[Congressional Record (Bound Edition), Volume 145 (1999), Part 11]
[Senate]
[Pages 16141-16159]
[From the U.S. Government Publishing Office, www.gpo.gov]



            PROLIFERATION PREVENTION ENHANCEMENT ACT OF 1999

  Mr. SPECTER. Mr. President, I have sought recognition today to 
introduce legislation that will help the United States achieve 
important non-proliferation and counter-proliferation goals by 
improving the process through which export data on shipments of 
proliferation concern is collected and analyzed. By requiring that 
export data related to shipments of proliferation concern be filed 
electronically, this legislation will make it possible for agencies 
with export control responsibilities to do their job more efficiently 
and effectively.
  To minimize the administrative burden on exporters, my legislation 
phases in the electronic filing requirement 180 days after the 
Secretary of Commerce and the Secretary of the Treasury certify that a 
secure, Internet-based filing system is up and running. There is 
already an electronic filing system available, but the existing system 
is being replaced with an Internet-based system that will be easier to 
access and use. When the new Internet-based system is in place, and 
that is expected to happen by early next year, my legislation will 
require that shipments of proliferation concern be reported 
electronically. The net result of enacting this legislation will be 
enhanced export control monitoring and enforcement, with minimal burden 
to shippers and exporters.
  Let me take a moment to provide some background information for my 
colleagues, to make it clear what my legislation does and why. Current 
law requires shippers, forwarders and exporters to file what is known 
as a Shipper's Export Declaration, or SED. The SED indicates what is 
being shipped, where it is going, who it is being shipped to. Most of 
these are now filed on paper, and it is a time consuming and difficult 
process to sort through all these paper SEDs to identify shipments of 
proliferation concern, to track them down and check them out. In 1995, 
the Customs Service and the Census Bureau created the Automated Export 
System, or AES, which makes it possible to submit SEDs electronically. 
With the SED information in electronic form, it is much easier to sort 
through the data and identify shipments of concern.
  About ten percent of SEDs are currently filed in electronic form 
through AES, and almost ninety percent of the forms are filed on paper. 
The data from the ninety percent of SEDs that are filed on paper is not 
as easy to review as it could be, and it is not possible to do the type 
of cross-checking and analysis that is necessary to zero in on the 
shipments that export officials need to monitor closely, and in some 
cases, prevent from being shipped. For example, before the 1991 Persian 
Gulf War, the Iraqis had a very sophisticated procurement strategy for 
acquiring weapons of mass destruction. They broke down their purchase 
requests and instead of asking for everything they wanted from one or 
two companies, asked for a few items from a large number of suppliers. 
If the Iraqis had grouped their requests, their orders would have 
raised eyebrows. Someone would have become suspicious, either the 
suppliers or export enforcement officers who reviewed the export data. 
As it was, the Iraqis ordered relatively small quantities of dual use 
commodities, items that can be used to create

[[Page 16142]]

weapons of mass destruction but also have perfectly ordinary commercial 
uses, and combined them with shipments from other suppliers, sometimes 
from other countries, to make weapons of mass destruction. If all SEDs 
on items of proliferation concern had been filed electronically, as 
they will be when my legislation is enacted, it would have been much 
easier to detect what the Iraqis were up to and take preventive action.
  Not all of the shipments that are being reported on paper rather than 
electronically are of proliferation concern. Shippers in the United 
States export literally hundreds of thousands of items each month that 
do not raise proliferation concerns; agricultural products, toasters, 
automobiles, and all sorts of completely harmless goods. But there are 
other items that we have to watch more carefully; items that are on the 
Department of State's Munitions List or the Commerce Control List. My 
legislation will make it easier to track shipments of these items by 
requiring that SEDs be filed electronically for any item that is on the 
United States Munitions List or the Commerce Control List. With this 
information available in electronic format, agencies with export 
control responsibilities will be able to enforce our export control 
laws more effectively and prevent proliferation of WMD. By limiting 
mandatory electronic filing to items that raise genuine concerns about 
proliferation, my legislation will maximize the benefit to our national 
security without unduly burdening shippers and exporters.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1372

       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 ``Proliferation Prevention 
     Enhancement Act of 1999''.

     SEC. 2. MANDATORY USE OF THE AUTOMATED EXPORT SYSTEM FOR 
                   FILING CERTAIN SHIPPERS' EXPORT DECLARATIONS.

       (a) Authority.--Section 301 of title 13, United States 
     Code, is amended by adding at the end the following new 
     subsection:
       ``(h) The Secretary is authorized to require the filing of 
     Shippers' Export Declarations under this chapter through an 
     automated and electronic system for the filing of export 
     information established by the Department of the Treasury.''.
       (b) Implementing Regulations.--
       (1) In general.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary of the Treasury, in 
     consultation with the Secretary of Commerce and the Secretary 
     of State, shall publish regulations in the Federal Register 
     to require that, upon the effective date of those 
     regulations, exporters (or their agents) who are required to 
     file Shippers' Export Declarations under chapter 9 of title 
     13, United States Code, file such Declarations through the 
     Automated Export System with respect to exports of items on 
     the United States Munitions List or the Commerce Control 
     List.
       (2) Elements of the regulations.--The regulations referred 
     to in paragraph (1) shall include at a minimum--
       (A) provision for the establishment of online assistance 
     services to be available for those individuals who must use 
     the Automated Export System;
       (B) provision for ensuring that an individual who is 
     required to use the Automated Export System is able to print 
     out from the System a validated record of the individual's 
     submission, including the date of the submission and a serial 
     number or other unique identifier for the export transaction; 
     and
       (C) a requirement that the Department of Commerce print out 
     and maintain on file a paper copy or other acceptable back-up 
     record of the individual's submission at a location selected 
     by the Secretary of Commerce.
       (c) Effective Date.--The amendment made by subsection (a) 
     and the regulations described in subsection (b) shall take 
     effect 180 days after the Secretary of Commerce, the 
     Secretary of the Treasury, and the Director of the National 
     Institute of Standards and Technology jointly certify, by 
     publishing in the Federal Register a notice, that a secure, 
     Internet-based Automated Export System that is capable of 
     handling the expected volume of information required to be 
     filed under subsection (b), plus the anticipated volume from 
     voluntary use of the Automated Export System, has been 
     successfully implemented and tested.

     SEC. 3. VOLUNTARY USE OF THE AUTOMATED EXPORT SYSTEM.

       It is the sense of Congress that exporters (or their 
     agents) who are required to file Shippers' Export 
     Declarations under chapter 9 of title 13, United States Code, 
     but who are not required under section 2(b) to file such 
     Declarations using the Automated Export System, should do so.

     SEC. 4. REPORT TO CONGRESS.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretary of Commerce, in coordination with the 
     Secretary of State, the Secretary of Defense, the Secretary 
     of the Treasury, the Secretary of Energy, and the Director of 
     Central Intelligence, shall submit a report to Congress 
     setting forth--
       (1) the advisability and feasibility of mandating 
     electronic filing through the Automated Export System for all 
     Shippers' Export Declarations;
       (2) the manner in which data gathered through the Automated 
     Export System can most effectively be used by other automated 
     licensing systems administered by Federal agencies, 
     including--
       (A) the Defense Trade Application System of the Department 
     of State;
       (B) the Export Control Automated Support System of the 
     Department of Commerce;
       (C) the Foreign Disclosure and Technology Information 
     System of the Department of Defense;
       (D) the Proliferation Information Network System of the 
     Department of Energy;
       (E) the Enforcement Communication System of the Department 
     of the Treasury; and
       (F) the Export Control System of the Central Intelligence 
     Agency; and
       (3) a proposed timetable for any expansion of information 
     required to be filed through the Automated Export System.

     SEC. 5. DEFINITIONS.

       In this Act:
       (1) Automated export system.--The term ``Automated Export 
     System'' means the automated and electronic system for filing 
     export information established under chapter 9 of title 13, 
     United States Code, on June 19, 1995 (60 Federal Register 
     32040).
       (2) Commerce control list.--The term ``Commerce Control 
     List'' has the meaning given the term in section 774.1 of 
     title 15, Code of Federal Regulations.
       (3) Shippers' export declaration.--The term ``Shippers' 
     Export Declaration'' means the export information filed under 
     chapter 9 of title 13, United States Code, as described in 
     part 30 of title 15, Code of Federal Regulations.
       (4) United states munitions list.--The term ``United States 
     Munitions List'' means the list of items controlled under 
     section 38 of the Arms Export Control Act (22 U.S.C. 2778).

  Mr. BIDEN. Mr. President, there is no greater threat to our country 
than that posed by weapons of mass destruction. Nuclear, chemical or 
biological weapons--perhaps delivered by long-range guided missiles--
could cause more destruction in a week or even a day than we suffered 
in all of the Vietnam war.
  The United States has many nonproliferation and counterproliferation 
programs, but there are cracks in our organization for combating this 
terrible scourge.
  The Commission to Assess the Organization of the Federal Government 
to Combat the Proliferation of Weapons of Mass Destruction, also know 
as the ``Deutch Commission,'' has found those cracks.
  Yesterday the Commission gave America a blueprint for repairing them. 
We dare not ignore its analysis, any more than we would ignore termites 
in our homes.
  My colleague and friend from Pennsylvania, Senator Arlen Specter, 
also deserves special recognition today. The Commission was his idea; 
he secured its establishment and later ensured its continued existence. 
As Vice Chairman of the Commission, he worked to ensure that its 
recommendations would be practical and politically feasible.
  Today Senator Specter is introducing legislation to implement one of 
the Deutch Commission recommendations: that we require electronic 
filing of Shippers' Export Declarations on a secure, Internet-based 
system.
  This legislation will provide more timely and usable data for non-
proliferation analysis by executive branch agencies, without causing 
any significant burden for exporters or endangering the traditional 
confidentiality of Shippers' Export Declarations.
  I am pleased to be an initial cosponsor of this legislation and I am 
confident that it will be enacted.
  Shippers' Export Declarations are already required under chapter 9 of 
title 13, United States Code. The content of those Declarations is 
prescribed in part 30 of title 15, Code of Federal Regulations. This 
legislation will not require

[[Page 16143]]

any reporting by industry that is not already mandated under those 
regulations.
  There is also an existing Automated Export System, but its use is 
voluntary and it has not gained much acceptance. This bill will require 
that shippers use an Internet-based Automated Export System, once it is 
certified as being secure and capable of handling the expected volume 
of information that would be filed.
  I want to assure U.S. companies, as I have been assured, that this 
legislation will not cause difficulties for them. Exporters will have 
on-line assistance in filing their Declarations and will be able to 
double-check their Declarations for accuracy after filing them.
  In addition, the Director of the National Institute of Standards and 
Technology, which maintains the security of unclassified Federal 
Government communications, must join in certifying that the Internet-
based Automated Export System is ready for use and has been 
successfully tested.
  That will ensure the continued confidentiality of these Declarations.
  This is hardly a revolutionary bill. Rather, it is one discrete, 
rational measure that is needed to improve our defense against the 
spread of nuclear, chemical or biological weapons to countries or 
groups that could otherwise rain chaos and destruction upon our country 
and the whole world.
  We simply must take this step, along with others recommended by the 
Deutch Commission. For our own sake and for our children's sake as 
well, we absolutely must respond to the challenge of proliferation.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 1373. A bill to increase monitoring of the use of offsets in 
international defense trade; to the Committee on Foreign Relations.


                 defense offsets disclosure act of 1999

  Mr. FEINGOLD. Mr. President, I rise today to introduce a bill that 
will help clarify the difficult subject of the use of offsets in 
international defense trade. This little known practice has a 
potentially tremendous impact on our domestic industry, international 
trade, and national security, yet is barely understood by either the 
public or private sectors. My bill, the ``Defense Offsets Disclosure 
Act of 1999'' seeks to expand the monitoring and reporting of offsets 
use so that policy makers and the public can better understand the 
impact on our economy.
  Mr. President, what are offsets? Offsets are the entire range of 
industrial and commercial benefits that are provided to foreign 
governments as inducements, or conditions, for the purchase of military 
goods and services. Among techniques used to meet offset requirements 
are co-production, subcontracting, technology transfers, in-country 
procurement, marketing and financial assistance, and joint ventures. In 
other words, they are largely non-cash ``sweeteners'' attached to 
export sales of large military [and occasionally civilian] products, 
typically set forth in side agreements and provided to the purchasing 
country over a period of time.
  My legislation would offer several measures to get a handle on the 
whole range of issues involved in the use of offsets:
  First, my bill declares that it is the policy of the United States to 
pursue better monitoring of offsets, to promote fairness in 
international trade; and to ensure an appropriate level of foreign 
participation in the production of United States weapons systems. To 
fully understand the implications of offsets and the extent of their 
impact, we must have more information on offset agreements, 
particularly the indirect offset obligations that are otherwise 
invisible. While many of my colleagues can cite anecdotal evidence of 
companies harmed or jobs lost, we must develop a more effective 
mechanism to accurately quantify the impact of offsets.
  Second, my bill expresses the sense of Congress that the Executive 
Branch should seek trade fairness through transparency and 
standardization of the use of offsets in international defense trade. 
In particular, the Secretaries of State and Commerce and the U.S. Trade 
Representative should raise the issues of transparency and 
standardization bilaterally at all suitable venues, and our government 
should initiate discussions on standards for use of offsets through 
appropriate multilateral fora. While some believe that offsets are a 
business practice best left to business to handle, the nature of the 
problem calls out for government-to-government discussion to ensure 
that an even playing field exists for all stakeholders in the 
international defense trade.
  Third, the bill establishes a new requirement for more detailed 
information on offsets in Congressional notifications of government-to-
government and commercial sales. Current law only requires notification 
of the existence of an offset agreement, with no details or follow up 
description of the measures used to fulfill the offset obligation. My 
bill will require a description of the offset agreement and its dollar 
value. It also calls for an additional report upon completion of an 
offset obligation which would identify all measures taken to fulfill 
the offset agreement identified earlier in its pre-sale Congressional 
notification. At least one defense contractor already has been willing 
to provide this information as part of its regular license application 
and has provided the size of the offset, its direct and indirect 
components, and a rough estimate of the likely measures it would use to 
fulfill its offset obligations. My bill should elicit similar useful 
information on all offset agreements.
  Fourth, the bill expands a prohibition on incentive payments that I 
authored in 1993. That earlier provision prohibited the use of third 
party incentive payments to secure offset agreements in any sale 
subject to the Arms Export Control Act. My new bill expands the 
prohibition to include items ``exported'' or ``licensed''. The previous 
language addressed only ``sales''. The incentive payments provision in 
my bill should close any loopholes and clarify that incentive payments 
are not an acceptable component of any type of offset transaction.
  Fifth, the bill requires the Administration to initiate a review to 
determine the feasibility, and the most effective means, of negotiating 
multilateral agreements on standards for the use of offsets. It also 
mandates a report on the Administration's activities in the area. 
Through international dialogue and coordination we can arrive at 
multilateral standards for the use of offsets in defense trade 
agreements. Whether you believe that offsets are merely an annoying, 
but ordinary, business practice, or hold the view that they pose a 
major long term threat to our labor force, our industries, and our 
national security, I believe it is both possible and necessary to 
develop some common ground for business practices worldwide.
  Sixth, the bill requires the President to establish a high-level, 
nonpartisan commission to review the full range of current practices; 
the impact of the use of offsets; and the role of offsets in domestic 
industry, trade competitiveness, national security, and the 
globalization of the weapons industry. There needs to be broader public 
awareness and national debate by a range of concerned parties on the 
implications of offsets. A June 29 hearing on offsets in the House 
Subcommittee on Criminal Justice, Drug Policy, and Human Resources, at 
which I testified, was a good start, but more still must be done.
  Mr. President, I first discovered the murky world of offsets in 1993 
when I learned that the Wisconsin-based Beloit Corporation, a 
subsidiary of Harnischfeger Industries Inc., had been negatively 
affected by an apparent indirect offset arrangement between the 
Northrop Corporation and the government of Finland. Beloit was one of 
only three companies in the world that produced a particular type of 
large paper-making machine. In its efforts to sell one of these 
machines to the International Paper Company, Beloit became aware that 
Northrop had offered International Paper an incentive payment to select 
instead the machine offered by a Finnish company, Valmet. Northrop was 
promoting the purchase of the Valmet machinery as part of an

[[Page 16144]]

agreement that would provide dollar-for-dollar offset credit on a deal 
with Finland to purchase sixty-four F-18 aircraft. This type of payment 
had the flavor of a kickback, distorted the practice of free 
enterprise, and threatened U.S. jobs. By lowering its bid--barely 
breaking even on the contract--to take into account the incentive 
payment offered by Northrop, Beloit did succeed in winning the 
contract. Nevertheless, the incident demonstrated to me the potential 
for offset obligations to have an impact on apparently unrelated 
domestic U.S. industries.
  To address some of the immediate concerns raised by Beloit's 
experience, as I mentioned earlier, in 1993 I offered an amendment 
(which passed into law in 1994), to the Arms Export Control Act to 
prohibit incentive payments in the provision of offset credit. I wanted 
to clarify the Congress' disapproval of an activity that appeared to 
fall through the cracks of various existing acts. Neither the Anti-
Kickback Act nor the Foreign Corrupt Practices Act seemed clearly to 
address issues raised by the payment being offered to International 
Paper in the Beloit case. The measure also expanded the requirements 
for Congressional notification of the existence, and to the extent 
possible, information on any offset agreement at the time of 
Congressional notification of a pending arms sale under the Arms Export 
Control Act. Last year, I offered additional language to expand further 
the prohibition on incentive payments and enhance the reporting 
requirement on offsets to include a description of the offset with 
dollar amounts. While my provisions were incorporated in the Security 
Assistance Act of 1998 as passed by the Senate Foreign Relations 
Committee, the legislation never made it to the floor.
  Unfortunately, Mr. President, while Congress has tried to address 
specific problems encountered by companies in our states and districts, 
efforts to date have barely scratched the surface of the difficult 
subject of offsets. In fact, neither the legislative nor the executive 
branches has a full grasp of the breadth and complexity of the issue, 
although I know many are concerned about the potential impact of the 
use of offsets. From what we do know, it appears that there are several 
key areas affected by the practice of using offsets:
  The domestic labor force and defense industrial base, particularly in 
the aerospace industry, impacted by the increasing role of overseas 
production in the defense industry;
  The non-defense industrial sectors unintentionally harmed, as in the 
Beloit case, when defense contractors engage in indirect offset 
obligations;
  The breadth of the U.S. economy potentially influenced by the growing 
globalization of the defense industry; and
  The national security possibly threatened by joint ventures and 
growing reliance on foreign defense contractors, a concern recently 
highlighted in the Cox report on China's technology acquisition.
  Mr. President, I believe my bill will allow us to collect better 
information on the use of offsets, to engage in an informed discussion 
on both the problem and viable policy options, and to encourage 
multilateral efforts to find common standards and solutions that will 
benefit us all. Only through these efforts can we hope to get a clear 
picture of the complex offset issue and ensure that their use does not 
produce negative consequences for the American labor force, the 
domestic industrial base, or our national security.
  Mr. President, I ask that the bill be printed in the Record.
  The bill follows:

                                S. 1373

       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 ``Defense Offsets Disclosure 
     Act of 1999''.

