--
(A) in the first sentence--
(i) by inserting ``or property'' after ``dwelling unit'';
and
(ii) by inserting ``or property'' after ``the unit''; and
(B) in the second sentence, by inserting ``or properties''
after ``dwelling units''; and
(4) in subparagraph (D), in the first sentence--
(A) by inserting ``or property'' after ``dwelling unit'';
(B) by inserting ``or property'' after ``payments contract
for the unit''; and
(C) by inserting ``or property'' after ``whether the
unit''.
TITLE VI--PROGRAM MODERNIZATION
SEC. 601. ASSISTANCE FOR SELF-HELP HOUSING PROVIDERS.
(a) Reauthorization.--Section 11 of the Housing Opportunity
Program Extension Act of 1996 (42 U.S.C. 12805 note) is
amended by striking subsection (p) and inserting the
following:
``(p) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $25,000,000 for
fiscal year 2001 and such sums as may be necessary for each
of fiscal years 2002 and 2003.''.
(b) Eligible Expenses.--Section 11(d)(2)(A) of the Housing
Opportunity Program Extension Act of 1996 (42 U.S.C. 12805
note) is amended by inserting before the period at the end
the following: ``, which may include reimbursing an
organization, consortium, or affiliate, upon approval of any
required environmental review, for nongrant amounts of the
organization, consortium, or affiliate advanced before such
review to acquire land''.
(c) Deadline for Recapture of Funds.--Section 11 of the
Housing Opportunity Program Extension Act of 1996 (42 U.S.C.
12805 note) is amended--
(1) in subsection (i)(5)--
(A) by striking ``if the organization or consortia has not
used any grant amounts'' and inserting ``the Secretary shall
recapture any grant amounts provided to the organization or
consortia that are not used'';
(B) by striking ``(or,'' and inserting ``, except that such
period shall be 36 months''; and
(C) by striking ``within 36 months), the Secretary shall
recapture such unused amounts'' and inserting ``and in the
case of a grant amounts provided to a local affiliate of the
organization or consortia that is developing 5 or more
dwellings in connection with such grant amounts''; and
(2) in subsection (j), by inserting ``and grant amounts
provided to a local affiliate of the organization or
consortia that is developing 5 or more dwellings in
connection with such grant amounts'' before the period at the
end.
(d) Technical Correction.--Section 11(e) of the Housing
Opportunity Program Extension Act of 1996 (42 U.S.C. 12805
note) is amended by striking ``consoria'' and inserting
``consortia''.
SEC. 602. LOCAL CAPACITY BUILDING FOR COMMUNITY DEVELOPMENT
AND AFFORDABLE HOUSING.
Section 4 of the HUD Demonstration Act of 1993 (42 U.S.C.
9816 note) is amended--
(1) in subsection (a), by inserting ``National Association
of Housing Partnerships,'' after ``Humanity,''; and
(2) in subsection (e), by striking ``$25,000,000'' and all
that follows before the period and inserting ``to carry out
this section, $40,000,000 for each of fiscal years 2001
through 2003''.
SEC. 603. WORK REQUIREMENT FOR PUBLIC HOUSING RESIDENTS:
COORDINATION OF FEDERAL HOUSING ASSISTANCE WITH
STATE WELFARE REFORM WORK PROGRAMS.
(a) In General.--Title I of the United States Housing Act
of 1937 (42 U.S.C. 1437 et seq.) is amended by adding at the
end the following:
``SEC. 36. WORK REQUIREMENT.
``(a) In General.--Each family residing in public housing,
shall comply with the requirements of section 407 of the
Social Security Act (42 U.S.C. 607) in the same manner and to
the same extent as a family receiving assistance under a
State program funded under part A of title IV of that Act (42
U.S.C. 601 et seq.).
``(b) Work Requirements.--
``(1) Annual determinations.--
``(A) Requirement.--For each family residing in public
housing that is subject to the requirement under subsection
(a), the public housing agency shall, 30 days before the
expiration of each lease term of the family under section
6(l)(1), review and determine the compliance of the family
with the requirement under subsection (a) of this subsection.
``(B) Due process.--Each determination under subparagraph
(A) shall be made in accordance with the principles of due
process and on a nondiscriminatory basis.
``(C) Noncompliance.-- If a public housing agency
determines that a family subject to the requirement under
subsection (a) has not complied with the requirement, the
agency--
``(i) shall notify the family--
``(I) of such noncompliance;
``(II) that the determination of noncompliance is subject
to the administrative grievance procedure under subsection
(k); and
``(III) that, unless the family enters into an agreement
under clause (ii) of this subparagraph, the family's lease
will not be renewed; and
``(ii) may not renew or extend the family's lease upon
expiration of the lease term and shall take such action as is
necessary to terminate the tenancy of the household, unless
the agency enters into an agreement, before the expiration of
the lease term, with the family providing for the family to
cure any noncompliance with the requirement under paragraph
(1), by participating in an economic self-sufficiency program
(as defined in section 12(g)) for or contributing to
community service as many additional hours as the family
needs to comply in the aggregate with such requirement over
the 12-month term of the lease.
``(2) Ineligibility for occupancy for noncompliance.--A
public housing agency may not renew or extend any lease, or
provide any new lease, for a dwelling unit in public housing
for any family who was subject to the requirement under
subsection (a) and failed to comply with the requirement.
``(3) Inclusion in plan.--Each public housing agency shall
include in its public housing agency plan a detailed
description of the manner in which the agency intends to
implement and administer this subsection.''.
(b) Conforming Amendment.--Section 12(c) of the United
States Housing Act of 1937 (42 U.S.C. 1437j(c)) is repealed.
SEC. 604. SIMPLIFIED FHA DOWNPAYMENT CALCULATION.
Section 203(b) of the National Housing Act (12 U.S.C.
1709(b)) is amended--
(1) in paragraph (2), by striking subparagraph (B) and all
that follows through ``applicability of this requirement.''
and inserting the following:
``(B) not to exceed an amount equal to--
``(i) 98.75 percent of the appraised value of the property,
if such value is equal to or less than $50,000;
``(ii) 97.65 percent of the appraised value of the
property, if such value is in excess of $50,000 but not in
excess of $125,000;
``(iii) 97.15 percent of the appraised value of the
property, if such value is in excess of $125,000; or
``(iv) notwithstanding clauses (ii) and (iii), 97.75
percent of the appraised value of the property, if such value
is in excess of $50,000 and the property is in a State for
which the average closing cost exceeds 2.10 percent of the
average, for the State, of the sales price of properties
located in the State for which mortgages have been executed,
as determined by the Secretary, except that, in this clause,
the term `average closing cost' means, with respect to a
State, the average, for mortgages executed for properties in
the State, of the total amounts (as determined by the
Secretary) of initial service charges, appraisal, inspection,
and other fees and costs (as the Secretary shall approve)
that are paid in connection with such mortgages.''; and
(2) by striking paragraph (10).
SEC. 605. FLEXIBLE USE OF CDBG FUNDS.
Section 105(a)(23) of the Housing and Community Development
Act of 1974 (42 U.S.C. 5305(a)(23)) is amended by striking
``housing units acquired'' and all that follows before the
semicolon and inserting the following: ``housing (A) acquired
through tax foreclosure proceedings brought by a unit of
State or local government, or (B) placed under the
supervision of a court for the purpose of remedying
conditions dangerous to life, health, and safety, in order to
prevent the abandonment and deterioration of such housing
primarily in low- and moderate-income neighborhoods''.
SEC. 606. USE OF SECTION 8 ASSISTANCE IN GRANDFAMILY HOUSING
ASSISTED WITH HOME FUNDS.
Section 215(a) of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 12745(a)) is amended by adding at the
end the following:
``(6) Waiver of qualifying rent.--
``(A) In general.--For the purpose of providing affordable
housing appropriate for families described in subparagraph
(B), the Secretary may, upon the application of the project
owner, waive the applicability of paragraph (1)(A) with
respect to a dwelling unit if--
``(i) the unit is occupied by such a family, on whose
behalf tenant-based assistance is provided under section 8 of
the United States Housing Act of 1937 (42 U.S.C. 1437f);
``(ii) the rent for the unit is not greater than the
existing fair market rent for comparable units in the area,
as established by the Secretary under section 8 of the United
States Housing Act of 1937; and
``(iii) the Secretary determines that the waiver, together
with waivers under this paragraph for other dwelling units in
the project, will result in the use of amounts described in
clause (iii) in an effective manner that will improve the
provision of affordable housing for such families.
[[Page S7880]]
``(B) Eligible families.--A family described in this
subparagraph is a family that consists of at least 1 elderly
person (who is the head of household) and 1 or more of such
person's grandchildren, great grandchildren, great nieces,
great nephews, or great great grandchildren (as defined by
the Secretary), but does not include any parent of such
grandchildren, great grandchildren, great nieces, great
nephews, or great great grandchildren. Such term includes any
such grandchildren, great grandchildren, great nieces, great
nephews, or great great grandchildren who have been legally
adopted by such elderly person.''.
SEC. 607. SECTION 8 HOMEOWNERSHIP OPTION DOWNPAYMENT
ASSISTANCE.
(a) Amendments.--Section 8(y) of the United States Housing
Act of 1937 (42 U.S.C. 1437f(y)) is amended--
(1) by redesignating paragraph (7) as paragraph (8); and
(2) by inserting after paragraph (6) the following:
``(7) Downpayment assistance.--
``(A) Authority.--A public housing agency may, in lieu of
providing monthly assistance payments under this subsection
on behalf of a family eligible for such assistance and at the
discretion of the public housing agency, provide assistance
for the family in the form of a single grant to be used only
as a contribution toward the downpayment required in
connection with the purchase of a dwelling for fiscal year
2001 and each fiscal year thereafter to the extent provided
in advance in appropriations Acts.
``(B) Amount.--The amount of a downpayment grant on behalf
of an assisted family may not exceed the amount that is equal
to the sum of the assistance payments that would be made
during the first year of assistance on behalf of the family,
based upon the income of the family at the time the grant is
to be made.''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect immediately after the amendments made by
section 555(c) of the Quality Housing and Work Responsibility
Act of 1998 take effect pursuant to such section.
SEC. 608. REAUTHORIZATION OF NEIGHBORHOOD REINVESTMENT
CORPORATION.
Section 608(a)(1) of the Neighborhood Reinvestment
Corporation Act (42 U.S.C. 8107(a)(1)) is amended by striking
the first sentence and inserting the following: ``There is
authorized to be appropriated to the corporation to carry out
this title $90,000,000 for fiscal year 2001, $95,000,000 for
fiscal year 2002, and $95,000,000 for fiscal year 2003.''.
TITLE VII--STATE HOUSING BLOCK GRANT
SEC. 701. STATE CONTROL OF PUBLIC AND ASSISTED HOUSING FUNDS.
Title I of the United States Housing Act of 1937 (42 U.S.C.
1437 et seq.) is amended by adding at the end the following:
``SEC. 37. STATE HOUSING BLOCK GRANT.
``(a) Purpose.--The purpose of this section is to create
options for States and to provide maximum freedom to States
to determine the manner in which to implement assisted
housing reforms.
``(b) Authority.--Notwithstanding any other provision of
law, a State may assume control of the Federal housing
assistance funds available to residents in that State
following the execution of a performance agreement with the
Secretary in accordance with this section.
``(c) Performance Agreement.--
``(1) In general.--A State may, at its option, execute a
performance agreement with the Secretary under which the
provisions of law described in subsection (d) shall not apply
to such State, except as otherwise provided in this section.
``(2) Approval of performance agreement.--A performance
agreement submitted to the Secretary under this section shall
be approved by the Secretary unless the Secretary makes a
written determination, within 60 days after receiving the
performance agreement, that the performance agreement is in
violation of the provisions of this section.
``(3) Terms of performance agreement.--Each performance
agreement executed pursuant to this section shall include
each of the following provisions:
``(A) Term.--A statement that the term of the performance
agreement shall be 5 years.
``(B) Application of program requirements.--A statement
that no program requirements of any program included by the
State in the performance agreement shall apply, except as
otherwise provided in this Act.
``(C) List.--A list provided by the State of the programs
that the State would like to include in the performance
agreement.
``(D) Use of funds to improve housing opportunities for
low-income individuals and families.--Include a 5-year plan
describing the manner in which the State intends to combine
and use the funds for programs included in the performance
agreement to advance the low-income housing priorities of the
State, improve the quality of low-income housing, reduce
homelessness, reduce crime, and encourage self-sufficiency by
achieving the performance goals.
``(E) Performance goals.--
``(i) In general.--A statement of performance goals
established by the State for the 5-year term of the
performance agreement that, at a minimum measures--
``(I) improvement in housing conditions for low-income
individuals and families;
``(II) the increase in the number of assisted units that
pass housing quality inspections;
``(III) the increase in economic opportunity and self-
sufficiency and increases the number of residents that obtain
employment;
``(IV) the reduction in crime and assistance to victims of
crime;
``(V) the reduction in homelessness and the level of
poverty;
``(VI) the cost of assisted housing units provided;
``(VII) the level of assistance provided to people with
disabilities and to the elderly;
``(VIII) the success in maintaining and increasing the
stock of affordable housing and increasing home ownership.
``(IX) sets numerical goals to attain for each performance
goal by the end of the performance agreement.
``(ii) Additional indicators of performance.--A State may
identify in the performance agreement any indicators of
performance such as reduced cost.
``(F) Fiscal responsibilities.--An assurance that the State
will use fiscal control and fund accounting procedures that
will ensure proper disbursement of, and accounting for,
Federal funds paid to the State or community under this Act.
Recipients will use Generally Accepted Accounting Principles
(GAAP).
``(G) Civil rights.--An assurance that the State will meet
the requirements of applicable Federal civil rights laws
including section 25(k).
``(H) State financial participation.--An assurance that the
State will not significantly reduce the level of spending of
State funds for housing during the term of the performance
agreement.
``(I) Annual report.--An assurance that not later than 1
year after the execution of the performance agreement, and
annually thereafter, each State shall disseminate widely to
the general public, submit to the Secretary, and post on the
Internet, a report that includes low-income housing
performance data and a detailed description of the manner in
which the State has used Federal funds to provide low-income
housing assistance to meet the terms of the performance
agreement.
``(4) Amendment to performance agreement.--A State may
submit an amendment to the performance agreement to the
Secretary under the following circumstances:
``(A) Reduce scope of performance agreement.--Not later
than 1 year after the execution of the performance agreement,
a State may amend the performance agreement through a request
to withdraw a program from such agreement. Upon approval by
the Secretary of the amendment, the requirements of existing
law shall apply for any program withdrawn from the
performance agreement.
``(B) Expand scope of performance agreement.--Not later
than 1 year after the execution of the performance agreement,
a State may amend its performance agreement to include
additional programs and performance indicators for which it
will be held accountable.
``(d) Eligible Programs.--
``(1) In general.--The provisions of law referred to in
subsection (c), are--
``(A) the voucher program for rental assistance under
section 8(o) of the United States Housing Act of 1937;
``(B) the programs for project-based assistance under
section 8 of the United States Housing Act of 1937;
``(C) the program for housing for the elderly under section
202 of the Housing Act of 1959;
``(D) the program for housing for persons with disabilities
under section 811 of the Cranston-Gonzales National
Affordable Housing Act; and
``(2) Allocation amounts.--A State may choose to combine
funds from any or all the programs described in paragraph (1)
without regard to the program requirements of such
provisions, except as otherwise provided in this Act.
``(3) Uses of funds.--Funds made available under this
section to a State shall be used for any housing purpose
other than those prohibited by State law of the participating
State.
``(e) Within-State Distribution of Funds.--The distribution
of funds from programs included in the performance agreement
from a State to a local housing agency within the State shall
be determined by the State legislature and the Governor of
the State. In a State in which the State constitution or
State law designates another individual, entity, or agency to
be responsible for housing, such other individual, entity, or
agency shall work in consultation with the Governor and State
legislature to determine the local distribution of funds.
``(f) Set-Aside for State Administrative Expenditures.--A
State may use not more than 3 percent of the total amount of
funds allocated to such State under the programs included in
the performance agreement for administrative purposes.
``(g) Level of Block Grant.--
``(1) In general.--During the initial 5 years following
execution of the performance agreement, a participating State
shall receive the highest level of funding for the 3 years
prior to the first year of the performance agreement in each
program included in the block grant. This level will be
adjusted each year by multiplying the prior year's amount by
the cost-of-living adjustment determined under section
1(f)(3) of the Internal Revenue Code of 1986.
``(2) Formula.--Six months after the effective date of the
Local Housing Opportunities Act, the Secretary shall submit
to Congress
[[Page S7881]]
recommendations for a block grant formula that reflects the
relative low-income level and affordable housing needs of
each State.
``(h) Performance Review.--
``(1) In general.--If at the end of the 5-year term of the
performance agreement a State has failed to meet at least 80
percent of the performance goals submitted in the performance
agreement, the Secretary shall terminate the performance
agreement and the State shall be required to comply with the
program requirement, in effect at the time of termination, of
each program included in the performance agreement.
``(2) Renewal.--A State that seeks to renew its performance
agreement shall notify the Secretary of its renewal request
not less that 6 months prior to the end of the term of the
performance agreement. A State that has met at least 80
percent of its performance goals submitted in the performance
agreement at the end of the 5-year term may reapply to the
Secretary to renew its performance agreement for an
additional 5-year period. Upon the completion of the 5-year
term of the performance agreement or as soon thereafter as
the State submits data required under the agreement, the
Secretary shall renew, for an additional 5-year term, the
performance agreement of any State or community that has met
at least 80 percent of its performance goals.
``(i) Performance Reward Fund.--To reward States that make
significant progress in meeting performance goals, the
Secretary shall annually set aside sufficient funds to grant
a reward of up to 5 percent of the funds allocated to
participating States.
``(j) Definitions.--In this section:
``(1) Community.--The term `community' means any local
governing jurisdiction within a State.
``(2) Secretary.--The term `Secretary' means the Secretary
of Housing and Urban Development.
``(3) State.--The term `State' means each of the 50 States,
the District of Columbia, the Commonwealth of Puerto Rico,
Guam, the United States Virgin Islands, the Commonwealth of
the Northern Mariana Islands, and American Samoa.''.
TITLE VIII--PRIVATE SECTOR INCENTIVES
SEC. 801. SENSE OF CONGRESS REGARDING LOW-INCOME HOUSING TAX
CREDIT STATE CEILINGS AND PRIVATE ACTIVITY BOND
CAPS.
(a) Findings.--Congress finds that--
(1) the low-income housing tax credit and private activity
bonds have been valuable resources in the effort to increase
affordable housing;
(2) the low-income housing tax credit and private activity
bonds effectively utilize the ability of the States to
deliver resources to the areas of greatest need within their
jurisdictions; and
(3) the value of the low-income housing tax credit and the
private activity bonds have been eroded by inflation.
(b) Sense of Congress.--It is the sense of Congress that--
(1) the State ceiling for the low-income housing tax credit
should be increased by 40 percent in the year 2000, and the
level for the State ceiling should be adjusted annually to
account for increases in the cost of living; and
(2) the private activity bond cap should be increased by 50
percent in the year 2000, and the value of the cap should be
adjusted annually to account for increases in the cost of
living.
TITLE IX--ENFORCEMENT
SEC. 901. PROHIBITION ON USE OF APPROPRIATED FUNDS FOR
LOBBYING BY THE DEPARTMENT.
(a) In General.--Subchapter III of chapter 13 of title 31,
United States Code, is amended by adding at the end the
following:
``Sec. 1354. Prohibition on lobbying by the Department of
Housing and Urban Development
``(a) Prohibition.--Except as provided in subsection (b),
unless such activity has been specifically authorized by an
Act of Congress and notwithstanding any other provision of
law, no funds made available to the Department of Housing and
Urban Development by appropriation shall be used by such
agency for any activity (including the preparation,
publication, distribution, or use of any kit, pamphlet,
booklet, public presentation, news release, radio,
television, or film presentation, video, or other written or
oral statement) that in any way tends to promote public
support or opposition to any legislative proposal (including
the confirmation of the nomination of a public official or
the ratification of a treaty) on which congressional action
is not complete.
``(b) Exceptions.--
``(1) President and vice president.--Subsection (a) shall
not apply to the President or Vice President.
``(2) Congressional communications.--Subsection (a) shall
not be construed to prevent any officer or employee of the
Department of Housing and Urban Development from--
``(A) communicating directly to a Member of Congress (or to
any staff of a Member or committee of Congress) a request for
legislation or appropriations that such officer or employee
deems necessary for the efficient conduct of the public
business; or
``(B) responding to a request for information or technical
assistance made by a Member of Congress (or by any staff of a
Member or committee of Congress).
``(3) Public communications on views of president.--
``(A) In general.--Subsection (a) shall not be construed to
prevent any Federal agency official whose appointment is
confirmed by the Senate, any official in the Executive Office
of the President directly appointed by the President or Vice
President, or the head of any Federal agency described in
subsection (e)(2), from communicating with the public,
through radio, television, or other public communication
media, on the views of the President for or against any
pending legislative proposal.
``(B) Nondelegation.--Subparagraph (A) does not permit any
Federal agency official described in that subparagraph to
delegate to another person the authority to make
communications subject to the exemption provided by that
subparagraph.
``(c) Comptroller General.--
``(1) Assistance of inspector general.--In exercising the
authority provided in section 712, as applied to this
section, the Comptroller General may obtain, without
reimbursement from the Comptroller General, the assistance of
the Inspector General within the Department of Housing and
Urban Development when any activity prohibited by subsection
(a) of this section is under review.
``(2) Evaluation.--One year after the date of enactment of
this section, the Comptroller General shall report to the
Committee on Banking and Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate on the implementation of this
section.
``(3) Annual report.--The Comptroller General shall, in the
annual report under section 719(a), include summaries of
investigations undertaken by the Comptroller General with
respect to subsection (a).
``(d) Penalties and Injunctions.--
``(1) Penalties.--
``(A) In general.--The Attorney General may bring a civil
action in the appropriate district court of the United States
against any person who engages in conduct constituting an
offense under this section, whether such offense is due to
personal participation in any activity prohibited in
subsection (a) or improper delegation to another person the
authority to make exempt communications in violation of
subsection (b)(3), and, upon proof of such conduct by a
preponderance of the evidence, such person shall be subject
to a civil penalty of not less than $5,000 and not more than
$10,000 for each violation.
``(B) Other remedies not precluded.--The imposition of a
civil penalty under this subsection does not preclude any
other criminal or civil statutory, common law, or
administrative remedy, which is available by law to the
United States or any other person.
``(2) Injunctions.--
``(A) In general.--If the Attorney General has reason to
believe that a person is engaging in conduct constituting an
offense under this section, whether such offense is due to
personal participation in any activity prohibited in
subsection (a) or improper delegation to another person the
authority to make exempt communications in violation of
subsection (b)(3)--
``(i) the Attorney General may petition an appropriate
district court of the United States for an order prohibiting
that person from engaging in such conduct; and
``(ii) the court may issue an order prohibiting that person
from engaging in such conduct if the court finds that the
conduct constitutes such an offense.
``(B) Other remedies not precluded.--The filing of a
petition under this section does not preclude any other
remedy which is available by law to the United States or any
other person.
``(e) Definition.--In this section, the term `Federal
agency' means--
``(1) any executive agency, within the meaning of section
105 of title 5; and
``(2) any private corporation created by a law of the
United States for which the Congress appropriates funds.''.
(b) Conforming Amendment.--The table of sections for
chapter 13 of title 31, United States Code, is amended by
inserting after the item relating to section 1353 the
following:
``1354. Prohibition on lobbying by the Department of Housing and Urban
Development.''.
(c) Applicability.--The amendments made by this section
shall apply to the use of funds after the effective date of
this Act, including funds appropriated or received on or
before that date.
SEC. 902. REGULATIONS.
Not later than 6 months after the date of enactment of this
Act, the Secretary shall issue such regulations as may be
necessary to carry out this Act and the amendments made by
this Act.
______
By Mr. WYDEN:
S. 2970. A bill to provide for summer academic enrichment programs,
and for the purposes; to the Committee on Health, Education, Labor, and
Pensions.
the student education enrichment development act
Mr. WYDEN. Mr. President, approximately 3.4 million students entered
kindergarten in U.S. public schools last
[[Page S7882]]
fall, and experts predict wildly different futures for them. Many
children do well throughout elementary school, only to slip and fall
between the cracks in middle school. This so-called ``achievement gap''
opens wide in middle school and grows throughout high school if nothing
is done to stop it.
Raising test scores in K-12 education has brought the achievement-gap
issue to the forefront of the national education debate and created a
new opportunity to support those states that are making a real effort
to improve student achievement. But trying to close the gap by simply
bumping up test standards only pushes kids out of school rather than
across the gap.
Few have really looked at the most logical place to begin to close
the gap: summer school. Students take their achievement tests in April
but have to return to school in the Fall. Summer school is one place to
begin helping students close the gap, yet the Federal government does
nothing to create and support successful summer academic programs.
The legislation I am introducing today, the Student Education
Enrichment Development Act, or SEED Act, will leverage summer academic
programs to boost student performance. SEED will support all struggling
students by providing the first federal funds to backstop state and
local efforts to develop, plan, implement, and operate high quality
summer academic enrichment programs.
The disparity in school performance tied to race and ethnicity, known
as the achievement gap, shows up in grades, test scores, course
selection, and college completion. To a large extent, these factors
predict a student's success in school, whether a student will go to
college, and how much money the student will earn when he or she enters
the working world. It happens in cities and in suburbs and in rural
school districts. The gaps are so pronounced that in 1996, several
national tests found African-American and Hispanic 12th graders scoring
at roughly the same levels in reading and math as white 8th graders. By
2019, when they are 24 years old, current trends indicate that the
white children who are now nearing the end of their first year in
school will be twice as likely as their African-American classmates,
and three times as likely as Hispanics, to have a college degree.
In Oregon last year, only 52 percent of the tenth graders met the
state's standard for reading, while only 36 percent met the standard
for math. But students in Oregon are actually doing better than the
national average. More than two-thirds of American high-school seniors
graduated last year without being able to read at a proficient level.
Results like these are the reason we need SEED.
This week's Time Magazine reports that at least 25 percent of our
U.S. school districts are mandating summer school for struggling
students--twice that number in poor urban areas. While these programs
are helping some students, the results should be better. Only 40
percent of New York students who failed state exams and completed
summer school passed on the state exam on their second attempt. In the
Pacific Northwest, Seattle canceled its summer program after students
made only meager academic gains. I ask unanimous consent that the
article from Time magazine be included in the record at the conclusion
of my statement.
