[Congressional Record Volume 148, Number 126 (Tuesday, October 1, 2002)]
[Senate]
[Pages S9715-S9723]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. BAUCUS (for himself and Mr. Grassley):
  S. 3018. A bill to amend title XVIII of the Social Security Act to 
enhance beneficiary access to quality health care services under the 
medicare program, and for other purposes; read the first time.
  Mr. BAUCUS. Mr. President, I rise today, along with Senator Grassley, 
to introduce the ``Beneficiary Access to Care and Medicare Equity 
Act.'' This legislation is critical to ensuring access to quality, 
affordable health care for the 40 million Medicare beneficiaries 
nationwide.
  Medicare is one of America's great success stories. Since its 
inception 36 years ago, Medicare has provided millions of elderly and 
disabled Americans with insurance coverage they would not have 
otherwise had. When Medicare was enacted, about half of America's 
elderly lacked health insurance. Now nearly all are covered by 
Medicare.
  Over the past three decades, Medicare has undergone significant 
changes, including changes in the way that health care providers are 
reimbursed. In response to rising Medicare expenditures, Congress has 
responded with complex cost-containment mechanisms: diagnosis related 
groups, or DRGs, for hospital inpatient services in the early 1980s, a 
fee schedule for physicians' services in 1989. And in 1997, Congress 
passed the Balanced Budget Act, which mandated prospective payment 
systems for hospital outpatient departments, home health agencies, and 
skilled nursing facilities. Gradually, Medicare has changed from a 
cost-based system to one of prospective, flat-rate payment.
  The significant changes in payment policy have resulted in a few 
bumps along the way, particularly those enacted as part of the Balanced 
Budget Act of 1997. The BBA was a well-intended attempt to get our 
Nation's fiscal house in order and extend the life of the Medicare 
trust fund. And in that regard, the goal of the legislation was 
achieved. Solvency of the Part A Trust Fund was extended by almost 30 
years. But in some instances, the BBA cuts went too far.
  In such cases, these cuts threatened to reduce Medicare and Medicaid 
beneficiaries' access to quality medical care and services. Congress 
responded by passing the Balanced Budget Refinement Act, BBRA, of 1999 
and the Beneficiary Improvement and Protection Act, BIPA, of 2000. I 
was proud to play a role in both of these bills, including help for 
rural areas, which were disproportionately affected by the BBA.
  Despite the policies and payment changes enacted as part of BBRA and 
BIPA, we still find that in some cases more improvements and 
adjustments are needed. And that is why Senator Grassley and I are 
introducing this bill today.
  So what does this bill do? Most importantly, this bill would restore 
payments to physicians, which were cut in 2002 by about five percent. 
Under the Medicare fee schedule, payment for physician services depends 
on several factors, including the growth in medical inflation, 
performance of the American economy, and changes in law and regulation.
  Also central to the calculation of payments are estimates by the 
Centers for Medicare and Medicaid Services, or CMS, which was formerly 
known as the Health Care Financing Administration, of the numbers of 
Medicare beneficiaries in traditional fee-for-service Medicare. Largely 
because of significant estimation errors and a weakened economy, 
physicians under Medicare experienced an average payment reduction of 
five percent in 2002. If Congress does not act to fix the system, 
further large cuts are forecast for the coming years. And the potential 
consequences of inaction are serious.
  According to a 30-State survey by the Medicare Rights Center, 
Medicare beneficiaries in 15 states and the District of Columbia are 
already having trouble finding a physician who accepts new Medicare 
patients. And researchers from the Center for Studying Health System 
Change have found that the percentage of Medicare beneficiaries who 
reported delaying or not getting necessary physician care rose from 9.1 
percent in 1997 to 11 percent in 2001. The study also showed that of 
the near-elderly, patients between 50 and 64, 18.4 percent experienced 
difficulty in seeing a physician in 2001, up from 15.2 percent in 1997.
  This bill would provide positive payment updates to the physician fee 
schedule over the next three years, representing a dramatic turnaround 
in Medicare physician payments. It would also modify the formula that 
is used to increase payments each year, the so-called SGR, which most 
physicians have learned to view with uncertainty and distrust.
  While this proposal on physician updates represents progress, I 
acknowledge that it is imperfect, producing large reductions in 
Medicare physician payments in 2006 and beyond. I am committed to 
working with my colleagues in the Congress and the Administration to 
find a more reasonable solution.
  Aside from physician payments, this legislation addresses a number of 
other important Medicare reimbursement issues, many of which are set to 
take effect today, October 1. The bill will

[[Page S9716]]

completely eliminate the 15 percent cut in home health payments. It 
will forestall large cuts to indirect medical education, so critical to 
the well-being of our nation's teaching hospitals. And the bill will 
continue additional payments to nursing homes to help them hire more 
staff to care for patients.