     SEC. 2. FINDINGS AND DECLARATION OF POLICY.

       (a) Findings.--Congress makes the following findings:
       (1) A fair business environment is necessary to advance 
     international trade, economic stability, and development 
     worldwide, is beneficial for American workers and businesses, 
     and is in the United States national interest.
       (2) Mandated offset requirements can cause economic 
     distortions in international defense trade and sabotage 
     fairness and competitiveness, and may cause particular harm 
     to small- and medium-sized businesses.
       (3) The stated goal of supporting the national security 
     needs of allied countries by assisting their defense 
     industries through the use of offsets may no longer be 
     sufficient justification for the practice.
       (4) The use of offsets may lead to increasing dependence on 
     foreign suppliers for the production of United States weapons 
     systems.
       (5) The offset demands required by some purchasing 
     countries, including some of the United States closest 
     allies, equal or exceed the value of the base contract they 
     are intended to offset, mitigating much of the potential 
     economic benefit of the exports.
       (6) Offset demands often unduly inflate the prices of 
     defense contracts.
       (7) In some cases, United States contractors are required 
     to provide indirect offsets which can negatively impact 
     nondefense industrial sectors.
       (8) Unilateral efforts by the United States to prohibit 
     offsets may be impractical in the current era of 
     globalization and would severely hinder the competitiveness 
     of the United States defense industry in the global market.
       (9) The development of global standards to manage and 
     restrict demands for offsets would enhance United States 
     efforts to mitigate the negative impact of offsets.
       (b) Declaration of Policy.--Congress declares that the 
     United States policy is to develop a workable system to 
     monitor the use of offsets in the defense industry, to 
     promote fairness in international trade, and to ensure an 
     appropriate level of foreign participation in production of 
     United States weapons systems.

     SEC. 3. SENSE OF CONGRESS.

       It is the sense of Congress that--
       (1) the executive branch should pursue efforts to address 
     trade fairness by making transparent and establishing 
     standards for the use of offsets in international business 
     transactions among United States trading partners and 
     competitors;
       (2) the Secretary of State, the Secretary of Commerce, and 
     the United States Trade Representative, or their designees, 
     should raise the need for transparency and other standards 
     bilaterally with other industrialized nations at every 
     suitable venue; and
       (3) the United States Government should enter into 
     discussions regarding the establishment of multilateral 
     standards for the control of the use of offsets in 
     international defense trade through the appropriate 
     multilateral fora, including such organizations as the 
     Transatlantic Economic Partnership, the Wassenaar 
     Arrangement, the G-8, and the World Trade Organization.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means--
       (A) the Committee on Foreign Relations of the Senate;
       (B) the Committee on International Relations of the House 
     of Representatives;
       (C) the Committees on Commerce of the Senate and the House 
     of Representatives; and
       (D) the Committees on Armed Services of the Senate and the 
     House of Representatives.
       (2) G-8.--The term ``G-8'' means the group consisting of 
     France, Germany, Japan, the United Kingdom, the United 
     States, Canada, Italy, and Russia established to facilitate 
     economic cooperation among the eight major economic powers.
       (3) Offset.--The term ``offset'' means the entire range of 
     industrial and commercial benefits provided to foreign 
     governments as an inducement or condition to purchase 
     military goods or services, including benefits such as 
     coproduction, licensed production, subcontracting, technology 
     transfer, in-country procurement, marketing and financial 
     assistance, and joint ventures.
       (4) Transatlantic economic partnership.--The term 
     ``Transatlantic Economic Partnership'' means the joint 
     commitment made by the United States and the European Union 
     to reinforce their close relationship through an initiative 
     involving the intensification and extension of multilateral 
     and bilateral cooperation and common actions in the areas of 
     trade and investment.
       (5) Wassenaar arrangement.--The term ``Wassenaar 
     Arrangement'' means the multilateral export control regime in 
     which the United States participates that seeks to promote 
     transparency and responsibility with regard to transfers of 
     conventional armaments and sensitive dual-use items.
       (6) World trade organization.--The term ``World Trade 
     Organization'' means the organization established pursuant to 
     the WTO Agreement.
       (7) WTO agreement.--The term ``WTO Agreement'' means the 
     Agreement Establishing The World Trade Organization entered 
     into on April 15, 1994.

     SEC. 5. REPORTING OF OFFSET AGREEMENTS.

       (a) Initial Reporting of Offset Agreements.--
       (1) Government-to-government sales.--Section 36(b)(1) of 
     the Arms Export Control Act (22 U.S.C. 2776(b)(1)) is 
     amended--

[[Page 16145]]

       (A) in the fourth sentence, by striking ``(if known on the 
     date of transmittal of such certification)'' and inserting 
     ``and a description of any offset agreement, including the 
     dollar amount of the agreement''; and
       (B) by inserting after the fourth sentence the following: 
     ``Such description shall to the extent possible be available 
     to the public.''.
       (2) Commercial sales.--Section 36(c)(1) of the Arms Export 
     Control Act (22 U.S.C. 2776(c)(1)) is amended--
       (A) in the second sentence, by striking ``(if known on the 
     date of transmittal of such certification)'' and inserting 
     ``and a description of any offset agreement, including the 
     dollar amount of the agreement''; and
       (B) by inserting after the fourth sentence the following: 
     ``Such description shall to the extent possible be available 
     to the public.''.
       (b) Reporting Upon Completion of Offset Obligations.--Not 
     later than 90 days after the fulfillment of an offset 
     obligation made in conjunction with transactions reported in 
     section 36 (b) or (c) of the Arms Export Control Act, the 
     President shall submit a report to Congress identifying all 
     measures taken to fulfill the offset obligations related to 
     the sale. The report shall contain all the information 
     required in section 36 (b) and (c) of the Arms Export Control 
     Act, as well as any additional information that may not have 
     been available at the time of the initial notification.

     SEC. 6. EXPANDED PROHIBITION ON INCENTIVE PAYMENTS.

       (a) In General.--Section 39A(a) of the Arms Export Control 
     Act (22 U.S.C. 2779a(a)) is amended--
       (1) by inserting ``or licensed'' after ``sold''; and
       (2) by inserting ``or export'' after ``sale''.
       (b) Definition of United States Person.--Section 
     39A(d)(3)(B)(ii) of the Arms Export Control Act (22 U.S.C. 
     2779a(d)(3)(B)(ii)) is amended by inserting ``or by an entity 
     described in clause (i)'' after ``subparagraph (A)''.

     SEC. 7. MULTILATERAL STRATEGY TO COMBAT OFFSETS.

       (a) In General.--The President shall initiate a review to 
     determine the feasibility of establishing, and the most 
     effective means of negotiating, multilateral agreements on 
     standards for the use of offsets in international defense 
     trade, with a goal of limiting all offset transactions.
       (b) Report Required.--Not later than 90 days after the date 
     of enactment of this Act, the President shall submit to the 
     appropriate congressional committees a report containing a 
     strategy for United States negotiations of multilateral 
     agreements with designated foreign countries that provide 
     standards for the use of offsets with respect to the sale or 
     licensing of defense articles or defense services under the 
     Arms Export Control Act (22 U.S.C. 2751 et seq.), and a 
     timetable for entering into such multilateral agreements. One 
     year after the date the report is submitted under the 
     preceding sentence, and annually thereafter for 5 years, the 
     President shall submit to the appropriate congressional 
     committees a report detailing the progress toward reaching 
     such multilateral agreements.
       (c) Required Information.--The report required by 
     subsection (b) shall include--
       (1) a description of the United States efforts to pursue 
     multilateral negotiations on standards for the use of offsets 
     in international defense trade;
       (2) an evaluation of existing multilateral fora as 
     appropriate venues for establishing such negotiations;
       (3) a description on a country-by-country basis of United 
     States efforts to engage in negotiations to establish 
     bilateral agreements with respect to the use of offsets in 
     international defense trade; and
       (4) an evaluation on a country-by-country basis of foreign 
     government efforts to address the use of offsets in 
     international defense trade.
       (d) Comptroller General Review.--The Comptroller General of 
     the United States shall monitor and periodically report to 
     Congress on the progress in reaching a multilateral 
     agreement.

     SEC. 8. ESTABLISHMENT OF REVIEW COMMISSION.

       (a) In General.--There is established a National Commission 
     on the Use of Offsets in Defense Trade (in this section 
     referred to as the ``Commission'') to address all aspects of 
     the use of offsets in international defense trade.
       (b) Commission Membership.--Not later than 60 days after 
     the date of enactment of this Act, the President, in 
     consultation with Congress, shall appoint 10 people to serve 
     as members of the Commission. Commission membership shall 
     include four representatives from the private sector, 
     including one each from a labor organization, the defense 
     manufacturing sector, academia, and an organization devoted 
     to arms control; four from the executive branch, including 
     one each from the Office of Management and budget, and the 
     Departments of Commerce, Defense, and State; and two from the 
     legislative branch, one each from among members of the Senate 
     and the House of Representatives. The member designated from 
     Office of Management and Budget will serve as Chairperson of 
     the Commission. The President shall ensure that the 
     Commission is nonpartisan and that the full range of 
     perspectives on the subject of offsets in the defense 
     industry is adequately represented.
       (c) Duties.--The Commission shall be responsible for 
     reviewing and reporting on--
       (1) the full range of current practices by foreign 
     governments requiring offsets in purchasing agreements and 
     the extent and nature of offsets offered by United States and 
     foreign defense industry contractors;
       (2) the impact of the use of offsets on defense 
     subcontractors and nondefense industrial sectors affected by 
     indirect offsets; and
       (3) the role of offsets, both direct and indirect, on 
     domestic industry stability, United States trade 
     competitiveness, national security, and the globalization of 
     the weapons industry.
       (d) Commission Report.--Not later than 12 months after the 
     Commission is established, the Commission shall submit a 
     report to the appropriate congressional committees. The 
     report shall include--
       (1) an analysis of--
       (A) the collateral impact of offsets on industry sectors 
     that may be different than those of the contractor providing 
     the offsets, including estimates of contracts and jobs lost 
     as well as an assessment of damage to industrial sectors;
       (B) the role of offsets with respect to competitiveness of 
     the United States defense industry in international trade and 
     the potential damage to the ability of United States 
     contractors to compete if offsets were prohibited;
       (C) the impact on United States national security of the 
     use of coproduction, subcontracting, and technology transfer 
     with foreign governments or companies that result from 
     fulfilling offset requirements; and
       (D) the potential negative effects of the increasing 
     globalization of the weapons industry through the use of 
     offsets and the resultant implications for the United States 
     ability to limit the proliferation of weapons and weapons 
     technology;
       (2) proposals for unilateral, bilateral, or multilateral 
     measures aimed at reducing the detrimental effects of 
     offsets; and
       (3) an identification of the appropriate executive branch 
     agencies to be responsible for monitoring the use of offsets 
     in international defense trade.
       (e) Termination.--The Commission shall terminate not later 
     than the date that is 3 years after the date of enactment of 
     this Act.
                                 ______
                                 
      By Mr. THOMAS (for himself and Mr. Enzi):
  S. 1374. A bill to authorize the development and maintenance of a 
multiagency campus project in the town of Jackson, Wyoming; to the 
Committee on Energy and Natural Resources.


            multi-agency visitor campus in jackson, wyoming

  Mr. THOMAS. Mr. President, I am pleased to introduce a bill today to 
authorize the development and maintenance of a multi-agency campus in 
the town of Jackson, Wyoming.
  The management of our public lands and natural resources is often 
complicated and requires the coordination of many individuals to 
accomplish desired objectives. When western folks discuss federal land 
issues, we do not often have an opportunity to identify proposals that 
capture this type of consensus and enjoy the support from a wide array 
of interests; however, the multi-agency campus offers just such a 
unique prospect. As local, state and federal officials attempt to 
provide services to the public, they have identified a need to develop 
a campus in Jackson, Wyoming that offers visitors ``one stop shopping'' 
service for wildlife, tourism and resource issues.
  The multi-agency campus includes a wildlife interpretive center, 
facilities for public programs, walkways, bike paths, museum space, and 
office locations for Wyoming Game and Fish, U.S. Forest Service and the 
local chamber of commerce. There are several entities involved with 
this effort--U.S. Department of Agriculture, U.S. Forest Service, 
Wyoming Game and Fish, National Park Service, U.S. Fish and Wildlife, 
U.S. Department of Interior, Teton County, Town of Jackson, Jackson 
Chamber of Commerce and the Jackson Hole Historical Society. Project 
coordinators and involved parties have spent a great deal of time 
incorporating the concerns of various individuals through public 
meetings and by presenting their plans to agency and congressional 
representatives.
  This legislation is needed to improve communication between the 
federal agencies and related entities, and reduce costs to federal, 
state and local governments as they attempt to address public needs. 
Specifically, the bill would allow the U.S. Forest Service to transfer 
a small parcel of their land

[[Page 16146]]

within the proposed campus boundaries to the Town of Jackson in 
exchange for the Town constructing a new administrative facility for 
the agency.
  Mr. President, this bill enjoys the support of many different groups 
including federal agencies, state organizations and officials, as well 
as the local community. It is my hope that the Senate will seize this 
opportunity to improve upon efforts to provide services to the American 
public.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1374

       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 ``Jackson Multi-Agency Campus 
     Act of 1999''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the management of public land and natural resources and 
     the service of the public in the area of Jackson, Wyoming, 
     are responsibilities shared by--
       (A) the Department of Agriculture;
       (B) the Forest Service;
       (C) the Department of the Interior, including--
       (i) the National Park Service; and
       (ii) the United States Fish and Wildlife Service;
       (D) the Game and Fish Commission of the State of Wyoming;
       (E) Teton County, Wyoming;
       (F) the town of Jackson, Wyoming;
       (G) the Jackson Chamber of Commerce; and
       (H) the Jackson Hole Historical Society; and
       (2) it is desirable to locate the administrative offices of 
     several of the agencies and entities specified in paragraph 
     (1) on 1 site to--
       (A) facilitate communication between the agencies and 
     entities;
       (B) reduce costs to the Federal, State, and local 
     governments; and
       (C) better serve the public.
       (b) Purposes.--The purposes of this Act are to--
       (1) authorize the Federal agencies specified in subsection 
     (a) to--
       (A) develop and maintain the Project in Jackson, Wyoming, 
     in cooperation with the other agencies and entities specified 
     in subsection (a); and
       (B) provide resources and enter into such agreements as are 
     necessary for the planning, design, construction, operation, 
     maintenance, and fixture modifications of all elements of the 
     Project;
       (2) direct the Secretary to convey to the town of Jackson, 
     Wyoming, certain parcels of federally owned land located in 
     Teton County, Wyoming, in exchange for construction of 
     facilities for the Bridger-Teton National Forest by the town 
     of Jackson;
       (3) direct the Secretary to convey to the Game and Fish 
     Commission of the State of Wyoming certain parcels of 
     federally owned land in the town of Jackson, Wyoming, in 
     exchange for approximately 1.35 acres of land, also located 
     in the town of Jackson, to be used in the construction of the 
     Project; and
       (4) relinquish certain reversionary interests of the United 
     States in order to facilitate the transactions described in 
     paragraphs (1) through (4).