Schools should strive to meet higher standards, and we should have
high expectations for every child. But our kids should not be punished
because our education system has failed them. It's time to make sure
every child learns and succeeds. According to a recent study, more than
half of our teachers promoted unprepared students because the current
system does not provide adequate options.
High-quality summer academic programs would give struggling students
a chance to succeed in a system that has failed them and help reverse
the trend of poor student performance by preparing students to succeed
where they have previously failed. Over the past years, we've heard a
lot of rhetoric about education, but empty promises won't help our kids
learn. Our children deserve more.
I am pleased to be joined by Senators Landrieu, Breaux and Bayh in
introducing the bill today, and ask unanimous consent that my statement
and 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. 2970
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 ``Student Education Enrichment
Demonstration Act''.
SEC. 2. FINDINGS.
Congress finds that--
(1) States are establishing new and higher academic
standards for students in kindergarten through grade 12;
(2) no Federal funding streams are specifically designed to
help States and school districts with the costs of providing
students who are struggling academically, with the extended
learning time and accelerated curricula that the students
need to meet high academic standards;
(3) forty-eight States now require State accountability
tests to determine student grade-level performance and
progress;
(4) nineteen States currently rate the performance of all
schools or identify low-performing schools through State
accountability tests;
(5) sixteen States now have the power to close, take over,
or overhaul chronically failing schools on the basis of those
tests;
(6) fourteen States provide high-performing schools with
monetary rewards on the basis of those tests;
(7) nineteen States currently require students to pass
State accountability tests to graduate from high school;
(8) six States currently link student promotion to results
on State accountability tests;
(9) excessive percentages of students are not meeting their
State standards and are failing to perform at high levels on
State accountability tests; and
(10) while the Chicago Public School District implemented
the Summer Bridge Program to help remediate their students in
1997, no State has yet created and implemented a similar
program to complement the education accountability programs
of the State.
SEC. 3. PURPOSE.
The purpose of this Act is to provide Federal support
through a new demonstration program to States and local
educational agencies, to enable the States and agencies to
develop models for high quality summer academic enrichment
programs that are specifically designed to help public school
students who are not meeting State-determined performance
standards.
SEC. 4. DEFINITIONS.
In this Act:
(1) Elementary school; secondary school; local educational
agency; state educational agency.--The terms ``elementary
school'', ``secondary school'', ``local educational agency'',
and ``State educational agency'' have the meanings given the
terms in section 14101 of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 8801).
(2) Secretary.--The term ``Secretary'' means the Secretary
of Education.
(3) Student.--The term ``student'' means an elementary
school or secondary school student.
SEC. 5. GRANTS TO STATES.
(a) In General.--The Secretary shall establish a
demonstration program through which the Secretary shall make
grants to State educational agencies, on a competitive basis,
to enable the agencies to assist local educational agencies
in carrying out high quality summer academic enrichment
programs as part of statewide education accountability
programs.
(b) Eligibility and Selection.--
(1) Eligibility.--For a State educational agency to be
eligible to receive a grant under subsection (a), the State
served by the State educational agency shall--
(A) have in effect all standards and assessments required
under section 1111 of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 6311); and
(B) compile and annually distribute to parents a public
school report card that, at a minimum, includes information
on student and school performance for each of the assessments
required under section 1111 of the Elementary and Secondary
Education Act of 1965.
(2) Selection.--In selecting States to receive grants under
this section, the Secretary shall make the selections in a
manner consistent with the purpose of this Act.
(c) Application.--
(1) In general.--To be eligible to receive a grant under
this section, a State educational agency shall submit an
application to the Secretary at such time, in such manner,
and containing such information as the Secretary may require.
(2) Contents.--Such application shall include--
(A) information describing specific measurable goals and
objectives to be achieved in the State through the summer
academic enrichment programs carried out under this Act,
which may include specific measurable annual educational
goals and objectives relating to--
(i) increased student academic achievement;
(ii) decreased student dropout rates; or
(iii) such other factors as the State educational agency
may choose to measure; and
[[Page S7883]]
(B) information on criteria, established or adopted by the
State, that--
(i) the State will use to select local educational agencies
for participation in the summer academic enrichment programs
carried out under this Act; and
(ii) at a minimum, will assure that grants provided under
this Act are provided to--
(I) the local educational agencies in the State that have
the highest percentage of students not meeting basic or
minimum required standards for State assessments required
under section 1111 of the Elementary and Secondary Education
Act of 1965;
(II) local educational agencies that submit grant
applications under section 6 describing programs that the
State determines would be both highly successful and
replicable; and
(III) an assortment of local educational agencies serving
urban, suburban, and rural areas.
SEC. 6. GRANTS TO LOCAL EDUCATIONAL AGENCIES.
(a) In General.--
(1) First year.--
(A) In general.--For the first year that a State
educational agency receives a grant under this Act, the State
educational agency shall use the funds made available through
the grant to make grants to eligible local educational
agencies in the State to pay for the Federal share of the
cost of carrying out the summer academic enrichment programs,
except as provided in subparagraph (B).
(B) Technical assistance and planning assistance.--The
State educational agency may use not more than 5 percent of
the funds--
(i) to provide to the local educational agencies technical
assistance that is aligned with the curriculum of the
agencies for the programs;
(ii) to enable the agencies to obtain such technical
assistance from entities other than the State educational
agency that have demonstrated success in using the
curriculum; and
(iii) to assist the agencies in planning activities to be
carried out under this Act.
(2) Succeeding years.--
(A) In general.--For the second and third year that a State
educational agency receives a grant under this Act, the State
educational agency shall use the funds made available through
the grant to make grants to eligible local educational
agencies in the State to pay for the Federal share of the
cost of carrying out the summer academic enrichment programs,
except as provided in subparagraph (B).
(B) Technical assistance and planning assistance.--The
State educational agency may use not more than 5 percent of
the funds--
(i) to provide to the local educational agencies technical
assistance that is aligned with the curriculum of the
agencies for the programs;
(ii) to enable the agencies to obtain such technical
assistance from entities other than the State educational
agency that have demonstrated success in using the
curriculum; and
(iii) to assist the agencies in evaluating activities
carried out under this Act.
(b) Application.--
(1) In general.--To be eligible to receive a grant under
this section, a local educational agency shall submit an
application to the State educational agency at such time, in
such manner, and containing by such information as the
Secretary or the State may require.
(2) Contents.--The State shall require that such an
application shall include, to the greatest extent
practicable--
(A) information that--
(i) demonstrates that the local educational agency will
carry out a summer academic enrichment program funded under
this section--
(I) that provides intensive high quality programs that are
aligned with challenging State content and student
performance standards and that are focused on reinforcing and
boosting the core academic skills and knowledge of students
who are struggling academically, as determined by the State;
(II) that focuses on accelerated learning, rather than
remediation, so that students served through the program will
master the high level skills and knowledge needed to meet the
highest State standards or to perform at high levels on all
State assessments required under section 1111 of the
Elementary and Secondary Education Act of 1965 (20 U.S.C.
6311);
(III) that is based on, and incorporates best practices
developed from, research-based enrichment methods and
practices;
(IV) that has a proposed curriculum that is directly
aligned with State content and student performance standards;
(V) for which only teachers who are certified and licensed,
and are otherwise fully qualified teachers, provide academic
instruction to students enrolled in the program;
(VI) that offers to staff in the program professional
development and technical assistance that are aligned with
the approved curriculum for the program; and
(VII) that incorporates a parental involvement component
that seeks to involve parents in the program's topics and
students' daily activities; and
(ii) may include--
(I) the proposed curriculum for the summer academic
enrichment program;
(II) the local educational agency's plan for recruiting
highly qualified and highly effective teachers to participate
in the program; and
(III) a schedule for the program that indicates that the
program is of sufficient duration and intensity to achieve
the State's goals and objectives described in section
5(c)(2)(A);
(B) an outline indicating how the local educational agency
will utilize other applicable Federal, State, local, or other
funds, other than funds made available through the grant, to
support the program;
(C) an explanation of how the local educational agency will
ensure that only highly qualified personnel who volunteer to
work with the type of student targeted for the program will
work with the program and that the instruction provided
through the program will be provided by qualified teachers;
(D) an explanation of the types of intensive training or
professional development, aligned with the curriculum of the
program, that will be provided for staff of the program;
(E) an explanation of the facilities to be used for the
program;
(F) an explanation regarding the duration of the periods of
time that students and teachers in the program will have
contact for instructional purposes (such as the hours per day
and days per week of that contact, and the total length of
the program);
(G) an explanation of the proposed student/teacher ratio
for the program, analyzed by grade level;
(H) an explanation of the grade levels that will be served
by the program;
(I) an explanation of the approximate cost per student for
the program;
(J) an explanation of the salary costs for teachers in the
program;
(K) a description of a method for evaluating the
effectiveness of the program at the local level;
(L) information describing specific measurable goals and
objectives, for each academic subject in which the program
will provide instruction, that are consistent with, or more
rigorous than, the adequate yearly progress goals established
by the State under section 1111 of the Elementary and
Secondary Education Act of 1965;
(M) a description of how the local educational agency will
involve parents and the community in the program in order to
raise academic achievement; and
(N) a description of how the local educational agency will
acquire any needed technical assistance that is aligned with
the curriculum of the agency for the program, from the State
educational agency or other entities with demonstrated
success in using the curriculum.
(c) Priority.--In making grants under this section, the
State educational agency shall give priority to applicants
who demonstrate a high level of need for the summer academic
enrichment programs.
(d) Federal Share.--
(1) In general.--The Federal share of the cost described in
subsection (a) is 50 percent.
(2) Non-federal share.--The non-Federal share of the cost
may be provided in cash or in kind, fairly evaluated,
including plant, equipment, or services.
SEC. 7. SUPPLEMENT NOT SUPPLANT.
Funds appropriated pursuant to the authority of this Act
shall be used to supplement and not supplant other Federal,
State, and local public or private funds expended to provide
academic enrichment programs.
SEC. 8. REPORTS.
(a) State Reports.--Each State educational agency that
receives a grant under this Act shall annually prepare and
submit to the Secretary a report. The report shall describe--
(1) the method the State educational agency used to make
grants to eligible local educational agencies and to provide
assistance to schools under this Act;
(2) the specific measurable goals and objectives described
in section 5(c)(2)(A) for the State as a whole and the extent
to which the State met each of the goals and objectives in
the year preceding the submission of the report;
(3) the specific measurable goals and objectives described
in section 6(b)(2)(L) for each of the local educational
agencies receiving a grant under this Act in the State and
the extent to which each of the agencies met each of the
goals and objectives in that preceding year;
(4) the steps that the State will take to ensure that any
such local educational agency who did not meet the goals and
objectives in that year will meet the goals and objectives in
the year following the submission of the report or the plan
that the State has for revoking the grant of such an agency
and redistributing the grant funds to existing or new
programs;
(5) how eligible local educational agencies and schools
used funds provided by the State educational agency under
this Act; and
(6) the degree to which progress has been made toward
meeting the goals and objectives described in section
5(c)(2)(A).
(b) Report to Congress.--The Secretary shall annually
prepare and submit to Congress a report. The report shall
describe--
(1) the methods the State educational agencies used to make
grants to eligible local educational agencies and to provide
assistance to schools under this Act;
(2) how eligible local educational agencies and schools
used funds provided under this Act; and
[[Page S7884]]
(3) the degree to which progress has been made toward
meeting the goals and objectives described in sections
5(c)(2)(A) and 6(b)(2)(L).
(c) Government Accounting Office Report to Congress.--The
Comptroller General of the United States shall conduct a
study regarding the demonstration program carried out under
this Act and the impact of the program on student
achievement. The Comptroller General shall prepare and submit
to Congress a report containing the results of the study.
SEC. 9. ADMINISTRATION.
The Secretary shall develop program guidelines for and
oversee the demonstration program carried out under this Act.
SEC. 10. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this
Act $25,000,000 for each of fiscal years 2001 through 2004.
SEC. 11. TERMINATION.
The authority provided by this Act terminates 3 years after
the date of enactment of this Act.
______
By Mr. HARKIN:
S. 2971. A bill to amend the Clean Air Act to phase out the use of
methyl tertiary butyl ether in fuels or fuel additives, to promote the
use of renewable fuels, and for other purposes; to the Committee on
Environment and Public Works.
clean and renewable fuels act of 2000
Mr. HARKIN. Mr. President. I am introducing today legislation
designed to address the extensive problems that have been caused by the
gasoline additive methyl tertiary butyl ether (MTBE) and to make
appropriate revisions to the reformulated gasoline (RFG) program in the
Clean Air Act.
It has become absolutely clear that MTBE has to go. Even in Iowa,
where we are not required to have oxygenated fuels or RFG, a recent
survey found a surprising level of water contamination with MTBE. So my
legislation requires a phased reduction in the use of MTBE in motor
fuel and then a prohibition on MTBE in fuel of fuel additives beginning
three years after enactment. Retail pumps dispensing gasoline with MTBE
would be labeled so that consumers know what they are buying. And in
order to facilitate an orderly phase-out of MTBE, EPA may establish a
credit trading system for the dispensing and sale of MTBE.
My legislation recognizes the benefits that have been provided by the
oxygen content requirement in the reformulated gasoline program. Oxygen
added to gasoline reduces emissions of carbon monoxide, toxic compounds
and fine particulate matter. So my legislation continues the oxygen
content requirement, but it does allow for certain actions that would
alleviate concerns about whether alternative oxygen additives will be
available after MTBE is removed from gasoline. The bill allows for
averaging of the oxygen content upon a proper showing and it also would
allow for a temporary reduction or waiver of the minimum oxygen content
requirement in very limited circumstances.
The legislation also ensures that all health benefits of the
reformulated gasoline program are maintained and improved. The bill
includes very strong provisions to ensure that there is no backsliding
in air quality and health benefits from cleaner burning reformulated
gasoline. The petroleum companies would also be prohibited from taking
the pollutants from gasoline in some areas and putting them back into
gasoline in other areas of the country that are not subject to the more
stringent air quality standards. Those are referred to as the anti-
dumping protections. My bill places tighter restrictions on highly
polluting aromatic and olefin content of reformulated gasoline.
My legislation also recognizes the important role of renewable fuels
in improving our environment, building energy security for our nation,
and increasing farm income, economic growth and job creation,
especially in rural areas. The legislation creates a renewable content
requirement for gasoline and for diesel fuel.
Overall, this legislation will get MTBE out of gasoline, maintain and
improve the air quality and health benefits of the reformulated
gasoline program and the Clean Air Act, and put our nation on a solid
path toward greater use of renewable fuels.
I ask unanimous consent that a section-by-section summary of my
legislation be printed in the Record. I urge my colleagues to support
this important legislation.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Section-by-Section Summary--Clean and Renewable Fuels Act of 2000
Section 1. Short title
The bill may be cited as the ``Clean and Renewable Fuels
Act of 2000''
Section 2. Use and cleanup of methyl tertiary butyl ether
Prohibition Except in Specified Nonattainment Areas:
Section 211(c) of the Clean Air Act is amended to provide
that beginning January 1, 2001, a person shall not sell or
dispense to ultimate consumers any fuel or fuel additive
containing MTBE in any area that is not a specified
nonattainment area in which reformulated gasoline is required
to be used and in which MTBE was used to meet the oxygen
content requirement prior to January 1, 2000.
Interim Period for Use of MTBE: The Administrator shall
issue regulations requiring, during the one-year period
beginning one year after enactment, a one-third reduction in
the quantity of MTBE that may be sold or dispensed for use in
a fuel or fuel additive, and during the one-year period
beginning two years after enactment, a two-thirds reduction
in the quantity of MTBE that may be sold or dispensed for use
in a fuel or fuel additive. In no area may the quantity of
MTBE sold or dispensed for use as a fuel or fuel additive
increase.
Basis for Reductions; Equitable Treatment: The basis for
reductions shall be the quantity of MTBE sold or dispensed
for use as a fuel or fuel additive in the United States
during the one-year period ending on the date of enactment.
The regulations requiring such reductions shall to the
maximum extent practicable provide for equitable treatment on
a geographical basis and among manufacturers, refiners,
distributors and retailers.
Trading of Authorizations to Sell or Dispense MTBE: To
facilitate the most orderly and efficient reduction in the
use of MTBE, the regulations may allow the sale and purchase
of authorizations to sell or dispense MTBE for use in a fuel
or fuel additive.
Labeling: The Administrator shall issue regulations
requiring any person selling or dispensing gasoline that
contains MTBE at retail prominently to label the gasoline
dispensing system with a notice stating that the gasoline
contains MTBE and providing such information concerning the
human health and environmental risks of MTBE as the
Administrator determines appropriate.
Prohibition on Use of MTBE or Other Ethers: Effective three
years after enactment, a person shall not manufacture,
introduce into commerce, offer for sale, sell, or dispense a
fuel or fuel additive containing MTBE or any other ether
compound. The Administrator may waive the prohibition on an
ether compound other than MTBE upon a determination that it
does not pose a significant risk to human health or the
environment. The Administrator may require a more rapid
reduction (including immediate termination) of the quantity
of MTBE sold or dispensed in an area upon a determination of
MTBE contamination or a substantial risk or contamination.
State Authority to Regulate MTBE: A State may impose such
restrictions, including a prohibition, on the manufacture,
sale or use of MTBE in a fuel or fuel additive as the State
determines appropriate to protect human health and the
environment.
Remedial Action Regarding MTBE Contamination: MTBE
contamination would be prioritized in state source water
assessment programs. EPA shall issue guidelines for MTBE
cleanup and may enter into cooperative agreements for, and
provide technical assistance to support, voluntary pilot
programs for the cleanup of MTBE and the protection of
private wells from MTBE contamination.
Section 3. Reformulated gasoline--in general; oxygen content
Opt-in Areas; General Provisions: Regulations issued for
the reformulated gasoline program shall apply to specified
nonattainment areas and opt-in areas. The regulations shall
require the greatest possible reduction in emissions of ozone
forming volatile organic and other compounds and emissions of
toxic air pollutants and precursors of toxic air pollutants.
Waiver of Per-Gallon Oxygen Content Requirement: The
Administrator shall issue regulations establishing a
procedure providing for the submission of applications for a
waiver of any per-gallon oxygen content requirement otherwise
established and the averaging of oxygen content over an
appropriate period of time, not exceeding a year. After
consultation with the Secretary of Energy and the Secretary
of Agriculture, the Administrator shall grant a petition for
oxygen averaging where necessary to avoid a shortage or
disruption in supply of reformulated gasoline, to avoid
excessive prices for reformulated gasoline, or to facilitate
attainment by the area of a national ambient air quality
standard. The Administrator shall ensure that the human
health and environmental benefits of the reformulated
gasoline program are fully maintained during the period of
any waiver.
Temporary Reduction of Oxygen Content Requirement: Upon
application of a state, if the Secretary of Energy with the
concurrence of the Secretary of Agriculture finds that there
is an insufficient supply of oxygenates in an area the
Administrator
[[Page S7885]]
may temporarily reduce or waive the oxygen content
requirement for the area to the extent necessary to ensure an
adequate supply of reformulated gasoline. A temporary waiver
would be effective for 90 days, or a shorter period if a
sufficient supply of oxygenates exists, and may be extended
for an additional 90-day period. The regulations shall ensure
that the human health and environmental benefits of the
reformulated gasoline program are fully maintained during the
period of any temporary waiver of the oxygen content
requirement.
Section 4. Limitations on aromatics and olefins in
reformulated gasoline
Aromatic Content: The aromatic hydrocarbon content of
reformulated gasoline shall not exceed 22 percent by volume;
the average aromatic hydrocarbon content shall not exceed the
average aromatic hydrocarbon content of reformulated gasoline
sold in either calendar year 1999 or calendar year 2000; and
no gallon of reformulated gasoline shall have an aromatic
hydrocarbon content in excess of 30 percent.
Olefin Content: The olefin content of reformulated gasoline
shall not exceed 8 percent by volume; the average olefin
content shall not exceed the average olefin content of
reformulated gasoline sold in either calendar year 1999 or
calendar year 2000; and no gallon of reformulated gasoline
shall have an olefin content in excess of 10 percent.
Section 5. Reformulated gasoline performance standards
Emissions of Volatile Organic Compounds: Required
reductions in VOC emissions shall be on a mass basis and, to
the maximum extent practicable using available science, on
the basis of ozone forming potential of VOCs and taking into
account the effect on ozone formation of reducing carbon
monoxide emissions.
Emissions of Toxic Air Pollutants and Precursors: The
required reductions shall apply to toxic air pollutants or
precursors of toxic air pollutants. The required emissions
reductions shall be on a mass basis and, to the maximum
extent practicable using available science, on the basis of
relative toxicity or carcinogenic potency, whichever is more
protective of human health and the environment.
Section 6. Anti-backsliding
Ozone Forming Potential: The Administrator shall revise
performance standards to ensure that the ozone forming
potential, taking into account all ozone precursors, of the
aggregate emissions during the high ozone season from
baseline vehicles using reformulated gasoline does not exceed
the ozone forming potential of emissions when using
reformulated gasoline that complies with the regulations in
effect on January 1, 2000.
Specified Pollutants: The Administrator shall revise
performance standards to ensure that the aggregate emissions
of specified pollutants or their precursors when using
reformulated gasoline do not exceed the aggregate emissions
of such pollutants or precursors from baseline vehicles when
using reformulated gasoline that complies with the
regulations in effect on January 1, 2000. The specified air
pollutants are toxic air pollutants, categorized by degree of
toxicity and carcinogenic potency; particulate matter and
fine particulate matter; pollutants regulated under section
108; and such other pollutants as the Administrator
determines should be controlled to prevent deterioration of
air quality and to achieve attainment of a national ambient
air quality standard in one or more areas.
Adjustments for Carbon Monoxide Emissions: In carrying out
the ozone anti-backsliding requirement, the Administrator
shall adjust the performance standard to take into account
carbon monoxide emissions that are greater or less than the
carbon monoxide emissions achieved by reformulated gasoline
containing 2 percent oxygen by weight and meeting other
performance standards. An adjustment to the VOC emission
reduction requirements under the provisions of this section
shall be credited toward the requirement for VOC emissions
reductions under section 182 of the Clean Air Act.
Updating of Baseline Vehicles: Not later than 3 years after
enactment, the Administrator shall revise the performance
standards to redefine the term ``baseline vehicles'' as
used in the anti-backsliding provisions to mean vehicles
representative of vehicles (including off-road vehicles)
in use as of January 1, 2000.
Section 7. Certification of fuels
Combined Reductions of Ozone Forming VOCs and Carbon
Monoxide: In certifying a fuel formulation or slate of fuel
formulations as equivalent to reformulated gasoline, the
Administrator shall determine whether the combined reductions
in emissions of VOCs and carbon monoxide result in a
reduction in ozone concentration equivalent to or greater
than the reduction achieved by a reformulated gasoline
meeting the statutory formula and performance requirements. A
certified fuel formulation or slate of fuel formulations
shall receive the same VOC reduction credit under section 182
as a reformulated gasoline meeting the statutory formula and
performance requirements.
Carbon Monoxide Credit: In determining combined reductions
in emissions of VOCs and carbon monoxide by a fuel
formulation or slate of fuel formulations the Administrator
shall consider the change in carbon monoxide emissions from
baseline vehicles attributable to an oxygen content that
exceeds any minimum oxygen content for reformulated gasoline
applicable to the area and may consider the change in carbon
monoxide emissions attributable to such oxygen content from
vehicles other than baseline vehicles.
Toxic Air Pollutants and Precursors: To be certified as
equivalent to reformulated gasoline, the fuel or slate of
fuels must achieve equivalent or greater reduction in
emissions of toxic air pollutants or precursors of toxic air
pollutants than are achieved by a reformulated gasoline
meeting the statutory formula and performance requirements.
Certification Subject to Anti-Backsliding Rules: The
provisions on certification would clearly specify that a
requirement for certification of a fuel formulation or slate
of fuel formulations is compliance with the anti-backsliding
provisions.
Section 8. Additional opt-in areas
Upon application of the Governor of a State, the
Administrator shall apply the requirements relating to
reformulated gasoline in any area of the State that is not a
covered area or a classified area. The application shall be
published in the Federal Register as soon as practicable
after it is received.
Section 9. Anti-dumping protections
Updating Baseline Year; Additional Pollutants Covered: The
Administrator shall issue regulations to ensure that gasoline
sold or introduced into commerce by a refiner, blender or
importer (other than gasoline covered by the reformulated
gasoline rules) does not result in average per-gallon
emissions of VOCs, oxides of nitrogen, carbon monoxide, toxic
air pollutants, particulate matter, fine particulate matter,
or any precursor of such pollutants, in excess of
the emissions of each pollutants attributable to gasoline
sold or introduced into commerce by the refiner, blender
or importer in calendar year 1999 or calendar year 2000,
in whichever year the lower emissions occurred. In the
absence of adequate and reliable data for a refiner,
blender or importer for calendar year 1999 or calendar
year 2000, the Administrator shall substitute baseline
gasoline for 1999 or 2000 gasoline.
Average Per-Gallon Emissions: In applying the anti-dumping
provisions, average per-gallon emissions shall be measured on
the basis of mass, and to the maximum extent practicable
using available science, on the basis of ozone-forming
potential, degree of toxicity and carcinogenic potency.
Aromatic Hydrocarbon and Olefin Content: Anti-dumping
requirements also apply to ensure against increases in
aromatic hydrocarbon or olefin content of gasoline relative
to the levels in calendar year 1999 or calendar year 2000, in
whichever year the content was lower.
Anti-Dumping Compliance: The Administrator shall issue
regulations providing that an increase in oxides of nitrogen
or volatile organic compounds caused by adding oxygenates may
be offset by an equal or greater reduction in emissions of
VOCs, carbon monoxide or toxic air pollutants. In making this
determination, the Administrator shall measure emissions on
the basis of mass, and to the maximum extent practicable
using available science, on the basis of ozone-forming
potential, degree of toxicity and carcinogenic potency.
Section 10. Renewable content of gasoline and diesel fuel
Renewable Content of Gasoline: Not later than September 1,
2000, the Administrator shall issue regulations requiring
each refiner, blender or importer of gasoline to comply with
renewable content requirements. On a quarterly basis, all
gasoline sold or introduced into commerce shall contain the
applicable percentage of fuel derived from a renewable
source. The applicable percentages increase from 1.3 percent
in 2000, to 2.4 percent in 2004 (coinciding with the expected
prohibition of MTBE by late 2003) and to 4.2 percent in 2010
and thereafter.
