[Congressional Record (Bound Edition), Volume 145 (1999), Part 2]
[Senate]
[Pages 3040-3065]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. THOMAS (for himself and Mr. Enzi):
  S. 449. A bill to direct the Secretary of the Interior to transfer to 
the personal representative of the estate of Fred Steffens of Big Horn 
County, Wyoming, certain land comprising the Steffens family property; 
to the Committee on Energy and Natural Resources.


      legislation to transfer property in big horn county, wyoming

  Mr. THOMAS. Mr. President, I rise today to introduce legislation 
which was passed by the Senate during the 105th Congress and 
unfortunately was not passed by the House of Representatives. This 
measure, which would return a family farm in Big Horn County, WY, to 
its rightful owners, has also gained the Administration's full support.
  The family of Fred Steffens lost ownership of the property where they 
lived and prospered for almost 70 years, as a result of a 
misrepresentation by the original property owners. Mr. Steffens' 
relatives have explored every avenue to regain the title to their 
property, and are left with no other option than to seek congressional 
assistance. I stand before you today, on behalf of my constituents, to 
request help in providing a timely solution to this problem. It is my 
hope that in doing so, this wrong can be righted.
  Upon the death of Fred Steffens on January 20, 1995, his sister Marie 
Wambeke was appointed personal representative of the 80-acre Steffens 
Estate. In February 1996, Ms. Wambeke learned from the Bureau of Land 
Management (BLM) that she did not have a clear title to her brother's 
property, and she submitted a Color-of-Title application. Shortly 
thereafter, Ms. Wambeke was informed that her brother's property was 
never patented, so her application was rejected.
  The injustice of this situation is that when Mr. Steffens purchased 
this property in 1928, he did receive a Warranty Deed with Release of 
Homestead from the former owners. Unfortunately, these individuals did 
not have a reclamation entry to assign to Mr. Steffens. In fact, 2 
years before selling the property, the original owners had been 
informed that the land they occupied was withdrawn by the Bureau of 
Reclamation for the Shoshone Reclamation Project. At the same time, 
they were notified that they had never truly owned the property.
  Unethically, this did not stop them from selling the land to Mr. 
Steffens in 1928. In good faith Mr. Steffens purchased the property, 
paid taxes on the property from the time of purchase, and is on record 
at the Big Horn County Assessor's office as owner of this property. Due 
to the dishonesty of others, his family now faces the sobering reality 
of losing this land unless a title transfer can be effected 
legislatively.
  Mr. President, the legislation I am introducing today would transfer 
the land from Fred Steffens' Estate to his sister Marie. This property 
has been in their family since 1928. Through no fault of their own, 
these folks are being forced to relinquish rights not only to their 
land, but to a part of their heritage and a legacy to their future 
generations. I hope we can expedite this matter by turning this land 
over the Marie Wambeke's ownership.
  Mr. President, I ask unanimous consent that a copy of the legislation 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 449

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

     SECTION 1. TRANSFER OF STEFFENS FAMILY PROPERTY.

       (a) Conveyance.--Subject to subsection (b) and valid 
     existing rights, the Secretary of the Interior shall issue, 
     without consideration, a quitclaim deed to Marie Wambeke of 
     Big Horn County, Wyoming, the personal representative of the 
     estate of Fred Steffens, to the land described in subsection 
     (c).
       (b) Reservation of Minerals.--All minerals underlying the 
     land described in subsection (c) are reserved to the United 
     States.
       (c) Land Description.--The land described in this 
     subsection is the parcel comprising approximately 80 acres 
     and known as ``Farm Unit C'' in the E\1/2\NW\1/4\ of Section 
     27 in Township 57 North, Range 97 West, 6th Principal 
     Meridian, Wyoming.
       (d) Revocation of Withdrawal.--The withdrawal for the 
     Shoshone Reclamation Project made by the Bureau of 
     Reclamation under Secretarial Order dated October 21, 1913, 
     is revoked with respect to the land described in subsection 
     (c).
                                 ______
                                 
      By Mr. HATCH:
  S. 451. A bill for the relief of Saeed Rezai; to the Committee on the 
Judiciary.


                          private relief bill

  Mr. HATCH. Mr. President, I rise today to introduce private relief 
legislation on behalf of my constituents, Mr. Saeed Rezai, and his 
wife, Mrs. Julie Rezai.
  As my colleagues are aware, those immigration cases that warrant 
private legislation are extremely rare, but are warranted in some 
cases. I am introducing a bill for the relief of Saeed Rezai. I had 
hoped that this case would not require congressional intervention. 
Unfortunately, it is clear that private legislation is the only means 
remaining to ensure that the equities of Mr. and Mrs. Rezai's case are 
heard and that a number of unresolved questions are answered without 
imposing a terrible hardship on Mr. and Mrs. Rezai and on their 
marriage.
  I wish to take a moment, Mr. President, to provide something by way 
of background to this somewhat complicated case and to explain the 
urgency of this legislation. Mr. Rezai first came to the United States 
in 1986. On June 15, 1991, he married his current wife, Julie, who is a 
U.S. citizen. Shortly thereafter, she filed an immigrant visa petition 
on his behalf. Approval of this petition has been blocked, however, by 
the application of 204(c) of the Immigration and Nationality Act. 
Section 204(c) precludes the approval of a visa petition for anyone who 
entered, or conspired to enter, into a fraudulent marriage. The 
Immigration and Nationalization Service [INS] applied this provision in 
Mr. Rezai's case because his previous marriage ended in divorce before 
his 2-year period of conditional residence had expired. In immigration 
proceedings following the divorce, the judge heard testimony from 
witness on behalf of Mr. Rezai and his former wife. After considering 
that testimony, he found there was insufficient evidence to warrant 
lifting the conditions on Mr. Rezai's permanent residency and, in the 
absence of a qualifying marriage, granted

[[Page 3041]]

Mr. Rezai voluntary departure from the United States. The judge was 
very careful to mention, however, that there was no proof of false 
testimony by Mr. Rezai, and he granted voluntary departure rather than 
ordering deportation because, in his words, Mr. Rezai `may be eligible 
for a visa in the future.'
  Despite these comments by the immigration judge, who clearly did not 
anticipate the future application of the 204(c) exclusion to Mr. 
Rezai's case, the INS has refused to approve Mrs. Rezai's petition for 
permanent residence on behalf of her husband based on that very 
exclusion. In the meantime, Mr. Rezai appealed the initial termination 
of his lawful permanent resident status in 1990. In August 1995, the 
10th Circuit Court of Appeals denied this appeal and reinstated the 
voluntary departure order. Under current law, there is no provision to 
stay Mr. Rezai's deportation pending the BIA's consideration of Mrs. 
Rezai's current immigrant visa petition.
  Mr. President, there is no question that Mr. Rezai deportation will 
create extraordinary hardship for both Mr. and Mrs. Rezai. Throughout 
all the proceedings of the past 6 years, not a single person that I 
know of--including the INS--has questioned the validity of Mr. and Mrs. 
Rezai's marriage. In fact, many that I have heard from have 
emphatically told me that Mr. and Mrs. Rezai's marriage is as strong as 
any they have seen. Given the prevailing political and cultural climate 
in Iran, I would not expect that Mrs. Rezia will choose to make her 
home there. Thus, Mr. Rezai's deportation will result in either the 
breakup of a legitimate family or the forced removal of a U.S. citizen 
and her husband to a third country foreign to both of them.
  It should also be noted that Mr. Rezai has been present in the United 
States for more than a decade. During this time he has assimilated to 
American culture and has become a contributing member of his community. 
He has been placed in a responsible position of employment as the 
security field supervisor at Westminster College where he has gained 
the respect and admiration of both his peers and his supervisors. In 
fact, I received a letter from the interim president of Westminister 
College, signed by close to 150 of Mr. Rezai's associates, attesting to 
his many contributions to the college and the community. This is just 
one of the many, many letters and phone calls I have received from 
members of our community. Mr. Rezai's forced departure in light of 
these considerations would both unduly limit his own opportunities and 
deprive the community of his continued contributions.
                                 ______
                                 
      By Mr. HATCH:
  S. 452. A bill for the relief of Belinda McGregor; to the Committee 
on the Judiciary.


