Congressional Record, Volume 146 Issue 103 (Thursday, September 7, 2000)

[Congressional Record Volume 146, Number 103 (Thursday, September 7, 2000)]
[Senate]
[Pages S8197-S8214]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

Mr. INHOFE:

[[Page S8198]]

S. 3013. To make technical amendments concerning contracts affecting
certain Indian tribes in Oklahoma, and for other purposes; to the
Committee on Indian Affairs.

legislation concerning contracts affecting certain indian tribes in
oklahoma

Mr. INHOFE. Mr. President, today I am pleased to introduce
legislation which will remedy a long outdated statute which impedes
economic development for the Five Civilized Tribes of Oklahoma. For
years tribes have been required to seek approval by the Secretary of
the Interior before they may engage in contracts. Section 81, as it is
known, provides that a contract `relating to Indian lands' is not valid
unless it is approved by the Secretary. This statute was enacted with
good intentions but unfortunately has outgrown its usefulness. Today
this provision constitutes a confusing legal obstacle for tribal
development.
Early last year, Senator Ben Nighthorse Campbell introduced
comprehensive legislation to address the current problems associated
with this statute. That legislation has passed the Senate and now
awaits action before the House. However, the Five Tribes have often
been treated with separate statutes unique to eastern Oklahoma. The
legislation I propose simply corrects a technical oversight which
affects only the Five Civilized Tribes of Oklahoma which is commonly
referred to as Section 82a. Without this correction, the Five Civilized
Tribes of Oklahoma would be the only tribes in the nation which may
still be required to seek Secretarial approval for these contracts. I
urge my colleagues to join me in correcting this oversight.
______

Mr. ASHCROFT:
S. 3015. A bill to grant the consent of Congress to the Kansas and
Missouri Metropolitan Culture District Compact; to the Committee on the
Judiciary.

The Kansas and Missouri Metropolitan Cultural District Compact Act of
2000

Mr. ASHCROFT. Mr. President, today I rise to introduce a bill to
grant the consent of Congress to the Kansas and Missouri Metropolitan
Cultural District Compact.
This bill would allow the people in 2002, or after, to consider
additional projects which contribute or enhance the aesthetic,
artistic, historical, intellectual of social development or
appreciation of members of the general public. This definition has been
expanded to include sports facilities. This compact has made the
restoration of Kansas City's Union Station possible.
The original enabling legislation, which passed in 1994 established a
bi-state cultural district for the Kansas City metropolitan area of
five counties in Western Missouri and Eastern Kansas. This provides a
secure source of local funding for metropolitan cooperation across
state lines to restore historic structures and cultural facilities. The
Federal authority for this bi-state compact expires at the end of 2001.
We must see to it that a new compact is approved to continue this
successful venture.
Mr. President, this legislation does not cost the Federal government
any money. It is funded through a \1/8\ sales tax, passed by the voters
of Jackson, Johnson, Clay and Platte counties, and merely needs Federal
approval. This measure is a perfect example of the appropriate
relationship between the Federal government and the states. This
approval would allow these local communities to make decisions on how--
and whether--their tax dollars are to be spent on cultural activities.
This bill has bipartisan support in the House of Representatives. The
companion legislation, HR 4700, passed the House Judiciary Committee by
voice vote and the full House also by voice vote. It is supported by
the Greater Kansas City Chamber of Commerce, the Mid-American Regional
Council, the Overland Park Chamber of Commerce, Kansas City Area
Development Council, Johnson County President's Council, Labor-
Management Council of Greater Kansas City, Jackson County Executive,
Kansas Governor Bill Graves, and Missouri Governor Mel Carnahan.
______

Mr. ROTH (for himself, Mr. Jeffords, Mr. Gramm, Mr. Murkowski,
Mr. Campbell, Mr. Nickles, Mr. Lott, Mr. Stevens, Mr. Frist,
Mr. Domenici, Mr. Craig, and Mr. Grams):

MEDICARE TEMPORARY DRUG ASSISTANCE ACT

Mr. ROTH. Mr. President, for the past two years, the Finance
Committee has been working on comprehensive Medicare reform--reform
intended both to modernize the Medicare benefit package, which would
include the creation of an outpatient prescription drug benefit, and to
protect the long-term solvency of the program. The Committee has held
15 hearings on many different aspects of Medicare reform. We have
listened to testimony from scores of witnesses.
And we appreciate how important, but also how complex an undertaking
Medicare reform is, as what we do will affect 40 million Americans who
rely on the program.
Working closely with colleagues on both sides of the aisle, this July
I introduced an ambitious Medicare plan that took the best ideas from
Republicans and Democrats--a plan that would achieve the modern reforms
we all seek. I am committed to adding a comprehensive prescription drug
benefit to the Medicare program, coupled with other major reforms that
are badly needed.
The plan that I have been working on includes not only comprehensive
drug coverage added to the basic Medicare benefit package, but
improvements to hospital and other benefits, low-income beneficiary
protections, access to medical technologies, private sector drug
benefit management, improvements to Medicare's long-term solvency and a
strengthened Medicare+Choice Program.
I have been working for several months to refine my bill and to get
the finalized estimates from the Congressional Budget Office that are
necessary to advance any major piece of legislation in the Congress.
These steps are also essential to make sure that the program is kept
affordable for beneficiaries and taxpayers alike. I intend shortly to
share the latest information with my colleagues on the Finance
Committee.
It is my intention to continue to work aggressively with my
colleagues on the Finance Committee--as well as with all members of
this body--to build on my initiative introduced in July and to move
ahead with successful bipartisan reform. I appreciate the strong
interest and support our agenda for reform is receiving from both sides
of the aisle.
However, there are real reasons why we don't yet have agreement on
Medicare. Program reform efforts are enormously complex. In no small
part because Medicare is such an important part of our social fabric.
We must work through extraordinarily diverse views on the proper role
of government, how best to achieve affordability for beneficiaries and
taxpayers--all while ensuring stability and continuity in the program.
In view of the fact that at this time there is no clear consensus on
comprehensive reform, and that even if there were, such reform would
take two or three years to implement, I am today introducing
legislation that will help us see that low-income beneficiaries are not
denied prescription drug coverage while we continue to move forward
with long-term reform.
I call this legislation the Medicare Temporary Drug Assistance Act,
and it actually includes two versions--one that meets current budget
guidelines and will only require a simple majority for passage, and a
second version that is larger, covers more beneficiaries, but exceeds
budget guidelines and will thus require a sixty-vote majority.
I call this initiative the Medicare Temporary Drug Assistance Act,
because that's exactly what it is. This effort is not to be mistaken
with the lasting, comprehensive Medicare reform that we will continue
to aggressively pursue--a reform effort that will build on our more
comprehensive plan offered in July. What this temporary legislation
offers is an assurance to low-income seniors that they will be able to
receive the help they need while Congress completes the larger task of
overhauling the Medicare program.
It's an assurance that their immediate needs will not be put on hold
as we deliberate and debate the complex intricacies of long-term
Medicare reform.
In testimony before our committee, the AARP repeatedly reminded us
how

[[Page S8199]]

important it is that we proceed carefully with long-term reform. AARP
also told our Committee that a program aiding low-income beneficiaries
could be achieved in a shorter time frame. I agree with their
assessment and support the goal of providing immediate help to low-
income beneficiaries.
And this is what my legislation will do--it allows us to continue the
intricate work of long-term reform without forcing Americans to dilute
their prescription dosages or to choose between prescription drugs and
food.
It is my hope--as I believe there is sufficient bipartisan consensus
on the subject of prescription drug coverage--that we can come together
to pass this legislation. Like I've said, the first version of this
bill requires only a simple majority. It has been designed to fit
within current budget restrictions.
Having my preference, Mr. President, I would like to see us pass the
broader version that will require sixty votes, as it will offer more
extensive coverage. But either way, these bills--once enacted--will
implement a temporary, state-based, program to provide low-income
Medicare beneficiaries with prescription drug coverage outside the
Medicare program.
Now, Mr. President, let me clear up a couple of misunderstandings
that appear to surround this. First of all, I have heard concerns
raised that this legislation depends on the appropriations process for
funding. This is wrong; they do not. Just like the State Children
Health Insurance Program, funding is mandatory under the Social
Security Act.
Second, I know that some have tried to attach a welfare stigma to the
new program. Let me be clear: prescription drug coverage is not
welfare, it is common sense. Frankly, I am surprised that there are
those who would imply otherwise, because for years, we have worked to
de-stigmatize important programs such as Medicaid and the State
Children's Health Insurance Program.
The legislation I'm introducing is modeled on the State Children's
Health Insurance Program--a solution designed to extend drug coverage
to lower-income Medicare beneficiaries--beneficiaries with incomes
below 150 percent of the poverty, and those with the highest out-of-
pocket drug costs. If we have sufficient support to pass the more
generous measure, we can cover beneficiaries up to 175 percent of the
poverty level.
State participation in the new program would be optional, as it is
under SCHIP. According to the National Conference of State
Legislatures, 22 states have passed some type of pharmacy assistance
law. Senior Pharmacy Assistance Programs currently are in place in 16
states, and another five states have passed laws to create such
programs. Many of these states will likely opt to immediately
participate in the new program--receiving federal funds to allow them
to quickly expand their programs to provide drug benefits to even more
Medicare beneficiaries.
Eligible beneficiaries living in states that choose not to
participate in the new program would receive coverage through a fall-
back option administered by the Health Care Financing Administration.
HCFA would contract with a pharmacy benefit manager to provide these
beneficiaries with a drug benefit comparable to that offered to all
Federal employees through the Blue Cross Standard Option plan.
Under either scenario, beneficiaries will receive immediate
assistance. They will not have to wait, they will not have to wonder,
and most importantly they will not have to worry about what happens in
Washington.
Again, Mr. President, this effort is not to be mistaken with the
lasting, comprehensive Medicare reform that we must continue to pursue.
It is best seen as a bridge--a bridge that will provide a low-income
Medicare beneficiaries with prescription drugs--a bridge that the
Washington Post acknowledged just today would be of material value to
lower-income individuals while we continue our work on long-term,
bipartisan reform.
I will continue to work in the Finance Committee toward long-term
Medicare reform--reform which will include a comprehensive outpatient
prescription drug benefit. If we can't pass such a package this year,
we will resume our efforts on the first day of the next session, and we
will not stop until we get the job done. But low-income Medicare
beneficiaries should not have to wait for comprehensive reform to be
enacted in order to receive prescription drug benefits.
This legislation will provide prescription drug coverage and peace of
mind while Congress continues to work on the larger reform package.
Passing it will certainly not obviate the need, nor diminish the
pressing objective that we will have to achieve Medicare reform. There
is no argument on either side of the aisle that long-term reform is not
necessary. But in the interim, we should also take this step.
Then when we get the long-term reform initiative passed--when
comprehensive reform is enacted--this interim step will automatically
be repealed. In that way, it will not replace or compete with reform.
But it will provide valuable protection for many. Full enactment of
this legislation will ensure that 82 percent of all Medicare
beneficiaries will have prescription drug coverage, through the new
program and through other sources of coverage. If Congress votes for
increased coverage, 85 percent of all Medicare beneficiaries would have
prescription drug coverage.
Mr. President, I urge my colleagues to join me on this important
issue. Our many successes in advancing the Medicare program these last
three years have been achieved through cooperation from both sides of
the aisle. We have seen what we can do when we move forward on those
issues where we have a consensus. Now, let's join together to take this
step, as well. Let's implement a principle on which I believe we all
agree--helping our neediest Medicare beneficiaries pay for their
prescription drugs. Toward achieving this important objective, there is
no legitimate reason to delay.
Mr. President, I ask unanimous consent that the bill I am introducing
be printed in the Record following my remarks.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 3016

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 Temporary Drug
Assistance Act''.

SEC. 2. OUTPATIENT PRESCRIPTION DRUG ASSISTANCE PROGRAM.

(a) Establishment.--The Social Security Act (42 U.S.C. 301
et seq.) is amended by adding at the end the following new
title:

``TITLE XXII--OUTPATIENT PRESCRIPTION DRUG ASSISTANCE PROGRAM

``SEC. 2201. PURPOSE; OUTPATIENT PRESCRIPTION DRUG ASSISTANCE
PLANS.

``(a) Purpose.--The purpose of this title is to provide
funds to States to enable States, individually or in a group,
to establish a program, separate from the medicaid program
under title XIX, to provide assistance to low-income medicare
beneficiaries (as defined in section 2202(b)) and, at State
option, medicare beneficiaries with high drug costs (as
defined in section 2202(c)) to obtain coverage for outpatient
prescription drugs.
``(b) Outpatient Prescription Drug Assistance Plan
Required.--A State may not receive payments under section
2205 unless the State, individually or as part of a group of
States, submits in writing to the Secretary an outpatient
prescription drug assistance plan under section 2206(a)(1)
that--
``(1) describes how the State or group of States intends to
use the funds provided under this title to provide outpatient
prescription drug assistance to low-income medicare
beneficiaries and, if applicable, medicare beneficiaries with
high drug costs consistent with the provisions of this title;
``(2) includes a description of the budget for the plan
(updated periodically as necessary) and details on the
planned use of funds, the sources of the non-Federal share of
plan expenditures, and any requirements for cost-sharing by
beneficiaries;
``(3) describes the procedures to be used to ensure that
the outpatient prescription drug assistance provided to low-
income medicare beneficiaries and, if applicable, medicare
beneficiaries with high drug costs under the plan does not
supplant coverage for outpatient prescription drugs available
to such beneficiaries under group health plans; and
``(4) has been approved by the Secretary under section
2206(a)(2).
``(c) Entitlement.--Subject to subsection (d)(2), this
title constitutes budget authority in advance of
appropriations Acts and represents the obligation of the
Federal Government to provide for the payment to States,
groups of States, and contractors described in section
2209(a)(2)(A), of amounts provided under section 2204.
``(d) Period of Applicability.--
``(1) In general.--No State, group of States, or contractor
described in section 2209(a)(2)(A), may receive payments
under

[[Page S8200]]

section 2205 for outpatient prescription drug assistance
provided for periods beginning before October 1, 2000, or
after December 31, 2003.
``(2) Medicare reform.--If medicare reform legislation that
includes coverage for outpatient prescription drugs is
enacted during the period that begins on October 1, 2000, and
ends on December 31, 2003, this title shall be repealed upon
the effective date of such legislation, and no State, group
of States, or contractor described in section 2209(a)(2)(A)
shall be entitled to receive payments for any outpatient
prescription drug assistance provided on or after such date.

