[Congressional Record Volume 150, Number 135 (Saturday, November 20, 2004)]
[Senate]
[Pages S11751-S11767]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  STATEMENT DESCRIBING PROVISIONS OF DIVISION K OF H.R. 4818 FILED BY 
                        SENATOR OLYMPIA J. SNOWE


                       Section 101. Express Loans

  Section 7(a)(25)(B) authorizes the Administrator to create pilot loan 
programs. In exercising that authority, the Administrator created an 
``Express Loan Pilot Program.'' The program authorizes lenders to use 
their own forms in submitting requests to the Administrator for the 
issuance of guarantees. Two significant restrictions are imposed by the 
``Express Loan Pilot Program:'' the guarantee cannot exceed 50 percent 
of the loan and the maximum loan amount is $250,000.
  Section 101 codifies, with a few significant differences, the 
provisions of Pub. L. No. 108-217, which addressed the Express Loan 
Program. The two most significant changes are the permanent 
authorization of the Express Loan Program by creating a new paragraph 
(31) in Sec. 7(a) of the Small Business Act and the statutory increase 
in the size of such loans to $350,000.
  Section 101 defines an ``express lender'' as any lender authorized by 
the Administrator to participate in the Express Loan Program. Congress 
expects that the Administrator will establish by rule the standards 
needed to qualify as an Express Lender.
  Section 101 defines an ``express loan'' as one in which the lender 
utilizes, to the maximum extent practicable, its own analyses of credit 
and forms. Congress fully expects that the conditions under which 
express loans are made will not vary significantly from those 
conditions that currently exist under the ``Express Loan Pilot 
Program.'' Nevertheless, Congress understands that the Administrator 
may wish to revise the standards and operating procedures associated 
with ``express loans.'' Nothing in the statutory language should be 
interpreted as prohibiting the Administrator from imposing these 
additional requirements that are otherwise consistent with the 
statutory language.
  Section 101 codifies the existing concept of the Administrator's 
``Express Loan Pilot Program.'' In other words, the ``Express Loan 
Program'' is one in which lenders utilize their own forms and get a 
guarantee of no more than 50 percent.
  Section 101 restricts the program, including the increased loan 
amount of $350,000, to those lenders designated as express lenders by 
the Administrator. Designation as an express lender does not limit the 
lender to making express loans if the lender has been authorized to 
make other types of loans pursuant to Sec. 7(a) of the Small Business 
Act. Although a lender may only seek status as an express lender, this 
section was included to ensure that the Administrator not limit the 
ability of an express lender to seek other lending authority from the 
Administrator. Nor is the Administrator permitted to change its 
standards for designating an express lender in a manner that only 
authorizes the lender to make express loans. To the extent that the 
lending institution wishes to offer a full range of loan products 
authorized by Sec. 7(a) and is otherwise qualified to do so, the 
Administrator shall not restrict that ability on the lender's status as 
an express lender.
  Section 101 prohibits the Administrator from revoking the designation 
of any lender as an express lender that was so designated at the time 
of enactment. This prohibition does not apply if the Administrator 
finds the express lender to have violated laws or regulations or the 
Administrator modifies the requirements for designation in a way that 
the express lender cannot meet those standards. Congress does not 
expect that the Administrator will impose new requirements for express 
lenders that prohibit them from making loans under other loan programs 
authorized by the Small Business Act for which they have approval from 
the Administrator.

       Congress, at the request of the Small Business 
     Administration, determined that it was appropriate to expand 
     the size of ``express loans'' to $350,000. Any change in the 
     size of an express loan now will require action by Congress.
       Congress is concerned that the Administrator will take 
     regulatory actions that unduly favor express lending over 
     other types of lending authorized by Sec. 7(a) of the Small 
     Business act. As such, Congress incorporated a provision 
     prohibiting the Administrator from taking any action that 
     would have the effect of requiring a lender to make an 
     express loan rather than a conventional loan pursuant to 
     Sec. 7(a). Any significant policy change in the operation of 
     the lending programs authorized by Sec. 7(a) of the Small 
     Business Act requires notification to the House and Senate 
     Small Business Committees. Furthermore, the statutory 
     language on notification goes beyond that which is required 
     pursuant to Sec. 7(a)(24) of the Small Business Act.


                    section 102. loan guarantee fees

       Section 102 increases the loan guarantee amount to a 
     maximum of $1.5 million. Given the fact that borrowers are 
     getting an additional increment in loan guarantees, the 
     sponsors determined that it would be appropriate to require 
     an additional 0.25 percent fee for the amount of guarantee in 
     excess of $1 million. Thus, on the amount of the guarantee 
     between $1 million and $1.5 million, the upfront fee 
     authorized pursuant to Sec. 7(a)(18) of the Small Business 
     Act increases from 3.5 percent to 3.75 percent but only for 
     that portion of the loan guarantee in excess of $1 million. 
     This is consistent with typical commercial lending practices 
     of charging fees that are commensurate with the lenders' 
     exposure to risk.
       Section 102 also raises the fee collected by the 
     Administrator from banks of the unpaid balance of deferred 
     participation loans. To avoid situations such as those that 
     occurred at the end of calendar year 2003 in which the 
     Administrator was required to drastically reduce lending and 
     impose other restrictions on the program, Congress determined 
     that it would be appropriate for the Administrator to have 
     some discretion in setting the fee paid by lenders on the 
     unpaid balance. The total amount of the fee cannot in any 
     year, exceed 0.55 percent of the unpaid balance. Congress 
     expects the Administrator to use this authority only when 
     needed to drive the cost, as that term is defined in the 
     Federal Credit Reform Act, of the loan program to zero, i.e., 
     not need an appropriation. Any use of this discretion to 
     raise the fee beyond the current level of 0.5 percent should 
     trigger the notification provisions in Sec. 7(a)(24) of the 
     Small Business Act. As a further oversight tool, Congress 
     expects that the Administrator would satisfy any relevant 
     committee's request for information on the utilization of 
     this discretion.
       Finally, Congress determined that the Administrator also be 
     given the authority to lower fees charged to borrowers and 
     lenders if the subsidy cost becomes negative, i.e., the fees 
     will actually take in more money to the government than it 
     costs to operate the Sec. 7(a) loan program. Congress adopted 
     an approach that the Administrator, should it undertake a fee 
     reduction, first consider reducing the fees set forth in 
     clauses (i)-(iii) of subsection 7(a)(18)(A) and then reduce 
     fees on lenders. As a further restriction on the discretion 
     of the Small Business Administration, the fees that were 
     charged to borrowers on the date of enactment of this 
     conference report may not be raised. Congress adopted this 
     language to ensure that any fee increases to borrowers 
     beyond the statutory limits requires the action of 
     Congress.


Section 103. Increase in Guarantee Amount in Institution of Associated 
                                  Fee

       Access to capital is vital to the growth of small 
     businesses. Particularly for manufacturers and high 
     technology research and development businesses, typical 
     amounts of capital available under the existing loan limits 
     authorized by Sec. 7(a) of the Small Business Act often are 
     inadequate. Given the importance of capital to grow small 
     businesses, Congress determined that it would be appropriate 
     to permanently increase the amount

[[Page S11752]]

     of the loan guarantee from $1 million to $1.5 million. No 
     additional changes were made in the overall statutory cap of 
     a gross $2 million loan. Thus, the Administrator will be able 
     to guarantee up to $1.5 million of a $2 million loan rather 
     than the current limit of $1 million. Congress expects that 
     this will increase the number of lenders willing to make 
     loans to small manufacturers who face significant global 
     competition.


                      Section 104. Debenture Size

       Congress raised all of the loan limitations for qualified 
     state and local development companies (``CDCs'') because they 
     had not been raised in many years and the long-term financing 
     needs of small businesses were not being met by loans that 
     did not exceed the thresholds for loans made pursuant to 
     Sec. 7(a) of the Small Business Act. Raising the loan 
     limitations has two effects. First, it signifies the 
     recognition that Title V of the Small Business Investment Act 
     and Sec. 7(a) of the Small Business Act has very different 
     purposes in mind. Second, an increase in the threshold allows 
     more effective economic development projects to be funded by 
     CDCs.
       Congress believes that the increases to $1,500,000 for 
     regular projects, $2,000,000 for public policy goal projects, 
     and $4,000,000 for small manufacturers will provide 
     significant new financial inputs to small businesses in 
     general and to small manufacturers in particular.
       While all small businesses whose primary industrial 
     classification is in North American Industrial Classification 
     sectors 31, 32, and 33 (the sectors for manufacturing), not 
     all small business concerns in those sectors are considered 
     small manufacturers. Congress adopted a requirement that 
     small manufacturers should be limited to those small business 
     concerns that have all of their production facilities are 
     located in the United States. Congress does not intend that 
     small business concerns that have manufacturing facilities 
     situated outside of the United States should be denied 
     assistance under programs operated by the Small Business 
     Administration. However, special benefits should be afforded 
     to those manufacturers whose production facilities are 
     located in the United States. Finally, the definition in 
     Sec. 106 is identical to the definition in this section 
     thereby avoiding any potential interpretive concerns about 
     what the legislature meant when it used the same term in 
     different sections of legislation.


                     Section 105. Job Requirements

       The Administrator has promulgated regulations, pursuant to 
     Sec. 501 of the Small Business Investment Act mandating that 
     a loan made by a CDC must create or save one job for each 
     $35,000 in guarantee. This standard has not been revised 
     since it was adopted in 1990. The standard clearly does not 
     reflect inflation or the dramatic increases in productivity 
     that has led to higher wages for all employees. Congress 
     determined that the standard should be revised to take 
     account of the changes in the economy during the past 14 
     years. Therefore, Sec. 105 statutorily raises the job 
     creation standard to one job for every $50,000 in 
     guarantees.
       Manufacturing requires greater capital investment than 
     other businesses. Such investment may lead to higher 
     productivity for small manufacturers and therefore fewer jobs 
     created per investment. Congress does not want to prejudice 
     the ability of CDCs to fund projects that would assist small 
     manufacturers. Section 106 establishes a standard that 
     authorizes CDC loans to small manufacturers if the project 
     creates one job for each $100,000 of guarantee.
       CDCs do not need to meet job creation standards for 
     individual loans if the loan is used to further one of the 
     public policy objectives in Sec. 501(d). Section 105 modifies 
     that requirement slightly by exempting a particular project 
     from the job creation standards if the project was meeting a 
     public policy objective and if the CDC's overall loan 
     portfolio creates one job for $50,000 in guarantees.
       Since the basic premise of loans made pursuant to Title V 
     of the Small Business Investment Act is to encourage economic 
     development, Congress concluded that it made sense to 
     establish a different standard for job creation in 
     economically-depressed areas or places with unusually high 
     wage requirements. Congress believes that CDCs should be 
     provided more leeway in creating jobs in economically-
     depressed areas and Alaska and Hawaii. As a result, CDC loans 
     in these areas only need to meet a more lenient job creation 
     standard of one job per $75,000 of guarantee in certain 
     areas.
       Given the importance of small manufacturing to economic 
     development, Congress excluded loans to small manufacturers 
     from the calculations needed to determine whether a CDC's 
     loan portfolio meets the overall job creation standard of one 
     job per $50,000 of guarantee or the $75,000 standard for 
     high-wage and economically-depressed areas. Congress intends 
     that the public policy goals set forth in Sec. 501 should be 
     accomplished without reference to job creation for small 
     manufacturers. Section 105 also authorizes the Administrator 
     to waive any of the standards when appropriate. Congress 
     expects that the Administrator will promulgate regulations 
     specifying when the job creation standards will be waived. 
     Two restrictions are imposed on the Administrator's 
     discretion. First, the Administrator may not waive the 
     requirements concerning small manufacturers. Second, the 
     Administrator may not mandate a job creation standard with a 
     number lower than that set forth in Sec. 105 but does have 
     the liberty to set a higher dollar guarantee per job 
     standard. These restrictions ensure that the Administrator 
     does not undermine the ability of CDCs to lend to small 
     manufacturers.


 Section 106. Report Regarding National Database of Small Manufacturers

       Institutions of higher education can play a vital role in 
     reviving small manufacturers. Universities must purchase 
     large amounts of standard manufactured products (often on an 
     annual basis--such as furniture for dormitory rooms). They 
     also often purchase very sophisticated tools and laboratory 
     equipment that small manufacturers may produce. Congress 
     believes that some mechanism should be in place so that 
     institutions of higher education can identify suppliers from 
     the universe of small manufacturers. While not an ideal 
     system, a database similar to PRO-NET represents a useful 
     model for making institutions of higher education aware of 
     the capabilities of small manufacturers. PRO-NET is a 
     database operated by the federal government in which the 
     capabilities of numerous small businesses are outlined. 
     Contracting officers use PRO-NET to find small businesses 
     capable of providing goods and services. Section 106 
     requires the Administrator and the Association of Small 
     Business Development Centers to study the viability of 
     creating a PRO-NET-like database that all institutions of 
     higher education can use to identify small manufacturers 
     (the definition is identical to the definition in 
     Sec. Sec. 104-05) capable of providing their procurement 
     needs. The bill also requires a report to Congress on the 
     viability and cost to establish such a database.


                    Section 107. International Trade

       All Sec. 7(a) loans can be used to refinance existing debt 
     except for international trade loans. Congress determined 
     that the restriction did not make sense especially since 
     businesses harmed by unfair international competition will be 
     more competitive if their debt service payments are lower. 
     Therefore, Congress authorized businesses otherwise eligible 
     for an international trade loan to use it for refinancing of 
     debt but only to the extent that the Administrator determines 
     the applicant's existing debt is not structured with 
     reasonable terms and conditions. Congress expects that the 
     Administrator examine the interest rate being charged 
     relative to the interest rates generally available for 
     similar businesses to determine whether the terms and 
     conditions are not reasonable.
       To obtain an international trade loan, the applicant must 
     demonstrate that the business either is engaged in or 
     adversely affected by international trade. To avoid the 
     necessity of having to prove adverse effects if other 
     government agencies already reached that conclusion in the 
     same industry as the borrower, Congress mandated that the 
     Administrator must accept as conclusive proof of injury a 
     finding by the Secretary of Commerce issued pursuant to 
     chapter 3 of Title II of the Trade Act of 1974 or any 
     determination by the International Trade Commission. If an 
     applicant is in an industry for which the Commission or the 
     Secretary has made an injury finding, Congress concluded that 
     it would be pointless to require the small businesses so 
     suffering to go through the additional expense of presenting 
     new evidence to the Administrator of injury.
       Congress intends that the utilization of the findings by 
     the Secretary or the Commission is not a limiting factor if a 
     small business can present other evidence of injury. For 
     example, the Commission or Secretary may not find that an 
     industry was injured or that no claims were made to either 
     agency. Nothing in Sec. 107 prevents a small business from 
     presenting of evidence of specific injury to his or her 
     business. The Administrator then would be required to rule on 
     the adequacy of the proof, and if sufficient evidence was 
     found of injury, make a loan under Sec. 7(a)(16).
       Section 107 also provides for an increase in the size of 
     international trade loans. Given the nature of international 
     trade, Congress typically has mandated that loan caps be 
     $250,000 higher than those for conventional Sec. 7(a) loans. 
     This section maintains that practice and increased the cap 
     for international trade loans based on the increase in the 
     guarantee fees for conventional loans.