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Commission.--The term ``Commission'' means the Game and 
     Fish Commission of the State of Wyoming.
       (2) Construction cost.--The term ``construction cost'' 
     means any cost that is--
       (A) associated with building improvements to Federal 
     standards and guidelines; and
       (B) open to a competitive bidding process approved by the 
     Secretary.
       (3) Federal parcel.--The term ``Federal parcel'' means the 
     parcel of land, and all appurtenances to the land, comprising 
     approximately 15.3 acres, depicted as ``Bridger-Teton 
     National Forest'' on the Map.
       (4) Map.--The term ``Map'' means the map entitled ``Multi-
     Agency Campus Project Site'', dated March 31, 1999, and on 
     file in the offices of--
       (A) the Bridger-Teton National Forest, in the State of 
     Wyoming; and
       (B) the Chief of the Forest Service.
       (5) Master plan.--The term ``master plan'' means the 
     document entitled ``Conceptual Master Plan'', dated July 14, 
     1998, and on file at the offices of--
       (A) the Bridger-Teton National Forest, in the State of 
     Wyoming; and
       (B) the Chief of the Forest Service.
       (6) Project.--The term ``Project'' means the proposed 
     project for construction of a multi-agency campus, to be 
     carried out by the town of Jackson in cooperation with the 
     other agencies and entities described in section 2(a)(1), to 
     provide, in accordance with the master plan--
       (A) administrative facilities for various agencies and 
     entities; and
       (B) interpretive, educational, and other facilities for 
     visitors to the greater Yellowstone area.
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture (including a designee of the Secretary).
       (8) State parcel.--The term ``State parcel'' means the 
     parcel of land comprising approximately 3 acres, depicted as 
     ``Wyoming Game and Fish'' on the Map.
       (9) Town.--The term ``town'' means the town of Jackson, 
     Wyoming.

     SEC. 4. MULTI-AGENCY CAMPUS PROJECT, JACKSON, WYOMING.

       (a) Construction Offers for Exchange of Property.--
       (1) In general.--The town may offer to construct, as part 
     of the Project, an administrative facility for the Bridger-
     Teton National Forest.
       (2) Conveyance.--If the offer described in paragraph (2) is 
     made not later than 5 years after the date of enactment of 
     this Act, the Secretary shall convey the Federal land 
     described in section 5(a)(1) to the town, in exchange for the 
     completed administrative facility described in this 
     paragraph, in accordance with this Act.
       (b) Offer To Convey State Parcel.--
       (1) In general.--The Commission may offer to convey a 
     portion of the State parcel, depicted on the Map as ``Parcel 
     Three'', to the United States to be used for construction of 
     an administrative facility for the Bridger-Teton National 
     Forest.
       (2) Conveyance.--If the offer described in paragraph (2) is 
     made not later than 5 years after the date of enactment of 
     this Act, the Secretary shall convey, through a simultaneous 
     conveyance, the Federal land described in section 5(a)(2) to 
     the Commission, in exchange for the portion of the State 
     parcel described in paragraph (2), in accordance with this 
     Act.

     SEC. 5. CONVEYANCE OF FEDERAL LAND.

       (a) In General.--In exchange for the consideration 
     described in section 3, the Secretary shall convey--
       (1) to the town, a portion of the Federal parcel, 
     comprising approximately 9.3 acres, depicted on the Map as 
     ``Parcel Two''; and
       (2) to the Commission, a portion of the Federal parcel 
     comprising approximately 3.2 acres, depicted on the Map as 
     ``Parcel One''.
       (b) Reversionary Interests.--As additional consideration 
     for acceptance by the United States of any offer described in 
     section 4, the United States shall relinquish all 
     reversionary interests in the State parcel, as set forth in 
     the deed between the United States and the State of Wyoming, 
     dated February 19, 1957, and recorded on October 2, 1967, in 
     Book 14 of Deeds, Page 382, in the records of Teton County, 
     Wyoming.

     SEC. 6. EQUAL VALUE OF INTERESTS EXCHANGED.

       (a) Valuation of Land To Be Conveyed.--
       (1) In general.--The fair market and improvement values of 
     the land to be exchanged under this Act shall be determined--
       (A) by appraisals acceptable to the Secretary, utilizing 
     nationally recognized appraisal standards; and
       (B) in accordance with section 206 of the Federal Land 
     Policy and Management Act of 1976 (43 U.S.C. 1716).
       (2) Appraisal report.--Each appraisal report shall be 
     written to Federal standards, as defined in the Uniform 
     Appraisal Standards for Federal Land Acquisitions developed 
     by the Interagency Land Acquisition Conference.
       (3) No effect on value of reversionary interests.--An 
     appraisal of the State parcel shall not take into 
     consideration any reversionary interest held by the United 
     States in the State parcel as of the date on which the 
     appraisal is conducted.
       (b) Value of Federal Land Greater Than Construction 
     Costs.--If the value of the Federal land to be conveyed to 
     the town under section 5(a)(1) is greater than the 
     construction costs to be paid by the town for the 
     administrative facility described in section 4(a), the 
     Secretary shall reduce the acreage of the Federal land 
     conveyed so that the value of the Federal land conveyed to 
     the town closely approximates the construction costs.
       (c) Value of Federal Land Less Than Construction Costs.--If 
     the value of the Federal land to be conveyed to the town 
     under section 5(a)(1) is less than the construction costs to 
     be paid by the town for the administrative facility described 
     in section 4(a), the Secretary may convey to the town 
     additional Federal land administered by the Secretary for 
     national forest administrative site purposes in Teton County, 
     Wyoming, so that the total value of the Federal land conveyed 
     to the town closely approximates the construction costs.
       (d) Value of Federal Land Equal to Value of State Parcel.--
       (1) In general.--The value of any Federal land conveyed to 
     the Commission under section 5(a)(2) shall be equal to the 
     value of the State parcel conveyed to the United States under 
     section 4(b).
       (2) Boundaries.--The boundaries of the Federal land and the 
     State parcel may be adjusted to equalize values.
       (e) Payment of Cash Equalization.--Notwithstanding 
     subsections (b) through (d), the values of Federal land and 
     the State parcel may be equalized by payment of cash to the 
     Secretary, the Commission, or the town, as appropriate, in 
     accordance with section

[[Page 16147]]

     206(b) of the Federal Land Policy and Management Act of 1976 
     (43 U.S.C. 1716(b)), if the values cannot be equalized by 
     adjusting the size of parcels to be conveyed or by conveying 
     additional land, without compromising the design of the 
     Project.

     SEC. 7. ADDITIONAL PROVISIONS.

       (a) Construction of Federal Facilities.--The construction 
     of facilities on Federal land within the boundaries of the 
     Project shall be--
       (1) supervised and managed by the town; and
       (2) carried out to standards and specifications approved by 
     the Secretary.
       (b) Access.--The town (including contractors and 
     subcontractors of the town) shall have access to the Federal 
     land until completion of construction for all purposes 
     related to construction of facilities under this Act.
       (c) Administration of Land Acquired by United States.--Land 
     acquired by the United States under this Act shall be 
     governed by all laws applicable to the administration of 
     national forest sites.
       (d) Wetland.--
       (1) In general.--There shall be no construction of any 
     facility after the date of conveyance of Federal land under 
     this Act within any portion of the Federal parcel delineated 
     on the map as ``wetlands''.
       (2) Deeds and conveyance documents.--A deed or other 
     conveyance document executed by the Secretary in carrying out 
     this Act shall contain such reservations as are necessary to 
     preclude development of wetland on any portion of the Federal 
     parcel.
                                 ______
                                 
      By Mr. LEAHY (for himself and Mr. Kohl):
  S. 1375. A bill to amend the Immigration and Nationality Act to 
provide that aliens who commit act of torture abroad are inadmissible 
and removable and to establish within the Criminal Division of the 
Department of Justice an Office of Special Investigations having 
responsibilities under that Act with respect to all alien participants 
in act of genocide and torture abroad; to the Committee on the 
Judiciary.


                the anti-atrocity alien deportation act

  Mr. LEAHY. Mr. President, the recent events in Kosovo have been a 
graphic reminder that crimes against humanity did not end with the 
Second World War. Our treatment of those persecuted by the Nazis has 
long been regarded as a travesty. Blatant American anti-Semitism led to 
post-war immigration quotas that virtually shut out Jews coming from 
concentration camps while embracing German sympathizers.
  In contrast to this country's dismal record in accepting Jewish 
refugees following the last world war, the United States has tried 
harder and done better in recent years to provide refuge to those 
persons fleeing homelands that have been ravaged by violence. For 
example, over the past five years, approximately 83,247 Bosnian 
refugees have been admitted to this country. During the latest 
hostilities in Kosovo, the Clinton Administration provided leadership 
to other nations by pledging to take in as many as 20,000 Kosovar 
refugees.
  Unfortunately, criminals who wielded machetes and guns against 
innocent civilians in countries like Haiti, Yugoslavia and Rwanda have 
been able to gain entry to the United States through the same doors 
that we have opened to deserving refugees. We need to lock that door to 
those war criminals who seek a safe haven in the United States. And to 
those war criminals who are already here, we should promptly show them 
the door out.
  Our country has long provided the template and moral leadership for 
dealing with Nazi war criminals. The Justice Department has a 
specialized unit, the Offfice of Special Investigations (OSI), which 
was created to hunt down, prosecute and remove Nazi war criminals who 
had slipped into the United States among their victims under the 
Displaced Persons Act. Since the OSI's inception in 1979, 61 Nazi 
persecutors have been stripped of U.S. citizenship, 49 such individuals 
have been removed from the United States, and more than 150 have been 
denied entry.
  OSI was created almost 35 years after the end of World War II and it 
remains authorized only to track Nazi war criminals. Little is being 
done about the new generation of international war criminals living 
among us, and these delays are costly. As any prosecutor--or, in my 
case, former prosecutor--knows instinctively, such delays make 
documentary and testimonial evidence more difficult to obtain. Stale 
cases are the hardest to make.
  We should not repeat the mistake of waiting decades before tracking 
down war criminals and human rights abusers who have settled in this 
country. War criminals should find no sanctuary in loopholes in our 
current immigration policies and enforcement. No war criminal should 
ever come to believe that he is going to find safe harbor in the United 
States.
  Too often, once war criminals slip through the immigration nets, they 
remain in the United States, unpunished for their crimes. In Vermont, 
news reports indicate that a Bosnian-Muslim man suspected of 
participating in ethnic cleansing during the Serbian war now is in 
Burlington. He has been identified by many people, including his own 
relatives, as a member of a Serbian paramilitary group responsible for 
the torture, rape, and murder of countless innocent people. We see the 
possibility that refugees now may encounter their persecutors thousands 
of miles away from their homeland, walking the streets of America.
  This is not an isolated occurrence. The center for Justice and 
Accountability, a San Francisco human rights group, has identified 
approximately sixty suspected human rights violators now living in the 
United States. We have unwittingly sheltered the oppressors along with 
the oppressed for too long. We should not let this situation continue. 
We waited too long after the last world war to focus prosecutorial 
resources and attention on Nazi war criminals who entered this country 
on false pretenses. We should not repeat that mistake for other aliens 
who engaged in human rights abuses before coming to the United States. 
We need to focus the attention of our law enforcement investigators to 
prosecute and deport those who have committed atrocities abroad and who 
now enjoy safe harbor in the United States.
  Despite U.S. ratification of the United Nations' ``Convention Against 
Torture and Other Cruel, Inhuman or Degrading Treatment or 
Punishment,'' current immigration law provides that those who 
participated in Nazi war crimes and genocide are inadmissible to and 
are removable from the United States, yet those who have committed the 
criminal act of torture are not. This leads to cases like that of 
Kelbessa Negewo, a member of the military dictatorship ruling Ethiopia 
in the 1970s, who has been found guilty of torture in a private civil 
action by an American court but who remains in the United States 
nonetheless because the Immigration and Naturalization Act does not 
provide explicit authority to investigate, denaturalize or remove him. 
The Leahy ``Anti-Atrocity Alien Deportation Act'' would close this 
loophole and make those who commit torture abroad inadmissible to and 
deportable from our country.
  The ``Anti-Atrocity Alien Deportation Act,'' which I introduce today 
with Senator Kohl, would amend the Immigration and Nationality Act to 
expand the grounds for inadmissibility and deportation to cover aliens 
who have engaged in acts of torture abroad. ``Torture'' is already 
defined in the Federal criminal code, 18 U.S.C. Sec. 2340, in a law 
passed as part of the implementing legislation for the ``Convention 
Against Torture.'' Under this Convention, the United States has an 
affirmative duty to prosecute torturers within its boundaries 
regardless of their respective nationalities. 18 U.S.C. Sec. 2340A 
(1994).
  This legislation would also provide statutory authorization for OSI, 
which currently owes its existence to an Attorney General order, and 
would expand its jurisdiction to authorize investigations, 
prosecutions, and removal of any alien who participated in torture and 
genocide abroad--not just Nazis. The success of OSI is hunting Nazi war 
criminals demonstrates the effectiveness of centralized resources and 
expertise in these cases. OSI has worked, and it is time to update its 
mission.
  The knowledge of the people, politics and pathologies of particular 
regimes engaged in genocide and human rights abuses is often necessary 
for effective prosecutions of these cases and may

[[Page 16148]]

best be accomplished by the concentrated efforts of a single office, 
rather than in piecemeal litigation around the country or in offices 
that have more diverse missions.
  Unquestionably, the need to bring Nazi war criminals to justice 
remains a matter of great importance. Funds would not be derived from 
the OSI's current mission. Additional resources are authorized in the 
bill for OSI's expanded duties.
  I have for many years sought to advance the search for war criminals 
who have clandestinely immigrated to our country. In 1996, the moving 
testimony of esteemed individuals like Rabbi Marvin Hier (the dean and 
founder of the Simon Wisenthal Center) led me to work closely on the 
drafting of the Nazi War Crimes Disclosure Act. More recently, I helped 
to ensure that the OSI would be able to further its efforts in 
investigating and denaturalizing Nazi war criminals with a budget 
increase of two million dollars for 1999, and I am attempting to do the 
same for the Year 2000.
  I have also supported a strong and effective War Crimes Tribunal--
with the necessary funds and authority to fully apprehend and prosecute 
war criminals. Expanding the mission of OSI, combined with a vigorous 
War Crimes Tribunal, represents a full-scale, two-prong assault on war 
criminals, wherever they may hide.
  We must honor and respect the unique experiences of those who were 
victims in the darkest moment in world history. The Anti-Defamation 
League has expressed its support for my bill. We may help honor the 
memories of the victims of the Holocaust by pursuing all war criminals 
who enter our country. By so doing, the United States can provide moral 
leadership and show that we will not tolerate perpetrators of genocide 
and torture, least of all here.
  In sum, the Anti-Atrocity Alien Deportation Act would:
  Bar admission into the United States and authorize the deportation of 
aliens who have engaged in acts of torture abroad.
  Provide statutory authorization for and expand the jurisdiction of 
the Office of Special Investigations (so-called ``Nazi war criminal 
hunters'') with the Department of Justice to investigate, prosecute and 
remove any alien who participated in torture and genocide abroad--not 
just Nazis; and
  Authorize additional funding to ensure that OSI has adequate 
resources to fulfill its current mission of hunting Nazi war criminals.
  I ask unanimous consent that the text of the bill and a sectional 
analysis be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1375

       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 ``Anti-Atrocity Alien 
     Deportation Act''.

     SEC. 2. INADMISSIBILITY AND REMOVABILITY OF ALIENS WHO HAVE 
                   COMMITTED ACTS OF TORTURE ABROAD.

       (a) Inadmissibility.--Section 212(a)(3)(E) of the 
     Immigration and Nationality Act (8 U.S.C. 1182(a)(3)(E)) is 
     amended by adding at the end the following:
       ``(iii) Commission of acts of torture.--Any alien who, 
     outside the United States, has committed any act of torture, 
     as defined in section 2340 of title 18, United States Code, 
     is inadmissible.''.
       (b) Removability.--Section 237(a)(4)(D) of that Act (8 
     U.S.C. 1227(a)(4)(D)) is amended by striking ``clause (i) or 
     (ii)'' and inserting ``clause (i), (ii), or (iii)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to offenses committed before, on, or after the 
     date of enactment of this Act.

     SEC. 3. ESTABLISHMENT OF THE OFFICE OF SPECIAL 
                   INVESTIGATIONS.

