[Congressional Record Volume 155, Number 49 (Monday, March 23, 2009)]
[Senate]
[Pages S3611-S3617]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Ms. COLLINS:
  S. 664. A bill to create a systemic risk monitor for the financial 
system of the United States, to oversee financial regulatory activities 
of the Federal Government, and for other purposes; to the Committee on 
Banking, Housing, and Urban Affairs.
  Ms. COLLINS. Mr. President, at the heart of the deep recession is a 
crisis in our financial system that has choked off credit upon which 
the health of our economy depends. With their jobs disappearing and 
their life savings evaporating, the American people rightly ask why the 
Federal Government failed to protect them from Wall Street's greed, 
unwise decisions, and manipulations that have caused so much harm.
  As a former Maine financial regulator, I am convinced regulatory 
reform is essential to restoring public confidence in our financial 
markets. America's main street small businesses, homeowners, employees, 
savers, and investors deserve the protection of a new regulatory system 
that modernizes regulatory agencies, sets safety and soundness 
requirements for financial institutions to prevent excessive risk-
taking, and improves oversight, accountability, and transparency.
  To achieve those goals, I am introducing the Financial System 
Stabilization and Reform Act of 2009. This legislation will 
fundamentally restructure our financial regulatory system. It will 
strengthen oversight and accountability in our financial markets, and 
it would help rebuild the confidence of our citizens in our economy and 
help restore stability to our financial markets.
  Mr. President, as financial institutions speculated in increasingly 
risky products and practices, not one of the hundreds of Federal and 
State agencies involved in financial regulation was responsible for 
detecting and assessing the risk to the system as a whole. The 
financial sector was gambling on the rise of the housing market, yet no 
single regulator could see that everyone, from mortgage brokers to 
credit default swap traders, was betting on a bubble that was about to 
burst. Instead, each agency viewed its regulated market through a 
narrow lens, missing the total risk that permeated our financial 
markets.
  In order to prevent this problem from recurring, a single financial 
regulator must be tasked with understanding the full range of risks our 
financial system faces. This regulator also must have the authority to 
take proactive steps to prevent or minimize systemic risk.
  This is an urgent need. Unemployment reached 7.8 percent in my home 
State in January. Last month, the national unemployment rate hit 8.1 
percent, the highest in 25 years. Earlier this month, the Federal 
Reserve reported that the net worth of American households plummeted by 
more than $11 trillion in 2008, a staggering drop of nearly 20 percent, 
the most in 63 years. And, at the same time, court proceedings and 
congressional hearings on the Bernie Madoff case revealed that this 
multibillion-dollar Ponzi scheme of nonexistent transactions and 
fraudulent statements was perpetrated for

[[Page S3612]]

years under the very noses of the Federal agencies that should have 
stopped it.
  The American people need more than words of optimism or promises of a 
turnaround. With their jobs lost or in jeopardy, with their financial 
plans in ruin, and now with their hard-earned tax dollars on the line 
to clean up the mess, they need reforms. They need action.
  The American people are angry, and rightfully so. They are angry 
because the current crisis was not created from their own bad 
investments or decisions, but by those on Wall Street who concocted 
complicated financial instruments that ended up backfiring. Investment 
firms borrowed to the hilt when they did not have the resources to do 
so.
  When the average American decides to purchase a security on credit, 
margin requirements dictate that he or she put up at least 50 percent 
of its value in cash. But investment banks did not have to play by the 
same rules when they bought for their own accounts. And they took 
advantage of this system.
  Indicative of the extent of the borrowing, Bear Stearns had a 
leverage ratio of 35 to 1, which means the firm borrowed $35 for every 
dollar of its own money. For example, suppose your net worth is a 
dollar and you combine that dollar with $35 in borrowed money to buy an 
asset worth $36. If the value of that asset declines by only $2, to 
$34, you are now bankrupt. This is exactly what happened to Bear 
Stearns and other investment banks.
  Since last spring, the Homeland Security and Governmental Affairs 
Committee, on which I serve as ranking member, has held a series of 
hearings on the roots of the present crisis. We began by looking at the 
derivatives and commodity markets and more recently looked at the steps 
that can be taken to protect our Nation's financial system as a whole 
by creating a systemic-risk regulator. The many expert witnesses who 
have appeared before us have described how our financial system was 
destabilized by a combination of reckless lending, complex new 
instruments, securitization of assets, poor disclosure and 
understanding of risks, excessive leverage, and inadequate regulation.
  Our witnesses were in wide agreement that the mounting risk went 
virtually undetected by the vast network of Federal and State 
regulatory agencies. As the Government Accountability Office put it in 
a recent report to the committee, ``it has become apparent that the 
regulatory system is ill-suited to meet the nation's needs in the 21st 
century.'' To meet this challenge, Federal Reserve Chairman Bernanke 
said recently:

       We must have a strategy that regulates the financial system 
     as a whole, in a holistic way, not just its individual 
     components.