               Section 121. Program Authorization Levels

       This section amends Sec. 20 of the Small Business Act and 
     provides for authorization of appropriations. Congress 
     selected authorization levels with sufficient room to allow 
     for expected growth and expansion of programs authorized by 
     the Small Business Act and Small Business Investment Act. 
     Congress also determined that an authorization of 
     appropriations not elsewhere provided should apply to all of 
     the Small Business Investment Act.
       Finally, Congress concluded that the existing standing 
     authorization of appropriations only for carrying out title 
     IV of the Small Business Investment Act was illogical. 
     Section 121 amends Sec. 20 to provide for an authorization of 
     appropriations not elsewhere provided for carrying out both 
     the Small Business Act and all titles of the Small Business 
     Investment Act.


                Section 122. Additional Reauthorizations

       The Small Business Development Center (SBDC) program's 
     authorization levels are set forth in Sec. 21 of the Small 
     Business Act. Congress provided modest authorization 
     increases for the SBDCs to take account of necessary growth 
     in providing services to entrepreneurs. In addition, Congress 
     also extended the authority of SBDCs to provide

[[Page S11753]]

     drug-free workplace counseling. This authority would have 
     lapsed without the change. The extension of authority will 
     give the SBDC grantees sufficient time to coordinate their 
     actions with the grantees under the revised drug-free 
     workplace program.
       Given the SBDCs expertise in providing assistance to 
     entrepreneurs, Congress established a program authorizing 
     grants to SBDCs that are willing to offer advice in 
     communities that are economically challenged due to business 
     or government facility down-sizing or closing. Congress 
     expects that this assistance will first be offered to 
     communities suffering from plant closings, then to 
     communities suffering from government office closings, and 
     finally to base realignments. To the extent that other bases 
     are closed in future years, Congress expects that legislation 
     concerning such closures will provide additional assistance 
     to the surrounding communities and that assistance provided 
     under Sec. 122 should be utilized in other areas that do not 
     receive the directed assistance associated with base 
     closures.


      Section 123. Paul D. Coverdell Drug-Free Workplace Program 
                        Authorization Provisions

       Congress recognizes that small businesses need drug free 
     workplaces. Drug-free workers boost productivity and reduce 
     the costs of health care coverage and absenteeism. As a 
     result, Congress reauthorized the program for two years at 
     the five million dollar level. In addition, to ensure that 
     funding is maximized to eligible intermediaries that 
     specialize in providing drug-free workplace assistance to 
     small businesses, Congress adopted a limitation on the amount 
     of funds that can be awarded to SBDCs for carrying out the 
     purposes of the Paul D. Coverdell Program. Furthermore, 
     Congress, again in an effort to maximize limited dollars, 
     restricts the use of funds for administrative purposes to 
     five percent of the total made available to grantees. Nothing 
     in this limitation restricts the drug-free workplace advice 
     that SBDC grantees are authorized to provide in their normal 
     course of operations.


                     Section 124. Grant Provisions

       Congress recognized that improvements in coordination 
     between the activities of drug-free workplace eligible 
     intermediaries and SBDCs might improve delivery of services 
     to small businesses. As a result, Congress established a 
     grant program within the Paul D. Coverdell Drug-Free 
     Workplace Program to promote cooperation between eligible 
     intermediaries and SBDC grantees. Congress expects that the 
     Administrator award the two-year grants to those applicants 
     that best demonstrate the capacity to deliver advice in a 
     coordinated manner between SBDCs and eligible intermediaries.


       Section 125. Drug-Free Communities Coalitions as Eligible 
                             Intermediaries

       Congress recognizes that there are numerous entities that 
     receive grants under chapter 2 of the National Narcotics 
     Leadership Act of 1988 but are not currently authorized to 
     participate as eligible intermediaries under the Paul D. 
     Coverdell Drug-Free Workplace Program. This section makes 
     these National Narcotics Leadership Act grantees, which could 
     provide valuable insight into establishing drug-free 
     workplaces, eligible to receive awards under the Paul D. 
     Coverdell Drug-Free Workplace Program. Inclusion of new 
     additional parties should not be interpreted as directing the 
     Administrator to favor them over others that apply for grants 
     under the Paul D. Coverdell Drug-Free Workplace Program.


       Section 126. Promotion of Effective Practices of Eligible 
                             Intermediaries

       To ensure that the Paul D. Coverdell Drug-Free Workplace 
     Program operates optimally, Congress mandates that the 
     Administrator provide best practices to eligible 
     intermediaries. The Administrator should use all of its 
     available outreach resources, including SBDCs, Women Business 
     Centers, and district offices to insure that eligible 
     intermediaries are kept apprised of best practices.
       Congress also believe that the performance of eligible 
     intermediaries should be assessed and measured. Such 
     evaluations will be useful to Congress when it considers what 
     changes, if any, need to make the program even more 
     effective. This section establishes the procedures for 
     collecting data needed to evaluate the efficacy of the 
     program.


                    Section 127. Report to Congress

       This section requires the Administrator to use the data 
     collected under Sec. 126 and report to Congress on the 
     efficacy of the program and dissemination of drug-free 
     workplace information. Congress expects the relevant 
     committees to examine the report and make necessary 
     legislative changes as a result to ensure optimal operation 
     of the Paul D. Coverdell Drug-Free Workplace Program.


               Section 131. Lender Examination and Review

       Current practice authorizes SBIC licensees to pay for 
     examination and reviews conducted by the Administrator. 
     Congress determined that the same principles should apply to 
     lenders authorized to make government-guaranteed loans under 
     Sec. 7(a). This section grants the Administration the 
     authority to charge for examinations and reviews. The section 
     also requires that the fees be directed to lender oversight 
     activities including the payment of salaries and expenses of 
     Administration personnel involved in such functions. This 
     authority does not imply that the fees may be directed to the 
     reimbursement of other functions of the Administration.


            Section 132. Gifts and Co-Sponsorship of Events

       Gifts and co-sponsorships play a useful role in the Small 
     Business Administration's performance of its outreach 
     function to small businesses. Congress determined that even 
     broader language than is currently permitted was necessary to 
     ensure the Administration's continued ability to obtain gifts 
     and seek co-sponsorships. In particular, Congress recognized 
     that in many instances the Administration does not receive 
     gifts but rather contributions are made by a co-sponsoring 
     entity to an Administration event, such as small business 
     forum. In other instances, the SBA uses gifts to pay for 
     promotional materials, such as cards that are handed out in 
     district offices to promote an event. This section clarifies 
     and broadens the existing authority of the Small Business 
     Administration to obtain gifts and co-sponsorships in order 
     to expand the agency's outreach. To ensure appropriate 
     clarity, Congress added the term ``recognition events'' 
     which would include Small Business Week and sponsorship of 
     dinners during that period. The section also requires the 
     Administration to recognize the co-sponsors of such events 
     but only to the extent of their contributions. No 
     endorsements of the co-sponsors products or services are 
     permitted.
       In order to ensure that conflicts of interest do not arise 
     in the solicitation or acceptance of gifts, Congress requires 
     the General Counsel to determine whether a conflict of 
     interest exists. If a determination that a conflict of 
     interest exists, the General Counsel is empowered to prohibit 
     the solicitation or acceptance. Finally, the language 
     clarifies that the Administrator may delegate the approval of 
     co-sponsorships to the Deputy Administrator, Associate 
     Administrators, and Assistant Administrators. No personnel 
     located in district or regional offices are permitted to 
     approve co-sponsorships. Congress adopted this restriction to 
     ensure close cooperation with the General Counsel of the 
     Administration.
       Congress also requires that the Inspector General audit the 
     use of such gifts and co-sponsorships. This avoids potential 
     abuses of the program through independent oversight of an 
     official whose investigations cannot be impeded by the 
     Administrator or Administration personnel. Congress wanted 
     additional assurances (beyond the Inspector General audit) 
     that the Small Business Administration achieved a proper 
     balance between this new expanded authority and 
     accountability. As a result, a sunset date of 2006 was added 
     in order to properly monitor this new authority before 
     considering making this language permanent in the Small 
     Business Act.


            Section 141. Service Corps of Retired Executives

       Currently, the Administrator has the discretion whether to 
     permit the Service Corps of Retired Executives (SCORE) to 
     maintain offices at the headquarters of the Administration 
     and pay employees of SCORE. Congress determined that the 
     vitality of SCORE should not be subject to whims of the 
     Administrator and therefore require that the Administrator 
     maintain SCORE's offices at the Administration's headquarters 
     and continue to pay for the salaries of SCORE personnel. 
     Congress notes that this will not require any increased 
     appropriation since these services and expenses are currently 
     included in the Small Business Administration's budget.


         Section 142. Small Business Development Center Program

       Congress remains concerned that SBDCs were and may continue 
     to be revealing the name of businesses that seek their advice 
     to Administration employees for functions unrelated to the 
     financial auditing or client surveys needed to oversee the 
     operations of the SBDC grantees. Congress believes that such 
     behavior is intolerable. This section prohibits the 
     disclosure of client information (including the name, 
     address, telephone and facsimile numbers, and e-mail address) 
     of any concern or individual receiving assistance from a SBDC 
     grantee or its subcontractors (who operate service centers 
     that business owners can utilize to obtain advice) unless the 
     Administrator is ordered to make such disclosure pursuant to 
     a court order or civil or criminal enforcement action 
     commenced by a federal or state agency. Congress expects that 
     SBDC grantees will only respond to formal agency requests, 
     such as civil investigative demands, and subpoenas.
       Congress also recognizes that the Administrator has 
     significant management responsibilities to ensure that 
     federal taxpayer dollars are wisely used by grantees and are 
     in compliance with the law, regulations, and the cooperative 
     agreements signed by SBDC grantees. Congress authorizes the 
     SBDC grantees to provide client names for the purposes of 
     financial audits conducted by the Administrator or 
     Inspector General and for client surveys to ensure that 
     the SBDC grantees are satisfying certain aspects of their 
     grant agreements. Congress recognizes that client surveys 
     may be misused and impose restrictions on their use. Until 
     regulations are in place to ensure that SBDC grantee 
     client's privacy is protected to the maximum extent 
     practicable given the management oversight responsibility 
     of the Administrator, Congress requires client surveys to 
     be approved by the Inspector General and any approval 
     incorporated into the

[[Page S11754]]

     semi-annual report made to Congress.
       This section also makes a technical change in wording of 
     the SBDC program. It renames the certification program as an 
     accreditation program. The change was made because 
     institutions are accredited not certified. Since the program 
     determines the quality of SBDCs, it makes sense to have them 
     accredited not certified. An identical change is made in 
     Sec. 20(a)(1)(D)-(E).


      Section 143. Advisory Committee on Veterans Business Affairs

       Congress has determined that the federal government must 
     provide better assistance and support to veterans in their 
     efforts to form and expand small businesses. In 1999, as part 
     of this effort, Congress established an Advisory Committee on 
     Veterans Business Affairs. Its responsibilities included 
     providing advice to Congress and the Small Business 
     Administration on policy initiatives that would promote 
     entrepreneurship by veterans. The responsibilities of this 
     advisory board were to be taken over by the National Veterans 
     Business Development Corporation on October 1, 2004. Congress 
     determined that the Advisory Committee's role was 
     sufficiently beneficial that it should not be subsumed within 
     the National Veterans Business Development Corporation. As a 
     result, Congress authorized an extension of the Advisory 
     Committee as a separate entity to continue its functions 
     through September 30, 2006.


               Section 144. Outreach Grants for Veterans

       The Administration is authorized to provide outreach grants 
     to help disabled veterans start and expand small businesses. 
     Congress determined that the outreach grants should not be 
     limited to disabled veterans. This section extends the 
     authority to provide outreach programs to veterans and 
     reservists.


              Section 145. Authorization of Appropriations

       To express Congress' concern about adequate efforts to 
     assist veterans, Congress determined that the Small Business 
     Administration's Office of Veterans Affairs should have a 
     separate authorization. This section provides for that 
     separate authorization for fiscal years 2005 and 2006.


    Section 146. National Veterans Business Development Corporation

       A ruling by the Department of Justice concluded that the 
     National Veterans Business Development Corporation was a 
     federal agency for all purposes and thus subject to, among 
     other things, federal administrative, personnel, and 
     procurement laws. Congress, when it created the corporation, 
     never intended that it would be considered a federal agency. 
     The legislation mandated sufficient fundraising by the 
     corporation that would eliminate the need for federal 
     funding. While that fundraising continues, Congress 
     determined that its original intent concerning the status of 
     the corporation should be honored. This section makes it 
     clear that the corporation is to be considered and treated as 
     a private entity and not an agency or instrumentality of 
     the Federal government.


          Section 147. Small Business Manufacturing Task Force

       Manufacturing jobs in the United States have declined since 
     their historic peak in 1979 and that loss has accelerated in 
     recent years. Small business manufacturers constitute over 98 
     percent of our nation's manufacturing enterprises. It is 
     impossible to overstate the role of small manufacturers 
     within the overall manufacturing industry and our nation's 
     economy. The House and Senate Small Business Committees have 
     placed a high priority on trying to resuscitate the small 
     business industrial base because economic security in the 
     United States cannot occur in a purely post-industrial 
     economy.
       Section 147 establishes a Small Business Manufacturing Task 
     Force within the Small Business Administration, charged with 
     ensuring that the Administration is properly addressing the 
     particular needs of small manufacturers. Specifically, the 
     Small Business Manufacturing Task Force will: (a) evaluate 
     and identify whether existing programs and services are 
     sufficient to serve small manufacturers' needs, or whether 
     additional programs or services are necessary; (b) actively 
     promote the SBA's programs and services that serve small 
     manufacturers; and (c) identify and study the unique 
     conditions of small manufacturers, and develop and propose 
     policy initiatives to support and assist them. This section 
     also instructs the Small Business Manufacturing Task Force to 
     submit a report of its findings and recommendations to the 
     President and the Senate and House Small Business Committees 
     not later than 12 months after the effective date of the bill 
     and annually thereafter. In carrying out their obligations 
     under this section, Congress expects that the Task Force will 
     consult with other agencies that have manufacturing 
     responsibilities, such as the Department of Commerce.


