Congressional Record, Volume 150 Issue 135 (Saturday, November 20, 2004)

[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

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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

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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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