``SEC. 2202. BENEFICIARY ELIGIBILITY.

``(a) Eligibility.--
``(1) In general.--In order for a State (individually or as
part of a group of States) to receive payments under section
2205 with respect to an outpatient prescription drug
assistance program, the program must provide, subject to the
availability of funds, outpatient prescription drug
assistance to each individual who--
``(A) resides in the State;
``(B) applies for such assistance; and
``(C) establishes that the individual is--
``(i) a low-income medicare beneficiary (as defined in
subsection (b)); or
``(ii) at the option of the State, a medicare beneficiary
with high drug costs (as defined in subsection (c)).
``(2) Residency rules.--In applying paragraph (1),
residency rules similar to the residency rules applicable to
the State plan under title XIX shall apply.
``(b) Low-Income Medicare Beneficiary Defined.--
``(1) In general.--In this title, except as provided in
section 2209(a)(2)(B), the term `low-income medicare
beneficiary' means an individual who--
``(A) is entitled to benefits under part A of title XVIII
or enrolled under part B of such title, including an
individual enrolled in a Medicare+Choice plan under part C of
such title;
``(B) subject to subsection (d), is not entitled to medical
assistance with respect to prescribed drugs under title XIX
or under a waiver under section 1115 of the requirements of
such title;
``(C) is determined to have family income that does not
exceed a percentage of the poverty line for a family of the
size involved specified by the State that, subject to
paragraph (2), may not exceed 150 percent; and
``(D) at the option of the State, is determined to have
resources that do not exceed a level specified by the State.
``(2) State-only drug assistance programs.--In the case of
a State that has a State-based drug assistance program
described in section 2203(e) that provides outpatient
prescription drug coverage for individuals described in
paragraph (1)(A) who have family income up to or exceeding
150 percent of the poverty line, the State may specify a
percentage of the poverty line under paragraph (1)(C) that
exceeds the income eligibility level specified by the State
for such program but does not exceed 50 percentage points
above such income eligibility level.
``(c) Medicare Beneficiary With High Drug Costs Defined.--
``(1) In general.--In this title, except as provided in
section 2209(a)(2)(C), the term `medicare beneficiary with
high drug costs' means an individual--
``(A) who satisfies the requirements of subparagraphs (A)
and (B) of subsection (b)(1);
``(B) whose family income exceeds the percentage of the
poverty line specified by the State in accordance with
subsection (b)(1)(C);
``(C) at the option of the State, whose resources exceed a
level (if any) specified by the State in accordance with
subsection (b)(1)(D); and
``(D) who has out-of-pocket expenses for outpatient
prescription drugs and biologicals (including insulin and
insulin supplies) for which outpatient prescription drug
assistance is available under this title that exceed such
amount as the State specifies in accordance with paragraph
(2).
``(2) Determination of out-of-pocket expenses.--A State
that elects to provide outpatient prescription drug
assistance to an individual described in paragraph (1) shall
provide the Secretary with the methodology and standards used
to determine the individual's eligibility under subparagraph
(D) of such paragraph.
``(d) Access for Medicaid Expansion States.--
``(1) In general.--Notwithstanding any other provision of
this title, with respect to any State that, as of the date of
enactment of this title, has made outpatient prescription
drug coverage for individuals described in paragraph (2)
available through the State medicaid program under title XIX
under a section 1115 waiver, the Secretary, in consultation
with such State, shall establish procedures under which the
State shall be able to receive payments from the allotment
made available under section 2204 for such State for a fiscal
year for purposes of offsetting the costs of making such
coverage available to such individuals.
``(2) Individuals described.--Individuals described in this
paragraph are individuals who are--
``(A) entitled to benefits under part A of title XVIII or
enrolled under part B of such title, including an individual
enrolled in a Medicare+Choice plan under part C of such
title; and
``(B) eligible for outpatient prescription drug coverage
only, under a State medicaid program under title XIX as a
result of a section 1115 waiver.
``(e) Individual Nonentitlement.--Nothing in this title
shall be construed as providing an individual with an
entitlement to outpatient prescription drug assistance
provided under this title.

``SEC. 2203. COVERAGE REQUIREMENTS.

``(a) Required Scope of Coverage.--
``(1) In general.--The outpatient prescription drug
assistance provided under the plan may consist of any of the
following:
``(A) Benchmark coverage.--Outpatient prescription drug
coverage that is equivalent to the outpatient prescription
drug coverage in a benchmark benefit package described in
subsection (b).
``(B) Aggregate actuarial value equivalent to benchmark
package.--Outpatient prescription drug coverage that has an
aggregate actuarial value that is at least equivalent to one
of the benchmark benefit packages.
``(C) Existing comprehensive state-based coverage.--
Outpatient prescription drug coverage under an existing
State-based program, described in subsection (e).
``(D) Secretary-approved coverage.--Any other outpatient
prescription drug coverage that the Secretary determines,
upon application by a State or group of States, provides
appropriate outpatient prescription drug coverage for the
population of medicare beneficiaries proposed to be provided
such coverage.
``(2) Consistent design.--A State or group of States may
only select one of the options described in paragraph (1)
(and, if the State or group chooses to provide outpatient
prescription drug coverage that is equivalent to the
outpatient prescription drug coverage in a benchmark benefit
package, only one of the benchmark benefit package options
described in subsection (b)) in order to provide outpatient
prescription drug assistance in a uniform manner for the
population of medicare beneficiaries provided such coverage.
``(b) Benchmark Benefit Packages.--The benchmark benefit
packages are as follows:
``(1) Medicaid outpatient prescription drug coverage.--In
the case of--
``(A) a State, the outpatient prescription drug coverage
provided under the State medicaid plan under title XIX; or
``(B) a group of States, the outpatient prescription drug
coverage provided under the State medicaid plan under such
title of one of the States in the group, as identified in the
outpatient prescription drug assistance plan.
``(2) FEHBP-equivalent outpatient prescription drug
coverage.--The outpatient prescription drug coverage provided
under the Standard Option Blue Cross and Blue Shield Service
Benefit Plan described in and offered under section 8903(1)
of title 5, United States Code.
``(3) State employee outpatient prescription drug
coverage.--In the case of--
``(A) a State, the outpatient prescription drug coverage
provided under a health benefits coverage plan that is
offered and generally available to State employees in the
State involved; or
``(B) a group of States, the outpatient prescription drug
coverage provided under a health benefits coverage plan that
is offered and generally available to State employees in one
of the States in the group, as identified in the outpatient
prescription drug assistance plan.
``(4) Outpatient prescription drug coverage offered through
largest hmo.--In the case of--
``(A) a State, the outpatient prescription drug coverage
provided under a health insurance coverage plan that is
offered by a health maintenance organization (as defined in
section 2791(b)(3) of the Public Health Service Act) and has
the largest insured commercial, nonmedicaid enrollment of
covered lives of such coverage plans offered by such a health
maintenance organization in the State involved; or
``(B) a group of States, the outpatient prescription drug
coverage provided under a health insurance coverage plan that
is offered by a health maintenance organization (as defined
in section 2791(b)(3) of the Public Health Service Act) and
has the largest insured commercial, nonmedicaid enrollment of
covered lives of such coverage plans offered by such a health
maintenance organization in one of the States involved.
``(c) Determination of Actuarial Value of Coverage.--
``(1) In general.--The actuarial value of outpatient
prescription drug coverage offered under benchmark benefit
packages and the outpatient prescription drug assistance plan
shall be set forth in an opinion in a report that has been
prepared--
``(A) by an individual who is a member of the American
Academy of Actuaries;
``(B) using generally accepted actuarial principles and
methodologies;
``(C) using a standardized set of utilization and price
factors;
``(D) using a standardized population that is
representative of the population to be covered under the
outpatient prescription drug assistance plan;
``(E) applying the same principles and factors in comparing
the value of different coverage;
``(F) without taking into account any differences in
coverage based on the method of delivery or means of cost
control or utilization used; and

[[Page S8201]]

``(G) taking into account the ability of a State or group
of States to reduce benefits by taking into account the
increase in actuarial value of benefits coverage offered
under the outpatient prescription drug assistance plan that
results from the limitations on cost-sharing under such
coverage.
``(2) Requirement.--The actuary preparing the opinion shall
select and specify in the report the standardized set and
population to be used under subparagraphs (C) and (D) of
paragraph (1).
``(d) Prohibited Coverage.--Nothing in this section shall
be construed as requiring any outpatient prescription drug
coverage offered under the plan to provide coverage for an
outpatient prescription drug for which payment is prohibited
under this title, notwithstanding that any benchmark benefit
package includes coverage for such an outpatient prescription
drug.
``(e) Description of Existing Comprehensive State-Based
Coverage.--
``(1) In general.--A program described in this paragraph is
an outpatient prescription drug coverage program for
individuals who are entitled to benefits under part A of
title XVIII or enrolled under part B of such title, including
an individual enrolled in a Medicare+Choice plan under part C
of such title, that--
``(A) is administered or overseen by the State and receives
funds from the State;
``(B) was offered as of the date of the enactment of this
title;
``(C) does not receive or use any Federal funds; and
``(D) is certified by the Secretary as providing outpatient
prescription drug coverage that satisfies the scope of
coverage required under subparagraph (A), (B), or (D) of
subsection (a)(1).
``(2) Modifications.--A State may modify a program
described in paragraph (1) from time to time so long as it
does not reduce the actuarial value (evaluated as of the time
of the modification) of the outpatient prescription drug
coverage under the program below the lower of--
``(A) the actuarial value of the coverage under the program
as of the date of enactment of this title; or
``(B) the actuarial value described in subsection
(a)(1)(B).
``(f) Beneficiary Premiums and Cost-Sharing.--
``(1) Description; general conditions.--
``(A) Description.--
``(i) In general.--An outpatient prescription drug
assistance plan shall include a description, consistent with
this subsection, of the amount of any premiums or cost-
sharing imposed under the plan.
``(ii) Public schedule of charges.--Any premium or cost-
sharing described under clause (i) shall be imposed under the
plan pursuant to a public schedule.
``(B) Protection for beneficiaries.--The outpatient
prescription drug assistance plan may only vary premiums and
cost-sharing based on the family income of low-income
medicare beneficiaries and, if applicable, medicare
beneficiaries with high drug costs, in a manner that does not
favor such beneficiaries with higher income over
beneficiaries with low-income.
``(2) Limitations on premiums and cost-sharing.--
``(A) No premiums or cost-sharing for beneficiaries with
income below 100 percent of poverty line.--In the case of a
low-income medicare beneficiary whose family income does not
exceed 100 percent of the poverty line, the outpatient
prescription drug assistance plan may not impose any premium
or cost-sharing.
``(B) Other beneficiaries.--For low-income medicare
beneficiaries not described in subparagraph (A) and, if
applicable, medicare beneficiaries with high drug costs, any
premiums or cost-sharing imposed under the outpatient
prescription drug assistance plan may be imposed, subject to
paragraph (1)(B), on a sliding scale related to income,
except that the total annual aggregate of such premiums and
cost-sharing with respect to all such beneficiaries in a
family under this title may not exceed 5 percent of such
family's income for the year involved.
``(g) Restriction on Application of Preexisting Condition
Exclusions.--The outpatient prescription drug assistance plan
shall not permit the imposition of any preexisting condition
exclusion for covered benefits under the plan and may not
discriminate in the pricing of premiums under such plan
because of health status, claims experience, receipt of
health care, or medical condition.

``SEC. 2204. ALLOTMENTS.