Fuel Derived From A Renewable Source: The definition of
fuel derived from a renewable source includes fuel produced
from agricultural commodities, products and their residues;
plant materials, including grasses, fibers, wood and wood
residues; dedicated energy crops and trees; animal wastes,
byproducts and other materials of animal origin; municipal
wastes and refuse derived from plant or animal sources; and
other biomass that is used to replace or reduce the quantity
of fossil fuel in a fuel mixture used to operate a motor
vehicle, motor vehicle engine, nonroad vehicle, or nonroad
engine.
Credit Program: The Administrator shall establish a program
for renewable fuel credit trading on a quarterly average
basis. The Administrator, in consultation with the Secretary
of Energy and the Secretary of Agriculture, may issue
regulations governing the generation and trading of such
credits in order to prevent excessive geographical
concentration in the use of fuel derived from renewable
sources that would tend unduly to affect the price, supply or
distribution of such fuels; impede the development of the
renewable fuels industry; or otherwise interfere with the
purposes of the renewable fuel content requirement.
Waiver: A waiver from the renewable content requirement may
be granted for an area in whole or in part after consultation
with the Secretary of Agriculture and the Secretary of
Energy. The waiver may only be granted for an area upon a
determination that the renewable content requirement would
severely harm the economy or environment of the area, or
there is inadequate
[[Page S7886]]
domestic supply or distribution capacity with respect to
fuels from renewable sources and only after a determination
that use of the credit trading program would not alleviate
the circumstances on which the petition is based. A waiver
shall terminate after one year, or at such earlier time as is
determined appropriate by the Administrator, but may be
renewed after consultation with the Secretary of Agriculture
and the Secretary of Energy.
Labeling: The Administrator shall issue guidance to the
States for labeling at the point of retail sale of fuel
derived from a renewable source and the major fuel additive
components of the fuel.
Reports to Congress: Concerning the renewable content
requirement, the Administrator shall report to Congress at
least every 3 years (1) regarding reductions in emissions of
air pollutants; (2) in consultation with the Secretary of
Agriculture, regarding the impact on demand for farm
commodities, biomass and other material used for producing
fuel derived from renewable sources; the adequacy of food and
feed supplies; and the effect upon farm income, employment
and economic growth, particularly in rural areas; and (3) in
consultation with the Secretary of Energy, describing
greenhouse gas emission reductions and assessing the effect
on U.S. energy security and reliance on imported petroleum.
Renewable Content of Diesel Fuel: Not later than September
1, 2000, the Administrator shall issue regulations applicable
to each refiner, blender, or importer of diesel fuel to
ensure that diesel fuel sold or introduced into commerce in
the United States complies with renewable content
requirements. The Administrator shall establish requirements
for the content of diesel fuel that is derived from renewable
sources similar to the requirements of the program for
gasoline, using the same definition of fuel derived from a
renewable source. The regulations shall establish applicable
percentages by volume for renewable content for diesel fuel
on a quarterly basis, require a gradual increase in the
renewable content of diesel fuel, and require that for
calendar year 2010 and thereafter the applicable percentage
shall be 1.0 percent. The regulations shall provide for
credit trading and waiver applications on similar terms to
those of the program for gasoline.
Prevention of effects on Highway Apportionments: States
would be protected from any adverse impacts as a consequence
of the sale and use within a State of ethanol in determining
the payments attributable to a State paid into the Highway
Trust Fund and the minimum guarantee based on payments into
the Highway Trust Fund.
______
By Mr. KERRY (for himself, Mr. Grassley, Mr. Sarbanes, Mr. Levin,
and Mr. Rockefeller):
S. 2972. A bill to combat international money laundering and protect
the United States financial system, and for other purposes; to the
Committee on Banking, Housing, and Urban Affairs.
the international counter-money laundering and foreign anticorruption
act of 2000
Mr. KERRY. Mr. President, I believe the United States must do more to
stop international criminals from washing the blood off their profits
from the sale of drugs, from terror or from organized crime by
laundering money into the United States financial system.
That is why today, along with Senators Grassley, Sarbanes, Levin, and
Rockefeller, I am introducing the International Counter-Money
Laundering and Foreign Anticorruption Act of 2000 which will give the
Secretary of the Treasury the tools to crack down on international
money laundering havens and protect the integrity of the U.S. financial
system from the influx of tainted money from abroad.
I very much appreciate work of the Secretary of Treasury Lawrence
Summers in the development of this legislation. Secretary Summers has
been a leader in bringing the issue of money laundering to the
attention of the American public and the Congress. Earlier this year,
Secretary Summers said, ``The attack on money laundering is an
essential front in the war on narcotics and the broader fight against
organized crime worldwide. Money laundering may look like a polite form
of white collar crime, but it is the companion of brutality, deceit and
corruption.''
I am deeply saddened that I will not have the pleasure of working
with Senator Paul Coverdell, who was to be the primary cosponsor of
this legislation. His passing is a tremendous loss to the both to the
American people and the U.S. Senate.
Money laundering is the financial side of international crime. It
occurs when criminals seek to disguise money that was illegally
obtained. It allows terrorists, drug cartels, organized crime groups,
corrupt foreign government officials and others to preserve the profit
from their illegal activities and to finance new crimes. It provides
the fuel that allows criminal organizations to conduct their ongoing
affairs. It has a corrosive effect on international markets and
financial institutions. Money launderers rely upon the existence of
jurisdictions outside the United States that offer bank secrecy and
special tax or regulatory advantages to non-residents, and often
complement those advantages with weak financial supervision and
regulatory regimes.
Today, the global volume of laundered money is estimated to be 2-5
percent of global Gross Domestic Product, between $600 billion and $1.5
trillion. The effects of money laundering extend far beyond the
parameters of law enforcement, creating international political issues
while generating domestic political crises.
International criminals have taken advantage of the advances in
technology and the weak financial supervision in some jurisdictions to
place their illicit funds into the United States financial system.
Globalization and advances in communications and technologies allow
criminals to move their illicit gains faster and farther than ever
before. The result has been a proliferation of international money
laundering havens. The ability to launder money into the United States
through these jurisdictions has allowed corrupt foreign officials to
systemically divert public assets to their personal use, which in turn
undermines U.S. efforts to promote democratic institutions and stable,
vibrant economies abroad.
In February, State and Federal regulators formally sanctioned the
Bank of New York for ``deficiencies'' in its anti-money laundering
practices including lax auditing and risk management procedures
involving their international banking business. The sanctions were
based on the Bank of New York's involvement in an alleged money
laundering scheme where more than $7 billion in funds were transmitted
from Russia into the bank. Federal investigators are
currently attempting to tie the $7 billion to criminal activities in
Russia such as corporate theft, political graft or racketeering.
In November 1999, the minority staff of the Senate Governmental
Affairs Subcommittee on Investigations released a report on private
banking and money laundering. The report describes a number of
incidences where high level government officials have used private
banking accounts with U.S. financial institutions to launder millions
of dollars from foreign governments. The report details how Raul
Salinas, brother of former President of Mexico, Carlos Salinas, used
private bank accounts to launder money out of Mexico. Representatives
from Citigroup testified at a Subcommittee hearing that the bank had
been slow to correct controls over their private banking accounts.
During the 1980's, as chairman of the Senate Permanent Subcommittee
on Investigations, I began an investigation of the Bank of Credit and
Commerce International (BCCI), and uncovered a complex money laundering
scheme. Unlike any ordinary bank, BCCI was from its earliest days made
up of multiplying layers of entities, related to one another through an
impenetrable series of holding companies, affiliates, subsidiaries,
banks-within-banks, insider dealings, and nominee relationships.
By fracturing corporate structure, record keeping, regulatory review,
and audits, the complex BCCI family of entities was able to evade
ordinary legal restrictions on the movement of capital and goods as a
matter of daily practice and routine. In creating BCCI as a vehicle
fundamentally free of government control, its creators developed an
ideal mechanism for facilitating illicit activity by others.
BCCI's used this complex corporate structure to commit fraud
involving billions of dollars; and launder money for their clients in
Europe, Africa, Asia and the Americas. Fortunately, we were able to
bring many of those involved in BCCI to justice. However, my
investigation clearly showed that rogue financial institutions have the
ability to circumvent the laws designed to stop financial crimes.
In recent years, the United States and other well-developed financial
centers have been working together to improve their antimoney
laundering regimes and to set international anti-
[[Page S7887]]
money laundering standards. Back in 1988, I included a provision in the
State Department Reauthorization bill that requires major money
laundering countries to adopt laws similar to our own on reporting
currency, or face sanctions if they did not. Panama and Venezuela wound
up negotiating what were called Kerry agreements with the United States
and became less vulnerable to the placement of U.S. currency by drug
traffickers in the process.
Unfortunately, other nations--some small, remote islands--have moved
in the other direction. Many have passed laws that provide for
excessive bank secrecy, anonymous company incorporation, economic
citizenship, and other provisions that directly conflict with well-
established international anti-money laundering standards. In doing so,
they have become money laundering havens for international criminal
networks. Some even blatantly advertise the fact that their laws
protect anyone doing business from U.S. law enforcement.
Just last month, the Financial Action Task Force, an
intergovernmental body developed to develop and promote policies to
combat financial crime, released a report naming fifteen
jurisdictions--including the Bahamas, The Cayman Islands, Russia,
Israel, Panama, and the Philippines--that have failed to take adequate
measures to combat international money laundering. This is a clear
warning to financial institutions in the United States that they must
begin to scrutinize many of their financial transactions with customers
in these countries as possibly being linked to crime and money
laundering. Soon, the Financial Action Task Force will develop bank
advisories and criminal sanctions that will have the effect of driving
legitimate financial business from these nations, depriving them of a
lucrative source of tax revenue. This report has provided important
information that governments and financial institutions around the
world should learn from in developing their own anti-money laundering
laws and policies.
The Financial Stability Forum has recently released a report that
categorizes offshore financial centers according to their perceived
quality of supervision and degree of regulatory cooperation. The
Organization of Economic Cooperation and Development (OECD) has begun a
new crackdown on harmful tax competition. Members of the European Union
has reached an agreement in principle on sweeping changes to bank
secrecy laws, intended to bring cross-border investment income within
the net of tax authorities.
The actions by the Financial Action Task Force, the European Union
and others show a renewed international focus and commitment to curbing
financial abuse around the world. I believe the United States has a
similar obligation to use this new information to update our anti-money
laundering status.
The International Counter-Money Laundering and Anticorruption Act of
2000 which I am introducing today would provide the tools the U.S.
needs to crack down on international money laundering havens and
protect the integrity of the U.S. financial system from the influx of
tainted money from abroad. The bill provides for actions that will be
graduated, discretionary, and targeted, in order to focus actions on
international transactions involving criminal proceeds, while allowing
legitimate international commerce to continue to flow unimpeded. It
will give the Secretary of the Treasury--acting in consultation with
other senior government officials and the Congress--the authority to
designate a specific foreign jurisdiction, foreign financial
institution, or class of international transactions as being of
``primary money laundering concern.'' Then, on a case-by-case basis,
the Secretary will have the option to use a series of new tools to
combat the specific type of foreign money laundering threat we face. In
some cases, the Secretary will have the option to require banks to
pierce the veil of secrecy that foreign criminals hide behind. In other
cases, the Secretary will have the option to require the identification
of those using a foreign bank's correspondent or payable-through
accounts. And if these transparency provisions were deemed to be
inadequate to address the specific problem identified, the Secretary
will have the option to restrict or prohibit U.S. banks from continuing
correspondent or payable-through banking relationships with money
laundering havens and rogue foreign banks. Through these steps, the
Secretary will help prevent laundered money from slipping undetected
into the U.S. financial system and, as a result, increase the pressure
on foreign money laundering havens to bring their laws and practices
into line with international anti-money laundering standards. The
passage of this legislation will make it much more difficult for
international criminal organizations to launder the proceeds of their
crimes into the United States.
This bill fills in the current gap between bank advisories and
International Emergency Economic Powers Act (IEEPA) sanctions by
providing five new intermediate measures. Under current law, the only
counter-money laundering tools available to the federal governments are
advisories, an important but relatively limited measure instructing
banks to pay close attention to transactions that involve a given
country, and full-blown economic sanctions under the IEEPA. This
legislation gives five additional measures to increase the government's
ability to apply pressure against targeted jurisdictions or
institutions.
This legislation will in no way jeopardize the privacy of the
American public. The focus is on foreign jurisdictions, financial
institutions and classes of transactions that present a threat to
the United States, not on American citizens. The actions that the
Secretary of the Treasury is authorized to take are designated solely
to combat the abuse of our banks by specifically identified foreign
money laundering threats. This legislation is in no way similar to the
Know-Your-Customer regulations that were proposed by the regulators
last year. Further, the intent of this legislation is not to add
additional regulatory burdens on financial institutions, but, to give
the Secretary of the Treasury the ability to take action against
existing money laundering threats.
Let me repeat, this legislation only gives the discretion to use
these tools to the Secretary of the Treasury. There is no automatic
trigger which forces action whenever evidence of money laundering is
uncovered. Before any action is taken, the Secretary of the Treasury,
in consultation with other key government officials, must first
determine whether a specific country, financial institution or type of
transaction is of primary money laundering concern. Then, a calibrated
response will be developed that will consider the effectiveness of the
measure to address the threat, whether other countries are taking
similar steps, and whether the response will cause harm to U.S.
financial institutions and other firms.
This legislation will strengthen the ability of the Secretary to
combat the international money laundering and help protect the
integrity of the U.S. financial system. This bill is supported by the
heads of all the major federal law enforcement agencies. The House
Banking Committee recently reported out this legislation with a
bipartisan 33-1 vote. I believe this legislation deserves consideration
by the Senate during the 106th Congress.
Today, advances in technology are bringing the world closer together
than ever before and opening up new opportunities for economic growth.
However, with these new advantages come equally important obligations.
We must do everything possible to insure that the changes in technology
do not give comfort to international criminals by giving them new ways
to hide the financial proceeds of their crimes. I believe that this
legislation is a first step toward limiting the scourge of money
laundering will help stop the development of international criminal
organizations.
Mr. SARBANES. Mr. President, I am pleased to join Senators Kerry,
Grassley, Levin, and Rockefeller in introducing the Clinton/Gore
administration's International Counter-Money Laundering and Foreign
Anti-Corruption Act of 2000 (``ICMLA''). Money laundering poses an
ongoing threat to the financial stability of the United States. It is
estimated by the Department of the Treasury that the global volume of
laundered money accounts for between 2-5 percent of the global GDP.
The ICMLA is designed to bolster the United States ability to counter
the
[[Page S7888]]
laundering of the proceeds of drug trafficking, organized crime,
terrorism, and official corruption from abroad. The bill broadens the
authority of the Secretary of the Treasury, ensures that banking
transactions and financial relationships do not contravene the purposes
of current antimoney laundering statutes, provides a clear mandate for
subjecting foreign jurisdictions that facilitate money laundering to
special scrutiny, and enhances reporting of suspicious activities. The
bill similarly strengthens current measures to prevent the use of the
U.S. financial system for personal gain by corrupt foreign officials
and to facilitate the repatriation of any stolen assets to the citizens
of countries to whom such assets belong.
First, section 101 of the ICMLA gives the Secretary of the Treasury,
in consultation with other key government officials, discretionary
authority to impose five new ``special measures'' against foreign
jurisdictions and entities that are of ``primary money laundering
concern'' to the United States. Under current law, the only counter-
money laundering tools available to the federal government are
advisories, an important but relatively limited measure instructing
banks to pay close attention to transactions that involve a given
country, and full-blown economic sanctions under the International
Emergency Economic Powers Act (``IEEPA''). The five new intermediate
measures will increase the government's ability to apply well-
calibrated pressure against targeted jurisdictions or institutions.
These new measures include: (1) requiring additional record keeping/
reporting on particular transactions, (2) requiring the identification
of the beneficial foreign owner of a U.S. bank account, (3) requiring
the identification of those individuals using a U.S. bank account
opened by a foreign bank to engage in banking transactions (a
``payable-through account''), (4) requiring the identification of those
using a U.S. bank account established to receive deposits and make
payments on behalf of a foreign financial institution (a
``correspondent account''), and (5) restricting or prohibiting the
opening or maintaining of certain correspondent accounts.
Second, the bill seeks to enhance oversight into illegal activities
by clarifying that the ``safe harbor'' from civil liability for filing
a Suspicious Activity Report (``SAR'') applies in any litigation,
including suit for breach of contract or in an arbitration proceeding.
Under the Bank Secrecy Act (``BSA''), any financial institution or
officer, director, employee, or agent of a financial institution is
protected against private civil liability for filing a SAR. Section 201
of the bill amends the BSA to clarify the prohibition on disclosing
that a SAR has been filed. These reports are the cornerstone of our
nation's money-laundering efforts because they provide the information
necessary to alter law enforcement to illegal activity.
Third, the bill enhances enforcement of Geographic Targeting Orders
(``GTOs''). These orders lower the dollar thresholds for reporting
transactions within a defined geographic area. Section 202 of the bill
clarifies that civil and criminal penalties for violations of the Bank
Secrecy Act and its regulations also apply to reports required by
GTO's. In addition, the section clarifies that structuring a
transaction to avoid a reporting requirement by a GTO is a criminal
offense and extends the presumptive GTO period from 60 to 180 days.
Fourth, section 203 of the bill permits a bank, upon request of
another bank, to include suspicious illegal activity in written
employment references. Under this provision, banks would be permitted
to share information concerning the possible involvement of a current
or former officer or employee in potentially unlawful activity without
fear of civil liability for sharing the information.
Finally, title III of the bill addresses corruption by foreign
officials and ruling elites. Pursuant to a sense of Congress, the
Secretary of the Treasury, in consultation with the Attorney General
and the financial services regulators, is mandated to issue guidelines
to financial institutions operating in the United States on appropriate
practices and procedures to reduce the likelihood that such
institutions could facilitate proceeds expropriated by or on behalf of
foreign senior government officials.
The ICMLA addresses many of the shortcomings of current law. The
Secretary of Treasury is granted additional authority to require
greater transparency of transactions and accounts as well as to
narrowly target penalties and sanctions. The reporting and collection
of additional information on suspected illegal activity will greatly
enhance the ability of bank regulators and law enforcement to combat
the laundering of drug money, proceeds from corrupt regimes, and other
illegal activities.
Mr. President, the House Banking Committee passed the identical
antimoney laundering bill by a vote of 31 to 1 on June 8, 2000. I hope
that we can move this legislation expeditiously in the Senate.
______
By Mr. KERRY (for himself and Mr. Hollings):
S. 2973. A bill to amend the Magnuson-Stevens Fishery Conservation
and Management Act to improve fishery management and enforcement, and
fisheries data collection, research, and assessment, and for other
purposes; to the Committee on Commerce, Science, and Transportation.
the magnuson-stevens act amendments of 2000
Mr. KERRY. Mr. President, I rise today to introduce the Magnuson-
Stevens Act Amendments of 2000. I would like to thank Mr. Hollings for
joining me as an original cosponsor of this legislation to reauthorize
and update the Magnuson-Stevens Fishery Conservation and Management
Act. As my colleagues and I well remember, we last substantially
reauthorized the Act only four years ago with the Sustainable Fisheries
Act--a three-year effort in itself. As in 1996, I look forward to
working with members of the Commerce Committee as we update and improve
this most important legislation.
Mr. President, the fishery resources found off U.S. shores are a
valuable national heritage. In 1998, the last year for which we have
figures, U.S. commercial fisheries produced $3.1 billion in dockside
revenues, contributing a total of more than $25 billion to the Gross
National Product. By weight of catch, the United States is the world's
fifth largest fishing nation, harvesting over 4 million tons of fish
annually. The United States is also a significant seafood exporter,
with exports valued at over $8 billion in 1998. In addition to
supporting the commercial seafood industry, U.S. fishery resources
provide enjoyment for about 9 million saltwater anglers who take home
roughly 200 million pounds of fish each year.
Over the past year, the Commerce Committee under Senator Snowe's
leadership has been holding a series of hearings around the country in
preparation for this year's reauthorization. These hearings have
pointed to one central theme--while there is certainly room for
improving fisheries management under the Magnuson-Stevens Act, the
sweeping changes we made in 1996 are still being implemented in each
region. In fact, a number of regions are showing good progress,
including New England where the yellowtail flounder and haddock stocks
are rebounding. For this reason, I believe this year's reauthorization
should leave in place the core conservation provisions of the Act, and
focus on providing adequate resources, and any organizational or other
changes necessary for NOAA Fisheries and Regional Fishery Management
Councils to achieve the goals we set forth in the Sustainable Fisheries
Act.
Mr. President, the bill I introduce today outlines a proposal for
making this a reality. While we have added increasingly complex
technical and scientific requirements to the fisheries management
process, we have failed in many cases to provide the resources
necessary to meet these requirements. Effective fisheries management
for the future will rely on committing adequate resources and direction
to the fisheries managers as well as the fishing participants. These
include providing necessary funding increases to both the agency and
the Councils, creation of a national observer program, establishing a
nationwide cooperative research program with the fishing industry, and
ensuring that we are collecting the socioeconomic data we need to
design management measures that
[[Page S7889]]
make sense for fishermen. This legislation aims to remedy this by
providing a significant increase in funding, and specifying amounts
required to support both the new initiatives and existing programs.
Over the years, we have reauthorized the Magnuson-Stevens Act many
times, and each time we have wrestled with the question of how to
improve the ability of the Regional Fisheries Management Councils to
effectively and fairly implement the requirements of the Act. This bill
suggests ways in which to begin remedying these concerns. First, the
bill would clarify that the Secretary of Commerce must ensure
representation on the Council of all qualified persons who are
concerned with fisheries conservation and management. While fishermen
are the source of tremendous wisdom and expertise needed in managing
these fisheries, there are others such as scientists and those with
other relevant experience who may also provide valuable service to the
Councils. To help the Secretary meet this requirement, the bill
requires Governors to consult with members of recreational, commercial,
and other fishing or conservation interests within a State before
selecting a list of nominees to send to the Secretary. We would like to
see all those who can provide constructive attention to our fishery
management problems to work together to forge innovative and
progressive solutions. In addition, we must increase independent
scientific involvement in the Councils, and my legislation would
provide that Councils must involve Science and Statistics Committee
members in the development and amendment of fisheries management plans.
I do know of the grave concerns expressed by conservation groups,
fishermen, scientists and managers about problems with the existing
fishery management process. I believe we need to address these
questions, both with respect to the Councils and the Agency. I would
like to work on this further with my colleagues as we go forward, but
in the meantime this bill asks the National Academy of Sciences to
bring together international and regional experts to evaluate what
works and what may be broken in the current system, and what additional
changes may be necessary to modernize and make more effective our
entire fishery management process.
In our series of hearings around the country, we have consistently
heard a call from both industry and conservation groups for observer
coverage in our fisheries. We have failed to adequately provide funding
mechanisms for observer coverage; each year, federally funded observers
are deployed in as few as five to seven fisheries, and observer
coverage is rarely over 20 percent. Without observer coverage, there is
little hope that we will have statistically significant data,
particularly data on actual levels of bycatch. I have included
provisions to ensure that each fishery management plan details observer
coverage and monitoring needs for a fishery, and created a new National
Observer Program. This national program would address technical and
administrative responsibilities over regional observer programs. I have
also included provisions to allow Councils or the Secretary to develop
observer monitoring plans, and have established a fishery observer fund
which would include funds appropriated for this purpose, collected as
fines under a new bycatch incentive program, or deposited through fees
established under this section.
In the 1996 reauthorization, we took a first step in dealing with the
issue of bycatch by instructing NMFS to implement a standardized
bycatch reporting methodology. Nonetheless, I believe we have a long
way to go in dealing with the bycatch problem in many of our fisheries.
In addition to establishing a national observer program, my bill would
establish a task force to recommend measures to monitor, manage, and
reduce bycatch and unobserved fishing mortality. The Secretary would
then be charged with implementing these recommendations. In addition, I
have provided for the development of bycatch reduction incentive
programs that could include a system of fines, non-transferable bycatch
quotas, or preferences for gear types with low-bycatch rates.
It is also time for us to move forward on ecosystem-based fishery
management. We do not yet have the data to actually manage most of our
fisheries on an ecosystem basis, but I still believe we must begin the
preparation and consideration of fishery ecosystem plans. We must
strive to understand the complex ecological and socioeconomic
environments in which fish and fisheries exist, if we hope to
anticipate the effects that fishery management will have on the
ecosystem, and the effects that ecosystem change will have on
fisheries. My legislation would require each Council to develop one
fishery ecosystem plan for a marine ecosystem under its jurisdiction.
Each ecosystem plan would have to include a listing of data and
information needs identified during development of the plan, and the
means of addressing any scientific uncertainties associated with the
plan.
One of the most resounding comments we heard at all of our regional
hearings was the need to continually improve scientific information,
and to involve the fishing industry in the collection of this
information. My bill would establish a national cooperative research
program, patterned after the successful cooperative research program in
the New England scallop fishery, for projects that are developed
through partnerships among federal and state managers, fishing industry
participants, and academic institutions. Priority would be given to
projects to reduce bycatch, conservation engineering projects, projects
to identify and protect essential fish habitat or habitat area of
particular concern, projects to collect fishery ecosystem information
and improve predictive capabilities, and projects to compile social and
economic data on fisheries.
Over the years, I have heard much complaint that NMFS does not
communicate effectively with the fishing industry or the general
public. To remedy this, my bill calls for the establishment of a
fisheries outreach program within NMFS to heighten public understanding
of NMFS research and technology, train Council members on
implementation of National Standards 1 and 8 requirements of NEPA and
the Regulatory Flexibility Act, and identify means of improving quality
and reporting of fishery-dependent data. New provisions would also
require improvement of the transparency of the stock assessment process
and methods, and increase access and compatibility of data relied upon
in fishery management decisions. I have required the Secretary to
periodically review fishery data collection and assessment methods, and
to establish a Center for Independent Peer Review under which
independent experts would be provided for special peer review
functions.
Mr. President, I have also included provisions to address one of our
biggest problems in fisheries today--too many fishermen chasing too few
fish. It is true that many of our fisheries are overcapitalized. A
buyout in New England several years ago attempted to deal with this
problem, and according to Penny Dalton, Assistant Administrator for
Fisheries, in a recent USA Today article, the buyout ``jump started
recovery in the New England groundfish fishery.'' A section of my bill
would require the Secretary to evaluate overcapacity in each fishery,
and identify measures planned or taken to reduce any such overcapacity.