  This statement confirms a view that I find inescapable, our current 
system suffers from regulatory gaps that pose enormous risks to our 
entire economy. The holistic approach recommended by Chairman Bernanke 
is the guiding principle of the comprehensive legislation I introduce 
today. Like legislation I introduced last fall, this bill would also 
regulate Wall Street investment banks for safety and soundness and 
close the gap that has allowed credit default swaps and other financial 
instruments to escape regulation by both Federal and State regulators.
  To ensure a systemic approach to Federal financial regulation, this 
legislation calls for the creation of an independent financial 
stability council to serve as a ``systemic-risk regulator.'' The 
council would maintain comprehensive oversight of all potential risks 
to the financial system, and would have the power to act to prevent or 
mitigate those risks. The financial stability council would be composed 
of representatives from existing Federal agencies which now have the 
responsibility to oversee segments of the financial system--the Federal 
Reserve; the Treasury Department; the Securities and Exchange 
Commission; the Commodity Futures Trading Commission; the Federal 
Deposit Insurance Corporation; and the National Credit Union 
Administration.
  The council would be led by a chairman nominated by the President and 
confirmed by the Senate, with the responsibility for the day-to-day 
operations of the council. The chairman would be required to appear 
before Congress twice a year to report on the state of the country's 
financial system, areas in which systemic risk are anticipated, and 
whether any legislation is needed for the council to carry out its 
mission of preventing systemic risks.
  Witnesses who have appeared before our committee have stressed the 
need to ensure that the systemic-risk regulator has the responsibility 
and the authority to ensure that risks to our financial system are 
identified and addressed. If it is not clear who has that 
responsibility, then agencies will dig in their heels and resist 
changes they do not agree with, and engage in finger-pointing when 
things go bad. At the same time, other witnesses have stressed the 
dangers of consolidating too much power in the hands of a single 
regulator and the need to maintain the level of oversight Congress has 
historically exercised with respect to financial market regulation.
  The financial stability council created by this legislation balances 
these concerns. As Damon Silvers, the AFL-CIO representative on the 
TARP congressional oversight panel, testified before our committee 
earlier this month:

       [T]he best approach is a body made up of the key 
     regulators. . . . It is unlikely a systemic risk regulator 
     would develop deep enough expertise on its own. . . . To be 
     effective it would need to cooperate. . . . with all the 
     routine regulators where the relevant expertise would be 
     resident. . . .

  Former Senator John Sununu, another member of the congressional 
oversight panel, recognized that ``systemic risk can materialize in a 
broad range of areas within our financial system. . . . Thus, it is 
impractical, and perhaps a dangerous concentration of power, to give 
one single regulator the power to set or modify any and all standards 
relating to such risk. Systemic risk oversight and management must be a 
collaborative effort. . . .''
  The financial stability council will be the primary entity 
responsible for detecting systemic risk and implementing the steps 
necessary to protect against that risk. The key to such a structure, I 
believe, is to ensure that the council is headed by a chairman 
confirmed by the Senate and subject to oversight by Congress, who is 
dedicated entirely to the mission of the council, and who does not 
carry a bias in favor of any particular agency on the council.
  Some have suggested that the Federal Reserve play the role of 
systemic-risk regulator. That is not what my bill contemplates. The 
chairman of the Federal Reserve will be a member of the council, and of 
course, the Nation's top banker will play a critical role in how the 
council discharges its responsibilities. But in my view, the Federal 
Reserve already has enough on its plate, and does not need additional, 
heavy responsibilities. I should add that nothing in my bill alters the 
Federal Reserve's role with respect to monetary policy in any way.
  This bill, however, would apply safety and soundness regulation to 
investment bank holding companies by assigning the Federal Reserve this 
responsibility. Although the five big firms have left the field, this 
is a necessary step. Any new investment bank would fall into the same 
regulatory void as its predecessors. The SEC would be able to regulate 
its broker-dealer operations, but no agency would have the explicit 
authority to examine its operations for safety and soundness or for 
systemic risk. The collapses at Bear Stearns and Lehman Brothers 
illustrate the tremendous costs that can be inflicted if these 
investment banks are not regulated for safety and soundness. Under this 
legislation, the council's role as the systemic-risk regulator will 
support the critical importance of the Federal Reserve's safety and 
soundness duties.
  Under my bill, whenever the financial stability council believes that 
a risk to the financial system is present due to a lack of proper 
regulation, or by the appearance of new and unregulated financial 
products or services, it would have the power to propose changes to 
regulatory policy, using the statutory authority provided to our 
existing Federal financial regulatory agencies.
  The financial stability council will have the power to obtain 
information directly from any regulated provider of financial products 
and, in limited form, from State regulators regarding the solvency of 
State-regulated insurers.

[[Page S3613]]

The council will also be able to propose regulations of financial 
instruments which are designed to look like insurance products, but 
that in reality are financial products which could present a systemic 
risk. But--and I want to stress this point--my bill does not preempt 
State law governing traditional insurance products.
  In keeping with the recommendations of the experts who testified 
before our committee, the bill provides the council with the power to 
adopt rules designed to address the ``too big to fail'' problem. How 
often we have heard that term lately. We hear financial experts and 
Federal officials telling us we have to continue to bail out large 
institutions like AIG because they are ``too big to fail.'' We need to 
remedy this problem so we don't find ourselves in the same situation a 
decade from now. This bill provides the council with the power to adopt 
rules designed to discourage financial institutions from becoming ``too 
big to fail'' or to regulate them appropriately if they become what we 
call ``systemically important financial institutions.'' The need to 
regulate how these systemically important financial institutions, or 
``SIFIs,'' invest their own capital was not previously recognized. 
Indeed, the prevailing attitude was that if firms failed because of bad 
investments, possibly bringing some of their creditors down with them, 
that was how the market was supposed to work. In true Darwinian 
fashion, eliminating firms with less investment acumen would only serve 
to strengthen American capitalism. We now know the fallacy of that 
reasoning, and it has been a very painful lesson, for it is not just 
the large investment houses that are hurt, but average Americans from 
Maine to California also suffer.
  Under this legislation the council would help make sure financial 
institutions do not become ``too big to fail'' by imposing different 
capital requirements on them as they grow in size, raising their risk 
premiums, or requiring them to hold a larger percentage of their debt 
as long-term debt. The TARP congressional oversight panel adopted this 
position, explaining:

       We should not identify specific institutions in advance as 
     too big to fail, but rather have a regulatory framework in 
     which institutions have higher capital requirements and 
     pay more on insurance funds on a percentage basis than 
     smaller institutions which are less likely to be rescued 
     as being too systemic to fail.