``(a) Appropriation.--
``(1) In general.--For the purpose of providing allotments
under this section to States, there is appropriated, out of
any money in the Treasury not otherwise appropriated--
``(A) for fiscal year 2001, $1,200,000,000;
``(B) for fiscal year 2002, $4,200,000,000;
``(C) for fiscal year 2003, $9,000,000,000; and
``(D) for fiscal year 2004, $3,000,000,000.
``(2) Availability.--Amounts appropriated under paragraph
(1) shall only be available for providing the allotments
described in such paragraph during the fiscal year for which
such amounts are appropriated. Any amounts that have not been
obligated by the Secretary for the purposes of making
payments from such allotments under section 2205, or under
contracts entered into under section 2209(b)(2)(B), on or
before September 30 of fiscal year 2001, 2002, or 2003 (as
applicable) or, with respect to fiscal year 2004, December
31, 2003, shall be returned to the Treasury.
``(b) Allotments to 50 States and District of Columbia.--
``(1) In general.--Subject to paragraph (3), of the amount
available for allotment under subsection (a) for a fiscal
year, reduced by the amount of allotments made under
subsection (c) for the fiscal year, the Secretary shall allot
to each State (other than a State described in such
subsection) with an outpatient prescription drug assistance
plan approved under this title the same proportion as the
ratio of--
``(A) the number of medicare beneficiaries with family
income that does not exceed 150 percent of the poverty line
residing in the State for the fiscal year; to
``(B) the total number of such beneficiaries residing in
all such States.
``(2) Determination of number of medicare beneficiaries
with income that does not exceed 150 percent of poverty.--For
purposes of paragraph (1), a determination of the number of
medicare beneficiaries with family income that does not
exceed 150 percent of the poverty line residing in a State
for the calendar year in which such fiscal year begins shall
be made on the basis of the arithmetic average of the number
of such medicare beneficiaries, as reported and defined in
the 5 most recent March supplements to the Current Population
Survey of the Bureau of the Census before the beginning of
the fiscal year.
``(3) Minimum allotment.--In no case shall the amount of
the allotment under this subsection for one of the 50 States
or the District of Columbia for a fiscal year be less than an
amount equal to 0.5 percent of the amount provided for
allotments under subsection (a) for that fiscal year (reduced
by the amount of allotments made under subsection (c) for the
fiscal year). To the extent that the application of the
previous sentence results in an increase in the allotment to
a State or the District of Columbia above the amount
otherwise provided, the allotments for the other States and
the District of Columbia under this subsection shall be
reduced in a pro rata manner (but not below the minimum
allotment described in such preceding sentence) so that the
total of such allotments in a fiscal year does not exceed the
amount otherwise provided for allotment under subsection (a)
for that fiscal year (as so reduced).
``(c) Allotments to Territories.--
``(1) In general.--Of the amount available for allotment
under subsection (a) for a fiscal year, the Secretary shall
allot 0.25 percent among each of the commonwealths and
territories described in paragraph (3) in the same proportion
as the percentage specified in paragraph (2) for such
commonwealth or territory bears to the sum of such
percentages for all such commonwealths or territories so
described.
``(2) Percentage.--The percentage specified in this
paragraph for--
``(A) Puerto Rico is 91.6 percent;
``(B) Guam is 3.5 percent;
``(C) the United States Virgin Islands is 2.6 percent;
``(D) American Samoa is 1.2 percent; and
``(E) the Northern Mariana Islands is 1.1 percent.
``(3) Commonwealths and territories.--A commonwealth or
territory described in this paragraph is any of the following
if it has an outpatient prescription drug assistance plan
approved under this title:
``(A) Puerto Rico.
``(B) Guam.
``(C) The United States Virgin Islands.
``(D) American Samoa.
``(E) The Northern Mariana Islands.
``(d) Transfer of Certain Allotments and Portions of
Allotments.--
``(1) Transfer and redistribution.--
``(A) In general.--Subject to subparagraph (B), not later
than 30 days after the date described in paragraph (2)--
``(i) 90 percent of the allotment determined for a fiscal
year under subsection (b) or (c) for a State shall be
transferred and made available in such fiscal year to the
Secretary, acting through the Administrator of the Health
Care Financing Administration, for purposes of carrying out
the default program established under section 2209; and
``(ii) 10 percent of such allotment shall be redistributed
in accordance with subsection (e).
``(B) Applicability.--Subparagraph (A) shall not apply if,
not later than the date described in paragraph (2) for such
fiscal year, a State submits a plan or is part of a group of
States that submits a plan to the Secretary that the
Secretary finds meets the requirements of section 2201(b).
``(2) Date described.--The date described in this paragraph
is--
``(A) in the case of fiscal year 2001, December 31, 2000;
and
``(B) in the case of fiscal year 2002, 2003, or 2004,
September 1 of the fiscal year preceding such fiscal year.
``(e) Redistribution of Portion of Allotments.--With
respect to a fiscal year, not later than 30 days after the
date described in subsection (d)(2) for such fiscal year, the
Secretary shall redistribute the total amount made available
for redistribution for such fiscal year under subsection
(d)(1)(A)(ii) to each State that submits a plan or is part of
a group of States that submits a plan to the Secretary that
the Secretary finds meets the requirements of this title.
Such amount shall be redistributed in the same manner as
allotments are determined under subsections

[[Page S8202]]

(b) and (c) and shall be available only to the extent
consistent with subsection (a)(2).

``SEC. 2205. PAYMENTS TO STATES.

``(a) In General.--Subject to the succeeding provisions of
this section, the Secretary shall pay to each State with a
plan approved under section 2206(a)(2) (individually or as
part of a group of States) from the State's allotment under
section 2204, an amount for each quarter equal to the
applicable percentage of expenditures in the quarter--
``(1) for outpatient prescription drug assistance under the
plan for low-income medicare beneficiaries and, if
applicable, medicare beneficiaries with high drug costs in
the form of providing coverage for outpatient prescription
drugs that meets the requirements of section 2203; and
``(2) only to the extent permitted consistent with
subsection (c), for reasonable costs incurred to administer
the plan.
``(b) Applicable Percentage.--For purposes of subsection
(a), the applicable percentage is--
``(1) for low-income medicare beneficiaries with family
incomes that do not exceed 135 percent of the poverty line,
100 percent; and
``(2) for all other low-income medicare beneficiaries and
for medicare beneficiaries with high drug costs, the enhanced
FMAP (as defined in section 2105(b)).
``(c) Limitation on Payments for Certain Expenditures.--
``(1) General limitations.--Funds provided to a State or
group of States under this title shall only be used to carry
out the purposes of this title.
``(2) Administrative expenditures.--
``(A) In general.--Subject to subparagraph (B), payment
shall not be made under subsection (a) for expenditures
described in subsection (a)(2) for a fiscal year to the
extent the total of such expenditures (for which payment is
made under such subsection) exceeds 10 percent of the total
expenditures described in subsection (a)(1) made by--
``(i) in the case of a State that is not part of a group of
States, the State for such fiscal year; and
``(ii) in the case of a group of States, the group for such
fiscal year.
``(B) Special rule.--With respect to the first fiscal year
that a State or group of States provides outpatient
prescription drug assistance under a plan approved under this
title, the 10 percent limitation described in subparagraph
(A) shall be applied--
``(i) in the case of a State that is not part of a group of
States, to the allotment available for such State for such
fiscal year; and
``(ii) in the case of a group of States, to the aggregate
of the State allotments available for all the States in such
group for such fiscal year.
``(3) Use of non-federal funds for state matching
requirement.--Amounts provided by the Federal Government, or
services assisted or subsidized to any significant extent by
the Federal Government, may not be included in determining
the amount of the non-Federal share of plan expenditures
required under the plan.
``(4) Offset of receipts attributable to premiums or cost-
sharing.--For purposes of subsection (a), the amount of the
expenditures under the plan shall be reduced by the amount of
any premiums or cost-sharing received by a State.
``(5) Prevention of duplicative payments.--
``(A) Other health plans.--No payment shall be made under
this section for expenditures for outpatient prescription
drug assistance provided under an outpatient prescription
drug assistance plan to the extent that a private insurer (as
defined by the Secretary by regulation and including a group
health plan, a service benefit plan, and a health maintenance
organization) would have been obligated to provide such
assistance but for a provision of its insurance contract
which has the effect of limiting or excluding such obligation
because the beneficiary is eligible for or is provided
outpatient prescription drug assistance under the plan.
``(B) Other federal governmental programs.--Except as
otherwise provided by law, no payment shall be made under
this section for expenditures for outpatient prescription
drug assistance provided under an outpatient prescription
drug assistance plan to the extent that payment has been made
or can reasonably be expected to be made promptly (as
determined in accordance with regulations) under any other
federally operated or financed health care insurance program
identified by the Secretary. For purposes of this paragraph,
rules similar to the rules for overpayments under section
1903(d)(2) shall apply.
``(d) Advance Payment; Retrospective Adjustment.--The
Secretary may make payments under this section for each
quarter on the basis of advance estimates of expenditures
submitted by a State or group of States and such other
investigation as the Secretary may find necessary, and may
reduce or increase the payments as necessary to adjust for
any overpayment or underpayment for prior quarters.
``(e) Flexibility in Submittal of Claims.--Nothing in this
section shall be construed as preventing a State or group of
States from claiming as expenditures in any quarter of a
fiscal year expenditures that were incurred in a previous
quarter of such fiscal year.

``SEC. 2206. PROCESS FOR SUBMISSION, APPROVAL, AND AMENDMENT
OF OUTPATIENT PRESCRIPTION DRUG ASSISTANCE
PLANS.

``(a) Initial Plan.--
``(1) Submission.--A State may receive payments under
section 2205 with respect to a fiscal year if the State,
individually or as part of a group of States, has submitted
to the Secretary, not later than the date described in
section 2204(d)(2), an outpatient prescription drug
assistance plan that the Secretary has found meets the
applicable requirements of this title.
``(2) Approval.--Except as the Secretary may provide under
subsection (e), a plan submitted under paragraph (1)--
``(A) shall be approved for purposes of this title; and
``(B) shall be effective beginning with a calendar quarter
that is specified in the plan, but in no case earlier than
October 1, 2000.
``(b) Plan Amendments.--Within 30 days after a State or
group of States amends an outpatient prescription drug
assistance plan submitted pursuant to subsection (a), the
State or group shall notify the Secretary of the amendment.
``(c) Disapproval of Plans and Plan Amendments.--
``(1) Prompt review of plan submittals.--The Secretary
shall promptly review plans and plan amendments submitted
under this section to determine if they substantially comply
with the requirements of this title.
``(2) 45-day approval deadlines.--A plan or plan amendment
is considered approved unless the Secretary notifies the
State or group of States in writing, within 45 days after
receipt of the plan or amendment, that the plan or amendment
is disapproved (and the reasons for the disapproval) or that
specified additional information is needed.
``(3) Correction.--In the case of a disapproval of a plan
or plan amendment, the Secretary shall provide a State or
group of States with a reasonable opportunity for correction
before taking financial sanctions against the State or group
on the basis of such disapproval.
``(d) Program Operation.--
``(1) In general.--A State or group of States shall conduct
the program in accordance with the plan (and any amendments)
approved under this section and with the requirements of this
title.
``(2) Violations.--The Secretary shall establish a process
for enforcing requirements under this title. Such process
shall provide for the withholding of funds in the case of
substantial noncompliance with such requirements. In the case
of an enforcement action against a State or group of States
under this paragraph, the Secretary shall provide a State or
group of States with a reasonable opportunity for correction
and for administrative and judicial appeal of the Secretary's
action before taking financial sanctions against the State or
group of States on the basis of such an action.
``(e) Continued Approval.--Subject to section 2201(d), an
approved outpatient prescription drug assistance plan shall
continue in effect unless and until the State or group of
States amends the plan under subsection (b) or the Secretary
finds, under subsection (d), substantial noncompliance of the
plan with the requirements of this title.

``SEC. 2207. PLAN ADMINISTRATION; APPLICATION OF CERTAIN
GENERAL PROVISIONS.

``(a) Plan Administration.--An outpatient prescription drug
assistance plan shall include an assurance that the State or
group of States administering the plan will collect the data,
maintain the records, afford the Secretary access to any
records or information relating to the plan for the purposes
of review or audit, and furnish reports to the Secretary, at
the times and in the standardized format the Secretary may
require in order to enable the Secretary to monitor program
administration and compliance and to evaluate and compare the
effectiveness of plans under this title.
``(b) Application of Certain General Provisions.--The
following sections of this Act shall apply to the program
established under this title in the same manner as they apply
to a State under title XIX:
``(1) Title xix provisions.--
``(A) Section 1902(a)(4)(C) (relating to conflict of
interest standards).
``(B) Paragraphs (2), (16), and (17) of section 1903(i)
(relating to limitations on payment).
``(C) Section 1903(w) (relating to limitations on provider
taxes and donations).
``(2) Title xi provisions.--
``(A) Section 1115 (relating to waiver authority).
``(B) Section 1116 (relating to administrative and judicial
review), but only insofar as consistent with this title.
``(C) Section 1124 (relating to disclosure of ownership and
related information).
``(D) Section 1126 (relating to disclosure of information
about certain convicted individuals).
``(E) Section 1128A (relating to civil monetary penalties).
``(F) Section 1128B(d) (relating to criminal penalties for
certain additional charges).

``SEC. 2208. REPORTS.

[[Page S8203]]

``(1) An assessment of the effectiveness of the plan in
providing outpatient prescription drug assistance to low-
income medicare beneficiaries and, if applicable, medicare
beneficiaries with high drug costs.
``(2) A description and analysis of the effectiveness of
elements of the plan, including--
``(A) the characteristics of the low-income medicare
beneficiaries and, if applicable, medicare beneficiaries with
high drug costs assisted under the plan, including family
income and access to, or coverage by, other health insurance
prior to the plan and after eligibility for the plan ends;
``(B) the amount and level of assistance provided under the
plan; and
``(C) the sources of the non-Federal share of plan
expenditures.
``(c) Annual Report of the Secretary.--The Secretary shall
submit to Congress and make available to the public an annual
report based on the reports required under subsection (a) and
section 2209(b)(5), containing any conclusions and
recommendations the Secretary considers appropriate.

``SEC. 2209. ESTABLISHMENT OF DEFAULT PROGRAM.