     Section 151. Streamlining and Revision of HUBZone Eligibility 
                              Requirements

       The Historically Underutilized Business Zone (HUBZone) 
     program was designed to direct portions of federal 
     contracting dollars into areas of the country that in the 
     past have been out of the economic mainstream. HUBZone areas, 
     which include qualified census tracts, poor rural counties, 
     and Indian reservations, often are out-of-the-way places that 
     the stream of commerce passes by, and thus tend to be in low 
     or moderate income areas also characterized by comparatively 
     high unemployment. These areas can also include certain rural 
     communities and tend generally to be low-traffic areas that 
     do not have a reliable customer base to support business 
     development. As a result, businesses have been reluctant to 
     move into these areas and expend the necessary funds to 
     develop the infrastructure for creation of jobs. It simply 
     has not been profitable, without a customer base, to keep 
     those businesses operating.
       The HUBZone program seeks to overcome these problems by 
     providing the means for Federal procurement activities to 
     become customers for small businesses that locate in 
     HUBZones. While a small business works to grow, expand its 
     payroll, and establish a solid base of commercial or other 
     customers, federal business opportunities can be of vital 
     importance. Federal prime and subcontracts can become an 
     important source of revenue for a HUBZone small business, and 
     prime contracts in particular can help stabilize revenues, 
     establish valuable past performance record, and maintain 
     future profitability.
       In past years, the HUBZone program has encountered issues 
     relating to the statutory requirement that a HUBZone firm be 
     entirely owned and controlled by individual U.S. citizens. 
     This requirement means that all HUBZone applicants need to 
     be owned by human beings directly and not human beings 
     organized as business entities. However, many small 
     business owners and small business investors prefer to 
     take advantage of various corporate forms in order to 
     limit the personal liability for themselves and their 
     families. Exceptions for Alaska Native Corporations, 
     Indian tribal governments, and community development 
     corporations were added by the Small Business Act 
     reauthorization legislation in 2000. Even with those 
     changes, the presence of a corporate entity or a limited 
     liability company with an ownership stake in a small 
     business would have automatically disqualified an 
     otherwise eligible firm from participation in the HUBZone 
     program. Small agricultural cooperatives, which already 
     maintain presence in rural HUBZones, would have faced 
     similar restrictions. These rules unnecessarily impede the 
     flow of capital to the very areas that need it the most 
     and create compliance conflicts with other small business 
     procurement programs.
       Section 151 addresses this problem through streamlining and 
     revision of the eligibility requirements for HUBZone small 
     businesses to include small businesses that are 51 percent 
     owned by United States citizens, as well as to include small 
     businesses which are small agricultural cooperatives or are 
     owned and controlled by small agricultural cooperatives.
       In addition, HUBZone firms owned by the Indian tribes have 
     been facing peculiar challenges due to statutory requirements 
     that they must hire a certain percentage of its workforce 
     performing a federal contract or subcontract from Indian 
     reservations or adjacent areas. These requirements, while 
     motivated by the desire to spur economic development of the 
     tribes, over time had the unintended consequence of putting 
     tribally-owned firms at a disadvantage in comparison with all 
     other HUBZone concerns by imposing a geographic restriction 
     on the kinds of contracts that tribally-owned HUBZone firms 
     could perform. Geographic restrictions also impeded business 
     synergies between tribally-owned HUBZone firms and Alaskan 
     Native Corporations. To remedy this disparity, Section 151 is 
     providing tribally-owned HUBZone concerns the option of 
     qualifying for the program based on locating in, and hiring 
     workers from, either Indian reservations or any other 
     HUBZones on the same terms as available to other HUBZone 
     firms. Congress notes that the Indian tribes, as owners of 
     the HUBZone firms, will be receiving expanded economic 
     benefits from new contracting opportunities.


               Section 152. Expansion of Qualified Areas

       Congress observes that the HUBZone area qualifications are 
     also in need of improvement. Paradoxically, economically 
     distressed rural communities in states with high 
     unemployment--among the neediest of needy areas--currently do 
     not qualify for the HUBZone program because rural areas 
     currently must qualify in relation to the statewide 
     unemployment average. As an example, in calendar year 2003, 
     Alaska had a statewide unemployment rate of 8.0 percent. To 
     qualify as a HUBZone area, it was necessary for an Alaskan 
     rural community to have an 11.2 percent unemployment rate. 
     But, in 25 of the 50 states, a rural community could have 
     qualified as a HUBZone with an unemployment range of 7.8 
     percent or less.
       Section 152 addresses this problem by modifying the 
     definition of a ``qualified nonmetropolitan county'' to 
     provide the option of comparing the unemployment statistic 
     for that area to the statewide average or to the national 
     average. The new statutory HUBZone definition should give the 
     Small Business Administration flexibility to address both 
     national and state-wide unemployment disparities without 
     hurting the states that have comparatively low 
     unemployment overall, but with pockets of serious 
     unemployment.

[[Page S11755]]

       Congress recognizes the drastic economic ramifications of 
     military base closures and that the HUBZone program can 
     uniquely harness the strength and the creativity of the 
     private sector by providing incentive for small businesses to 
     relocate to areas suffering such ramifications. According to 
     congressional research, more than 300 military bases closed 
     or realigned between 1988 and 2003 and more than 50 percent 
     of these bases were located outside of a designated HUBZone. 
     Therefore, Congress intends that, upon the later of the 
     enactment of this act or the date of final closure, existing 
     as well as future military base closure areas be designated 
     as HUBZones for a period of five years in order to 
     reinvigorate the productive capacity of such areas and 
     leverage existing local customers and a skilled workforce. 
     Congress believes that new businesses and new jobs created 
     through the HUBZone small firms mean new life for areas 
     affected by base closure.
       Additionally, Congress notes the existence of numerous 
     complaints that the current definition of HUBZone qualified 
     areas based on census income data, in conjunction with the 
     definition of HUBZone qualified redesignated areas, fail to 
     provide adequate time to recoup a return on investment. These 
     concerns appear justified. Congress observes that the HUBZone 
     program is relatively young, and the federal government is 
     not even close to meeting its statutory prime contracting 
     goal of 3 percent. Because the HUBZone program was enacted 
     into law in 1997, the initial HUBZone areas were designated 
     on the basis of the 1990 Census. However, the federal 
     government conducted another census in 2000. As a result, 
     many areas were redesignated after only 3 years of the 
     program's existence. The statute currently grandfathers the 
     redesignated areas into the program for 3 years.
       Congress notes that, at the time of the last redesignation, 
     the small business community received comparatively few 
     benefits from the HUBZone program despite the substantial 
     workforce recruitment, compliance, and business development 
     efforts that must be expended by each of the HUBZone firms. 
     These small businesses, which made business decisions to 
     pursue the HUBZone strategy by locating in a HUBZone, 
     adjusting their ownership structure, and recruiting HUBZone 
     residents are in danger of being penalized for the federal 
     government's slow initial implementation of the HUBZone 
     program. Further, anecdotal evidence indicates that it may 
     take a long time for a new firm to secure a federal contract, 
     and that multiple-order contracts commonly envision task 
     orders over a number of years. In these circumstances, a 3-
     year grandfather clause would appear not to provide 
     sufficient time for a small business to generate a return on 
     the HUBZone investment. By comparison, companies under the 
     Sec. 8(a) program can maintain such a designation for 9 
     years, and a general small business designation can be 
     maintained indefinitely. Therefore, Congress imposes a 
     moratorium on HUBZone area redesignations by providing for an 
     extension of the redesignation period until the conclusion of 
     the 2010 Census. No certified HUBZone firm shall be 
     decertified as a result of either the redesignation process 
     based on the 2000 Census data or any revised unemployment 
     data subsequent to December 21, 2000, the date of passage of 
     enactment of the HUBZone in the Native America Act. It is the 
     intent of Congress to have the Small Business Administration 
     reinstate any HUBZone firm previously decertified based on 
     these two criteria.
       Congress also finds that, concurrently with the moratorium, 
     a study on the effectiveness of the HUBZone area definitions, 
     including the redesignation period, must be conducted by the 
     Office of Advocacy of the United States Small Business 
     Administration. The Office of Advocacy is chosen to conduct 
     this study for its particular expertise in small business 
     procurement, rural small business development, and general 
     small business matters. Congress directs the Office of 
     Advocacy to examine the impact and effectiveness of the 
     HUBZone definitions on small business development and jobs 
     creation, and expect that the Office of Advocacy will 
     periodically consult with congressional small business 
     committees on matters concerning this study. Findings and 
     recommendations of the study must be reported to 
     congressional small business committees by May 1, 2008.


                Section 153. Price Evaluation Preference

       With regards to the application of existing HUBZone price 
     preferences to international food aid procurements conducted 
     by the United States Department of Agriculture (USDA), 
     Congress concludes that the preferences as they currently 
     stand are hindering the goals of U.S. foreign humanitarian 
     food assistance programs. This view is supported by extensive 
     consideration of market data from the Kansas City auction 
     office of the USDA Farm Service Agency, the structure of 
     auction tenders and other auction processes, as well as data 
     supplied by the industry. It appears that there is a risk of 
     various unintended and undesirable consequences to applying 
     the current HUBZone mandate to international food aid 
     acquisitions. In particular, it appears that, in the context 
     of food aid tender auctions, the claimed job gains fostered 
     by the current price preference are offset by job losses in 
     other communities, the non-HUBZone small businesses 
     attempting to compete may experience undue harm, and the 
     competitive supplier base may atrophy. In turn, this may 
     undermine USDA's capacity to secure adequate foodstuffs for 
     malnourished persons and increase the costs to the food aid 
     programs without realizing adequate jobs creation and 
     business development benefits.
       The HUBZone price preference alternative adopted in this 
     act (a 5 percent price evaluation preference on 20 percent of 
     the contract) would alleviate these potentially damaging 
     effects on the U.S. food aid system. Congress believes that 
     this approach would preserve the HUBZone program's goal of 
     providing HUBZone-eligible companies with a meaningful 
     opportunity to compete while ensuring that the USDA has an 
     adequate capacity of supply from which to draw to deliver 
     emergency food aid in catastrophic situations. This approach 
     would also eliminate the current HUBZone program's 
     application problem which directly penalizes non-HUBZone 
     small businesses due to the nature of the food aid auctions. 
     The potential for job losses in other communities would be 
     limited. Importantly, this approach also reflects the 
     cornerstone of America's efforts to provide food assistance 
     to the world's neediest people through competitive markets.
       According to President Dwight D. Eisenhower and 
     congressional architects of the Small Business Act, an 
     overarching purpose of small business procurement programs is 
     to assure a vibrant, competitive supplier base for the 
     Federal Government. Price preferences are employed to further 
     this purpose, and should be structured accordingly. Congress 
     notes that, in general, price preferences have been a 
     valuable tool for encouraging a more robust supplier base. 
     Nevertheless, Congress believes that, in these very special 
     circumstances, it is important to encourage competition by 
     keeping multiple vendors actively bidding in our food 
     assistance programs to secure the lowest cost procurement 
     and emergency supply chains in the case of humanitarian 
     crisis. This approach builds on the current small business 
     10 percent set-aside by an additional 20 percent 
     allocation of every tender to small businesses and HUBZone 
     applicants. It guarantees full and open competition, 
     including competition pursuant to the Small Business Act, 
     in food aid procurement tenders to assure that U.S. food 
     aid programs do not suffer consequences inconsistent with 
     the intent of the price preference program. The approach 
     in this legislation safeguards the dual interests of a 
     vibrant small business presence in federal procurements 
     and robust food aid programs.


                  Section 154. HUBZone Authorizations

       Congress notes that the Federal Government has failed to 
     meet its statutory HUBZone contracting goals every single 
     year these goals have been in effect. Continuous, dedicated 
     authorization of the HUBZone program is essential to continue 
     the effort to bring economic opportunities to the HUBZone 
     areas. Therefore, Congress extends the current authorization 
     of appropriations of $10,000,000 for the SBA's HUBZone 
     program through Fiscal Year 2006.


        Section 155. Participation in Federally Funded Projects

       Section 155 removes the burdensome paperwork requirements 
     for additional certification by firms seeking to perform any 
     State, or political subdivison projects that utilize federal 
     dollars if they are currently certified, or otherwise meet 
     the applicable qualification requirements, for participation 
     in any program under Sec. 8(a) of the Small Business Act.
       This change will: (1) provide federally certified Sec. 8(a) 
     small businesses with access to all State and local projects 
     funded in whole or in part by the Federal Government; (2) 
     eliminate the burden of requiring Sec. 8(a) small businesses 
     to get certifications from the State or local government or 
     both in addition to their federal certification under 
     Sec. 8(a); and, (3) decrease certification costs and 
     eliminate time delays associated with the burden of receiving 
     additional State or local government certifications for 
     businesses authorized to participate in program established 
     by Sec. 8(a) of the Small Business Act.


   Section 161. Supervisory Enforcement Authority for Small Business 
                           Lending Companies

       This section creates a new Sec. 23 of the Small Business 
     Act. It gives the Administrator specific enforcement and 
     supervisory authority over Small Business Lending Companies 
     (SBLCs) and Non-Federally Regulated SBA Lenders as those 
     terms are defined in Sec. 162 of this conference report. The 
     vast majority of lenders authorized to make loans pursuant to 
     the Small Business Act have their lending and other 
     activities overseen and regulated by federal financial 
     regulators, including loans and corporate transactions 
     related to their general lending practices. The Administrator 
     makes no effort at regulating lending institutions except for 
     their authority to make Sec. 7(a) loans.
       In contradistinction, there are a few institutions that are 
     authorized to make loans pursuant to Sec. 7(a) of the Small 
     Business Act that are not typical lending institutions. SBLCs 
     (except for two which are wholly-owned by national banks) are 
     subsidiaries of industrial corporations and thus not subject 
     to any regulation by financial regulators, other than certain 
     filings made with the Securities and Exchange Commission. 
     Non- federally regulated SBA lenders have some state 
     oversight but the extent varies according to state law. 
     The only authority that the Administrator has with respect 
     to these

[[Page S11756]]