  I want to make clear, though, that the power this bill provides to 
the council is not meant to restrict financial institutions from 
growing in size, but rather from becoming risks to the system as a 
whole.
  The bill also provides the council with authority to address so-
called regulatory ``black holes,'' created by new and imaginative 
financial instruments that do not fall within the jurisdictional 
authority of any Federal financial regulatory agency. Credit default 
swaps are a perfect example of this problem. Prior to 2000, credit 
default swaps existed in a regulatory limbo. Neither the SEC nor the 
CFTC were willing to exert authority over the credit default swap 
market. As a result, they fell through the jurisdictional cracks. 
Congress then compounded the problem by explicitly exempting credit 
default swaps from regulation under the Commodity Futures Modernization 
Act of 2000.
  As was the case with AIG, serious problems can arise when a major 
``credit event'' suddenly reveals that massive claims for collateral 
posting or payment are converging on credit default swap parties who 
cannot meet their obligations. But because the market was bilateral and 
over-the-counter, it was often impossible for regulators--and even 
market participants--to know in advance how all the tangled webs of 
contract commitments overlapped and affected any particular party. 
Under the current system which lacks a systemic-risk regulator, 
regulators at times lack the authority to take action against excessive 
debt, inadequate reserves, and other threats, even when they see them 
occurring.
  This legislation specifically addresses the credit default swap 
problem by repealing the exemption from regulation that Congress 
created for these instruments in 2000, and by setting up a government-
regulated clearinghouse.
  But beyond credit default swaps, risky new financial instruments 
could still avoid the reach of our regulatory system. For that reason, 
my legislation provides the council with the power to propose 
regulations and legislation governing the sale or marketing of any 
financial instrument which would fall into a ``black hole,'' and would 
otherwise present a systemic risk to the financial systems of the 
United States if left unmonitored.
  Professor Howell Jackson, the acting dean of Harvard Law School, 
discussed this ``black hole'' problem in his testimony to our committee 
early this year. He stated that the underlying issue is that ``well-
advised financial services firms are capable of exploiting the 
legalistic boundaries of jurisdictional authority that characterize our 
system of financial regulation. Without broad jurisdictional mandates, 
our financial regulators will remain at a serious disadvantage in 
setting policy for new financial products and risks.''
  Finally, my bill will merge the Office of Thrift Supervision, OTS, 
into the Office of the Comptroller of the Currency, OCC. Secretary 
Paulson recommended this merger in the plan he released last year, and 
2 years ago, John Dugan, the U.S. Comptroller, said that such a merger 
would be ``appropriate and healthy.'' There are currently at least four 
agencies involved in bank regulation, including the FDIC, the Federal 
Reserve, and the OCC and OTC. Consolidating and reducing the number of 
banking regulators would improve the efficiency and effectiveness of 
this system.
  OTS is the best candidate for several reasons, including that many of 
its largest regulated entities, thrifts, have either collapsed or been 
acquired in the midst of the financial crisis--such as Washington 
Mutual and Indy Mac. And in the last 4 months, the inspector general 
for Treasury has raised serious questions about the objectivity and 
effectiveness of OTS's supervision of the largest thrifts.
  Mr. President, the regulatory reforms in this legislation are 
absolutely essential to restoring public confidence in our financial 
markets. We have relied too long on a patchwork of regulatory agencies 
that is incapable of understanding or controlling risks to the system 
as a whole. The overarching purpose of this legislation is to ensure 
that, as the financial-services industry becomes ever more global and 
complex, those in government, responsible for overseeing the system's 
stability, can see the whole picture. We are in this crisis precisely 
because firms, whether for good or bad, exploited legal boundaries, 
risky financial instruments fell beyond the reach of regulators, and 
institutions doomed to fail grew too big to fail.
  Honest savers, borrowers, investors, Main Street businesses, and 
responsible financial institutions deserve a regulatory system suited 
to demands of modern times, where dangerous gaps are closed, and where 
risky transactions are indentified and controlled before they pose a 
threat to the markets as a whole. These reforms must be made to restore 
the confidence necessary to stabilize our financial markets. That is 
what this legislation aims to do, and I urge my colleagues to support 
it.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 665. A bill to allow modified bloc voting by cooperative 
associations of milk producers in connection with a referendum on 
Federal milk marketing order reform; to the Committee on Agriculture, 
Nutrition, and Forestry.
  Mr. FEINGOLD. Mr. President, the first day of spring is appropriately 
also National Agriculture Day and a time to recognize the important 
contribution made by farmers, ranchers and the agriculture industry 
that is largely responsible for putting food on the table and clothes 
on our backs. Agriculture is critically important to both our Nation 
and Wisconsin. Over 22 million Americans and 420,000 Wisconsinites are 
employed by farms or agriculture related businesses. Approximately a 
fifth of U.S. gross domestic product is linked to agriculture and 
Wisconsin's farms and farm-related businesses create $51.5 billion in 
economic activity each year.
  Unfortunately, Agriculture Day this year comes at an unusually 
stressful time for the farm community. Even for an industry used to ups 
and downs from