                          private relief bill

  Mr. HATCH. Mr. President, I am today introducing a private relief 
bill on behalf of Belinda McGregor, the beloved sister of one of my 
constituents, Rosalinda Burton.
  Mistakes are made every day, Mr. President, and when innocent people 
suffer severe consequences as a result of these mistakes, something 
ought to be done to remedy the situation.
  In the particular case of Ms. Belinda McGregor, the federal 
bureaucracy made a mistake--a mistake which cost Ms. McGregor dearly 
and it is now time to correct this mistake. Unfortunately, the only way 
to provide relief is through Congressional action.
  Belinda McGregor, a citizen of the United Kingdom, filed an 
application for the 1995 Diversity Visa program. Her husband, a citizen 
of Ireland, filed a separate application at the same time. Ms. 
McGregor's application was among those selected to receive a diversity 
visa. When the handling clerk at the National Visa Center received the 
application, however, the clerk erroneously replaced Ms. McGregor's 
name in the computer with that of her husband.
  As a result, Ms. McGregor was never informed that she had been 
selected and never provided the requisite information. The mistake with 
respect to Ms. McGregor's husband was caught, but not in time for Ms. 
McGregor to meet the September, 1995 deadline. Her visa number was 
given to another applicant.
  In short, Ms. McGregor was unfairly denied the 1995 diversity visa 
that was rightfully hers due to a series of errors by the National Visa 
Center. As far as I know, these facts are not disputed.
  Unfortunately, the Center does not have the legal authority to 
rectify its own mistake by simply granting Ms. McGregor a visa out of a 
subsequent year's allotment. Thus, a private relief bill is needed in 
order to see that Ms. McGregor gets the visa to which she was clearly 
entitled to in 1995.
  Mr. President, I have received a very compelling letter from 
Rosalinda Burton of Cedar Hills, UT, which I am placing in the Record. 
Ms. Burton is Ms. McGregor's sister and she described to me the strong 
relationship that she and her sister have and the care that her sister 
provided when Ms. Burton was seriously injured in a 1993 car accident.
  I hope that the Senate can move forward on this bill expeditiously. 
Ms. McGregor was the victim of a simple and admitted bureaucratic 
snafu. The Senate ought to move swiftly to correct this injustice.
  Mr. President, I am also including in the Record additional relevant 
correspondence which documents the background of this case.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                              Cedar Hills, UT,

                                               September 23, 1997.
     Hon. Orrin Hatch,
     U.S. Senate.
       Dear Senator Hatch: This is one of the many endless 
     attempts to seek fairness and justification regarding a very 
     unique and still unresolved case pertaining to the future of 
     my beloved sister, Belinda McGregor.
       This is a plea on my part for you to please allow me the 
     opportunity to humbly express in this letter, my deepest 
     concern which is also personally shared by Senator Edward 
     Kennedy.
       It would be a challenge to explain what once started as 
     ``the dream come true'' for my sister, Belinda, on to paper, 
     but I hope you will grant me a moment of your time to read 
     this attempt to seek your help, as my Senator.
       Towards the end of 1993 I was the victim of a very serious 
     car accident and I could not have coped without the support 
     of my church and the tremendous help of my beloved sister, 
     Belinda, after which she expressed a strong desire to come 
     and live in Utah, to be close to me, her only sister. In 
     1994, therefore, a dream came true when, after applying for 
     the DVI Program, which is held yearly, my sister's husband 
     David, was informed by the National Visa Center, that he was 
     selected in the 1995 Diversity Visa Lottery Program. Finally, 
     my sister had a chance to live near her family and friends, 
     Belinda, who is Austrian/British, then working for the 
     ``United Nations Drug Control Programme'' (UNDCP) at the UN 
     Headquarters in Vienna, Austria, was so thrilled to be 
     informed of the good news. Therefore, all the necessary 
     documents were provided to the National Visa Center in New 
     Hampshire.

                           *   *   *   *   *

                                 ______
                                 
      By Mr. SARBANES (for himself and Ms. Mikulski):
  S. 454. A bill to amend title 28, United States Code, to authorize 
the appointment of additional bankruptcy judges for the judicial 
district of Maryland, to the Committee on the Judiciary.


           BANKRUPTCY JUDGESHIPS FOR THE DISTRICT OF MARYLAND

 Mr. SARBANES. Mr. President, I rise today on behalf of myself 
and my colleague from Maryland, Senator Mikulski, to introduce 
legislation that is absolutely critical to the administration of 
justice and the economy in our State of Maryland. This legislation 
provides for four additional bankruptcy judges for the federal judicial 
District of Maryland.
  This bill represents only the most recent of our efforts to 
strengthen Maryland's federal bankruptcy court. Early in the 105th 
Congress, we introduced legislation adding two additional bankruptcy 
judges for the District of Maryland, in line with the then-pending 
request of the Judicial Conference. The House of Representatives 
followed suit in summer 1997, passing legislation that authorized these 
two judges, in addition to other new bankruptcy judgeships throughout 
the country.

[[Page 3042]]

Last year, the Senate overwhelmingly passed bankruptcy reform 
legislation that, among other things, authorized these two judgeships, 
though under the Senate bill the judges were of temporary, rather than 
permanent, status. This legislation ultimately was not enacted into 
law, however, and with such inaction the problem facing Maryland's 
sitting bankruptcy judges has only grown. Maryland remains without the 
additional judgeships it so desperately needs to make our bankruptcy 
system work.
  Our State's need for additional bankruptcy judges has long since 
passed the critical stage. Since November 1993, when Maryland last 
received an additional bankruptcy judge, the number of bankruptcy 
filings in the State has more than doubled. While the entire Nation has 
witnessed a surge in bankruptcy filings over the past several years, 
the increase in Maryland has dwarfed the national average increase. 
Bankruptcy filings in Maryland in the second quarter of 1998 grew at 
eight times the national rate of increase for that period; for the 12-
month period ending June 30, 1998, the rate of increase in Maryland was 
the tenth greatest of the 90 federal judicial districts in the Nation. 
The District of Maryland ranks first among federal judicial districts 
in filings per judge. As noted earlier, each House of Congress 
authorized two additional bankruptcy judges for Maryland during the 
105th Congress. Simply put, however, the problem has outpaced this 
solution.
  The need for the four additional judgeships sought in this 
legislation becomes even more evident when one considers it in the 
context of the case-weighting system adopted by the Judicial Conference 
in 1991 to assess requests for additional bankruptcy judges. Under this 
system, different types of bankruptcy cases are assigned different 
degrees of difficulty and overall weighted case-hour goals are 
established for the judges.
  The Judicial Conference begins to consider requests for additional 
judges when a district's per-judge weighted caseload reaches 1500 
hours. The average United States Bankruptcy Judge had a weighted case-
hour load of 1429 hours per year for the 12-month period ending June 
30, 1998. For that same period, Maryland's bankruptcy judges averaged a 
weighted case-hour load of 3020 hours--an astounding 211 percent of the 
national average. Not only do the Maryland figures dwarf the national 
average; they also dwarf the prior Maryland figures which led to 
legislation passed by each Houses of Congress authorizing additional 
judgeships. Indeed, Maryland's overall weighted case load for the 12-
month period ending June 30, 1998, represented a 25% increase over its 
load for the prior 12-month period alone.
  I ask my colleagues to consider these telling statistics:
  If Maryland were to receive two additional judgeships tomorrow, its 
per-judge weighted caseload would still be 2013 hours--41 percent 
greater than the national average last year, and 34 percent greater 
than the 1500-hour benchmark used by the Judicial Conference to 
evaluate requests for additional judgeships.
  If Maryland were to receive three additional judgeships tomorrow, its 
per-judge weighted caseload would still be 1725 hours--21 percent more 
than the national average, and 15 percent greater than the Judicial 
Conference benchmark.
  Only if Maryland were to receive four additional judgeships, as 
requested in this bill, would the per-judge caseload in Maryland 
approximate the national average. And even then each Maryland judge 
would have a caseload of 1510 case-weighted hours--still above the 
1429-hour national average, and still above the 1500-hour Judicial 
Conference benchmark.
  The additional judgeships sought in this bill are essential not only 
for effective judicial administration, but also for Maryland's economy. 
Bankruptcy laws foster orderly, constructive relationships between 
debtors and creditors during times of economic difficulty. Their 
effective and expeditious implementation results in businesses being 
reorganized, jobs (provided by creditors and debtors) preserved, and 
debts managed fairly. Overworked bankruptcy courts have a destabilizing 
effect on this system, and the inevitable delays occasioned by the lack 
of judges harm creditors and debtors, imperiling Maryland's businesses 
and the people they employ.
  It is expected that bankruptcy reform legislation will be one of the 
first items on the Senate's agenda now that it has resumed legislative 
business. Adding judgeships in Maryland's and other bankruptcy courts 
in need of relief is an essential component of any such reform, given 
that the legislation we are contemplating will not only not ease the 
burdens on these courts, but in fact will increase these burdens by 
imposing new responsibilities on our Nation's bankruptcy judges. And 
even if comprehensive bankruptcy reform fails or is delayed, the 
current state of affairs facing Maryland's bankruptcy court requires 
immediate action in the form of adding judges to that court.
  In closing let me once again commend the efforts of Maryland's four 
sitting bankruptcy judges--Chief Judge Paul Mannes and Judges Duncan 
Keir, James Schneider, and Steve Derby. Their dedication to the 
administration of justice is especially impressive given the 
extraordinary burdens placed on them--burdens which the Senate ought to 
ease at the earliest possible instance.
                                 ______
                                 
      By Mr. DURBIN (for himself and Mrs. Hutchison):
  S. 455. A bill to amend the Immigration and Nationality Act with 
Respect to the requirements for the admission of nonimmigrant nurses 
who will practice in health professional shortage areas; to the 
Committee on the Judiciary.