     lenders is the ability to prohibit them from making loans 
     pursuant to Sec. 7(a). The Administrator has no authority 
     to take other regulatory action, similar to that available 
     to banking regulators, to protect the public and the 
     federal treasury. Congress concurs with the 
     Administrator's request that greater authority is needed 
     to regulate SBLCs and Non-Federally Regulated SBA Lenders.
       The basic approach adopted by Congress enables the 
     Administrator to supervise the soundness and safety of 
     institutions authorized to make loans pursuant to Sec. 7(a) 
     but are not otherwise subject to the strict oversight imposed 
     by federal financial regulators. Congress concurs with the 
     Administrator's request that specific enforcement and 
     supervisory authority are needed. These authorities include 
     the power to: issue cease and desist orders, impose civil 
     money penalties, mandate capital standards, and remove 
     officers and directors who are acting in an unsafe and 
     unsound manner. The power and authority tracks closely the 
     powers granted to the Administrator with respect to 
     regulation of SBICs and their officers and employees. In some 
     cases, Congress differentiated regulatory powers applicable 
     to SBLCs and those applicable to Non-Federally Regulated 
     Lenders. Nothing in this section grants the Administrator the 
     authority to be extended to overall corporate management of 
     the parent that owns a SBLC.
       Congress provides for the Administrator to issue capital 
     directives mandating maintenance of certain capital 
     standards, including the requirement to increase its level of 
     capital. The section also authorizes the Administrator to 
     issue cease and desist orders by the SBLC or Non-Federally 
     Regulated Lender. To ensure that the capital directive is 
     used sparingly and only in appropriate circumstances, the 
     Administrator is required to promulgate regulations on 
     capital directives and may only delegate the authority to the 
     Associate Administrator for Capital Access.
       The Administrator also is empowered to suspend or remove 
     officials that have management responsibility for the 
     entity's lending pursuant to Sec. 7(a) of the Small Business 
     Act. No authority, explicit or implied, is authorized to 
     remove or suspend officials that do not have management 
     responsibilities with respect to Sec. 7(a) lending. Thus, 
     Congress expects that the Administrator take action not to 
     suspend the Chief Executive Officer of General Electric 
     Corporation but only its SBLC subsidiary.
       Prior to the issuance of any order under this section 
     except for a capital directive, the Administrator is required 
     to provide any target of the order a hearing pursuant to 
     Sec. Sec. 554, 556, and 557 of the Administrative Procedure 
     Act. The section delegates the responsibility of conducting 
     the hearing to administrative law judges but the final 
     responsibility on determining whether an order should issue 
     rests with the Administrator based on the record developed at 
     the adjudication. The approach is similar to that used by 
     independent federal regulatory agencies such as the Federal 
     Communications Commission or Federal Trade Commission. Those 
     agencies use administrative law judges to conduct hearings 
     and the commissioners use that record as the basis for their 
     legal and policy determination. This bifurcation of the 
     hearing from the decisionmaker ensures that the hearing will 
     be fair and provide an opportunity for the target of an order 
     to make the best possible case before an impartial fact-
     gathering tribunal.
       The Administrator is authorized to issue orders prior to a 
     hearing if extraordinary circumstances exist and the order is 
     needed to protect the financial or legal position of the 
     United States. The Administrator only should use the power to 
     issue orders without a hearing only under those circumstances 
     in which an agency issues a rule without notice and comment, 
     i.e., a truly exigent circumstance, see, e.g., NRDC v. Evans, 
     316 F.3d 904, 912 (9th Cir. 2002); Utilities Solid Waste 
     Group v. EPA, 236 F.3d 749, 754 (D.C. Cir. 2001) (good cause 
     to forgo notice and comment applies only in emergency 
     circumstances), or when a federal court would issue an ex 
     parte temporary restraining order (but in order to preserve 
     and protect the federal government rather than the status 
     quo). Cf. Granny Goose Foods, Inc. v. Brotherhood of 
     Teamsters & Auto Truck Drivers, 415 U.S. 423, 439 (1974) 
     (noting that ex parte restraining orders necessary evil to 
     protect status quo). The section then provides that the 
     procedures for holding a hearing, including the notice 
     requirement, be commenced within 2 days after the issuance of 
     the order. Congress believes that this comports with the 
     fundamental fairness exhibited by federal courts when issuing 
     an ex parte temporary restraining order.
       Congress' approach defines final agency action for purposes 
     of a challenge to the issuance of an order by the 
     Administrator and authorizes that a challenge may be 
     commenced in federal court within 20 days after issuance of a 
     final order. For purposes of fundamental fairness to 
     individuals, Congress also believes that interim relief in 
     federal court is appropriate for a stay of an order issued 
     prior to hearing until the hearing itself is completed. Both 
     of these provisions were added out of an abundance of 
     caution. Although Congress believes that federal court 
     jurisdiction challenging the Administrator's action may 
     constitute a ``federal question'' pursuant to Sec. 1331 of 
     the Title 28, United States Code, Congress determined that 
     explicit authority to challenge the Administrator's orders in 
     federal court removes any question that this decision has 
     been remitted solely to the discretion of the agency and is 
     not subject to review under Heckler v. Chaney, 470 U.S. 821 
     (1985).
       This section authorizes a court to appoint a receiver for 
     the entities subject to regulation pursuant to this section. 
     The receiver is entitled to take possession of assets of the 
     SBLC or Non-Federally Regulated SBA Lender. Congress intends 
     this authority to extend only to the SBLC or Non-Federally 
     Regulated Lender's portfolio of loans or other instruments 
     guaranteed by the Administrator including any debentures, 
     participating debt, or securities issued pursuant to the 
     Small Business Investment Act.
       Congress believes that suspension, revocation, or cease and 
     desist is an extraordinary remedy. Each requires an extremely 
     high burden of proof related to willful misconduct that may 
     present a difficult case for the Administrator to prove. 
     Therefore, the bill also provides the Administrator with the 
     authority to seek court-imposed civil penalties for the 
     failure to file reports required by the Administrator. Such 
     penalties shall issue when the failure to file is willful and 
     not due to neglect. The failure to file required reports for 
     more than two reporting periods is, in the opinion of 
     Congress, sufficient, but not the only evidence of willful 
     neglect. Congress expects the Administrator to promulgate 
     regulations outlining the factors that determine willful 
     neglect for the purposes of civil penalties (as an aid to the 
     entities regulated pursuant to Sec. 23). These regulations 
     also must contain standards for exempting SBLCs and Non-
     Federally Regulated Lenders from the civil penalty provisions 
     as well as the procedures used for determining whether the 
     institution qualifies.


 Section 162. Definitions Relating to Small Business Lending Companies

       Almost all of the lenders authorized by the Administrator 
     to issue guaranteed loans pursuant to Sec. 7(a) are lending 
     institutions regulated by a federal financial regulator. 
     However, there are a few institutions that make guaranteed 
     loans that are not subject to federal financial regulatory 
     oversight or regulation by a state banking authority. The 
     Administrator classifies these institutions generically as 
     ``small business lending companies.'' However, that universe 
     actually consists of two separate entities--small business 
     lending companies (not financial institutions) and financial 
     institutions not subject to any agency authorized to review 
     the safety and soundness of depositary institutions. Since 
     Sec. 161 adds a new Sec. 23 granting the Administrator power 
     to regulate these entities, Sec. 162 adds two new subsections 
     to the definitions in the Small Business Act defining small 
     business lending companies and non-federally regulated SBA 
     lenders.


Section 201. Amendment to Definition of Equity Capital with Respect to 
                  Issuers of Participating Securities

       Congress determined that changes were needed in the 
     definition of equity capital with respect to any company that 
     issues participating securities. Such companies, 
     participating securities SBICs, commit to invest an amount 
     equal to the outstanding face value of participating 
     securities solely in equity capital. Equity capital refers to 
     common or preferred stock or a similar instrument, including 
     subordinated debt with equity features. Equity capital issued 
     by participating securities SBICs previously provided for 
     interest payments to be made to the Administration contingent 
     upon--and limited to--the extent of earnings on equity 
     capital. However, since the inception of the Participating 
     Security SBIC program, the majority of SBICs have not 
     realized sufficient profits with which to meet their 
     financial obligations to the federal government. This has 
     resulted in serious financial loss for the federal 
     government. In order to mitigate these losses, the definition 
     of equity capital has changed so that participating security 
     SBICs do not have to realize profits on their investments in 
     order to make payments to the Administration. If a 
     participating security SBIC is experiencing overall losses on 
     their investments but has other sources of funds such as 
     invested excess funds, royalty payments, licensing fees and 
     the like, Congress intends that these funds may be used to 
     meet their obligations to the Administration.


                Section 202. Investment of Excess Funds

       This section provides SBICs with additional flexibility for 
     handling funds prior to investments in small businesses by 
     allowing SBICs to invest such funds in additional types of 
     securities. Currently, SBICs holding cash, prior to investing 
     in a small business, are only permitted to invest directly in 
     obligations of the United States, obligations guaranteed by 
     the United States, or in certificates of deposit maturing 
     within one year or savings accounts that are in institutions 
     insured by the Federal Deposit Insurance Corporation or the 
     Federal Savings and Loan Insurance Corporation. This section 
     modifies the current restriction by permitting SBICs to 
     invest in securities, mutual funds, or instruments, which 
     themselves invest solely in the obligations that are 
     currently permitted. For instance, Congress expects that 
     SBICs will be able to invest in mutual funds that, in turn, 
     invest in the government-backed obligations already 
     authorized for investment in SBICs. Congress believes that 
     this modification will provide SBICs with greater flexibility 
     and a wider range of short-term investment options.


                  Section 203. Surety Bond Amendments

       Section 203(a) clarifies that the current $2 million limit 
     on surety bonds applies to the

[[Page S11757]]

     bond guarantee and not the contract size. Congress adopted 
     this clarification to prohibit contracting officers from 
     determining that small businesses would not qualify for an 
     Administration-backed surety bond for a contract worth less 
     than $2 million even though it was part of a bundle of 
     contracts that exceeded $2 million. For example, a small 
     business might be denied a surety bond if the small business 
     had a contract for $1.5 million, but that contract was part 
     of a $12 million bundle of contracts that had been awarded 
     simultaneously.
       Section 203(b) requires that an audit of each participating 
     surety shall occur every three years instead of annually. 
     This reduction in the frequency of audits will save 
     participating sureties time and money and allow them to 
     allocate these resources to more productive uses. In 
     addition, this will enable the Administrator to focus on more 
     critical elements since the sureties already provide reports 
     on a periodic basis that would identify problems during the 
     interregnum between audits.
       Currently certain sureties designated by the Administrator 
     may issue, monitor, and service surety bonds issued pursuant 
     to Title IV of the Small Business Investment Act. This 
     authority ceased to be operative on September 30, 2003 (but 
     has been extended for short periods of time on a temporary 
     basis). Congress determined that the authority for this 
     program should be made permanent. Section 203(b) makes that 
     change by repealing Sec. 207 of the Small Business 
     Reauthorization and Amendment Act of 1988.


              Section 204. Effective Date of Certain Fees

       Loans made pursuant to Title V of the Small Business 
     Investment Act do not require any appropriation. Fees charged 
     to borrowers and CDCs absorb the costs associated with the 
     issuance of such loans. When the zero-subsidy for the program 
     was instituted, Congress made the fee authority temporary to 
     see whether the program could survive without an 
     appropriation. The program has succeeded admirably and 
     Congress does not expect that an appropriation to fund loans 
     made by CDCs will be made for the foreseeable future. As a 
     result, Congress determined it was pointless to continue, as 
     temporary, the Administrator's authority to charge fees for 
     loans made pursuant to Title V of the Small Business 
     Investment Act. Section 204 grants the Administrator 
     permanent authority to charge fees.

  Mr. President, I oppose language that has been included in the fiscal 
year 2005 Omnibus Appropriations that was authored by U.S. 
Representative Dave Weldon the so-called Abortion Non-Discrimination 
Act amendment. This language will have a chilling effect on women's 
access to legal reproductive health services.
  The Weldon language would allow a broad range of health-care entities 
to refuse to comply with existing Federal, State, and local laws and 
regulations pertaining to abortion services. This harmful language will 
severely limit patients' rights and access to services and information, 
thereby impeding their ability to make informed decisions about their 
health care options.
  I join my colleagues in supporting a conscience clause that would 
allow doctors to opt-out from providing abortion services due to their 
moral or religious beliefs. That's why I worked with former Senator Dan 
Coats in 1996 to construct a conscience clause that is in law today 
that ensures medical students and medical teaching institutions have 
the ability to refuse to participate in abortion training if it is 
against their personal beliefs, while ensuring that women would have 
access to the highest quality medical care.
  But this is not what the language in the Weldon amendment does. The 
Abortion Non-Discrimination Act is instead a sweeping new exemption 
from current laws and regulations pertaining to abortion services. Far 
from constituting a ``conscience clause,'' as the sponsors claim, the 
language that is included in the Omnibus is an overly broad opt-out 
from compliance of state or local laws ensuring access to abortion 
services which could have the consequence of limiting the availability 
of safe and legal health care.
  This language would change existing law to say that Federal, State, 
or local governments may not require a health-care entity--broadly 
defined to include insurance companies, hospitals, and HMOs, among 
others--to perform, provide coverage of, pay, or even, most shockingly, 
refer for abortion services. Any law or regulation that did so would be 
considered ``discrimination'' against the health-care entity, in the 
words of the bill, and the requirement could not be enforced. What's 
more, the State or local entity that tried to enforce that law, would 
lose all funding under this bill.
  Further, this language ignores the fact that more than 40 states 
already have conscience clauses that are in law today that allow 
individuals--and in many states larger health entities--to opt out of 
providing abortion services. In doing so, the authors of this provision 
undermine what in many cases were hard fought and carefully crafted 
conscience clauses instituted by our State and local governments.
  Instead of accepting the language included in the bill before us, the 
Senate must have the opportunity to work, as Senator Coats and I did in 
1996, to devise a compromise that would result in a conscience clause 
that allows for conscientious objection without impairing the provision 
of health care in America.
  I am opposed to the inclusion of this language in the omnibus. This 
language will have a detrimental effect on women's health, it will 
override a state's or a locality's ability to require access to these 
services, and it will prevent women from exercising their right to 
decide what health care services they want to seek and limit their 
ability to access information about such services.
  Senator Boxer has received a commitment to revisit this issue with 
consideration of legislation that would repeal this language before 
March 1, 2005. I join my colleagues in supporting a conscience clause 
but I object to the language included in this bill and the process that 
has brought us to this point today.
  Mr. KERRY. Mr. President, I oppose the passage of the Omnibus 
appropriations conference report.
  The bill before us was written in a process that is the legislative 
equivalent of painting a room in the dark. You don't know exactly how 
the room will look until you turn on the lights, but you can be sure 
that it will be a mess. And, of course, that is what has happened. This 
bill is a mess.
  The Republican leadership has taken nine spending bills, funding 13 
Government agencies with more than $388 billion, and combined them into 
a single bill that is more than 3,000 pages long. On top of all that 
spending, they have included several riders that make unrelated changes 
in Federal law. Most of these bills were never debated or amended by 
the full Senate. Many of the provisions haven't even had a committee 
hearing. The only people who have had a chance to review and amend the 
bill are the Republican leadership and the White House, and all of that 
went on behind closed doors. And the public, the press and almost every 
Member of Congress has had no real opportunity to review them before we 
vote and send them to the President to become law.
  So it comes as no surprise that this massive spending bill, created 
by a terribly flawed process, is itself terribly flawed.
  The Republican majority and the Bush administration have provided 
inadequate investments in education, housing, small business and a 
number of other important domestic priorities.
  The Community Oriented Policing Systems program, called the COPS 
program, has been eviscerated, and funding for the Local Law 
Enforcement Block Grant program has been cut. Both of these programs 
help our cities and towns fight crime and protect our citizens but 
putting well-trained and well-equipped cops on the street. And both 
programs had played an increasingly important role in homeland 
security.
  The bill does not keep our promise to care for our veterans. The 
funding level included in the conference report for veteran's 
healthcare, while above last year's level, is insufficient to meet the 
needs of our veterans. Today, 500,000 veterans are prevented from 
receiving health care through the Veterans Administration. New veterans 
are fighting to obtain the services they have earned. Thousands more 
are waiting for disability ratings. The Congress had an opportunity to 
make a real difference in the lives of those who have given so much for 
this country, and the Congress failed.
  The bill harms small businesses by failing to provide access to the 
capital they need for investment and growth. As the ranking member of 
the Senate Committee on Small Business and Entrepreneurship, I know how 
critical small business loans are to expanding economic opportunity, 
especially in low-income neighborhoods. Unfortunately, the bill 
eliminates all funding