My legislation would amend the existing Act to ensure that capacity
reduction programs also consider and address latent fishing capacity,
and would allow the use of Capital Construction Funds and funds from
the Fisheries Finance Program for measures to benefit the conservation
and management of fisheries such as capacity reduction, as well as for
gear and safety improvements.
In 1996, we enacted a new concept in defining, and requiring
protection and identification of, essential fish habitat (EFH). While
there has been much outcry that essential fish habitat has been
identified too broadly and that EFH consultation processes have
resulted in regulatory delay, GAO reports very few real problems
resulting from such designations. As a result, I do not feel it is
necessary to significantly modify EFH provisions. Instead, I believe we
can improve the current work of NMFS and the Councils to identify EFH,
and areas within them called ``habitat areas of particular concern''
(HAPCs). I have added new provisions that would require Councils to
protect and identify
[[Page S7890]]
HAPCs as part of existing requirements to identify and protect EFH. My
bill would clarify that HAPCs are to be identified pursuant to the NMFS
EFH guidelines, and that these areas should receive priority
identification and protection, as they are oftentimes the areas most
critical to fish spawning and recruitment. It is crucial that we
improve our understanding of fisheries habitat, and my bill would
establish pilot cooperative research projects on fishery and non-
fishery impacts to HAPCs.
Finally, Mr. President, I would like to address the issue of
individual fishing quotas, which have been the subject of much debate
over the past few years. There is a moratorium on these programs in
place until September 30, 2000, and we have been skirting consideration
of this new management tool for too long. We must begin debate and
consideration of the panoply of exclusive quota-based programs that
have developed over the past several years, which must include adoption
of legislative guidance for these programs. For this reason, the bill
suggests a set of national criteria that would permit establishment of
exclusive quota based programs--including community-based quotas,
fishing cooperatives, and individual fishing quotas--but still protect
the concerns of those who do not wish to employ these tools. I invite
all those who are concerned about these issues to engage in a
discussion with my colleagues and me on the appropriate way to address
this national issue as we move forward this session.
I understand the many concerns of small fishermen in New England
regarding the use of these tools. First, no region would have to
implement an exclusive quota-based program without approval of a 3/5
majority of eligible permit holders through a referendum process. In
addition, any exclusive quota-based program developed under my
legislation would have to meet a set of national criteria. These
national criteria would include provisions specifically aimed at
protecting small fishermen such as the following: (1) ensuring that
quota-based programs provide a fair and equitable initial allocation of
quota (including the establishment of an appeals process for
qualification and allocation decisions), (2) preserving the historical
distribution of catch among vessel categories and gear sectors, (3)
considering allocation of a portion of the annual harvest specifically
to small fishermen and crew members; and (4) requiring programs to
consider the effects of consolidation of quota shares and establish
limits necessary to prevent inequitable concentration of quota share or
significant impacts on other fisheries or fishing communities. To
respond to the concern that we must ensure quota-based programs meet
conservation objectives, my legislation would provide a 7-year review
of the performance of quota holders, including fulfillment of
conservation requirements of the Act. Finally any quota-based program
would have to have a plan to rationalize the fishery--which in some
cases would require a buyout of excess capacity under section 312(b) of
the Act.
Mr. President, I believe this legislation provides the funding,
tools, and programs to ensure the important changes made in the 1996
amendments are implemented effectively and improved where necessary.
During the last reauthorization, our nation's fisheries were at a
crossroads, and action was required to remedy our marine resource
management problems, to preserve the way of life of our coastal
communities, and to promote the sustainable use and conservation of our
marine resources for future generations and for the economic good of
the nation. We made changes in 1996 that were good for the environment,
good for the fish, and good for the fishermen. We must stay the course,
and this bill will help us do just that. In addition, the bill will
provide us with innovative tools, such as exclusive quota-based
programs and the new national observer program, to further advance
fisheries management. Mr. President, I remain committed to the goal of
establishing biologically and economically sustainable fisheries so
that fishing will continue to be an important part of the culture of
coastal communities as well as the economy of the Nation and
Massachusetts.
______
By Mrs. FEINSTEIN:
S. 2975. A bill to limit the administrative expenses and profits of
managed care entities to not more than 15 percent of premium revenues;
to the Committee on Finance.
managed care health benefits integrity act of 2000
Mrs. FEINSTEIN. Mr. President, today, I am introducing the Health
Benefits Integrity Act to make sure that most health care dollars that
people and employers pay into a managed care health insurance plan get
spent on health care and not on overhead.
Under my bill, managed care plans would be limited to spending 15
percent of their premium revenues on administration. This means that if
they spend 15 percent on administration, they would spend 85 percent of
premium revenues on health care benefits or services.
This bill was prompted by study by the Inspector General (IG) for the
U.S. Department of Health and Human Services reported under a USA Today
headline in February, ``Medicare HMOs Hit for Lavish Spending.'' The IG
reviewed 232 managed care plans that contract with Medicare and found
that in 1999 the average amount allocated for administration ranged
from a high of 32 percent to a low of three percent. The IG recommended
that the Department establish a ceiling on the amount of administrative
expenditures of plans, noting that if a 15 percent ceiling had been
placed in 1998, an additional $1 billion could have been passed on to
Medicare beneficiaries in the form of additional benefits or reduce
deductibles and copayments.
The report said, ``This review, similar OIG reviews, and other
studies have shown that MCOs' [managed care organizations'] exorbitant
administrative costs have been problematic and can be the source for
abusive behavior.'' Here are some examples cited by the Inspector
General on page 7 of the January 18 report: $249,283 for food, gifts
and alcoholic beverages for meetings by one plan; $190,417 for a sales
award meeting in Puerto Rico for one plan; $157,688 for a party by one
plan; $25,057 for a luxury box at a sports arena by one plan; $106,490
for sporting events and/or theater tickets at four plans; $69,700 for
holiday parties at three plans; and $37,303 for wine gift baskets,
flowers, gifts and gift certificates at one plan.
It is no wonder that people today are angry at HMOs. When our hard-
earned premium dollars are frittered away on purchases like these, we
have to ask whether HMOs are really providing the best care possible.
Furthermore, in the case of Medicare, we are also talking about wasted
taxpayer dollars since Part B of Medicare is funded in part by the
general treasury. One dollar wasted in Medicare is one dollar too much.
Medicare needs all the funds it can muster to stay solvent and to be
there for beneficiaries when they need it.
I feel strongly that if HMOs are to be credible, they must be more
prudent in how they spend enrollees' dollars. Administrative expenses
must be limited to reasonable expenses.
An October 1999 report by Interstudy found that for private HMO
plans, administrative expenses range from 11 percent to 21 percent and
that for-profit HMOs spend proportionately more on administrative cost
than not-for-profit HMOs. This study found the lowest rate to be 3.6
percent and the highest 38 percent in California! In some states the
maximums were even higher.
The shift from fee-for-service to managed care as a form of health
insurance has been rapid in recent years. Nationally, 86 percent of
people who have employment-based health insurance (81.3 million
Americans) are in some form of managed care. Around 16 percent of
Medicare beneficiaries are in managed care nationally (40 percent in
California), a figure that doubled between 1994 and 1997. By 2010, the
Congressional Budget Office predicts that 31 percent of Medicare
beneficiaries will be in managed care. Between 1987 and 1999, the
number of health plans contracting with Medicare went from 161 to 299.
As for Medicaid, in 1993, 4.8 million people (14 percent of Medicaid
beneficiaries) were in managed care. Today, 16.6 million (54 percent)
are in managed care.
In California, the State which pioneered managed care for the nation,
an estimated 88 percent of the insured are in some form of managed
care. Of the 3.7 million Californians who are in Medicare, 40 percent
(1.4 million) are in
[[Page S7891]]
managed care, the highest rate in the U.S. As for Medicaid in
California, 2.5 million people (50 percent) of beneficiaries are in
managed care. And so managed care is growing and most people think it
is here to stay.
I am pleased to say that in California we already have a regulation
along the lines of the bill I am proposing. We have in place a
regulatory limit of 15 percent on commercial HMO plans' administrative
expenses. This was established in my State for commercial plans because
of questionable expenses like those the HHS IG found in Medicare HMO
plans and because prior to the regulation, some plans had
administrative expense as high as 30 percent of premium revenues.
This bill would never begin to address all the problems patients
experience with managed care in this country. That is why we also need
a strong Patients Bill of Rights bill. I hope, however, this bill will
discourage abuses like those the HHS Inspector General found and will
help assure people that their health care dollars are spent on health
care and are not wasted on outings, parties, and other activities
totally unrelated to providing health care services.
I call on my colleagues to join me in enacting this bill.
______
By Mrs. FEINSTEIN (for herself, Mr. Byrd, and Mrs. Boxer):
S. 2976. A bill to amend title XXI of the Social Security Act to
allow States to provide health benefits coverage for parents of
children eligible for child health assistance under the State
children's health insurance program; to the Committee on Finance.
family health insurance program act of 2000
Mrs. FEINSTEIN. Mr. President, today, Senators Byrd, Boxer and I are
introducing legislation to allow States, at their option, to enroll
parents in the State-Children's Health Insurance Program, known as S-
CHIP. This bill could provide insurance to 2.7 million parents
nationwide and 356,000 parents in California by using unspent
allocations States will otherwise lose on September 30, 2000. Congress
has appropriated a total of $12.9 billion for S-CHIP for fiscal years
1998, 1999, and 2000, or about $4.3 billion for each fiscal year.
California received $854.6 million in 1998, $850.6 million in 1999, and
$765.5 million in 2000. Right now California stands to lose $588
million just in fiscal year 1998 funds because California has faced
many hurdles in enrolling children. That is in part why we are
introducing this bill, to enhance enrollment of more children and to
help states use available S-CHIP funds.
S-CHIP is a low-cost health insurance program for low-income children
up to age 19 that Congress created in the Balanced Budget Act of 1997.
After three years, S-CHIP covers approximately two million children
across the country, out of the three to four million children estimated
to be eligible. Congress created it as a way to provide affordable
health insurance for uninsured children in families that cannot afford
to buy private insurance.
States can choose from three options when designing their S-CHIP
program: (1) expansion of their current Medicaid program; (2) creation
of a separate State insurance program; or (3) a combination of both
approaches. In California, S-CHIP, known as Health Families, is set up
as a public-private program rather than a Medicaid expansion. Healthy
Families allows California families to use federal and State S-CHIP
funds to purchase private managed care insurance for their children.
Under the federal law, States generally cover children in families with
incomes up to 200 percent of poverty, although States can go higher if
their Medicaid eligibility was higher than that when S-CHIP was enacted
in 1997. In California, eligibility was raised to 250 percent in
November 1999, increasing the number of eligible children by 129,000.
Basic benefits in the California S-CHIP program include inpatient and
outpatient hospital services, surgical and medical services, lab and x-
ray services, and well-baby and well-child care, including
immunizations. Additional services which States are encouraged to
provide, and which California has elected to include, are prescription
drugs and mental health, visions, hearing, dental, and preventive care
services such as prenatal care and routine physical examinations. In
California, enrollees pay a $5.00 co-payment per visit which generally
applies to inpatient services, selected outpatient services, and
various other health care services.
The United States faces a serious health care crisis that continues
to grow as more and more people are becoming uninsured. Despite the
robust health of the economy, the U.S. has seen an increase in the
uninsured by nearly five million since 1994. Currently, 44 million
people (or 18 percent) of the non-elderly population are uninsured. In
California, 23.5 percent, or 7.3 million, are uninsured. One study
cited in the May 2000 California Journal found that as many as 2,333
Californians lose health insurance every day. A May 29, 2000 San Jose
Mercury article cited California's emergency room doctors who
``estimate that anywhere from 20 percent to 40 percent of their walk-in
patients have no health coverage.'' This a problem that needs to be
addressed now.
The bill we are introducing would allow States to expand S-CHIP
coverage to parents whose children are eligible for the program. In my
State, that would be families up to 250 percent of the federal poverty
level. For the year 2000, the federal poverty level for a family of
four is $17,050. In California, with the upper eligibility limit of 250
percent of poverty, families of four making up to $42,625 are eligible.
This bill could reach approximately 2.7 million parents nationwide and
more than 356,000 parents in California. The bill we are introducing
retains the current funding formula, State allotments, benefits,
eligibility rules, and cost-sharing requirements.
An S-CHIP expansion should be accomplished without substituting S-
CHIP coverage for private insurance or other public health insurance
that parents might already have. The current S-CHIP law requires that
State plans include adequate provisions preventing substitution and my
bill retains that. For example, many States require that an enrollee be
uninsured before he or she is eligible for the program.
This bill is important for several reasons. Many State officials say
that by covering parents of uninsured children we can actually cover
more children. More than 75 percent of uninsured children live with
parents who are uninsured. If an entire family is enrolled in a plan
and seeing the same group of doctors--in other words, if the care is
convenient for the whole family--all the members of the family are more
likely to be insured and to stay healthy. This is a key reason for this
legislation, bringing in more children by targeting the whole family.
Private health insurance in the commercial market can be very
expensive. The average annual cost of family coverage in private health
plans for 1999 was $5,742, according to the Kaiser Family Foundation.
California has some of the lowest-priced health insurance, yet the
State ranks fifth in uninsured for 1998-1996. In California, high
housing costs, high gas prices, expensive commutes, and a high cost-of-
living make it difficult for many California families to buy health
insurance. According to the California Institute, the median price of
single family home rose 17 percent, to $231,710, from February 1999 to
February 2000. The California Housing Affordability Index, which
measures the percentage of Californians that are able to purchase mid-
priced homes, declined 11 percent from 1999 to 2000. With prices like
these, many families are unable to afford health insurance even though
they work full-time.
Many low-income people work for employers who do not offer health
insurance. In fact, forty percent of California small businesses (those
employing between three and 50 employers) do not offer health
insurance, according to a Kaiser Family Foundation study in June.
We need to give hard-working, lower income American families
affordable, comprehensive health insurance, and this bill does that.
The President has proposed to cover parents under the S-CHIP program.
The California Medical Association and Alliance of Catholic Health Care
support our bill.
Current law requires States to spend federal S-CHIP dollars within
three years of the appropriation. Many States, including California,
could lose millions of dollars of unspent federal
[[Page S7892]]
Fiscal Year 1998 funds on September 30, 2000. I am working to get an
extension of that deadline. In the meantime, we could begin to cover
parents while getting that extension and working to increase funds for
the program. According to estimates from the Health Care Financing
Administration, the following 39 States could lose the following
amounts, totaling $1.9 billion. Arizona, California, Georgia, Illinois,
Louisiana, Michigan, New Mexico, and Texas stand to lose the most
money. These eight States alone would lose $1.4 billion.
States Millions
Arizona...........................................................$77.2
Arkansas...........................................................45.4
California........................................................588.8
Colorado...........................................................12.9
Connecticut.........................................................9.4
Delaware..............................................................6
District of Columbia................................................2.4
Florida............................................................41.5
Georgia............................................................78.1
Hawaii..............................................................8.9
Idaho...............................................................4.1
Illinois...........................................................84.2
Iowa................................................................1.4
Kansas..............................................................1.5
Louisiana..........................................................73.3
Maryland...........................................................26.7
Michigan...........................................................51.4
Minnesota..........................................................28.3
Montana.............................................................1.8
Nevada.............................................................18.6
New Hampshire.......................................................7.5
New Jersey............................................................2
New Mexico.........................................................57.9
North Dakota........................................................2.9
Ohio...............................................................19.8
Oklahoma...........................................................37.6
Oregon.............................................................18.3
Pennsylvania.......................................................0.64
Rhode Island........................................................4.6
South Dakota........................................................4.4
Tennessee..........................................................26.4
Texas.............................................................443.6
Utah................................................................1.7
Vermont.............................................................1.6
Virginia...........................................................38.4
Washington.........................................................45.1
West Virginia......................................................11.3
Wisconsin............................................................23
Wyoming.............................................................6.9
Our bill would offer another option for States like mine to use these
unspent funds.
I urge my colleagues to join us in supporting and passing this bill.
By giving States the option to cover parents--whole families--we can
reduce the number of uninsured with existing funds and encourage the
enrollment of more children and we can help keep people healthy by
better using this valuable, but currently under-utilized program.
______
By Mrs. FEINSTEIN:
S. 2977. A bill to assist in the establishment of an interpretive
center and museum in the vicinity of the Diamond Valley Lake in
southern California to ensure the protection and interpretation of the
paleontology discoveries made at the lake and to develop a trail system
for the lake for use by pedestrians and nonmotorized vehicles; to the
Committee on Energy and Natural Resources.
bill to Establish an Interpretive Center around Diamond Valley Lake
Mrs. FEINSTEIN. Mr. President, I am pleased to introduce a bill today
to benefit 17 million citizens of Southern California and visitors from
around the country and world through the development of the Western
Center for Archaeology and Paleontology. At this center, visitors will
be able to marvel at the archaeological and paleontological past of
inland southern California.
This bill would help create an interpretive center and museum around
Diamond Valley Lake to highlight the animals and habitat of the Ice Age
up to the European settlement period.
I understand that the paleontological resources are world class and
include hundreds of thousands of historic and pre-historic artifacts.
These include a mastodon skeleton, a mammoth skeleton, a seven-foot
long tusk, and bones from extinct species previously not believed to
have lived in the area, including the giant long-horned bison and North
American lion.
Additionally, visitors will enjoy unprecedented recreational
opportunities through a system of hiking, biking, and equestrian trails
wandering through the grasslands, chaparral, and oak groves that
surround the reservoir.
The total cost of the project is $58 million. The State has agreed to
commit one quarter of the tab, the Metropolitan Water District has
agreed to contribute one-quarter, and other local governments will also
contribute one-quarter. This bill would authorize the federal
government's share of one-quarter or $14 million.
I urge the Senate to adopt this legislation.
______
By Mr. DASCHLE (for himself, Mr. Bingaman, Mr. Conrad, Mr.
Baucus, Mr. Kerrey, Mr. Kohl, Mr. Akaka, Mr. Johnson, Mr. Reid,
Mr. Kennedy, and Mr. Dodd):
S. 2978. A bill to recruit and retain more qualified individuals to
teach in Tribal Colleges or Universities; to the Committee on Indian
Affairs.
The Tribal College or University Loan Forgiveness Act.
Mr. DASCHLE. Mr. President, our tribal colleges and universities have
come to play a critically important role in educating Native Americans
across the country. For more than 30 years, these institutions have
proven instrumental in providing a quality education for those who had
previously been failed by our mainstream educational system. Before the
tribal college movement began, only six or seven out of 100 Native
American students attended college. Of those few, only one or two would
graduate with a degree. Since these institutions have curricula that is
culturally relevant and is often focused on a tribe's particular
philosophy, culture, language and economic needs, they have a high
success rate in educating Native American people. As a result, I am
happy to say that tribal college enrollment has increased 62 percent
over the last six years.
The results of a tribal college education are impressive. Recent
studies show that 91 percent of 1998 tribal college and university
graduates are working or pursuing additional education one year after
graduating. Over the last ten years, the unemployment rate of recently
polled tribal college graduates was 15 percent, compared to 55 percent
on many reservations overall.
While tribal colleges and universities have been highly successful in
helping Native Americans obtain a higher education, many challenges
remain to ensure the future success of these institutions. These
schools rely heavily on federal resources to provide educational
opportunities for all students. As a result, I strongly support efforts
to provide additional funding to these colleges through the Interior,
Agriculture and Labor, Health and Human Services, and Education
Appropriations bills.
In addition to resource constraints, administrators have expressed a
particular frustration over the difficulty they experience in
attracting qualified individuals to teach at tribal colleges.
Geographic isolation and low faculty salaries have made recruitment and
retention particularly difficult for many of these schools. This
problem is increasing as enrollment rises.
That is why I am introducing the Tribal College or University Loan
Forgiveness Act. This legislation will provide loan forgiveness to
individuals who commit to teach for up to five years in one of the 32
tribal colleges nationwide. Individuals who have Perkins, Direct, or
Guaranteed loans may qualify to receive up to $15,000 in loan
forgiveness. This program will provide these schools extra help in
attracting qualified teachers, and thus help ensure that deserving
students receive a high quality education.
This measure will benefit individual students and their communities.
By providing greater opportunities for Native American students to
develop skills and expertise, this bill will spur economic growth and
help bring prosperity and self-sufficiency to communities that
desperately need it. Native Americans and the tribal college system
deserve nothing less. I believe our responsibility was probably best
summed up by one of my state's greatest leaders, Sitting Bull. He once
said, ``Let us put our minds together and see what life we can make for
our children.''
I am pleased that Senators Bingaman, Conrad, Baucus, Kerrey, Kohl,
Akaka, Johnson, Reid, Kennedy, and Dodd are original cosponsors of this
bill, and I look forward to working with my colleagues to pass this
important legislation.
I ask unanimous consent that the text of the Tribal Colleges or
University Loan Forgiveness Act be printed in the Record following my
remarks.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
[[Page S7893]]
S. 2978
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. LOAN REPAYMENT OR CANCELLATION FOR INDIVIDUALS WHO
TEACH IN TRIBAL COLLEGES OR UNIVERSITIES.
(a) Short Title.--This Act may be cited as the ``Tribal
College or University Teacher Loan Forgiveness Act''.
(b) Perkins Loans.--
(1) Amendment.--Section 465(a) of the Higher Education Act
of 1965 (20 U.S.C. 1087ee(a)) is amended--
(A) in paragraph (2)--
(i) in subparagraph (H), by striking ``or'' after the
semicolon;
(ii) in subparagraph (I), by striking the period and
inserting ``; or''; and
(iii) by adding at the end the following:
``(J) as a full-time teacher at a tribal College or
University as defined in section 316(b).''; and
(B) in paragraph (3)(A)(i), by striking ``or (I)'' and
inserting ``(I), or (J)''.
(2) Effective date.--The amendments made by paragraph (1)
shall be effective for service performed during academic year
1998-1999 and succeeding academic years, notwithstanding any
contrary provision of the promissory note under which a loan
under part E of title IV of the Higher Education Act of 1965
(20 U.S.C. 1087aa et seq.) was made.
(c) FFEL and Direct Loans.--Part G of title IV of the
Higher Education Act of 1965 (20 U.S.C. 1088 et seq.) is
amended by adding at the end the following:
``SEC. 493C. LOAN REPAYMENT OR CANCELLATION FOR INDIVIDUALS
WHO TEACH IN TRIBAL COLLEGES OR UNIVERSITIES.
``(a) Program Authorized.--The Secretary shall carry out a
program, through the holder of a loan, of assuming or
canceling the obligation to repay a qualified loan amount, in
accordance with subsection (b), for any new borrower on or
after the date of enactment of the Tribal College or
University Teacher Loan Forgiveness Act, who--
``(1) has been employed as a full-time teacher at a Tribal
College or University as defined in section 316(b); and
``(2) is not in default on a loan for which the borrower
seeks repayment or cancellation.
``(b) Qualified Loan Amounts.--
``(1) Percentages.--Subject to paragraph (2), the Secretary
shall assume or cancel the obligation to repay under this
section--
``(A) 15 percent of the amount of all loans made, insured,
or guaranteed after the date of enactment of the Tribal
College or University Teacher Loan Forgiveness Act to a
student under part B or D, for the first or second year of
employment described in subsection (a)(1);
``(B) 20 percent of such total amount, for the third or
fourth year of such employment; and
``(C) 30 percent of such total amount, for the fifth year
of such employment.
``(2) Maximum.--The Secretary shall not repay or cancel
under this section more than $15,000 in the aggregate of
loans made, insured, or guaranteed under parts B and D for
any student.
``(3) Treatment of consolidation loans.--A loan amount for
a loan made under section 428C may be a qualified loan amount
for the purposes of this subsection only to the extent that
such loan amount was used to repay a loan made, insured, or
guaranteed under part B or D for a borrower who meets the
requirements of subsection (a), as determined in accordance
with regulations prescribed by the Secretary.
``(c) Regulations.--The Secretary is authorized to issue
such regulations as may be necessary to carry out the
provisions of this section.
``(d) Construction.--Nothing in this section shall be
construed to authorize any refunding of any repayment of a
loan.
``(e) Prevention of Double Benefits.--No borrower may, for
the same service, receive a benefit under both this section
and subtitle D of title I of the National and Community
Service Act of 1990 (42 U.S.C. 12571 et seq.).
``(f) Definition.--For purposes of this section, the term
`year', when applied to employment as a teacher, means an
academic year as defined by the Secretary.''.
______
By Mr. GRAHAM (for himself and Mr. Mack):
S. 2979. A bill to amend the Internal Revenue Code of 1986 to clarify
the status of professional employer organizations and to promote and
protect the interests of professional employer organizations, their
customers, and workers; to the Committee on Finance.
professional employer organization workers benefits act of 2000
Mr. GRAHAM. Mr. President, today along with my Finance Committee
colleague, Senator Mack, I am introducing the Professional Employer
Organization Workers Benefits Act of 2000. This legislation will expand
retirement and health benefits for workers at small and medium-sized
businesses in this country.
The bill makes it easier for certified professional employer
organizations (PEO's) to assist small and medium-sized businesses in
complying with the many responsibilities of being an employer. It
permits PEO's to collect Federal employment taxes on behalf of the
employer and provide benefits to the small business' workers. For many
of these workers, the pension, health and other benefits that a PEO
provides would not be available from the small business itself because
they are too costly for the small business to provide on its own. The
average client of a PEO is a small business with 18 workers and an
average wage of $20,000. PEO's have the expertise and can take
advantage of economies of scale to provide health and retirement
benefits in an affordable and efficient manner.
A recent Dunn & Bradstreet survey of small businesses reveled that
only 39 percent offered health care and just 19 percent offer
retirement plans. We must take every opportunity to assist these small
businesses in providing retirement and health benefits to their
employees. PEO's offer one creative way to bridge the gap between what
workers need and what small businesses can afford to provide. In fact,
one analyst at Alex. Brown & Sons estimates that 40 percent of
companies in a PEO coemployment relationship upgrade their total
employee benefits package as a result of the partnership with the PEO.
Twenty-five percent of those companies offer health and other benefits
for the first time.
Over the past few years, small and medium-sized businesses have
sought out the services offered by PEO's. In response, many states have
created programs to recognize, license and regulate PEO's to ensure
that a viable industry could grow. Unfortunately, federal law has not
kept pace. Current rules for who can collect employment taxes and
provide benefits do not fit with the PEO model. Under some
interpretations, PEO's would be prohibited from performing the very
services that small businesses are asking them to undertake.