           nursing relief for disadvantaged areas act of 1999

  Mr. DURBIN. Mr. President, I rise today with by colleague, Senator 
Kay Bailey Hutchison to introduce the Nursing Relief for Disadvantaged 
Areas Act of 1999. Today, some of our Nation's poorest rural and inner-
city communities face a crisis--they may soon have inadequate or no 
hospital healthcare because nurses are unwilling to work in these 
neighborhoods. The Nursing Relief for Disadvantaged Areas Act of 1999 
will ensure that hospitals located in these desperately underserved 
areas can continue to provide adequate healthcare to our most needy 
communities.
  Hospitals located in underprivileged areas often experience severe 
difficulty in attracting nurses. These hospitals operate in the middle 
of some of the harshest poverty and crime in our country. The employees 
of these hospitals often treat the worst and most troubling cases.
  The condition of the surrounding area imperils the ability of these 
hospitals to recruit and maintain an adequate nursing staff. These 
circumstances have pushed some hospitals into a financial crisis, 
threatening the quality of healthcare to those most in need.
  For the past eight years, this problem has been addressed by the 
H(1)(a) visa program which has allowed these hospitals to hire 
nonimmigrant nurses. Unfortunately, the H(1)(a) visa program sunset in 
1997, and so once again such hospitals are in crisis. By replacing the 
H(1)(a) visa, the Nursing Relief Act will alleviate this crisis.
  The true beneficiary of this program will not be the hospitals, but 
the underprivileged communities which rely on the hospitals' services. 
Let me tell you a story about the role that this program can play in 
the health of a community. The story is about the St. Bernard Hospital 
on the South Side of Chicago.
  St. Bernard Hospital is the only remaining hospital in the Englewood 
community, which serves over 100,000 people. It is located in one of 
the poorest and most crime ridden neighborhoods in the country. Over 
the years, St. Bernard has become indispensable to its community. Even 
though it has not been designated as a trauma center, St. Bernard 
receives the second highest number of ambulance runs from the Chicago 
Fire Department. St. Bernard also provides free vision exams and free 
screening for blood pressure, cholesterol, diabetes, and sickle cell 
anemia. In addition, schoolchildren receive free physicals and 
inoculations.

[[Page 3043]]

  St. Bernard Hospital also offers a great number of outreach and 
community services. A food pantry is stocked, and clothes are made 
available for patients in need. St. Bernard is sponsoring a project for 
affordable housing in the community. The hospital has opened four 
family clinics in Englewood to provide safe and easy access to 
healthcare for community residents. Physicians from St. Bernard visit 
senior housing facilities on a regular basis, and the hospital has been 
recognized by Catholic Charities for its work with senior housing and 
healthcare.
  In addition, St. Bernard is by far the largest employer in the 
Englewood area. When the hospital faces a crisis, many jobs in the 
community are placed at risk.
  Even though the health of Englewood relies on this hospital, St. 
Bernard almost had to close its doors in 1992. After aggressive 
recruitment efforts, the hospital was unable to attract enough 
healthcare professionals to maintain its services. The hospital was 
especially in need of registered nurses.
  The problem had been solved in part by hiring foreign nurses through 
the H(1)(a) visa program. The hospital had gone through great lengths 
to hire domestic nurses, and was using the H(1)(a) program only as a 
last alternative to closing its doors.
  In the first half of 1997, for example, the hospital placed want ads 
in the Chicago Tribune and received approximately 200 responses. 
However, almost 75 percent of the responses declined to interview when 
they learned where the hospital was located. St. Bernard has also tried 
to hire nurses through nurse registries. However, the rates of the 
registries would cost the hospital more than $2 million a year, an 
unsustainable expense for an already financially burdened hospital.
  Clearly, the H(1)(a) visa program had been offering St. Bernard a way 
to maintain its service to the community when no other option was 
available. In 1997, even that option was eliminated.
  The Nursing Relief for Disadvantaged Areas Act will ensure that 
hospitals like St. Bernard can keep their doors open to the public and 
continue to support their community. In addition, however, the bill has 
been designed to protect the jobs of domestic nurses and to ensure that 
hospitals use the visa program faithfully and only as a last resort 
solution.
  This bill is more narrowly targeted than the old H(1)(a) visa 
program. The measure ensures that nurses can only be brought into the 
United States by hospitals that have no alternative. In short, we have 
made every effort to ensure that no American nurse will lose his or her 
job as a result of this bill. While we want to assure that these 
hospitals have an adequate nursing staff, we must also guarantee that 
foreign nurses are not taking away jobs from domestic nurses.
  Let me tell you what this bill does:
  It establishes a nonimmigrant classification for nurses in health 
professional shortage areas. The program provides nonimmigrant visas 
for 500 nurses each year to work in hospitals where there are severe 
nursing shortages.
  The Nursing Relief Act protects the jobs of domestic nurses in three 
separate ways:
  First, the measure requires that a hospital must certify that it has 
gone through great lengths to hire and retain domestic nurses before it 
can use this visa program to hire nonimmigrant nurses.
  Second, the measure requires that nonimmigrant nurses must be paid 
the same wages and work under the same conditions as domestic nurses. 
In addition, nonimmigrant nurses cannot be hired in order to disrupt 
the activities of labor unions. These provisions ensure that hospitals 
cannot undercut the working conditions of domestic nurses.
  And third, the measure limits the number of nonimmigrant nurses who 
may enter the United States in any given year. The Act provides spaces 
for only 500 nonimmigrants each year, and it caps the number of nurses 
who may enter each state.
  In addition, the Nursing Relief Act provides for serious penalties 
for abuse, thus ensuring that hospitals will not misuse this new visa 
category. Moreover, the bill guarantees that hospitals use this program 
faithfully by narrowly defining the hospitals which are eligible. In 
order to hire nonimmigrant nurses through this visa program, hospitals 
must fulfill four strict requirements.
  First, the hospital must be located in an area which has been defined 
by the Department of Health and Human Services as having a shortage of 
health care professionals.
  Second, the hospital must have at least 190 acute care beds.
  Third, the hospital must have at least 35 percent of its in-patient 
days reimbursed by Medicare.
  Fourth, the hospital must have at least 28 percent of its in-patient 
days reimbursed by Medicaid.
  All of these measures ensure that the Nursing Relief Act will serve 
as a relief to our communities rather than a loophole in the 
immigration laws.
  Thank you, Mr. President, for the opportunity to introduce this 
important and very timely initiative. I hope that my colleagues will 
join me and support the Nursing Relief for Disadvantaged Areas Act of 
1999 so that every hospital can maintain an adequate nursing staff 
regardless of its location.
  Mr. President, I ask unanimous consent that a copy of the legislation 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 455

       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 ``Nursing Relief for 
     Disadvantaged Areas Act of 1999''.

     SEC. 2. REQUIREMENTS FOR ADMISSION OF NONIMMIGRANT NURSES IN 
                   HEALTH PROFESSIONAL SHORTAGE AREAS DURING 4-
                   YEAR PERIOD.

       (a) Establishment of a New Nonimmigrant Classification for 
     Nonimmigrant Nurses in Health Professional Shortage Areas.--
     Section 101(a)(15)(H)(i) of the Immigration and Nationality 
     Act (8 U.S.C. 1101(a)(15)(H)(i)) is amended by striking ``; 
     or'' at the end and inserting the following: ``, or (c) who 
     is coming temporarily to the United States to perform 
     services as a registered nurse, who meets the qualifications 
     described in section 212(m)(1), and with respect to whom the 
     Secretary of Labor determines and certifies to the Attorney 
     General that an unexpired attestation is on file and in 
     effect under section 212(m)(2) for the facility (as defined 
     in section 212(m)(6)) for which the alien will perform the 
     services; or''.
       (b) Requirements.--Section 212(m) of the Immigration and 
     Nationality Act (8 U.S.C. 1182(m)) is amended to read as 
     follows:
       ``(m)(1) The qualifications referred to in section 
     101(a)(15)(H)(i)(c), with respect to an alien who is coming 
     to the United States to perform nursing services for a 
     facility, are that the alien--
       ``(A) has obtained a full and unrestricted license to 
     practice professional nursing in the country where the alien 
     obtained nursing education or has received nursing education 
     in the United States;
       ``(B) has passed an appropriate examination (recognized in 
     regulations promulgated in consultation with the Secretary of 
     Health and Human Services) or has a full and unrestricted 
     license under State law to practice professional nursing in 
     the State of intended employment; and
       ``(C) is fully qualified and eligible under the laws 
     (including such temporary or interim licensing requirements 
     which authorize the nurse to be employed) governing the place 
     of intended employment to engage in the practice of 
     professional nursing as a registered nurse immediately upon 
     admission to the United States and is authorized under such 
     laws to be employed by the facility.
       ``(2)(A) The attestation referred to in section 
     101(a)(15)(H)(i)(c), with respect to a facility for which an 
     alien will perform services, is an attestation as to the 
     following:
       ``(i) The facility meets all the requirements of paragraph 
     (6).
       ``(ii) The employment of the alien will not adversely 
     affect the wages and working conditions of registered nurses 
     similarly employed.
       ``(iii) The alien employed by the facility will be paid the 
     wage rate for registered nurses similarly employed by the 
     facility.
       ``(iv) The facility has taken and is taking timely and 
     significant steps designed to recruit and retain sufficient 
     registered nurses who are United States citizens or 
     immigrants who are authorized to perform nursing services, in 
     order to remove as quickly as reasonably possible the 
     dependence of the facility on nonimmigrant registered nurses.
       ``(v) There is not a strike or lockout in the course of a 
     labor dispute, the facility did not lay off and will not lay 
     off a registered nurse employed by the facility within the 
     period beginning 90 days before and ending 90 days