[[Page S11758]]

and increases fees for the program at the Small Business Administration 
that is the largest source of small business loans in the Nation.
  I will not try to list all the worthwhile programs that have been cut 
or eliminated, because the list is just too long. The point is simple: 
dozens of Federal investments that help our cities and towns, our 
schools, our small businesses, our police, our environment and much 
more have been needlessly cut. And those cuts will do needless harm to 
communities and families all across the country.
  And along with the spending provisions of the bill, the White House 
and the Republican leadership have attached riders that make changes in 
Federal law. These are provisions that have not been considered by the 
House or Senate, and in many cases have not received a committee 
hearing or markup.
  The bill includes a provision that will prevent Federal, State and 
local governments from requiring any institutional or individual health 
care provider to provide, pay for, or refer for abortion services. Ten 
of my female colleagues, including two Republicans, have expressed 
their strong opposition to that provision and affect it may have on 
reproductive health services. In a letter to the Appropriations 
Committee, they point out that the provision has never been considered 
and never had a hearing in the Senate. It comes down to this: whether 
you support or oppose this provision, and I oppose it, this is no way 
to do the people's work. Whatever you think of this provision, it does 
not belong in a 3,000 page spending bill. It deserves a hearing, a 
debate and vote.
  Another provision that was included with no vote, hearing or 
discussion by the Senate would allow congressional staff access to the 
tax returns of individuals and businesses. There is absolutely no 
justification for such a provision in this bill or anywhere else. It is 
a shocking abuse of power by the Republicans. This provision, which 
would allow congressional staff to review any private citizen's tax 
return, is unacceptable. It tramples the rights of our citizens and 
grossly violates the public trust. I am pleased to hear the assurances 
of the majority leader that this provision will be removed from the 
bill. However, we need to understand how it came to be included in the 
conference report. Who in the Congress sponsored this provision? Who in 
the White House approved it, since we know the White House has blessed 
this bill?
  Is there any good in this bill? Of course there are many worthwhile 
Federal programs that are funded. Like a broken clock is right twice a 
day, a bill spending $388 billion will get a few things right.
  I am pleased that the conference report includes $62 million for the 
YouthBuild program, which is a highly effective comprehensive program 
that helps at-risk youth obtain an education and take responsibility 
for their lives and their communities. YouthBuild is the only national 
program that provides young adults an immediately productive role in 
the community while also providing equal measures of basic education 
toward a diploma, skills training toward a decent paying job, 
leadership development toward civic engagement, adult mentorship toward 
overcoming personal problems, and participation in a supportive mini-
community with a positive set of values.
  And there are other good programs this bill has funded adequately. I 
am grateful for the good that will come from this legislation, 
including funding for Federal projects and programs in Massachusetts.
  On a whole, the bad outweighs the good in this bill, and I will vote 
against it.
  Mr. LEVIN. Mr. President, it is difficult to vote against this 
omnibus appropriations bill because it provides funding for many 
programs that I support. In fact, it contains many provisions that I 
worked to have included.
  However, we are confronted with this legislation containing funding 
for fiscal year 2005 which under normal circumstances would have been 
contained in nine separate appropriations bills and which should have 
been done prior to the beginning of this fiscal year last October 1. 
Once again, for the third consecutive year, and all too frequently in 
recent years, the Senate finds itself considering a massive 
appropriations bill, in this case totaling about 3,000 pages and 
spending nearly $400 billion, and containing important legislation 
which doesn't belong in an appropriations bill at all. We have had only 
a matter of hours to read and consider this bill.
  This is a process which reflects poorly on the Congress both because 
it represents a failure to get the Nation's work done on time, and 
because of its huge size and the inclusion of matters which were not 
previously considered in the Senate hinders the kind of careful 
consideration and debate which wise decisionmaking demands. It is 
certain that Senators will only learn after the fact details about many 
provisions which have been added.
  And perhaps most importantly, because these omnibus bills are delayed 
until the waning hours of each Congress, the White House is included in 
the meetings as the language is written, in order to avoid a 
Presidential veto. This weakens the constitutional prerogative of the 
legislative branch to control the Nation's purse strings and it 
undermines the critical oversight role which the Congress plays, in 
part, through its appropriations activities when they are conducted in 
the normal manner.
  One example of the consequences of this hurried and extraordinary 
process is a provision in the bill late yesterday by our Republican 
colleagues that provides the chairman of the House or Senate 
Appropriations Committee or his or her staff access the tax returns and 
other tax return information of any corporation or individual. Further, 
it would exempt the chairman or staffer gaining access to these returns 
from any provision of law governing the disclosure of income tax 
returns. The House did not debate that provision. The Senate did not 
debate that provision. However, somehow it ended up in this bill. This 
is an outrage. The Senate passed a resolution earlier tonight in an 
effort to eventually remove this provision from law, however if this 
bill is adopted, this provision violating the privacy of income tax 
returns will become law and we will have to hope that the House of 
Representatives will follow through and the President will sign the 
resolution to remedy the situation.
  For every egregious provision like the one above that we find, there 
could be several more that were missed.
  I am also concerned about the failure of this bill to adequately fund 
vital education initiatives. The bill before us underfunds title I by 
$500 million below the President's budget request; this critical 
program provides aid to states and school districts to help 
educationally disadvantaged children achieve the same high academic 
performance standards as other students. The bill before us also 
underfunds the important Individual with Disabilities Education Act by 
$415 million and it underfunds the National Science Foundation at $62 
million below the fiscal year 2004 funding level and $278 million below 
the budget request. Additionally, this legislation does not provide for 
an increase in the maximum Pell Grant award--the very foundation of aid 
for many needy students. It remains at the current level of $4,050, 
rather than increasing toward the authorized maximum award level of 
$5,800.
  This bill also cuts funding for local law enforcement programs that 
could compromise the safety of communities around the country. Not only 
are our police on the beat essential for maintaining community safety, 
but they are the first line of defense against potential terrorist 
attacks. This bill cuts funding for the Community Oriented Policing 
Services, COPS, program by over $140 million from last year's funding 
level. This program provides vital funding to our first responders and 
I cannot support such a drastic cut in funding.

  Throughout Michigan and the rest of the country, our cities are 
struggling to finance urgent upgrades to municipal sewer systems to 
prevent discharges to the environment or private property. These 
communities have very high water and sewer rates and cannot handle 
additional debt. The State Revolving Loan Fund, which has received 
$1.35 billion per year from Congress in the past several fiscal years, 
has helped to clean up polluted waters, however more money is needed to 
help communities such as ours in Michigan with

[[Page S11759]]

significant needs. This bill does the opposite; it cuts funding for the 
State Revolving Loan Fund which will harm our ability to clean up our 
waters and upgrade our aging sewer systems.
  This bill deletes a provision contained in both the House and Senate 
Labor-HHS appropriations bills that would have prohibited enforcement 
of the administration's overtime regulation that went into effect in 
August 2004.
  I am also disappointed that this bill provides less funding for the 
IRS than the administration requested. This legislation provides $400 
million less than the President requested. This overall dollar figure 
reflects $166 million less than requested for tax enforcement, which is 
a non-sensical and irresponsible decision. Tax enforcement is an 
unusual area of the budget where a relatively small increase pays for 
itself many times over by increasing the amount of revenue collected. 
Just days ago the IRS announced that its fiscal year 2004 enforcement 
revenue of $43 billion represented a roughly four-to-one return rate on 
its overall budget of $10.2 billion, a return that is even greater when 
only enforcement funding is taken into account. And this return on 
investment doesn't even take into account the fact that vigorous 
enforcement also has a word-of-mouth effect that goes beyond the direct 
revenue generated. Unfortunately, this conference report does not give 
the IRS nearly the resources it needs to ensure this vigorous 
enforcement, so we will continue to leave honest taxpayers shouldering 
an unfair share of the burden while many tax dodgers escape scot free. 
When only one in five known tax cheats is even chased by the IRS, and 
when fewer than 1 percent of the estimated 1 to 2 million individuals 
dodging taxes by using offshore bank accounts have pending IRS 
enforcement actions, there is obviously a lot more the IRS could be 
doing to improve enforcement.
  Mr. President, while this bill funds many programs that I support, on 
balance I cannot support this legislation. For the reasons I have 
mentioned, and others, I will vote against this Omnibus bill.
  Mr. CONRAD. Mr. President, I will vote against the omnibus 
appropriations conference report. The bill before the Senate contains 9 
appropriations bills, 7 of which were never debated, amended, or voted 
upon by the Senate. The bill spends $388 billion, and, together with 
its explanatory language, it is 3,646 pages long.
  Throughout the day today, I and several members of my staff have been 
reading and analyzing the provisions of this bill. During the 
examination, we discovered a particularly egregious provision. It would 
have allowed an agent of the chairman of the House or Senate 
Appropriations Committee to look at the tax return of anyone in 
America. And, further, it would have allowed them to release the 
private information contained in those returns without any civil or 
criminal penalty. That would have created the opportunity for an abuse 
of power almost unprecedented in our history.
  Thankfully, my staff and I were able to catch this, and after 
strenuous debate, the provision will be nullified. But this is an 
indication of how completely flawed this process has become. None of us 
can know what other inappropriate provisions are in this bill. There 
simply has not been enough time to thoroughly scour the more than 3,600 
pages in this bill.
  There are a number of provisions in this bill that are good for North 
Dakota that I worked hard to have included, but it is clear to me this 
appropriations process is broken. Former President Ronald Reagan in his 
1988 State of the Union Address told us we should not do business this 
way. He was right.
  For that reason, I am obligated to oppose this conference report.
  Ms. MIKULSKI. Mr. President, this is the toughest VA/HUD bill we have 
ever faced.
  In putting this bill together, we were told by the Republican 
leadership that we had to do two things. First, we had to fund veterans 
medical care $1.2 billion above the President's budget request. Second, 
we had to fund NASA at the President's budget request of $16.2 billion. 
In addition, we had to provide enough money to renew Section 8 housing 
vouchers. Even though this was not a priority for the President, it was 
a priority for us.
  I agree with these priorities. I have fought for these priorities. 
But in order to fund these priorities, we had to cut $3 billion from 
other programs. This is a shell game.
  The Republican leadership gave us an allocation for conference that 
is $3 billion less than we had for our Senate bill. With the exception 
of VA medical care, Section 8 and NASA, we had to cut all other 
programs an average of 4 percent below last year.
  For the first time in history, we had to cut essential programs to 
pay for these priorities. These are real cuts to programs that help 
people and communities. This is the illusion of being compassionate. We 
were forced to do this because of the budget caps that we are forced to 
live under by the Republican leadership.
  These spending caps put a stranglehold on essential programs. The 
Republican leadership created this situation and unfortunately, the 
American people will pay the price.
  Our No. 1 priority has always been our veterans. Senator Bond and I 
will always make veterans the number one priority in this bill. We have 
increased veterans medical care by $1.5 billion over last year, and 
$1.2 billion more than the President requested in his budget. We 
eliminated the President's proposal to increase deductibles and co-pays 
for veterans. It is wrong to ask veterans to pay more for their medical 
care, especially when we are fighting a war. We created a new 
prosthetics and holistic care program to find new ways to treat and 
care for veterans, especially for our veterans returning from Iraq and 
Afghanistan.
  For this reason alone, we had to produce a bill, even under these 
circumstances. If we didn't produce a bill this year, we would not have 
enough money to care for our veterans, particularly our veterans 
returning from Iraq and Afghanistan.
  We have increased funding for NASA to help fund the repairs to the 
Space Shuttle so we can return to flight next year and fix the Hubble 
Space Telescope.
  Returning the Shuttle safely to flight is our top NASA priority. We 
are fully committed to implementing the recommendations of the Gehman 
Commission, and we have given NASA sufficient funding to accomplish 
this goal. We have provided the full budget request, $4.3 billion, to 
fund the Space Shuttle and we have provided NASA with unprecedented 
flexibility to add more funds for the Space Shuttle, if they need it.
  We added $300 million to NASA's budget to fund a servicing mission to 
the Hubble Space Telescope, the most successful scientific instrument 
since Galileo's telescope. I have fought to save Hubble and I am proud 
that my colleagues have joined me in this fight by providing an 
additional $300 million to fund a servicing mission in 2007.
  We also made a down payment on the President's Exploration Initiative 
so we can begin a new era in space exploration and we protected NASA's 
critical science programs such as Living With A Star and Earth science 
applications to help us better understand the Earth's environment.
  For National Service, the overall budget was cut by over $3 million 
compared to last year but we were able to fund AmeriCorps at a level 
that supports 70,000 new volunteers, despite the cut in funding. This 
will allow us to maintain the momentum we started last year.
  However, these increases come at a price. To provide these needed 
increases for veterans and NASA, we had to cut essential programs, 
``including housing programs. Senator Bond and I have a responsibility 
to fund the renewals of Section 8 vouchers. We added funding for 
Section 8 renewals, but we had to cut other programs to pay for it.
  We were forced to cut housing for the elderly by $26 million. Housing 
for the disabled is cut by $10 million. The Community Development Block 
Grant Program, one of our most popular programs in this bill, and one 
of the most important programs for State and local governments, is cut 
by $200 million compared to last year. We should not have to be forced 
to shift funding from one essential program to another.
  For EPA, we were forced to make cuts because of the budget cuts 
imposed on us by the Republican leadership. The clean water State 
revolving

[[Page S11760]]