[[Page S3614]]

a variety of sources, the recent problems associated with the global 
economic troubles are taxing farmers and agriculture in general more 
than usual. Dairy farmers have been particularly hard hit recently, 
with the price they receive for their milk having fallen by 50 percent 
or more since last year. While I was glad that the dairy safety net or 
Milk Income Loss Contract program was reauthorized and improved during 
the farm bill, the dramatic drop in prices combined with relatively 
high input costs will mean that many dairy farmers are not coming close 
to covering their expenses even with the safety net.
  Given these serious challenges facing dairy farmers, on January 30, 
2009, I sent a letter with Senator Kohl and 33 other Senators to U.S. 
Department of Agriculture, USDA, Secretary Tom Vilsack that calls on 
the USDA to take a series of actions to protect the industry from 
instability. This geographically diverse group of senators is asking 
the USDA to more fully utilize existing programs like the Dairy Product 
Price Support Program, DPPSP, and the Dairy Export Incentive Program, 
to reverse the outgoing administration's recent decision to halt 
purchases of value-added dairy products by the DPPSP, and to help more 
low-income individuals, food banks and schools gain access to 
nutritious dairy products.
  As Americans and businesses are feeling the impact of the current 
economic troubles and sometimes falling behind on payments, farmers 
across the country are increasingly facing the same prospect as well. 
This is one reason I supported $193 million for Farm Service Agency 
farm loans and loan restructuring as part of the American Recovery and 
Reinvestment Act, P.L. 111-5, also known as the stimulus bill--to 
ensure that credit for farmers is available during these difficult 
times. Also along these lines, on March 5, 2009, I sent a letter with 
Senators Brown, Kohl, Gillibrand and 15 other Senators urging the Obama 
administration to help reduce farm foreclosures related to the troubled 
economy. The letter to Agriculture Secretary Tom Vilsack and Treasury 
Secretary Tim Geithner called for additional requirements for banks and 
other financial institutions that have taken Federal bailout funds to 
work with farmers to restructure farm loans to help keep them in their 
homes and businesses. These conditions would mirror requirements that 
are already in place on farm loans supported by the USDA Farm Service 
Agency and the requirements being developed for home loans held by 
these same lenders that have taken bailout funds. While I did not 
support the flawed bailout bill, I believe it is essential that bailout 
funds be used as much as possible to help consumers, farmers, home-
owners and others feeling the pain of the economic crisis we are in.
  In addition to focusing resources to help farmers and others in 
agriculture ride out the current economic storm, it is still important 
to seek solutions to long term inequities in agriculture. I have been 
particularly concerned about the increasing concentration in 
agriculture sectors and the potential for this market power to be used 
unduly against farmers and small independent businesses. During a 
Senate Judiciary Committee hearing on March 10, 2009, I discussed the 
grave concerns of Wisconsin farmers about slumping dairy prices and the 
Bush administration's failure to take action against anti-competitive 
behavior in the agriculture industry. Under my questioning, Christine 
Anne Varney, the nominee to be Assistant Attorney General of the 
Antitrust Division in the Department of Justice, committed, if she is 
confirmed, to make agriculture a priority of the Antitrust Division. 
She indicated that she will examine questionable antitrust decisions of 
the Bush administration and order a thorough review of slumping farm-
level dairy prices, which do not appear to be reflected in retail 
prices paid by consumers.
  Even with the troubles currently facing agriculture, farmers, and 
agriculture are resilient and entrepreneurial. I am certain that these 
individuals and businesses will bounce back and continue to push for 
more opportunities for farmers, agriculture and the rural communities 
that depend on them. Wisconsin's diverse agricultural producers--from 
ginseng growers to cheese makers to cranberry growers and everything in 
between--are rightly proud of their work and look for ways to 
differentiate themselves and add value whether it is through country-
of-origin or other labeling, converting to organic production or other 
measures. During debate on the farm bill, I was glad to support federal 
programs such as organic programs, Value-Added Producer Grants and the 
Rural Microentrepreneur Assistance Program as ways that the federal 
government can support important new opportunities for farmers to 
improve their livelihood without drastically changing the size and 
methods of their production.