This legislation clarifies the tax laws to make it clear that PEO's
meeting certain standards will be able to assist small businesses in
providing employee benefits and collecting Federal employment taxes.
This bill is a narrower version of a provision that was included in the
pension legislation I sponsored in the last Congress. This new bill
incorporates comments we received from interested parties over the
course of the past year, including those received from the Treasury and
Labor Departments. As a result the bill we are introducing today is
much improved from previous versions.
In addition, I would like to make clear what this bill does not do.
Unlike earlier versions, this legislation applies only to PEO's, and
not to temporary staffing agencies. Further, this bill applies only to
the two specific areas of tax law--employment taxes and employee
benefits. It does not affect any other law nor does it affect the
determination of who is the employer for any other purpose. The bill
specifically provides that it creates no inferences with respect to
those issues.
I am hopeful that, with this narrower focus, this legislation can be
considered on its own merits, without getting bogged down in larger
disputes involving contingent workforces and independent contractors.
Those issues are important ones that Congress may want to examine, but
we should not allow them to delay resolution of the unrelated PEO
issued addressed by this bill.
I look forward to working with Senator Mack, my other colleagues on
the Finance Committee, and the administration to move this bill during
the 106th Congress so that we can help small- and medium-sized
businesses operate more efficiently while at the same time expanding
the benefits available to their workers.
Mr. President, I ask unanimous consent that the following explanation
of the bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Technical Explanation of Professional Employer Organization Workers
Benefits Act of 2000
The bill would amend the Internal Revenue Code of 1986 to
clarify the treatment of certain qualifying organizations--
called Certified Professional Employer Organizations
(CPEOs)--for employee benefit and employment tax purposes.
Generally, the bill provides that an entity which meets
certain requirements may be certified as a CPEO by the
Internal Revenue Service (IRS) and will be allowed (1) to
take responsibility for employment taxes with respect to
worksite employees of an unrelated client and (2) to provide
such workers with employee benefits
[[Page S7894]]
under a single employer plan maintained by the CPEO.
While the legislation will allow the CPEO to take
responsibility for certain functions, the bill expressly
states (1) that it does not override the common law
determination of an individual's employer and (2) that it
will not affect the determination of who is a common law
employer under federal tax laws or who is an employer under
other provisions of law (including the characterization of an
arrangement as a MEWA under ERISA). Status as a CPEO (or
failure to be a CPEO) will also not be a factor in
determining employment status under current rules.
CERTIFICATION OF PROFESSIONAL EMPLOYER ORGANIZATIONS
In order to be certified as a CPEO, an entity must
demonstrate to the IRS by written application that it meets
(or, if applicable, will meet) certain requirements.
Generally, the requirements for certification will be
developed by the IRS using the ERO (electronic return
originator) program and the requirements to practice before
the IRS (as described in Circular 230) as a model. Standards
will include review of the experience of the PEO and issuance
of an opinion by a certified public accountant on the CPEOs
financial statements. As part of the certification process,
the applicant must disclose any criminal complaints against
it, its principal owners and officers, or related entities,
and any incidence of failure to timely file tax returns or
pay taxes (either income or employment taxes) by it, its
principal owners and officer, or related entities. The IRS
would have the ability to do a background and tax check of
the applicant, its principal owners and officers, or related
entities, and may reject an application on the basis of
information determined in that process. In addition, in order
to be certified, a CPEO must represent that it (or the
client) will maintain a qualified retirement plan for the
benefit of 95% of worksite employees.
The CPEO must notify the IRS in writing of any change that
affects the continuing accuracy of any representation made in
the initial certification request. In addition, after initial
certification, the CPEO must continue to file copies of its
audited financial statements with the IRS by the last day of
the sixth month following the end of the fiscal year.
Procedures would be established for suspending or revoking
CPEO status (similar to those under the ERO program). There
would be a right to administrative appeal from an IRS denial,
suspension, or revocation or certification.
cpeo relationship with particular workers
After certification, a CPEO will be allowed to take
responsibility for employment taxes and to provide employee
benefits to ``worksite employees.'' A worker who performs
services at a client's worksite is a ``worksite employee'' if
the worker (and at least 85% of the individuals working at
the worksite) are subject to a written service contract that
expressly provide that the CPEO will:
(1) Assume responsibility for payment of wages to the
worker, without regard to the receipt or adequacy of payment
from the client for such services;
(2) Assume responsibility for employment taxes with respect
to the worker, without regard to the receipt or adequacy of
payment from the client for such services;
(3) Assume responsibility for any worker benefits that may
be required by the service contract, without regard to the
receipt or adequacy of payment from the client for such
services;
(4) Assume shared responsibility with the client for firing
the worker and recruiting and hiring any new worker; and
(5) Maintain employee records.
(6) Agrees to be treated as a CPEO with respect to the
worksite employees covered under the agreement.
For this purpose, a worksite is defined as a physical
location at which a worker generally performs service or, if
there is no such location, the location from which the worker
receives job assignments. Contiguous locations would be
treated as a single physical location. Noncontiguous
locations would generally be treated as separate worksites,
except that each worksite within a reasonably proximate area
would be required to satisfy the 85% test for the workers at
that worksite.
While the determination of whether noncontiguous locations
are reasonably proximate is a facts and circumstances
determination, certain situations will be deemed not to be
reasonably proximate. If the worksite is separated from all
other client worksites by at least 35 miles, it will not be
considered reasonably proximate. Thus, a client (or any
member of its controlled group) that maintains two worksites
that are more than 35 miles apart could treat the worksites
as separate for purposes of applying the 85% standard. Within
a 35-mile radius, a worksite will not be considered
reasonably proximate to another if the worksite operates in a
different industry or industries from other worksites within
the 35-mile radius pursuant to standards similar to those
established in Revenue Procedure 91-64 (relating to industry
classification codes). For example, a client that maintained
a restaurant and a hardware store in the same town could
treat them as separate worksites because they are in
different industries. In addition, based on all the facts
and circumstances, under rules prescribed by the IRS, a
worksite would not be reasonably proximate if it operates
independently for a bona fide business reason (that is
unrelated to employment taxes and employee benefits). For
example, a convenience store and a restaurant which have
no supervisory personnel in common but which are under
common ownership control could, under rules prescribed by
the IRS, be treated as different worksites. Similarly, two
noncontiguous wholesale and retail operations owned by the
same individual but which are operated independently
(including independent supervisory personnel) may, under
rules prescribed by the IRS, be determined to be not
reasonably proximate.
The 85% rule generally is intended to describe the typical,
non-abusive PEO arrangement whereby a business contracts with
a PEO to take over substantially all its workers at a
particular worksite. The 85% rule is intended to ensure that
the benefits of the bill are not available in any situation
in which a business uses a PEO arrangement to artificially
divide its workforce.
cpeo employee benefit plans
To the extent consistent with the Internal Revenue Code and
corresponding provisions of other federal laws, the CPEO may
generally provide worksite employees with most types of
retirement plans or other employee benefit plans that the
client could provide. Worksite employees may not, however, be
offered a plan that the client would be prohibited from
offering on its own. For example, if the client is a state or
local government, worksite employees performing services for
that client may not be offered participation in a section
401(k) plan. Similarly, a CPEO may not maintain a plan that
it would be prohibited from offering on its own (e.g., a
section 403(b) plan). However, an eligible client could
maintain such a plan.
Size Limitations.--In general, employee benefit provisions
(in the Internal Revenue Code and in directly correlative
provisions in other Federal laws) that reference the size of
the employer or number of employees will generally be applied
based on the size or number of employees and worksite
employees of the CPEO. For example, worksite employees will
be entitled to COBRA health care continuation coverage even
if the client would have qualified for the small employer
exception to those rules. Similarly, a CPEO welfare benefit
plan will be treated as a single employer plan for purposes
of Internal Revenue Code section 419A(f)(6). Plan reporting
requirements are met at the CPEO level. However, a client
which could meet the size requirements for eligibility for an
MSA or a SIMPLE plan could contribute to such an arrangement
maintained by the CPEO.
Nondiscriminaiton Testing.--The legislation intends that
clients of a CPEO will not generally receive significantly
better or worse treatment with respect to coverage,
nondiscrimination or other Internal Revenue Code rules than
they would get outside of the CPEO arrangement. Consequently,
nondiscrimination and other rules of the Code relating to
retirement plans (including sections 401(a)(4), 401(a)(17),
401(a)(26), 401(k), 401(m), 410(b) and 416 and similar rules
applicable to welfare and fringe benefit plans such as
section 125) will generally be applied on a client-by-client
basis.
The portion of the CPEO plan covering worksite employees
with respect to a client will be tested taking into account
the worksite employees at a client location and all other
nonexcludable employees of the client taking into account
414(b), (c), (m), (n) (with respect to workers not otherwise
included as worksite employees) and (o), but one client's
worksite employees would not be included in applying the
coverage or other nondiscrimination rules (1) to portions of
the CPEO plan covering worksite employees of other clients,
(2) to the portion of the CPEO plan covering nonworksite
employees, (3) to other plans maintained by the CPEO (except
to the extent such plan covers worksite employees of the same
client), or (4) to other plans maintained by members of the
CPEO's controlled group.
The legislation also treats any worksite employees as ``per
se'' leased employees of the client, thus requiring clients
to include all worksite employees in plan testing. In
accordance with current leased employee rules, the client
would take into account CPEO plan contributions or benefits
made on behalf of worksite employees of that client.
Consistent with this treatment of worksite employees, the
client would be permitted to cover worksite employees under
any employee benefit plan maintained by the client and
compensation paid by the CPEO to worksite employees would be
treated as paid by the client for purposes of applying
applicable qualification tests.
For example, assume a CPEO maintained a plan covering
worksite employees performing services for Corporation X,
worksite employees performing services for Corporation Y, and
employees of the CPEO who are not worksite employees. In that
case the nondiscrimination tests would be applied separately
to the portions of the plan covering (1) worksite employees
performing services for Corporation X; (2) worksite employees
performing services for corporation Y, and (3) CPEO employees
who are not worksite employees, as if each of (1), (2), and
(3) were a separate plan. In addition, worksite employees
performing services for Corporation X, for example, would be
per se leased employees of Corporation X and thus would be
included in testing any other plans maintained by Corporation
X or any members of Corporation X's controlled group.
Similarly, the CPEO workforce (other than worksite employees)
will be treated as a separate employer for testing purposes
(and will
[[Page S7895]]
be included in applying the nondiscrimination rules to any
plans maintained by the CPEO or members of its controlled
group).
In applying nondiscrimination rules to plans maintained by
other entities within the CPEO's controlled group for workers
who are not worksite employees, worksite employees will not
be taken into account. Thus, in the example above, worksite
employees performing services for Corporation X or
Corporation Y would not be taken into account in testing
plans maintained by other members of the CPEO's controlled
group.
For purposes of testing a particular client's portion of
the plan under the rules above, general rules applicable to
that client would apply as if the client maintained that
portion of the plan. Thus, if the terms of the benefits
available to the client's worksite employees satisfied the
requirements of the section 401(k) testing safe harbor, then
that client could take advantage of the safe harbor.
Similarly, a client that meets the eligibility criteria for a
SIMPLE 401(k) plan would be allowed to utilize the SIMPLE
rules to demonstrate compliance with the applicable
nondiscrimination rules for that client.
Application of certain other qualified plan and welfare
benefit plan rules will generally be determined as if the
client and the CPOE are a single employer (consistent with
the principle that the CPEO arrangement will not result in
better or worse treatment). Thus, there would be a single
annual limit under section 415. Section 415 will provide that
any cutbacks required as a result of the single annual limit
will be made in the client plan. Deduction limits and funding
requirements would apply at the CPEO level. In addition, if
the client portion of a plan is part of a top heavy group,
any required top heavy minimum contribution or benefit will
generally need to be made by the CPEO plan. There will be
complete ``crediting'' of service for all benefit purposes.
The ``break in service'' rules for plan vesting will be
applied with respect to worksite employees using rules
generally based on Code section 413.
The bill also provides the Secretary with the authority to
promulgate rules and regulations that streamline, to the
extent possible, the application of certain requirements, the
exchange of information between the client and the CPEO, and
the reporting and record keeping obligations of the CPEO with
respect to its employee benefit plans.
Worksite employees will not generally be entitled to
receive plan distributions of elective deferrals until the
worker leaves the CPEO group. In cases where a client
relationship terminates with a CPEO that maintains a plan,
the CPEO will be able to ``spin off'' the former client's
portion of the plan to a new or existing plan maintained by
the client. Where the terminated client does not establish a
plan or wish to maintain the client's portion of the CPEO
plan, the CPEO plan may distribute elective deferrals of
worksite employees associated with a terminated client only
in a direct rollover to an IRA designated by the worker. In
the event that no such IRA is designated before the second
anniversary of the termination of the CPEO/client
relationship the assets attributable to a client's worksite
employees may be distributed under the general plan terms
(and law) that applies to a distribution upon a separation
from service or severance from employment after that time.
Similar to IRS practice in multiple employer plans,
disqualification of the entire plan will occur if a
nondiscrimination failure occurs with respect to worksite
employees of a client and either that failure is not
corrected under one of the IRS correction programs or that
portion of the plan is not spun off and/or terminated. If
that portion of the plan is corrected or spun off and/or
terminated, then the failure of a CPEO retirement plan to
satisfy applicable nondiscrimination requirements with
respect to that client will not result in the
disqualification of the plan as applied to other clients.
Existing government programs for correcting violations would
be available to the CPEO for the plan and, in the case of
nondiscrimination failures tested at the client level, to the
client portion of the plan with the fee to be based on the
size of the affected client's portion of the plan. Moreover,
the CPEO plan will be treated as one plan for purposes of
obtaining a determination letter.
employment tax liability
An entity that has been certified as a CPEO must accept
responsibility for employment taxes with respect to wages it
pays to worksite employees performing services for clients.
Such liability will be exclusive or primary, as provided
below. It is expected that the CPEO would (as provided by the
Secretary) be required, on an ongoing basis, to provide the
IRS with a list of clients for which employment tax liability
has been assumed and a list of clients for whom it no longer
has employment tax liability. Reporting and other
requirements that apply to an employer with respect to
employment taxes would generally apply to the CPEO for
remuneration remitted by the CPEO (as provided by the
Secretary). In addition, the remittance frequency of
employment taxes will be determined with reference to
collections and the liability of the CPEO.
Wages paid by the client during the calendar year prior to
the assumption of employment tax liability would be counted
towards the applicable FICA or FUTA tax wage base for the
year in determining the employment tax liability of the CPEO
(and vice versa). Exceptions to payments as wages or
activities as employment, and thus to the required payment of
employment taxes, are determined by reference to the client.
Also, for purposes of crediting state unemployment insurance
(SUI) taxes against FUTA tax liability, payments by the CPEO
(or transmitted by the CPEO for the client) with respect to
worksite employees would be taken into account. Thus, in
determining FUTA liability, CPEO's would be treated as the
employer for crediting SUI collection purposes on essentially
the same terms as they would be authorized to process wage
withholding, FICA and FUTA. The bill is, however, limited to
Federal law and does not address the issue of whether a CPEO
(i) would be eligible for successor status for SUI tax
collection or (ii) how the state experience rating formula
would be applied to the CPEO. Determinations with respect to
these issues will be made pursuant to state law.
A CPEO will have exclusive liability for employment taxes
with respect to wage payments made by the CPEO to worksite
employees (including owners of the client who are worksite
employees) if the CPEO meets the net worth requirement and,
at least quarterly, an examination level attestation by an
independent Certified Public Accountant attesting to the
adequate and timely payment of federal employment taxes has
been filed with the IRS.
The net worth requirement is satisfied if the CPEO's net
worth (less goodwill and other intangibles) is, on the last
day of the fiscal quarter preceding the date on which payment
is due and on the last day of the fiscal quarter in which the
payment is due, at least:
$50,000 if the number of worksite employees is fewer than
500;
$100,000 if the number of worksite employees is 500 to
1,499;
$150,000 if the number of worksite employees is 1,500 to
2,499;
$200,000 if the number of worksite employees is 2,500 to
3,999; and
$250,000 if the number of worksite employees is more than
3,999;
In the alternative, the net worth requirement could be
satisfied through a bond (for employment taxes up to the
applicable net worth amount) similar to an appeal bond filed
with the Tax Court by a taxpayer or by an insurance bond
satisfying similar rules.
Within 60 days after the end of each fiscal quarter, the
CPEO will provide the IRS with an examination level
attestation from an independent certified public accountant
that states that the accountant has found no material reason
to question the CPEO's assertions with respect to the
adequacy of federal employment tax payments for the fiscal
quarter. In the event that such attestation is not provided
on a timely basis, the CPEO will cease to have exclusive
liability with respect to employment taxes (regardless of the
net worth or bonding requirement) effective the due date for
the attestation. Exclusive liability will not be restored
until the first day of the quarter following two successive
quarters for which an examination level attestations were
timely filed. In addition, the Secretary will have the
authority, under final regulations, to provide limits on a
CPEO's exclusive liability for employment taxes with respect
to a particular customer in cases where there is an undue and
large risk with respect to the ultimate collection of those
taxes.
For any tax period for which any of these criteria for
exclusive liability for employment taxes are not satisfied,
or to the extent the client has not made adequate payments to
the CPEO for the payment of wages, taxes, and benefits, the
CPEO will have primary liability and the client will have
secondary liability for employment taxes. In that instance,
the IRS will assess and attempt to collect unpaid employment
taxes against the CPEO first and may not generally take any
action against a client with respect to liability for
employment taxes until at least 45 days following the date
the IRS mails a notice and demand to the CPEO. For this
purpose, the statute of limitations for assessment or
collection against the client will not expire until one year
after the date that is 45 days after mailing of notice and
demand to the CPEO (in the same manner as transferee
liability under section 6901(c)). With respect to employment
taxes attributable to periods during which a CPEO has
liability, the client will be liable to the IRS for taxes,
penalties (applicable to client actions or to the time
periods after assessment of the client for the taxes), and
interest (with such liability to be reduced by amounts paid
to the IRS by the CPEO that are allocable, under rules to be
determined by the IRS, to the client).
effective date
These provisions will be effective on January 1, 2002. The
IRS will be directed to establish the PEO certification
program at least three months prior to the effective date.
The bill directs the IRS to accommodate transfers of assets
in existing plans maintained by a CPEO or CPEO clients into a
new plan (or amended plan) meeting the requirements of the
legislation (e.g., client-by-client nondiscrimination
testing) without regard to whether or not such plans might
fail the exclusive benefit rule because worksite employees
might be considered common law employees of the client.
Mr. THOMAS. Mr. President, I rise today to join my colleagues in
introducing the ``Rural Health Care in the 21st Century Act.'' I am
pleased to have worked with my colleagues in crafting this bill that
will address the
[[Page S7896]]
needs of rural providers and beneficiaries as we begin the new century.
This legislation establishes a grant and loan program to assist rural
providers in acquiring the necessary technologies to improve patient
safety and meet the continually changing records management
requirements. Rural hospitals and other providers do not have the
capital needed to purchase these expensive technologies nor the
resources to train their staff. This new program will enable these
providers to purchase such crucial equipment as patient tracking
systems, bar code systems to avoid drug errors and software equipped
with artificial intelligence.
Another reason this legislation is so important is because it will
bring equity to the Medicare Disproportionate Share Hospital (DSH)
program, which has been inherently biased against rural providers since
it was implemented in 1986. The premise of this program is to give
hospitals that provide a substantial amount of care to low-income
patients additional funding to assist with the higher costs associated
with caring for this population.
Mr. President, the current DSH program does almost nothing for rural
hospitals because different eligibility requirements have been
established for rural and urban providers. To qualify for the increased
payments the DSH program provides, urban hospitals are required to
demonstrate that 15 percent of their patient load consists of Medicaid
patients and Medicare patients eligible for Supplemental Security
Income. However, rural hospitals must meet a higher threshold of 45
percent. Mr. President, there is no justification for this inequity.
Our bill will level the playing field by applying the same eligibility
threshold currently enjoyed by urban hospitals to all rural hospitals
as well. According to the Medicare Payment Advisory Commission this
reform will open the door for 55 percent of all rural hospitals to
benefit from the DSH program--a significant increase over the 15.6
percent of rural hospitals currently participating.
The ``Rural Health Care in the 21st Century Act'' also addresses
other inequities faced by rural providers because federal regulators do
not adequately reflect the unique circumstances of delivering health
care in rural America. This bill provides rural home health agencies
with a 10 percent bonus payment as they have average per episode costs
that are 20 percent higher than urban agencies.
Rural Health Clinics and Critical Access Hospitals are a key
component of maintaining access to primary and emergency services in
rural communities. This legislation makes modifications to the Balanced
Budget Act to ensure these providers will continue to be an integral
part of the rural health care delivery system.
Mr. President, I believe this bill is an important step in ensuring
rural providers are treated equally under federal programs. This
equalization must be accomplished so we can guarantee that rural
Medicare beneficiaries have the same choices and access to services as
their urban counterparts.
______
By Mr. BROWNBACK (for himself, Mr. Daschle, Mr. DeWine, Mr.
Kerrey, Mr. Grassley, Mr. Byrd, and Mr. Lugar):
S. 2982. A bill to enhance international conservation, to promote the
role of carbon sequestration as a means of slowing the building of
greenhouse gases in the atmosphere, and to reward and encourage
voluntary, pro-active environmental efforts on the issue of global
climate change; to the Committee on Finance.
International Carbon Sequestration Incentive Act
Mr. BROWNBACK. Mr. President, I rise today to introduce the
International Carbon Sequestration Incentive Act. I am joined by
Senators Daschle, DeWine, Bob Kerrey, Grassley and Byrd.
Environmental issues have traditionally been filled with
controversy--pitting beneficial environmental measures against hard-
working small business and state interests. It is unfortunate that the
atmosphere surrounding environmental debate is filled with accusations
of blame rather than basic problem-solving.
From listening to the public discourse concerning environmental
issues, one would thing there is no other choice but to handicap our
booming economy in order to have a clean environment, despite the fact
that pollution is often, unfortunately, an unavoidable consequence of
meeting public needs.
Mr. President, I stand here today to illustrate that there is a
better way to deal with important environmental concerns. There is a
way to encourage the best rather than expecting the worst. There is a
way to create environmental incentives and environmental markets,
rather than only environmental regulations. There is a way to chip away
at environmental challenges, rather than demagoging an ``all or
nothing'' stance.
This bill--the International Carbon Sequestration Incentive Act,
takes a pro-active, incentive-driven approach to one of the most
difficult environmental issues of our time--global climate change.
Specifically, this bill provides investment tax credits for groups
who invest in international carbon sequestration projects--including
investments which prevent rainforest destruction and projects which
reforest abandoned native forest areas. These projects will reduce the
amount of carbon dioxide emitted into the air--helping to offset
climate change since carbon dioxide is one of the main greenhouse
gases.
This bill achieves these environmental benefits by promoting carbon
sequestration--the process of converting carbon dioxide in the
atmosphere into carbon which is stored in plants, trees and soils.
Under this bill, eligible projects can receive funding at a rate of
$2.50 per verified ton of carbon stored or sequestered--up to 50% of
the total project cost. The minimum length of these projects is 30
years and the Implementing Panel can only approve $200 million in tax
credits each year.
Why do this? Carbon dioxide is a greenhouse gas believed to
contribute to global warming. While there is debate over the role in
which human activity plays in speeding up the warming process, there is
broad consensus that there are increased carbon levels in the
atmosphere today.
Until now, the only real approach seriously considered to address
climate change was an international treaty which calls for emission
limits on carbon dioxide--which would mean limiting the amount that
comes from your car, your business and your farm. This treaty--the
Kyoto treaty, also favored exempting developing nations from emission
limits--putting the U.S. economy at a distinct disadvantage.
Approaching the issue of climate change in this fashion would be very
costly and would not respond to the global nature of this problem.
Instead, my approach encourages offsetting greenhouse gases through
improved land management and conservation--and by engaging developing
nations rather than cutting them out of the process.
In addition to reducing greenhouse gas emissions, sponsored projects
under this bill will also help to preserve the irreplaceable
biodiversity that flourishes in the Earth's tropical rain forests and
other sensitive eco-systems. In addition to diverse plant life, these
projects will be protecting countless endangered and rare species.
This bill requires investors to work closely with foreign
governments, non-governmental organizations and indigenous peoples to
find the capital necessary to set aside some of the last great
resources of the planet. Rain forests have been called the lungs of the
Earth--helping to filter out pollution and provide sanctuary for
numerous pharmaceutical finds which may one day cure many of our human
diseases.
This bill rewards the partnership and pro-active vision of companies
that want to be part of the solution to climate change. We are lucky in
the fact that private industry is already looking at this issue and
working to find a way to contribute. An example of what this bill would
promote can be seen by looking at the Noel Kempff Mercado National Park
in Bolivia.
As you can see by looking at these photos [DISPLAY FOREST SCENES],
Noel Kempff is a beautiful, biodiverse part of the world. This park
spans nearly 4 million acres in Bolivia, hosts several hundred species
of rare and endangered wildlife--including 130 species of mammals, 620
species of birds and 70 species of reptiles--not to mention 110
different species of orchids and grasses.
[[Page S7897]]
This park was in direct danger of deforestation. The land would have
been cleared and eventually turned into large commercial farming
operations. The loss of this park would have led to carbon dioxide
emissions of between 25-36 million tons as well as increased commercial
agricultural competition.
Instead, the Bolivian government came together with The Nature
Conservancy, American Electric Power and other investors to preserve
the park and conduct extensive verification of the carbon being stored
in trees and soils of the now protected area.
Companies like American Electric Power, BP Amoco and PacifiCorp want
to invest in projects like Noel Kempff because they want to promote the
role of carbon sequestration as a means to combat climate change. These
companies have taken a big step in contributing to the solution--think
how much more good they, and other companies, could do if there were
incentives to encourage this activity.
In the U.S., we are lucky enough to have programs like the
Conservation Reserve Program and federal parks--which help preserve
some of the natural resources of this great nation. Unfortunately,
developing countries do not have access to the kind of capital it takes
to make similar investments in their own countries. It is therefore, a
worthy investment in the world environment--since climate change is a
global problem, to chip away at this problem by doing what we know
helps reduce pollution and greenhouse gases: planting and preserving
trees.
This bill is designed to encourage more participation in projects
like the Noel Kempff Park. By using limited and very targeted tax
credits, we have an opportunity as a nation--to take a leadership role
on climate change without crushing our own economy. This bill also
furthers the goal of including developing countries in the climate
change issue--since any agreement to reduce greenhouse gases must
ultimately include these areas which will become the largest emitters.