[[Page 3044]]

     after the date of filing of any visa petition, and the 
     employment of such an alien is not intended or designed to 
     influence an election for a bargaining representative for 
     registered nurses of the facility.
       ``(vi) At the time of the filing of the petition for 
     registered nurses under section 101(a)(15)(H)(i)(c), notice 
     of the filing has been provided by the facility to the 
     bargaining representative of the registered nurses at the 
     facility or, where there is no such bargaining 
     representative, notice of the filing has been provided to the 
     registered nurses employed at the facility through posting in 
     conspicuous locations.
       ``(vii) The facility will not, at any time, employ a number 
     of aliens issued visas or otherwise provided nonimmigrant 
     status under section 101(a)(15)(H)(i)(c) that exceeds 33 
     percent of the total number of registered nurses employed by 
     the facility.
       ``(viii) The facility will not, with respect to any alien 
     issued a visa or otherwise provided nonimmigrant status under 
     section 101(a)(15)(H)(i)(c)--
       ``(I) authorize the alien to perform nursing services at 
     any worksite other than a worksite controlled by the 
     facility; or
       ``(II) transfer the place of employment of the alien from 
     one worksite to another.

     Nothing in clause (iv) shall be construed as requiring a 
     facility to have taken significant steps described in such 
     clause before the date of the enactment of the Nursing Relief 
     for Disadvantaged Areas Act of 1999. A copy of the 
     attestation shall be provided, within 30 days of the date of 
     filing, to registered nurses employed at the facility on the 
     date of filing.
       ``(B) For purposes of subparagraph (A)(iv), each of the 
     following shall be considered a significant step reasonably 
     designed to recruit and retain registered nurses:
       ``(i) Operating a training program for registered nurses at 
     the facility or financing (or providing participation in) a 
     training program for registered nurses elsewhere.
       ``(ii) Providing career development programs and other 
     methods of facilitating health care workers to become 
     registered nurses.
       ``(iii) Paying registered nurses wages at a rate higher 
     than currently being paid to registered nurses similarly 
     employed in the geographic area.
       ``(iv) Providing reasonable opportunities for meaningful 
     salary advancement by registered nurses.

     The steps described in this subparagraph shall not be 
     considered to be an exclusive list of the significant steps 
     that may be taken to meet the conditions of subparagraph 
     (A)(iv). Nothing in this subparagraph shall require a 
     facility to take more than one step if the facility can 
     demonstrate that taking a second step is not reasonable.
       ``(C) Subject to subparagraph (E), an attestation under 
     subparagraph (A)--
       ``(i) shall expire on the date that is the later of--
       ``(I) the end of the one-year period beginning on the date 
     of its filing with the Secretary of Labor; or
       ``(II) the end of the period of admission under section 
     101(a)(15)(H)(i)(c) of the last alien with respect to whose 
     admission it was applied (in accordance with clause (ii)); 
     and
       ``(ii) shall apply to petitions filed during the one-year 
     period beginning on the date of its filing with the Secretary 
     of Labor if the facility states in each such petition that it 
     continues to comply with the conditions in the attestation.
       ``(D) A facility may meet the requirements under this 
     paragraph with respect to more than one registered nurse in a 
     single petition.
       ``(E)(i) The Secretary of Labor shall compile and make 
     available for public examination in a timely manner in 
     Washington, D.C., a list identifying facilities which have 
     filed petitions for nonimmigrants under section 
     101(a)(15)(H)(i)(c) and, for each such facility, a copy of 
     the facility's attestation under subparagraph (A) (and 
     accompanying documentation) and each such petition filed by 
     the facility.
       ``(ii) The Secretary of Labor shall establish a process, 
     including reasonable time limits, for the receipt, 
     investigation, and disposition of complaints respecting a 
     facility's failure to meet conditions attested to or a 
     facility's misrepresentation of a material fact in an 
     attestation. Complaints may be filed by any aggrieved person 
     or organization (including bargaining representatives, 
     associations deemed appropriate by the Secretary, and other 
     aggrieved parties as determined under regulations of the 
     Secretary). The Secretary shall conduct an investigation 
     under this clause if there is reasonable cause to believe 
     that a facility fails to meet conditions attested to. Subject 
     to the time limits established under this clause, this 
     subparagraph shall apply regardless of whether an attestation 
     is expired or unexpired at the time a complaint is filed.
       ``(iii) Under such process, the Secretary shall provide, 
     within 180 days after the date such a complaint is filed, for 
     a determination as to whether or not a basis exists to make a 
     finding described in clause (iv). If the Secretary determines 
     that such a basis exists, the Secretary shall provide for 
     notice of such determination to the interested parties and an 
     opportunity for a hearing on the complaint within 60 days of 
     the date of the determination.
       ``(iv) If the Secretary of Labor finds, after notice and 
     opportunity for a hearing, that a facility (for which an 
     attestation is made) has failed to meet a condition attested 
     to or that there was a misrepresentation of material fact in 
     the attestation, the Secretary shall notify the Attorney 
     General of such finding and may, in addition, impose such 
     other administrative remedies (including civil monetary 
     penalties in an amount not to exceed $1,000 per nurse per 
     violation, with the total penalty not to exceed $10,000 per 
     violation) as the Secretary determines to be appropriate. 
     Upon receipt of such notice, the Attorney General shall not 
     approve petitions filed with respect to a facility during a 
     period of at least one year for nurses to be employed by the 
     facility.
       ``(v) In addition to the sanctions provided for under 
     clause (iv), if the Secretary of Labor finds, after notice 
     and an opportunity for a hearing, that a facility has 
     violated the condition attested to under subparagraph 
     (A)(iii) (relating to payment of registered nurses at the 
     prevailing wage rate), the Secretary shall order the facility 
     to provide for payment of such amounts of back pay as may be 
     required to comply with such condition.
       ``(F)(i) The Secretary of Labor shall impose on a facility 
     filing an attestation under subparagraph (A) a filing fee, in 
     an amount prescribed by the Secretary based on the costs of 
     carrying out the Secretary's duties under this subsection, 
     but not exceeding $250.
       ``(ii) Fees collected under this subparagraph shall be 
     deposited in a fund established for this purpose in the 
     Treasury of the United States.
       ``(iii) The collected fees in the fund shall be available 
     to the Secretary of Labor, to the extent and in such amounts 
     as may be provided in appropriations Acts, to cover the costs 
     described in clause (i), in addition to any other funds that 
     are available to the Secretary to cover such costs.
       ``(3) The period of admission of an alien under section 
     101(a)(15)(H)(i)(c) shall be 3 years.
       ``(4) The total number of nonimmigrant visas issued 
     pursuant to petitions granted under section 
     101(a)(15)(H)(i)(c) in each fiscal year shall not exceed 500. 
     The number of such visas issued for employment in each State 
     in each fiscal year shall not exceed the following:
       ``(A) For States with populations of less than 9,000,000, 
     based upon the 1990 decennial census of population, 25 visas.
       ``(B) For States with populations of 9,000,000 or more, 
     based upon the 1990 decennial census of population, 50 visas.
       ``(C) If the total number of visas available under this 
     paragraph for a fiscal year quarter exceeds the number of 
     qualified nonimmigrants who may be issued such visas during 
     those quarters, the visas made available under this paragraph 
     shall be issued without regard to the numerical limitation 
     under subparagraph (A) or (B) of this paragraph during the 
     last fiscal year quarter.
       ``(5) A facility that has filed a petition under section 
     101(a)(15)(H)(i)(c) to employ a nonimmigrant to perform 
     nursing services for the facility--
       ``(A) shall provide the nonimmigrant a wage rate and 
     working conditions commensurate with those of nurses 
     similarly employed by the facility;
       ``(B) shall require the nonimmigrant to work hours 
     commensurate with those of nurses similarly employed by the 
     facility; and
       ``(C) shall not interfere with the right of the 
     nonimmigrant to join or organize a union.
       ``(6) For purposes of this subsection and section 
     101(a)(15)(H)(i)(c), the term `facility' means a subsection 
     (d) hospital (as defined in section 1886(d)(1)(B) of the 
     Social Security Act (42 U.S.C. 1395ww(d)(1)(B))) that meets 
     the following requirements:
       ``(A) As of March 31, 1997, the hospital was located in a 
     health professional shortage area (as defined in section 332 
     of the Public Health Service Act (42 U.S.C. 254e)).
       ``(B) Based on its settled cost report filed under title 
     XVIII of the Social Security Act for its cost reporting 
     period beginning during fiscal year 1994--
       ``(i) the hospital has not less than 190 licensed acute 
     care beds;
       ``(ii) the number of the hospital's inpatient days for such 
     period which were made up of patients who (for such days) 
     were entitled to benefits under part A of such title is not 
     less than 35 percent of the total number of such hospital's 
     acute care inpatient days for such period; and
       ``(iii) the number of the hospital's inpatient days for 
     such period which were made up of patients who (for such 
     days) were eligible for medical assistance under a State plan 
     approved under title XIX of the Social Security Act, is not 
     less than 28 percent of the total number of such hospital's 
     acute care inpatient days for such period.
       ``(7) For purposes of paragraph (2)(A)(v), the term `lay 
     off', with respect to a worker--
       ``(A) means to cause the worker's loss of employment, other 
     than through a discharge for inadequate performance, 
     violation of workplace rules, cause, voluntary departure, 
     voluntary retirement, or the expiration of a grant or 
     contract; but

[[Page 3045]]

       ``(B) does not include any situation in which the worker is 
     offered, as an alternative to such loss of employment, a 
     similar employment opportunity with the same employer at 
     equivalent or higher compensation and benefits than the 
     position from which the employee was discharged, regardless 
     of whether or not the employee accepts the offer.