       (a) Amendment of the Immigration and Nationality Act.--
     Section 103 of the Immigration and Nationality Act (8 U.S.C. 
     1103) is amended by adding at the end the following:
       ``(g) The Attorney General shall establish within the 
     Criminal Division of the Department of Justice an Office of 
     Special Investigations with the authority of investigating, 
     and, where appropriate, taking legal action to remove, 
     denaturalize, or prosecute any alien found to be in violation 
     of clause (i), (ii), or (iii) of section 212(a)(3)(E).''.
       (b) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     the Department of Justice for the fiscal year 2000 such sums 
     as may be necessary to carry out the additional duties 
     established under section 103(g) of the Immigration and 
     Nationality Act (as added by this Act) in order to ensure 
     that the Office of Special Investigations fulfills its 
     continuing obligations regarding Nazi war criminals.
       (2) Availability of funds.--Amounts appropriated pursuant 
     to paragraph (1) are authorized to remain available until 
     expended.
                                  ____


    Sectional Analysis of Leahy Anti-Atrocity Alien Deportation Act

       Summary: This bill would make two significant changes in 
     our country's enforcement capability against those who have 
     committed atrocities abroad and then entered the United 
     States. First, the bill would amend the Immigration and 
     Nationality Act to expand the grounds for inadmissibility and 
     deportation to cover aliens who have engaged in acts of 
     torture, as defined in 18 U.S.C. Sec. 2340, abroad. Second, 
     the bill would direct the Attorney General to establish the 
     Office of Special Investigations (OSI) within the Criminal 
     Division and expand the current OSI's authority to 
     investigate, prosecute, and remove any alien who participated 
     in torture and genocide abroad, not just Nazi war criminals.
       Sec. 1. Short Title. The Act may be cited as the ``Anti-
     Atrocity Alien Deportation Act.''
       Sec. 2. Admissibility and Removability of Aliens Who Have 
     Committed Acts of Torture Abroad. Currently, the Immigration 
     and Nationality Act provides that (i) participants in Nazi 
     persecutions during the time period from March 23, 1933 to 
     May 8, 1945, and (ii) aliens who engaged in genocide, are 
     inadmissable to the United States and deportable. See 8 
     U.S.C. Sec. 1182(a)(3)(E)(i) and Sec. 1227(a)(4)(D). The bill 
     would amend these sections of the Immigration and Nationality 
     Act by expanding the grounds for inadmissibility and 
     deportation to cover aliens who have engaged in acts of 
     torture abroad. The United Nations' ``Convention Against 
     Torture and Other Cruel, Inhuman or Degrading Treatment or 
     Punishment'' entered into force with respect to the United 
     States on November 20, 1994. This Convention, and the 
     implementing legislation, the Torture Victims Protection Act, 
     18 U.S.C. Sec. Sec. 2340 et seq., includes the definition of 
     ``torture'' incorporated in the bill and imposed an 
     affirmative duty on the United States to prosecute tortures 
     within its jurisdiction.
       Sec. 3. Establishment of the Office of Special 
     Investigations. Attorney General Civiletti established OSI in 
     1979 within the Criminal Division of the Department of 
     Justice, consolidating within it all ``investigative and 
     litigation activities involving individuals, who prior to and 
     during World War II, under the supervision of or in 
     association with the Nazi government of Germany, its allies, 
     and other affiliatated [sic] governments, are alleged to have 
     ordered, incited, assisted, or otherwise participated in the 
     persecution of any person because of race, religion, national 
     origin, or political opinion.'' (Att'y Gen. Order No. 851-
     79). The OSI's mission continues to be limited by that 
     Attorney General Order.
       This section would amend the Immigration and Nationality 
     Act, 8 U.S.C. Sec. 1103, by directing the Attorney General to 
     establish an Office of Special Investigations within the 
     Department of Justice with authorization to investigate, 
     remove, denaturalize, or prosecute any alien who has 
     participated in torture or genocide abroad. This would expand 
     OSI's current authorized mission. Additional funds are 
     authorized for these expanded duties to ensure that OSI 
     fulfills its continuing obligations regarding Nazi war 
     criminals.
                                 ______
                                 
      By Mr. HOLLINGS:
  S. 1376. A bill to amend the Internal Revenue Code of 1986 to impose 
a value added tax and to use the receipts from the tax to reduce 
Federal debt and to ensure the solvency of the Social Security System; 
to the Committee on Finance.


  deficit and debt reduction and social security solvency act of 1999

 Mr. HOLLINGS. Mr. President, this charade has gone far enough. 
The economy gives indications of overheating causing the Federal 
Reserve to increase interest rates, and now both the President and the 
Congress are in a foot race to cut taxes to make sure the economy 
catches fire. Rather than a surplus, the President's OMB Mid-Session 
Review on page 42 projects an increase in the debt each year for five 
years, and on page 43, by computation, an increase in the debt of 
$1.883.4 trillion over fifteen years. Some suggest cutting spending; 
others downsizing the government. The Democrats did both in 1993 and 
lost the Congress in 1994. Now, neither Republicans nor Democrats will 
vote to make substantial cuts and what's really needed is a tax 
increase. When Lyndon Johnson last balanced the budget the national

[[Page 16149]]

debt was less than $1 trillion and interest costs of $16 billion. Now, 
CBO projects a deficit this year of $5.6 trillion with interest costs 
of $356 billion. We have increased spending since President Johnson's 
time $340 billion each year for nothing. A fiscal cancer. To excise 
this fiscal cancer, to put government on a pay-as-you-go basis, 
spending cuts and a tax increase will be necessary. A value added tax 
of 5 percent dedicated to eliminating the debt and stabilizing Social 
Security is in order. It would promote a very much needed paradigm of 
saving. More than that, it would eliminate a substantial disadvantage 
in international trade. The deficit in the balance of trade nears $300 
billion this year. Every industrial country except the United States 
has a VAT which is rebated at the port of departure. Articles produced 
in Europe enter the United States market with a 15 percent rebated 
advantage, and from Korea 25 percent. All this talk of surpluses and 
tax cuts misleads the American public. What we really should be doing 
in good times is paying down the National Debt. This bill that I am 
introducing today will do the trick.
                                 ______
                                 

                            By Mr. BENNETT:

  S. 1377. A bill to amend the Central Utah Project Completion Act 
regarding the use of funds for water development for the Bonneville 
Unit, and for other purposes; to the Committee on Energy and Natural 
Resources.


           central utah project completion amendment of 1999

  Mr. BENNETT. Mr. President, I am pleased to introduce legislation 
which amends the Central Utah Project Completion Act. This is a simple 
bill and I hope my colleagues will support it.
  My father was elected to the Senate in 1950 and it was during that 
time that legislation was passed that created the Central Utah Project. 
During his 24 years in the Senate, my father fought to win the initial 
authorizations as well as provide the annual appropriations for the 
various projects. Were it not for the foresight of planners in the 
1950s, Utah would be grappling with severe water shortages for both 
agricultural and municipal purposes today.
  In 1992, the Central Utah Project was reauthorized with the passage 
of the Central Utah Project Completion Act of 1992 (CUPCA). As part of 
the 1992 Act, CUPCA provided strict authorization levels for each 
project and program. Seven years after the passage of the 
reauthorization bill, planning has neared completion on these projects. 
During that time, we have learned several things. First, we are pleased 
that the District and the Bureau have saved money on other projects 
authorized under CUPCA. At the same time, many of us were surprised how 
successful the water conservation activities have been. They have been 
so successful that it appears we are on track to reach the authorized 
funding in the near future. We have also learned that the acquisition 
of water rights and instream flows are inadequate in other areas.
  Recognizing that there are shortfalls in some areas and significant 
savings achieved in other areas, this legislation simply amends the 
current law to permit the use of savings achieved in certain areas to 
be spent on other projects and programs where needed. By doing so, we 
can ensure that the projects can be completed in a timely and cost-
effective manner.
  By passing this legislation we can continue the progress made in 
completing the Central Utah Project. I hope my colleagues will support 
this bill and I look forward to working with the members of the Energy 
Committee to bring it to the floor for consideration.
                                 ______
                                 
      By Mr. VOINOVICH (for himself and Mrs. Lincoln):
  S. 1378. A bill to amend chapter 35 of title 44, United States Code, 
for the purposes of facilitating compliance by small businesses with 
certain Federal paperwork requirements, to establish a task force to 
examine the feasibility of streamlining paperwork requirements 
applicable to small businesses, and for other purposes; to the 
Committee on Governmental Affairs.


               THE SMALL BUSINESS PAPERWORK REDUCTION ACT

  Mr. VOINOVICH. Mr. President, I rise today to introduce the Small 
Business Paperwork Reduction Act, legislation that will give small 
businesses across the nation the time they need to correct first-time 
paperwork violations before federal fines are assessed When enacted, 
the provisions of this law would apply as long as the violations do not 
cause serious harm or threaten public health or safety. I am pleased to 
be joined in this effort by my colleague from Arkansas, Senator Blanche 
Lambert-Lincoln.
  To own one's business is, for many, the epitome of the American 
dream, knowing that you are your own boss and that you alone are 
responsible for the success of your business. It's what motivates 
thousands of individuals each week to take that initial leap of faith 
and it is their effort and their perseverance to succeed that 
constitute the economic and entrepreneurial backbone of this country.
  Small business owners are reponsible for the employment of millions 
of individuals, providing the roots for families to settle in small 
towns and large cities all across America. Through their payroll 
contributions and their tax base, small businesses--whether it's a shoe 
store in Cleveland, Ohio or a diner in Arkadelphia, Arkansas--make up 
the final nucleus of many a community.
  However, even with their many contributions, small business owners 
face a number of obstacles to success. One of the larger obstacles they 
face is the daunting task of meeting federal paperwork requirements. 
Small business owners spend an inordinate amount of their time filling 
out various forms to comply with a myriad of government requirements. 
In fact, small business owners spend about $229 billion per year on 
compliance costs and some 6.7 billion hours are used annually to fill 
out the expected paperwork.
  In addition, according to the National Federation of Independent 
Business (NFIB), small business owners are subjected to 63% of the 
nation's regulatory burden, and the paperwork regulations they are 
subjected to cost more than $2,000 per employee.
  I believe whatever we can do to relieve the burden on the small 
business men and women of our nation will help increase productivity, 
save money and create more jobs. Obviously, to obtain these benefits 
necessitates a review of our paperwork requirements on our nation's 
small businesses.
  When Congress passed the Paperwork Reduction Act of 1995, many small 
business owners believed they would finally obtain relief from the 
blizzard of paper to which they are subjected. Unfortunately, it has 
done too little to stem the tide of Federal paperwork requirements. In 
1996, the Act was supposed to reduce the amount of paper by 10%. 
Instead, it was only a 2.6% * * * .
  When Congress passed the Paperwork Reduction Act of 1995, many small 
business owners believed they would finally obtain relief from the 
blizzard of paper to which they are subjected. Unfortunately, it has 
done too little to stem the tide of federal paperwork requirements. In 
1996, the Act was supposed to reduce the amount of paper by 10%. 
Instead, it was only 2.6% reduction. In 1997, the Act was supposed to 
provide another 10% reduction in the amount of paper. Instead, there 
was a 2.3% increase. In 1998, the Act was supposed to provide another 
5% reduction in the amount of paper. Instead, there was another 1% 
increase.
  In addition, under the Small Business Regulatory Enforcement Fairness 
Act (SBREFA) of 1996, federal agencies were required to submit plans to 
Congress by March of 1998 for waiving and/or reducing fines as deemed 
appropriate for small business. However, a large majority of federal 
agencies, including at least half-a-dozen cabinet departments, did not 
even submit their plans by the March 1998 deadline. In addition, of the 
plans submitted, most are settlement policies, which force small 
businesses into negotiations to reduce or eliminate penalties rather 
than to help small businesses comply with paperwork reductions.
  Mr. President, even with all the forms that they are required to fill 
out,

[[Page 16150]]

and all the time it takes to complete them, small business owners want 
to comply with the laws of our nation. Their biggest concern, though, 
is the Sword of Damocles that hangs over them should they send in an 
incorrect form, or worse, not send one in at all. In the latter 
instance, it is almost always because they didn't know that they were 
supposed to fill out any paperwork, and unfortunately, it is such 
situations that generally bring about hefty fines for small business 
owners.
  Clearly, we have an opportunity to help these business owners, and, 
in turn, help continue the growth of our strong U.S. economy, maintain 
stable and productive jobs and create new jobs and opportunities.
  The legislation that Senator Lincoln and I are introducing, the Small 
Business Paperwork Reduction Act, is a companion bill to H.R. 391, 
which passed the House on February 11, 1999 by a vote of 274-151. Like 
the House-passed bill, our legislation will give small business owners 
a ``grace period'' to make amends for first-time paperwork violations 
before fines are assessed. The only exceptions would be for violations 
that cause harm, affect internal revenue laws or involve criminal 
activity. If a violation threatens public health or safety, each 
affected agency of jurisdiction would have the discretion to levy a 
fine as usual, or provide a 24-hour window to correct the infraction.
  In addition, our bill would establish a multi-agency task force to 
study how to streamline reporting requirements for small business; 
establish a point of contact at each federal agency that small 
businesses could contact regarding paperwork requirements; and require 
an annual comprehensive list of all federal paperwork requirements for 
small business to be placed on the Internet.
  So there is no confusion--our bill does not give small business 
owners carte blanch to skip their record keeping and reporting 
requirements. Thus, firefighters will not be threatened with injury on 
the job because a business doesn't have records of the toxic substances 
it has on its premises, or an elderly patient in a nursing home will be 
secure in the knowledge that their medical records will be maintained.
  As I stated earlier, the men and women of America who own small 
businesses do not embark on a course of flagrantly violating the laws 
of our nation. If they did, they would soon be out of business and 
probably in jail. They just want an opportunity to make up what they 
didn't do or correct what they've done wrong.
  Mr. President, compliance through cooperation should be the way our 
federal agencies do business, however, in many instances, federal 
agencies are all too eager to ``fine first, ask questions later.'' This 
legislation will give our nation's small business owners the time they 
need to correct small, non-threatening paperwork mistakes without 
having to pay a penalty that could jeopardize their very business.
  Our legislation is a sensible approach that has the support of the 
National Federation of Independent Business (NFIB), the voice of small 
business owners across the country, who have written to me in support 
of this legislation. I urge my colleagues to co-sponsor our bill and I 
encourage the Senate to act expeditiously.
  I ask unanimous consent that the letter from the NFIB in support of 
this legislation be inserted into the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                            National Federation of


                                         Independent Business,

                                    Washington, DC, July 15, 1999.
     Hon. George Voinovich,
     U.S. Senate, Washington, DC.
       Dear Senator Voinovich: On behalf of the 600,000 members of 
     the National Federation of Independent Business (NFIB), I 
     want to thank you and Senator Lincoln for your leadership in 
     introducing the Small Business Paperwork Reduction Act 
     Amendments of 1999.
       The federal paperwork burden consistently ranks among the 
     top small business concerns in the NFIB ``Small Business 
     Problems and Priorities'' survey. In fact, the burden of 
     regulatory compliance is as much as 50 percent more for small 
     businesses than their larger counterparts. In addition, it is 
     estimated that paperwork alone accounts for one-third of 
     regulatory compliance costs. Small businesses spent 
     approximately 7 billion hours filling out federal paperwork 
     in 1998, with the total paperwork burden estimated at $229 
     billion. It is clear that the burden of government paperwork 
     hinders the ability of small businesses to grow and create 
     new jobs.
       The Voinovich-Lincoln bill will provide small businesses 
     with a penalty waiver for a first-time paperwork violation, 
     provided that it does not threaten public health, safety or 
     the environment. This waiver is only applicable if the 
     business owner corrects the violation in a reasonable time 
     period. The bill would also establish a task force of agency 
     representatives to study streamlining reporting requirements 
     for small businesses.
       We believe that this incremental and responsible bill can 
     be signed into law this year. A similar bill was passed by a 
     bipartisan majority in the House, laying the groundwork for 
     Senate action. We look forward to working with you for Senate 
     passage and enactment of this bill.
           Sincerely,
                                                       Dan Danner,
                            Vice President, Federal Public Policy.

  Mrs. LINCOLN. Would my colleague from Ohio kindly answer a few 
questions regarding this bill?
  Mr. VOINOVICH. I would be happy to discuss the bill with my 
distinguished colleague.
  Mrs. LINCOLN. Thank you. I have heard some concerns voiced about this 
bill, namely how it could impact nursing homes and fire fighters. I 
hope you can clarify for me how regulations applicable to these groups 
would be impacted by the Small Business Paperwork Reduction Act, if at 
all.
  Mr. VOINOVICH. Certainly, I would be happy to clear up the 
misconceptions that this bill might endanger firefighters and nursing 
home patients.
  Some have claimed that this bill would encourage fraud or abuse of 
elderly nursing home patients by allowing a penalty waiver for those 
who violate rules regulating their care. Still others have claimed that 
the bill would threaten the lives of firefighters by allowing a waiver 
for businesses that violate rules regulating hazardous substances in 
the workplace. Neither of these claims is substantiated.
  Like the Senator from Arkansas, I care very much about the health and 
safety of all Americans and would not dream of putting seniors or 
firefighters in obvious jeopardy. Clearly, this is not the kind of 
negligent misbehavior this bill aims to reward with a civil penalty 
waiver for a first-time paperwork violation. And this is not the kind 
of violation covered by this bill.
  Mrs. LINCOLN. How can my colleague be certain that this kind of 
tragedy is not protected from civil penalty under this bill?
  Mr. VOINOVICH. Allow me to explain. Nursing homes that do not keep 
proper medical and treatment records for their patients are clearly 
endangering human health and safety. Small businesses that do not keep 
the required records of hazardous chemicals are also endangering human 
health and safety. As such, neither is covered by this bill.
  Mrs. LINCOLN. So what my colleague is saying is that any violation 
that causes actual danger to human health and safety is exempted from 
coverage by this bill.
  Mr. VOINOVICH. This bill goes even further than that. The language 
states that any violation that has ``the potential to cause serious 
harm to the public interest'' is exempt from this bill and cannot 
receive a penalty waiver. Where there is a potential to cause serious 
harm to the public, the agencies will be able to impose, in addition to 
all of their other remedies, an appropriate civil fine.
  Mrs. LINCOLN. As the Senator from Ohio knows, he and I are working 
together on another piece of legislation that would protect the powers 
of states and impose accountability for Federal preemption of state and 
local laws. Does this bill preempt state laws?
  Mr. VOINOVICH. My colleague raises a good point. This bill does not 
preempt state laws regarding collection of information. What it does 
say is that states my not impose a civil penalty on small businesses 
for a first-time violation under Federal laws that the State may 
administer.
  Again--I want to make clear--this bill does not preempt state laws. 
Instead it provides consistency that a

[[Page 16151]]

small business will not be fined under Federal laws whether the laws 
are being carried out by Federal or State government.
  Mrs. LINCOLN. I thank my colleague for these clarifications. I am 
pleased to hear that this bill will help reduce the paperwork burden 
from our nation's small businesses while protecting the health and 
safety of our nursing home and firefighter communities, and I look 
forward to working with him to pass this bill.
                                 ______
                                 
      By Mr. DOMENICI:
  S. 1379. A bill to amend the Internal Revenue Code of 1986 to provide 
broad based tax relief for all taxpaying families, to mitigate the 
marriage penalty, to expand retirement savings, to phase out gift and 
estate taxes, and for other purposes; to the Committee on Finance.
  Mr. DOMENICI. Mr. President, I am going to send to the desk a tax 
reduction bill. Everybody has ideas around here. I thought I would work 
with some people who think like I think and put together what I choose 
to call the Share the Surplus Tax Reduction and Simplification Act. It 
uses up the $780 billion over 10 years. I am introducing it tonight, 
and tomorrow I will speak on it. I hope some Senators will look at it 
from the standpoint of a balanced approach to moving toward some 
simplification and, at the same time, doing some of the things that 
will be fair, equitable, and good for our economy.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1379

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Share the 
     Surplus Tax Reduction and Simplification Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                          TITLE I--TAX RELIEF

Sec. 11. Broad based tax relief for all taxpaying families.
Sec. 12. Marriage penalty mitigation and tax burden reduction.