``(a) Program Authority.--
``(1) In general.--With respect to a fiscal year, in the
case of a State that fails to submit (individually or as part
of a group of States) an approved outpatient prescription
drug assistance plan to the Secretary by the date described
in section 2204(d)(2) for such fiscal year, outpatient
prescription drug assistance to low-income medicare
beneficiaries and, subject to the availability of funds,
medicare beneficiaries with high drug costs, who reside in
such State shall be provided during such fiscal year by the
Secretary, through the Administrator of the Health Care
Financing Administration, in accordance with this section.
``(2) Definitions.--In this section:
``(A) Contractor.--The term `contractor' means a
pharmaceutical benefit manager or other entity that meets
standards established by the Administrator of the Health Care
Financing Administration for the provision of outpatient
prescription drug assistance under a contract entered into
under this section.
``(B) Low-income medicare beneficiary.--The term `low-
income medicare beneficiary' means an individual who--
``(i) satisfies the requirements of subparagraphs (A) and
(B) of section 2202(b)(1);
``(ii) is determined to have family income that does not
exceed a percentage of the poverty line for a family of the
size involved specified by the Administrator of the Health
Care Financing Administration that may not exceed 135
percent; and
``(iii) at the option of the Administrator of the Health
Care Financing Administration, is determined to have
resources that do not exceed a level specified by such
Administrator.
``(C) Medicare beneficiary with high drug costs.--The term
`medicare beneficiary with high drug costs' means an
individual--
``(i) who satisfies the requirements of subparagraphs (A)
and (B) of section 2202(b)(1);
``(ii) whose family income exceeds the percentage of the
poverty line specified by the Administrator of the Health
Care Financing Administration under subparagraph (B)(ii) for
a low-income medicare beneficiary residing in the same State;
``(iii) whose resources exceed a level (if any) specified
by the Administrator of the Health Care Financing
Administration under subparagraph (B)(iii) for a low-income
medicare beneficiary residing in the same State; and
``(iv) with respect to any 3-month period, who has out-of-
pocket expenses for outpatient prescription drugs and
biologicals (including insulin and insulin supplies) for
which outpatient prescription drug assistance is available
under this title that exceed a level specified by such
Administrator (consistent with the availability of funds for
the operation of the program established under this section
in the State where the beneficiary resides).
``(b) Administration.--In administering the default program
established under this section, the Administrator of the
Health Care Financing Administration shall--
``(1) establish procedures to determine the eligibility of
the low-income medicare beneficiaries and medicare
beneficiaries with high drug costs described in subsection
(a) for outpatient prescription drug assistance;
``(2) establish a process for accepting bids to provide
outpatient prescription drug assistance to such
beneficiaries, awarding contracts under such bids, and making
payments under such contracts;
``(3) establish policies and procedures for overseeing the
provision of outpatient prescription drug assistance under
such contracts;
``(4) develop and implement quality and service assessment
measures that include beneficiary quality surveys and annual
quality and service rankings for contractors awarded a
contract under this section;
``(5) annually assess the program established under this
section and submit a report to the Secretary containing the
information required under section 2208(b); and
``(6) carry out such other responsibilities as are
necessary for the administration of the provision of
outpatient prescription drug assistance under this section.
``(c) Contract Requirements.--
``(1) Authority; term.--
``(A) Use of competitive procedures.--
``(i) Fiscal year 2001.--With respect to fiscal year 2001,
the Administrator of the Health Care Financing Administration
may enter into contracts under this section without using
competitive procedures, as defined in section 4(5) of the
Office of Federal Procurement Policy Act (41 U.S.C. 403(5)),
or any other provision of law requiring competitive bidding.
``(ii) Fiscal years 2002, 2003, and 2004.--With respect to
fiscal years 2002, 2003, and 2004, the Administrator of the
Health Care Financing Administration shall award contracts
under this section using competitive procedures (as so
defined).
``(B) Term.--Each contract shall be for a uniform term of
at least 1 year, but may be made automatically renewable from
term to term in the absence of notice of termination by
either party.
``(2) Benefit.--The contract shall require the contractor
to provide a low-income medicare beneficiary and, if
applicable, a medicare beneficiary with high drug costs,
outpatient prescription drug assistance that is equivalent to
the FEHBP-equivalent benchmark benefit package described in
section 2203(b)(2) in a manner that is consistent with the
provisions of this title as such provisions apply to a State
that provides such assistance.
``(3) Quality and service assessment.--The contract shall
require the contractor to cooperate with the quality and
service assessment measures implemented in accordance with
subsection (b)(4).
``(4) Payments.--The contract shall specify the amount and
manner by which payments (including any administrative fees)
shall be made to the contractor for the provision of
outpatient prescription drug assistance to low-income
medicare beneficiaries and, if applicable, medicare
beneficiaries with high drug costs.
``(d) Funding.--
``(1) Aggregate of transferred amounts.--The Secretary,
through the Administrator of the Health Care Financing
Administration, shall use the aggregate of the amounts
transferred and made available under section 2204(d)(1)(A)(i)
for purposes of carrying out the default program established
under this section. Such aggregate may be used to provide
outpatient prescription drug assistance to any low-income
medicare beneficiary, and, subject to the availability of
funds, medicare beneficiary with high drug costs, who resides
in a State described in subsection (a)(1).
``(2) Limitation on administrative costs.--Administrative
expenditures incurred by the Secretary or the Administrator
of the Health Care Financing Administration for a fiscal year
to carry out this section (other than administrative fees
paid to a contractor under a contract meeting the
requirements of subsection (c))--
``(A) shall be paid out of the aggregate amounts described
in paragraph (1); and
``(B) may not exceed an amount equal to 1 percent of all
premiums imposed for such fiscal year to provide outpatient
prescription drug assistance to low-income medicare
beneficiaries and medicare beneficiaries with high drug costs
under this section.
``(e) Termination.--Except as provided in section
2201(d)(2), the program established under this section shall
terminate on December 31, 2003.

``SEC. 2210. DEFINITIONS.

``In this title:
``(1) Cost-sharing.--The term `cost-sharing' means a
deductible, coinsurance, copayment, or similar charge, and
includes an enrollment fee.
``(2) Outpatient prescription drug assistance.--
``(A) In general.--The term `outpatient prescription drug
assistance' means, subject to subparagraph (B), payment for
part or all of the cost of coverage of self-administered
outpatient prescription drugs and biologicals (including
insulin and insulin supplies) for low-income medicare
beneficiaries and, if applicable, medicare beneficiaries with
high drug costs.
``(B) Exclusions.--Such term does not include payment or
coverage with respect to--
``(i) items covered under title XVIII; or
``(ii) items for which coverage is not available under a
State plan under title XIX.
``(3) Outpatient prescription drug assistance plan; plan.--
Unless the context otherwise requires, the terms `outpatient
prescription drug assistance plan' and `plan' mean an
outpatient prescription drug assistance plan approved under
section 2206.
``(4) Group health plan; group health insurance coverage;
etc.--The terms `group health plan', `group health insurance
coverage', and `health insurance coverage' have the meanings
given such terms in section 2791 of the Public Health Service
Act (42 U.S.C. 300gg-91).
``(5) Poverty line.--The term `poverty line' has the
meaning given such term in section 673(2) of the Community
Services Block Grant Act (42 U.S.C. 9902(2)), including any
revision required by such section.
``(6) Preexisting condition exclusion.--The term
`preexisting condition exclusion' has the meaning given such
term in section 2701(b)(1)(A) of the Public Health Service
Act (42 U.S.C. 300gg(b)(1)(A)).
``(7) State.--The term `State' has the meaning given such
term for purposes of title XIX.''.
(b) Conforming Amendments.--
(1) Definition of state.--Section 1101(a)(1) of the Social
Security Act (42 U.S.C. 1301(a)(1)) is amended in the first
and fourth sentences, by striking ``and XXI'' each place it
appears and inserting ``XXI, and XXII''.

[[Page S8204]]

(2) Treatment as state health care program.--Section
1128(h) of such Act (42 U.S.C. 1320a-7(h)) is amended--
(A) in paragraph (3), by striking ``or'' at the end;
(B) in paragraph (4), by striking the period at the end and
inserting ``, or''; and
(C) by adding at the end the following new paragraph:
``(5) an outpatient prescription drug assistance plan
approved under title XXII.''.

SEC. 3. ELECTION BY LOW-INCOME MEDICARE BENEFICIARIES AND
MEDICARE BENEFICIARIES WITH HIGH DRUG COSTS TO
SUSPEND MEDIGAP INSURANCE.

Section 1882(q) of the Social Security Act (42 U.S.C.
1395ss(q)) is amended--
(1) in paragraph (5)(C), by striking ``this paragraph or
paragraph (6)'' and inserting ``this paragraph, or paragraph
(6) or (7)''; and
(2) by adding at the end the following new paragraph:
``(7) Each medicare supplemental policy shall provide that
benefits and premiums under the policy shall be suspended at
the request of the policyholder if the policyholder is
entitled to benefits under section 226 and is covered under
an outpatient prescription drug assistance plan (as defined
in section 2210(3)) or provided outpatient prescription drug
assistance under the program established under section 2209.
If such suspension occurs and if the policyholder or
certificate holder loses coverage under such plan or program,
such policy shall be automatically reinstituted (effective as
of the date of such loss of coverage) under terms described
in subsection (n)(6)(A)(ii) as of the loss of such coverage
if the policyholder provides notice of loss of such coverage
within 90 days after the date of such loss.''.

Mr. JEFFORDS. Mr. President, today I am announcing my support for the
Medicare Temporary Drug Assistance Act, introduced by Senator Roth. The
Act will immediately provide funding for prescription drugs for
Medicare beneficiaries who are having difficulty paying for the
medicines that they need to live longer, happier lives.
Mr. President, we all know that as the baby boomers become eligible
for Medicare the program needs to be reformed due to the increased
population. As a part of Medicare reform, we must have a broad
prescription drug benefit that ensures that all Medicare beneficiaries
have access to affordable medications. It doesn't make any sense for
Medicare to pay for the cost of hospital stays, but not cover the drugs
that can keep patients out of the hospital. The best medicines in the
world will not help a patient who can't afford to take them. That is
why I will continue to do all that I can, as the Chairman of the
Committee on Health, Education, Labor and Pensions and member of the
Finance Committee, to assure that Medicare beneficiaries have access to
affordable prescription drugs this year.
Today Chairman Roth has introduced two bills--one version that stays
within the Budget Resolution, and one that exceeds our budget
restraints--and I am proud to be an original cosponsor of this
legislation, because I am convinced that it will immediately help
millions of Americans who need but can't afford their medications. My
own state of Vermont, which has already acted responsibly by extending
prescription drug coverage to many low-income seniors through the
Vermont Health Access Plan and the Vscript pharmacy program, will be
rewarded with millions of federal dollars to extend its coverage to
even larger numbers of Medicare beneficiaries. Under this bill, federal
dollars will begin paying for prescription drugs for Vermonters on
October 1 of this year--that's only about three weeks from now.
Mr. President, I commend Chairman Roth for his outstanding leadership
on this issue. Chairman Roth has worked tirelessly with me and the
other members of the Finance Committee, clearly demonstrating that he
supports Medicare reform, including coverage of prescription drugs, and
that he believes that this can only be achieved through a bipartisan
process. I have strongly supported his efforts to build a bipartisan
consensus on this issue through the Committee process.
Several weeks ago, Chairman Roth acknowledged the difficulty in
finding a bipartisan consensus during this election year, and announced
that if the Finance Committee is unable to report out a bipartisan
Medicare reform bill, he would propose a plan to cover prescription
drugs for the most needy Medicare beneficiaries, through grants to the
states, as a stop-gap measure until Congress is able to pass larger-
scale Medicare reform. He also acknowledged that even if we were able
to enact a prescription drug benefit this year, it would be almost
impossible to implement such a plan for at least two years. The bill he
has introduced today addresses both of these problems.
Mr. President, let me be clear. This proposal is a stop-gap measure
that will be put into place only until we are able to achieve broad
Medicare reform, including prescription drug coverage that benefits all
Medicare beneficiaries. This is not a substitute for Medicare reform,
and it does not mean that we have given up on enacting Medicare reform
this year. We must also attack the problem of affordability by passing
my bill, the Medicine Equity and Drug Safety Act (S. 2520), which
already passed the Senate by a vote of 74-21 as a part of the
Agriculture Appropriations bill. These efforts will be undertaken
simultaneously. I consider this bill to be emergency aid for
prescription drugs that will be the bridge to a comprehensive plan. It
is a very important down payment that will benefit Vermonters and all
Americans immediately. That is why I am an original cosponsor of
Chairman Roth's proposal, I urge my colleagues support.
Thank you, Mr. President. I yield the floor.
______

By Mr. ROTH (for himself, Mr. Jeffords, Mr. Murkowski, Mr.
Campbell, Mr. Stevens, and Mr. Frist):
S. 3017. A bill to amend the Social Security Act to establish an
outpatient prescription drug assistance program for low-income Medicare
beneficiaries and Medicare beneficiaries with high drug costs; to the
Committee on Finance.

Medicare Temporary Drug Assistance Act

Mr. ROTH. Mr. President, I ask unanimous consent that the text of the
bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 3017

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 Temporary Drug
Assistance Act''.

SEC. 2. OUTPATIENT PRESCRIPTION DRUG ASSISTANCE PROGRAM.

(a) Establishment.--The Social Security Act (42 U.S.C. 301
et seq.) is amended by adding at the end the following new
title:

``TITLE XXII--OUTPATIENT PRESCRIPTION DRUG ASSISTANCE PROGRAM

``SEC. 2201. PURPOSE; OUTPATIENT PRESCRIPTION DRUG ASSISTANCE
PLANS.

[[Page S8205]]

``(2) Medicare reform.--If medicare reform legislation that
includes coverage for outpatient prescription drugs is
enacted during the period that begins on October 1, 2000, and
ends on September 30, 2004, this title shall be repealed upon
the effective date of such legislation, and no State, group
of States, or contractor described in section 2209(a)(2)(A)
shall be entitled to receive payments for any outpatient
prescription drug assistance provided on or after such date.

``SEC. 2202. BENEFICIARY ELIGIBILITY.