     Nothing in this paragraph is intended to limit an employee's 
     or an employer's rights under a collective bargaining 
     agreement or other employment contract.''.
       (c) Repealer.--Clause (i) of section 101(a)(15)(H) of the 
     Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(H)(i)) 
     is amended by striking subclause (a).
       (d) Implementation.--Not later than 90 days after the date 
     of enactment of this Act, the Secretary of Labor (in 
     consultation, to the extent required, with the Secretary of 
     Health and Human Services) and the Attorney General shall 
     promulgate final or interim final regulations to carry out 
     section 212(m) of the Immigration and Nationality Act (as 
     amended by subsection (b)).
       (e) Limiting Application of Nonimmigrant Changes to 4-Year 
     Period.--The amendments made by this section shall apply to 
     classification petitions filed for nonimmigrant status only 
     during the 4-year period beginning on the date that interim 
     or final regulations are first promulgated under subsection 
     (d).

     SEC. 3. RECOMMENDATIONS FOR ALTERNATIVE REMEDY FOR NURSING 
                   SHORTAGE.

       Not later than the last day of the 4-year period described 
     in section 2(e), the Secretary of Health and Human Services 
     and the Secretary of Labor shall jointly submit to the 
     Congress recommendations (including legislative 
     specifications) with respect to the following:
       (1) A program to eliminate the dependence of facilities 
     described in section 212(m)(6) of the Immigration and 
     Nationality Act (as amended by section 2(b)) on nonimmigrant 
     registered nurses by providing for a permanent solution to 
     the shortage of registered nurses who are United States 
     citizens or aliens lawfully admitted for permanent residence.
       (2) A method of enforcing the requirements imposed on 
     facilities under sections 101(a)(15)(H)(i)(c) and 212(m) of 
     the Immigration and Nationality Act (as amended by section 2) 
     that would be more effective than the process described in 
     section 212(m)(2)(E) of such Act (as so amended).

     SEC. 4. CERTIFICATION FOR CERTAIN ALIEN NURSES.

       (a) In General.--
       (1) Section 212 of the Immigration and Nationality Act (8 
     U.S.C. 1182) is amended by adding at the end the following 
     new subsection:
       ``(r) Subsection (a)(5)(C) shall not apply to an alien who 
     seeks to enter the United States for the purpose of 
     performing labor as a nurse who presents to the consular 
     officer (or in the case of an adjustment of status, the 
     Attorney General) a certified statement from the Commission 
     on Graduates of Foreign Nursing Schools (or an equivalent 
     independent credentialing organization approved for the 
     certification of nurses under subsection (a)(5)(C) by the 
     Attorney General in consultation with the Secretary of Health 
     and Human Services) that--
       ``(1) the alien has a valid and unrestricted license as a 
     nurse in a State where the alien intends to be employed and 
     such State verifies that the foreign licenses of alien nurses 
     are authentic and unencumbered;
       ``(2) the alien has passed the National Council Licensure 
     Examination (NCLEX);
       ``(3) the alien is a graduate of a nursing program--
       ``(A) in which the language of instruction was English;
       ``(B) located in a country--
       ``(i) designated by such commission not later than 30 days 
     after the date of the enactment of the Nursing Relief for 
     Disadvantaged Areas Act of 1999, based on such commission's 
     assessment that the quality of nursing education in that 
     country, and the English language proficiency of those who 
     complete such programs in that country, justify the country's 
     designation; or
       ``(ii) designated on the basis of such an assessment by 
     unanimous agreement of such commission and any equivalent 
     credentialing organizations which have been approved under 
     subsection (a)(5)(C) for the certification of nurses under 
     this subsection; and
       ``(C)(i) which was in operation on or before the date of 
     the enactment of the Nursing Relief for Disadvantaged Areas 
     Act of 1999; or
       ``(ii) has been approved by unanimous agreement of such 
     commission and any equivalent credentialing organizations 
     which have been approved under subsection (a)(5)(C) for the 
     certification of nurses under this subsection.''.
       (2) Section 212(a)(5)(C) of the Immigration and Nationality 
     Act (8 U.S.C. 1182(a)(5)(C)) is amended by striking ``Any 
     alien who seeks'' and inserting ``Subject to subsection (r), 
     any alien who seeks''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on the date of the enactment of this Act, 
     without regard to whether or not final regulations to carry 
     out such amendments have been promulgated by such date.
       (c) Issuance of Certified Statements.--The Commission on 
     Graduates of Foreign Nursing Schools, or any approved 
     equivalent independent credentialing organization, shall 
     issue certified statements pursuant to the amendment under 
     subsection (a) not more than 35 days after the receipt of a 
     complete application for such a statement.
                                 ______
                                 
      By Mr. CONRAD (for himself, Mrs. Feinstein, Mr. Daschle, Mr. 
        Johnson, Mr. Reid, Mr. Sarbanes, Mrs. Boxer, Ms. Snowe, Mr. 
        Robb, Mrs. Murray, and Mr. Rockefeller):
  S. 456. A bill to amend the Internal Revenue Code of 1986 to allow 
employers a credit against income tax for information technology 
training expenses paid or incurred by the employer, and for other 
purposes; to the Committee on Finance.


                  information technology training act

  Mr. CONRAD. Mr. President, throughout the 105th Congress, the 
Administration and the Congress focused considerable attention on 
information technology (IT) issues, particularly the difficulties that 
many American companies are experiencing in recruiting skilled workers 
to fill key positions in information technology.
  The Department of Commerce, early in the 105th Congress, released a 
study, ``America's New Deficit: The Shortage of Information Technology 
Workers,'' alerting us to the severe shortage of information technology 
workers. This report was supported by a study from the Information 
Technology Association of America, ``Help Wanted 1998: A Call for 
Collaborative Action For the New Millennium,'' which estimated that 
there are more than 340,000 highly skilled positions in information 
technology that are not filled. Moreover, the Department of Labor 
projected that our economy will require more than 130,000 information 
technology jobs in three fields--systems analysts, computer scientists 
and engineers, and computer programmers--every year for the next 10 
years.
  Mr. President, the shortage of skilled high-tech workers is not 
unique to any one region of the country--Silicon Valley, Dallas, 
Atlanta, or Northern Virginia. It is a matter of urgent concern across 
the country. The shortage affects every State, every sector of the 
economy, and its impact was documented during a conference of more than 
350 educators, State officials, and business community leaders that I 
hosted last fall in Bismarck, North Dakota. The conference was 
scheduled to examine the challenges and opportunities of information 
technology in the 21st century.
  Without question, the shortage of skilled IT workers is a major 
concern for State officials and the North Dakota business community. 
During the conference, many North Dakota business leaders from firms, 
including Great Plains Software, Gateway, U.S. West, and North Central 
Data Co-op, confirmed the difficulties they are having in recruiting 
employees with qualified information technology skills. The business 
community and educators, representing all levels of education, 
emphasized the importance of expanding opportunities in information 
technology training and education.
  Last year, during the closing days of the 105th Congress, we took the 
first step to respond to the concern over the shortage of skilled high-
tech workers by increasing the annual cap on H1-B visas for foreign 
workers recruited to work in U.S. high-tech industries. As important as 
this first step is, the increase in H1-B visas by itself will not 
adequately respond to the shortage of skilled workers in the U.S. Nor 
is it acceptable to authorize an increase in the number of foreign 
workers coming to the U.S. to fill IT vacancies without taking steps to 
ensure that American workers and students have opportunities to train 
and qualify for these excellent opportunities.
  Mr. President, that is why, during consideration of the American 
Competitiveness Act last year, I introduced legislation, S. 2089, to 
allow employers an income tax credit for information technology 
training expenses paid on behalf of employees or other individuals who 
are entering information