fund was cut by $250 million compared to last year. That means every 
State will get less money for sewer construction.
  EPA's successful science and technology programs--the programs 
looking at innovative and cost effective solutions for environmental 
protection--are cut by $40 million compared to last year. Overall, EPA 
is cut by over $300 million compared to last year.
  Thanks to the Republican budget cuts, we are shifting the burden of 
environmental protection to State and local governments. I am opposed 
to this and fought it every step of the way.
  For NSF, Senator Bond and I have fought to incease funding for 
science and technology by fighting to double NSF's budget over 5 years. 
Yet, the budget cuts imposed on us forced us to cut $60 million from 
NSF's budget compared to last year.
  Fortunately, we were able to increase funding for our historically 
black colleges and universities and maintain graduate stipends at 
$30,000 per year--two of my top priorities.
  But we will not be able to maintain our leadership in science and 
technology if we are forced to cut NSF funding. We will not be able to 
produce the new technologies that lead to the new jobs if we have to 
cut basic research funding. This is not a sound policy.
  Senator Bond and I have done the best we could do under the 
circumstances. We had no choice but to produce a bill. A CR would have 
been worse for our veterans and we could not let that happen. We have 
soldiers returning from Iraq and Afghanistan. Without an increase in VA 
medical care, we would not be able to care for them once they return 
and enter the VA system.
  Senator Bond and I would never let that happen, but it is wrong to 
have to cut other important programs to pay for it. I hope that we will 
not face this situation next year.
  Mr. BUNNING. Mr. President, today I voted to approve the Conference 
Report to Accompany H.R. 4818, the Consolidated Appropriations Act of 
Fiscal Year 2005. As many of my colleagues in both the Senate and the 
House of Representatives have discussed at length today, this bill 
contains a provision, Section 222, which could be interpreted in a way 
as to cause concern regarding the protection of the privacy of I.R.S. 
data of U.S. taxpayers. As a Member of the Senate, and particularly as 
a member of the Senate Finance Committee, I take the American 
taxpayers' rights to privacy regarding their personal income tax 
information very seriously. I supported a joint resolution, passed 
earlier today by the Senate, which calls for the removal of this 
provision from this conference report. In addition, I understand that 
the chairmen of the House Appropriations, Senate Appropriations, House 
Ways and Means and Senate Finance Committees have made clear their 
intentions to insure that this provision is deleted or otherwise 
removed at the earliest possible opportunity. I also understand that 
the President of the United States is expected to issue a statement 
indicating that this provision of the conference report shall be 
disregarded. It is with reliance upon these commitments, and with my 
intentions to follow this issue closely to insure that this situation 
is corrected at the earliest possible opportunity, that I cast my vote 
in support of this conference report today.
  Mr. GRASSLEY. Mr. President, today the House and Senate are 
considering whether to approve the conference report to H.R. 4818. H.R. 
4818 is what is commonly called in the Congress an omnibus 
appropriations bill. Basically, an omnibus bill rolls a number of other 
bills into a single legislative vehicle for an up-or-down vote on the 
final package. It is a method frequently used by the Appropriations 
Committee at the end of the legislative session after the committee has 
failed to complete its work in regular order. It enables the 
Appropriations Committee to appropriate funds at the end of the year. 
Without this appropriation, the Government would shut down. So, it is 
must pass legislation.
  Work on this bill was completed last night around midnight. Since 
that time, my Finance Committee staff has been scouring the package to 
determine whether there are any provisions within the jurisdiction of 
the Finance Committee in the bill. Unfortunately, the Appropriations 
Committee often includes authorizing language on matters within the 
jurisdiction of my committee, but fails to notify us. The result is 
usually poorly drafted and short-sighted provisions, many of which have 
unintended effects. Unfortunately, this year is no different.
  Let's just take one area--international trade. A few years ago, the 
Appropriations Committee included an amendment which required that 
monies collected as countervailing duties and antidumping duties be 
distributed to the petitioners who filed the underlying cases. Many of 
our trading partners thought this provision violated our international 
obligations because it enables petitioning industries to not only have 
duties placed against competing imports, but to also receive these 
duties. The World Trade Organization agreed and found the amendment to 
be contrary to our trade obligations. Nevertheless, the law is still on 
the books. As a result, many of our export industries may face 
retaliatory sanctions.
  As I said, this amendment was slipped into an appropriations 
conference report without full debate in the Senate. The Finance 
Committee, as the committee of jurisdiction and the committee with 
expertise in international trade, never had a chance to review the 
amendment. Now, I'm not surprised that a bill that was never considered 
by the committee of expertise or even the full Senate was found to 
violate our international commitments.
  But, even aside from the WTO ruling, there are a number of other 
problems with the way the amendment operates. For example, earlier this 
year the Congressional Budget Office issued a report in which it found 
that, regardless of the economic harm which can be caused by 
retaliation, the amendment is detrimental to the overall economic 
welfare of the United States. An earlier report issued by the 
Department of Treasury Inspector General found that the Bureau of 
Customs and Border Protection made $25 million in overpayments when 
disbursing funds. The report also faulted the Bureau of Customs and 
Border Protection because qualifying expenditures claimed by domestic 
producers are not verified on a routine basis. So, there are a lot of 
problems with the way this program functions that are totally 
independent from our WTO obligations.
  But because the Finance Committee never had an opportunity to review 
the amendment, these problems were never addressed. Instead of working 
with the Committee to address these problems, they took a different 
tack. In this year's omnibus appropriations bill they decided to 
require our United States Trade Representative and the Department of 
Commerce to negotiate the right for WTO members to distribute monies 
collected from antidumping and countervailing duty measures. In short, 
they are directing our trade negotiators to go back to the negotiating 
table and try to negotiate for something which we have already lost. I 
doubt our trading partners will be sympathetic.
  The Appropriations Committee also required the Office of the United 
States Trade Representative to create a new position of Chief 
Negotiator for Intellectual Property Rights Enforcement. Now, this may 
be good idea--but, again the Finance Committee has not had an 
opportunity to review this provision so we do not know if this is an 
appropriate use of government resources or not. We do know that the 
decision about whether to create new trade negotiating positions is up 
to the Finance Committee, not the Appropriations Committee.
  Unfortunately Mr. President, these provisions are just exemplary. 
There are many other provisions in the bill dealing with international 
trade that, frankly, should not be in there. Whatever position you may 
take on the merits of these provisions, international trade 
negotiations and antidumping and countervailing duty laws are plainly 
matters within the jurisdiction of the Committee on Finance. The vast 
trade implications of these provisions were not carefully weighed by 
the Committee on Finance. This is bad precedent--and I sincerely hope 
we will not see similar actions in the future.
  Mr. KOHL. Mr. President, I rise today to oppose the Omnibus 
appropriations bill. I think the American

[[Page S11761]]

people would be appalled by the process under which the Senate is 
considering this bill. Provisions have been added that have never been 
debated, never had a hearing, and never had a vote in the Senate. It is 
thousands of pages long, and yet the Senate has had only a few hours to 
read the bill. We are just beginning to learn about all of the 
provisions that have been added.
  Already, we have learned about an outrageous provision that would 
allow for a complete reversal of longstanding privacy protections. The 
bill contains a provision that allows Appropriations Committee 
chairman, or their designees, to review the tax returns of any American 
citizen. Any individual, any corporation could have their very private 
information poured over by any number of people. Not only would the 
private, sensitive tax information be available to the Chairmen and 
their staffs--they would be able to distribute that information without 
incurring any penalties. This egregious ``oversight'' is inexcusable. 
That a provision with this impact, on both privacy rules and on powers 
of the Senate, would be slipped in at the midnight hour with no 
oversight, is an offense to every Member of the Senate and most 
importantly, to the American people.
  While I am relieved that promises have been made to remove this 
egregious provision, this is just an example of the danger that comes 
with rushing a bill like this through the Senate. This is simply 
indefensible. The American people deserve a more serious effort, and I 
cannot support a bill that has been rushed through in this manner.
  I am also troubled by much of what we already know about this bill. 
This bill demonstrates that the budget deficit our Nation is facing 
today is causing real cuts in important programs and real pain for 
working families. These tight budget numbers are the consequence of a 
fiscal policy that puts reckless and expensive tax cuts for the 
wealthiest in our country above all other priorities. That policy has 
left us with huge deficits and the inability to fully fund some of our 
Nation's most pressing needs--needs like education, health care, law 
enforcement and housing. Clearly, we need to take another look at our 
Nation's fiscal policy and finally put together a budget plan that meet 
the needs of American families.
  The Omnibus appropriations bill before us simply falls short on too 
many of our priorities. I recognize that it includes a $500 million 
increase for the title I education program for disadvantaged students 
and a $607 million increase for special education. I am grateful that 
increases were provided during these difficult times but let's not 
forget that even with these increases, funding for No Child Left Behind 
is still far below the levels authorized when the law passed. We are 
still not coming anywhere close to our commitment to fund 40 percent of 
the costs of special education. And once again, the maximum Pell Grant 
award has been frozen leaving more students with higher student loan 
debts or shut out of higher education altogether. These are just a few 
examples. I believe we should be able to do better when it comes to our 
Nation's students and schools.
  In addition, I am very disappointed with the practical elimination of 
the COPS Universal Hiring program. The Omnibus appropriations bill 
allocates a paltry $10 million for this nationwide program--a program 
that has added tens of thousands of police officers to police 
departments across the country. Not surprisingly, the COPS program has 
been overwhelmingly popular among our local police departments in 
Wisconsin and beyond. Moreover, crime has been steadily decreasing in 
the past decade thanks in part to the COPS program. A mere $10 million 
is not enough for a program that received more than $300 million just a 
few years ago. Quite simply, this appropriations bill demonstrates an 
insensitivity to the needs of our police officers who are also the 
first line of defense in the war on terror.
  This Omnibus bill also contains inadequate support for energy saving 
research. One of the programs that I was disappointed did not receive 
sufficient funding in this bill was the Department of Energy's 
Industrial Technologies program. This program is an important effort to 
invest in our manufacturing base by increasing energy efficiency. This 
program invests in research to improve industrial energy efficiency and 
environmental performance in eight basic, energy intensive industries 
named by DoE as Industries of the Future: aluminum, chemicals, forest 
products, glass, metal casting, mining, petroleum and steel.
  An example of such a program in Wisconsin that is applicable to all 
eight DOE Industries of the Future in Wisconsin is the project 
``Wireless Sensor Network for Advanced Energy Management Solutions'' 
which applies advanced communications and sensors technology to 
industrial motors. The projected benefits from this program in 2020 
include energy savings of 279 trillion Btus, $1.3 billion and 116 
million pounds of pollutant reduction.
  It is my hope that DOE reconsider this very important technology 
development and that the Interior Appropriations subcommittee focus 
next year on this program because of the impact it will have on our 
manufacturing capabilities in the United States.
  I am also very concerned about the across-the-board cut that is 
included in this bill. The bill includes a cut of 0.83 percent that 
will apply to every program. That means the increases some programs 
received will be scaled back, and those programs that received flat 
funding will actually get a cut from last year's levels after the 
across-the-board reduction goes into effect.
  I am particularly disappointed that this bill fails to address one 
critical area that is very important to me regarding dairy. As I have 
stated many times before on the floor of the Senate, dairy is an 
extremely important part of the economy of the Upper Midwest. For 
Wisconsin alone, employment associated with dairy farming, processing 
and related activities is estimated to be about 160,000, generating 
roughly $5 billion in income annually.
  During the 2002 farm bill, a new dairy program was created, called 
the Milk Income Loss Contract, MILC, program, to provide 
countercyclical assistance to all dairy farmers in the nation, whenever 
market prices for milk fall below certain trigger levels. The program 
provides assistance in the form of direct payments to producers, up to 
the first 2.4 million pounds of production annually, when market prices 
are low. While the MILC program uses the market as a reference price to 
trigger assistance, it does not directly intervene into the market.
  In 2002 and the first half of 2003, dairy prices reached 25-year 
lows. During that time, the MILC program provided dairy producers with 
much needed assistance. Wisconsin dairy producers have received $413 
million in assistance under the program to date.
  Without a doubt, dairy producers prefer to receive their income from 
the marketplace. Fortunately, milk prices have recovered over the last 
year, and as a result, the MILC program is now dormant. However, the 
safety net provided by the MILC program has been extremely helpful, 
particularly during times of low market prices. Unfortunately, the MILC 
program is scheduled to expire in September of 2005, 2 years earlier 
than the rest of the farm bill commodity programs.
  Recognizing this problem, a bipartisan, multiregional coalition of 
Senators sought to remedy the situation during this year's 
appropriations process by extending the MILC program for 2 more years. 
Such an extension would put the MILC program on equal footing with 
other farm bill commodity programs.
  On October 7, the President of the United States personally entered 
the debate on MILC extension. He traveled to Wisconsin to voice his 
support for the MILC program and before a group of Wisconsin dairy 
families stated:

       I know that the Milk Income Lost Contract Program is 
     important to the dairy farmers here in Wisconsin. The milk 
     program is set to expire next fall. I look forward to working 
     with Congress to reauthorize the program so Wisconsin dairy 
     farmers and dairy farmers all across this country can count 
     on the support they need.

  Our effort to extend the MILC program was also endorsed by a 
bipartisan, multiregional group of Governors. I ask unanimous consent 
that the Governors' letter of support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


[[Page S11762]]


                                                    Nov. 12, 2004.
     Hon. Ted Stevens,
     Chair, Senate Appropriations Committee,
     Hart Senate Office Building, Washington, DC.
     Hon. Robert Byrd,
     Ranking Member, Senate Appropriations Committee,
     Hart Senate Office Building, Washington, DC.
     Hon. Bill Young,
     Chair, House Appropriations Committee,
     Rayburn House Office Building, Washington, DC.
     Hon. David Obey,
     Ranking Member, House Appropriations Committee,
     Rayburn House Office Building, Washington, DC.
       Dear Senators Stevens and Byrd; Representatives Young and 
     Obey: We are writing today to urge you to support a two-year 
     extension of the Milk Income Loss Contract (MILC) program, as 
     was recently passed by the Senate Appropriations Committee by 
     a vote of 18 to five.
       The MILC program, created by the 2002 farm bill, has been 
     extremely helpful to dairy producers nationwide, by providing 
     financial assistance when milk prices fall below certain 
     target prices. The program has helped to stem the tide of 
     dairy farm loss in our states, especially when milk prices 
     fell to historic lows in 2002 and the first half of 2003.
       Without question, dairy producers in our states prefer to 
     receive their income from the market. As designed, the MILC 
     program is dormant when market prices are strong, as they 
     have been during most of 2004. When milk prices fall, 
     however, the MILC program provides an effective safety net 
     for the dairy-dependent communities in our states.
       Unfortunately, the MILC program is scheduled to expire on 
     September 30, 2005, two years earlier than the other farm 
     bill programs, The bipartisan Senate provision would extend 
     the MILC program by two years, to bring it in line with the 
     timing of the rest of the farm bill, assuring a continued 
     safety net for dairy farmers nationwide in the event of 
     future price declines.
       We therefore strongly urge you to support the inclusion of 
     the Senate MILC extension provision on one of the remaining 
     Fiscal Year 2005 appropriations conference reports scheduled 
     for enactment this year.
           Sincerely.
       Governor Jim Doyle, Wisconsin.
       Governor Mark R. Warner, Virginia.
       Governor Bob Holden, Missouri.
       Governor Edward Rendell, Pennsylvania.
       Governor John Baldacci, Maine.
       Governor Jennifer Granholm, Michigan.
       Governor Mike Rounds, South Dakota.
       Governor Kathleen Babineaux Blanco, Louisiana.
       Governor Tim Pawlenty, Minnesota.
       Governor James H. Douglas, Vermont.
       Govemor Michael Easley, North Carolina.
       Governor Dirk Kempthorne, Idaho.
       Governor Tom Vilsack, Iowa.
       Governor George E. Pataki, New York.
       Governor Bob Taft, Ohio.
       Governor John Hoeven, North Dakota.

  Mr. KOHL. Our MILC extension was adopted twice by Senate conferees on 
appropriations measures, and each time it was shot down by House 
negotiators. Notwithstanding assurances of executive support and 
gubernatorial support, House Republican negotiators thwarted our 
efforts to include MILC extension in the various appropriations 
measures. I am extremely disappointed they did so.
  One can reasonably assume, given the President's assurances in 
Wausau, WI, that MILC extension will be a part of his budget submission 
next year. While that is welcome, I caution my fellow MILC supporters 
and dairy farmers all across the nation to take that eventual 
development with a grain of salt.
  Budget resolutions themselves are not enacted into law. They form a 
blueprint for subsequent Congressional action. Putting MILC in the 
President's budget, by itself, won't get the job done. It will take 
concerted and cooperative effort on both sides of the capitol to extend 
the MILC program.
  Despite the serious problems I have noted above, it is worth 
mentioning several positive things in this bill that are of importance 
to my State, and I want to thank the chairman and ranking member, 
Senators Stevens and Byrd, for working to accommodate my priorities.
  First, I am pleased that juvenile justice programs fared much better 
than the President's original budget request. In that proposal, 
juvenile justice programs--which fund afterschool and other juvenile 
crime prevention programs, intervention initiatives that work to 
redirect troubled teens, youth mentoring programs, substance abuse 
prevention and education projects, and programs that help keep kids out 
of gangs--received just under $200 million. Through our work with 
Senators Gregg and Hollings throughout the year, we have been able to 
increase that number to $384 million in this appropriations bill and I 
thank my colleagues for their support and cooperation. Though 
encouraging, we must remember that juvenile justice programs and our 
children deserve more funding than that. Just three years ago, these 
programs received roughly $550 million. Dollars spent on juvenile crime 
prevention is a wise investment. We can and must do better.
  I am also grateful for the efforts of Senators Specter and Harkin in 
working so hard to accomodate my State's needs for additional funding 
for Hmong refugees. The U.S. Government announced in December, 2003, 
that 15,000 Hmong refugees living in Thailand would be resettled in our 
country, primarily in Wisconsin, Minnesota and California. The 
resources provided in this bill will provide job training, health care, 
education and other support services and help our communities assist 
them with their basic needs. I know it was very difficult to find 
scarce resources in this tight budget, and I greatly appreciate the 
hard work of Senator Specter and Senator Harkin to meet this need.
  The bill before us also makes progress in meeting the need to provide 
assistance for low-income people trying to pay their rising heating 
bills. Funding for LIHEAP has been seriously underfunded coming into 
the heating season. As the prices of heating oil and natural gas 
continue to go up, an economic disaster was around the corner for many 
working families. While this bill did not provide the entire $600 
million in emergency funds that many of my colleagues and I thought was 
necessary, it did provide $300 million. This additional funding raises 
to $2.2 billion the amount of regular and emergency funding available 
to help families meet there energy needs. In my state of Wisconsin, 
this account is crucial to helping the disadvantaged make it through 
the long winter.
  In addition, one of my top priorities this year has been to restore 
full funding for the Commerce Department's Manufacturing Extension 
Partnership program, so I am especially pleased that we have been able 
to provide a total of $109 million for this vital program, a dramatic 
increase above the fiscal year 2004 funding of $39 million and a $3 
million increase above funding in fiscal year 2003. Wisconsin is one of 
the most manufacturing-dependent States in the Nation, second only to 
Indiana, and this budget will be able to support the Wisconsin 
Manufacturing Extension Partnership program and the Northwest Wisconsin 
Manufacturing Outreach Center, the two MEP centers in my State. MEP 
provides critical assistance to small- and medium-sized manufacturers 
throughout the Nation. It is one of the only Federal programs which 
exists to help manufacturers maintain their technological edge and 
thus, retain jobs. Unfortunately, the fiscal year 2004 budget and the 
administration's fiscal year 2005 budget request included deep cuts to 
the program leading to the firing of staff and the closing of local 
offices around the country. While we were able to get the Commerce 
Department to reprogram some funding at the end of fiscal year 2004 to 
stave off further cuts, it was essential that we put this program back 
on track for fiscal year 2005.