  It should come as no surprise that another priority of mine, and 
Senator Grassley's, is ensuring that rural areas are treated on par 
with their urban counterparts. I represent a state with a population 
density of about six people per square mile where patients and 
providers are often separated by vast distances. The current Medicare 
payment structure does not adequately account for the unique 
circumstances and challenges of providing medical care in such areas, 
where economies of scale often make systems like prospective payment 
unworkable.
  That's why I was proud to help write the Sole Community Hospital law 
in the early 1980s and the Critical Access Hospital, CAH, program in 
1997. Based on the Montana Medical Assistance Facility program, or MAF, 
the CAH concept has been a lifeline for over 600 rural communities 
nationwide, allowing hospitals that might have otherwise closed to stay 
open. This bill makes a number of important changes to the CAH program, 
including a provision allowing greater flexibility in the use of acute 
care and swing beds, as well as reauthorization of the Rural Hospital 
Flexibility Grant Program, which assists facilities in making the 
switch to CAH status.
  Aside from Critical Access Hospitals, this legislation makes a number 
of other important changes to bring Medicare equity to rural America. 
By making the Medicare Incentive Payment Program, MIPP, automatic, 
physicians can more easily receive their 10 percent bonus for 
practicing in health professional shortage areas. And by setting a 
floor for the physician work component of Medicare's geographic cost 
index, payments to rural physicians will be raised.
  This bill also puts rural and urban areas on a more level playing 
field with respect to non-CAH hospital payments. It equalizes the base 
payment rate for all PPS hospitals, eliminating the differential in the 
so-called ``standardized amount,'' which systematically pays rural 
areas less than large urban ones. And it makes Disproportionate Share 
Hospital, DSH, payments more equitable by allowing rural facilities to 
receive increased payments for treating indigent patients.
  Many of these provisions are based on the work and recommendations of 
the Medicare Payment Advisory Commission, MedPAC, in their report on 
rural Medicare policy. That report included telling statistics, and 
reinforced what I hear from my constituents on a regular basis: 
Medicare payment policy disadvantages rural areas and changes are 
needed. For example, in 1999, overall Medicare margins for rural 
hospitals with 50 beds or less were negative 5.4 percent, worse than 
any other category of hospital. And total margins for these hospitals 
are also the lowest, at 1.7 percent in 1999, compared to 3.6 percent 
for all hospitals. Clearly Congress has work to do to ensure greater 
geographic equity in Medicare payment, and this bill makes great 
strides to that end.
  In addition to many reimbursement changes, this legislation contains 
important relief for providers struggling with Medicare's regulatory 
framework. Many of these regulatory relief provisions were contained in 
legislation I wrote with Senators Kerry, Murkowski and Grassley last 
year. Among other things, these provisions will: ensure that CMS 
answers questions posed by health care providers in a timely manner; 
give additional appeals rights to providers, so that they receive fair 
treatment for honest billing mistakes; and ensure that CMS demands on 
providers to return overpayments are reasonable and do not force small 
providers to declare bankruptcy.
  In addition to Medicare provisions, this legislation addresses many 
critical issues related to Medicaid and the State Children's Health 
Insurance Program. The bill provides $5 billion in fiscal relief to 
states struggling with tight Medicaid budgets and nearly $3 billion to 
help safety net hospitals continue to provide critical health care 
services to low-income Americans. The bill also ensures the continued 
success of the S-CHIP program by giving States more time to spend their 
S-CHIP allotments and ensuring that as many children as possible are 
covered.
  The bill provides immediate, temporary fiscal relief to states in two 
ways: by giving states a temporary increase in their Medicaid match 
rate, or FMAP; and by increasing funding for the Social Services Block 
Grant. Taken together, these two approaches will help alleviate the 
pressure on states to cut programs that serve low income families, 
children, seniors and the disabled.
  The State fiscal relief provision recognizes that States are in the 
midst of their worst fiscal crisis since the early 1990s. States have 
cut their budgets across many programs, from education to health care 
to other social programs. And because Medicaid is one of the largest 
parts of state budgets, Medicaid continues to be a prime target for 
spending cuts.
  According to a recent report from the Kaiser Commission on Medicaid 
and the Uninsured, 45 states took action to reduce their Medicaid 
spending growth in fiscal year 2002, and 41 states are planning further 
reductions in fiscal year 2003. In my own State of Montana, Medicaid 
beneficiaries have been asked to pay a larger share of the costs of 
their coverage, and provider reimbursement rates have been cut.
  These program cuts have come about at the same time that Medicaid 
rolls are increasing due to the recession. As more people lose their 
jobs and health insurance--just yesterday, we learned that in 2001 
another 1.4 million people joined the ranks of the uninsured, many 
become eligible for Medicaid. At the same time, States are forced to 
cut back on this vital safety net program when people need it most. 
This is a vicious cycle that we must help end. If we don't, the 
ultimate result of all this is an increase in the uninsured. Just as we 
saw in the early 1990s.
  The financial crisis facing State Medicaid programs is also felt by 
the facilities that provide care to Medicaid beneficiaries and low-
income insured populations. To ensure that hospitals serving our most 
vulnerable populations can continue providing their vital services, 
this bill eliminates the scheduled reduction in federal Medicaid 
funding for hospitals that serve a disproportionate share of Medicaid 
beneficiaries and low-income, uninsured patients. Without the 
restoration of these DSH funds, safety net hospitals would lose nearly 
$3 billion in federal Medicaid funding over the next three years. 
States with smaller DSH programs will also benefit through this 
legislation, as it provides them with greater resources to serve their 
low-income patients.
  This bill also seeks to continue the unqualified success of the S-
CHIP program by ensuring that S-CHIP funds are used to cover as many 
children as possible, as efficiently and effectively as possible. By 
giving states an additional year to spend funds that would otherwise be 
returned to the Federal Treasury and renewing the ongoing system to 
allocate unspent S-CHIP funds equitably among the States, the 
legislation will help sustain the significant progress S-CHIP has made 
in reducing the ranks of uninsured children. In addition, the new 
caseload stabilization pool will provide additional funds to states 
expected to have insufficient federal funds over the next few years, 
reducing the chance that children will be dropped from the rolls.
  This bill would also make important improvements to the Medicaid and 
S-CHIP waiver process. Medicaid and S-CHIP waivers have become an 
increasingly powerful way for the Secretary of Health and Human 
Services to make changes to crucial health programs without having to 
consult with, or seek legislative change from, the Congress.
  The General Accounting Office recently identified serious problems 
with the current waiver approval process, including a lack of 
accountability in several areas. I am pleased to have worked with 
Senator Grassley to develop legislation that would address the key GAO 
recommendations and begin to restore integrity to the waiver process. 
More specifically, this bill would require that the waiver process be 
more transparent and require public notification when major changes are 
in store.
  Our bill would also prohibit approval of future waivers that would 
take dollars set aside for children's health and

[[Page S9717]]

use them instead on childless adults. Where Congress has set limits on 
the use of federal dollars, waivers should not be used as a back door 
way to get around those limits.
  Without question, the Medicaid and S-CHIP programs are vital 
components of America's health care safety net, and both programs are 
critical to the well-being of thousands in my State. The Billings 
Gazette reported yesterday that about 14,000 of the 18,000 newly-
insured Montanans since 1999 were additions to Montana's Medicaid and 
S-CHIP programs.
  But despite the critical role these programs play, I am not convinced 
that we know enough about our nation's health care safety net. Based on 
legislation I introduced last congress with Senator Grassley, the bill 
we are introducing today would change that, by establishing the Safety 
Net Organizations and Patient Advisory Commission. SNOPAC would be an 
independent and nonpartisan commission charged with the authority to 
oversee all aspects of America's health care safety net, including 
Medicaid and S-CHIP. Based on an Institute of Medicine report, SNOPAC 
will include health care experts from the disparate parts of our safety 
net system, reporting to Congress on recommendations to maintain our 
intact, but endangered, health care safety net.
  Some will argue that Congress has more pressing Medicare priorities 
to address than restoring payments to health care providers. They argue 
will that before action on a bill concerning Medicare payment policy, 
Congress should debate and enact a solid prescription Medicare drug 
benefit.
  I agree wholeheartedly with the need for a good drug benefit. I have 
worked for years to enact one, and I think that the lack of a drug 
benefit is the greatest deficiency in the Medicare program today. 
Almost 40 percent of seniors currently lack drug coverage. And for 
those who have it, it is often unreliable and unaffordable.
  I did my utmost to pass a drug benefit this year, and I will continue 
my efforts until one is signed into law. But I will not support a 
benefit that is unworkable for Montana. And I will not support reviving 
a prescription drug debate that threatens passage of the important bill 
Senator Grassley and I are introducing today.
  The United States Senate debated Medicare prescription coverage in 
July. We had four votes on four different proposals to establish a drug 
benefit under Medicare. But all of those votes failed. None came close 
to getting the required 60 votes for passage in the Senate.
  Voting again on a prescription drug bill that has not changed 
materially from the proposals we voted on in July is not the way to 
pass a drug benefit. In fact, it's a prescription for legislative 
impasse--on prescription drugs and on provider reimbursement issues.
  For those reasons, I urge my colleagues to support this legislation, 
with the recognition that there are other pressing issues facing the 
Medicare program besides provider payments, but with the acknowledgment 
that maintaining access to health care services is also an important 
goal.
  As Calvin Coolidge once said, ``We cannot do everything at once . . . 
but we can do something at once.'' Today is October 1, and large 
Medicare, Medicaid and S-CHIP payment reductions and changes will go 
into effect. Congress should act as soon as possible to address these 
issues, to get something done, and to ensure access to care for our 
seniors, our children, and our disabled population. This bill is 
necessary, timely and should be considered with expedition. I urge 
Congress and the President to act swiftly on this comprehensive 
legislation and enact it into law.
  Mr. GRASSLEY. Mr. President, I am joining Chairman Baucus today to 
introduce the Beneficiary Access to Care and Medicare Equity Act of 
2002.
  This legislation arrives at an important time for Medicare 
beneficiaries and the providers that care for them: October 1. Many 
provisions of the Medicare law that ensure adequate payment for 
providers, and in turn, beneficiary access to care, expire today. I 
urge the Senate to consider this legislation with all speed, as soon as 
possible.
  Our bill addresses pressing needs. The clock is running out on 
Medicare payments to doctors, who are scheduled for yet another 
reduction in their fees for a second straight year, absent 
Congressional action. Skilled Nursing Facilities also face a major 
reduction in payment today. In other areas facing imminent payment 
cuts, such as home health and hospital services, our bill injects 
financial support that will stabilize these essential services our 
seniors rely on. The legislation also provides billions in aid to State 
governments, many of them facing steep budget deficits, so they can 
meet the needs of citizens who rely on the Medicaid and Children's 
Health Insurance Programs.
  In addition to ensuring continued access to quality care for Medicare 
beneficiaries, our bipartisan Beneficiary Access to Care and Medicare 
Equity Act makes long overdue improvements to health care in rural 
America. Our bill invests in States like Iowa, my home State, where 
small providers that practice efficient medicine are hurt by complex 
payment formulas that favor high-cost care in big cities.
  The formulas also don't recognize special costs faced by smaller, 
more isolated physicians, hospitals and clinics. It obviously doesn't 
make sense to penalize States like Iowa who do more with less. That's 
why I'm so committed to fixing these formulas. The proposal I've put 
together with Senator Baucus would provide a tremendous infusion of 
cash to hard-pressed health care providers across Iowa and to other 
rural States. It takes money to ensure access to care for Iowans, and 
this will help make the federal government part of the solution instead 
of part of the problem.
  Together, Senator Baucus and I have introduced our bill under Rule 
14, which means the bill will be placed directly on the calendar two 
days from now, rather than referred to our own Committee, the Finance 
Committee. We agreed to take this extraordinary step because the Senate 
is basically tied up in knots right now. Well, our message is that 
Medicare fairness is too urgent to let this bill be a victim of 
gridlock. Our action today gives Senate Majority Leader Daschle the 
ability to call the bill up as early as Thursday. In short, there's no 
time to waste.
                                 ______
                                 