``(a) Eligibility.--
``(1) In general.--In order for a State (individually or as
part of a group of States) to receive payments under section
2205 with respect to an outpatient prescription drug
assistance program, the program must provide, subject to the
availability of funds, outpatient prescription drug
assistance to each individual who--
``(A) resides in the State;
``(B) applies for such assistance; and
``(C) establishes that the individual is--
``(i) a low-income medicare beneficiary (as defined in
subsection (b)); or
``(ii) at the option of the State, a medicare beneficiary
with high drug costs (as defined in subsection (c)).
``(2) Residency rules.--In applying paragraph (1),
residency rules similar to the residency rules applicable to
the State plan under title XIX shall apply.
``(b) Low-Income Medicare Beneficiary Defined.--
``(1) In general.--In this title, except as provided in
section 2209(a)(2)(B), the term `low-income medicare
beneficiary' means an individual who--
``(A) is entitled to benefits under part A of title XVIII
or enrolled under part B of such title, including an
individual enrolled in a Medicare+Choice plan under part C of
such title;
``(B) subject to subsection (d), is not entitled to medical
assistance with respect to prescribed drugs under title XIX
or under a waiver under section 1115 of the requirements of
such title;
``(C) is determined to have family income that does not
exceed a percentage of the poverty line for a family of the
size involved specified by the State that, subject to
paragraph (2), may not exceed 175 percent; and
``(D) at the option of the State, is determined to have
resources that do not exceed a level specified by the State.
``(2) State-only drug assistance programs.--In the case of
a State that has a State-based drug assistance program
described in section 2203(e) that provides outpatient
prescription drug coverage for individuals described in
paragraph (1)(A) who have family income up to or exceeding
175 percent of the poverty line, the State may specify a
percentage of the poverty line under paragraph (1)(C) that
exceeds the income eligibility level specified by the State
for such program but does not exceed 50 percentage points
above such income eligibility level.
``(c) Medicare Beneficiary With High Drug Costs Defined.--
``(1) In general.--In this title, except as provided in
section 2209(a)(2)(C), the term `medicare beneficiary with
high drug costs' means an individual--
``(A) who satisfies the requirements of subparagraphs (A)
and (B) of subsection (b)(1);
``(B) whose family income exceeds the percentage of the
poverty line specified by the State in accordance with
subsection (b)(1)(C);
``(C) at the option of the State, whose resources exceed a
level (if any) specified by the State in accordance with
subsection (b)(1)(D); and
``(D) who has out-of-pocket expenses for outpatient
prescription drugs and biologicals (including insulin and
insulin supplies) for which outpatient prescription drug
assistance is available under this title that exceed such
amount as the State specifies in accordance with paragraph
(2).
``(2) Determination of out-of-pocket expenses.--A State
that elects to provide outpatient prescription drug
assistance to an individual described in paragraph (1) shall
provide the Secretary with the methodology and standards used
to determine the individual's eligibility under subparagraph
(D) of such paragraph.
``(d) Access for Medicaid Expansion States.--
``(1) In general.--Notwithstanding any other provision of
this title, with respect to any State that, as of the date of
enactment of this title, has made outpatient prescription
drug coverage for individuals described in paragraph (2)
available through the State medicaid program under title XIX
under a section 1115 waiver, the Secretary, in consultation
with such State, shall establish procedures under which the
State shall be able to receive payments from the allotment
made available under section 2204 for such State for a fiscal
year for purposes of offsetting the costs of making such
coverage available to such individuals.
``(2) Individuals described.--Individuals described in this
paragraph are individuals who are--
``(A) entitled to benefits under part A of title XVIII or
enrolled under part B of such title, including an individual
enrolled in a Medicare+Choice plan under part C of such
title; and
``(B) eligible for outpatient prescription drug coverage
only, under a State medicaid program under title XIX as a
result of a section 1115 waiver.
``(e) Individual Nonentitlement.--Nothing in this title
shall be construed as providing an individual with an
entitlement to outpatient prescription drug assistance
provided under this title.

``SEC. 2203. COVERAGE REQUIREMENTS.

[[Page S8206]]

the outpatient prescription drug assistance plan that results
from the limitations on cost-sharing under such coverage.
``(2) Requirement.--The actuary preparing the opinion shall
select and specify in the report the standardized set and
population to be used under subparagraphs (C) and (D) of
paragraph (1).
``(d) Prohibited Coverage.--Nothing in this section shall
be construed as requiring any outpatient prescription drug
coverage offered under the plan to provide coverage for an
outpatient prescription drug for which payment is prohibited
under this title, notwithstanding that any benchmark benefit
package includes coverage for such an outpatient prescription
drug.
``(e) Description of Existing Comprehensive State-Based
Coverage.--
``(1) In general.--A program described in this paragraph is
an outpatient prescription drug coverage program for
individuals who are entitled to benefits under part A of
title XVIII or enrolled under part B of such title, including
an individual enrolled in a Medicare+Choice plan under part C
of such title, that--
``(A) is administered or overseen by the State and receives
funds from the State;
``(B) was offered as of the date of the enactment of this
title;
``(C) does not receive or use any Federal funds; and
``(D) is certified by the Secretary as providing outpatient
prescription drug coverage that satisfies the scope of
coverage required under subparagraph (A), (B), or (D) of
subsection (a)(1).
``(2) Modifications.--A State may modify a program
described in paragraph (1) from time to time so long as it
does not reduce the actuarial value (evaluated as of the time
of the modification) of the outpatient prescription drug
coverage under the program below the lower of--
``(A) the actuarial value of the coverage under the program
as of the date of enactment of this title; or
``(B) the actuarial value described in subsection
(a)(1)(B).
``(f) Beneficiary Premiums and Cost-Sharing.--
``(1) Description; general conditions.--
``(A) Description.--
``(i) In general.--An outpatient prescription drug
assistance plan shall include a description, consistent with
this subsection, of the amount of any premiums or cost-
sharing imposed under the plan.
``(ii) Public schedule of charges.--Any premium or cost-
sharing described under clause (i) shall be imposed under the
plan pursuant to a public schedule.
``(B) Protection for beneficiaries.--The outpatient
prescription drug assistance plan may only vary premiums and
cost-sharing based on the family income of low-income
medicare beneficiaries and, if applicable, medicare
beneficiaries with high drug costs, in a manner that does not
favor such beneficiaries with higher income over
beneficiaries with low-income.
``(2) Limitations on premiums and cost-sharing.--
``(A) No premiums or cost-sharing for beneficiaries with
income below 100 percent of poverty line.--In the case of a
low-income medicare beneficiary whose family income does not
exceed 100 percent of the poverty line, the outpatient
prescription drug assistance plan may not impose any premium
or cost-sharing.
``(B) Other beneficiaries.--For low-income medicare
beneficiaries not described in subparagraph (A) and, if
applicable, medicare beneficiaries with high drug costs, any
premiums or cost-sharing imposed under the outpatient
prescription drug assistance plan may be imposed, subject to
paragraph (1)(B), on a sliding scale related to income,
except that the total annual aggregate of such premiums and
cost-sharing with respect to all such beneficiaries in a
family under this title may not exceed 5 percent of such
family's income for the year involved.
``(g) Restriction on Application of Preexisting Condition
Exclusions.--The outpatient prescription drug assistance plan
shall not permit the imposition of any preexisting condition
exclusion for covered benefits under the plan and may not
discriminate in the pricing of premiums under such plan
because of health status, claims experience, receipt of
health care, or medical condition.

``SEC. 2204. ALLOTMENTS.

``(a) Appropriation.--
``(1) In general.--For the purpose of providing allotments
under this section to States, there is appropriated, out of
any money in the Treasury not otherwise appropriated--
``(A) for fiscal year 2001, $1,300,000,000;
``(B) for fiscal year 2002, $4,600,000,000;
``(C) for fiscal year 2003, $9,700,000,000; and
``(D) for fiscal year 2004, $13,000,000,000.
``(2) Availability.--Amounts appropriated under paragraph
(1) shall only be available for providing the allotments
described in such paragraph during the fiscal year for which
such amounts are appropriated. Any amounts that have not been
obligated by the Secretary for the purposes of making
payments from such allotments under section 2205, or under
contracts entered into under section 2209(b)(2)(B), on or
before September 30 of fiscal year 2001, 2002, 2003, or 2004
(as applicable), shall be returned to the Treasury.
``(b) Allotments to 50 States and District of Columbia.--
``(1) In general.--Subject to paragraph (3), of the amount
available for allotment under subsection (a) for a fiscal
year, reduced by the amount of allotments made under
subsection (c) for the fiscal year, the Secretary shall allot
to each State (other than a State described in such
subsection) with an outpatient prescription drug assistance
plan approved under this title the same proportion as the
ratio of--
``(A) the number of medicare beneficiaries with family
income that does not exceed 175 percent of the poverty line
residing in the State for the fiscal year; to
``(B) the total number of such beneficiaries residing in
all such States.
``(2) Determination of number of medicare beneficiaries
with income that does not exceed 175 percent of poverty.--For
purposes of paragraph (1), a determination of the number of
medicare beneficiaries with family income that does not
exceed 175 percent of the poverty line residing in a State
for the calendar year in which such fiscal year begins shall
be made on the basis of the arithmetic average of the number
of such medicare beneficiaries, as reported and defined in
the 5 most recent March supplements to the Current Population
Survey of the Bureau of the Census before the beginning of
the fiscal year.
``(3) Minimum allotment.--In no case shall the amount of
the allotment under this subsection for one of the 50 States
or the District of Columbia for a fiscal year be less than an
amount equal to 0.5 percent of the amount provided for
allotments under subsection (a) for that fiscal year (reduced
by the amount of allotments made under subsection (c) for the
fiscal year). To the extent that the application of the
previous sentence results in an increase in the allotment to
a State or the District of Columbia above the amount
otherwise provided, the allotments for the other States and
the District of Columbia under this subsection shall be
reduced in a pro rata manner (but not below the minimum
allotment described in such preceding sentence) so that the
total of such allotments in a fiscal year does not exceed the
amount otherwise provided for allotment under subsection (a)
for that fiscal year (as so reduced).
``(c) Allotments to Territories.--
``(1) In general.--Of the amount available for allotment
under subsection (a) for a fiscal year, the Secretary shall
allot 0.25 percent among each of the commonwealths and
territories described in paragraph (3) in the same proportion
as the percentage specified in paragraph (2) for such
commonwealth or territory bears to the sum of such
percentages for all such commonwealths or territories so
described.
``(2) Percentage.--The percentage specified in this
paragraph for--
``(A) Puerto Rico is 91.6 percent;
``(B) Guam is 3.5 percent;
``(C) the United States Virgin Islands is 2.6 percent;
``(D) American Samoa is 1.2 percent; and
``(E) the Northern Mariana Islands is 1.1 percent.
``(3) Commonwealths and territories.--A commonwealth or
territory described in this paragraph is any of the following
if it has an outpatient prescription drug assistance plan
approved under this title:
``(A) Puerto Rico.
``(B) Guam.
``(C) The United States Virgin Islands.
``(D) American Samoa.
``(E) The Northern Mariana Islands.
``(d) Transfer of Certain Allotments and Portions of
Allotments.--
``(1) Transfer and redistribution.--
``(A) In general.--Subject to subparagraph (B), not later
than 30 days after the date described in paragraph (2)--
``(i) 90 percent of the allotment determined for a fiscal
year under subsection (b) or (c) for a State shall be
transferred and made available in such fiscal year to the
Secretary, acting through the Administrator of the Health
Care Financing Administration, for purposes of carrying out
the default program established under section 2209; and
``(ii) 10 percent of such allotment shall be redistributed
in accordance with subsection (e).
``(B) Applicability.--Subparagraph (A) shall not apply if,
not later than the date described in paragraph (2) for such
fiscal year, a State submits a plan or is part of a group of
States that submits a plan to the Secretary that the
Secretary finds meets the requirements of section 2201(b).
``(2) Date described.--The date described in this paragraph
is--
``(A) in the case of fiscal year 2001, December 31, 2000;
and
``(B) in the case of fiscal year 2002, 2003, or 2004,
September 1 of the fiscal year preceding such fiscal year.
``(e) Redistribution of Portion of Allotments.--With
respect to a fiscal year, not later than 30 days after the
date described in subsection (d)(2) for such fiscal year, the
Secretary shall redistribute the total amount made available
for redistribution for such fiscal year under subsection
(d)(1)(A)(ii) to each State that submits a plan or is part of
a group of States that submits a plan to the Secretary that
the Secretary finds meets the requirements of this title.
Such amount shall be redistributed in the same manner as
allotments are determined under subsections (b) and (c) and
shall be available only to the extent consistent with
subsection (a)(2).

``SEC. 2205. PAYMENTS TO STATES.

``(a) In General.--Subject to the succeeding provisions of
this section, the Secretary shall pay to each State with a
plan

[[Page S8207]]

approved under section 2206(a)(2) (individually or as part of
a group of States) from the State's allotment under section
2204, an amount for each quarter equal to the applicable
percentage of expenditures in the quarter--
``(1) for outpatient prescription drug assistance under the
plan for low-income medicare beneficiaries and, if
applicable, medicare beneficiaries with high drug costs in
the form of providing coverage for outpatient prescription
drugs that meets the requirements of section 2203; and
``(2) only to the extent permitted consistent with
subsection (c), for reasonable costs incurred to administer
the plan.
``(b) Applicable Percentage.--For purposes of subsection
(a), the applicable percentage is--
``(1) for low-income medicare beneficiaries with family
incomes that do not exceed 135 percent of the poverty line,
100 percent; and
``(2) for all other low-income medicare beneficiaries and
for medicare beneficiaries with high drug costs, the enhanced
FMAP (as defined in section 2105(b)).
``(c) Limitation on Payments for Certain Expenditures.--
``(1) General limitations.--Funds provided to a State or
group of States under this title shall only be used to carry
out the purposes of this title.
``(2) Administrative expenditures.--
``(A) In general.--Subject to subparagraph (B), payment
shall not be made under subsection (a) for expenditures
described in subsection (a)(2) for a fiscal year to the
extent the total of such expenditures (for which payment is
made under such subsection) exceeds 10 percent of the total
expenditures described in subsection (a)(1) made by--
``(i) in the case of a State that is not part of a group of
States, the State for such fiscal year; and
``(ii) in the case of a group of States, the group for such
fiscal year.
``(B) Special rule.--With respect to the first fiscal year
that a State or group of States provides outpatient
prescription drug assistance under a plan approved under this
title, the 10 percent limitation described in subparagraph
(A) shall be applied--
``(i) in the case of a State that is not part of a group of
States, to the allotment available for such State for such
fiscal year; and
``(ii) in the case of a group of States, to the aggregate
of the State allotments available for all the States in such
group for such fiscal year.
``(3) Use of non-federal funds for state matching
requirement.--Amounts provided by the Federal Government, or
services assisted or subsidized to any significant extent by
the Federal Government, may not be included in determining
the amount of the non-Federal share of plan expenditures
required under the plan.
``(4) Offset of receipts attributable to premiums or cost-
sharing.--For purposes of subsection (a), the amount of the
expenditures under the plan shall be reduced by the amount of
any premiums or cost-sharing received by a State.
``(5) Prevention of duplicative payments.--
``(A) Other health plans.--No payment shall be made under
this section for expenditures for outpatient prescription
drug assistance provided under an outpatient prescription
drug assistance plan to the extent that a private insurer (as
defined by the Secretary by regulation and including a group
health plan, a service benefit plan, and a health maintenance
organization) would have been obligated to provide such
assistance but for a provision of its insurance contract
which has the effect of limiting or excluding such obligation
because the beneficiary is eligible for or is provided
outpatient prescription drug assistance under the plan.
``(B) Other federal governmental programs.--Except as
otherwise provided by law, no payment shall be made under
this section for expenditures for outpatient prescription
drug assistance provided under an outpatient prescription
drug assistance plan to the extent that payment has been made
or can reasonably be expected to be made promptly (as
determined in accordance with regulations) under any other
federally operated or financed health care insurance program
identified by the Secretary. For purposes of this paragraph,
rules similar to the rules for overpayments under section
1903(d)(2) shall apply.
``(d) Advance Payment; Retrospective Adjustment.--The
Secretary may make payments under this section for each
quarter on the basis of advance estimates of expenditures
submitted by a State or group of States and such other
investigation as the Secretary may find necessary, and may
reduce or increase the payments as necessary to adjust for
any overpayment or underpayment for prior quarters.
``(e) Flexibility in Submittal of Claims.--Nothing in this
section shall be construed as preventing a State or group of
States from claiming as expenditures in any quarter of a
fiscal year expenditures that were incurred in a previous
quarter of such fiscal year.