Mr. President, I do not pretend that this bill will resolve the
climate change issue. That is not my intent. Rather, this bill takes
the view that where we do agree that good can be achieved--we should
move forward. It is my hope that this bill will contribute to the
solution on climate change and help to re-shape the way we view
environmental problems.
______
By Mr. AKAKA (for himself and Mr. Inouye):
S. 2983. A bill to provide for the return of land to the Government
of Guam, and for other purposes; to the Committee on Energy and Natural
Resources.
the guam omnibus opportunities act
Mr. AKAKA. Mr. President, I rise to introduce the Guam Omnibus
Opportunities Act, which seeks to address important issues to the
people of Guam dealing with land, economic development and social
issues. On July 25, the House passed similar legislation, H.R. 2462,
which was introduced by Congressman Robert Underwood, the Delegate from
Guam. During the 105th Congress, the Senate passed similar provisions
of H.R. 2462 as part of S. 210, an omnibus territories bill.
There are several provisions of the Guam Omnibus Opportunities Act.
First, Section 2 of the bill provides a process for the Government of
Guam to receive lands from the U.S. government for specified public
purposes by giving Guam the right of first refusal for declared federal
excess lands by the General Services Administration prior to it being
made available to any other federal agency. It also provides for a
process for the Government of Guam and the U.S. Fish and Wildlife
Service to engage in negotiations on the future ownership and
management of declared federal excess lands within the Guam National
Wildlife Refuge.
Section 3 provides the Government of Guam with the authority to tax
foreign investors at the same rates as states under U.S. tax treaties
with foreign countries since Guam cannot change the withholding tax
rate on its own under current law. Under the U.S. Internal Revenue
Code, there is a 30 percent withholding tax rate for foreign investors
in the United States. Since Guam's tax law ``mirrors'' the rate
established under the U.S. Code, the standard rate of foreign investors
in Guam is 30 percent. It is a common feature in U.S. tax treaties for
countries to negotiate lower withholding rates on investment returns.
Unfortunately, while there are different definitions for the term
``United States'' under these treaties, Guam is not included. This
omission has adversely impacted Guam since 75 percent of Guam's
commercial development is funded by foreign investors. As an example,
with Japan, the U.S. rate for foreign investors is 10 percent. This
means that while Japanese investors are taxed at a 10 percent
withholding tax rate on their investments in the fifty states, those
same investors are taxed at a 30 percent withholding rate on Guam.
While the long-term solution is for U.S. negotiators to include Guam
in the definition of the term ``United States'' for all future tax
treaties, the immediate solution is to amend the Organic Act of Guam
and authorize the Government of Guam to tax foreign investors at the
same rates as the fifty states. It is my understanding that all other
U.S. territories have remedied this problem in one way or another.
Therefore, Guam is the only U.S. jurisdiction in the country that is
not extended tax equity for foreign investors.
With an unemployment rate of 15 percent, Guam continues to struggle
economically due to the Asian financial crisis. That is why I believe
it is vitally important for the federal government to assist Guam in
stimulating its economy through sound federal policies and technical
assistance. This section would greatly assist the Government of Guam in
promoting economic development on the island and would provide long
needed tax equity.
Section 4 considers Guam within the U.S. Customs zone in the
treatment of betel nuts, which are part of Chamorro tradition and
culture. While betel nuts are grown in the United States, the Food and
Drug Administration (FDA) has an important alert for betel nuts from
foreign countries in place due to the influx of betel nuts from Asian
countries for commercial consumption and the FDA's contention that the
betel nut is ``adulterated.'' This means an automatic detention of
betel nuts by U.S. Customs agents when entering the United States.
Although Guam is a U.S. territory, Guam is considered to be outside the
U.S. Customs zone. Betel nuts grown in Guam, therefore, are subject to
the FDA ban in the same manner as foreign countries. This section
narrowly applies to Guam, limits use to personal consumption, and
ensure that the FDA ban against foreign countries remains in place.
Section 5 empowers the governors of the territories and the State of
Hawaii to report to the Secretary of the Interior on the financial and
social impacts of the Compacts of Free Association on their respective
jurisdictions and requires that the Secretary forward Administration
comments and recommendations on the report to Congress. This is an
important issue to the State of Hawaii as the numbers of migrants to
Hawaii from the Republic of the Marshall Islands, the Federated States
of Micronesia, and the Republic of Palau continue to grow. The State of
Hawaii has spent well over $14 million in public funds in the past year
alone, with most of the funds being spent on our educational and health
care systems.
Under the compact agreements, the Federal government made clear that
it would compensate jurisdictions affected, yet the State of Hawaii has
not received federal funding since the implementation of these
agreements. This section seeks to improve the reporting requirements
for Compact Impact Aid to address this situation.
Section 6 establishes a five-member Guam War Claims Review Commission
to be appointed by the Secretary of the Interior. The goal of the
Commission is to review the facts and circumstances surrounding U.S.
restitution to Guamanians who suffered compensable injury during the
occupation of Guam by Japan during World War II. Compensable injury
includes death, personal injury, or forced labor, forced march, or
internment. The Commission would review the relevant historical facts
and determine the eligible claimants, the eligibility requirements, and
the total amount necessary for compensation, and report its findings
and recommendations for action to Congress nine months after the
Commission is established.
The 1951 Treaty of Peace between the U.S. and Japan effectively
barred
[[Page S7898]]
claims by U.S. citizens against Japan. As a consequence, the U.S.
inherited these claims, which was acknowledged by Secretary of State
John Foster Dulles when the issue was raised during consideration of
the treaty before the Committee on Foreign Relations in 1952.
Considerable historical information indicates that the United States
intended to remedy the issue of war restitution for the people of Guam.
In 1945, the Guam Meritorious Claims Act was enacted which authorized
the Navy to adjudicate and settle war claims in Guam for property
damage for a period of one year. Claims in access of $5,000 for
personal injury or death were to be forwarded to Congress.
Unfortunately, the Act never fulfilled its intended purposes due to the
limited time frame for claims and the preoccupation of the local
population with recovery from the war, resettlement of their homes, and
rebuilding their lives.
On March 25, 1947, the Hopkins Commission, a civilian commission
appointed by the Navy Secretary, issued a report which revealed the
flaws of the 1945 Guam Meritorious Claims Act and recommended that the
Act be amended to provide on the spot settlement and payment of all
claims, both property and for the death and personal injury.
Despite the recommendations of the Hopkins Commission, the U.S.
government failed to remedy the flaws of the Guam Meritorious Act when
it enacted the War Claims Act of 1948, legislation which provided
compensations for U.S. citizens who were victims of the Japanese war
effort during World War II. Guamanians were U.S. nationals at the time
of the enactment of the War Claims Act, thereby making them ineligible
for compensation. In 1950, with the enactment of the Organic Act of
Guam, Guamanians became U.S. citizens.
In 1962, Congress again attempted to address the remaining
circumstances of U.S. citizens and nationals that had not received
reparations from previous enacted laws. Once again, however, the
Guamanians were inadvertently made ineligible because policymakers
assumed that the War Claims Act of 1948 included them. Section 6 brings
closure to this longstanding issue.
In summary, Mr. President, the Guam Omnibus Opportunities Act will go
a long way toward resolving issues that the Federal Government has been
working on with the Government of Guam on land, economic development
and social issues. I look forward to working with my colleagues in the
Senate to resolve these issues to assist Guam in achieving greater
economic self-sufficiency.
______
By Mr. CONRAD:
S. 2984. A bill to amend the Internal Revenue Code of 1986 and to
provide a refundable caregivers tax credit; to the Committee on
Finance.
long-term caregivers assistance act of 2000
Mr. CONRAD. Mr. President, today I am introducing the Long-Term
Caregivers Assistance Act of 2000, a proposal that would provide much
needed assistance to individuals with long-term care needs and their
caregivers.
Nationwide, more than 8 million individuals require some level of
assistance with activities of daily living. Over the next 30 years,
this number is expected to increase significantly as our nation
experiences an unprecedented growth in its elderly population.
We know that for many people leaving their homes to obtain care is
not their first choice--the cost of nursing home care can be
prohibitive, and such care often takes individuals away from their
communities. While federal support for long-term care is primarily
spent on nursing home services, many people receive assistance with
their long-term care needs in the home from their families, often
without the help of public assistance or private insurance.
Nationwide, nearly 37 million individuals provide unpaid care to
family members of all ages with functional or cognitive impairments. In
my state, there are about 61,000 individuals providing informal
caregiving services.
Unfortunately, the need for long-term care can cause substantial
financial burdens on many individuals and their families. According to
a recent study, almost two-thirds of those serving as caregivers suffer
financial setbacks--setbacks that can total thousands of dollars in
lost wages and other benefits over a caregiver's lifetime. This is a
burden that caregivers and their families should not have to bear
alone.
For this reason, I am introducing this proposal to provide a $2,000
tax credit that could be used by individuals with substantial care
needs or by their caregivers.
Taxpayers who have long-term care needs, or who care for others with
such needs, may not have the same ability to pay taxes as other
taxpayers--a reasonable and legitimate concern in a tax system based on
the principle of ability-to-pay. Providing a tax credit is an equitable
and efficient way of helping caregivers and individuals with long-term
care needs meet their formal and informal costs.
I recognize that this tax credit is only a piece of the long-term
care puzzle--but I believe it is an important piece. This credit could
be used to help pay for prescription drugs or other out-of-pocket
expenses. It could be used to pay for some formal home care services.
It could also be used to help family members offset some of the
expenses they incur in caregiving.
We must act now to address the long-term care needs of our nation. I
urge my colleagues to support this important legislation.
______
By Mr. DURBIN (for himself and Mr. Kennedy):
S. 2985. A bill to amend the Agricultural Trade Act of 1978 to
authorize the Commodity Credit Corporation to reallocate certain
unobligated funds from the export enhancement program to other
agricultural trade development and assistance programs; to the
Committee on Finance.
providing school lunches to hungry children--the agricultural
flexibility in export development and assistance act of 2000
Mr. DURBIN. Mr. President, if you had happened to be in the Senate
Dining Room a few months ago, you might have seen a group of people
having lunch and wondered what in the world would gather Ambassador
George McGovern, Senators Bob Dole and Ted Kennedy, Agriculture
Secretary Dan Glickman, Congressmen Jim McGovern and Tony Hall and
myself all at one table.
The answer to your question is that we were working together on a
bipartisan initiative that could have a positive impact on children
around the world and be of great benefit to America's farmers.
Former Senator and now Ambassador McGovern has advocated an idea to
emulate one of the most beneficial programs ever launched on behalf of
children in this country--the school lunch program.
He has worked with Senator Dole and others to establish an
international school lunch program and President Clinton has jump-
started this proposal with his announcement that the United States will
provide $300 million in surplus commodities for the initiative.
Today, I am introducing legislation to provide a long-term funding
source for international school feeding programs that will allow such
programs to expand and reach more kids.
Today there are more than 300 million children throughout the world--
more kids than the entire population of the United States--who go
through the day and then to bed at night hungry. Some 130 million of
these kids don't go to school right now, mainly because their parents
need them to stay at home or work to pitch in any way that they can.
In January of this year, I traveled to sub-Saharan Africa, the
epicenter of the AIDS crisis, with more than two-thirds of AIDS cases
worldwide. There I saw first-hand the horrible impact AIDS is having on
that continent. I met a woman in Uganda named Mary Nalongo Nassozzi,
who is a 63-year-old widow.
All of her children died from AIDS and she has created an
``orphanage'' with 16 of her grandchildren now living in her home.
People like Mary need our help to keep these kids in school.
Linking education and nutrition is not a new idea. Private voluntary
organizations like CARE, Catholic Relief Services, ADRA, World Vision,
Save the Children and Food for the Hungry are already helping kids with
education, mother/child nutrition programs and school feeding programs.
[[Page S7899]]
These organizations and the World Food Program operate programs in more
than 90 countries at this time, but typically can only target the
poorest children in the poorest districts of the country.
Ambassador McGovern, Senator Dole, myself and others have called for
an expanded effort, and as I noted earlier, President Clinton has
responded. I applaud the President for the program he announced last
Sunday in Okinawa. This $300 million initiative is expected to help
serve a solid, nutritious meal to nine million children every day they
go to school.
Think about it: for only 10 cents a day for each meal, we can feed a
hungry child and help that child learn. With what you or I pay for a
Big Mac, fries and a soft drink, we could afford to feed two classrooms
of kids in Ghana or Nepal.
The Benefits of School Feeding Programs
While we need to consider the costs of an international school
feeding program, I think we should also look at the benefits.
Malnourished children find it difficult to concentrate and make poor
students. But these school feeding programs not only help
concentration, they have many benefits, including increased attendance
rates and more years of school attendance, improved girls' enrollment
rates, improved academic performance, lower malnutrition rates, greater
attention spans and later ages for marriage and childbirth.
These benefits ripple in many directions: higher education levels for
girls and later marriage for women help slow population growth; greater
education levels overall help spur economic development; and giving
needy children a meal at school could also help blunt the terrible
impact AIDS is having throughout Africa, where there are more than 10
million AIDS orphans who no longer have parents to feed and care for
them.
domestic benefits
Some will question our involvement in overseas feeding programs, so
let me describe what we're doing at home and how we benefit from these
efforts.
This year, we're spending more than $20 billion in our food stamp
program. More than half of this amount goes to kids. We're also
spending over $9 billion for school child nutrition programs, and more
than $4 billion for the WIC program. While this sounds like a lot, we
need to do more. Many people who are eligible for these programs are
not aware of it and the Department of Agriculture must do a better job
getting the word out. Still, these figures put the costs of an
international school feeding effort in perspective: they will be a
small fraction of what we're spending here at home.
Through our international efforts, we share some of what we have
learned with less fortunate countries. But we also benefit.
An international school lunch program will provide a much-needed
boost to our beleaguered farm economy, where surpluses and low prices
have been hurting farmers for the third year in a row. Congress has
provided more than $20 billion in emergency aid to farmers over the
last three years. Buying farm products for this proposal would boost
prices in the marketplace, helping U.S. farmers and needy kids in the
process. It is a common-sense proposal for helping our farmers, and the
right thing to do.
Second, the education of children leads to economic development,
which in turn increases demand for U.S. products in the future. Some of
the largest food aid recipients in the 1950s are now our largest
commercial customers.
Finally, let's consider the positive foreign policy implications of
this measure. It helps fulfill the commitments we made in Rome in 1996
to work to improve world food security and helps satisfy the commitment
to net food importing developing countries we made in Marrakesh in 1995
at the conclusion of the Uruguay Round. It also supports the goals of
``Education for All'' made in April in Dakar to achieve universal
access to primary education.
It goes beyond demonstrating our commitment to summit texts and
documents and has a real impact on our national security. When people
are getting enough to eat, internal instability is less likely. Most of
the conflicts taking place right now around the world are related at
least in part to food insecurity.
we can't and shouldn't do this alone
The United States shouldn't go it alone. This needs to be an
international effort. If the full costs for this program are shared
fairly among developed countries, as we do now for United Nations
peacekeeping efforts or humanitarian food aid relief efforts, then our
resource commitments will be multiplied many times over. I encourage
the Administration to continue its efforts to gain multilateral support
for this initiative.
We should also seek the involvement and commitment of America's
corporations and philanthropic organizations. Companies can contribute
books and school supplies, computer equipment, kitchen equipment,
construction supplies and management expertise.
proposed legislation
The food aid laws we already have in place allow USDA and USAID to
start up these kinds of programs, but resources are limited.
The President's initiative is a concrete first step in the effort to
assure that every kid is going to school, and that every kid going to
school has a meal.
However--and this is not to detract in any way from the important
action he has taken--the President's initiative relies on surplus
commodities. That is a sensible approach at this time. But we may not
always have an overabundance. We all hope for and are working for an
end to the farm crisis, which means the quantity of surplus commodities
will decline. We need to look at how we will continue to pay for this
program in the future as it helps more children and as surplus
commodities dwindle.
The legislation I am introducing today, the Agricultural Flexibility
in Export Development and Assistance Act of 2000, addresses the longer-
term funding issue.
My legislation authorizes the Secretary of Agriculture to reallocate
unspent Export Enhancement Program (EEP) money to school feeding and
other food aid programs. When EEP was first authorized, one of its main
purposes was to increase demand for U.S. agricultural commodities--to
put money in the wallets of farmers by promoting overseas demand for
our products. Because U.S. commodity prices have come down, it hasn't
been used to any major extent since 1995. We are sitting on a pot of
money, authorized but not being spent, while the EU spends over $5
billion annually on similar programs. My legislation would free up the
Secretary of Agriculture to devote those funds to school feeding and
other food aid programs.
Because I recognize some would like to see a portion of the surplus
EEP funds to be spent on export development programs, my bill also
permits a portion of the funds to be spent on export promotion.
To maintain flexibility while ensuring our food aid goals are
addressed, the measure would require that a minimum of 75 percent of
reallocated EEP funding be spent for either PL480 (Title I or Title II)
or Food for Progress food aid, with at least half of this amount
devoted to school feeding or child nutrition programs. It would allow
up to 20 percent of the reallocated funds to be spent on the Market
Access Program to promote agricultural exports, and a maximum of five
percent to be spent on the Foreign Market Development (Cooperator)
program.
To ensure new artificial restraints don't block our intention in this
legislation, the measure also raises the caps currently in place
regarding the quantity of food aid permitted under Food for Progress
and the amount that may be used to pay for the administrative expenses
associated with the program.
Both the Coalition for Food Aid and Friends of the World Food Program
support this measure. Major commodity groups such as the American
Soybean Association and the National Corn Growers Association also
support it.
Mr. President, I urge my colleagues to join me as cosponsors of this
legislation and in support of the broader effort to respond to the
nutrition needs of 300 million children, 130 million of whom are not
but could and should be in school. With our help, these statistics can
change.
Mr. HUTCHINSON. Mr. President, I rise today to introduce the Just
Opportunities in Bidding (JOB) Act which is
[[Page S7900]]
necessary to ensure that companies who seek to do business with our
government are treated fairly. The JOB Act would prohibit the
implementation of proposed regulations which would dramatically amend
the Federal Acquisition Regulation.
I have many concerns about these proposed regulations, but I am
deeply troubled by the discrimination which it will inevitably foster
when implemented. The regulations will de facto amend many of our
nation's laws and give government contracting officers, who are not
trained in the interpretation of these laws, unfettered discretion to
deny contracts to companies based on any alleged violation of any labor
and employment, environmental, antitrust, tax, or consumer protection
laws over the three years immediately preceding the contract. This is a
dramatic change from the current requirements of the Federal
Acquisition Regulation which requires that violations must be
substantial to trigger denial of contract eligibility and does not
extend to unrelated, past violations.
The proposed regulations would also allow for the denial of contracts
on the basis of a mere complaint issued by a federal agency, which
often are based solely upon information provided by outside, interested
parties. Moreover, the proposal's terminology is vague and extremely
subjective--placing tremendous and unprecedented discretion in the
hands of federal contracting officers. That is discretion that they do
not need nor qualified to exercise. Terms such as ``legal compliance''
by bidding parties are well-intentioned, I am sure, however, I view
this as a trial lawyer's greatest wish come true. What does ``legal
compliance'' mean? Does it mean that employers must ensure that they
are 100 percent in compliance with all of the pertinent laws? Can even
the most prudent employers guarantee that they and their worksites are
100 percent in compliance with all federal tax, labor, environmental,
and anti-trust statutes and regulations? That's certainly a question
which many creative lawyers will undoubtedly rush to answer in
courthouses across our nation.
This proposal is in direct contradiction to existing policy which is
to fulfill governmental needs for goods and services at a fair and
reasonable price from contractors who are technically qualified and
able to perform the contract. Our current policy is based upon a good
balance between our desire to get the best value for our constituents'
taxdollars while being fair to all qualified companies who want to have
the opportunity to provide their goods and services to the government.
The proposed regulations will result in the unjustified exclusion of
many of these companies from the bidding process and will result in
less competition, reduced job opportunities for many employees--
especially small businesses--and less value for our constituents'
taxdollars.
As elected representatives of our constituents, we cannot condone
this and as a legislative body we must refuse to allow a continuation
of this Administration's legislation by regulation. The JOB Act would
require the GAO to thoroughly examine this issue and report back to
Congress with its findings. To me, this is a sound and reasonable
approach rather than a political one. If you agree that the proposed
regulations--and the millions of American workers, employers, and
taxpayers that they will profoundly affect--deserve more thorough
consideration, join me in my effort to enact the JOB Act.
I ask consent that the text of the bill be included in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2986
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 ``Just Opportunities in
Bidding Act of 2000''.
SEC. 2. REGULATIONS PROHIBITED PENDING GAO REVIEW.
(a) Regulations Not To Have Legal Effect.--The proposed
regulations referred to in subsection (c) shall not take
effect and may not be enforced.
(b) Limitation on Additional Proposed Regulations.--No
proposed or final regulations on the same subject matter as
the proposed regulations referred to in subsection (c) may be
issued before the date on which the Comptroller General
submits to Congress the report required by section 3.
(c) Covered Regulations.--Subsection (a) applies to the
following:
(1) The proposed regulations that were published in the
Federal Register, volume 64, number 131, beginning on page
37360, on July 9, 1999.
(2) The proposed regulations that were published in the
Federal Register, volume 65, number 127, beginning on page
40830, on June 30, 2000.
SEC. 3. COMPTROLLER GENERAL REVIEW OF CONTRACTOR COMPLIANCE
WITH FEDERAL LAW.
The Comptroller General shall--
(1) conduct a general review of the level of compliance by
Federal contractors with the Federal laws that--
(A) are applicable to the contractors; and
(B) affect--
(i) the rights and responsibilities of contractors to
participate in contracts of the United States; and
(ii) the administration of such contracts with respect to
contractors; and
(2) submit to Congress a report on the findings resulting
from the review.
______
By Mr. ROBERTS (for himself, Mr. Grassley, Mr. Jeffords, and Mr.
Thomas):
S. 2987. A bill to amend title XVIII of the Social Security Act to
promote access to health care services in rural areas, and for other
purposes; to the Committee on Finance.
rural health care in the 21st century act of 2000
Mr. ROBERTS. Mr. President, I rise today to introduce the Rural
Health Care in the 21st Century Act of 2000. This legislation will
improve access to technology necessary to improve rural health care and
expand access to quality health care in rural areas.
The future of health care in this country is being challenged by a
variety of factors. The growing pains associated with managed care, an
increasing elderly population and the drive to ensure the solvency of
the federal Medicare Trust Fund are just a few of the factors placing
pressure on health care facilities and health care providers across the
country. Small, rural hospitals that provide services to a relatively
low volume of patients are faced with even greater challenges in this
environment.
The bill I am introducing today takes critical steps to improve
access to high technology in rural areas and establishes a new high
technology acquisition grant and loan program to improve patient safety
and outcomes. At the same time hospitals need to update equipment,
comply with new regulatory requirements and join the effort to reduce
medical errors, many hospitals are finding it difficult to access the
financial backing necessary to acquire the telecommunications equipment
necessary to develop innovative solutions. This bill establishes a 5-
year grant program through the Office of Rural Health Policy that
allows hospitals, health care centers and related organizations to
apply for matching grants or loans up to $100,000 to purchase the
advanced technologies necessary to improve patient safety and keep pace
with the changing records management requirements of the 21st Century.
This bill also increases Disproportionate Share Hospitals payments to
rural hospitals. The Medicare DSH adjustment is based on a complex
formula and the hospital's percentage of low-income patients. This
percentage of low-income patients is different for each hospital,
depending on where the hospital is located and the number of beds in
the hospital. This bill establishes one formula to distribute payments
to all hospitals covered by the inpatient PPS. This will give rural
hospitals an equal opportunity to qualify for the DSH adjustment.
Twenty-five percent of our nation's senior citizens live in rural
areas where access to modern health care services is often lacking.
Telehealth technologies have evolved significantly and can serve to
connect rural patients to the health care providers that they need.
This bill includes provisions of S. 2505, a telehealth bill introduced
by my colleague from Vermont, Senator Jeffords. These provisions
address eight areas of Medicare reimbursement policy that need
improvement. It eliminates requirements for fee-sharing between
providers and provides a standard professional fee to the health care
provider who delivers the care. The site where the patient is presented
is made eligible for a standard facility fee. The requirement for a
telepresenter is
[[Page S7901]]
eliminated and the codes that can be billed for are expanded to reflect
current practice. All rural counties and urban HPSAs are covered by
this legislation and demonstration projects are established to access
reimbursement for store and forward activities. Also, the law
is clarified to allow for home health agencies to incorporate
telehomecare into their care plans where appropriate.
The Health Care Financing Administration is currently administering
five telemedicine demonstration projects. This provision extends these
projects an additional two years to give the projects adequate time to
produce useful data.
The Medicare Rural Hospital Flexibility Program established by the
Balanced Budget Act of 1997 allows rural hospitals to be reclassified
as limited service facilities, known as Critical Access Hospitals.
Critical Access Hospitals are important components of the rural health
care infrastructure. They are working to provide quality health care
services in sparsely populated areas of the country. However, they are
restricted by burdensome regulations and inadequate Medicare payments.
In addition to reduced staffing requirements, Congress intended to
reimburse CAH inpatient and outpatient hospital services on the basis
of reasonable costs. This legislation exempts Medicare swing beds in
CAHs for the Skilled Nursing Facility (SNF) Prospective Payment System
(PPS) and reimburses based on reasonable costs, and provides reasonable
cost payment for ambulance services and home health services in CAHs.
In addition, this legislation directs the Secretary of HHS to
establish a procedure to ensure that a single FI will provide services
to all CAHs and allows CAHs to choose between two options for payment
for outpatient services: (1) reasonable costs for facility services, or
(2) an all-inclusive rate which combines facility and professional
services.
This bill permanently guarantees pre-Balanced Budget Act payment
levels for outpatient services provided by rural hospitals with under
100 beds, modifies the 50 bed exemption language and for Rural Health
Clinics allows RHCs to qualify as long as their average daily patient
census does not exceed 50, allows Physician Assistant-owned RHCs that
lose their clinic status to maintain Medicare Part B payments, and
clarifies that when services already excluded from the PPS system are
delivered to Skilled Nursing Facility patients by practitioners
employed by the RHCs, those visits are also excluded from the PPS
payment system. In addition, this bill increases payments under the
Medicare home health PPS for beneficiaries who reside in rural areas by
increasing the standardized payment per 60-day episode by 10 percent.