  Of more general importance to all rural residents is closing the 
digital divide and providing affordable broadband Internet access to 
all Americans. I was glad the farm bill made improvements to the USDA 
broadband programs and that the American Recovery and Reinvestment Act 
followed this up with a commitment to spend $7.2 billion. On March, 9, 
2009, I cosigned a series of letters to the administrators of the 
Federal broadband programs highlighting the need to ensure that these 
funds are targeted toward bringing broadband and the opportunities that 
come with this connectivity to rural areas without service.
  Finally, the first day of spring also seems like an opportune time to 
reintroduce some legislation related to agriculture. While I was able 
to include several of my proposals in the farm bill last year including 
a tax provision to allow farmers to remain eligible for Social Security 
benefits in lean years, country-of-origin labeling for ginseng, a new 
higher profile office at USDA for small farms, and a provision similar 
to a bill I had with Senator Grassley to give farmers an option to opt 
out of mandatory binding arbitration in contracts, I have three bills 
to reintroduce: The Quality Cheese Act, The Democracy for Dairy Farmers 
Act and the Federal Milk Marketing Reform Act.
  The import of milk protein concentrates and casein, which can 
substitute for domestic milk in many food products, continues to put 
pressure on our farmers and can threaten the integrity of our dairy 
products. For example, concerns about the safety of imported dairy 
products such as the recent Chinese melamine adulteration have the 
potential to threaten consumer confidence even for U.S. dairy products. 
The Quality Cheese Act will preserve the integrity of our natural 
cheeses by preventing milk protein concentrates and other imported milk 
substitutes from ever entering cheese vats.
  Under the Federal Milk Marketing Order system, the deck has been 
stacked against Wisconsin's dairy farmers for some time. The legacy of 
transportation costs being calculated for the base milk price based on 
the distance from Eau Claire, WI, remains a problem to this day. This 
rule unfairly keeps Wisconsin's milk price disproportionately low, and 
bears no relation to the actual costs of transportation. While I hope 
that the commission provided for by the farm bill can address this 
problem also, my Federal Milk Market Reform Act would even the playing 
field for Wisconsin's producers and remove this longstanding inequity.
  If a dairy cooperative decides to vote on behalf of all of its 
members or ``bloc vote,'' individual members have no opportunity to 
voice opinions separately. That seems unfair when you consider what 
significant issues may be at stake. The Democracy for Dairy Producers 
Act of 2007 is simple and fair. It provides that a cooperative cannot 
deny any of its members a ballot to opt to vote separately from the 
cooperative. It also contains safeguards to make sure that farmers have 
information about each vote and is structured in such a way that it 
will not slow down the process, and the implementation of any rule or 
regulation would proceed on schedule.
                                 ______
                                 
      By Mrs. MURRAY (for herself and Ms. Cantwell):
  S. 668. A bill to reauthorize the Northwest Straits Marine 
Conservation Initiative Act to promote the protection of the resources 
of the Northwest Straits, and for other purposes; to the Committee on 
Commerce, Science, and Transportation.

[[Page S3615]]

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

                                 S. 668

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Northwest Straits Marine 
     Conservation Initiative Reauthorization Act of 2009''.

     SEC. 2. REAUTHORIZATION OF NORTHWEST STRAITS MARINE 
                   CONSERVATION INITIATIVE ACT.

       The Northwest Straits Marine Conservation Initiative Act 
     (title IV of Public Law 105-384; 112 Stat. 3458) is amended--
       (1) in section 402, by striking ``(in this title referred 
     to as the `Commission')''; and
       (2) by striking sections 403, 404, and 405 and inserting 
     the following:

     ``SEC. 403. FINDINGS.

       ``Congress makes the following findings:
       ``(1) The marine waters and ecosystem of the Northwest 
     Straits in Puget Sound in the State of Washington represent a 
     unique resource of enormous environmental and economic value 
     to the people of the United States.
       ``(2) During the 20th century, the environmental health of 
     the Northwest Straits declined dramatically as indicated by 
     impaired water quality, declines in marine wildlife, collapse 
     of harvestable marine species, loss of critical marine 
     habitats, ocean acidification, and sea level rise.
       ``(3) At the start of the 21st century, the Northwest 
     Straits have been threatened by sea level rise, ocean 
     acidification, and other effects of climate change.
       ``(4) In 1998, the Northwest Straits Marine Conservation 
     Initiative Act (title IV of Public Law 105-384) was enacted 
     to tap the unprecedented level of citizen stewardship 
     demonstrated in the Northwest Straits and create a mechanism 
     to mobilize public support and raise capacity for local 
     efforts to protect and restore the ecosystem of the Northwest 
     Straits.
       ``(5) The Northwest Straits Marine Conservation Initiative 
     helps the National Oceanic and Atmospheric Administration and 
     other Federal agencies with their marine missions by 
     fostering local interest in marine issues and involving 
     diverse groups of citizens.
       ``(6) The Northwest Straits Marine Conservation Initiative 
     shares many of the same goals with the National Oceanic and 
     Atmospheric Administration, including fostering citizen 
     stewardship of marine resources, general ecosystem 
     management, and protecting Federally managed marine species.
       ``(7) Ocean literacy and identification and removal of 
     marine debris projects are examples of on-going partnerships 
     between the Northwest Straits Marine Conservation Initiative 
     and the National Oceanic and Atmospheric Administration.

     ``SEC. 404. DEFINITIONS.

       ``In this title:
       ``(1) Commission.--The term `Commission' means the 
     Northwest Straits Advisory Commission established by section 
     402.
       ``(2) Indian tribe.--The term `Indian tribe' has the 
     meaning given that term in section 4 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b).
       ``(3) Northwest straits.--The term `Northwest Straits' 
     means the marine waters of the Strait of Juan de Fuca and of 
     Puget Sound from the Canadian border to the south end of 
     Snohomish County.

     ``SEC. 405. MEMBERSHIP OF THE COMMISSION.