               TITLE II--SAVING AND INVESTMENT PROVISIONS

Sec. 21. Dividend and interest tax relief.
Sec. 22. Long-term capital gains deduction for individuals.
Sec. 23. Increase in contribution limits for traditional IRAs.

               TITLE III--BUSINESS INVESTMENT PROVISIONS

Sec. 31. Repeal of alternative minimum tax on corporations.
Sec. 32. Increase in limit for expensing certain business assets.

                  TITLE IV--ESTATE AND GIFT TAX RELIEF

Sec. 41. Phaseout of estate and gift taxes.

          TITLE V--RESEARCH CREDIT EXTENSION AND MODIFICATION

Sec. 51. Purpose.
Sec. 52. Permanent extension of research credit.
Sec. 53. Improved alternative incremental credit.
Sec. 54. Modifications to credit for basic research.
Sec. 55. Credit for expenses attributable to certain collaborative 
              research consortia.
Sec. 56. Improvement to credit for small businesses and research 
              partnerships.

                     TITLE VI--ENERGY INDEPENDENCE

Sec. 61. Purposes.
Sec. 62. Tax credit for marginal domestic oil and natural gas well 
              production.
Sec. 63. 10-year carryback for unused minimum tax credit.
Sec. 64. 10-year net operating loss carryback for losses attributable 
              to oil servicing companies and mineral interests of oil 
              and gas producers.
Sec. 65. Waiver of limitations.
Sec. 66. Election to expense geological and geophysical expenditures 
              and delay rental payments.

                      TITLE VII--REVENUE PROVISION

Sec. 71. 4-year averaging for conversion of traditional IRA to Roth 
              IRA.

                          TITLE I--TAX RELIEF

     SEC. 11. BROAD BASED TAX RELIEF FOR ALL TAXPAYING FAMILIES.

       (a) Purpose.--The purpose of this section is to cut taxes 
     for 120,000,000 taxpaying families by lowering the 15 percent 
     tax rate.
       (b) In General.--Section 1 of the Internal Revenue Code of 
     1986 (relating to tax imposed) is amended--
       (1) by striking ``15%'' each place it appears in the tables 
     in subsections (a) through (e) and inserting ``The applicable 
     rate'', and
       (2) by adding at the end the following:
       ``(i) Applicable Rate.--For purposes of this section, the 
     applicable rate for any taxable year shall be determined in 
     accordance with the following table:

 The applicable rate is:able year beginning in--
                                                                Percent
  2002............................................................14.9 
  2003............................................................14.8 
  2004............................................................14.7 
  2005............................................................14.1 
  2006 and thereafter...........................................13.5.''
       (b) Conforming Amendments.--
       (1) Section 1(f)(2) of the Internal Revenue Code of 1986 is 
     amended--
       (A) by inserting ``except as provided in subsection (i),'' 
     before ``by not changing'' in subparagraph (B), and
       (B) by inserting ``and the adjustment in rates under 
     subsection (i)'' after ``rate brackets'' in subparagraph (C).
       (2) Section 1(g)(7)(B)(ii)(II) of such Code is amended by 
     striking ``15 percent'' and inserting ``the applicable 
     rate''.
       (3) Section 3402(p)(2) of such Code is amended by striking 
     ``15 percent'' and inserting ``the applicable rate in effect 
     under section 1(i) for the taxable year''.
       (c) New Tables.--Not later than 15 days after the date of 
     enactment of this Act, the Secretary of the Treasury--
       (1) shall prescribe tables for taxable years beginning in 
     2002 which shall reflect the amendments made by this section 
     and which shall apply in lieu of the tables prescribed under 
     sections 1(f)(1) and 3(a) of the Internal Revenue Code of 
     1986 for such taxable years, and
       (2) shall modify the withholding tables and procedures for 
     such taxable years under section 3402(a)(1) of such Code to 
     take effect as if the reduction in the rate of tax under 
     section 1 of such Code (as amended by this section) was 
     attributable to such a reduction effective on such date of 
     enactment.
       (d) Section 15 Not To Apply.--No amendment made by this 
     section shall be treated as a change in a rate of tax for 
     purposes of section 15 of the Internal Revenue Code of 1986.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 12. MARRIAGE PENALTY MITIGATION AND TAX BURDEN 
                   REDUCTION.

       (a) Purpose.--The purposes of this section are to return 
     7,000,000 taxpaying families to the 15 percent tax bracket 
     and to cut taxes for 35,000,000 taxpaying families who will 
     benefit from a tax cut of up to $1,300 per family by 
     eliminating or mitigating the marriage penalty for many 
     middle class taxpaying families.
       (b) In General.--Section 1(f) of the Internal Revenue Code 
     of 1986 (relating to adjustments in tax tables so that 
     inflation will not result in tax increases) is amended--
       (1) in paragraph (2)--
       (A) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (C) and (D),
       (B) by inserting after subparagraph (A) the following:
       ``(B) in the case of the tables contained in subsections 
     (a), (b), (c), and (d), by increasing the maximum taxable 
     income level for the lowest rate bracket and the minimum 
     taxable income level for the 28 percent rate bracket 
     otherwise determined under subparagraph (A) for taxable years 
     beginning in any calendar year after 2001, by the applicable 
     dollar amount for such calendar year,'', and
       (C) by striking ``subparagraph (A)'' in subparagraph (C) 
     (as so redesignated) and inserting ``subparagraphs (A) and 
     (B)'', and
       (2) by adding at the end the following:
       ``(8) Applicable dollar amount.--For purposes of paragraph 
     (2)(B), the applicable dollar amount for any calendar year 
     shall be determined as follows:
       ``(A) Joint returns and surviving spouses.--In the case of 
     the table contained in subsection (a)--

``Calendar year:                              Applicable Dollar Amount:
  2002..........................................................$2,000 
  2003..........................................................$4,000 
  2004..........................................................$6,000 
  2005..........................................................$8,000 
  2006 and thereafter..........................................$10,000.
       ``(B) Other tables.--In the case of the table contained in 
     subsection (b), (c), or (d)--

``Calendar year:                              Applicable Dollar Amount:
  2002..........................................................$1,000 
  2003..........................................................$2,000 
  2004..........................................................$3,000 
  2005..........................................................$4,000 
  2006 and thereafter........................................$5,000.''.

     SEC. 13. REPEAL OF ALTERNATIVE MINIMUM TAX ON INDIVIDUALS.

       (a) Purposes.--The purposes of this section are--
       (1) to simplify the tax code so that millions of Americans 
     will no longer be required to calculate their income taxes 
     under 2 systems; and
       (2) to recognize that tax credits should not be denied to 
     individuals who are eligible for such credit.

[[Page 16152]]

       (b) In General.--Subsection (a) of section 55 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new flush sentence:

     ``For purposes of this title, the tentative minimum tax on 
     any taxpayer other than a corporation for any taxable year 
     beginning after December 31, 2009, shall be zero.''
       (c) Reduction of Tax on Individuals Prior to Repeal.--
     Section 55 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following new subsection:
       ``(f) Phaseout of Tax on Individuals.--
       ``(1) In general.--The tax imposed by this section on a 
     taxpayer other than a corporation for any taxable year 
     beginning after December 31, 2004, and before January 1, 
     2010, shall be the applicable percentage of the tax which 
     would be imposed but for this subsection.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage shall be determined in 
     accordance with the following table:

``For taxable years beginning in calendarThe applicable percentage is--
    2005............................................................80 
    2006............................................................70 
    2007............................................................60 
    2008 or 2009..................................................50.''
       (d) Nonrefundable Personal Credits Fully Allowed Against 
     Regular Tax Liability.--
       (1) In general.--Subsection (a) of section 26 of the 
     Internal Revenue Code of 1986 (relating to limitation based 
     on amount of tax) is amended to read as follows:
       ``(a) Limitation Based on Amount of Tax.--The aggregate 
     amount of credits allowed by this subpart for the taxable 
     year shall not exceed the taxpayer's regular tax liability 
     for the taxable year.''
       (2) Child credit.--Subsection (d) of section 24 of such 
     Code is amended by striking paragraph (2) and by 
     redesignating paragraph (3) as paragraph (2).
       (e) Limitation on Use of Credit for Prior Year Minimum Tax 
     Liability.--Subsection (c) of section 53 of the Internal 
     Revenue Code of 1986 is amended to read as follows:
       ``(c) Limitation.--
       ``(1) In general.--Except as otherwise provided in this 
     subsection, the credit allowable under subsection (a) for any 
     taxable year shall not exceed the excess (if any) of--
       ``(A) the regular tax liability of the taxpayer for such 
     taxable year reduced by the sum of the credits allowable 
     under subparts A, B, D, E, and F of this part, over
       ``(B) the tentative minimum tax for the taxable year.
       ``(2) Taxable years beginning after 2009.--In the case of 
     any taxable year beginning after 2009, the credit allowable 
     under subsection (a) to a taxpayer other than a corporation 
     for any taxable year shall not exceed 90 percent of the 
     excess (if any) of--
       ``(A) regular tax liability of the taxpayer for such 
     taxable year, over
       ``(B) the sum of the credits allowable under subparts A, B, 
     D, E, and F of this part.''
       (f) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.

               TITLE II--SAVING AND INVESTMENT PROVISIONS

     SEC. 21. DIVIDEND AND INTEREST TAX RELIEF.

       (a) Purposes.--The purposes of this section are--
       (1) to provide an incremental step toward taxing income 
     that is consumed rather than income that is earned and saved;
       (2) to simplify the tax code by eliminating 67,000,000 
     hours spent on tax preparation;
       (3) to eliminate all income tax on savings for more than 
     30,000,000 middle class families;
       (4) to reduce income taxes on savings for 37,000,000 
     individuals; and
       (5) to allow a $10,000 nest egg to grow tax-free and let 
     individuals experience the miracle of compound interest.
       (b) In General.--Part III of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to amounts 
     specifically excluded from gross income) is amended by 
     inserting after section 115 the following new section:

     ``SEC. 116. PARTIAL EXCLUSION OF DIVIDENDS AND INTEREST 
                   RECEIVED BY INDIVIDUALS.

       ``(a) Exclusion From Gross Income.--Gross income does not 
     include the sum of the amounts received during the taxable 
     year by an individual as--
       ``(1) dividends from domestic corporations, or
       ``(2) interest.
       ``(b) Limitations.--
       ``(1) Maximum amount.--The aggregate amount excluded under 
     subsection (a) for any taxable year shall not exceed $250 
     ($500 in the case of a joint return).
       ``(2) Certain dividends excluded.--Subsection (a)(1) shall 
     not apply to any dividend from a corporation which, for the 
     taxable year of the corporation in which the distribution is 
     made, or for the next preceding taxable year of the 
     corporation, is a corporation exempt from tax under section 
     501 (relating to certain charitable, etc., organization) or 
     section 521 (relating to farmers' cooperative associations).
       ``(c) Interest.--For purposes of this section, the term 
     `interest' means--
       ``(1) interest on deposits with a bank (as defined in 
     section 581),
       ``(2) amounts (whether or not designated as interest) paid 
     in respect of deposits, investment certificates, or 
     withdrawable or repurchasable shares, by--
       ``(A) a mutual savings bank, cooperative bank, domestic 
     building and loan association, industrial loan association or 
     bank, or credit union, or
       ``(B) any other savings or thrift institution which is 
     chartered and supervised under Federal or State law,

     the deposits or accounts in which are insured under Federal 
     or State law or which are protected and guaranteed under 
     State law,
       ``(3) interest on--
       ``(A) evidences of indebtedness (including bonds, 
     debentures, notes, and certificates) issued by a domestic 
     corporation in registered form, and
       ``(B) to the extent provided in regulations prescribed by 
     the Secretary, other evidences of indebtedness issued by a 
     domestic corporation of a type offered by corporations to the 
     public,
       ``(4) interest on obligations of the United States, a 
     State, or a political subdivision of a State (not excluded 
     from gross income of the taxpayer under any other provision 
     of law), and
       ``(5) interest attributable to participation shares in a 
     trust established and maintained by a corporation established 
     pursuant to Federal law.
       ``(d) Special Rules.--For purposes of this section--
       ``(1) Distributions from regulated investment companies and 
     real estate investment trusts.--Subsection (a) shall apply 
     with respect to distributions by--
       ``(A) regulated investment companies to the extent provided 
     in section 854(c), and
       ``(B) real estate investment trusts to the extent provided 
     in section 857(c).
       ``(2) Distributions by a trust.--For purposes of subsection 
     (a), the amount of dividends and interest properly allocable 
     to a beneficiary under section 652 or 662 shall be deemed to 
     have been received by the beneficiary ratably on the same 
     date that the dividends and interest were received by the 
     estate or trust.
       ``(3) Certain nonresident aliens ineligible for 
     exclusion.--In the case of a nonresident alien individual, 
     subsection (a) shall apply only--
       ``(A) in determining the tax imposed for the taxable year 
     pursuant to section 871(b)(1) and only in respect of 
     dividends and interest which are effectively connected with 
     the conduct of a trade or business within the United States, 
     or
       ``(B) in determining the tax imposed for the taxable year 
     pursuant to section 877(b).''.
       (c) Conforming Amendments.--
       (1) The table of sections for part III of subchapter B of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     inserting after the item relating to section 115 the 
     following:

``Sec. 116. Partial exclusion of dividends and interest received by 
              individuals.''.
       (2) Paragraph (2) of section 265(a) of such Code is amended 
     by inserting before the period at the end the following: ``, 
     or to purchase or carry obligations or shares, or to make 
     deposits, to the extent the interest thereon is excludable 
     from gross income under section 116''.
       (3) Subsection (c) of section 584 of such Code is amended 
     by adding at the end the following new flush sentence:

     ``The proportionate share of each participant in the amount 
     of dividends or interest received by the common trust fund 
     and to which section 116 applies shall be considered for 
     purposes of such section as having been received by such 
     participant.''.
       (4) Subsection (a) of section 643 of such Code is amended 
     by redesignating paragraph (7) as paragraph (8) and by 
     inserting after paragraph (6) the following:
       ``(7) Dividends or interest.--There shall be included the 
     amount of any dividends or interest excluded from gross 
     income pursuant to section 116.''.
       (5) Section 854 of such Code is amended by adding at the 
     end the following:
       ``(c) Treatment Under Section 116.--
       ``(1) In general.--For purposes of section 116, in the case 
     of any dividend (other than a dividend described in 
     subsection (a)) received from a regulated investment company 
     which meets the requirements of section 852 for the taxable 
     year in which it paid the dividend--
       ``(A) the entire amount of such dividend shall be treated 
     as a dividend if the sum of the aggregate dividends and the 
     aggregate interest received by such company during the 
     taxable year equals or exceeds 75 percent of its gross 
     income, or
       ``(B) if subparagraph (A) does not apply, there shall be 
     taken into account under section 116 only the portion of such 
     dividend which bears the same ratio to the amount of such 
     dividend as the sum of the aggregate dividends received and 
     aggregate interest received bears to gross income.