  In addition, I am pleased we have added bipartisan legislation to the 
Omnibus that will extend the benefits of the Satellite Home Viewer 
Improvement Act for another five years. We needed to act quickly to 
extend some sections of the satellite law we passed in 1999 because 
they were set to expire this year. To be sure, compromises were made to 
achieve this goal. But, we feel a deal was struck that is fair to all 
parties--consumers, satellite companies, and broadcasters alike.
  Let me discuss how this bill will further spur competition between 
cable and satellite, which in turn will benefit consumers. Our bill 
will allow satellite companies to retransmit ``significantly viewed'' 
stations into local markets on a royalty-free basis. Cable companies 
have enjoyed this privilege for years, and it is time to extend this 
right to the satellite industry. By doing so, satellite companies will 
be able to craft a local channel line-up more similar to what cable 
currently offers.
  Furthermore, through working with my colleagues, particularly Senator 
Hatch, we were able to assist low power TV stations, like Channel 41 in

[[Page S11763]]

Milwaukee, carry valuable local programming and sports broadcasts that 
other stations do not carry. Satellite television consumers in 
southeastern Wisconsin and around the country will benefit from more 
local programs and more choices. It represents a tremendous win for 
consumers and local sports fans. Simply, we extended a statutory 
license to low power TV stations in the same way those stations receive 
that privilege in the cable world. This is an important pro-consumer 
measure that we are able to successfully include in the Omnibus.
  Finally, this bill includes funding for many important programs that 
will improve the lives of people in Wisconsin. Projects that provide 
job training, health care and dental care to uninsured families, 
afterschool programs, mental health services, caregiver training, 
transportation, crime prevention and economic development--all of these 
programs will have a real benefit for families and communities in my 
State. I am grateful for the hard work of the committee in accomodating 
these Wisconsin priorities.
  As ranking member of the Agriculture Subcommittee, I would also like 
to make a few remarks about what is included in Division A of the bill, 
providing fiscal year 2005 appropriations for Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies.
  First of all, I want to congratulate Senator Bennett who has now 
completed his second year as chairman of the Agriculture Subcommittee. 
In the period he has served as our chairman, his grasp of the policies, 
programs, and problems related to this subcommittee's jurisdiction has 
been outstanding. It has been a great pleasure for me to work with him, 
and I look forward to our continuing partnership next year.
  Again this year the resources available to the Agriculture 
Subcommittee have witnessed a decrease from the previous year. Yet in 
spite of those constraints, Chairman Bennett was able to provide some 
important increases to benefit American consumers and those who live 
and work in our rural areas. This conference report includes more than 
$5 billion for the WIC program. This amount is significantly higher 
than the fiscal year 2004 level or that of either the House or Senate 
bills. This appropriation will help meet caseload requirements for the 
coming year in spite of higher than expected food costs and 
participation rates.
  This conference report includes new funding for a number of plant and 
animal disease problems including research for soybean rust, mad cow 
disease, avian influenza and a number of other emerging issues. More 
than $33 million is provided to establish a national animal 
identification program, as is funding related to conservation, rural 
development, food and drug safety, and more.
  However, I must mention concerns I have with this conference report. 
I am concerned about reductions in the rural water and wastewater 
programs. Further, although the Public Law 480 title II program is 
funded at near the Senate level, worsening conditions around the world 
and the administration's reluctance to use the Emerson Humanitarian 
Trust, worries me that international food assistance may fall short and 
our contributions to humanitarian relief around the world may go 
wanting.
  I also feel it is important to mention a growing, and unfortunate, 
practice on which this subcommittee has had to rely again this year. In 
order to achieve the funding levels for discretionary programs that we 
have in this conference report, serious reductions or rescissions in 
other programs had to be realized. This is not a wholly new occurrence. 
For many years, this subcommittee has effected limitations on a number 
of mandatory programs, notably those funded through various farm bills, 
in order to meet discretionary targets. However, due to a strangling of 
resources provided to this subcommittee in discretionary allocations, 
reductions in mandatory programs are becoming more and more severe.
  My grave fear is if discretionary constraints continue at the rate we 
have seen the past couple of years, we will hit the limit on savings we 
can achieve and there will be nothing left to rescind. If and when that 
happens, the demands for carrying out farm programs, protecting 
American consumers, ensuring food and drug safety, keeping our 
environment clean, providing basic services for rural families, and 
meeting new challenges such as mad cow disease, soybean rust and all 
the rest will not diminish and we will simply not be able to provide 
what is necessary. On that day, we, and all of America, will be 
standing in the middle of a very tragic train wreck and we will all be 
asking each other how and why we let this happen. I hope that before 
that day comes, we will be able once again to have the resources 
necessary to meet the demands we were given the trust to overcome.
  Having said that, I do want to praise the work of Chairman Bennett. 
With the limitations I have just outlined, he has crafted a very 
balanced bill that will serve America well. He has done an outstanding 
job with limited resources and we should all be very proud of him for 
that.
  I also want to recognize the majority staff who has worked so well 
with mine on putting this conference report together. I would like to 
mention Fitzhugh Elder, Hunter Moorhead, and Dianne Preece. I 
especially want to recognize the majority clerk, Pat Raymond, for her 
outstanding service, not just to his subcommittee, but to the Senate 
overall. I want to note that Pat will be leaving the Senate after the 
first of the year and we will all miss her and wish her well.
  I would also like to recognize Galen Fountain, Jessica Arden, Bill 
Simpson, Tom Gonzales and Meagan McCarthy of the minority staff and 
Phil Karsting of my personal staff for all their hard work on this 
bill.
  While I am pleased that the Omnibus appropriations bill includes many 
of my priorities, on balance, I cannot support it. First, this bill 
shortchanges too many of our nation's most important priorities. This 
Nation's fiscal policy throughout the last several years has led to 
large and irresponsible deficits, and as a result, we are facing an 
appropriations bill that is unable to meet some of the most pressing 
needs of our families and communities.
  Finally, I cannot support this bill because the process by which it 
was put together and rushed through the Senate has been unacceptable. 
It is three thousand pages long and we have had only a matter of hours 
to review it. We have already learned about an egregious provision that 
would infringe on the privacy of Americans' tax returns, and as we have 
more time to review the bill, it is likely we will find more troubling 
provisions. I hope that this unfortunate process will not be repeated 
in the future. People in Wisconsin and across the Nation expect a more 
serious effort from the Senate. I urge my colleagues to oppose the 
conference report.
  Mr. DODD. Mr. President, I regrettably voted against the adoption, of 
the conference report tonight. I say ``regrettably'' because I 
appreciate the efforts of Senator Stevens, Byrd, and others to fashion 
sound legislation for the country, including the State of Connecticut. 
I am grateful to them. I applaud their efforts. However, I felt 
compelled to oppose this legislation because of the troubling way this 
bill was brought before this body and because of certain provisions 
about which I held deep concerns.
  A few hours before the vote tonight, we were handed a piece of 
legislation 3,200 pages in length that combined nine appropriations 
bills worth over $380 billion. It is important to note that these 
appropriations bills did not follow the normal legislative process. 
Instead of being considered and voted on separately by the Senate and 
House and reconciled in a conference committee, they were combined into 
an existing conference report and sent to both the House and Senate 
with limited time for debate and no chance of amending. Furthermore, 
this omnibus bill was largely written under a shroud of secrecy--a 
shroud so thick that it became apparent this afternoon that not even 
the Senate leadership or Senate Appropriations Committee chairman knew 
fully what was contained in this legislation.
  Thanks to our colleague Kent Conrad and his staff this afternoon, we 
learned of an extraordinary tax provision buried in the middle of this 
3-foot thick bill--a provision apparently unbeknownst to the majority 
that launches an unprecedented assault on the personal privacy. This 
provision allows

[[Page S11764]]

certain Members of Congress or their designees--designees that could 
include anybody from staff members to private contractors--to request 
the tax returns of any United States citizen without having to give any 
reason for requesting the returns and without having any limitations on 
how to use those returns. Simply put, it is an unprecedented abuse of 
congressional power and a frontal assault on our civil liberties.
  I am told that the fact remains that this legislation contains a 
provision that strikes at the heart of our nation's civil liberties. 
Moreover, that this provision will be repealed by the House and Senate 
before becoming law. While I am comforted by this move, I remain deeply 
troubled that other damaging provisions such as the one above might 
remain in this bill.
  A second issue over which I hold deep concerns is that this 
conference report essentially allows health care providers to ``gag'' 
medical professionals and deny women from obtaining medically necessary 
information and services concerning reproductive health. This so-called 
Federal refusal clause would exempt health care providers from any 
existing federal, state, or municipal law that ensures that women have 
legal access to abortion services and reproductive health information. 
It would also bar states and municipalities from enforcing their own 
access laws without jeopardizing all of their federal funding for 
health and educational initiatives. While supporters of this provision 
claim that it solely serves as a ``conscience clause'' that protects 
the religious beliefs of certain health care providers, it is clear to 
me that this provision is yet another veiled attempt to undermine a 
woman's constitutional right to choose.
  I am encouraged that Senator Boxer has reached an agreement with the 
Senate leadership to introduce and consider a bill next year that will 
strip this provision. As legislators, I believe that we should not work 
to uphold the rights and freedoms proscribed by the Constitution. We 
should not work to stifle or remove them. Therefore, I urge my 
colleagues to support the constitutional rights of women as enshrined 
by Roe v. Wade. I urge them to support initiatives that properly and 
effectively make a woman's life and well-being a top priority.
  Furthermore, I am concerned that this conference report fails to 
contain several important measures that were previously approved by the 
House and Senate. One such measure prevents the Labor Department to, in 
effect, deny overtime pay to as many as 8 million workers across our 
country. While both the House and the Senate opposed this policy by 
bipartisan majorities, that opposition was ignored by Republican 
conferees. Many workers who now qualify for overtime pay would find 
their jobs reclassified as a managerial or professional position, thus 
making them ineligible for overtime pay if they work in excess of 40 
hours.
  This change is significant because overtime pay can provide as much 
as 25 percent of a worker's annual income. Instead of working toward 
creating new jobs and helping working families and individuals, the 
legislation creates yet another obstacle for millions of Americans to 
provide for themselves and their families.
  Second, this conference report fails to stop the outsourcing of 
American jobs. The conference report that was before us tonight fails 
to reverse a Bush administration policy of allowing government 
functions to be outsourced to other countries--thereby causing 
thousands of job losses at home.
  Finally, the conference report wholly underfunds important domestic 
initiatives such as education and health. It shows once again the 
current Administration's failure in guaranteeing the well-being of all 
Americans.
  I regretted voting against this bill tonight because it does provide 
several million dollars for important initiatives in my home state of 
Connecticut and across the Nation. However, in my view, it carries too 
many negative provisions for me to support. I will continue to work 
with my colleagues in rectifying the bill's shortcomings in the coming 
months and new session of Congress.
  Mr. STEVENS. I ask for passage of the bill, and I yield back the 
remainder of my time.
  The PRESIDING OFFICER. All time has been yielded back and all time 
has been used.
  Mrs. BOXER. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mrs. BOXER. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. Mr. President, I am strongly opposed to a provision 
included in this omnibus bill that has never been debated or considered 
by the Senate. It denies millions of women basic information about 
their constitutional rights and endangers women who are in desperate 
situations in pregnancies caused by rape or incest or pregnancies that 
threaten their health or their life. Again, this provision has never 
been considered or debated by the Senate, yet it is included in this 
appropriations bill.
  Given the rules of the Senate, there is no way I can strike this 
provision of the bill at this point. I could delay the passage of the 
bill, but I cannot strike this outrageous provision.
  When the Senate returns to session in January, I will be introducing 
legislation to repeal this so-called Weldon provision. I feel strongly 
the Senate must debate, consider, and vote on this issue. It is too 
important to millions of American women to be slipped into an Omnibus 
appropriations bill. Therefore, I ask the majority and soon-to-be 
minority leaders to commit to bring before the Senate by April 30, 
2005, my bill to repeal the so-called Weldon amendment, with a minimum 
of 4 hours of debate and an up-or-down vote on my bill without 
amendment. I ask the majority leader if he will comment on this?
  Mr. FRIST. Mr. President, I thank Senator Boxer for allowing us to 
move toward completion of the Omnibus appropriations bill today. I 
commit to her that no later than April 30, 2005, the Senate will 
consider her bill to repeal the so-called Weldon amendment regarding 
abortion conscience clauses that is included in the Omnibus 
appropriations bill. When we consider that bill, we will have no less 
than 4 hours of debate equally divided on the bill, with Senator Boxer 
controlling half the time. There will be no amendment or other motions 
in order to the bill, and at the conclusion or yielding back of time 
the Senate will conduct an up-or-down vote on the Boxer bill.
  I further commit to the Senator from California that this debate and 
vote will not occur on a Monday or a Friday and that it will not occur 
during the evening or a late night session.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, I thank the majority leader for making this 
agreement and allowing the Senate to complete its work this year. I 
commit to the Senator from California that I will ensure the agreement 
that is reached today will be upheld.
  Mrs. BOXER. I thank the two leaders and I urge the vote.
  Mr. FRIST. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second.
  The question is on agreeing to the conference report. The clerk will 
call the roll.
  The assistant legislative clerk called the roll.
  Mr. McCONNELL. The following Senators were necessarily absent. The 
Senator from Colorado (Mr. Campbell), the Senator from New Hampshire 
(Mr. Gregg), and the Senator from Indiana, (Mr. Lugar).
  Mr. REID. I announce that the Senator from Delaware (Mr. Biden), and 
the Senator from South Carolina (Mr. Hollings), are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Delaware (Mr. Biden) would vote ``no.''
  The PRESIDING OFFICER (Mr. Chafee). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 65, nays 30, as follows:

                      [Rollcall Vote No. 215 Leg.]