       ``(a) Composition.--The Commission shall be composed of up 
     to 14 members who shall be appointed as follows:
       ``(1) One member appointed by a consensus of the members of 
     a marine resources committee established under section 408 
     for each of the following counties of the State of 
     Washington:
       ``(A) San Juan County.
       ``(B) Island County.
       ``(C) Skagit County.
       ``(D) Whatcom County.
       ``(E) Snohomish County.
       ``(F) Clallam County.
       ``(G) Jefferson County.
       ``(2) Two members appointed by the Secretary of the 
     Interior in trust capacity and in consultation with the 
     Northwest Indian Fisheries Commission or the Indian tribes 
     affected by this title collectively, as the Secretary of the 
     Interior considers appropriate, to represent the interests of 
     such tribes.
       ``(3) One member appointed by the Governor of the State of 
     Washington to represent the interests of the Puget Sound 
     Partnership.
       ``(4) Four members appointed by the Governor of the State 
     of Washington who--
       ``(A) are residents of the State of Washington; and
       ``(B) are not employed by a Federal, State, or local 
     government.
       ``(b) Vacancies.--A vacancy in the Commission shall be 
     filled in the manner in which the original appointment was 
     made.
       ``(c) Chairperson.--The Commission shall select a 
     Chairperson from among its members.
       ``(d) Meeting.--The Commission shall meet at the call of 
     the Chairperson, but not less frequently than quarterly.
       ``(e) Liaison.--The Secretary of Commerce shall, acting 
     through the Under Secretary for Oceans and Atmosphere and in 
     consultation with the Director of the Commission appointed 
     under section 407(a), appoint an employee of the National 
     Oceanic and Atmospheric Administration--
       ``(1) to serve as a liaison among the Commission and the 
     Department of Commerce; and
       ``(2) to attend meetings and other events of the Commission 
     as a nonvoting participant.

     ``SEC. 406. GOAL AND DUTIES OF THE COMMISSION.

       ``(a) Goal.--The goal of the Commission is to protect and 
     restore the marine waters, habitats, and species of the 
     Northwest Straits region to achieve ecosystem health and 
     sustainable resource use by--
       ``(1) designing and initiating projects that are driven by 
     sound science, local priorities, community-based decisions, 
     and the ability to measure results;
       ``(2) building awareness and stewardship and making 
     recommendations to improve the health of the Northwest 
     Straits marine resources;
       ``(3) maintaining and expanding diverse membership and 
     partner organizations;
       ``(4) expanding partnerships with governments of Indian 
     tribes and continuing to foster respect for tribal cultures 
     and treaties; and
       ``(5) recognizing the importance of economic and social 
     benefits that are dependent on marine environments and 
     sustainable marine resources.
       ``(b) Duties.--The duties of the Commission are the 
     following:
       ``(1) To provide resources and technical support for marine 
     resources committees established under section 408.
       ``(2) To work with such marine resources committees and 
     appropriate entities of Federal and State governments and 
     Indian tribes to develop programs to monitor the overall 
     health of the marine ecosystem of the Northwest Straits.
       ``(3) To identify factors adversely affecting or preventing 
     the restoration of the health of the marine ecosystem and 
     coastal economies of the Northwest Straits.
       ``(4) To develop scientifically sound restoration and 
     protection recommendations, informed by local priorities, 
     that address such factors.
       ``(5) To assist in facilitating the successful 
     implementation of such recommendations by developing broad 
     support among appropriate authorities, stakeholder groups, 
     and local communities.
       ``(6) To develop and implement regional projects based on 
     such recommendations to protect and restore the Northwest 
     Straits ecosystem.
       ``(7) To serve as a public forum for the discussion of 
     policies and actions of Federal, State, or local government, 
     an Indian tribe, or the Government of Canada with respect to 
     the marine ecosystem of the Northwest Straits.
       ``(8) To inform appropriate authorities and local 
     communities about the marine ecosystem of the Northwest 
     Straits and about issues relating to the marine ecosystem of 
     the Northwest Straits.
       ``(9) To consult with all affected Indian tribes in the 
     region of the Northwest Straits to ensure that the work of 
     the Commission does not violate tribal treaty rights.
       ``(c) Benchmarks.--The Commission shall carry out its 
     duties in a manner that promotes the achieving of the 
     benchmarks described in subsection (f)(2).
       ``(d) Coordination and Collaboration.--The Commission shall 
     carry out the duties described in subsection (b) in 
     coordination and collaboration, when appropriate, with 
     Federal, State, and local governments and Indian tribes.
       ``(e) Regulatory Authority.--The Commission shall have no 
     power to issue regulations.
       ``(f) Annual Report.--
       ``(1) In general.--Each year, the Commission shall prepare, 
     submit to the Committee on Commerce, Science, and 
     Transportation of the Senate, the Committee on Energy and 
     Commerce of the House of Representatives, and the Under 
     Secretary for Oceans and Atmosphere, and make available to 
     the public an annual report describing--
       ``(A) the activities carried out by the Commission during 
     the preceding year; and
       ``(B) the progress of the Commission in achieving the 
     benchmarks described in paragraph (2).
       ``(2) Benchmarks.--The benchmarks described in this 
     paragraph are the following:
       ``(A) Protection and restoration of marine, coastal, and 
     nearshore habitats.
       ``(B) Prevention of loss and achievement of a net gain of 
     healthy habitat areas.
       ``(C) Protection and restoration of marine populations to 
     healthy, sustainable levels.
       ``(D) Protection of the marine water quality of the 
     Northwest Straits region and restoration of the health of 
     marine waters.
       ``(E) Collection of high-quality data and promotion of the 
     use and dissemination of such data.
       ``(F) Promotion of stewardship and understanding of 
     Northwest Straits marine resources through education and 
     outreach.

     ``SEC. 407. COMMISSION PERSONNEL AND ADMINISTRATIVE MATTERS.