      By Mr. McCAIN:
  S. 3019. A bill to authorize the Secretary of the Interior to conduct 
a special resource study of sites associated with the life of Cesar 
Estrada Chavez and the farm labor movement; to the Committee on Energy 
and Natural Resources.
  Mr. McCAIN. Mr. President, I am introducing legislation today to 
authorize the Secretary of the Interior to conduct a special resource 
study of sites associated with the life of Cesar Estrada Chavez. Chavez 
is one of the most revered public servants in our history for his 
leadership in helping organize migrant farm workers, and for providing 
inspiration to the most oppressed in our society. It is important that 
we cherish his struggle and do what we can to preserve certain sites 
located in Arizona, California and other states that are significant to 
his life.
  My fellow Arizonan, Cesar Chavez was born in Yuma. He was the son of 
migrant farm workers, and an exemplary American hero. He no doubt loved 
qualities of life associated with his family's heritage, but he will be 
remembered for the sincerity of his American patriotism. He fought to 
help Americans transcend distinctions of experience, and share equality 
in the rights and responsibilities of freedom. He made America a bigger 
and better Nation.
  While Chavez and his family migrated across the southwest looking for 
farm work, he evolved into a defender of worker's rights. He founded 
the National Farm Workers Association in 1962, which later became the 
United Farm Workers of America. Essentially, he gave a voice to those 
that had no voice. In his words: ``We cannot seek achievement for 
ourselves and forget about progress and prosperity for our community . 
. . our ambitions must be broad enough to include the aspirations and 
needs of others, for their sakes and for our own.''
  This legislation, almost identical to the House bill, H.R. 2966, 
introduced by Congresswoman Hilda Solis, D-CA, in September 2001, would 
specifically authorize the Secretary of the Interior to determine 
whether any of the sites

[[Page S9718]]

meet the criteria for being listed on the National Register of Historic 
Landmarks. The study would be conducted within three years. The goal of 
this legislation is to establish a foundation for a future bill that 
will designate land for these sites to become Historic Landmarks.
  Cesar Chavez was a humble man of deep conviction who understood what 
it meant to serve and sacrifice for others. He was a true American hero 
that embodied the values of justice and freedom this nation holds dear. 
Honoring the places of his life will enable his legacy to inspire and 
serve as an example for our future leaders.
  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. 3018

       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 ``Cesar Estrada Chavez Study 
     Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) on March 31, 1927, Cesar Estrada Chavez was born on a 
     small farm near Yuma, Arizona;
       (2) at age 10, Chavez and his family became migrant farm 
     workers after they lost their farm in the Great Depression;
       (3) throughout his youth and into adulthood, Chavez 
     migrated across the Southwest, laboring in fields and 
     vineyards;
       (4) during this period, Chavez was exposed to the hardships 
     and injustices of farm worker life;
       (5) in 1952, Chavez's life as an organizer and public 
     servant began when he left the fields and joined the 
     Community Service Organization, a community-based self-help 
     organization;
       (6) while with the Community Service Organization, Chavez 
     conducted--
       (A) voter registration drives; and
       (B) campaigns against racial and economic discrimination;
       (7) during the late 1950's and early 1960's, Chavez served 
     as the national director of the Community Service 
     Organization;
       (8) in 1962, Chavez founded the National Farm Workers 
     Association, an organization that--
       (A) was the first successful farm workers union in the 
     United States; and
       (B) became known as the ``United Farm Workers of America'';
       (9) from 1962 to 1993, as leader of United Farm Workers of 
     America, Chavez achieved for tens of thousands of farm 
     workers--
       (A) dignity and respect;
       (B) fair wages;
       (C) medical coverage;
       (D) pension benefits;
       (E) humane living conditions; and
       (F) other rights and protections;
       (10) the leadership and humanitarianism of Cesar Chavez 
     continue to influence and inspire millions of citizens of the 
     United States to seek social justice and civil rights for the 
     poor and disenfranchised; and
       (11) the life of Cesar Chavez and his family provides an 
     outstanding opportunity to illustrate and interpret the 
     history of agricultural labor in the western United States.

     SEC. 3. RESOURCE STUDY.