[[Page 3046]]

technology careers. I believe it is essential that we provide every 
opportunity to American workers and individuals to become aware of 
opportunities in information technology, and to ensure that training 
and education is available at all levels. I regret that we did not 
adopt this important initiative during the 105th Congress.
  Today, I am introducing this legislation to provide employers a tax 
credit for information technology training. I am very pleased that 
Senators Feinstein, Johnson, Daschle, Sarbanes, Boxer, Snowe, Murray, 
Reid, and Robb are cosponsoring this important initiative. This 
legislation is also endorsed by the Information Technology Association 
of America, the Software and Information Industry Association, the 
Computing Technology Industry Association, the Information Technology 
Training Association, and the American Society For Training and 
Development.
  Under this legislation, the tax credit would be an amount equal to 20 
percent of information technology training program expenses, not to 
exceed $6,000 in a taxable year. The value of the credit would increase 
by 5 percent if the IT training program is operated in an Empowerment 
Zone, Enterprise Community, Rural Economic Area Partnership (REAP) 
zone, in a school district in which at least 50 percent of the students 
in the school district participate in the school lunch program, in an 
area designated as a disaster zone by the President or Secretary of 
Agriculture, or associated with a small business with no more than 200 
employees.
  Mr. President, last year we responded to the IT worker shortage by 
increasing the opportunities for skilled high-tech workers from other 
countries to come to the U.S. to work in the information technology 
field. Now we have an obligation to make certain that the same exciting 
opportunities in information technology are available to American 
workers and other individuals interested in information technology 
careers. I welcome additional cosponsors of this legislation, and I 
strongly urge my colleagues to incorporate this important bill in the 
tax legislation that we are expected to consider in the 106th Congress.
  Mr. President, I ask unanimous consent that the text of the bill and 
letters of support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 456

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

     SECTION 1. CREDIT FOR INFORMATION TECHNOLOGY TRAINING PROGRAM 
                   EXPENSES.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business-related credits) is amended by adding at the end the 
     following:

     ``SEC. 45D. INFORMATION TECHNOLOGY TRAINING PROGRAM EXPENSES.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of an employer, the information technology training 
     program credit determined under this section is an amount 
     equal to 20 percent of information technology training 
     program expenses paid or incurred by the taxpayer during the 
     taxable year.
       ``(b) Additional Credit Percentage for Certain Programs.--
     The percentage under subsection (a) shall be increased by 5 
     percentage points for information technology training program 
     expenses paid or incurred--
       ``(1) by the taxpayer with respect to a program operated 
     in--
       ``(A) an empowerment zone or enterprise community 
     designated under part I of subchapter U,
       ``(B) a school district in which at least 50 percent of the 
     students attending schools in such district are eligible for 
     free or reduced-cost lunches under the school lunch program 
     established under the National School Lunch Act,
       ``(C) an area designated as a disaster area by the 
     Secretary of Agriculture or by the President under the 
     Disaster Relief and Emergency Assistance Act in the taxable 
     year or the 4 preceding taxable years,
       ``(D) a rural enterprise community designated under section 
     766 of the Agriculture, Rural Development, Food and Drug 
     Administration, and Related Agencies Appropriations Act, 
     1999, or
       ``(E) an area designated by the Secretary of Agriculture as 
     a Rural Economic Area Partnership Zone, or
       ``(2) by a small employer.
       ``(c) Limitation.--The amount of information technology 
     training program expenses with respect to an individual which 
     may be taken into account under subsection (a) for the 
     taxable year shall not exceed $6,000.
       ``(d) Information Technology Training Program Expenses.--
     For purposes of this section--
       ``(1) In general.--The term `information technology 
     training program expenses' means expenses paid or incurred by 
     reason of the participation of the employer in any 
     information technology training program.
       ``(2) Information technology training program.--The term 
     `information technology training program' means a program--
       ``(A) for the training of computer programmers, systems 
     analysts, and computer scientists or engineers (as such 
     occupations are defined by the Bureau of Labor Statistics),
       ``(B) involving a partnership of--
       ``(i) employers, and
       ``(ii) State training programs, school districts, 
     university systems, or certified commercial information 
     technology training providers, and
       ``(C) at least 50 percent of the costs of which is paid or 
     incurred by the employers.
       ``(3) Certified commercial information technology training 
     provider.--The term `certified commercial information 
     technology training providers' means a private sector 
     provider of educational products and services utilized for 
     training in information technology which is certified with 
     respect to--
       ``(A) the curriculum that is used for the training, or
       ``(B) the technical knowledge of the instructors of such 
     provider,

     by 1 or more software publishers or hardware manufacturers 
     the products of which are a subject of the training.
       ``(e) Small Employer.--For purposes of this section, the 
     term `small employer' means, with respect to any calendar 
     year, any employer if such employer employed 200 or fewer 
     employees on each business day in each of 20 or more calendar 
     weeks in such year or the preceding calendar year.
       ``(f) Denial of Double Benefit.--No deduction or credit 
     under any other provision of this chapter shall be allowed 
     with respect to information technology training program 
     expenses (determined without regard to the limitation under 
     subsection (c)).
       ``(g) Certain Rules Made Applicable.--For purposes of this 
     section, rules similar to the rules of section 45A(e)(2) and 
     subsections (c), (d), and (e) of section 52 shall apply.''
       (b) Credit To Be Part of General Business Credit.--Section 
     38(b) of the Internal Revenue Code of 1986 (relating to 
     current year business credit) 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 information technology training program credit 
     determined under section 45D.''
       (c) No Carrybacks.--Subsection (d) of section 39 of the 
     Internal Revenue Code of 1986 (relating to carryback and 
     carryforward of unused credits) is amended by adding at the 
     end the following:
       ``(9) No carryback of section 45d credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the information 
     technology training program credit determined under section 
     45D may be carried back to a taxable year ending before the 
     date of the enactment of section 45D.''
       (d) 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:

``Sec. 45D. Information technology training program expenses.''

       (e) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after the date of 
     enactment of this Act in taxable years ending after such 
     date.
                                  ____

                                            Information Technology


                                       Association of America,

                                  Arlington, VA, February 5, 1999.
     Hon. Kent Conrad,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Conrad: The Information Technology Association 
     of America (ITAA) and our member companies strongly support 
     tax credits for information technology (IT) training. With 
     over 346,000 IT jobs currently vacant in the United States, 
     American industry faces a severe shortage of trained IT 
     professionals. Filling these positions is imperative to the 
     growth of our national economy and securing our place as a 
     leader in the global marketplace.
       In order to grow the nation's IT workforce, we must provide 
     educational opportunities for all Americans that will allow 
     them to enter to this high-growth, high-wage industry 
     Training is readily available at both public institutions of 
     higher education and private training facilities, but many 
     cannot afford to take advantage of them.
       ITAA and our members urge you to cosponsor Senator Conrad's 
     proposed legislation that would amend the Internal Revenue

[[Page 3047]]

     Code of 1986 allowing employers a credit against income tax 
     for IT training expenses paid or incurred. It is critical 
     that we do everything we can to provide affordable access to 
     IT training for all Americans. If you need any additional 
     information, please contact me at 703-284-5340 or 
     [email protected] or Bob Foust with Senator Conrad at 202-224-
     2043.
           Sincerely,
                                                 Harris N. Miller,
     President.
                                  ____

                                              Software Information


                                          Industry Association

                                Washington, DC, February 18, 1999.
     Re endorsement of information technology training tax credit 
         legislation.

     Hon. Kent Conrad,
     U.S. Senator,
     Washington, DC 20510.
       Dear Senator Conrad: Recognizing that increasing the supply 
     of highly qualified information sector workers is an 
     essential cornerstone for sustaining U.S. economic 
     prosperity, the Software & Information Industry Association 
     (SIIA) is pleased to endorse your legislative proposal to 
     encourage greater business investment in workforce skills 
     training.
       SIIA is the principal trade association of the software and 
     information industry, representing 1,400 leading high-tech 
     companies that develop and market software and electronic 
     content for business, education, entertainment and the 
     Internet. SIIA was formed Jan. 1, 1999, as a result of a 
     merger between the Software Publishers Association and 
     Information Industry Association.
       To meet the demands of the Information Age, virtually every 
     business in every economic sector is undergoing a 
     transformation that requires its workers to use modern 
     workplace technologies to achieve higher levels of 
     productivity. Unfortunately, not enough of these ``high-
     performance'' workers exist to meet increasing demand. As the 
     Department of Commerce has estimated, hundreds of thousands 
     of positions will continue to go unfilled in the next decade 
     unless we improve our ability to build and sustain a modern, 
     high-tech workforce.
       Your proposal offers an important opportunity to focus 
     national attention on this problem. It would amend the 
     Internal Revenue Code to allow employers a credit against 
     income tax for information technology training expenses paid 
     or incurred by the employer. The credit would be an amount 
     equal to 20 percent of training program expenses up to $6,000 
     a year. The credit would increase by five percent for 
     expenses paid or incurred in programs operated in specific 
     underserved locations.
       The proposal complements bills enacted in 1998 that seek to 
     improve the technical skills of high school students and 
     adult learners, provide better training opportunities for 
     incumbent and dislocated workers and ease immediate high-tech 
     worker shortages by increasing the number of foreign workers 
     allowed in the U.S. on a temporary basis. We strongly believe 
     that passage of this legislation will signal a continued 
     national commitment to creating new opportunities for 
     American workers while addressing the urgent need to 
     alleviate the undersupply of technology-proficient workers.
       We look forward to working with you and your Senate 
     colleagues to gain swift passage.
           Sincerely,
                                                 Kenneth A. Wasch,
     President.
                                  ____