     For purposes of the preceding sentence, gross income and 
     aggregate interest received shall each be reduced by so much 
     of the deduction allowable by section 163 for the taxable 
     year

[[Page 16153]]

     as does not exceed aggregate interest received for the 
     taxable year.
       ``(2) Notice to shareholders.--The amount of any 
     distribution by a regulated investment company which may be 
     taken into account as a dividend for purposes of the 
     exclusion under section 116 shall not exceed the amount so 
     designated by the company in a written notice to its 
     shareholders mailed not later than 60 days after the close of 
     its taxable year.
       ``(3) Definitions.--For purposes of this subsection--
       ``(A) Gross income.--The term `gross income' does not 
     include gain from the sale or other disposition of stock or 
     securities.
       ``(B) Aggregate dividends.--The term `aggregate dividends' 
     includes only dividends received from domestic corporations 
     other than dividends described in section 116(b)(2). In 
     determining the amount of any dividend for purposes of this 
     subparagraph, the rules provided in section 116(d)(1) 
     (relating to certain distributions) shall apply.
       ``(C) Interest.--The term `interest' has the meaning given 
     such term by section 116(c).''.
       (6) Subsection (c) of section 857 of such Code is amended 
     to read as follows:
       ``(c) Limitations Applicable to Dividends Received From 
     Real Estate Investment Trusts.--
       ``(1) In general.--For purposes of section 116 (relating to 
     an exclusion for dividends and interest received by 
     individuals) and section 243 (relating to deductions for 
     dividends received by corporations), a dividend received from 
     a real estate investment trust which meets the requirements 
     of this part shall not be considered as a dividend.
       ``(2) Treatment as interest.--For purposes of section 116, 
     in the case of a dividend (other than a capital gain 
     dividend, as defined in subsection (b)(3)(C)) received from a 
     real estate investment trust which meets the requirements of 
     this part for the taxable year in which it paid the 
     dividend--
       ``(A) such dividend shall be treated as interest if the 
     aggregate interest received by the real estate investment 
     trust for the taxable year equals or exceeds 75 percent of 
     its gross income, or
       ``(B) if subparagraph (A) does not apply, the portion of 
     such dividend which bears the same ratio to the amount of 
     such dividend as the aggregate interest received bears to 
     gross income shall be treated as interest.
       ``(3) Adjustments to gross income and aggregate interest 
     received.--For purposes of paragraph (2)--
       ``(A) gross income does not include the net capital gain,
       ``(B) gross income and aggregate interest received shall 
     each be reduced by so much of the deduction allowable by 
     section 163 for the taxable year (other than for interest on 
     mortgages on real property owned by the real estate 
     investment trust) as does not exceed aggregate interest 
     received by the taxable year, and
       ``(C) gross income shall be reduced by the sum of the taxes 
     imposed by paragraphs (4), (5), and (6) of section 857(b).
       ``(4) Interest.--The term `interest' has the meaning given 
     such term by section 116(c).
       ``(5) Notice to shareholders.--The amount of any 
     distribution by a real estate investment trust which may be 
     taken into account as interest for purposes of the exclusion 
     under section 116 shall not exceed the amount so designated 
     by the trust in a written notice to its shareholders mailed 
     not later than 60 days after the close of its taxable 
     year.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 22. LONG-TERM CAPITAL GAINS DEDUCTION FOR INDIVIDUALS.

       (a) Purposes.--The purposes of this section are--
       (1) to provide an incremental step toward shifting the 
     Internal Revenue Code away from taxing savings and 
     investment,
       (2) to lower the cost of capital so that prosperity, better 
     paying jobs, and innovation will continue in the United 
     States,
       (3) to eliminate capital gain taxes for 10,000,000 
     families, 75 percent of whom have annual incomes of $75,000 
     or less, and
       (4) to simplify the tax code and thereby eliminate 
     70,000,000 hours of tax preparation.
       (b) General Rule.--Part I of subchapter P of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to treatment of 
     capital gains) is amended by redesignating section 1202 as 
     section 1203 and by inserting after section 1201 the 
     following:

     ``SEC. 1202. CAPITAL GAINS DEDUCTION FOR INDIVIDUALS.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a deduction for the taxable year an 
     amount equal to the lesser of--
       ``(1) the net capital gain of the taxpayer for the taxable 
     year, or
       ``(2) $5,000.
       ``(b) Sales Between Related Parties.--Gains from sales and 
     exchanges to any related person (within the meaning of 
     section 267(b) or 707(b)(1)) shall not be taken into account 
     in determining net capital gain.
       ``(c) Special Rule for Section 1250 Property.--Solely for 
     purposes of this section, in applying section 1250 to any 
     disposition of section 1250 property, all depreciation 
     adjustments in respect of the property shall be treated as 
     additional depreciation.
       ``(d) Section Not To Apply to Certain Taxpayers.--No 
     deduction shall be allowed under this section to--
       ``(1) an individual with respect to whom a deduction under 
     section 151 is allowable to another taxpayer for a taxable 
     year beginning in the calendar year in which such 
     individual's taxable year begins,
       ``(2) a married individual (within the meaning of section 
     7703) filing a separate return for the taxable year, or
       ``(3) an estate or trust.
       ``(e) Special Rule for Pass-Thru Entities.--
       ``(1) In general.--In applying this section with respect to 
     any pass-thru entity, the determination of when the sale or 
     exchange occurs shall be made at the entity level.
       ``(2) Pass-thru entity defined.--For purposes of paragraph 
     (1), the term `pass-thru entity' means--
       ``(A) a regulated investment company,
       ``(B) a real estate investment trust,
       ``(C) an S corporation,
       ``(D) a partnership,
       ``(E) an estate or trust, and
       ``(F) a common trust fund.''.
       (c) Coordination With Maximum Capital Gains Rate.--
     Paragraph (3) of section 1(h) of the Internal Revenue Code of 
     1986 (relating to maximum capital gains rate) is amended to 
     read as follows:
       ``(3) Coordination with other provisions.--For purposes of 
     this subsection, the amount of the net capital gain shall be 
     reduced (but not below zero) by the sum of--
       ``(A) the amount of the net capital gain taken into account 
     under section 1202(a) for the taxable year, plus
       ``(B) the amount which the taxpayer elects to take into 
     account as investment income for the taxable year under 
     section 163(d)(4)(B)(iii).''.
       (d) Deduction Allowable in Computing Adjusted Gross 
     Income.--Subsection (a) of section 62 of the Internal Revenue 
     Code of 1986 (defining adjusted gross income) is amended by 
     inserting after paragraph (17) the following:
       ``(18) Long-term capital gains.--The deduction allowed by 
     section 1202.''.
       (e) Treatment of Collectibles.--
       (1) In general.--Section 1222 of the Internal Revenue Code 
     of 1986 (relating to other terms relating to capital gains 
     and losses) is amended by inserting after paragraph (11) the 
     following:
       ``(12) Special rule for collectibles.--
       ``(A) In general.--Any gain or loss from the sale or 
     exchange of a collectible shall be treated as a short-term 
     capital gain or loss (as the case may be), without regard to 
     the period such asset was held. The preceding sentence shall 
     apply only to the extent the gain or loss is taken into 
     account in computing taxable income.
       ``(B) Treatment of certain sales of interest in 
     partnership, etc.--For purposes of subparagraph (A), any gain 
     from the sale or exchange of an interest in a partnership, S 
     corporation, or trust which is attributable to unrealized 
     appreciation in the value of collectibles held by such entity 
     shall be treated as gain from the sale or exchange of a 
     collectible. Rules similar to the rules of section 751(f) 
     shall apply for purposes of the preceding sentence.
       ``(C) Collectible.--For purposes of this paragraph, the 
     term `collectible' means any capital asset which is a 
     collectible (as defined in section 408(m) without regard to 
     paragraph (3) thereof).''.
       (2) Charitable deduction not affected.--
       (A) Paragraph (1) of section 170(e) of such Code is amended 
     by adding at the end the following: ``For purposes of this 
     paragraph, section 1222 shall be applied without regard to 
     paragraph (12) thereof (relating to special rule for 
     collectibles).''.
       (B) Clause (iv) of section 170(b)(1)(C) of such Code is 
     amended by inserting before the period at the end the 
     following: ``and section 1222 shall be applied without regard 
     to paragraph (12) thereof (relating to special rule for 
     collectibles)''.
       (f) Conforming Amendments.--
       (1) Section 57(a)(7) of the Internal Revenue Code of 1986 
     is amended by striking ``1202'' and inserting ``1203''.
       (2) Clause (iii) of section 163(d)(4)(B) of such Code is 
     amended to read as follows:
       ``(iii) the sum of--

       ``(I) the portion of the net capital gain referred to in 
     clause (ii)(II) (or, if lesser, the net capital gain referred 
     to in clause (ii)(I)) taken into account under section 1202, 
     reduced by the amount of the deduction allowed with respect 
     to such gain under section 1202, plus

       ``(II) so much of the gain described in subclause (I) which 
     is not taken into account under section 1202 and which the 
     taxpayer elects to take into account under this clause.''.

       (3) Subparagraph (B) of section 172(d)(2) of such Code is 
     amended to read as follows:
       ``(B) the deduction under section 1202 and the exclusion 
     under section 1203 shall not be allowed.''.
       (4) Section 642(c)(4) of such Code is amended by striking 
     ``1202'' and inserting ``1203''.
       (5) Section 643(a)(3) of such Code is amended by striking 
     ``1202'' and inserting ``1203''.
       (6) Paragraph (4) of section 691(c) of such Code is amended 
     inserting ``1203,'' after ``1202,''.

[[Page 16154]]

       (7) The second sentence of section 871(a)(2) of such Code 
     is amended by inserting ``or 1203'' after ``section 1202''.
       (8) The last sentence of section 1044(d) of such Code is 
     amended by striking ``1202'' and inserting ``1203''.
       (9) Paragraph (1) of section 1402(i) of such Code is 
     amended by inserting ``, and the deduction provided by 
     section 1202 and the exclusion provided by section 1203 shall 
     not apply'' before the period at the end.
       (10) Section 121 of such Code is amended by adding at the 
     end the following:
       ``(h) Cross Reference.--

  ``For treatment of eligible gain not excluded under subsection (a), 
see section 1202.''.
       (11) Section 1203 of such Code, as redesignated by 
     subsection (a), is amended by adding at the end the 
     following:
       ``(l) Cross Reference.--

  ``For treatment of eligible gain not excluded under subsection (a), 
see section 1202.''.
       (12) The table of sections for part I of subchapter P of 
     chapter 1 of such Code is amended by striking the item 
     relating to section 1202 and by inserting after the item 
     relating to section 1201 the following:

``Sec. 1202. Capital gains deduction.
``Sec. 1203. 50-percent exclusion for gain from certain small business 
              stock.''.
       (g) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2000.
       (2) Collectibles.--The amendments made by subsection (d) 
     shall apply to sales and exchanges after December 31, 2000.

     SEC. 23. INCREASE IN CONTRIBUTION LIMITS FOR TRADITIONAL 
                   IRAS.

       (a) Purposes.--The purposes of this section are--
       (1) to increase the savings rate for all Americans by 
     reforming the tax system to favorably treat income that is 
     invested for retirement, and
       (2) to provide targeted incentives to middle class families 
     to increase their retirement savings in a traditional IRA by 
     $1,000 per working member of the family per taxable year.
       (b) Increase in Contribution Limit.--Paragraph (1)(A) of 
     section 219(b) of the Internal Revenue Code of 1986 (relating 
     to maximum amount of deduction) is amended by striking 
     ``$2,000'' and inserting ``$3,000''.
       (c) Inflation Adjustment.--Section 219 of the Internal 
     Revenue Code of 1986 (relating to deduction for retirement 
     savings) is amended by redesignating subsection (h) as 
     subsection (i) and by inserting after subsection (g) the 
     following:
       ``(h) Cost-of-Living Adjustment.--
       ``(1) Deductible amounts.--In the case of any taxable year 
     beginning in a calendar year after 2009, the $3,000 amount 
     under subsection (b)(1)(A) shall be increased by an amount 
     equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2008' 
     for `calendar year 1992' in subparagraph (B) thereof.
       ``(2) Rounding rules.--If any amount after adjustment under 
     paragraph (1) is not a multiple of $100, such amount shall be 
     rounded to the next lower multiple of $100.''.
       (d) Conforming Amendments.--
       (1) Section 408(a)(1) of the Internal Revenue Code of 1986 
     is amended by striking ``in excess of $2,000 on behalf of any 
     individual'' and inserting ``on behalf of any individual in 
     excess of the amount in effect for such taxable year under 
     section 219(b)(1)(A)''.
       (2) Section 408(b)(2)(B) of such Code is amended by 
     striking ``$2,000'' and inserting ``the dollar amount in 
     effect under section 219(b)(1)(A)''.
       (3) Section 408(b) of such Code is amended by striking 
     ``$2,000'' in the matter following paragraph (4) and 
     inserting ``the dollar amount in effect under section 
     219(b)(1)(A)''.
       (4) Section 408(j) of such Code is amended by striking 
     ``$2,000''.
       (5) Section 408(p)(8) of such Code is amended by striking 
     ``$2,000'' and inserting ``the dollar amount in effect under 
     section 219(b)(1)(A)''.
       (6) Section 408A(c)(2)(A) of such Code is amended to read 
     as follows:
       ``(A) $2,000, over''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

               TITLE III--BUSINESS INVESTMENT PROVISIONS

     SEC. 31. REPEAL OF ALTERNATIVE MINIMUM TAX ON CORPORATIONS.

       (a) Purpose.--The purpose of this section is to eliminate 
     one of the most misguided, anti-growth, anti-investment tax 
     schemes ever devised.
       (b) In General.--The last sentence of section 55(a) of the 
     Internal Revenue Code of 1986, as amended by section 13, is 
     amended by striking ``on any taxpayer other than a 
     corporation''.
       (c) Repeal of 90 Percent Limitation on Foreign Tax 
     Credit.--
       (1) In general.--Section 59(a) of the Internal Revenue Code 
     of 1986 (relating to alternative minimum tax foreign tax 
     credit) is amended by striking paragraph (2) and by 
     redesignating paragraphs (3) and (4) as paragraphs (2) and 
     (3), respectively.
       (2) Conforming amendment.--Section 53(d)(1)(B)(i)(II) of 
     such Code is amended by striking ``and if section 59(a)(2) 
     did not apply''.
       (d) Limitation on Use of Credit for Prior Year Minimum Tax 
     Liability.--
       (1) In general.--Subsection (c) of section 53 of the 
     Internal Revenue Code of 1986, as amended by section 13, is 
     amended by redesignating paragraph (2) as paragraph (3) and 
     by inserting after paragraph (1) the following new paragraph:
       ``(2) Corporations for taxable years beginning after 
     2004.--In the case of corporation for any taxable year 
     beginning after 2004 and before 2010, the limitation under 
     paragraph (1) shall be increased by the applicable percentage 
     (determined in accordance with the following table) of the 
     tentative minimum tax for the taxable year.

``For taxable years beginning in calendarThe applicable percentage is--
    2005............................................................20 
    2006............................................................30 
    2007............................................................40 
    2008 or 2009....................................................50.
     In no event shall the limitation determined under this 
     paragraph be greater than the sum of the tax imposed by 
     section 55 and the regular tax reduced by the sum of the 
     credits allowed under subparts A, B, D, E, and F of this 
     part.''
       (2) Conforming amendments.--
       (A) Section 55(e) of such Code is amended by striking 
     paragraph (5).
       (B) Paragraph (3) of section 53(c) of such Code, as 
     redesignated by paragraph (1), is amended by striking ``to a 
     taxpayer other than a corporation''.
       (e) Effective Date.--
       (1) In general.--Except as provided in paragraphs (2) and 
     (3), the amendments made by this section shall apply to 
     taxable years beginning after December 31, 2004.
       (2) Repeal of 90 percent limitation on foreign tax 
     credit.--The amendments made by subsection (c) shall apply to 
     taxable years beginning after December 31, 2003.
       (3) Subsection (d)(2)(A).--The amendment made by subsection 
     (d)(2)(A) shall apply to taxable years beginning after 
     December 31, 2009.

     SEC. 32. INCREASE IN LIMIT FOR ELECTION TO EXPENSE CERTAIN 
                   BUSINESS ASSETS.

       (a) In General.--Section 179(b)(1) of the Internal Revenue 
     Code of 1986 (relating to dollar limitation) is amended by 
     striking the last item in the table and inserting the 
     following new items:

  ``2003 or 2004................................................25,000 
  ``2005 or thereafter.......................................250,000.''
       (b) Index.--Section 179(b) of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new 
     paragraph:
       ``(5) Inflation adjustment.--In the case of a taxable year 
     beginning after 2005, the $25,000 amount under paragraph (1) 
     shall be increased by an amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2004' 
     for `calendar year 1992' in subparagraph (B) thereof.''
       (c) Increase in Limitation on Cost of Property Placed in 
     Service.--Section 179(b)(2) of the Internal Revenue Code of 
     1986 (relating to reduction in limitation) is amended by 
     striking ``$200,000'' and inserting ``$4,000,000''.

                  TITLE IV--ESTATE AND GIFT TAX RELIEF

     SEC. 41. PHASEOUT OF ESTATE AND GIFT TAXES.