       (a) In General.--Not later than 3 years after the date of 
     enactment of this Act, the Secretary of the Interior 
     (referred to in this section as the ``Secretary'') shall 
     complete a resource study of sites in the State of Arizona, 
     the State of California, and other States that are 
     significant to the life of Cesar E. Chavez and the farm labor 
     movement in the western United States to determine--
       (1) appropriate methods for preserving and interpreting the 
     sites; and
       (2) whether any of the sites meets the criteria for listing 
     on the National Register of Historic Places or designation as 
     a national historic landmark under--
       (A) the Act of August 21, 1935 (16 U.S.C. 461 et seq.); and
       (B) the National Historic Preservation Act (16 U.S.C. 470 
     et seq.).
       (b) Requirements.--In conducting the study under subsection 
     (a), the Secretary shall--
       (1) consider the criteria for the study of areas for 
     potential inclusion in the National Park System under section 
     8(b)(2) of Public Law 91-383 (16 U.S.C. 1a-5(b)(2)); and
       (2) consult with--
       (A) the Cesar E. Chavez Foundation;
       (B) the United Farm Workers Union;
       (C) State and local historical associations and societies; 
     and
       (D) the State Historic Preservation Officers of the State 
     of Arizona, the State of California, and any other State in 
     which a site described in subsection (a) is located.
       (c) Report.--On completion of the study under subsection 
     (a), the Secretary shall submit to the Committee on Resources 
     of the House of Representatives and the Committee on Energy 
     and Natural Resources of the Senate a report on--
       (1) the findings of the study; and
       (2) any recommendations of the Secretary.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this Act.
                                 ______
                                 
      By Mr. ENZI:
  S. 3020. A bill to direct the Secretary of Veterans Affairs to 
establish a national cemetery for veterans in the Cheyenne, Wyoming, 
metropolitan area, to the Committee on Veterans' Affairs
  Mr. ENZI. Mr. President, I rise today with great honor and pride to 
introduce a bill that would direct the Secretary of Veterans Affairs to 
establish a national cemetery for veterans in Cheyenne, WY.
  As our Nation's veterans have proven time and time again, whenever 
the fear of war has knocked on America's door, we have had the strength 
to open it. This year has been no different. Since last September, we 
have witnessed the beginning of a new kind of war, a war on terrorism, 
and we have been confronted by the most evil of leaders who seek to 
destroy our love of country and freedom. Yet, our Nation's military men 
and women and our veterans have once again responded to the call of 
duty to protect everything we hold dear. They remind us that our faith 
in God, our belief and trust in our communities, and our strength as a 
Nation can and will endure through these extraordinary times.
  This is why I am introducing a bill to honor those who have given so 
much in defense of our great country. The price of freedom is not free, 
and many of our Nation's veterans have paid the ultimate price. 
Millions have been laid to rest in our Nation's national cemeteries, 
and millions more will follow. These veterans deserve to be placed next 
to those veterans with whom they so courageously engaged in battle 
throughout the years.
  All veterans deserve the opportunity to be buried in a veterans 
cemetery regardless of their place of residency. Fortunately, the 
Department of Veterans Affairs recognizes the importance of providing 
burial sites for our Nation's veterans next to their comrades and near 
their families. As such, they have established a goal to increase the 
percentage of veterans served by a national or State veterans cemetery 
within 75 miles of their residence to 88 percent by 2006. I commend the 
VA's efforts and believe my bill will help the department reach that 
goal.
  There are currently more than 53,000 veterans in Wyoming. They live 
in every town, big and small, and they must often travel hundreds of 
miles for health care and other veteran benefits. The largest and most 
concentrated group of veterans in Wyoming live near Wyoming's only 
military base, F.E. Warren Air Force Base in Cheyenne. Unfortunately, 
this veteran population must travel either 110 miles to the national 
cemetery in Colorado or 235 miles to the national cemetery in Maxwell, 
NE. It is worse for the veteran population living in other areas of the 
State. There are no national cemeteries in Montana, Idaho or Utah, 
which leaves veterans in the northwest with few options.
  Regardless of a veteran's place of residency in Wyoming, most are 
forced to select the Wyoming State Cemetery as their place of burial 
because it is the only state or national cemetery in the entire state. 
Although it is located in Wyoming's second-largest city of Casper, 
Wyoming's State cemetery does not adequately meet the needs of veterans 
in a State that spans more than 97,000 square miles. It is, on average, 
150 miles from any other incorporated city, and is more than 175 miles 
from the most concentrated veteran population in Cheyenne. While I 
commend the Wyoming State Cemetery for its exceptional service and 
careful maintenance, this is an extraordinary distance for friends and 
family to travel to visit their deceased loved ones.
  As such, I am introducing legislation today to create a National 
Veterans Cemetery in Cheyenne, WY because every veteran deserves to be 
buried near their families and with the honor that comes with being 
laid to rest in a national veterans cemetery.
  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. 3020

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

[[Page S9719]]

     SECTION 1. ESTABLISHMENT OF NATIONAL CEMETERY IN CHEYENNE, 
                   WYOMING, METROPOLITAN AREA.

       (a) In General.--The Secretary of Veterans Affairs shall 
     establish, in accordance with chapter 24 of title 38, United 
     States Code, a national cemetery in the Cheyenne, Wyoming, 
     metropolitan area to serve the needs of veterans and their 
     families.
       (b) Consultation in Selection of Site.--Before selecting 
     the site for the national cemetery established under 
     subsection (a), the Secretary shall consult with--
       (1) appropriate officials of the State of Wyoming and local 
     officials of the Cheyenne metropolitan area; and
       (2) appropriate officials of the United States, including 
     the Administrator of General Services, with respect to land 
     belonging to the United States in that area that would be 
     suitable to establish the national cemetery under subsection 
     (a).
       (c) Authority to Accept Donation of Parcel of Land.--(1) 
     The Secretary may accept on behalf of the United States the 
     gift of an appropriate parcel of real property. The Secretary 
     shall have administrative jurisdiction over such parcel of 
     real property, and shall use such parcel to establish the 
     national cemetery under subsection (a).
       (2) For purposes of Federal income, estate, and gift taxes, 
     the real property accepted under paragraph (1) shall be 
     considered as a gift to the United States.
       (d) Report.--As soon as practicable after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report on the establishment of the national cemetery under 
     subsection (a). The report shall set forth a schedule for the 
     establishment of the national cemetery and an estimate of 
     costs associated with the establishment of the national 
     cemetery.
                                 ______
                                 