Current law allows states the option to reimburse hospitals for
Qualified Medicare Beneficiary (QMB) services attributable to
deductibles and coinsurance amounts. However, many state Medicaid
programs have chosen not to pay these costs, leaving rural hospitals
with a significant portion of unpaid bad debt expenses. This is
especially burdensome since federal law prohibits hospitals from
seeking payment for the cost-sharing amounts from QMB patients. This
legislation provides additional relief to rural hospitals by restoring
100% Medicare bad debt reimbursement for QMBs.
Although, as a general rule, scholarships are excluded from income,
the Internal Revenue Service has taken the position that National
Health Service Corp scholarships are included in income. Imposing taxes
on the scholarships could have disastrous effects on a program that for
over 20 years has helped funnel doctors, nurse-practitioners, physician
assistants, and other health professionals into medically underserved
communities. This provision excludes from gross income of certain
scholarships any amounts received under the National Health Service
Corps Scholarship Program.
Finally, this bill includes important technical corrections to the
Balanced Budget Refinement Act of 1999. This bill extends the option to
rebase target amounts to all Sole Community Hospitals and allows
Critical Access Hospitals to receive reimbursement for lab services on
a reasonable cost basis.
Exciting changes are taking place in rural America. This legislation
will enable small rural hospitals to take advantage of the latest
technology and improve health care for rural residents across the
country. Mr. President, I invite my colleagues to join me in support of
this endeavor. I am unanimous consent that a copy of the bill appear in
the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2987
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Rural
Health Care in the 21st Century Act of 2000''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--HIGH TECHNOLOGY
Sec. 101. High technology acquisition grant and loan program.
Sec. 102. Refinement of medicare reimbursement for telehealth services.
Sec. 103. Extension of telemedicine demonstration projects.
TITLE II--IMPROVEMENTS IN THE DISPROPORTIONATE SHARE HOSPITAL (DSH)
PROGRAM
Sec. 201. Disproportionate share hospital adjustment for rural
hospitals.
TITLE III--IMPROVEMENTS IN THE CRITICAL ACCESS HOSPITAL (CAH) PROGRAM
Sec. 301. Treatment of swing-bed services furnished by critical access
hospitals.
Sec. 302. Treatment of ambulance services furnished by certain critical
access hospitals.
Sec. 303. Treatment of home health services furnished by certain
critical access hospitals.
Sec. 304. Designation of a single fiscal intermediary for all critical
access hospitals.
Sec. 305. Establishment of an all-inclusive payment option for
outpatient critical access hospital services.
TITLE IV--OUTPATIENT SERVICES FURNISHED BY RURAL PROVIDERS
Sec. 401. Permanent guarantee of pre-BBA payment levels for outpatient
services furnished by rural hospitals.
Sec. 402. Provider-based rural health clinic cap exemption.
Sec. 403. Payment for certain physician assistant services.
Sec. 404. Exclusion of rural health clinic services from the PPS for
skilled nursing facilities.
Sec. 405. Bonus payments for rural home health agencies.
TITLE V--BAD DEBT
Sec. 501. Restoration of full payment for bad debts of qualified
medicare beneficiaries.
TITLE VI--NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP PROGRAM
Sec. 601. Exclusion of certain amounts received under the National
Health Service Corps scholarship program.
TITLE VII--TECHNICAL CORRECTIONS TO BALANCED BUDGET REFINEMENT ACT OF
1999
Sec. 701. Extension of option to use rebased target amounts to all sole
community hospitals.
Sec. 702. Payments to critical access hospitals for clinical diagnostic
laboratory tests.
TITLE I--HIGH TECHNOLOGY
SEC. 101. HIGH TECHNOLOGY ACQUISITION GRANT AND LOAN PROGRAM.
(a) Establishment of Program.--Title III of the Public
Health Service Act (42 U.S.C. 241 et seq.) is amended by
inserting after section 330D the following:
``SEC. 330E. HIGH TECHNOLOGY ACQUISITION GRANT AND LOAN
PROGRAM.
``(a) Establishment of Program.--The Secretary, acting
through the Director of the Office of Rural Health Policy (of
the Health Resources and Services Administration), shall
establish a High Technology Acquisition Grant and Loan
Program for the purpose of--
``(1) improving the quality of health care in rural areas
through the acquisition of advanced medical technology;
``(2) fostering the development the networks described in
section 330D(c);
``(3) promoting resource sharing between urban and rural
facilities; and
``(4) improving patient safety and outcomes through the
acquisition of high technology, including software,
information services, and staff training.
``(b) Grants and Loans.--Under the program established
under subsection (a), the Secretary, acting through the
Director of the Office of Rural Health Policy, may award
grants and make loans to any eligible entity (as defined in
subsection (d)(1)) for any costs incurred by the eligible
entity in acquiring eligible equipment and services (as
defined in subsection (d)(2)).
``(c) Limitations.--
``(1) In general.--Subject to paragraph (2), the total
amount of grants and loans made
[[Page S7902]]
under this section to an eligible entity may not exceed
$100,000.
``(2) Federal sharing.--
``(A) Grants.--The amount of any grant awarded under this
section may not exceed 70 percent of the costs to the
eligible entity in acquiring eligible equipment and services.
``(B) Loans.--The amount of any loan made under this
section may not exceed 90 percent of the costs to the
eligible entity in acquiring eligible equipment and services.
``(d) Definitions.--In this section:
``(1) Eligible entity.--The term `eligible entity' means a
hospital, health center, or any other entity that the
Secretary determines is appropriate that is located in a
rural area or region.
``(2) Eligible equipment and services.--The term `eligible
equipment and services' includes--
``(A) unit dose distribution systems;
``(B) software and information services and staff training;
``(C) wireless devices to transmit medical orders;
``(D) clinical health care informatics systems, including
bar code systems designed to avoid medication errors and
patient tracking systems; and
``(E) any other technology that improves the quality of
health care provided in rural areas.
``(e) Authorization of Appropriations.--For the purpose of
carrying out this section there are authorized to be
appropriated such sums as may be necessary for each of the
fiscal years 2001 through 2006.''.
SEC. 102. REFINEMENT OF MEDICARE REIMBURSEMENT FOR TELEHEALTH
SERVICES.
(a) Revision of Telehealth Payment Methodology and
Elimination of Fee-Sharing Requirement.--Section 4206(b) of
the Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is
amended to read as follows:
``(b) Methodology for Determining Amount of Payments.--
``(1) In general.--The Secretary shall pay to--
``(A) the physician or practitioner at a distant site that
provides an item or service under subsection (a) an amount
equal to the amount that such physician or provider would
have been paid had the item or service been provided without
the use of a telecommunications system; and
``(B) the originating site a facility fee for facility
services furnished in connection with such item or service.
``(2) Application of part b coinsurance and deductible.--
Any payment made under this section shall be subject to the
coinsurance and deductible requirements under subsections
(a)(1) and (b) of section 1833 of the Social Security Act (42
U.S.C. 1395l).
``(3) Definitions.--In this subsection:
``(A) Distant site.--The term `distant site' means the site
at which the physician or practitioner is located at the time
the item or service is provided via a telecommunications
system.
``(B) Facility fee.--The term `facility fee' means an
amount equal to--
``(i) for 2000 and 2001, $20; and
``(ii) for a subsequent year, the facility fee under this
subsection for the previous year increased by the percentage
increase in the MEI (as defined in section 1842(i)(3)) for
such subsequent year.
``(C) Originating site.--
``(i) In general.--The term `originating site' means the
site described in clause (ii) at which the eligible
telehealth beneficiary under the medicare program is located
at the time the item or service is provided via a
telecommunications system.
``(ii) Sites described.--The sites described in this
paragraph are as follows:
``(I) On or before January 1, 2002, the office of a
physician or a practitioner, a critical access hospital, a
rural health clinic, and a Federally qualified health center.
``(II) On or before January 1, 2003, the sites described in
subclause (I), a hospital, a skilled nursing facility, a
comprehensive outpatient rehabilitation facility, a renal
dialysis facility, an ambulatory surgical center, an Indian
Health Service facility, and a community mental health
center.''.
(b) Elimination of Requirement for Telepresenter.--Section
4206 of the Balanced Budget Act of 1997 (42 U.S.C. 1395l
note) is amended--
(1) in subsection (a), by striking ``, notwithstanding that
the individual physician'' and all that follows before the
period at the end; and
(2) by adding at the end the following new subsection:
``(e) Telepresenter Not Required.--Nothing in this section
shall be construed as requiring an eligible telehealth
beneficiary to be presented by a physician or practitioner
for the provision of an item or service via a
telecommunications system.''.
(c) Reimbursement for Medicare Beneficiaries Who Do Not
Reside in a HPSA.--Section 4206(a) of the Balanced Budget Act
of 1997 (42 U.S.C. 1395l note), as amended by subsection (b),
is amended--
(1) by striking ``In General.--Not later than'' and
inserting the following: ``Telehealth Services Reimbursed.--
``(1) In general.--Not later than'';
(2) by striking ``furnishing a service for which payment''
and all that follows before the period and inserting ``to an
eligible telehealth beneficiary''; and
(3) by adding at the end the following new paragraph:
``(2) Eligible telehealth beneficiary defined.--In this
section, the term `eligible telehealth beneficiary' means a
beneficiary under the medicare program under title XVIII of
the Social Security Act (42 U.S.C. 1395 et seq.) that resides
in--
``(A) an area that is designated as a health professional
shortage area under section 332(a)(1)(A) of the Public Health
Service Act (42 U.S.C. 254e(a)(1)(A));
``(B) a county that is not included in a Metropolitan
Statistical Area;
``(C) an inner-city area that is medically underserved (as
defined in section 330(b)(3) of the Public Health Service Act
(42 U.S.C. 254b(b)(3))); or
``(D) an area in which there is a Federal telemedicine
demonstration program.''.
(d) Telehealth Coverage for Direct Patient Care.--
(1) In general.--Section 4206 of the Balanced Budget Act of
1997 (42 U.S.C. 1395l note), as amended by subsection (c), is
amended--
(A) in subsection (a)(1), by striking ``professional
consultation via telecommunications systems with a
physician'' and inserting ``items and services for which
payment may be made under such part that are furnished via a
telecommunications system by a physician''; and
(B) by adding at the end the following new subsection:
``(f) Coverage of Items and Services.--Payment for items
and services provided pursuant to subsection (a) shall
include payment for professional consultations, office
visits, office psychiatry services, including any service
identified as of July 1, 2000, by HCPCS codes 99241-99275,
99201-99215, 90804-90815, and 90862, and any additional item
or service specified by the Secretary.''.
(2) Study and report regarding additional items and
services.--
(A) Study.--The Secretary of Health and Human Services
shall conduct a study to identify items and services in
addition to those described in section 4206(f) of the
Balanced Budget Act of 1997 (as added by paragraph (1)) that
would be appropriate to provide payment under title XVIII of
the Social Security Act (42 U.S.C. 1395 et seq.).
(B) Report.--Not later than 2 years after the date of
enactment of this Act, the Secretary shall submit a report to
Congress on the study conducted under subparagraph (A)
together with such recommendations for legislation that the
Secretary determines are appropriate.
(e) All Physicians and Practitioners Eligible for
Telehealth Reimbursement.--Section 4206(a) of the Balanced
Budget Act of 1997 (42 U.S.C. 1395l note), as amended by
subsection (d), is amended--
(1) in paragraph (1), by striking ``(described in section
1842(b)(18)(C) of such Act (42 U.S.C. 1395u(b)(18)(C))''; and
(2) by adding at the end the following new paragraph:
``(3) Practitioner defined.--For purposes of paragraph (1),
the term `practitioner' includes--
``(A) a practitioner described in section 1842(b)(18)(C) of
the Social Security Act (42 U.S.C. 1395u(b)(18)(C)); and
``(B) a physical, occupational, or speech therapist.''.
(f) Telehealth Services Provided Using Store-and-Forward
Technologies.--Section 4206(a)(1) of the Balanced Budget Act
of 1997 (42 U.S.C. 1395l note), as amended by subsection (e),
is amended by adding at the end the following new paragraph:
``(4) Use of store-and-forward technologies.--For purposes
of paragraph (1), in the case of any Federal telemedicine
demonstration program in Alaska or Hawaii, the term
`telecommunications system' includes store-and-forward
technologies that provide for the asynchronous transmission
of health care information in single or multimedia
formats.''.
(g) Construction Relating to Home Health Services.--Section
4206(a) of the Balanced Budget Act of 1997 (42 U.S.C. 1395l
note), as amended by subsection (f), is amended by adding at
the end the following new paragraph:
``(5) Construction relating to home health services.--
``(A) In general.--Nothing in this section or in section
1895 of the Social Security Act (42 U.S.C. 1395fff) shall be
construed as preventing a home health agency that is
receiving payment under the prospective payment system
described in such section from furnishing a home health
service via a telecommunications system.
``(B) Limitation.--The Secretary shall not consider a home
health service provided in the manner described in
subparagraph (A) to be a home health visit for purposes of--
``(i) determining the amount of payment to be made under
the prospective payment system established under section 1895
of the Social Security Act (42 U.S.C. 1395fff); or
``(ii) any requirement relating to the certification of a
physician required under section 1814(a)(2)(C) of such Act
(42 U.S.C. 1395f(a)(2)(C)).''.
(h) Effective Date.--The amendments made by this Act shall
apply to items and services provided on or after the date of
enactment of this Act.
SEC. 103. EXTENSION OF TELEMEDICINE DEMONSTRATION PROJECTS.
The Secretary of Health and Human Services shall maintain
through September 30, 2003, the grant and operational phases
of any telemedicine demonstration project conducted under the
medicare program under title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.)--
[[Page S7903]]
(1) for which funds were expended before the date of
enactment of the Balanced Budget Act of 1997 (Public Law 105-
133; 111 Stat. 251); and
(2) that is ongoing as of the date of enactment of this
Act.
TITLE II--IMPROVEMENTS IN THE DISPROPORTIONATE SHARE HOSPITAL (DSH)
PROGRAM
SEC. 201. DISPROPORTIONATE SHARE HOSPITAL ADJUSTMENT FOR
RURAL HOSPITALS.
(a) Application of Uniform 15 Percent Threshold.--Section
1886(d)(5)(F)(v) of the Social Security Act (42 U.S.C.
1395ww(d)(5)(F)(v)) is amended by striking ``exceeds--'' and
all that follows and inserting ``exceeds 15 percent.''.
(b) Change in Payment Percentage Formulas.--Section
1886(d)(5)(F) of the Social Security Act (42 U.S.C.
1395ww(d)(5)(F)) is amended--
(1) in clause (iv), by striking ``and that--'' and all that
follows and inserting ``is equal to the percentage determined
in accordance with the applicable formula described in clause
(vii).'';
(2) in clause (vii), by striking ``clause (iv)(I)'' and
inserting ``clause (iv)''; and
(3) by striking clause (viii) and inserting the following
new clause:
``(viii) No hospital described in clause (iv) may receive a
payment amount under this section that is less than the
payment amount that would have been made under this section
if the amendments made by section 201 of the Rural Health
Care in the 21st Century Act of 2000 had not been enacted.''.
(c) Effective Date.--The amendments made by this section
apply to discharges occurring on or after October 1, 2000.
TITLE III--IMPROVEMENTS IN THE CRITICAL ACCESS HOSPITAL (CAH) PROGRAM
SEC. 301. TREATMENT OF SWING-BED SERVICES FURNISHED BY
CRITICAL ACCESS HOSPITALS.
(a) Exemption From SNF PPS.--Section 1888(e)(7) of the
Social Security Act (42 U.S.C. 1395yy(e)(7)) is amended--
(1) in the heading, by striking ``Transition for'' and
inserting ``Treatment of'';
(2) in subparagraph (A), by striking ``In general.--The''
and inserting ``Transition.--Except as provided in
subparagraph (C), the'';
(3) in subparagraph (B), by striking ``, for which'' and
all that follows before the period at the end and inserting
``(other than critical access hospitals)''; and
(4) by adding at the end the following new subparagraph:
``(C) Critical access hospitals.--In the case of facilities
described in subparagraph (B) that are critical access
hospitals--
``(i) the prospective payment system established under this
subsection shall not apply to services furnished pursuant to
an agreement described in section 1883; and
``(ii) such services shall be paid on the basis specified
in subsection (a)(3) of such section.''.
(b) Payment Basis for Swing-Bed Services Furnished by
Critical Access Hospitals.--Section 1883(a) of the Social
Security Act (42 U.S.C. 1395tt(a)) is amended--
(1) in paragraph (2)(A), by inserting ``(other than a
critical access hospital)'' after ``any hospital''; and
(2) by adding at the end the following new paragraph:
``(3) Notwithstanding any other provision of this title, a
critical access hospital shall be paid for services furnished
under an agreement entered into under this section on the
basis of the reasonable costs of such services (as determined
under section 1861(v)).''.
(c) Effective Date.--The amendments made by this section
shall apply to cost reporting periods beginning on or after
October 1, 1999.
SEC. 302. TREATMENT OF AMBULANCE SERVICES FURNISHED BY
CERTAIN CRITICAL ACCESS HOSPITALS.
(a) Exemption From Ambulance Fee Schedule.--
(1) In general.--Section 1834(l) of the Social Security Act
(42 U.S.C. 1395m(l)) is amended by adding at the end the
following new paragraph:
``(8) Inapplicability of fee schedule to certain
services.--In the case of ambulance services (described in
section 1861(s)(7)) that are provided in a locality by a
critical access hospital that is the only provider of
ambulance services in the locality, or by an entity that is
owned and operated by such a critical access hospital--
``(A) the fee schedule established under this subsection
shall not apply; and
``(B) payment under this part shall be paid on the basis of
the reasonable costs incurred in providing such services.''.
(2) Conforming amendments.--Section 1833(a)(1) of the
Social Security Act (42 U.S.C. 1395l(a)(1)) is amended--
(A) in subparagraph (R)--
(i) by inserting ``except as provided in subparagraph
(T),'' before ``with respect''; and
(ii) by striking ``and'' at the end; and
(B) in subparagraph (S), by striking the semicolon at the
end and inserting ``, and (T) with respect to ambulance
services described in section 1834(l)(8), the amount paid
shall be 80 percent of the lesser of the actual charge for
the services or the amount determined under such section;''.
(3) Effective date.--The amendments made by this subsection
shall apply to cost reporting periods beginning on or after
October 1, 1999.
(b) Exemption From Reasonable Cost Reductions.--
(1) Exemption.--Section 1861(v)(1)(U) of the Social
Security Act (42 U.S.C. 1395x(v)(1)(U)) is amended by
inserting after the first sentence the following new
sentence: ``The reductions required by the preceding sentence
shall not apply in the case of ambulance services that are
provided in a locality on or after October 1, 1999, by a
critical access hospital that is the only provider of
ambulance services in the locality, or by an entity that is
owned and operated by such a critical access hospital.''.
(2) Technical amendment.--Section 1861(v)(1) of the Social
Security Act (42 U.S.C. 1395x(v)(1)) is amended by realigning
subparagraph (U) so as to align the left margin of such
subparagraph with the left margin of subparagraph (T).
SEC. 303. TREATMENT OF HOME HEALTH SERVICES FURNISHED BY
CERTAIN CRITICAL ACCESS HOSPITALS.
(a) Exemption From Home Health Interim Payment System.--
Section 1861(v)(1)(L) of the Social Security Act (42 U.S.C.
1395x(v)(1)(L)) is amended by adding at the end the following
new clause:
``(xi) The preceding provisions of this subparagraph shall
not apply to home health services that are furnished on or
after October 1, 2000, by a home health agency that is--
``(I) the only home health agency serving a locality; and
``(II) owned and operated by a critical access hospital.''.
(b) Exemption From PPS.--
(1) In general.--Section 1895 of the Social Security Act
(42 U.S.C. 1395fff) is amended by adding at the end the
following new subsection:
``(e) Exemption.--The prospective payment system
established under this section shall not apply in determining
payments for home health services furnished by a home health
agency that is--
``(1) the only home health agency serving a locality; and
``(2) owned and operated by a critical access hospital.''.
(2) Conforming amendment.--Section 1833(a)(2)(A) of the
Social Security Act (42 U.S.C. 1395(a)(2)(A)) is amended by
inserting ``home health services described in section 1895(e)
and other than'' after ``other than''.
(3) Technical amendment.--Section 1833(a)(2)(A) of the
Social Security Act (42 U.S.C. 1395(a)(2)(A)) is amended by
striking ``drug) (as defined in section 1861(kk))'' and
inserting ``drug (as defined in section 1861(kk)))''.
(4) Effective date.--The amendments made by this subsection
shall apply to cost reporting periods beginning on or after
October 1, 2000.
SEC. 304. DESIGNATION OF A SINGLE FISCAL INTERMEDIARY FOR ALL
CRITICAL ACCESS HOSPITALS.
Section 1816 of the Social Security Act (42 U.S.C. 1395h)
is amended by adding at the end the following:
``(m) Not later than October 1, 2000, the Secretary shall
designate a national agency or organization with an agreement
under this section to perform functions under the agreement
with respect to each critical access hospital electing to
have such functions performed by such agency or
organization.''.
SEC. 305. ESTABLISHMENT OF AN ALL-INCLUSIVE PAYMENT OPTION
FOR OUTPATIENT CRITICAL ACCESS HOSPITAL
SERVICES.
(a) All-Inclusive Payment Option for Outpatient Critical
Access Hospital Services.--Section 1834(g) of the Social
Security Act (42 U.S.C. 1395m(g)) is amended--
(1) by striking paragraph (1) and inserting the following
new paragraph:
``(1) Election of cah.--At the election of a critical
access hospital, the amount of payment for outpatient
critical access hospital services under this part shall be
determined under paragraph (2) or (3), such amount determined
under either paragraph without regard to the amount of the
customary or other charge.''; and
(2) by striking paragraph (3) and inserting the following
new paragraph:
``(3) All-inclusive rate.--If a critical access hospital
elects this paragraph to apply, with respect to both facility
services and professional services, there shall be paid
amounts equal to the reasonable costs of the critical access
hospital in providing such services (except that in the case
of clinical diagnostic laboratory services furnished by a
critical access hospital the amount of payment shall be equal
to 100 percent of the reasonable costs of the critical access
hospital in providing such services), less the amount that
such hospital may charge as described in section
1866(a)(2)(A).''.
(b) Effective Date.--The amendments made by subparagraph
(a) shall take effect as if included in the enactment of
section 403(d) of the Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999 (113 Stat. 1501A-371), as
enacted into law by section 1000(a)(6) of Public Law 106-113.
TITLE IV--OUTPATIENT SERVICES FURNISHED BY RURAL PROVIDERS
SEC. 401. PERMANENT GUARANTEE OF PRE-BBA PAYMENT LEVELS FOR
OUTPATIENT SERVICES FURNISHED BY RURAL
HOSPITALS.
(a) In General.--Section 1833(t)(7)(D) of the Social
Security Act (42 U.S.C. 1395l(t)(7)(D)), as added by section
202 of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 (113 Stat. 1501A-342), as enacted into
law by section 1000(a)(6) of Public Law 106-113, is amended
to read as follows:
[[Page S7904]]
``(D) Hold harmless provisions for small rural hospitals
and cancer hospitals.--In the case of a hospital located in a
rural area and that has not more than 100 beds or a hospital
described in section 1886(d)(1)(B)(v), for covered OPD
services for which the PPS amount is less than the pre-BBA
amount, the amount of payment under this subsection shall be
increased by the amount of such difference.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect as if included in the enactment of section
202 of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 (113 Stat. 1501A-342), as enacted into
law by section 1000(a)(6) of Public Law 106-113.
SEC. 402. PROVIDER-BASED RURAL HEALTH CLINIC CAP EXEMPTION.
(a) In General.--The matter in section 1833(f) of the
Social Security Act (42 U.S.C. 1395l(f)) preceding paragraph
(1) is amended by striking ``with less than 50 beds'' and
inserting ``with an average daily patient census that does
not exceed 50''.
(b) Effective Date.--The amendment made by subparagraph (A)
applies to services furnished on or after January 1, 2001.
SEC. 403. PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT SERVICES.
(a) Payment for Certain Physician Assistant Services.--
Section 1842(b)(6)(C) of the Social Security Act (42 U.S.C.
1395u(b)(6)(C)) is amended by striking ``for such services
provided before January 1, 2003,''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the date of enactment of this Act.
SEC. 404. EXCLUSION OF RURAL HEALTH CLINIC SERVICES FROM THE
PPS FOR SKILLED NURSING FACILITIES.
(a) In General.--Section 1888(e)(2)(A)(ii) of the Social
Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by
inserting after the first sentence the following: ``Services
described in this clause also include services that are
provided by a physician, a physician assistant, a nurse
practitioner, a certified nurse midwife, or a qualified
psychologist who is employed, or otherwise under contract,
with a rural health clinic.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to services furnished on or after January 1,
2001.
SEC. 405. BONUS PAYMENTS FOR RURAL HOME HEALTH AGENCIES.
(a) Increase in Payment Rates for Rural Agencies.--
(1) In general.--Section 1895(b) of the Social Security Act
(42 U.S.C. 1395fff(b)) is amended by adding at the end the
following new paragraph:
``(7) Additional payment amount for services furnished in
rural areas.--In the case of home health services furnished
in a rural area (as defined in section 1886(d)(2)(D)), the
Secretary shall provide for an addition or adjustment to the
payment amount otherwise made under this section for services
furnished in a rural area in an amount equal to 10 percent of
the amount otherwise determined under this subsection.''.
(2) Waiving budget neutrality.--Section 1895(b)(3) of such
Act (42 U.S.C. 1395fff(b)(3)) is amended by adding at the end
the following new subparagraph:
``(D) No adjustment for additional payments for rural
services.--The Secretary shall not reduce the standard
prospective payment amount (or amounts) under this paragraph
applicable to home health services furnished during a period
to offset the increase in payments resulting from the
application of paragraph (7) (relating to services furnished
in rural areas).''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to episodes of care beginning on or after April
1, 2001.
TITLE V--BAD DEBT
SEC. 501. RESTORATION OF FULL PAYMENT FOR BAD DEBTS OF
QUALIFIED MEDICARE BENEFICIARIES.
(a) Medicare Cost-Sharing Uncollectible and Not Covered by
Medicaid State Plans.--Section 1902(n)(3)(B) of the Social
Security Act (42 U.S.C. 1396a(n)(3)(B)) is amended--
(1) by inserting ``(i)'' after ``(B)''; and
(2) by adding at the end the following new clause:
``(ii) the amount of medicare cost-sharing that is
uncollectible from the beneficiary because of clause (i) and
that is not paid by any other individual or entity shall be
deemed to be bad debt for purposes of title XVIII; and''.