                                              American Society for


                                       Training & Development,

                                                 February 2, 1999.
     Hon. Kent Conrad,
     Hart Senate Office Building, Washington, DC.
       Dear Senator Conrad: On behalf of the American Society for 
     Training & Development (ASTD), I want to thank you for 
     introducing legislation in the 106th Congress, that would 
     offer employers income tax credits that can be used to offset 
     IT training expenses.
       ASTD is the largest professional association in the field 
     of workplace learning and performance with 70,000 members who 
     work in more than 15,000 multinational corporations, small 
     and medium-sized business, government agencies, colleges and 
     universities. ASTD works with the federal government as well 
     as the business, labor and education communities to support 
     public policies and programs that encourage continuous 
     learning opportunities for all segments of the working 
     population.
       ASTD is a supporter of efforts to address the high-tech job 
     shortage. This legislation will serve as a significant 
     incentive for employer investment in continuing education 
     while providing employees with an opportunity to maintain and 
     improve skills in this rapidly advancing industry.
       ASTD appreciates your support for this important tax 
     credit. We look forward to working with you to move a bill 
     forward.
           Sincerely,
                                                    Laura Liswood,
     President and CEO.
                                  ____

                                   Information Technology Training


                                            Association, Inc.,

                                    Austin, TX, February 22, 1999.
     Hon. Kent Conrad,
     U.S. Senate,
     Washington, DC.

     Hon. Jim Moran,
     House of Representatives,
     Washington, DC.
       Dear Senator Conrad and Representative Moran: The 
     Information Technology Training Association (ITTA) 
     congratulates and thanks both of you for introducing 
     information technology training tax credit legislation in the 
     U.S. Senate and House of Representatives. In 1999 alone, our 
     380 member companies will train over 5,000,000 U.S. workers 
     on various IT topics. While most of our members are 
     responsible for providing the actual training to 
     corporations, we also represent various Fortune 1000 
     companies that conduct their own internal IT Training. More 
     than ever, we know that the value of trained and skilled IT 
     workers is crucial to the continued growth of the United 
     States in their high-tech arena. Many of our members cite 
     this as the number one problem facing their businesses today.
       Our nation's most important asset is our people. It is 
     important for the nation's economy to invest in the future of 
     its citizens and businesses. The most productive and cost 
     effective way to achieve that objective is to concentrate the 
     federal investment in incentives that most effectively help 
     citizens enter existing high-paying jobs. For that reason 
     directing this incentive to areas where jobs already exist is 
     a prudent decision. Industry studies have revealed that at 
     least 340,000 high paying jobs are currently available. Since 
     those receiving training will find jobs waiting for them when 
     they finish their training, the country will immediately 
     begin recouping its investment in the form of additional 
     personal and corporate income taxes that would otherwise not 
     be generated.
       Tax credits are an efficient way to deliver incentives to 
     small and medium-sized businesses, which typically are unable 
     to afford the costs of IT training and lack the resources to 
     keep up with paperwork required for other support programs. 
     There is also a shortage of industry workers with technical/
     vocational IT skills. Many economically disadvantaged 
     students and displaced workers enter the industry after 
     completing single courses or series of technical courses in 
     order to acquire the skills needed to become certified.
       We also want to acknowledge our support for your decision 
     to include the private-sector IT Training providers in this 
     legislation. Due to the rapidly changing nature of 
     technology, the private sector has led the way in developing 
     successful training programs on the latest and most current 
     technologies. Many of these companies have also partnered 
     with software and hardware vendors to ensure that the 
     training on their products is accurate and of a high quality. 
     We believe that the only way to have an impact on the IT 
     worker shortage is to include all providers of training: 
     private and public.
       Your legislation is a prudent, cost-effective, and user-
     friendly tool that will simultaneously help economically 
     disadvantaged students and displaced workers, the companies 
     in our industry, U.S. competitiveness, and our trade balance. 
     We thank you for your leadership on this important issue.
           Sincerely,
                                                     Peter Squier,
     President.
                                  ____



                              CompTIA Public Policy Committee,

                                 Arlington, VA, February 22, 1999.
     Hon. Kent Conrad,
     U.S. Senate,
     Washington, DC.

     Hon. Jim Moran,
     House of Representatives,
     Washington, DC.
       Dear Senator Conrad and Representative Moran: The Computing 
     Technology Industry Association (CompTIA) congratulates and 
     thanks both of you for introducing technology training tax 
     credit legislation in the US Senate and House of 
     Representatives. CompTIA represents 7,800 computer and 
     semiconductor manufacturers, distributors, software 
     publishers, resellers, retailers, Internet, long distance 
     training and other service companies. We believe that 
     productive investment in education and training are critical 
     to maintaining US economic strength.
       Our nation's most important asset is our people. It is 
     important for the nation's economy to invest in the future of 
     its citizens and businesses. The most productive and cost 
     effective way to achieve that objective is to concentrate the 
     federal investment in incentives that most effectively help 
     citizens enter existing high-paying jobs. For that reason 
     directing this incentive to areas where jobs already exist is 
     a prudent decision. Industry studies have revealed that at 
     least 340,000 high paying jobs are currently available. Since 
     those receiving training will find jobs waiting for them when 
     they finish their training, the country will immediately 
     begin recouping its investment in the form of additional 
     personal and corporate income taxes that would otherwise not 
     be generated.
       Tax credits are an efficient way to deliver incentives to 
     small businesses, which typically are unable to afford the 
     high costs of technology training and lack the manpower to 
     keep up with paperwork required to qualify for other support 
     programs. There is also

[[Page 3048]]

      a shortage of industry workers with technical/vocational IT 
     skills. Many economically disadvantaged students and 
     displaced workers enter the industry after completing single 
     courses or series of technical courses in order to acquire 
     the skills needed to become certified. CompTIA is currently 
     assisting in school-to-work programs in over 100 high schools 
     and assisting the Head Start program at the Department of 
     Labor develop introductory IT certifications for their 
     constituents.
       Your legislation is a prudent, cost-effective, and user-
     friendly tool that will simultaneously help economically 
     disadvantaged students and displaced workers, the companies 
     in our industry, US competitiveness, and our trade balance. 
     We thank you for your leadership on this important issue.
           Sincerely,
                                                     Alan P. Hald,
     Chairman, CompTIA Public Policy Committee.
                                  ____



                                     Sundog Interactive, Inc.,

                                     Fargo, ND, February 24, 1999.

           Proposed Legislation Would Help High-Tech Startups

       Fargo, N.D.--A shortage of high-tech employees has eclipsed 
     job creation as one of the most pressing economic issues in 
     many areas of the country, especially in rural states like 
     North Dakota. A bill to be introduced by Sen. Kent Conrad 
     would help high-tech startups train and retain highly-skilled 
     information technology (IT) workers.
       In North Dakota, the farm crisis is driving many young 
     people out of the state, and economic conditions make it more 
     difficult for companies to compete for top talent.
       One company that has seen firsthand how difficult it can be 
     to find and keep skilled IT workers is Fargo-based new media 
     and software developer Sundog Interactive. As a high-tech 
     startup in the heart of America's breadbasket, Sundog is 
     forced to compete with much larger firms on a national level, 
     not only for clients but also for talent.
       ``From the outside, Fargo might not seem like an ideal 
     location to start a high-tech company,'' explains Brent 
     Teiken, Sundog Interactive's cofounder and president. ``But 
     our community has three major colleges and universities and a 
     large technical college, so we produce a high level of 
     educated, skilled and motivated young people. Unfortunately, 
     many of these bright minds leave the area after graduation 
     because employers in larger metropolitan areas can offer 
     higher salaries and better benefits. The tax credit 
     legislation Senator Conrad is proposing should help level the 
     playing field.''
       Sen. Conrad's bill would allow high-tech companies like 
     Sundog Interactive to earn tax credits on the information 
     technology training they provide employees.
       ``In the long run, everybody would win,'' Teiken says. ``We 
     already rely on our area universities for qualified interns. 
     This legislation would provide an incentive to keep doing 
     that--and the working capital to grow our company and offer 
     more competitive salaries as a result. Students would gain 
     real-world knowledge and experience they could take with them 
     wherever they go. And more students would consider remaining 
     in the state after graduation, since employers here would be 
     able to afford better wages.''
       Teiken is scheduled to appear with Sen. Conrad at his press 
     conference on Wednesday, February 24, 1999, in Washington, 
     D.C., in support of the senator's proposed legislation. 
     Teiken is also a member of the North Dakota Information 
     Technology Council, a group Sen. Conrad helped organize to 
     address IT concerns in the state.
       To learn more about Sundog Interactive, visit the company's 
     Web site at http://www.sundoginteractive.com. The News 
     section of the site includes a feature story which provides 
     Teiken's perspective on the future of information technology 
     in the state.
                                  ____