      By Mr. SARBANES (for himself, Mr. Warner, and Ms. Mikulski):
  S. 3023. A bill to require the Secretary of Agriculture to establish 
a program to expand and strengthen cooperative efforts to restore and 
protect forests in the Chesapeake Bay watershed, and for other 
purposes; to the Committee on Agriculture, Nutrition, and Forestry.
  Mr. SARBANES. Mr. President, today I am introducing legislation to 
continue and enhance the USDA Forest Service's role in the restoration 
of the Chesapeake Bay watershed. Joining me in sponsoring this 
legislation are my colleagues, Senators Warner and Mikulski.
  Forest loss and fragmentation are occurring rapidly in the Chesapeake 
Bay region and are among the most important issues facing the Bay and 
forest management today. According to the National Resources Inventory, 
the States closest to the Bay lost 350,000 acres of forest between 
1987-1997 or almost 100 acres per day. More and more rural areas are 
being converted to suburban developments resulting in smaller 
contiguous forest tracts. These trends are leading to a regional forest 
land base that is more vulnerable to conversion, less likely to be 
economically viable in the future, and is losing its capacity to 
protect watershed health and other ecological benefits, such as 
controlling storm water runoff, erosion and air pollution, all critical 
to the Bay clean-up effort.
  Since 1990, the USDA Forest Service has been an important part of the 
Chesapeake Bay Program. Administered through the Northeastern Area, 
State and Private Forestry, this program has worked closely with 
Federal, State and local partners in the six-state Chesapeake Bay 
region to demonstrate how forest protection, restoration and 
stewardship activities, can contribute to achieving the Bay restoration 
goals. Over the past 12 years, it has provided modest levels of 
technical and financial assistance, averaging approximately $300,000 
year, to develop collaborative watershed projects that address 
watershed forest conservation, restoration and stewardship. With the 
signing of the Chesapeake 2000 Agreement, the role of the USDA Forest 
Service has become more important than ever. Among other provisions, 
this Agreement requires the signatories to conserve existing forests 
along all streams and shoreline; promote the expansion and connection 
of contiguous forests; assess the Bay's forest lands; and provide 
technical and financial assistance to local governments to plan for or 
revise plans, ordinances and subdivision regulations to provide for the 
conservation and sustainable use of the forest and agricultural lands. 
To address these goals, the USDA Forest Service must have additional 
resources and authority, and that is what my amendment seeks to 
provide.
  This legislation codifies the roles and responsibilities of the USDA 
Forest Service to the Bay restoration effort. It strengthens existing 
coordination, technical assistance, forest resource assessment and 
planning efforts. It authorizes a small grants program to support local 
agencies, watershed associations and citizen groups in conducting on-
the-ground conservation projects. It also establishes a regional 
applied forestry research and training program to enhance urban, 
suburban and rural forests in the watershed. Finally it authorizes $3.5 
million for each of fiscal years 2004 through 2010, a modest increase 
in view of the six-state, 64,000 square mile watershed. I urge my 
colleagues to join me in supporting this legislation.
                                 ______
                                 
      By Mr. SARBANES (for himself, Mr. Warner, and Ms. Mikulski):
  S. 3025. A bill to reauthorize and improve the Chesapeake Bay 
Environmental Restoration and Protection Program; to the Committee on 
Environment and Public Works.
  Mr. SARBANES. Mr. President, today I am introducing legislation, 
together with Senators Warner and Mikulski, to reauthorize and enhance 
the Chesapeake Bay Environmental Protection and Restoration Program. 
This program, which was first established in Section 510 of the Water 
Resources Development Act of 1996, Public Law 104-303, authorizes the 
U.S. Army Corps of Engineers to provide design and construction 
assistance to State and local authorities in the environmental 
restoration of the Chesapeake Bay.
  In 1994, when I first introduced the legislation to create this 
program, I spoke about the need for this assistance and the unique 
capabilities the Army Corps of Engineers brings to the Chesapeake Bay 
restoration effort. I want to underscore some of those arguments today 
and the vital importance of continuing and enhancing this program.
  The Army Corps of Engineers has been an integral part of the 
Chesapeake Bay Program for many years. In 1984 the Corps completed one 
of the most comprehensive investigations of the entire Chesapeake Bay 
basin, a landmark report which identified many of the serious problems 
facing the Bay. The Corps played a vital role in the development of the 
Bay Program's state-of-the-art computer model and has undertaken a 
variety of major projects in the 6-state Chesapeake Bay watershed 
including the Poplar Island beneficial use of dredged material project, 
oyster reef restoration, and removal of blockages to fish passage. The 
agency is currently conducting investigations on sedimentation, 
shoreline erosion, and environmental problems in specific watersheds 
that we hope will result in additional projects to restore the Bay. And 
I am delighted that the Environment and Public Works Committee has just 
approved our new Study Resolution directing the Corps to integrate 
these existing and future work efforts into a coordinated, 
comprehensive master plan.
  But while these projects and studies continue and the master plan is 
being developed, it is vital that environmental restoration efforts be 
sustained and expanded. Two years ago, the States in the Chesapeake Bay 
watershed and the Federal Government conducted an extensive evaluation 
of cleanup progress since the 1980s and determined that, despite 
important advances, efforts must be redoubled to restore the integrity 
of the Chesapeake Bay ecosystem. A new Chesapeake 2000 agreement was 
signed to serve as a blueprint for the restoration effort over the next 
decade. To meet the goals established in the new agreement, it is 
estimated that the local, State and Federal Governments must invest 
more than $8.5 billion over the course of the next ten years. Nutrient 
and sediment loads must be significantly reduced, oyster populations 
must be increased, Submerged Aquatic Vegetation and wetlands must be 
protected and restored, and remaining blockages to fish passage must be 
removed, among other actions. As the lead Federal agency in water 
resource management, the Corps has an essential role to play in this 
effort.
  Since the Chesapeake Bay Environmental Restoration and Protection 
Program was first established and funding was appropriated, requests 
from State and local governments for

[[Page S9720]]

assistance under the program has grown dramatically. The design-
construct nature of this program, which enables the Corps to streamline 
its process of undertaking on-the-ground environmental restoration 
projects, is particularly appealing to State and local governments. To 
date, the Corps of Engineers has constructed or approved $9.3 million 
in projects under the Chesapeake Bay Environmental Restoration and 
Protection Program including oyster restoration projects in Virginia, 
shoreline protection and wetland/sewage treatment projects at Smith 
Island in Maryland and the upgrade of the Scranton Wastewater Treatment 
Plant in Pennsylvania to reduce the amount of nutrients delivered to 
the Chesapeake Bay. These projects have nearly exhausted the current 
$10 million authorization.
  The legislation which I am introducing increases the authorization 
for this program from $10 million to $30 million. Consistent will all 
other environmental restoration authorities of the Corps of Engineers, 
it enables States and local governments to provide all or any portion 
of the 25 percent non-Federal share required in the form of in-kind 
services. It also establishes a new small-grants program for local 
governments and nonprofit organizations to carry out small-scale 
restoration and protection projects in the Chesapeake Bay watershed. 
The program would be administered by the National Fish and Wildlife 
Foundation which has extensive experience and expertise in managing 
these kinds of grants for other Federal agencies. Ten percent of the 
funds appropriated each year under this program would be set-aside for 
these grants.
  In view of the great need and the many requests for assistance from 
the Bay area states, this legislation is clearly warranted and I urge 
my colleagues to join me in supporting this measure. I ask unanimous 
consent that the text of legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3025

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

     SECTION 1. CHESAPEAKE BAY ENVIRONMENTAL RESTORATION AND 
                   PROTECTION PROGRAM.