       ``(a) Director.--The Manager of the Shorelands and 
     Environmental Assistance Program of the Department of Ecology 
     of the State of Washington may, upon the recommendation of 
     the Commission and the Director of the Padilla Bay National 
     Estuarine Research Reserve, appoint and terminate a

[[Page S3616]]

     Director of the Commission. The employment of the Director 
     shall be subject to confirmation by the Commission.
       ``(b) Staff.--The Director may hire such other personnel as 
     may be appropriate to enable the Commission to perform its 
     duties. Such personnel shall be hired through the personnel 
     system of the Department of Ecology of the State of 
     Washington.
       ``(c) Administrative Services.--If the Governor of the 
     State of Washington makes available to the Commission the 
     administrative services of the State of Washington Department 
     of Ecology and Padilla Bay National Estuarine Research 
     Reserve, the Commission shall use such services for 
     employment, procurement, grant and fiscal management, and 
     support services necessary to carry out the duties of the 
     Commission.

     ``SEC. 408. MARINE RESOURCES COMMITTEES.

       ``(a) In General.--The government of each of the counties 
     referred to in subparagraphs (A) through (G) of section 
     405(a)(1) may establish a marine resources committee that--
       ``(1) complies with the requirements of this section; and
       ``(2) receives from such government the mission, direction, 
     expert assistance, and financial resources necessary--
       ``(A) to address issues affecting the marine ecosystems 
     within its county; and
       ``(B) to work to achieve the benchmarks described in 
     section 406(f)(2).
       ``(b) Membership.--
       ``(1) In general.--Each marine resources committee 
     established pursuant to this section shall be composed of--
       ``(A) members with relevant scientific expertise; and
       ``(B) members that represent balanced representation, 
     including representation of--
       ``(i) local governments, including planning staff from 
     counties and cities with marine shorelines;
       ``(ii) affected economic interests, such as ports and 
     commercial fishers;
       ``(iii) affected recreational interests, such as sport 
     fishers; and
       ``(iv) conservation and environmental interests.
       ``(2) Tribal members.--With respect to a county referred to 
     in subparagraph (A) through (G) of section 405(a)(1), each 
     Indian tribe with usual and accustomed fishing rights in the 
     waters of such county and each Indian tribe with reservation 
     lands in such county, may appoint one member to the marine 
     resources committee for such county. Such member may be 
     appointed by the respective tribal authority.
       ``(3) Chairperson.--
       ``(A) In general.--Each marine resources committee 
     established pursuant to this section shall select a 
     chairperson from among members by a majority vote of the 
     members of the committee.
       ``(B) Rotating position.--Each marine resources committee 
     established pursuant to this section shall select a new 
     chairperson at a frequency determined by the county charter 
     of the marine resources committee to create a diversity of 
     representation in the leadership of the marine resources 
     committee.
       ``(c) Duties.--The duties of a marine resources committee 
     established pursuant to this section are the following:
       ``(1) To assist in assessing marine resource problems in 
     concert with governmental agencies, tribes, and other 
     entities.
       ``(2) To assist in identifying local implications, needs, 
     and strategies associated with the recovery of Puget Sound 
     salmon and other species in the region of the Northwest 
     Straits listed under the Endangered Species Act of 1973 (16 
     U.S.C. 1531 et seq.) in coordination with Federal, State, and 
     local governments, Indian tribes, and other entities.
       ``(3) To work with other entities to enhance the scientific 
     baseline and monitoring program for the marine environment of 
     the Northwest Straits.
       ``(4) To identify local priorities for marine resource 
     conservation and develop new projects to address those needs.
       ``(5) To work closely with county leadership to implement 
     local marine conservation and restoration initiatives.
       ``(6) To coordinate with the Commission on marine ecosystem 
     objectives.
       ``(7) To educate the public and key constituencies 
     regarding the relationship between healthy marine habitats, 
     harvestable resources, and human activities.

     ``SEC. 409. NORTHWEST STRAITS MARINE CONSERVATION FOUNDATION.

       ``(a) Establishment.--The Director of the Commission and 
     the Director of the Padilla Bay National Estuarine Research 
     Reserve may enter into an agreement with an organization 
     described in section 501(c)(3) of the Internal Revenue Code 
     of 1986 to establish a nonprofit foundation to support the 
     Commission and the marine resources committees established 
     under section 408 in carrying out their duties under this 
     Act.
       ``(b) Designation.--The foundation authorized by subsection 
     (a) shall be known as the `Northwest Straits Marine 
     Conservation Foundation'.
       ``(c) Receipt of Grants.--The Northwest Straits Marine 
     Conservation Foundation may, if eligible, apply for, accept, 
     and use grants awarded by Federal agencies, States, local 
     governments, regional agencies, interstate agencies, 
     corporations, foundations, or other persons to assist the 
     Commission and the marine resources committees in carrying 
     out their duties under this Act.
       ``(d) Transfer of Funds.--The Northwest Straits Marine 
     Conservation Foundation may transfer funds to the Commission 
     or the marine resources committees to assist them in carrying 
     out their duties under this Act.''.
                                 ______
                                 