       (a) Purpose.--The purpose of this section is to begin 
     phasing out the confiscatory gift and estate tax by reducing 
     the rate of tax.
       (b) Repeal of Estate and Gift Taxes.--Subtitle B of the 
     Internal Revenue Code of 1986 (relating to estate and gift 
     taxes) is repealed effective with respect to estates of 
     decedents dying, and gifts made, after December 31, 2009.
       (c) Phaseout of Tax.--Subsection (c) of section 2001 of the 
     Internal Revenue Code of 1986 (relating to imposition and 
     rate of tax) is amended by adding at the end the following:
       ``(3) Phaseout of tax.--In the case of estates of decedents 
     dying, and gifts made, during any calendar year after 1999 
     and before 2010--
       ``(A) In general.--The tentative tax under this subsection 
     shall be determined by using a table prescribed by the 
     Secretary (in lieu of using the table contained in paragraph 
     (1)) which is the same as such table; except that--
       ``(i) each of the rates of tax shall be reduced (but not 
     below zero) by the number of percentage points determined 
     under subparagraph (B), and
       ``(ii) the amounts setting forth the tax shall be adjusted 
     to the extent necessary to reflect the adjustments under 
     clause (i).
       ``(B) Percentage points of reduction.--

``For calendar year:                The number of percentage points is:
  2001...............................................................1 

[[Page 16155]]

  2002...............................................................2 
  2003...............................................................3 
  2004...............................................................4 
  2005...............................................................5 
  2006...............................................................7 
  2007...............................................................9 
  2008..............................................................11 
  2009..............................................................15.
       ``(C) Coordination with paragraph (2).--Paragraph (2) shall 
     be applied by reducing the 55 percent percentage contained 
     therein by the number of percentage points determined for 
     such calendar year under subparagraph (B).
       ``(D) Coordination with credit for state death taxes.--
     Rules similar to the rules of subparagraph (A) shall apply to 
     the table contained in section 2011(b) except that the number 
     of percentage points referred to in subparagraph (A)(i) shall 
     be determined under the following table:

``For calendar year:                The number of percentage points is:
  2001...............................................................1 
  2002...............................................................2 
  2003...............................................................3 
  2004...............................................................4 
  2005...............................................................5 
  2006...............................................................7 
  2007...............................................................9 
  2008..............................................................11 
  2009...........................................................15.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, and gifts made, 
     after December 31, 2000.

          TITLE V--RESEARCH CREDIT EXTENSION AND MODIFICATION

     SEC. 51. PURPOSE.

       The purpose of this title is to make the research credit 
     permanent and make certain modifications to the credit.

     SEC. 52. PERMANENT EXTENSION OF RESEARCH CREDIT.

       (a) In General.--Section 41 of the Internal Revenue Code of 
     1986 (relating to credit for increasing research activities) 
     is amended by striking subsection (h).
       (b) Conforming Amendment.--Section 45C(b)(1) of the 
     Internal Revenue Code of 1986 is amended by striking 
     subparagraph (D).
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after December 31, 
     2000.

     SEC. 53. IMPROVED ALTERNATIVE INCREMENTAL CREDIT.

       (a) In General.--Section 41 of the Internal Revenue Code of 
     1986 (relating to credit for increasing research activities), 
     as amended by section 52, is amended by adding at the end the 
     following:
       ``(h) Election of Alternative Incremental Credit.--
       ``(1) In general.--At the election of the taxpayer, the 
     credit under subsection (a)(1) shall be determined under this 
     section by taking into account the modifications provided by 
     this subsection.
       ``(2) Determination of base amount.--
       ``(A) In general.--In computing the base amount under 
     subsection (c)--
       ``(i) notwithstanding subsection (c)(3), the fixed-base 
     percentage shall be equal to 80 percent of the percentage 
     which the aggregate qualified research expenses of the 
     taxpayer for the base period is of the aggregate gross 
     receipts of the taxpayer for the base period, and
       ``(ii) the minimum base amount under subsection (c)(2) 
     shall not apply.
       ``(B) Start-up and small taxpayers.--In computing the base 
     amount under subsection (c), the gross receipts of a taxpayer 
     for any taxable year in the base period shall be treated as 
     at least equal to $1,000,000.
       ``(C) Base period.--For purposes of this subsection, the 
     base period is the 8-taxable year period preceding the 
     taxable year (or, if shorter, the period the taxpayer (and 
     any predecessor) has been in existence).
       ``(3) Election.--An election under this subsection shall 
     apply to the taxable year for which made and all succeeding 
     taxable years unless revoked with the consent of the 
     Secretary.''.
       (b) Conforming Amendment.--Section 41(c) of the Internal 
     Revenue Code of 1986 is amended by striking paragraph (4) and 
     by redesignating paragraphs (5) and (6) as paragraphs (4) and 
     (5), respectively.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

     SEC. 54. MODIFICATIONS TO CREDIT FOR BASIC RESEARCH.

       (a) Elimination of Incremental Requirement.--
       (1) In general.--Paragraph (1) of section 41(e) of the 
     Internal Revenue Code of 1986 (relating to credit allowable 
     with respect to certain payments to qualified organizations 
     for basic research) is amended to read as follows:
       ``(1) In general.--The amount of basic research payments 
     taken into account under subsection (a)(2) shall be 
     determined in accordance with this subsection.''.
       (2) Conforming amendments.--
       (A) Section 41(a)(2) of the Internal Revenue Code of 1986 
     is amended by striking ``determined under subsection 
     (e)(1)(A)'' and inserting ``for the taxable year''.
       (B) Section 41(e) of such Code is amended by striking 
     paragraphs (3), (4), and (5) and by redesignating paragraphs 
     (6) and (7) as paragraphs (3) and (4), respectively.
       (C) Section 41(e)(4) of such Code, as redesignated by 
     subparagraph (B), is amended by striking subparagraph (B) and 
     by redesignating subparagraphs (C), (D), and (E) as 
     subparagraphs (B), (C), and (D), respectively.
       (D) Clause (i) of section 170(e)(4)(B) of such Code is 
     amended by striking ``section 41(e)(6)'' and inserting 
     ``section 41(e)(3)''.
       (b) Basic Research.--
       (1) Specific commercial objective.--Section 41(e)(4) of the 
     Internal Revenue Code of 1986 (relating to definitions and 
     special rules), as redesignated by subsection (a)(2)(B), is 
     amended by adding at the end the following:
       ``(E) Specific commercial objective.--For purposes of 
     subparagraph (A), research shall not be treated as having a 
     specific commercial objective if the results of such research 
     are to be published in a timely manner as to be available to 
     the general public prior to their use for a commercial 
     purpose.''.
       (2) Exclusions from basic research.--Clause (ii) of section 
     41(e)(4)(A) of such Code (relating to definitions and special 
     rules), as redesignated by subsection (a), is amended to read 
     as follows:
       ``(ii) basic research in the arts and humanities.''.
       (c) Expansion of Credit to Research Done at Federal 
     Laboratories.--Section 41(e)(3) of the Internal Revenue Code 
     of 1986, as redesignated by subsection (a), is amended by 
     adding at the end the following new subparagraph:
       ``(E) Federal laboratories.--Any organization which is a 
     Federal laboratory (as defined in section 4(6) of the 
     Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
     3703(6)).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

     SEC. 55. CREDIT FOR EXPENSES ATTRIBUTABLE TO CERTAIN 
                   COLLABORATIVE RESEARCH CONSORTIA.

       (a) Credit for Expenses Attributable to Certain 
     Collaborative Research Consortia.--Subsection (a) of section 
     41 of the Internal Revenue Code of 1986 (relating to credit 
     for increasing research activities) is amended by striking 
     ``and'' at the end of paragraph (1), striking the period at 
     the end of paragraph (2) and inserting ``, and '', and by 
     adding at the end the following:
       ``(3) 20 percent of the amounts paid or incurred by the 
     taxpayer in carrying on any trade or business of the taxpayer 
     during the taxable year (including as contributions) to a 
     qualified research consortium.''.
       (b) Qualified Research Consortium Defined.--Subsection (f) 
     of section 41 of the Internal Revenue Code of 1986 is amended 
     by adding at the end the following:
       ``(6) Qualified research consortium.--The term `qualified 
     research consortium' means any organization--
       ``(A) which is--
       ``(i) described in section 501(c)(3) and is exempt from tax 
     under section 501(a) and is organized and operated primarily 
     to conduct scientific or engineering research, or
       ``(ii) organized and operated primarily to conduct 
     scientific or engineering research in the public interest 
     (within the meaning of section 501(c)(3)),
       ``(B) which is not a private foundation,
       ``(C) to which at least 5 unrelated persons paid or 
     incurred during the calendar year in which the taxable year 
     of the organization begins amounts (including as 
     contributions) to such organization for scientific or 
     engineering research, and
       ``(D) to which no single person paid or incurred (including 
     as contributions) during such calendar year an amount equal 
     to more than 50 percent of the total amounts received by such 
     organization during such calendar year for scientific or 
     engineering research.

     All persons treated as a single employer under subsection (a) 
     or (b) of section 52 shall be treated as related persons for 
     purposes of subparagraph (C) and as a single person for 
     purposes of subparagraph (D).''.
       (c) Conforming Amendment.--Paragraph (3) of section 41(b) 
     of the Internal Revenue Code of 1986 is amended by striking 
     subparagraph (C).
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

     SEC. 56. IMPROVEMENT TO CREDIT FOR SMALL BUSINESSES AND 
                   RESEARCH PARTNERSHIPS.

       (a) Assistance to Small and Start-Up Businesses.--The 
     Secretary of the Treasury or the Secretary's delegate shall 
     take such actions as are appropriate to--
       (1) provide assistance to small and start-up businesses in 
     complying with the requirements of section 41 of the Internal 
     Revenue Code of 1986, and
       (2) reduce the costs of such compliance.
       (b) Repeal of Limitation on Contract Research Expenses Paid 
     to Small Businesses, Universities, and Federal 
     Laboratories.--Section 41(b)(3) of the Internal Revenue Code 
     of 1986, as amended by section 55(c), is amended by adding at 
     the end the following:

[[Page 16156]]

       ``(C) Amounts paid to eligible small businesses, 
     universities, and federal laboratories.--
       ``(i) In general.--In the case of amounts paid by the 
     taxpayer to an eligible small business, an institution of 
     higher education (as defined in section 3304(f)), or an 
     organization which is a Federal laboratory (as defined in 
     subsection (e)(3)(E)), subparagraph (A) shall be applied by 
     substituting `100 percent' for `65 percent'.
       ``(ii) Eligible small business.--For purposes of this 
     subparagraph, the term `eligible small business' means a 
     small business with respect to which the taxpayer does not 
     own (within the meaning of section 318) 50 percent or more 
     of--

       ``(I) in the case of a corporation, the outstanding stock 
     of the corporation (either by vote or value), and
       ``(II) in the case of a small business which is not a 
     corporation, the capital and profits interests of the small 
     business.

       ``(iii) Small business.--For purposes of this 
     subparagraph--

       ``(I) In general.--The term `small business' means, with 
     respect to any calendar year, any person if the annual 
     average number of employees employed by such person during 
     either of the 2 preceding calendar years was 500 or fewer. 
     For purposes of the preceding sentence, a preceding calendar 
     year may be taken into account only if the person was in 
     existence throughout the year.
       ``(II) Startups, controlled groups, and predecessors.--
     Rules similar to the rules of subparagraphs (B) and (D) of 
     section 220(c)(4) shall apply for purposes of this clause.''.

       (c) Credit For Patent Filing Fees.--Section 41(a) of the 
     Internal Revenue Code of 1986, as amended by section 55(a), 
     is amended by striking ``and'' at the end of paragraph (2), 
     by striking the period at the end of paragraph (3) and 
     inserting ``, and'', and by adding at the end the following:
       ``(4) 20 percent of the patent filing fees paid or incurred 
     by a small business (as defined in subsection (b)(3)(C)(iii)) 
     to the United States or to any foreign government in carrying 
     on any trade or business.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

                     TITLE VI--ENERGY INDEPENDENCE

     SEC. 61. PURPOSES.

       The purposes of this title are--
       (1) to prevent the abandonment of marginal oil and gas 
     wells owned and operated by independent oil and gas 
     producers, which are responsible for half of the United 
     States' domestic production, and
       (2) to transform earned tax credits and other benefits into 
     working capital for the cash-strapped domestic oil and gas 
     producers and service companies.

     SEC. 62. TAX CREDIT FOR MARGINAL DOMESTIC OIL AND NATURAL GAS 
                   WELL PRODUCTION.

       (a) Credit for Producing Oil and Gas From Marginal Wells.--
     Subpart D of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 (relating to business credits) 
     is amended by adding at the end the following:

     ``SEC. 45D. CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL 
                   WELLS.

       ``(a) General Rule.--For purposes of section 38, the 
     marginal well production credit for any taxable year is an 
     amount equal to the product of--
       ``(1) the credit amount, and
       ``(2) the qualified crude oil production and the qualified 
     natural gas production which is attributable to the taxpayer.
       ``(b) Credit Amount.--For purposes of this section--
       ``(1) In general.--The credit amount is--
       ``(A) $3 per barrel of qualified crude oil production, and
       ``(B) 50 cents per 1,000 cubic feet of qualified natural 
     gas production.
       ``(2) Reduction as oil and gas prices increase.--
       ``(A) In general.--The $3 and 50 cents amounts under 
     paragraph (1) shall each be reduced (but not below zero) by 
     an amount which bears the same ratio to such amount 
     (determined without regard to this paragraph) as--
       ``(i) the excess (if any) of the applicable reference price 
     over $14 ($1.56 for qualified natural gas production), bears 
     to
       ``(ii) $3 ($0.33 for qualified natural gas production).

     The applicable reference price for a taxable year is the 
     reference price for the calendar year preceding the calendar 
     year in which the taxable year begins.
       ``(B) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after 2000, each of the 
     dollar amounts contained in subparagraph (A) shall be 
     increased to an amount equal to such dollar amount multiplied 
     by the inflation adjustment factor for such calendar year 
     (determined under section 43(b)(3)(B) by substituting `1999' 
     for `1990').
       ``(C) Reference price.--For purposes of this paragraph, the 
     term `reference price' means, with respect to any calendar 
     year--
       ``(i) in the case of qualified crude oil production, the 
     reference price determined under section 29(d)(2)(C), and
       ``(ii) in the case of qualified natural gas production, the 
     Secretary's estimate of the annual average wellhead price per 
     1,000 cubic feet for all domestic natural gas.
       ``(c) Qualified Crude Oil and Natural Gas Production.--For 
     purposes of this section--
       ``(1) In general.--The terms `qualified crude oil 
     production' and `qualified natural gas production' mean 
     domestic crude oil or natural gas which is produced from a 
     marginal well.
       ``(2) Limitation on amount of production which may 
     qualify.--
       ``(A) In general.--Crude oil or natural gas produced during 
     any taxable year from any well shall not be treated as 
     qualified crude oil production or qualified natural gas 
     production to the extent production from the well during the 
     taxable year exceeds 1,095 barrels or barrel equivalents.
       ``(B) Proportionate reductions.--
       ``(i) Short taxable years.--In the case of a short taxable 
     year, the limitations under this paragraph shall be 
     proportionately reduced to reflect the ratio which the number 
     of days in such taxable year bears to 365.
       ``(ii) Wells not in production entire year.--In the case of 
     a well which is not capable of production during each day of 
     a taxable year, the limitations under this paragraph 
     applicable to the well shall be proportionately reduced to 
     reflect the ratio which the number of days of production 
     bears to the total number of days in the taxable year.
       ``(3) Definitions.--
       ``(A) Marginal well.--The term `marginal well' means a 
     domestic well--
       ``(i) the production from which during the taxable year is 
     treated as marginal production under section 613A(c)(6), or
       ``(ii) which, during the taxable year--

       ``(I) has average daily production of not more than 25 
     barrel equivalents, and
       ``(II) produces water at a rate not less than 95 percent of 
     total well effluent.

       ``(B) Crude oil, etc.--The terms `crude oil', `natural 
     gas', `domestic', and `barrel' have the meanings given such 
     terms by section 613A(e).
       ``(C) Barrel equivalent.--The term `barrel equivalent' 
     means, with respect to natural gas, a conversion ratio of 
     6,000 cubic feet of natural gas to 1 barrel of crude oil.
       ``(d) Other Rules.--
       ``(1) Production attributable to the taxpayer.--In the case 
     of a marginal well in which there is more than one owner of 
     operating interests in the well and the crude oil or natural 
     gas production exceeds the limitation under subsection 
     (c)(2), qualifying crude oil production or qualifying natural 
     gas production attributable to the taxpayer shall be 
     determined on the basis of the ratio which taxpayer's revenue 
     interest in the production bears to the aggregate of the 
     revenue interests of all operating interest owners in the 
     production.
       ``(2) Operating interest required.--Any credit under this 
     section may be claimed only on production which is 
     attributable to the holder of an operating interest.
       ``(3) Production from nonconventional sources excluded.--In 
     the case of production from a marginal well which is eligible 
     for the credit allowed under section 29 for the taxable year, 
     no credit shall be allowable under this section unless the 
     taxpayer elects not to claim the credit under section 29 with 
     respect to the well.''.
       (b) Credit Treated as Business Credit.--Section 38(b) of 
     the Internal Revenue Code of 1986 is amended by striking 
     ``plus'' at the end of paragraph (11), by striking the period 
     at the end of paragraph (12) and inserting ``, plus'', and by 
     adding at the end the following:
       ``(13) the marginal oil and gas well production credit 
     determined under section 45D(a).''.
       (c) Credit Allowed Against Regular and Minimum Tax.--
       (1) In general.--Subsection (c) of section 38 of the 
     Internal Revenue Code of 1986 (relating to limitation based 
     on amount of tax) is amended by redesignating paragraph (3) 
     as paragraph (4) and by inserting after paragraph (2) the 
     following:
       ``(3) Special rules for marginal oil and gas well 
     production credit.--
       ``(A) In general.--In the case of the marginal oil and gas 
     well production credit--
       ``(i) this section and section 39 shall be applied 
     separately with respect to the credit, and
       ``(ii) in applying paragraph (1) to the credit--

       ``(I) subparagraphs (A) and (B) thereof shall not apply, 
     and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the marginal 
     oil and gas well production credit).