       Section 510 of the Water Resources Development Act of 1996 
     (110 Stat. 3759) is amended--
       (1) in subsection (d)(2), by adding at the end the 
     following:
       ``(C) In-kind services.--A non-Federal interest may provide 
     all or any portion of the non-Federal share referred to in 
     paragraph (1) in the form of in-kind services.'';
       (2) by striking subsection (i);
       (3) by redesignating subsection (h) as subsection (i);
       (4) by inserting after subsection (g) the following:
       ``(h) Small Watershed Grants.--
       ``(1) In general.--The Secretary shall establish a program, 
     to be administered by the National Fish and Wildlife 
     Foundation, to provide small watershed grants for technical 
     and financial assistance to local governments and nonprofit 
     organizations in the Chesapeake Bay region.
       ``(2) Use of funds.--A local government or nonprofit 
     organization that receives a grant under paragraph (1) shall 
     use funds from the grant only for implementation of 
     cooperative tributary basin strategies that address the 
     establishment, restoration, protection, or enhancement of 
     habitat associated with the Chesapeake Bay ecosystem.''; and
       (5) by inserting after subsection (i) (as redesignated by 
     paragraph (3)) the following:
       ``(j) Funding.--
       ``(1) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this section $30,000,000.
       ``(2) Annual grant expenditure.--Of the amount made 
     available under paragraph (1) to carry out this section for a 
     fiscal year, not more than 10 percent may be used to carry 
     out subsection (h) for the fiscal year.''.
                                 ______
                                 
      By Mr. SESSIONS:
  S. 3026. A bill to amend chapter 1 of title 9, United States Code, to 
provide for greater fairness in the arbitration process; to the 
Committee on the Judiciary.
  Mr. SESSION. Mr. President, I rise to send to the desk a bill 
entitled, ``The Arbitration Fairness Act of 2002.'' This bill continues 
the legislative process that I started in the 106th Congress with the 
introduction of the Consumer and Employee Arbitration Bill of Rights. 
The purpose of these bills is to improve the Federal Arbitration Act so 
that it will remain as a cost-effective means of resolving disputes, 
but will do so in a fair way. The Arbitration Fairness Act will provide 
procedural protections to everyone who enters into a contract that 
contains an arbitration clause. This bill would ensure that consumers, 
employees, and small businesses that enter into contracts covered by 
the Federal Arbitration Act will have their disputes resolved in 
accordance with due process of law, and in a speedy and cost effective 
manner.
  Congress enacted the Federal Arbitration Act in 1925. It has served 
us as well for three-quarters of a century. Under the Act, if the 
parties agree to a contract affecting interstate commerce that contains 
a clause requiring arbitration, the clause will be enforceable in 
court. In short, the Federal Arbitration Act allows parties to a 
contract to agree not to take their disputes to court, but to resolve 
any dispute arising from that contract before a neutral decision-maker, 
generally selected by a non-profit arbitration organization, such as 
the American Arbitration Association or the National Arbitration Forum. 
The parties can generally present evidence and be represented by 
counsel. And the decision-makers will apply the relevant State law in 
resolving the dispute. Arbitration is generally quicker and less 
expensive than going to court.
  In recent years, there have been some cases where the arbitration 
process has not worked well, but thousands of disputes have been fairly 
and effectively settled by arbitrators. Such a system is even more 
important because of skyrocketing legal costs where attorneys require 
large contingent fees. Accordingly, I have opposed piecemeal 
legislative changes to the act. Instead, I believe that the Senate 
should approach the Federal Arbitration Act in a comprehensive manner.
  The approach of reforming arbitration, rather than abandoning the 
arbitration process provides several benefits. Arbitration is one of 
the most cost-effective means of resolving a dispute. Unlike 
businesses, consumers and employees generally cannot afford a team of 
lawyers to represent them. And their claims are often not being enough 
so that a lawyer would take the case on a 25 percent or even a 50 
percent contingent fee. In an article in the Columbia Human Rights Law 
Review, Lewis Maltby, Director, National Task Force on Civil Liberties 
in the Workplace of the American Civil Liberties Union and a Director 
of the American Arbitration Association--not die-hard conservative 
entities--explains how court litigation is too expensive for most 
employees:
  ``Even if the client has clearly been wronged and is virtually 
certain to prevail in court, the attorney will be forced to turn down 
the case unless there are substantial damages. A survey of plaintiff 
employment lawyers found that a prospective plaintiff needed to have a 
minimum of $60,000 in provable damages-not including pain and suffering 
or other intangible damages-before an attorney would take the case.
  Even this, however, does not exhaust the financial obstacles an 
employee must overcome to secure representation. In light of their risk 
of losing such cases, many plaintiffs' attorneys require a prospective 
client to pay a retainer, typically about $3,000. Others require 
clients to pay out-of-pocket expenses of the case as they are incurred. 
Expenses in employment discrimination cases can be substantial. Donohue 
and Siegelman found that expenses in Title VII cases are at least 
$10,000 and can reach as high as $25,000. Finally, some plaintiffs' 
attorneys now require a consultation fee, generally $200-$300, just to 
discuss their situation with a potential client.
  ``The result of these formidable hurdles in that most people with 
claims against their employer are unable to obtain counsel, and thus 
never receive justice. Paul Tobias, founder of the National Employment 
Lawyer's Association, has testified that ninety-five percent of those 
who seek help from the private bar with an employment matter do not 
obtain counsel. Howard's survey of plaintiffs' lawyers produced the 
same result. A Detroit firm reported that only one of eighty-seven 
employees who came to them seeking representation was accepted as a 
client.''

  Lewis L. Maltby, Private Justice: Employment Arbitration and Civil 
Rights, 30 Col. Hum. R.L. Rev. 29, 57-58 (1998).

[[Page S9721]]