      By Mr. BURR (for himself, Mr. Webb, Mr. Graham, Mr. Wicker, Mr. 
        Coburn, Mr. DeMint, Mr. Roberts, Mr. Grassley, Mr. Vitter, Mr. 
        Enzi, Mr. Inhofe, Mr. Ensign, Mr. Crapo, Mr. Cochran, Ms. 
        Murkowski, and Mr. Thune):
  S. 669. A bill to amend title 38, United States Code, to clarify the 
conditions under which certain persons may be treated as adjudicated 
mentally incompetent for certain purposes; to the Committee on 
Veterans' Affairs.
  Mr. BURR. Mr. President, I rise today to again introduce bipartisan 
legislation that would end an arbitrary process through which our own 
government takes away the 2nd Amendment rights of veterans.
  I am pleased to be joined by three of my fellow Veterans' Affairs 
Committee Members on this legislation--Senators Webb, Graham, and 
Wicker--and 12 other members of the Senate, all as original cosponsors.
  The legislation is nearly identical to the bill I introduced last 
Congress under the same title. Unfortunately, after it was approved as 
an amendment at a Committee markup and reported to the full Senate, no 
further action was taken. I am hopeful that things will be different 
this Congress.
  As most of my colleagues know, the Federal Gun Control Act prohibits 
the sale of firearms to certain individuals, including convicted 
felons, fugitives, drug users, illegal aliens, and individuals who have 
been ``adjudicated as a mental defective.''
  The Brady Handgun Violence Prevention Act requires the government to 
maintain a database on these individuals called the National Instant 
Criminal Background Check System, or ``NICS''. The Brady Law and the 
NICS database aim to prevent those who may pose a danger to society or 
themselves from purchasing a firearm.
  Gun shop owners reference the NICS to screen customers. Needless to 
say, it is a serious matter to have one's name on the NICS. Every 
American should expect a rigorous and fair process before their right 
to bear arms is taken away.
  Unfortunately, when it comes to certain veterans, spouses, dependent 
children, and dependent parents, the process is neither rigorous nor 
fair.
  Since 1999, VA has sent the names of 116,000 of its beneficiaries to 
the FBI for inclusion on the NICS.
  None of these names were sent to the FBI because they were determined 
to be a danger to themselves or others. They were listed in NICS 
because they could not manage their financial affairs. We should not 
take away a Constitutional right because someone can't balance a 
checkbook or pay their bills on time.
  VA's review process for assigning a fiduciary is meant to determine 
one's financial responsibility in managing VA-provided cash assistance 
such as disability compensation, pension, and other benefits.
  For example, a veteran may be assigned a fiduciary if they have 
credit problems.
  VA focuses on whether or not benefits paid by VA will be spent in the 
manner for which they were intended. Nothing involved with VA's 
appointment of a fiduciary even gets at the question of whether an 
individual is a danger to themselves or others, or whether the person 
should own a firearm.
  Yet that is exactly what happens if VA appoints a fiduciary. Over 
116,000 individuals have been listed in NICS since 1999 because they 
were appointed a fiduciary.
  Again, this includes veterans, surviving spouses and, strangely 
enough, dependent children. That's right, a child entitled to receive 
survivor's compensation because their mother or father died as a result 
of service has their name sent to a government database filled with 
criminals. Even worse, the child's name stays on this list permanently 
unless he or she petitions to have it taken off.
  This makes no sense. States have age restrictions preventing kids 
from purchasing firearms. VA sending the names of innocent children to 
Government database of criminals just because their parent died as a 
result of service to their country simply makes no sense, and it is 
downright insulting.

[[Page S3617]]

  This process is not only arbitrary, it is unfair. Taking away a 
Constitutional right is a serious action and veterans should be 
afforded due process under the law. At the very least we should expect 
such decisions to be made by a competent judicial authority and not by 
civilian government employees.
  The current process is also a double standard. Only VA beneficiaries 
fall under these guidelines. The Social Security Administration assigns 
fiduciaries to help beneficiaries, yet it does not send their names to 
the NICS.
  Why are we singling out those who fought for this country and those 
who sacrificed while their spouse or parent served?
  My legislation would end this arbitrary and unfair practice that 
strips the finest men and women of this country of their right to bear 
arms. This legislation would require a judicial authority to determine 
that an individual is a danger to themselves or others before their 2nd 
Amendment rights are taken away.
  I am not here to ask that we put guns in the hands of dangerous 
people. I am here to ask that we treat our veterans fairly and that we 
take their rights seriously. Many of our veterans' organizations and 
other groups agree.
  The Veterans 2nd Amendment Protection Act has the support of the The 
American Legion, the Veterans of Foreign Wars of the United States, 
AMVETS, the Military Order of the Purple Heart, the National Alliance 
on Mental Illness, the National Rifle Association, and Gun Owners of 
America.
  No matter where my colleagues fall on the gun issue, I hope we can 
all agree that we need a process that is consistent and fair. Our 
veterans took an oath to uphold the Constitution. They deserve to enjoy 
the rights they fought so hard to protect.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
placed in the Record, as follows:

                                 S. 669

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Veterans 2nd Amendment 
     Protection Act''.

     SEC. 2. CONDITIONS FOR TREATMENT OF CERTAIN PERSONS AS 
                   ADJUDICATED MENTALLY INCOMPETENT FOR CERTAIN 
                   PURPOSES.

       (a) In General.--Chapter 55 of title 38, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 5511. Conditions for treatment of certain persons as 
       adjudicated mentally incompetent for certain purposes

       ``In any case arising out of the administration by the 
     Secretary of laws and benefits under this title, a person who 
     is mentally incapacitated, deemed mentally incompetent, or 
     experiencing an extended loss of consciousness shall not be 
     considered adjudicated as a mental defective under subsection 
     (d)(4) or (g)(4) of section 922 of title 18 without the order 
     or finding of a judge, magistrate, or other judicial 
     authority of competent jurisdiction that such person is a 
     danger to himself or herself or others.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 55 of such title is amended by adding at 
     the end the following new item:

``5511. Conditions for treatment of certain persons as adjudicated 
              mentally incompetent for certain purposes.''.

                          ____________________