(b) Recognition of 100 Percent of Bad Debt.--
(1) Nonapplication of reduction.--Section 1861(v)(1)(T) of
the Social Security Act (42 U.S.C. 1395x(v)(1)(T)) is amended
by inserting ``(other than any amount deemed to be bad debt
under section 1902(n)(3)(B)(ii))'' after ``amounts under this
title''.
(2) Recognition with respect to certified nurse
anesthetists, nurse practitioners, and clinical nurse
specialists.--Section 1833 of the Social Security Act (42
U.S.C. 1395l) is amended--
(A) in subsection (l)(5)(B), by striking ``No hospital''
and inserting ``Except as provided in section
1902(n)(3)(B)(ii), no hospital''; and
(B) in subsection (r)(2), by striking ``No hospital'' and
inserting ``Except as provided in section 1902(n)(3)(B)(ii),
no hospital''.
(c) Technical Amendment.--Section 1861(v)(1)(T) of the
Social Security Act (42 U.S.C. 1395x(v)(1)(T)) is amended by
striking ``1833(t)(5)(B)'' and inserting ``1833(t)(8)(B)'' in
the matter preceding clause (i).
(d) Effective Date.--The amendments made by this section
shall apply to bad debt incurred on or after the date of
enactment of this Act.
TITLE VI--NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP PROGRAM
SEC. 601. EXCLUSION OF CERTAIN AMOUNTS RECEIVED UNDER THE
NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP
PROGRAM.
(a) In General.--Section 117(c) of the Internal Revenue
Code of 1986 (relating to the exclusion from gross income
amounts received as a qualified scholarship) is amended--
(1) by striking ``Subsections (a)'' and inserting the
following:
``(1) In general.--Except as provided in paragraph (2),
subsections (a)''; and
(2) by adding at the end the following new paragraph:
``(2) Exception.--Paragraph (1) shall not apply to any
amount received by an individual under the National Health
Service Corps Scholarship Program under section 338A(g)(1)(A)
of the Public Health Service Act.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to amounts received in taxable years beginning
after December 31, 1994.
TITLE VII--TECHNICAL CORRECTIONS TO BALANCED BUDGET REFINEMENT ACT OF
1999
SEC. 701. EXTENSION OF OPTION TO USE REBASED TARGET AMOUNTS
TO ALL SOLE COMMUNITY HOSPITALS.
(a) In General.--Section 1886(b)(3)(I)(i) of the Social
Security Act (42 U.S.C. 1395ww(b)(3)(I)(i)) (as added by
section 405 of the Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999 (113 Stat. 1501A-372), as
enacted into law by section 1000(a)(6) of Public Law 106-113)
is amended--
(1) in the matter preceding subclause (I)--
(A) by striking ``for its cost reporting period beginning
during 1999 is paid on the basis of the target amount
applicable to the hospital under subparagraph (C) and that'';
and
(B) by striking ``such target amount'' and inserting ``the
amount otherwise determined under subsection (d)(5)(D)(i)'';
(2) in subclause (I), by striking ``target amount otherwise
applicable'' and all that follows through ``target amount')''
and inserting ``the amount otherwise applicable to the
hospital under subsection (d)(5)(D)(i) (referred to in this
clause as the `subsection (d)(5)(D)(i) amount')''; and
(3) in each of subclauses (II) and (III), by striking
``subparagraph (C) target amount'' and inserting ``subsection
(d)(5)(D)(i) amount''.
(b) Effective Date.--The amendments made by this section
shall take effect as if included in the enactment of the
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act
of 1999, as enacted into law by section 1000(a)(6) of Public
Law 106-113.
SEC. 702. PAYMENTS TO CRITICAL ACCESS HOSPITALS FOR CLINICAL
DIAGNOSTIC LABORATORY TESTS.
(a) Payment on Cost Basis Without Beneficiary Cost-
Sharing.--
(1) In general.--Section 1833(a)(6) of the Social Security
Act (42 U.S.C. 1395l(a)(6)) is amended by inserting
``(including clinical diagnostic laboratory services
furnished by a critical access hospital)'' after ``outpatient
critical access hospital services''.
(2) No beneficiary cost-sharing.--
(A) In general.--Section 1834(g) of the Social Security Act
(42 U.S.C. 1395m(g)) is amended by inserting ``(except that
in the case of clinical diagnostic laboratory services
furnished by a critical access hospital the amount of payment
shall be equal to 100 percent of the reasonable costs of the
critical access hospital in providing such services)'' before
the period at the end.
(B) BBRA amendment.--Section 1834(g) of the Social Security
Act (42 U.S.C. 1395m(g)) is amended--
(i) in paragraph (1), by inserting ``(except that in the
case of clinical diagnostic laboratory services furnished by
a critical access hospital the amount of payment shall be
equal to 100 percent of the reasonable costs of the critical
access hospital in providing such services)'' after ``such
services,''; and
(ii) in paragraph (2)(A), by inserting ``(except that in
the case of clinical diagnostic laboratory services furnished
by a critical access hospital the amount of payment shall be
equal to 100 percent of the reasonable costs of the critical
access hospital in providing such services)'' before the
period at the end.
(b) Conforming Amendments.--Paragraphs (1)(D)(i) and
(2)(D)(i) of section 1833(a) of the Social Security Act (42
U.S.C. 1395l(a)(1)(D)(i); 1395l(a)(2)(D)(i)) are each amended
by striking ``or which are furnished on an outpatient basis
by a critical access hospital''.
(c) Technical Amendment.--Section 403(d)(2) of the
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act
of 1999 (113 Stat. 1501A-371), as enacted into law by section
1000(a)(6) of Public Law 106-113, is amended by striking
``subsection (a)'' and inserting ``paragraph (1)''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to services
furnished on or after November 29, 1999.
(2) BBRA and technical amendments.--The amendments made by
subsections
[[Page S7905]]
(a)(2)(B) and (c) shall take effect as if included in the
enactment of section 403(d) of the Medicare, Medicaid, and
SCHIP Balanced Budget Refinement Act of 1999 (113 Stat.
1501A-371), as enacted into law by section 1000(a)(6) of
Public Law 106-113.
______
By Mr. FRIST (for himself, Mr. Breaux, Mr. Bond, and Mr.
Hollings):
S. 2988. A bill to establish a National Commission on Space; to the
Committee on Commerce, Science, and Transportation.
millennium national commission on space act
Mr. FRIST. Mr. President, I rise to introduce the Millennium National
Commission on Space Act.
The year 1999 proved to be very difficult for NASA. The Commerce
Committee reviewed reports on such incidents as:
Workers searching for misplaced Space Station tanks in a landfill;
Loose pins in the Shuttle's main engine;
Failure to make English-metric conversions causing the failure of a
$125 million mission to Mars;
Two-time use of ``rejected'' seals on Shuttle's turbopumps;
$1 billion of cost overruns on the prime contract for the Space
Station with calls from the Inspector General at NASA for improvement
in the agency's oversight;
Workers damaging the main antennae on the Shuttle for communication
between mission control and the orbiting Shuttle;
Urgent repair mission to the Hubble telescope;
Approximately $1 billion invested in an experimental vehicle and
currently no firm plans for its first flight, if it flies at all; and
The lack of long-term planning for the Space Station, an issue on
which the Science, Technology, and Space Subcommittee of the Commerce
Committee has repeatedly questioned NASA.
It is the last of these items, the lack of long-term planning for the
Space Station and the lack of long-term planning of NASA and the
civilian space program, that is of a concern to me. I feel that the
civilian space program is in need of some guidance. Just as the space
policy of the 1980's had changed since the creation of NASA in 1958,
the space policy of the New Millennium needs to change from the 1980's.
Space has become more commercialized. Today, the private sector
conducts more space launches than the government. There are many more
companies developing plans to implement other new and innovative
commercial ventures.
I feel that the long term civilian space goals and objectives of the
nation are in need of some major revisions. As I mentioned earlier,
today's environment has changed drastically since the last commission
of this type was assembled.
This bill proposes a Presidential Commission to address these points.
The commission will do the ``homework'' that will form the basis for a
revised civilian space program. The civilian space industry has proven
to be a valuable national asset over the years. The goal of this bill
will be to ensure that the U.S. maintains its preeminence in space.
This commission will consist of 15 Members appointed by the President
based upon the recommendations of Congressional leadership. My hope is
that today's new environment will be reflected in the make-up of the
commission's members. For that reason, the bill sets limits on how many
members shall be from the government and how many should serve on their
first federal commission. Ex-officio members of the commission are also
specified in the bill. Advisory members from the Senate and the House
of Representatives are to be appointed to the commission by the
President of the Senate and the Speaker of the House of
Representatives.
The final report of the commission is to identify the long range
goals, opportunities, and policy options for the U.S. civilian space
activity for the next 20 years.
As Chairman of the Science, Technology and Space Subcommittee of the
Commerce Committee, I will continue our oversight responsibilities at
NASA. I look forward to working with other Members of this body to
further perfect this bill.
Mr. President, I thank you for this opportunity to introduce this
legislation which addresses these very important issues for the space
community.
Mr. BREAUX. Mr. President, as the Ranking Democratic Member of the
Commerce Committee's Science, Technology, and Space Supcommittee, I am
joining my Chairman, Senator Frist, in introducing legislation to
establish a National Space Commission.
If past experience holds true, NASA will be a catalyst for scientific
discovery in this new century. In the past year, NASA has worked on a
variety of valuable projects from finding a value for the Hubble
Constant which measures how fast the universe is expanding to docking
with the International Space Station for the very first time. Earlier
this week, NASA and the Russian Space Agency completed the docking of
the Service Module to the International Space Station, setting the
stage for the first permanent crew to occupy the station.
Now, our space exploration agency is poised at a crossroads. After
several failures, management has made some changes and reinvested in
the work force and in project oversight. During the next year, NASA
will try to meet a very aggressive schedule for the assembly of the
Space Station, and we will finally have our orbiting laboratory in
space. At the same time, a new Administration will be entering the
White House. It seems to be an appropriate moment to stand back and ask
where our space program is going in the next twenty years.
Now is the time to look to the future. The Millennium National Space
Commission will build on the work of the 1985 National Space Commission
and help us formulate an agenda for the civilian space program. In
doing so, it will help keep this nation in the forefront of scientific
exploration of ``the final frontier.''
______
By Mr. McCAIN (for himself and Mr. Kerrey):
S. 2989. A bill to provide for the technical integrity of the FM
radio band, and for other purposes; to the Committee on Commerce,
Science, and Transportation.
low power radio act of 2000
Mr. McCAIN. Mr. President, I rise today to introduce a bill with my
friend and colleague Senator Kerrey to resolve the controversy that has
erupted over the Federal Communications Commission's creation of a new,
noncommercial low-power FM radio service.
As you undoubtedly know, the FCC's low-power FM rules will allow the
creation of thousands of new noncommercial FM radio stations with
coverage of about a mile or so. Although these new stations will give
churches and community groups new outlets for expression of their
views, commercial FM broadcasters as well as National Public Radio
oppose the new service. They argue that the FCC ignored studies showing
that the new low-power stations would cause harmful interference to the
reception of existing full-power FM stations.
Mr. President, legislation before the House of Representatives would
call a halt to the institution of low-power FM service by requiring
further independent study of its potential for causing harmful
interference to full-power stations, and Senator Gregg has introduced
the same legislation in the Senate. While this would undoubtedly please
existing FM radio broadcasters, it understandably angers the many
parties who are anxious to apply for the new low-power licenses. Most
importantly, it would delay the availability of whatever new
programming these new low-power licensees might provide, even where the
station would have caused no actual interference at all had it been
allowed to operate.
With all due respect to Senator Gregg and to the supporters of the
House bill, Senator Kerrey and I think we can reach a fairer result,
and the bill we are introducing, the Low Power Radio Act of 2000, is
intended to do just that.
Unlike Senator Gregg's bill, the Low Power Radio Act would allow the
FCC to license low-power FM radio stations. The only low-power FM
stations that would be affected would be those whose transmissions are
actually causing harmful interference to a full-power radio station.
The Commission would determine which stations are causing such
interference and what the low-power station must do to alleviate it,
[[Page S7906]]
as the expert agency with the experience and engineering resources
required to make such determinations.
The Act gives full-power broadcasters the right to file a complaint
with the Commission against any low-power FM licensee for causing
harmful interference, and stipulates that the costs of the proceeding
shall be borne by the losing party. Finally, to make sure that the FCC
does not relegate the interests of full-power radio broadcasters to
secondary importance in its eagerness to launch the new low-power FM
service, the bill requires the FCC to complete all rulemakings
necessary to implement full-power stations' transition to digital
broadcasting no later than June 1, 2001.
Mr. President, this legislation strikes a fair balance by allowing
non-interfering low-power FM stations to operate without further delay,
while affecting only those low-power stations that the FCC finds to be
causing harmful interference in their actual, everyday operations. This
is totally consistent with the fact that low-power FM is a secondary
service which, by law, must cure any interference caused to any
primary, full-power service. This legislation will provide an efficient
and effective means to detect and resolve harmful interference. By
providing a procedural remedy with costs assigned to the losing party,
the bill will discourage the creation of low-power stations most likely
to cause harmful interference even as it discourages full-power
broadcasters from making unwarranted interference claims. And for these
reasons it will provide a more definitive resolution of opposing
interference claims than any number of further studies ever could.
Mr. President, in the interests of would-be new broadcasters,
existing broadcasters, but, most of all, the listening public, I urge
the enactment of the Low Power Radio Act of 2000.
Mr. KERREY. Mr. President, I am pleased to introduce today the Low
Power Radio Act of 2000 with Senator McCain. Low power FM radio is an
effort to bring more diversity to the airwaves. Though radio airwaves
belong to the public, only a handful of people currently control what
we hear on-air. Low power FM will expand that number by thousands,
giving a voice to local governments, community groups, churches, and
schools.
I understand that there is some concern that these new low-power
signals will interfere with existing full-power stations. I believe
these fears are greatly exaggerated. The Federal Communications
Commission (FCC) has decades-long experience dealing with FM-spectrum
issues, and they have conducted extensive testing to ensure that these
new stations will not cause interference.
Should interference occur, however, I believe that full-power
stations must have a process for alleviating the problem. The Low Power
Radio Act allows any broadcaster or listener to file a formal complaint
with the FCC. If the FCC determines that a low-power station is causing
harmful interference, the low power station will be removed from the
airwaves while a technical remedy is found. To discourage frivolous
complaints, however, the FCC is authorized to assess reimbursement of
costs associated with the proceeding as well as punitive damages onto
any full-power station who files a complaint without any purpose other
than to impede a low-power radio transmission.
This initiative has undergone a considerable period of testing and
public comment. Delaying implementation will only result in more
conflicting engineering studies without guaranteeing that interference
will not occur. I believe that it is time to let low power FM go
forward. The Low Power Radio Act gives the FCC the authority to resolve
harmful interference complaints on a case-by-case, common sense basis.
It is a compromise that can work to the benefit of existing
broadcasters, potential low power licensees, and all radio listeners.
______
By Mr. KERRY (for himself and Mr. Feingold):
S. 2990. A bill to amend chapter 42 of title 28, United States Code,
to establish the Judicial Education Fund for the payment of reasonable
expenses of judges participating in seminars, to prohibit the
acceptance of seminar gifts, and for other purposes; to the Committee
on the Judiciary.
the judicial education reform act of 2000
Mr. KERRY. Mr. President, I send to the desk a bill for introduction.
The bill is entitled the Judicial Education Reform Act of 2000. Mr.
Feingold is cosponsoring the legislation.
Mr. President, as the arbiters of justice in our democracy, judges
must be honest and fair in their duties. As importantly, if the rule of
law is to have force in our society, citizens must have faith that
judges approach their duties honestly and fairly, and that their
decisions are based solely on the law and the facts of each case. Even
if every judge were uncorrupt and incorruptible, their honesty would
mean nothing if the public loses confidence in them. Court rulings are
effectively only if the public believes that they have been arrived at
through impartial decision-making. The judiciary must avoid the
appearance of conflict as fastidiously as it avoids conflict.
Recent press coverage and an investigation by the public interest law
firm Community Rights Counsel have revealed that more than 230 federal
judges have taken more than 500 trips to resort locations for legal
seminars paid for by corporations, foundations, and individuals between
1192 and 1998. Many of these sponsors have one-sided legal agendas in
the courts designed to advance their own interests at the expense of
the public interest. In many cases, judges accepted seminar trips while
relevant cases were pending before their court. In some cases, judges
ruled in favor of a litigant bankrolled by a seminar sponsor. And in
one case a judge ruled one way, attended a seminar and returned to
switch his vote to agree with the legal views expressed by the sponsor
of the trip.
The notion that federal judges are accepting all-expense-paid trips
that combine highly political legal theory with stays at resort
locations from persons with interests before their courts creates an
appearance of conflict that is unacceptable and unnecessary. At a
minimum, it creates a perception of improper influence that erodes the
trust the American people must have in our judicial system.
Fortunately, the problems posed by improper judicial junkets can be
remedied and the appearance of judicial impartiality restored. The
Judicial Education Reform Act will seek to amend the Ethics Reform Act
of 1989 to close the loophole that allows for privately-funded seminars
by requiring federal judges to live by the same rules that now govern
federal prosecutors. The proposal is modeled after the successful
Federal Judicial Center. It will ensure that legal educational seminars
for judges serve to educate, not improperly influence. It will ensure
that these seminars improve our judiciary through better-trained and
better-informed judges, not undermine it by eroding public confidence
in judicial neutrality.
Specifically, the legislation bans privately-funded seminars by
prohibiting judges from accepting private seminars as gifts, providing
appropriate exceptions, such as where a judge is a speaker, presenter
or panel participant in such a seminar. The proposal establishes a
Judicial Education Fund of $2 million within the U.S. Treasury for the
payment of expenses incurred by judges attending seminars approved by
the Board of the Federal Judicial Center. It requires the Judicial
Conference to promulgate guidelines to ensure that the Board approves
only those seminars that are conducted in a manner that will maintain
the public's confidence the judiciary. Finally, the proposal requires
that the Board approve a seminar only after information on its content,
presenters, funding and litigation activities of sponsors and
presenters are provided. If approved, information on the seminar must
be posted on the Internet.
Mr. President, in introducing this legislation, I am not charging the
federal judiciary or any single judge with improper behavior. I do not
question the integrity of judges, rather I question a system that
creates the clear appearance of conflict. I understand the need for
education. Our economy has mainstreamed once exotic technologies in
communication, medicine and other fields, and it is important that
judges have access to experts to keep current on technological
advances. And I recognize the need for judges to be exposed to diverse
legal views and to test current legal views. The Judicial Education
Reform Act legislation provides
[[Page S7907]]
$2 million for precisely that purpose. No judge will be without access
to continuing education. But, that education will not be funded by
private entities with broad legal agendas before the federal courts,
or, as has happened in some of the most unfortunate cases, private
entities with cases pending before participating judges.
Finally, Mr. President, I ask unanimous consent to place in the
record a statement from the Honorable Abner J. Mikva on this subject.
Mr. Mikva is a former Chief Judge on the United States Court of Appeals
for the D.C. Circuit and a current Visiting Professor of Law at the
University of Chicago. His statement captures this the essence this
issue and need for reform.
There being no objection, the material ordered to be printed in the
Record, as follows:
Statement of Abner J. Mikva
The notion that judges must be honest for the system to
work is hardly a profound statement. As early as the
Declaration of Independence, our founders complained about
judges who were obsequious to King George, rather than the
cause of justice. But a pure heart is not all that judges
must bring to the judicial equation. For the system to work
as it should, the judges must be perceived to be honest, to
be without bias, to have no tilt in the cause that is being
heard.
That perception of integrity is much more difficult to
obtain. After spending 15 years as a judge and a lifetime as
a lawyer and lawmaker, I can safely say that the number of
judges who were guilty of outright dishonesty--malum in se--
were happily very few. Even taking into account that I
started practicing law in Chicago in the bad old days, the
number of crooked judges was small. But that is not what
people believe--then or now.
The framers and attenders to our judicial system have taken
many steps to help foster the notion of the integrity of its
judges. Some relate to smoke and mirrors--the high bench, the
black robe, the ``all rise'' custom when the judge enters the
room. Some, like life tenure for federal judges, the codes of
conduct promulgated for all judges, are intended to create
the climate for integrity and good behavior. (The
Constitution limits the life tenure of federal judges to
their ``good behavior''.)
All of those steps become meaningless when private
interests are allowed to wine and dine judges at fancy
resorts under the pretext of ``educating'' them about
complicated issues. If an actual party to a case took the
judge to a resort, all expenses paid, shortly before the case
was heard, it would not matter what they talked about. Even
if all they discussed were their prostate problems, the judge
and the party would be perceived to be acting improperly.
The conduct is no less reprehensible when an interest
group substitutes for the party to the case, and the
format for discussion is seminars on environmental policy,
or law and economics, or the ``takings clause'' of the
Constitution.
That's what this report is about. It is about the
perception of dishonesty that arises when judges attend
seminars and study sessions sponsored by corporations and
foundations that have a special interest in the
interpretation given to environmental laws. It may be a
coincidence that the judges who attend these meetings usually
come down on the same side of important policy questions as
the funders who finance these meetings. It may even be a
coincidence that very few environmentalists are invited to
address the judges in the bucolic surroundings where the
seminars are held. But I doubt it. More importantly, any
citizen who reads about judges attending such fancy meetings
under such questionable sponsorship, will doubt it even more.
The federal judiciary has a very effective Federal Judicial
Center. It already provides many of the educational services
that these special interest groups seek to provide to judges.
Admittedly, since the Center is using taxpayer funds and must
answer to Congress, the locals of their programs are not as
exotic. (The last ones I attended were in South Bend, Indiana
in October, and Washington, D.C. in December.) The purpose of
Center sponsored programs is as vanilla as it claims: there
is no agenda to get the judges to perform in any particular
way in handling environmental cases. As a result, the
programs are not only balanced as to presentation, but they
provide no tilt to the judges' subsequent performance.
Unfortunately, the U.S. Judicial Conference, the governing
body for all federal judges, has punted on the propriety of
judges attending seminars funded by special interest groups.
It advised judges to consider the propriety of such seminars
on a ``case by case'' process. That delicacy has not begun to
stem the erosion of public confidence in the fairness of the
judicial process when it comes to environmental causes. One
of the special interest sponsoring groups publishes a ``Desk
Reference for Federal Judges'' which it distributes to all
its judge attendees. That must be a real confidence builder
for an environmental group that sees it on the desk of a
judge sitting on its case. One of the judges on the court on
which I sat has attended some 12 trips sponsored by the three
most prominent special interest seminar groups. I remember at
least two occasions where co-panelist judges took positions
that they had heard advocated at seminars sponsored by groups
with more than a passing interest in the litigation under
consideration.
When I was in the executive branch, all senior officials
operated under a very prophylactic rule. Whenever we were
invited to attend or speak at a private gathering, the
government paid our way. Whether it was the U.S. Chamber of
Commerce or the A.F.L.-C.I.O., nobody could even imply that
the official was being wined and dined and brainwashed to
further some special interest. Experience showed that such a
policy was not sufficient in itself to restore people's
confidence in the Executive Branch; at least we didn't make
the problem worse.
If the Federal Judicial Center can't provide sufficient
judicial education to the task, maybe the federal judges
could use such a prophylaxis. If the judges want to go
traveling, let the government pay for the trip. It may or may
not change the places they go or the things they learn, but
it will at least change the transactional analysis.
Mr. FEINGOLD. Mr. President, at the very foundation of our system of
justice is the notion that judges will be fair and impartial. Strict
ethical guidelines have been in effect for years to remove even the
hint of impropriety from the conduct of those we entrust with the
responsibility of adjudicating disputes and applying the law.
In recent years, there have been disturbing reports of judges
participating in legal education seminars sponsored and paid for by
organizations that simultaneously fund federal court litigation on the
same topics that are covered by the seminars. Some of these seminars
have a clearly biased agenda in favor a certain legal philosophy. A
recent report released by Community Rights Counsel found that at least
1,030 federal judges took over 5,800 privately funded trips between
1992 and 1998. The appearance created by these seminars is not
consistent with the image of an impartial judiciary.
Some of these seminars are conducted at posh vacation resorts in
locations such as Amelia Island, Florida and Hilton Head, South
Carolina, and include ample time for expense-paid recreation. These
kinds of education/vacation trips, which have been valued at over
$7,000 in some cases, create an appearance that the judges who attend
are profiting from their positions. Again, this is an appearance that
is at odds with the traditions of our judiciary.
One-sided seminars given in wealthy resorts funded by wealthy
corporate interests to ``educate'' our judges in a particular view of
the law cannot help but undermine public confidence in the decisions
that judges who attend the seminars ultimately make. I am pleased,
therefore, to join with my colleague from Massachusetts, Senator Kerry,
to introduce the Judicial Education Reform Act of 2000. Our bill
instructs the judicial conference to issue guidelines prohibiting
judges from attending privately funded education seminars. The bill
also authorizes $2 million per year over five years so that the Federal
Judicial Center, FJC, can reimburse judges for seminars they wish to
attend, as long as those seminars are approved by the FJC under
guidelines that will ensure that the seminars are balanced and will
maintain public confidence in the judiciary. And the bill makes clear
that the FJC cannot reimburse judges for the expense of recreational
activities at the seminars.
Mr. President, I have expressed concern throughout my time in the
Congress about the improper influence of campaign contributions and
gifts on members of Congress and the executive branch. Community Rights
Counsel's report has turned the spotlight on the judicial branch and
what it reveals is not at all comforting. The influence of powerful
interests on judicial decision-making through these education seminars
should concern everyone who believes in the rule of law in this
country. If judges are seen to be under the influence of the wealthy
and powerful in our society, ``equal justice under law'' will become an
empty platitude rather than a powerful aspiration for the greatest
judicial system on earth. I believe this bill will help us fulfill the
promise of that great aspiration, and I hope my colleagues will join
Senator Kerry and me in supporting it.
I yield the floor.
______
By Mr. LEAHY (for himself and Mr. Kohl):
S. 2993. A bill to enhance competition for prescription drugs by
increasing the
[[Page S7908]]
ability of the Department of Justice and Federal Trade Commission to
enforce existing antitrust laws regarding brand name drugs and generic
drugs; to the Committee on the Judiciary.
____________________