  Without arbitration, the consumer or employee is faced with having to 
pay a lawyer's hourly rate, which may amount to several thousand 
dollars to litigate a claim in court, for a broken television that cost 
$700 new. If this is what consumers and employees are left with, many 
will have no choice but to drop their claim. This is not right. It is 
not fair. Thus, Professor Stephen Ware of the Cumberland Law School, 
states in a recent paper published by the CATO Institution that 
``current [arbitration] law is better for all consumers [than an 
exemption from the FAA] except those few who are especially likely to 
have large liability claims . . .'' Stephen J. Ware, Arbitration under 
Assault, CATO Policy Analysis No. 433 p. 10 (2002).
  Thus, while some have argued that the Congress should enact 
exemptions from the FAA for different classes of contracts from 
automobile franchise contracts to employment contracts, such exemptions 
would not help the overwhelming majority of the people who could not 
afford a lawyer to litigate in court. This is where arbitration can 
give the consumer or employee a cost-effective forum to assert their 
claim. Thus, before we make exceptions to the FAA for some of the most 
well to do corporations in our society, I think it is our duty to 
consider how we can improve the system for those less financially able.
  Can we improve the arbitration system? Yes, but we must take a 
balanced approach. In this approach we should protect the sanctity of 
legal contracts. In any contract, the parties agree to all the terms 
and clauses included in the contract document. This includes the 
arbitration clause. This is basic contract law, and the basic principle 
upon which the FAA has been supported for 75 years.
  But this is not always the case. In certain situations, consumers, 
employees, or businesses have not been treated fairly. That is what the 
Arbitration Fairness Act is designed to correct.
  The bill will maintain the cost benefits of binding arbitration, but 
will grant several specific ``due process'' rights to all parties to an 
arbitration. The bill is based on the consumer and employee due process 
protocols of the American Arbitration Association that have broad 
support. The bill provides the following rights: 1. Notice. Under the 
bill an arbitration clause, to be enforceable, would have to have a 
heading in large, bold print, would have to state whether arbitration 
is binding or optional, identify a source that the parties may contact 
for more information, and state that a consumer could opt out to small 
claims court.
  This will ensure, for example, that consumers who receive credit card 
notices in the mail will not miss an arbitration clause because it is 
printed in fine print. Further, it will give all parties means to 
obtain more information on how to resolve any disputes. Finally, the 
clause would explain that if a party's claims could otherwise be 
brought in small claims court, he is free to do so. Small claims court, 
unlike regular trial court, provides another inexpensive and quick 
means of dispute resolution.
  2. Independent selection of arbitrators. The bill will grant all 
parties the right to have potential arbitrators disclose relevant 
information concerning their business ties and employment. All parties 
to the arbitration will have an equal voice in selecting a neutral 
arbitrator. This ensures that the large company who sold a consumer a 
product will not select the arbitrator itself, because the consumer 
with a grievance will have the right to nominate potential arbitrators 
too. As a result, the final arbitrator selected will have to have the 
explicit approval of both parties to the dispute. This means the 
arbitrator will be a neutral party with no allegiance to either party.
  3. Choice of law. The bill grants the non-drafting party, usually the 
consumer or the employee, the right to have the arbitrator governed by 
the substantive law that would apply under conflicts of laws principles 
applicable in the forum in which the non-drafting party resided at the 
time the contract was entered into. This means that the substantive 
contract law that would apply in a court where the consumer, employee, 
or business resides at the time of making the contract will apply in 
the arbitration. Thus, in a dispute arising from the purchase of a 
product by an Alabama consumer from an Illinois company, a court would 
have to determine whether Alabama or Illinois law applied by looking to 
the language of the contract and to the place the contract was entered 
into. The bill ensures that an arbitrator will use the same conflict of 
laws principles that a court would in determining whether Alabama or 
Illinois law will govern the arbitration proceedings.
  4. Representation. The bill grants all parties the right to be 
represented by counsel at their own expense. Thus, if the claim 
involves complicated legal issues, the consumer, employee, or small 
business is free to have his lawyer represent him in the arbitration. 
Such representation should be substantially less expensive than a trial 
in court because of the more abbreviated and expedited process of 
arbitration.
  5. Hearing. The bill grants all parties the right to a fair hearing 
in a forum that is reasonably convenient to the consumer or employee. 
This would prevent a large company from requiring a consumer, employee, 
or small business owner to travel across the country to arbitrate his 
claim and to expend more in travel costs than his claim may be worth.

  6. Evidence. The bill grants all parties the right to conduct 
discovery and to present evidence. This ensures that the arbitrator 
will have all the facts before him prior to making a decision.
  7. Cross examination. The bill grants all parties the right to cross-
examine witnesses presented by the other party at the hearing. This 
allows a party to test the statements of the other party's witnesses 
and be sure that the evidence before the arbitrator is correct.
  8. Record. The bill grants all parties the right to hire a 
stenographer or tape record the hearing to produce a record. This right 
is key to proving later that the arbitration proceeding was fair.
  9. Timely resolution. The bill grants all parties the right to have 
an arbitration proceeding to be completed promptly so that they do not 
have to wait for a year or more to have their claim resolved. Under the 
bill a defendant must file an answer within 30 days of the filing of 
the complaint. The arbitrator has 90 days after the answer to hold a 
hearing. The arbitrator must render a final decision within 30 days 
after the hearing. Extensions are available in extraordinary 
circumstances.
  10. Written decision. The bill grants all parties the right to a 
written decision by the arbitrator explaining the resolution of the 
case and his reasons therefor. If the consumer or employee takes a 
claim to arbitration, he deserves to have an explanation of why he won 
or lost.
  11. Expenses. The bill grants all parties the right to have an 
arbitrator provide for reimbursement of arbitration fees in the 
interests of justice and the reduction, deferral, or waiver of 
arbitration fees in cases of extreme hardship. It does little good to 
take a claim to arbitration if the consumer or employee cannot even 
afford the arbitration fee. This provision ensures that the arbitrator 
can waive or reduce the fee or make the company reimburse the consumer 
or employee for a fee if the interests of justice so require.
  12. Small claims opt out. The bill grants all parties the right to 
opt out of arbitration into small claims court if that court has 
jurisdiction over the claim and the claim does not exceed $50,000.
  The bill also provides an effective mechanism for parties to enforce 
these rights. At any time, if a consumer or employee believes that the 
other party violated his rights, he may ask and the arbitrator may 
award a penalty up to the amount of the claim plus attorneys fees. For 
example, if the defendant party fails to provides discovery to a 
plaintiff party, the plaintiff can make a motion for fees. The amount 
of fee award is limited, as it is in court, to the amount of cost 
incurred by the employee in trying to obtain the information from the 
company. This principle is taken from Federal Rule of Civil Procedure 
37. After the decision, if the losing party believes that the rights 
granted to him by the Act have been violated, he may file a petition 
with the Federal district court. If the court finds by clear and 
convincing evidence that his rights were violated, it may order a new 
arbitrator appointed. Thus, if a consumer, employee, or small business 
has an arbitrator that is unfair and this causes him to lose the case,

[[Page S9722]]

the plaintiff can obtain another arbitrator.
  This bill is an important step to creating a constructive dialog on 
arbitration reform. This bill will ensure that those who can least 
afford to go to court can go to a less expensive arbitrator and be 
treated fairly. It will ensure that every arbitration carried out under 
the Federal Arbitration Act is completed fairly, promptly, and 
economically. I look forward to working with my colleagues in the 
Senate to ensure that consumers, employees, and small business who 
agree in a contract to arbitrate their claims will be afforded due 
process of law.
  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. 3026

       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 ``Arbitration Fairness Act of 
     2002''.

     SEC. 2. ELECTION OF ARBITRATION.