``SEC. 2206. PROCESS FOR SUBMISSION, APPROVAL, AND AMENDMENT
OF OUTPATIENT PRESCRIPTION DRUG ASSISTANCE
PLANS.

``SEC. 2207. PLAN ADMINISTRATION; APPLICATION OF CERTAIN
GENERAL PROVISIONS.

``SEC. 2208. REPORTS.

``(a) In General.--Each State or group of States
administering a plan under this title shall annually--
``(1) assess the operation of the outpatient prescription
drug assistance plan under this title in each fiscal year;
and
``(2) report to the Secretary on the result of the
assessment.
``(b) Required Information.--The annual report required
under subsection (a) shall include the following:
``(1) An assessment of the effectiveness of the plan in
providing outpatient prescription drug assistance to low-
income medicare beneficiaries and, if applicable, medicare
beneficiaries with high drug costs.
``(2) A description and analysis of the effectiveness of
elements of the plan, including--

[[Page S8208]]

``(A) the characteristics of the low-income medicare
beneficiaries and, if applicable, medicare beneficiaries with
high drug costs assisted under the plan, including family
income and access to, or coverage by, other health insurance
prior to the plan and after eligibility for the plan ends;
``(B) the amount and level of assistance provided under the
plan; and
``(C) the sources of the non-Federal share of plan
expenditures.
``(c) Annual Report of the Secretary.--The Secretary shall
submit to Congress and make available to the public an annual
report based on the reports required under subsection (a) and
section 2209(b)(5), containing any conclusions and
recommendations the Secretary considers appropriate.

``SEC. 2209. ESTABLISHMENT OF DEFAULT PROGRAM.

``SEC. 2210. DEFINITIONS.

[[Page S8209]]

(C) by adding at the end the following new paragraph:
``(5) an outpatient prescription drug assistance plan
approved under title XXII.''.

SEC. 3. ELECTION BY LOW-INCOME MEDICARE BENEFICIARIES AND
MEDICARE BENEFICIARIES WITH HIGH DRUG COSTS TO
SUSPEND MEDIGAP INSURANCE.

Mr. TORRICELLI (for himself and Mr. Johnson):
S. 3018. A bill to amend the Federal Deposit Insurance Act with
respect to municipal deposits.

MUNICIPAL DEPOSIT INSURANCE PROTECTION ACT OF 2000

Mr. TORRICELLI. Mr. President, I rise with my colleague Senator
Johnson to introduce ``The Municipal Deposit Insurance Protection Act
of 2000.'' This legislation provides municipal deposits with one-
hundred percent federal deposit insurance coverage by the Federal
Deposit Insurance Corporation (FDIC). The lack of one-hundred percent
coverage for municipal deposits has stifled the ability of community
banks to invest in local families and businesses. By providing this
much-needed coverage, this legislation ensures that local banks have
the resources they need to grow their communities.
Municipal deposits are taxpayer funds deposited by state and local
governments, school districts, water authorities and other public
entities. Due to the fact that the FDIC does not provide insurance
coverage to municipal deposits, many states require banks to provide
collateral for municipal deposits. Full deposit insurance coverage of
municipal deposits could free up bank resources currently used for
collateral. These resources could be used to keep local public funds at
work in the communities in which they are generated.
Moreover, FDIC coverage helps build consumer confidence in their bank
and helps attract the core deposits that are needed for community
lending and a bank's survival. Without FDIC coverage, many independent,
local banks are losing substantial deposits to large, corporate banks
because of the perception that larger banks are safer. Providing
municipal deposits with complete insurance coverage will strengthen
community banks by placing these banks in a more competitive position
to attract municipal deposits. Our nation's independently-operated
banks are a valued part of our communities. It is important that these
banks are able to maintain their competitiveness and continue providing
their communities with their characteristic attention to customer
service and investments in local farms and small businesses.
Finally, numerous taxpayers may be at risk municipal funds are placed
in a failed bank. Recently, a bank failure in Carlisle, Iowa resulted
in the loss of nearly $12 million in uninsured municipal deposits. Even
though the state of Iowa has a fund that guarantees the deposits of
state and local governments, there was an $8.4 billion shortfall in the
fund. Consequently, this shortfall in funds will have to be made up by
other Iowa banks.
This is why Senator's Johnson and I are introducing ``The Municipal
Deposit Insurance Protection Act of 2000.'' The legislation will
provide one-hundred percent coverage for municipal deposits will free
up bank resources currently used as collateral, enable local,
independent banks to attract municipal deposits, and will protect
municipal taxpayers from losing uninsured public money. Senator Johnson
and I look forward to working with our colleagues on this much-need
legislation.
______

By Mr. INHOFE:
S. 3019. A bill to clarify the Federal relationship to the Shawnee
Tribe as a distinct Indian tribe, to clarify the status of the members
of the Shawnee Tribe, and for other purposes; to the Committee on
Indian Affairs.

SHAWNEE TRIBE STATUS ACT OF 2000

Mr. INHOFE. Mr. President, today I introduce a bill that will modify
the relationship between the Cherokee Nation in Oklahoma and the
Shawnee Tribe in Oklahoma. These two tribes were joined together by an
Agreement entered into between them on June 7, 1869. This bill will
allow the Shawnee Tribe to have an independent government, elect its
own officials and do those things it believes necessary to protect its
language, culture and traditions. Since the two tribes will continue to
operate in the same territory, the bill sets forth the conditions which
shall govern those operations.
This legislation will have the effect of modifying the Cherokee-
Shawnee agreement by allowing the Shawnee tribe to operate
independently of the Cherokee Nation. The Shawnee Tribe will be
governed by a separate constitution currently in existence. Membership
of Shawnee Indians will continue to be permitted within the Cherokee
Nation, although Shawnee Indians who so elect will become members of
the Shawnee Tribe exclusively.
The bill also sets forth the manner in which the Shawnee Tribe will
conduct its business within the Cherokee Nation and both Tribes have
concurred in this legislation through tribal resolutions of their
respective governing bodies. Although the Shawnee Tribe will be
operating within the jurisdictional territory of the Cherokee Nation,
the Shawnee people believe it is in their best interest to have a
separate tribal governance to protect and enhance their culture,
language and history and to pursue the goal of self-sufficiency for
their own Tribe.
It is important to note that in changing the agreement between these
two tribes there is no new tribal territory created nor is it proposed
that any additional land be taken into trust for either Tribe as a
result of the changes. The jurisdictional area of the tribes remains as
before so that there are no impacts on communities within the Cherokee
Nation. The proposal is also revenue neutral as to the United States.
Tribal members of either tribe now receiving services will continue to
receive those services as they have in the past.
The Shawnee Tribe was never terminated nor can the Bureau of Indian
Affairs cause the Tribes to be separated through the Federal
Acknowledgment Process. The Agreement of 1869 between the two tribes
was ratified by the President and can only be amended by this proposed
action of Congress.
In summary, this bill would recognize the long standing policy of the
United States to respect the sovereignty of every tribe and to respect
the desire of the Shawnee people to be governed independently of the
Cherokee Nation so that Shawnee people can identify with their own
Tribe and work to maintain their culture, language, heritage and
traditions.
______

By Mr. GRAMS (for himself, Mr. Baucus, Mr. Inhofe, Mr. Gregg, and
Mrs. Hutchison):
S. 3020. A bill to require the Federal Communications Commission to
revise its regulations authorizing the operation of new, low-power FM
radio stations; to the Committee on Commerce, Science, and
Transportation.

radio broadcasting preservation act of 2000

Mr. GRAMS. Mr. President, I rise today to introduce legislation to
address the ongoing dispute between advocates of low power FM radio and
full power FM radio broadcasters. I am pleased to be joined in this
bipartisan effort by Senators Baucus, Inhofe, Gregg, and Hutchison. Our
legislation, the ``Radio Broadcasting Preservation Act of 2000,'' was
overwhelmingly passed by the House of Representatives on April 13th by
a vote of 274-110.
On January 20th, the Federal Communications Commission narrowly
adopted a proposal that would establish a new radio service known as
low power FM radio (LPFM). Under this program, the Commission would
license hundreds of new low power FM

[[Page S8210]]

radio stations in two classes. The new service would license stations
with a maximum power level of 10 watts that would reach an area with a
radius of between 1 and 2 miles, and a second class of stations with a
maximum power level of 100 watts that would reach an area with a radius
of three and a half miles. Although the commission adopted first- and
second-adjacent channel interference protections as part of its
rulemaking, it chose to allow LPFM stations to be licensed on third-
adjacent channels. The FCC began accepting applications for this new
service on May 30th.
Over the last several months, I have carefully listened to
Minnesotans who care deeply about the issues involved in the debate
over LPFM. In the absence of third-adjacent channel protection,
incumbent FM broadcasters believe that low power FM radio stations
would cause interference to existing radio services. LPFM advocates
argue that the Federal Communications Commission has conducted adequate
testing for interference and that requiring third adjacent channel
protections would unnecessarily limit the number of licensed low power
FM radio stations. Further, they suggest that the 1996
Telecommunications Act has resulted in unprecedented concentration
within the telecommunications industry.
Although I have many concerns about the impact of LPFM service upon
current FM radio broadcasting, I share the commission's stated goal of
increasing diversity in radio and television broadcasting. Earlier this
Congress, I supported the enactment of the Community Broadcasters Act,
which preserves the unique community television broadcasting provided
by low power television stations that are operated by diverse groups
such as high schools, churches, local government and individual
citizens. I also look forward to reviewing the findings and
recommendations from the ongoing survey of minority broadcast owners
being conducted by the National Telecommunications and Information
Administration that will be used to analyze the impact of the 1996
Telecommunications Act upon minority broadcast ownership in the United
States.
Mr. President, I am also very mindful of the concerns about LPFM
raised by radio reading service programs. In my home state, the State
Services for the Blind sponsors the ``Radio Talking Book'' program.
Radio Talking Book is a closed-circuit broadcast system which uses FM
subcarrier frequencies from radio stations in Minnesota and South
Dakota to deliver readings from newspapers, magazines and books on a
daily basis to more than 10,000 blind and visually impaired persons.
Sub-carrier signals are the most vulnerable to low power FM radio
interference because they are located at the outer edge of the
frequency space.

I am troubled by the Federal Communications Commission's decision to
adopt LPFM without conducting field testing of subcarrier receivers.
Nearly eight months after the Commission approved LPFM, engineering
studies and field testing of these receivers have not yet been
completed by the Commission, and it remains unclear as to how the FCC
intends to address interference that may be caused to radio reading
services. The agency's inaction underscores the haste in which the LPFM
plan was developed and gives credence to the view that the adoption of
the FCC rules was a rush to judgment. I ask unanimous consent that
letters from Minnesota Public Radio, the Minnesota State Services for
the Blind and the International Association of Audio Information
Services be inserted into the Record at this time.
For these reasons, I am pleased to introduce the ``Radio Broadcasting
Preservation Act of 2000.'' I believe this legislation represents the
interests of LPFM advocates, full power FM broadcasters, and most
importantly--radio listeners. This compromise bill will allow the
Federal Communications Commission to license lower power FM radio
stations while requiring additional third adjacent channel protections
for full power FM broadcasters.
Among its other provisions, the Radio Broadcasting Preservation Act
of 2000 would require that an independent party conduct testing in nine
FM radio markets to determine whether LPFM without third adjacent
channel protections would cause harmful interference to existing FM
radio services. The legislation would require the FCC to submit a
report to Congress which analyzes the experimental test program
results; and evaluates the impact of LPFM on listening audiences,
incumbent FM radio broadcasters, minority and small market
broadcasters, and radio stations that provide radio reading services to
the blind.
Mr. President, some advocates of the low power FM plan adopted by the
Commission argue that the Congress should simply allow the agency to
move forward on LPFM without any input or modifications from Congress.
Those individuals apparently favor granting legislative authority to
federal regulatory agencies. Since the establishment of the Federal
Communications Commission through an Act of Congress in 1934, members
of the House and Senate have consistently exercised appropriate
oversight of FCC rules and proposals.
As a member of the Senate, I have carefully monitored the
Commission's activities to ensure responsible public policy and the
wisest use of taxpayer dollars. Over the last few years, I have
expressed my concern over a number of issues considered by the
Commission, including satellite television, rights-of-way management,
universal service, the impact of digital television rules upon low
power television and translator stations, and most recently low power
FM radio. Congress should not abdicate its oversight responsibilities
when considering the LPFM issue.
Mr. President, I firmly believe that the ``Radio Broadcasting
Preservation Act of 2000'' will strengthen community broadcasting
without sacrificing existing radio services. I ask unanimous consent
that the full text of this bill and additional material be printed in
the Record and I yield the floor.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 3020

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 ``Radio Broadcasting
Preservation Act of 2000''.