                                YEAS--65

     Alexander
     Allard
     Allen
     Baucus
     Bennett
     Bingaman
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Cantwell
     Chafee
     Chambliss
     Clinton

[[Page S11765]]


     Cochran
     Coleman
     Collins
     Cornyn
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dole
     Domenici
     Dorgan
     Enzi
     Feinstein
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Harkin
     Hatch
     Hutchison
     Inouye
     Johnson
     Landrieu
     Lieberman
     Lincoln
     Lott
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nickles
     Pryor
     Reid
     Roberts
     Santorum
     Schumer
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner
     Wyden

                                NAYS--30

     Akaka
     Bayh
     Boxer
     Byrd
     Carper
     Conrad
     Corzine
     Dodd
     Durbin
     Edwards
     Ensign
     Feingold
     Graham (FL)
     Hagel
     Inhofe
     Jeffords
     Kennedy
     Kerry
     Kohl
     Kyl
     Lautenberg
     Leahy
     Levin
     McCain
     Nelson (NE)
     Reed
     Rockefeller
     Sarbanes
     Sessions
     Stabenow

                             NOT VOTING--5

     Biden
     Campbell
     Gregg
     Hollings
     Lugar
  The conference report was agreed to.
  Mr. LEAHY. Mr. President, I rise today to applaud the fact that the 
Satellite Home Viewer Extension and Reauthorization Act of 2004 has 
been included in the Omnibus Appropriations conference report. The 
House is likely to pass the conference report later today. The fate of 
the conference report is less certain here in the Senate, and I still 
have not made up my mind how I will vote as I am still reviewing the 
text of the bill. I am pleased, however, that the Satellite Home Viewer 
Extension and Reauthorization Act of 2004 has been included. This new 
law marks important progress for rural Americans by providing greater 
access to more television options or these consumers, making more local 
TV channels available to them, encouraging more digital TV offerings, 
and providing head-to-head competition with cable TV.
  I was pleased to sponsor the original Senate bill with Chairman 
Hatch, and Senators DeWine and Kohl, which was introduced on January 
21, 2004. At our Judiciary Committee hearing on the bill we heard from 
the President and CEO of Vermont Public Television, John King, who 
testified about the benefits of local-into-local television to 
Vermonters and the importance of getting both satellite carriers to 
offer it in Vermont. He also noted that all of the Vermont network 
stations should be offered statewide, including in Bennington and 
Windham counties. He testified that those counties receive local news 
from the Schenectady area and from the Boston TV market, respectively, 
not from Vermont stations.
  I can recall hearing from many Vermont families over the years about 
this issue. In fact, in a letter dated February 20, 2004, I heard from 
almost 20 Vermont State representatives and State senators about the 
importance of getting satellite-delivered Vermont stations into 
Bennington and Windham counties. Indeed, the Vermont General Assembly 
adopted in both houses a joint resolution urging that ``the Vermont 
Congressional delegation assist in assuring the availability of 
Vermont-based television stations on all home satellite delivery 
systems in the state.'' I am pleased to announce that this just got 
done with the passage of this new law.
  Once the President signs this bill, both satellite carriers, the Dish 
Network, also known as EchoStar, and DirecTV will be able to offer all 
Vermont TV stations in all Vermont counties. The Dish Network has been 
offering Vermont TV stations over satellite for over 2 years, except in 
those two counties, and DirecTV announced this month that they would 
begin offering local TV service in Vermont.
  Both of these national satellite companies will also be able to offer 
TV satellite service in analog--as they do now--and in digital after 
full implementation of this new satellite law.
  The Hatch-Leahy Satellite Home Viewer Extension Act of 2004 was 
approved by the Senate Judiciary Committee on June 17, 2004. All the 
members of the Judiciary Committee supported that bill.
  When the bill was reported out of committee, I noted that the bill 
does far more than just protect satellite dish owners from losing 
signals as had happened in 1997 and 1998. I pointed out that the new 
satellite bill protects subscribers in every state, expands viewing 
choices for most dish owners, promotes access to local programming, and 
increases direct, head-to-head, competition between cable and satellite 
providers.
  Easily, this bill will benefit 21 million satellite television dish 
owners throughout the nation, and I am happy to note that around 90,000 
Vermonters receive satellite TV.
  I was pleased to work on this bill not only with the Vermont 
Congressional delegation but also with my colleagues from New 
Hampshire, Senator Sununu and Senator Gregg. We, along with Senator 
Jeffords, introduced legislation to ensure that satellite dish owners 
in every county in each of our States would be able to receive signals, 
via satellite, from our respective in-State television stations. While 
our two States represent a small television market as compared to some 
of the major population centers, this provision is nonetheless very 
important to residents in six of our collective counties--two in 
Vermont and four in New Hampshire. I also coordinated these efforts 
with Congressman Sanders and Congressman Bass of New Hampshire. Viewers 
in both States in those counties will simply choose whether they want 
to watch WMUR from Manchester, or watch WVNY or any of the other 
Vermont stations. For the first time, these residents in both States 
will be able to receive home State news and programming via satellite.
  For too long, Bennington and Windham counties have not been able to 
receive television news about what is happening in Vermont. Because of 
Vermont's alpine topography, with many towns in the saddles of our 
mountains, thousands of Vermonters did not receive Vermont television 
stations over the air. This new provision solves that problem.
  I have received input from all Vermont stations on this effort. I 
also had my staff meet with representatives from all the Vermont 
stations to go over the details. I appreciate the input of Peter Martin 
of WCAX; John King and Ann Curran of Vermont Public Television; Bill 
Sally of Fox, WFFF; Paul Sands of WPTZ and WNNE, NBC; Ted Teffner of 
WCAX; Eric Storck and Ken Kazabowski of WVNY, ABC. My staff also met 
with representatives of Adelphia Cable, Vermont's largest cable 
provider, and other providers.
  As I mentioned on the Senate floor in September, this effort will 
also allow additional programming via satellite through adoption of the 
so-called ``significantly viewed'' test now used for cable, but not for 
satellite subscribers. Generally applied that test means if a family 
were in an area in which most families in the past had received TV 
signals using a regular rooftop antenna, then those families could be 
offered that same signal TV via cable. By having similar rules, 
satellite carriers will be able to directly compete with cable 
providers who already operate under the significantly viewed test. This 
gives home dish owners more choices of programming.
  In 1997, we found a way to avoid cutoffs of satellite TV service to 
millions of homes and to protect the local affiliate broadcast system. 
The following year we forged an alliance behind a strong satellite bill 
to permit local stations to be offered by satellite, thus increasing 
competition between cable and satellite providers.
  I want to thank Chairman Hatch, along with Senators Kohl and DeWine, 
for providing such strong leadership in this effort. In 1998 and 1999 
we developed a major satellite law which transformed the industry by 
allowing local television stations to be carried by satellite and 
beamed back down to the local communities served by those stations. 
This marked the first time that thousands of TV owners were able to get 
the full complement of local network stations. In 1997 we found a way 
to avoid cutoffs of satellite TV service to millions of homes and to 
protect the local affiliate broadcast system. The following year we 
forged an alliance behind a strong satellite bill to permit local 
stations to be offered by satellite, thus increasing competition 
between cable and satellite providers.
  We also worked with the Public Broadcasting System so they could 
offer a national feed as they transitioned to having their local 
programming beamed up to satellites and then beamed back down to much 
larger audiences.
  Because of those efforts, dish owners in Vermont and most other 
States can

[[Page S11766]]

watch their local stations instead of receiving signals from distant 
stations. Such a service allows television watchers to be more easily 
connected to their communities as well as providing access to necessary 
emergency signals, news and broadcasts.
  The good news is that this bill is great for every state in the 
nation. Consumers in every county in every state will be offered, over 
time, more satellite TV choices. This effort is an example of how the 
Congress can work together on complex issues to benefit families all 
across America.
  Many Members had a hand in crafting this bill. Subcommittee Chairman 
DeWine, and his chief of staff, Pete Levitas, and David Bolling, and 
ranking member Senator Kohl and his staff, Jeff Miller and Jon 
Schwantes, were very helpful in crafting the Committee bill.
  In the other body, Chairman Sensenbrenner and subcommittee chairman 
Lamar Smith did a tremendous job on the Judiciary copyright issues. 
They worked with their Democratic colleagues including ranking member 
John Conyers and subcommittee ranking member Howard Berman to report 
out a strong bill.
  The leaders of the Committee on Energy and Commerce worked on issues 
related to their jurisdiction and together with the Judiciary Committee 
developed a combined bill for House floor action. That was a great idea 
and they proposed a seamless package. As I have stated several times 
before, H.R. 4518 represented a very careful balancing of interests and 
was good for consumers, good for the affected industries, good for 
copyright holders and good for rural America. Staff of Senate and House 
leadership helped facilitate the process of working out some of the 
differences between different versions of the bill.
  Many staff worked diligently on this effort, including David Jones 
with Senate Judiciary and David Whitney with House Judiciary, both of 
whom were instrumental in crafting good solutions to complex problems.
  Many House and Senate Commerce Committee staff pitched in and worked 
together to get this bill done. James Assey, Bill Bailey, Rachel Welch, 
Gregg Rothschild, Alec French, Peter Filon, Sampak Garg, Neil Fried, 
Mike Sullivan and Howard Waltzman are some of the House staff on both 
Committees who worked hard to get the job done.
  I know that my staff appreciated the helpful assistance provided by 
staff of Speaker Hastert, Bill Koetzle; Majority Leader Frist, Libby 
Jarvis; and Chairman Stevens, Christine Kurth and Lisa Sutherland, in 
this difficult process.
  I appreciate the efforts of my Judiciary counsel Ed Barron. As he did 
during the last reauthorization, Ed tried to work with everyone 
involved to help build a consensus on all the issues. Ed did an 
extraordinary job as he has done on all the other major projects I have 
asked him to do over the last 18 years.
  In the next Congress, I look forward to monitoring the implementation 
of this law and am ready to work with all involved in this process to 
address any concerns that may arise.
  Mr. ENSIGN. Mr. President, I rise today to report on a tremendous 
step forward for public safety, our economy, closing the digital 
divide, and bringing next generation high definition television to 
rural America. The House and Senate today passed legislation that will 
fundamentally impact the future of television especially in rural 
America. Today the U.S. Congress set aside entrenched special interest 
group wish lists and took a strong step forward toward making high 
definition digital television available in unserved areas.
  The Satellite Home Viewer Extension and Reauthorization Act of 2004 
enjoyed broad bipartisan support and is now headed to the President's 
desk. I applaud my colleagues from the Commerce and Judiciary 
Committees, from both sides of the aisle, and from both Chambers. The 
leaders of these committees did not bow down to the furious lobbying of 
those who have sought to slow down the digital transition and that 
attempted to gut the important pro-consumer digital white area 
provisions designed to make available high definition programming to 
rural Americans. This legislation sends an unmistakable message that we 
are not going to allow a digital divide like we have for broadband to 
occur in the new world of digital television. With this legislation, 
consumers who cannot receive digital television programming over the 
air, will now have a chance to receive it from satellite providers who 
are ready, willing and able to get high definition programming to 
unserved areas.
  One of the most exciting benefits of this legislation, is that it 
creates incentives and pressures to speed the return of this valuable 
analog television spectrum. There are endless possibilities for 
powerful new innovations for consumers that will flourish when new 
unlicensed wireless spectrum is made available. Consumers will benefit 
from new devices and services we haven't even contemplated yet.
  Public safety also needs to have access to this spectrum to ensure 
they have the ability to communicate in dark stairwells and wet 
basements. We know that the characteristics of this spectrum are such 
that they can penetrate walls and travel over greater distances. The 9/
11 Commission tells us that we need to make this spectrum available.
  The bill also mandates that satellite providers phase out their use 
of two-dish markets, across the country in 18 months. Currently, 
customers in some markets need a second dish to receive some stations 
and since many customers choose not to receive a second dish, some 
stations are not seen. This legislation ends that practice.
  Our work today, while a tremendous victory, is but the first step 
forward in what I believe history will mark as the turning point in the 
U.S. Congress recognizing that blindly clinging to the world of 1940's 
analog television is only harming our economy, our most rural areas, 
public safety and is stifling innovation. Today the Congress made an 
affirmative determination that all Americans deserve to have equal 
access to digital television programming regardless of geographic 
location.
  The purpose of this legislation is simple; to make sure consumers are 
not denied digital television based on where they live or whether the 
digital conversion has been completed in their area. People outside 
major market areas, like those in rural Nevada, should not be left 
behind in the DTV revolution.
  This legislation includes strong protections against abuse, and tough 
penalties to ensure satellite providers comply with a fair and 
equitable process by which all Americans can take part in the digital 
transition in a realistic timeframe. Local broadcasters who have been 
unable to turn up a full-power digital signal due to circumstances 
beyond their control will not be unfairly penalized.
  With the passage of the Balanced Budget Act of 1997, the Congress 
established a timeline for catching up our Nation's television 
broadcasting with rapidly changing technology. In fact, we gave 
broadcasters a multi-billion dollar public asset in the form of free 
spectrum for digital television with the explicit understanding that 
their analog spectrum be returned by December 31, 2006. Unfortunately, 
years of litigation, lobbying and foot dragging has made it likely that 
we will miss this deadline. Next year the Congress will be considering 
a new hard deadline for completion of this transition and it is my 
intention to work vigorously to ensure that these dates not be allowed 
to slip any longer than necessary.
  Equally important will be ensuring that we do not forget about those 
consumers for whom a new digital television set, cable or satellite 
receiver or digital converter box does not fit in their near-term 
buying plans. The Senate Commerce Committee has considered numerous 
proposals to ensure that these consumer's screens don't go dark when a 
hard deadline passes. Next year the Congress needs to decide on an 
approach to ensure that especially lower income consumers will be 
adequately accommodated. There are many good proposals on how to best 
ensure we protect these consumers, and there is no doubt in my mind 
that the tremendous proceeds of the spectrum auctions will give us the 
resources necessary to ensure a successful transition.
  Our work also remains unfinished for cable operators who wish to 
provide the same important services to rural Americans as will now be 
available to satellite customers. Consumers stand

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to benefit even further from competition in the multichannel video 
programming distribution marketplace if cable providers are afforded 
some of the same opportunities we have made available to satellite. We 
have to be careful not to tip the balance in favor of one industry over 
another. This is why the bill includes a provision requiring the FCC to 
study and report back to Congress in nine months on the impact of 
retransmission consent and certain blackout rules on competition in the 
multichannel video programming distribution market and, in particular, 
on the ability of rural cable television systems to provide their 
customers with digital broadcast television programming.
  Millions of people in rural areas subscribe to cable television 
service, often from small cable operators. Once again, it is not our 
intent to create a competitive advantage for one technology over 
another consumers should not be forced to choose between DBS and cable 
in order to receive digital broadcast television signals. I look 
forward to receiving the commission's report and I am confident the 
committee will give serious consideration to any recommendations for 
additional legislative action contained therein.
  This Congress sent a powerful message today that we understand the 
importance of the digital transition, and the powerful benefits for 
public safety, television viewers, innovation, public safety and our 
economy. I fully expect the momentum of this victory will carry forward 
into the next Congress where we can build on these great 
accomplishments for consumers.

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