       ``(B) Marginal oil and gas well production credit.--For 
     purposes of this subsection, the term `marginal oil and gas 
     well production credit' means the credit allowable under 
     subsection (a) by reason of section 45D(a).''.
       (2) Conforming amendment.--Subclause (II) of section 
     38(c)(2)(A)(ii) of such Code is amended by inserting ``or the 
     marginal oil and gas well production credit'' after 
     ``employment credit''.

[[Page 16157]]

       (d) Carryback.--Subsection (a) of section 39 of the 
     Internal Revenue Code of 1986 (relating to carryback and 
     carryforward of unused credits generally) is amended by 
     adding at the end the following:
       ``(3) 10-year carryback for marginal oil and gas well 
     production credit.--In the case of the marginal oil and gas 
     well production credit--
       ``(A) this section shall be applied separately from the 
     business credit (other than the marginal oil and gas well 
     production credit),
       ``(B) paragraph (1) shall be applied by substituting `10 
     taxable years' for `1 taxable years' in subparagraph (A) 
     thereof, and
       ``(C) paragraph (2) shall be applied--
       ``(i) by substituting `31 taxable years' for `21 taxable 
     years' in subparagraph (A) thereof, and
       ``(ii) by substituting `30 taxable years' for `20 taxable 
     years' in subparagraph (B) thereof.''.
       (e) Coordination With Section 29.--Section 29(a) of the 
     Internal Revenue Code of 1986 is amended by striking 
     ``There'' and inserting ``At the election of the taxpayer, 
     there''.
       (f) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following:

``45D. Credit for producing oil and gas from marginal wells.''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to production after December 31, 2000.

     SEC. 63. 10-YEAR CARRYBACK FOR UNUSED MINIMUM TAX CREDIT.

       (a) In General.--Section 53(c) of the Internal Revenue Code 
     of 1986 (relating to limitation) is amended by adding at the 
     end the following:
       ``(2) Special rule for taxpayers with unused energy minimum 
     tax credits.--
       ``(A) In general.--If, during the 10-taxable year period 
     ending with the current taxable year, a taxpayer has an 
     unused energy minimum tax credit for any taxable year in such 
     period (determined without regard to the application of this 
     paragraph to the current taxable year)--
       ``(i) paragraph (1) shall not apply to each of the taxable 
     years in such period for which the taxpayer has an unused 
     energy minimum tax credit (as so determined), and
       ``(ii) the credit allowable under subsection (a) for each 
     of such taxable years shall be equal to the excess (if any) 
     of--

       ``(I) the sum of the regular tax liability and the net 
     minimum tax for such taxable year, over
       ``(II) the sum of the credits allowable under subparts A, 
     B, D, E, and F of this part.

       ``(B) Energy minimum tax credit.--For purposes of this 
     paragraph, the term `energy minimum tax credit' means the 
     minimum tax credit which would be computed with respect to 
     any taxable year if the adjusted net minimum tax were 
     computed by only taking into account items attributable to--
       ``(i) the taxpayer's mineral interests in oil and gas 
     property, and
       ``(ii) the taxpayer's active conduct of a trade or business 
     of providing tools, products, personnel, and technical 
     solutions on a contractual basis to persons engaged in oil 
     and gas exploration and production.''.
       (b) Conforming Amendments.--Section 53(c) of the Internal 
     Revenue Code of 1986 (as in effect before the amendment made 
     by subsection (a)) is amended--
       (1) by striking ``The'' and inserting:
       ``(1) In general.--Except as provided in paragraph (2), the 
     '', and
       (2) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000, and to any taxable year beginning on or before such 
     date to the extent necessary to apply section 53(c)(2) of the 
     Internal Revenue Code of 1986 (as added by subsection (a)).

     SEC. 64. 10-YEAR NET OPERATING LOSS CARRYBACK FOR LOSSES 
                   ATTRIBUTABLE TO OIL SERVICING COMPANIES AND 
                   MINERAL INTERESTS OF OIL AND GAS PRODUCERS.

       (a) In General.--Paragraph (1) of section 172(b) of the 
     Internal Revenue Code of 1986 (relating to years to which 
     loss may be carried) is amended by adding at the end the 
     following:
       ``(H) Losses on operating mineral interests of oil and gas 
     producers and oilfield servicing companies.--In the case of a 
     taxpayer which has an eligible oil and gas loss (as defined 
     in subsection (j)) for a taxable year, such eligible oil and 
     gas loss shall be a net operating loss carryback to each of 
     the 10 taxable years preceding the taxable year of such 
     loss.''.
       (b) Eligible Oil and Gas Loss.--Section 172 of the Internal 
     Revenue Code of 1986 is amended by redesignating subsection 
     (j) as subsection (k) and by inserting after subsection (i) 
     the following:
       ``(j) Eligible Oil and Gas Loss.--For purposes of this 
     section--
       ``(1) In general.--The term `eligible oil and gas loss' 
     means the lesser of--
       ``(A) the amount which would be the net operating loss for 
     the taxable year if only income and deductions attributable 
     to--
       ``(i) mineral interests in oil and gas wells, and
       ``(ii) the active conduct of a trade or business of 
     providing tools, products, personnel, and technical solutions 
     on a contractual basis to persons engaged in oil and gas 
     exploration and production,

     are taken into account, and
       ``(B) the amount of the net operating loss for such taxable 
     year.
       ``(2) Coordination with subsection (b)(2).--For purposes of 
     applying subsection (b)(2), an eligible oil and gas loss for 
     any taxable year shall be treated in a manner similar to the 
     manner in which a specified liability loss is treated.
       ``(3) Election.--Any taxpayer entitled to a 10-year 
     carryback under subsection (b)(1)(H) from any loss year may 
     elect to have the carryback period with respect to such loss 
     year determined without regard to subsection (b)(1)(H). Such 
     election shall be made in such manner as may be prescribed by 
     the Secretary and shall be made by the due date (including 
     extensions of time) for filing the taxpayer's return for the 
     taxable year of the net operating loss. Such election, once 
     made for any taxable year, shall be irrevocable for such 
     taxable year.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to net operating losses for taxable years 
     beginning after December 31, 1999, and to any taxable year 
     beginning on or before such date to the extent necessary to 
     apply section 172(b)(1)(H) of the Internal Revenue Code of 
     1986 (as added by subsection (a)).

     SEC. 65. WAIVER OF LIMITATIONS.

       If refund or credit of any overpayment of tax resulting 
     from the application of the amendments made by sections 63 
     and 64 is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 66. ELECTION TO EXPENSE GEOLOGICAL AND GEOPHYSICAL 
                   EXPENDITURES AND DELAY RENTAL PAYMENTS.

       (a) Purpose.--The purpose of this section is to recognize 
     that geological and geophysical expenditures and delay 
     rentals are ordinary and necessary business expenses that 
     should be deducted in the year the expense is incurred.
       (b) Election To Expense Geological and Geophysical 
     Expenditures.--
       (1) In general.--Section 263 of the Internal Revenue Code 
     of 1986 (relating to capital expenditures) is amended by 
     adding at the end the following:
       ``(j) Geological and Geophysical Expenditures for Domestic 
     Oil and Gas Wells.--Notwithstanding subsection (a), a 
     taxpayer may elect to treat geological and geophysical 
     expenses incurred in connection with the exploration for, or 
     development of, oil or gas within the United States (as 
     defined in section 638) as expenses which are not chargeable 
     to capital account. Any expenses so treated shall be allowed 
     as a deduction in the taxable year in which paid or 
     incurred.''.
       (2) Conforming amendment.--Section 263A(c)(3) of such Code 
     is amended by inserting ``263(j),'' after ``263(i),''.
       (3) Effective date.--
       (A) In general.--The amendments made by this subsection 
     shall apply to expenses paid or incurred after December 31, 
     2000.
       (B) Transition rule.--In the case of any expenses described 
     in section 263(j) of the Internal Revenue Code of 1986, as 
     added by this subsection, which were paid or incurred on or 
     before December 31, 2000, the taxpayer may elect, at such 
     time and in such manner as the Secretary of the Treasury may 
     prescribe, to amortize the unamortized portion of such 
     expenses over the 36-month period beginning with the month of 
     January, 2001. For purposes of this subparagraph, the 
     unamortized portion of any expense is the amount remaining 
     unamortized as of the first day of the 36-month period.
       (c) Election To Expense Delay Rental Payments.--
       (1) In general.--Section 263 of the Internal Revenue Code 
     of 1986 (relating to capital expenditures), as amended by 
     subsection (b)(1), is amended by adding at the end the 
     following:
       ``(k) Delay Rental Payments for Domestic Oil and Gas 
     Wells.--
       ``(1) In general.--Notwithstanding subsection (a), a 
     taxpayer may elect to treat delay rental payments incurred in 
     connection with the development of oil or gas within the 
     United States (as defined in section 638) as payments which 
     are not chargeable to capital account. Any payments so 
     treated shall be allowed as a deduction in the taxable year 
     in which paid or incurred.
       ``(2) Delay rental payments.--For purposes of paragraph 
     (1), the term `delay rental payment' means an amount paid for 
     the privilege of deferring development of an oil or gas 
     well.''.
       (2) Conforming amendment.--Section 263A(c)(3) of the 
     Internal Revenue Code of 1986, as amended by subsection 
     (b)(2), is amended by inserting ``263(k),'' after 
     ``263(j),''.
       (3) Effective date.--

[[Page 16158]]

       (A) In general.--The amendments made by this subsection 
     shall apply to payments made or incurred after December 31, 
     2000.
       (B) Transition rule.--In the case of any payments described 
     in section 263(k) of the Internal Revenue Code of 1986, as 
     added by this subsection, which were made or incurred on or 
     before December 31, 2000, the taxpayer may elect, at such 
     time and in such manner as the Secretary of the Treasury may 
     prescribe, to amortize the unamortized portion of such 
     payments over the 36-month period beginning with the month of 
     January, 2001. For purposes of this subparagraph, the 
     unamortized portion of any payment is the amount remaining 
     unamortized as of the first day of the 36-month period.

                      TITLE VII--REVENUE PROVISION

     SEC. 71. 4-YEAR AVERAGING FOR CONVERSION OF TRADITIONAL IRA 
                   TO ROTH IRA.

       (a) In General.--Section 408A(d)(3)(A)(iii) of the Internal 
     Revenue Code of 1986 is amended by striking ``January 1, 
     1999,'' and inserting ``January 1, 2004,''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to distributions made after December 31, 2000.

                         ADDITIONAL COSPONSORS


                                 S. 253

  At the request of Mr. Murkowski, the name of the Senator from Idaho 
(Mr. Craig) was withdrawn as a cosponsor of S. 253, a bill to provide 
for the reorganization of the Ninth Circuit Court of Appeals, and for 
other purposes.


                                 S. 309

  At the request of Mr. McCain, the name of the Senator from Montana 
(Mr. Burns) was added as a cosponsor of S. 309, a bill to amend the 
Internal Revenue Code of 1986 to provide that a member of the uniformed 
services shall be treated as using a principal residence while away 
from home on qualified official extended duty in determining the 
exclusion of gain from the sale of such residence.


                                 S. 409

  At the request of Mr. Kennedy, the name of the Senator from 
Connecticut (Mr. Dodd) was added as a cosponsor of S. 409, a bill to 
authorize qualified organizations to provide technical assistance and 
capacity building services to microenterprise development organizations 
and programs and to disadvantaged entrepreneurs using funds from the 
Community Development Financial Institutions Fund, and for other 
purposes.


                                 S. 424

  At the request of Mr. Coverdell, the name of the Senator from Utah 
(Mr. Bennett) was added as a cosponsor of S. 424, a bill to preserve 
and protect the free choice of individuals and employees to form, join, 
or assist labor organizations, or to refrain from such activities.


                                 S. 514

  At the request of Mr. Cochran, the names of the Senator from Maryland 
(Mr. Sarbanes) and the Senator from Indiana (Mr. Lugar) were added as 
cosponsors of S. 514, a bill to improve the National Writing Project.


                                 S. 632

  At the request of Mr. DeWine, the name of the Senator from New York 
(Mr. Schumer) was added as a cosponsor of S. 632, a bill to provide 
assistance for poison prevention and to stabilize the funding of 
regional poison control centers.


                                 S. 800

  At the request of Mr. Burns, the name of the Senator from 
Massachusetts (Mr. Kerry) was added as a cosponsor of S. 800, a bill to 
promote and enhance public safety through the use of 9-1-1 as the 
universal emergency assistance number, further deployment of wireless 
9-1-1 service, support of States in upgrading 9-1-1 capabilities and 
related functions, encouragement of construction and operation of 
seamless, ubiquitous, and reliable networks for personal wireless 
services, and for other purposes.


                                 S. 820

  At the request of Mr. Breaux, the name of the Senator from Arkansas 
(Mrs. Lincoln) was added as a cosponsor of S. 820, a bill to amend the 
Internal Revenue Code of 1986 to repeal the 4.3-cent motor fuel excise 
taxes on railroads and inland waterway transportation which remain in 
the general fund of the Treasury.


                                 S. 872

  At the request of Mr. Voinovich, the name of the Senator from Oregon 
(Mr. Wyden) was added as a cosponsor of S. 872, a bill to impose 
certain limits on the receipt of out-of-State municipal solid waste, to 
authorize State and local controls over the flow of municipal solid 
waste, and for other purposes.


                                 S. 882

  At the request of Mr. Murkowski, the names of the Senator from 
Mississippi (Mr. Cochran), and the Senator from Colorado (Mr. Campbell) 
were added as cosponsors of S. 882, a bill to strengthen provisions in 
the Energy Policy Act of 1992 and the Federal Nonnuclear Energy 
Research and Development Act of 1974 with respect to potential Climate 
Change.


                                 S. 984

  At the request of Ms. Collins, the name of the Senator from Idaho 
(Mr. Crapo) was added as a cosponsor of S. 984, a bill to amend the 
Internal Revenue Code of 1986 to modify the tax credit for electricity 
produced from certain renewable resources.


                                S. 1029

  At the request of Mr. Cochran, the name of the Senator from South 
Dakota (Mr. Daschle) was added as a cosponsor of S. 1029, a bill to 
amend title III of the Elementary and Secondary Education Act of 1965 
to provide for digital education partnerships.


                                S. 1038

  At the request of Mr. Grassley, the name of the Senator from 
Minnesota (Mr. Grams) was added as a cosponsor of S. 1038, a bill to 
amend the Internal Revenue Code of 1986 to exempt small issue bonds for 
agriculture from the State volume cap.


                                S. 1053

  At the request of Mr. Bond, the names of the Senator from Oklahoma 
(Mr. Inhofe) and the Senator from Texas (Mrs. Hutchison) were added as 
cosponsors of S. 1053, a bill to amend the Clean Air Act to incorporate 
certain provisions of the transportation conformity regulations, as in 
effect on March 1, 1999.


                                S. 1070

  At the request of Mr. Bond, the name of the Senator from South 
Carolina (Mr. Thurmond) was added as a cosponsor of S. 1070, a bill to 
require the Secretary of Labor to wait for completion of a National 
Academy of Sciences study before promulgating a standard, regulation or 
guideline on ergonomics.


                                S. 1139

  At the request of Mr. Reid, the name of the Senator from New York 
(Mr. Moynihan) was added as a cosponsor of S. 1139, a bill to amend 
title 49, United States Code, relating to civil penalties for unruly 
passengers of air carriers and to provide for the protection of 
employees providing air safety information, and for other purposes.


                                S. 1193

  At the request of Mr. Lautenberg, the name of the Senator from Oregon 
(Mr. Wyden) was added as a cosponsor of S. 1193, a bill to improve the 
safety of animals transported on aircraft, and for other purposes.


                                S. 1196

  At the request of Mr. Coverdell, the name of the Senator from Georgia 
(Mr. Cleland) was added as a cosponsor of S. 1196, a bill to improve 
the quality, timeliness, and credibility of forensic science services 
for criminal justice purposes.


                                S. 1266

  At the request of Mr. Gorton, the name of the Senator from Virginia 
(Mr. Warner) was added as a cosponsor of S. 1266, a bill to allow a 
State to combine certain funds to improve the academic achievement of 
all its students.


                                S. 1318

  At the request of Mr. Jeffords, the name of the Senator from 
California (Mrs. Feinstein) was added as a cosponsor of S. 1318, a bill 
to authorize the Secretary of Housing and Urban Development to award 
grants to States to supplement State and local assistance for the 
preservation and promotion of affordable housing opportunities for low-
income families.


                                S. 1345

  At the request of Mr. Lautenberg, the name of the Senator from Oregon 
(Mr. Wyden) was added as a cosponsor of S. 1345, a bill to amend title 
18, United States Code, to prohibit certain interstate conduct relating 
to exotic animals.

[[Page 16159]]




                     Senate Concurrent Resolution 9

  At the request of Ms. Snowe, the name of the Senator from New York 
(Mr. Schumer) was added as a cosponsor of Senate Concurrent Resolution 
9, a concurrent resolution calling for a United States effort to end 
restrictions on the freedoms and human rights of the enclaved people in 
the occupied area of Cyprus.


                         Senate Resolution 128

  At the request of Mr. Cochran, the name of the Senator from Indiana 
(Mr. Lugar) was added as a cosponsor of Senate Resolution 128, a 
resolution designating March 2000, as ``Arts Education Month.''

                          ____________________