SEC. 2. MODIFICATIONS TO LOW-POWER FM REGULATIONS REQUIRED.

(a) Third-Adjacent Channel Protections Required.--
(1) Modifications required.--The Federal Communications
Commission shall modify the rules authorizing the operation
of low-power FM radio stations, as proposed in MM Docket No.
99-25, to--
(A) prescribe minimum distance separations for third-
adjacent channels (as well as for co-channels and first- and
second-adjacent channels); and
(B) prohibit any applicant from obtaining a low-power FM
license if the applicant has engaged in any manner in the
unlicensed operation of any station in violation of section
301 of the Communications Act of 1934 (47 U.S.C. 301).
(2) Congressional authority required for further changes.--
The Federal Communications Commission may not--
(A) eliminate or reduce the minimum distance separations
for third-adjacent channels required by paragraph (1)(A); or
(B) extend the eligibility for application for low-power FM
stations beyond the organizations and entities as proposed in
MM Docket No. 99-25 (47 CFR 73.853),
except as expressly authorized by Act of Congress enacted
after the date of the enactment of this Act.
(3) Validity of prior actions.--Any license that was issued
by the Commission to a low-power FM station prior to the date
on which the Commission modify its rules as required by
paragraph (1) and that does not comply with such
modifications shall be invalid.
(b) Further Evaluation of Need for Third-Adjacent Channel
Protections.--
(1) Pilot program required.--The Federal Communications
Commission shall conduct an experimental program to test
whether low-power FM radio stations will result in harmful
interference to existing FM radio stations if such stations
are not subject to the minimum distance separations for
third-adjacent channels required by subsection (a). The
Commission shall conduct such test in no more than nine FM
radio markets, including urban, suburban, and rural markets,
by waiving the minimum distance separations for third-
adjacent channels for the stations that are the subject of
the experimental program. At least one of the stations shall
be selected for the purpose of evaluating whether minimum
distance separations for third-adjacent channels are needed
for FM translator stations. The Commission may, consistent
with the public interest, continue after the conclusion of
the experimental program to waive the minimum distance
separations for third-adjacent channels for the stations that
are the subject of the experimental program.
(2) Conduct of testing.--The Commission shall select an
independent testing entity to

[[Page S8211]]

conduct field tests in the markets of the stations in the
experimental program under paragraph (1). Such field tests
shall include--
(A) an opportunity for the public to comment on
interference; and
(B) independent audience listening tests to determine what
is objectionable and harmful interference to the average
radio listener.
(3) Report to congress.--The Commission shall publish the
results of the experimental program and field tests and
afford an opportunity for the public to comment on such
results. The Federal Communications Commission shall submit a
report on the experimental program and field tests to the
Committee on Commerce of the House of Representatives and the
Committee on Commerce, Science, and Transportation of the
Senate not later than February 1, 2001. Such report shall
include--
(A) an analysis of the experimental program and field tests
and of the public comment received by the Commission;
(B) an evaluation of the impact of the modification or
elimination of minimum distance separations for third-
adjacent channels on--
(i) listening audiences;
(ii) incumbent FM radio broadcasters in general, and on
minority and small market broadcasters in particular,
including an analysis of the economic impact on such
broadcasters;
(iii) the transition to digital radio for terrestrial radio
broadcasters;
(iv) stations that provide a reading service for the blind
to the public; and
(v) FM radio translator stations;
(C) the Commission's recommendations to the Congress to
reduce or eliminate the minimum distance separations for
third-adjacent channels required by subsection (a); and
(D) such other information and recommendations as the
Commission considers appropriate.
____

Communication Center,

State Services for the Blind,

St. Paul, MN, February 11, 2000.
To Whom It May Concern: The Communication Center of
Minnesota State Services for the Blind, SSB, has provided
blind and visually impaired persons with access to the
printed word since 1953. The most popular and well-known way
we provide our customers with this access is via the Radio
Talking Book, RTB. The RTB is a closed-circuit broadcast
system which uses FM sub-carriers, or SCA's, to bring people
readings from newspapers, magazines and books, 24 hours a
day, seven days a week. We loan our customers special SCA
receivers, which only pick up the RTB signal.
The RTB, this nation's oldest and largest radio reading
service for the blind, was founded in 1969 and has over
10,000 users in Minnesota alone. It is also picked up by
other radio reading services around the country, for
rebroadcast, via satellite.
We rely on the SCA frequencies of approximately 40 radio
stations in Minnesota and South Dakota, to distribute our
programming to local listeners. Approximately 20 stations
used by us are operated by Minnesota Public Radio, MPR.
Further, the MPR stations we use are our main outlets. The
other stations we use are smaller and/or cover sparsely
populated areas. Consequently, the Radio Talking Book lives
and dies via the technical integrity and success of MPR.
While we support the principles of diversity and community
access for all, we cannot support these goals at the expense
of existing services. As you know, the Federal Communications
Commission, FCC, intends to create at least 1000 low-power FM
stations across the country. However, it is my understanding
that they have not tested the effects and implications of
these new services on existing FM SCA signals. This does not
seem right to us. Prior to authorizing a new set of services,
it seems to us, that you should know all the implications to
existing services.
Since the sub-carrier signal of an FM station is located on
the outside edge of its frequency space, it seems logical to
us that these are the signals which will receive the first,
and most harmful interference from new, untested signals. We
strongly urge the FCC to do more testing prior to proceeding
with the creation of new low-power FM services. Further, it
seems even more advisable to use to not create such a new
service at all prior to making long-term decisions about
digital broadcasting. The FCC may be creating a new service
that will be obsolete in a few years.
While we understand that the FCC must respond to a variety
of constituencies, their decision which doesn't adequately
consider the needs of SCA users, the majority of whom are
users of radio reading services, seems to be highly
disrespectful to blind and visually impaired persons. We urge
the FCC to reconsider its low-power FM policy. Thank you very
much for your consideration of our concerns.
Respectfully yours,
David Andrews,
Director, Communication Center.
____

Minnesota Public Radio,

St. Paul, MN, September 6, 2000.
Senator Rod Grams,
Dirksen Senate Office Building,
Washington, DC.
Dear Senator Grams: Minnesota Public Radio supports your
efforts to protect high quality signal integrity for
America's radio listening public. Recent action by the
Federal Communications Commission will cause harm to the
broadcast signal of existing stations and interfere with
their ability to serve their listeners. Your legislation, a
bipartisan compromise, will protect the rights of the
listening public to receive the highest quality signal
available.
In addition to protecting the general listening public,
your legislation will protect a particularly vulnerable
segment of the radio listening public, the blind and visually
impaired.
More than 1 million blind and visually impaired people in
the United States are served by the joint efforts of radio
reading services and public radio stations. This service is
now threatened by a well meaning but highly politicized
action of the FCC.
Started in Minnesota in 1969 as Radio Talking Book (RTB) by
the joint effort of Minnesota Public Radio and the Minnesota
Services for the Blind, radio reading services have grown to
more than 100 locally controlled and operated reading
services around the country. They bring newspapers, magazines
and books into the lives of those who can't see by the use of
an FM radio subcarrier, or SCA. The SCA uses a sliver of the
FM signal, and basically ``piggybacks'' onto the regular FM
frequency. Reading service customers receive a special radio
receiver, which picks up only the SCA broadcast.
The FCC in January approved rules to add more local public
service broadcasting to America's airwaves. Unfortunately, it
rescinded decades-old protections given existing broadcasters
and the listening public. The removal of those protections
will, most certainly, cause interference to the broadcast
signal that are currently being delivered by the nation's
radio reading services.
Many in this country, including Minnesota Public Radio,
support the goal of licensing more locally owned low-power FM
stations. They would be a welcome addition to the voices and
opinions heard on the air. However, when government deals
with trying to solve problems, it should learn from the
medical profession's Hippocratic Oath: First do no harm. Your
legislation helps solve the problem of additional voices and
does no harm to America's general listening public and
specifically the services of Radio Reading Services.
Attached is an Opinion piece from the Fergus Falls Daily
Journal as well as a letter in opposition to the FCC decision
by the Minnesota Services for the Blind.
Congratulations to taking on this important issue for the
benefit of the people of Minnesota.
Sincerely yours,
Will Haddeland,
Senior Vice President.
____

International Association of

Audio Information Services,

Pittsburgh, PA, May 20, 2000.
Senator Rod Grams,
Dirksen Senate Office Building, Washington, DC.
Dear Senator Grams: We are writing to ask for your help in
the urgent matter of Low Power FM service that is being
rushed into place by the FCC. There are millions of Americans
that may be dramatically and negatively impacted by these new
stations. They are blind, visually impaired, or have a
disability that prevents them from reading. Our association
members serve them with reading services on the radio, and
other print-to-audio services.
A reading service on the radio is the daily newspaper for
these men and women. It's where they learn what is on sale at
the local grocery store, what bus stops have changed in their
town, and who passed away. Without this valuable link to
their community, they are at grave risk of being isolated and
become very dependent.
Our association of these reading services, IAAIS, has asked
the FCC to ensure that reading services for the blind not
suffer interference from the coming new Low Power FM
stations. IAAIS is very concerned that the fragile sub-
carrier services will not be heard clearly when a low power
FM station is allowed in the 2nd adjacent space on the FM
dial. The radios we have to use to give blind listeners
access to the signals have very fragile reception
characteristics. The FCC's plan for low power stations brings
a potential of interference that never existed before.
We've taken radios from our members and supplied them to
the FCC for testing. These are the same special radios blind
listeners must use to hear the services. This entire class of
radio was not tested before the FCC authorized LPFM--so no
one knows if an LPFM station will impair the blind listeners
ability to hear their reading service. That's what really
concerns us.
The FCC does not know if Low Power stations will harm our
services, yet it is proceeding with the plans for
implementation. We think that's wrong and have asked them to
wait until the tests are done. In spite of our request and
others' at the end of this month, the FCC plans to begin the
application process to create Low Power stations. There need
be no rush. We think the FCC should at least wait for the
results of receiver tests before starting something that
might have devastating consequences.
We've also asked the FCC for a description of the procedure
they will use to resolve interference that occurs after Low
Power FM is implemented. They have given no indication that
they have such a procedure. We find this alarming to say the
least.

[[Page S8212]]

For all these reasons, we've endorsed the measures outlined
in the compromise legislation passed by the House in April,
HR3439. With the slow down in implementation and test roll-
out of low power sites that the bill affords, we feel there
will be a better chance that Low Power FM can be implemented
without damage to reading services for the blind.
We hope you'll help by supporting a Senate measure that
will echo the intentions of House Bill 3439. The Bill will
buy time while tests are completed. These test results, and
the procedure for resolving problems must be published before
adding new radio stations. It would help to ensure that the
listeners to reading services do not suffer the loss of their
ability to read a newspaper . . . for the second time.
Sincerely,
David W. Noble,
President.
______

By Mrs. HUTCHISON (for herself, Mr. Domenici, Mr. Dodd, and Mrs.
Feinstein):
S. 3021. A bill to provide that a certification of the cooperation of
Mexico with United States counterdrug efforts not be required in fiscal
year 2001 for the limitation on assistance for Mexico under section 490
of the Foreign Assistance Act of 1961 not to go into effect in that
fiscal year.