       (a) Fair Disclosure.--In order to be binding on the 
     parties, a contract containing an arbitration clause shall--
       (1) have a printed heading in bold, capital letters 
     entitled ``arbitration clause'', which heading shall be 
     printed in letters not smaller than \1/2\ inch in height;
       (2) explicitly state whether participation within the 
     arbitration program is mandatory or optional;
       (3) identify a source that a consumer or employee can 
     contact for additional information on costs and fees and on 
     all forms and procedures necessary for effective 
     participation in the arbitration program; and
       (4) provide notice that all parties retain the right to 
     resolve a dispute in a small claims court, if such dispute 
     falls within the jurisdiction of that court and the claim is 
     for less than or equal to $50,000 in total damages.
       (b) Procedural Rights.--If a contract provides for the use 
     of arbitration to resolve a dispute arising out of or 
     relating to the contract, each party to the contract shall be 
     afforded the following rights, in addition to any rights 
     provided by the contract:
       (1) Competence and neutrality of arbitrator and 
     administrative process.--
       (A) In general.--Each party to the dispute (referred to in 
     this section as a ``party'') shall be entitled to a 
     competent, neutral arbitrator and an independent, neutral 
     administration of the dispute.
       (B) Arbitrator.--Each party shall have an equal voice in 
     the selection of the arbitrator, who--
       (i) shall comply with the Code of Ethics for Arbitrators in 
     Commercial Disputes of the American Arbitration Association 
     and the State bar association of which the arbitrator is a 
     member;
       (ii) shall have no personal or financial interest in the 
     results of the proceedings in which the arbitrator is 
     appointed and shall have no relation to the underlying 
     dispute or to the parties or their counsel that may create an 
     appearance of bias; and
       (iii) prior to accepting appointment, shall disclose all 
     information that might be relevant to neutrality, including 
     service as an arbitrator or mediator in any past or pending 
     case involving any of the parties or their representatives, 
     or that may prevent a prompt hearing.
       (C) Administration.--The arbitration shall be administered 
     by an independent, neutral alternative dispute resolution 
     organization to ensure fairness and neutrality and prevent ex 
     parte communication between parties and the arbitrator. The 
     arbitrator shall have reasonable discretion to conduct the 
     proceeding in consideration of the specific type of industry 
     involved.
       (2) Applicable law.--In resolving a dispute, the 
     arbitrator--
       (A) shall be governed by the same substantive law that 
     would apply under conflict of laws principles applicable in a 
     court of the forum in which the party that is not drafter of 
     the contract resided at the time the contract was entered 
     into; and
       (B) shall be empowered to grant whatever relief would be 
     available in court under law or equity.
       (3) Representation.--Each party shall have the right to be 
     represented by an attorney, or other representative as 
     permitted by State law, at their own expense.
       (4) Hearing.--
       (A) In general.--Each party shall be entitled to a fair 
     arbitration hearing (referred to in this section as a 
     ``hearing'') with adequate notice and an opportunity to be 
     heard.
       (B) Electronic or telephonic means.--Subject to 
     subparagraph (C), in order to reduce cost, the arbitrator may 
     hold a hearing by electronic or telephonic means or by a 
     submission of documents.
       (C) Face-to-face meeting.--Each party shall have the right 
     to require a face-to-face hearing, which hearing shall be 
     held at a location that is reasonably convenient for the 
     party who did not draft the contract unless in the interest 
     of fairness the arbitrator determines otherwise, in which 
     case the arbitrator shall use the process described in 
     section 1391 of title 28, United States Code, to determine 
     the venue for the hearing.
       (5) Evidence.--With respect to any hearing--
       (A) each party shall have the right to present evidence at 
     the hearing and, for this purpose, each party shall grant 
     access to all information reasonably relevant to the dispute 
     to the other parties, subject to any applicable privilege or 
     other limitation on discovery under applicable State law;
       (B) consistent with the expedited nature of arbitration, 
     relevant and necessary prehearing depositions shall be 
     available to each party at the direction of the arbitrator; 
     and
       (C) the arbitrator shall--
       (i) make reasonable efforts to maintain the privacy of the 
     hearing to the extent permitted by applicable State law; and
       (ii) consider appropriate claims of privilege and 
     confidentiality in addressing evidentiary issues.
       (6) Cross examination.--Each party shall have the right to 
     cross examine witnesses presented by the other parties at a 
     hearing.
       (7) Record of proceeding.--Any party seeking a stenographic 
     record of a hearing shall make arrangements directly with a 
     stenographer and shall notify the other parties of these 
     arrangements not less than 3 days in advance of the hearing. 
     The requesting party or parties shall pay the costs of 
     obtaining the record. If the transcript is agreed by the 
     parties, or determined by the arbitrator to be the official 
     record of the proceeding, it shall be provided to the 
     arbitrator and made available to the other parties for 
     inspection, at a date, time, and place determined by the 
     arbitrator.
       (8) Timely resolution.--Upon submission of a complaint by 
     the claimant, the respondent shall have 30 days to file an 
     answer. Thereafter, the arbitrator shall direct each party to 
     file documents and to provide evidence in a timely manner so 
     that the hearing may be held not later than 90 days after the 
     filing of the answer. In extraordinary circumstances, 
     including multiparty, multidistrict, or complex litigation, 
     the arbitrator may grant a limited extension of these time 
     limits to a party, or the parties may agree to an extension. 
     The arbitrator shall notify each party of its decision not 
     later than 30 days after the hearing.
       (9) Written decision.--The arbitrator shall provide each 
     party with a written explanation of the factual and legal 
     basis for the decision. This written decision shall describe 
     the application of an identified contract term, statute, or 
     legal precedent. The decision of the arbitrator shall be 
     final and binding, subject only to the review provisions in 
     subsection (d).
       (10) Expenses.--The arbitrator or independent arbitration 
     administration organization, as applicable, shall have the 
     authority to--
       (A) provide for reimbursement of arbitration fees to the 
     claimant, in whole or in part, as part of the remedy in 
     accordance with applicable law or in the interests of 
     justice; and
       (B) waive, defer, or reduce any fee or charge due from the 
     claimant in the event of extreme hardship.
       (11) Small claims opt out.--
       (A) In general.--Each party shall have the right to opt out 
     of binding arbitration and into the small claims court for 
     the forum, if such court has jurisdiction over the claim. For 
     purposes of this paragraph, no court with jurisdiction to 
     hear claims in excess of $50,000 shall be considered to be a 
     small claims court.
       (B) Exception.--Where a complaint in small claims court is 
     subsequently amended to exceed the lesser of the 
     jurisdictional amount or a claim for $50,000 in total 
     damages, the small claims court exemption of this paragraph 
     shall not apply and the parties are required to arbitrate.
       (c) Denial of Rights.--
       (1) Denial of rights by party misconduct.--
       (A) In general.--At any time during an arbitration 
     proceeding, any party may file a motion with the arbitrator 
     asserting that the other party has deprived the movant of 1 
     or more rights granted by this section and seeking relief.
       (B) Award by arbitrator.--If the arbitrator determines that 
     the movant has been deprived of a right granted by this 
     section by the other party, the arbitrator shall award the 
     movant a monetary amount, which shall not exceed the 
     reasonable expenses incurred by the movant in filing the 
     motion, including attorneys' fees, unless the arbitrator 
     finds that--
       (i) the motion was filed without the movant's first making 
     a good faith effort to obtain discovery or the realization of 
     another right granted by this section;
       (ii) the opposing party's nondisclosure, failure to 
     respond, response, or objection was substantially justified; 
     or
       (iii) the circumstances otherwise make an award of expenses 
     unjust.
       (2) Denial of rights by arbitrator.--A losing party in an 
     arbitration may file a petition in the district court of the 
     United States in the forum in which the party that did not 
     draft the contract resided at the time the contract was 
     entered into to assert that the arbitrator violated 1 or more 
     of the rights granted to the party by this section and to 
     seek relief. In order to grant the petition, the court must 
     find clear and convincing evidence that 1 or more actions or 
     omissions of the arbitrator resulted in a deprivation of a 
     right of the petitioner under

[[Page S9723]]

     this section that was not harmless. If such a finding is 
     made, the court shall order a rehearing before a new 
     arbitrator selected in the same manner as the original 
     arbitrator as the exclusive judicial remedy provided by this 
     section.
       (d) Effective Date.--This section shall apply to any 
     contract entered into after the date that is 6 months after 
     the date of enactment of this Act.

     SEC. 3. LIMITATION ON CLAIMS.

       Except as otherwise expressly provided in this Act, nothing 
     in this Act may be construed to be the basis for any claim in 
     law or equity.

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