mexican decertification moratorium

Mrs. HUTCHISON. Mr. President, I send a bill to the desk. I submit
this bill on behalf of myself, Senator Domenici, Senator Dodd, and
Senator Feinstein.
The purpose of the bill is to put a 1-year moratorium on the
decertification process for Mexico as it relates to the illegal drug
trafficking issue that we have been dealing with for so long. The
reason we are introducing this bill and hope for expedited procedures
is that we have just seen a huge election in Mexico in which, for the
first time in 71 years, there is a president from the opposition party,
from the PRI, which has been the ruling party in Mexico all this time.
Democracy is beginning to be real in Mexico, and we want to do
everything we can to encourage this democracy. We want to do everything
we can to have good relations, better relations, with our sister
country to the south, Mexico.
Vicente Fox has visited the United States. He has opened the door for
better relations. I know our next President, whoever he may be, will
also want to do the same thing.
It is a very simple bill. It is a bill that says for 1 year we are
not going to go through the certification-decertification process, and
hopefully our two new Presidents will begin a new era of cooperation in
this very tough issue that plagues both of our countries. Having a
criminal element in Mexico and a criminal element in the United States
certainly is a cancer on both of our countries, and we want to do
everything we can to improve the cooperation in combating this issue.
The inauguration of Vicente Fox as President of Mexico on December
1st should usher in a sea change in Mexican politics as well as the
U.S.-Mexico relationship. Not only will 71 years of rule by the
Institutional Revolutionary Party (PRI) come to an end, but hopefully
so too will come an end to the flood of illegal drugs from Mexico into
the U.S.
Despite the promise of a new day in our relationship with Mexico, a
dark cloud looms on the horizon--the annual drug certification ritual
in which Congress requires the President to ``grade'' drug-producing
and drug-transit countries each March 1 on their progress in the war on
drugs.
The facts have remained essentially unchanged over the past several
years. Mexico is the source of about 20-30% of the heroin, up to 70% of
the foreign grown marijuana, and the transit point for 50-60% of the
cocaine shipped into the United States.
Mexico has never been decertified, but the thought of being in the
company of Iran, Iraq, and Afghanistan on this list, has done little
except to antagonize their political leadership and thwart expanded
cooperation. There is no reason to go through this exercise next March
and grade President Fox after fewer than 120 days in office. Further,
with a new U.S. President taking office on January 20, there is no
reason to set up a major confrontation between the two before they have
even had an opportunity to work together cooperatively.
I am proud to introduce legislation with Senators Pete Domenici,
Christopher Dodd, and Dianne Feinstein which will grant Mexico a 1-year
waiver from the annual certification process. I hope the Congress will
pass this waiver legislation before we adjourn.
This 1-year waiver will give President Fox the time he needs to
develop and implement a new drug-fighting strategy in Mexico. And it
will give the United States the time we need to work with President Fox
in the creation of this new strategy, and to finally put in place the
law enforcement needed to stop the flow of drugs across our 2000-mile
shared border.
The United States has enjoyed a long-term partnership with Mexico
that has grown closer and more cooperative over time. The North
American Free Trade Agreement cemented and strengthened our
relationship--and our interdependence. Just last year, Mexico surged
past Japan as our nation's second largest trade partner.
But partnership is a two-way exchange, and in recent years we have
drifted into tolerance of unacceptable conditions in the arena of drug
trafficking and the endemic corruption it causes in communities on both
sides of the border. The border has been a sieve for drugs, and it has
resulted in a degree of lawlessness in Texas and along the U.S.-Mexico
border that we have not seen since the days of the frontier. Even
worse, the war on drugs plays out daily on nearly every schoolyard
across our nation.
I am more optimistic than ever, though, by the election of Vicente
Fox, that Mexico is prepared to make the sacrifices necessary to
contain the drug threat. And as he seeks to make progress on this
almost overwhelming issue, we do not need to poison the spirit of early
cooperation by injecting drug certification.
Specifically, this bill waives for one-year only the requirement that
the President certify Mexico's cooperation with the United States in
the war on drugs. This waiver does not exempt Mexico from any of the
reports or other activities associated with the certification process.
It simply says the President does not need to ``grade'' Mexico by
choosing between certification, decertification, or decertification
with a national interest waiver.
This 1-year drug certification waiver will give both the United
States and Mexico time to develop a process that will make us partners
rather than adversaries in addressing the one issue that can make moot
all of the promising opportunities between our two nations.
Still, President-elect Fox and the Government of Mexico should make
no mistake about the priority the United States places on winning the
war on drugs. We will expect this to be a top priority of our new
President, and we hope that this will be a priority of President Fox.
The Mexican government must take effective, good-faith steps to stop
the narco-corruption that infects and demoralizes both of our
countries. We ask them to take effective action to destroy the major
drug cartels and imprison their kingpins, implement laws to curtail
money laundering, comply with U.S. extradition requests, increase
interdiction efforts and cooperate with U.S. law enforcement agencies.
President-elect Fox has shown every willingness to work with the
United States in developing these objectives. He knows the challenges
ahead, and especially the ones that will come as Mexico's democracy
continues to evolve and be tested. The United States should not add the
pressures of the certification process next year to a situation so full
of risks and opportunities.
Mr. DOMENICI. Mr. President, I commend Senator Hutchison, along with
Senators Dodd and Feinstein for introducing this bill today. I am
pleased to join in this effort.
The election of Vicente Fox as President of Mexico is a remarkable
event in the history of our neighbor to the south.
After 71 years of rule by the Institutional Revolutionary Party,
Mexico is about to embark on an important test of its new democracy.
Mr. Fox has spoken very eloquently and persuasively in recent weeks
and he has offered some interesting new ideas on critical issues which
affect both of our countries, like immigration, trade and controlling
illegal drugs.

[[Page S8213]]

Some of his ideas are quite impressive, and they certainly will spur
debate both in the United States and in Mexico.
I think it is important for our leaders in the United States,
particularly those in the border region, to engage Mr. Fox, talk with
him, listen to his ideas and offer our own thoughts to him.
In this spirit of cooperation and acceptance, I think it is critical
for the United States to suspend the drug certification process for
Mexico this coming year.
Mr. Fox needs time to build his administration, and to develop his
own plan for dealing with the drug cartels.
As we all know, the history of drug cooperation between the United
States and Mexico has not been great.
Mexico remains the source of 70 percent of the foreign grown
marijuana in the U.S., 50-60 percent of the cocaine and 25-30 percent
of the heroin.
In recent months, our federal law enforcement authorities have
dismantled a major heroin ring operating out of Nayarit, Mexico, which
was responsible for much of the black tar heroin in the Southwest.
It is this heroin which has torn apart the northern New Mexico county
of Rio Arriba, which has the highest per capita heroin overdose rate in
the Nation.
President-elect Fox has said that he will redouble his country's
efforts to fight the drug cartels, and will increase the number of
criminals extradited to the United States to stand trial.
I have fought for years for more extraditions, and I am pleased that
President Fox shares my goal.
I want to give Mr. Fox time to prove that he means what he says.
Engaging in the certification process in March of 2001, within only 120
days of Mr. Fox's first day in office, will only serve as a hindrance
to developing mutual cooperation between the two new administrations.
The bill we have introduced today merely waives for one year the
requirement that the President make a certification decision about
Mexico.
This waiver would not exempt Mexico from any of the annual reports or
other activities associated with the certification process, including
review by the State Department in its annual report to Congress.
It simply says that the next United States President need not grade
Mexico and its new President in his first four months in office by
choosing between certification, decertification or certification
through a national interest waiver.
Mr. Fox should make no mistake--Senators from the Southwest care
deeply about the drug problem, which affects our communities, courts,
jails, hospitals and border region like no other issue.
We expect Mr. Fox to set concrete, measurable goals and timetables
for crippling the drug cartels and ending narco-corruption.
This is a fair bill, one that respects the new democracy in Mexico,
and recognizes that the new administration needs time to set its own
agenda.
I look forward to working with my colleagues in the Senate and the
new President of Mexico on this and other important issues of mutual
interest between our two countries.
Mr. DODD. Mr. President, I commend my friend from Texas for this
proposal. I am pleased to be a cosponsor of it, along with the Senator
from New Mexico, Senator Domenici, and Senator Feinstein from
California. We hope others will join us and will soon be circulating a
dear colleague letter inviting them to do so.
We believe that this is a very sensible and timely proposal in light
of the dramatic changes that have occurred this past July 2 with the
election of Vincente Fox, candidate for the National Action Party, as
the next President of Mexico. His inauguration later this year will
bring to an end 71 years of the office of the Mexican President being
held by a representative of the Institutional Revolutionary Party.
Clearly President-elect Fox has an enormous task before him to put in
place his new administration and to formulate policies and programs
that he believes are consistent with his campaign promises and
priorities. Among the many issues that he has suggested will be
priorities of his administration is enhanced counter narcotics
cooperation with the United States.
I have made no secret of the fact that I believe that the annual
unilateral drug certification procedures have been an obstacle to
furthering cooperation between U.S. and Mexican law enforcement
authorities. Rather than encouraging them to work closely together to
thwart the corrupting impact of the drug kingpins in the United States
and Mexico, the certification process degenerates annually to a
shouting match across our southern border with respect to whether the
Mexican government has done enough to warrant a passing grade from us
on the counter narcotics front. Needless to say, Mexican officials
resent the fact the they are being unilaterally graded on their
performance by us while U.S. policies and programs are never subject to
similar review or criticism.
Frankly, Mr. President, this year elections on both sides of the
border give us an opportunity to start afresh with respect to counter
narcotics cooperation next year. By suspending the certification
process for FY 2001, the climate for working more closely on these
important programs will not be soured right off the bat by the March 1
grading of Mexico. It is my hope that the new U.S. and Mexican
administrations will make it a high priority in the early days of their
administrations to put forward a joint plan for ensuring enhanced
cooperation on counter narcotics issues that will replace the existing
and counterproductive unilateral annual certification process with a
multilateral mechanism to monitor progress in combating drug
trafficking and related crimes in all affected countries. I would
certainly be prepared to support an additional suspension of the
certification process for a second year if additional time is needed to
put in place a multilateral mechanism to ensure that international
cooperation on such matters is working.
Mr President, this is an extremely important issue for not only
Mexico and the United States both for countries throughout this
hemisphere. Certainly we need to address the problem of consumption
here at home. Our neighbors in this hemisphere, that are either
involved in the production, in the chemical transformation of these
products, or the transportation or the money laundering have a
different set of issues to address in our joint efforts to reduce both
production and consumption of illicit drugs. It is vital that there be
a high level of cooperation if we are going to be successful in
stemming the tide and flow of narcotics that pour into this country,
that result in the deaths of 50,000 Americans every year in drug-
related deaths in this country. I believe that the certification
procedures are impeding that kind of cooperation. We believe that the
legislation we have introduced this evening will improve the prospects
that this will be done. I would hope that all of our colleagues will
join us in endorsing this approach.
Mrs. FEINSTEIN. Mr. President, I rise today to offer my support to
the legislation introduced by my distinguished colleague from Texas,
Senator Hutchison.
Essentially, this bill would--for 1 year only--suspend the
certification process with respect to Mexico.
It is my hope that this one-year hiatus will be viewed as a sign of
good faith between our nations, and that our two countries will
dramatically increase the level of our cooperation in the coming year.
The problem of drugs is as serious as any we face, and only with a true
partnership with Mexico and other source countries can we hope to
succeed in the battle against illegal narcotics.
Mr. President, let me be very clear--my support for this legislation
this year should not be taken as a sign that I am any less concerned
with the rampant corruption and increasingly serious problem of illegal
narcotics flowing from Mexico into the United States. I sincerely hope
that President-elect Fox and the government of Mexico will with
innovation and commitment launch a new and effective war against the
cartels that are currently of unparalleled strength and viciousness.
The Zedillo administration has made some progress in cooperating with
the United States in this fight.
For instance, the Zedillo administration:
Allowed, for the first time, the extradition of two Mexican Nationals
on

[[Page S8214]]

drug charges--although these were lower level participants in the drug
trade. This is a beginning, but just that--there is still a long way to
go.
Fired more than 1400 of 3500 federal police officers for corruption;
and so far, more than 350 officers have been prosecuted.
Cooperated with the FBI late last year in an investigation on Mexican
soil.
And greatly increased seizures of illegal narcotics.
On the other hand, not nearly enough has been done:
Mexico is still the conduit to as much as 70% of the cocaine consumed
in the United States (much of it originating in Colombia);
Mexico supplies the majority of marijuana to the U.S., and, according
to the United States Forest Service, Mexican cartels are now sending
people across the border to grow marijuana in our national forests and
on other federal lands;
Despite recent successes in disrupting methamphetamine production in
Mexico, the meth cartels are now increasingly setting up meth labs in
the United States;
To date, not one major drug kingpin of Mexican nationality has yet
been extradited to this country, nor has a major kingpin even been
arrested, with the exception of the Amezcua brothers, currently in
jail, while the Mexican government decides whether to extradite. Until
the cartel leaders are arrested, tried, convicted and imprisoned, there
can be no real improvement.
In the meantime, Mexican drug cartels are becoming ever more vicious.
Tijuana, for instance recently saw its second police chief gunned down
in less than 6 years, as dozens of judges, prosecutors and drug agents
have been killed in Tijuana alone in recent years.
Last April, the bodies of two Mexican drug agents and a special
prosecutor for the Mexican Attorney General's anti-narcotics unit were
found in such a mangled state that identification--even by the spouse
of one of the agents--was impossible. According to press accounts, one
investigator who saw the photographs of the crime scene said ``They
told me it was a body. I've never seen anything like that.''
The Arellano Felix organization is responsible for many of these
crimes. They hold such a strong grip over their community that former
DEA Administrator Thomas Constantine recently said that ``in Tijuana
and Baja, they have become more powerful than the instruments of
government in Mexico.''
The Arellano Felix cartel operates with an estimated one million
dollars in bribe money every day. With that money they pay law
enforcement to look the other way, prosecutors to leave them alone,
judges to let them go free, and for information about their enemies.
This leads to the largest single threat in this war against drugs--
the level of corruption within Mexican law enforcement and even
extending into this country. Honest law enforcement officers cannot
know who to trust. Anyone who gets too close to capturing cartel
members is subject to exposure and assassination. And the cycle of
corruption and failure continues.
The corruption is evident at all levels of Mexican law enforcement,
and this is a problem that can only be solved through a concerted,
comprehensive effort on the part of the Fox administration.
Until the history of corruption is reversed and the drug cartels are
brought to justice, this nation will have no respite from the scourge
of drugs flowing across our borders.
I cosponsor this legislation today as an experiment to see that, if
by putting aside the contentiousness of a certification debate next
March, there can be a new, more productive process. I will follow this
closely. If reports do not reflect substantial, positive change, we
will know clearly that decertification may be the only course.
I thank the Chair, and I yield the floor.
Mrs. HUTCHISON. Mr. President, if Senator Domenici would yield for 1
more minute, I would like to, first of all, thank him for allowing us
the time to introduce this bill. If we are going to be able to pass
this by the end of the session, it is imperative that we get the bill
into the process. I also thank the Senator from New Mexico, the Senator
from Connecticut, and the Senator from California for being prime
cosponsors because this will show the Mexican people and the new
President-elect of Mexico that we do want cooperation.
I believe it is in our long-term best interests that we develop trade
relationships with our neighbor to the south, that we work with them on
investments because as we increase the standard of living in Mexico, I
think many of the immigration problems and the problems dealing with
illegal drugs will also be wiped away.
So this is a new era. I think this bill will signal that we do want
cooperation and friendship. I have high hopes for President-elect
Vincente Fox. I have high hopes that our new President will focus on
this issue as well, to try to come up with a whole new process beyond
certification and decertification, which certainly has not worked very
well in the past.
I yield the floor.

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