Cisco Systems CEO Chambers: High-Tech Training Key to Prosperity in the 
                            Internet Economy


          bi-partisan senate bill demonstrates u.s. leadership

       Washington, DC.--February 24, 1999--Cisco Systems CEO and 
     President John Chambers today hailed a bi-partisan effort in 
     the Senate to focus on high-tech job-training and education 
     programs.
       ``As the Internet Economy takes shape, there is a critical 
     need to prepare our workers for the jobs of tomorrow. There 
     is already a shortage of skilled high-tech workers and more 
     than 1.8 million new jobs will be created as the Internet 
     Economy transforms our economy,'' said Chambers.
       With these challenges ahead, Chambers praised lawmakers for 
     ensuring that policymakers will address the pressing need for 
     training and education.
       ``I salute Sen. Kent Conrad--along with Sen. Olympia Snowe, 
     Sen. Dianne Feinstein, Sen. Barbara Boxer and others--for 
     highlighting the need for the government and the private 
     sector to partner to train workers for the Internet 
     Economy,'' he added.
       Cisco Systems, the worldwide leader in networking for the 
     Internet, has already worked with Sen. Conrad on a number of 
     high-tech initiatives, including the establishment of a Cisco 
     Networking Academy in the State of North Dakota. The Cisco 
     Networking Academy program, currently in 1,200 high schools 
     across the country, teaches high-tech skills to students.
       About 17,000 students are currently in the Networking 
     Academy program and Cisco expects more than 2,000 students to 
     graduate in 1999.
       ``The kind of training Sen. Conrad and his colleagues are 
     encouraging through this legislation will allow students to 
     learn skills needed for jobs in high-technology companies and 
     help current employees to be retrained to meet the needs of 
     21st Century jobs,'' said Chambers.
                                  ____



                                        Great Plains Software,

                                     Fargo, ND, February 23, 1999.
     Re tax credit for information technology training expenses.

     Senator Kent Conrad,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Conrad: We have reviewed the legislation 
     drafted and sponsored by yourself, along with Senators 
     Feinstein, Boxer, Johnson, Daschle and Sarbanes which would 
     provide tax credits to businesses that train workers in 
     information technology skills. As the largest technology-
     based employer in North Dakota, we support this legislation. 
     While benefit to our Company may be modest, smaller, start-up 
     technology companies, especially those in rural areas of our 
     state, should see substantial benefits.
       As you know, American industry faces a severe shortage of 
     information training (IT) professionals. Any legislation 
     which addresses this issue is welcome.
       Please feel free to note our Company's support of your 
     legislation publicly.
           Very truly yours,
                                                Douglas R. Herman,
                                                  General Counsel.

  Mrs. FEINSTEIN. Mr. President, I rise today alongside my colleague 
from North Dakota in support of S. 456, the Information Technology Tax 
Credit bill, which provides employers with a tax credit for information 
technology training for their employees.
  The purpose of this legislation is quite simple: To assist American 
companies which are having difficulty in recruiting skilled workers to 
fill positions in the information technology field.
  Information technology--including computer programmers, systems 
analysts, computer scientists and engineers--is a critical ingredient 
in the growth of the U.S. economy as well as the economy of California. 
A field that barely existed a few decades ago, information technologies 
are now among the most important emerging technologies in the world.
  Information technology now accounts for more than $500 billion a year 
to U.S. economy, and one-third of all new jobs created since 1992 are 
in computers, semiconductors, software, and communications equipment.
  According to recent studies, ``e-commerce'' is projected to grow from 
$2.6 billion in 1996 to over $220 billion in 2001--explosive growth 
that will generate countless additional jobs.
  And, just as important, many information technology jobs tend to be 
high value added, high-wage.
  Last year California alone was responsible for sales of approximately 
$125 billion in high-tech production--almost than double 1992's $64 
billion in sales.
  Computer services--just one sector of the IT economy--have created 
100,000 jobs in California in the past five years. There are now over 
400,000 people in California employed directly in high-tech 
manufacturing jobs. When information technology business service jobs 
are added into the mix, there are currently over 700,000 information 
technology jobs in California, according to the Center for the 
Continuing Study of the California Economy.
  And yet, despite this explosive growth--or perhaps because of it--
America is simply not producing enough skilled and able workers to meet 
the needs of the information technology field.
  Last year the Information Technology Association of America releases 
a study which estimated that there are more than 340,000 high skilled 
positions in the information technology field that are not filled.
  And the Department of Labor has projected that our economy will 
require more than 130,000 information technology jobs in just three 
fields--computer scientists and engineers, systems analysts, and 
computer programmers--every year for the next decade.
  One of the most sobering experiences of my Senate career occurred 
last year

[[Page 3049]]

when I was told point blank by the CEO's of several large California 
high-tech companies that the United States is simply not producing a 
sufficient number of skilled and educated workers to fill the 
information technology positions that their companies need to fill if 
they were to be able to continue to grow and successfully compete in 
the international economy.
  To meet the needs of these companies, last year Congress had to 
revise the cap on H1B visas to allow foreign professional and skilled 
workers who had the education and skills to fill these information 
technology positions to come to the United States.
  While raising the H1B visa cap may meet the short term needs of these 
companies and of the economy, it is not a long-term solution to this 
problem.
  To avoid the danger of a ``hollowing out'' the U.S. workforce we must 
invest more in the education and training of American workers so that 
they have the education and skills needed for the information 
technology jobs which make up the backbone of the new high-tech 
economy.
  We must make sure that new workers entering the workforce have the 
skills they need to match with the jobs they want to be able to get. We 
must focus on retraining unemployed, older, and displaced workers, and 
encourage new partnerships between the IT industry and educational 
institutions. And we must reach out to those who have been left out to 
make sure that they have the training they need to join in our current 
economic prosperity.
  To meet these needs, this legislation provides a tax credit for 
employers who offer information technology training for individuals, 
equal to 20 percent of the information technology training program 
expense, capped to $6,000 in a calendar year.
  And, to help those who may have been excluded from the economy of 
today take their place in the economy of tomorrow, it provides a 5 
percent increase in the value of the credit as an additional incentive 
for training in empowerment zones or enterprise communities.
  The current strength of U.S. information technology industry comes, 
in large part, from a long and successful partnership between 
government, educational institutions, and industry.
  This legislation builds on that partnership to both meet our current 
needs and to train the next generation of information technology 
workers, and to maintain the U.S. economy's strength and leadership in 
the twenty-first century.
                                 ______
                                 
      By Mr. DURBIN (for himself, Mr. Chafee, Mr. Schumer, Mr. 
        Lautenberg, Mr. Torricelli, Mr. Reed, Mrs. Boxer, and Mr. 
        Dodd):
  S. 457. A bill to amend section 922(t) of title 18, United States 
Code, to require the reporting of information to the chief law 
enforcement officer of the buyer's residence and to require a minimum 
72-hour waiting period before the purchase of a handgun, and for other 
purposes; to the Committee on the Judiciary.


             the permanent brady waiting period act of 1999

  Mr. DURBIN. Mr. President, I rise today with my colleagues Senators 
Chafee, Schumer, Lautenberg, Torricelli, Reed, Boxer, and Dodd to 
introduce the ``Permanent Brady Waiting Period Act of 1999.'' It is 
vital that we enact this measure if we are to ensure Americans that the 
popular Brady Bill will continue to be one hundred percent effective.
  Five years ago, Congress passed the Brady Bill. That law contained a 
provision that required a 5-day waiting period before a person can buy 
a gun. Unfortunately last November, the waiting period was eliminated 
when we begin using the national instant check system for gun 
purchasers.
  I fully support the use of an instant check system to determine if a 
putative firearm purchaser is legally barred from owning a gun because 
of a criminal record. But I believe that it must be coupled with a 
cooling off period.
  Let me briefly explain what this legislation would do. It would 
require that anyone who wishes to buy a handgun must wait three days. 
There are two exceptions to this requirement. First, if a prospective 
purchaser presents a written statement from his or her local chief law 
enforcement officer stating that the handgun is needed immediately 
because of a threat to that person's life or that of his family, then 
the cooling off period will not apply. Second, if a prospective 
purchaser lives in a state that has a licensing requirement--and there 
are 27 such states--then the federal cooling off period will not apply.
  I think both of these are common sense exceptions. Obviously people 
who have a legitimate and immediate need of a handgun for self-defense 
should be able to buy one. And in the states that have licensing or 
permit systems, the process of getting a permit acts as a state cooling 
off period.
  This measure also requires that when a person applies to buy a gun 
that the gun shop owner send a copy of the application to the local 
chief law enforcement officer. In addition, it alters the amount of 
time that the state or federal government has to investigate a 
potential purchaser who has an arrest record. Under the law that will 
go into effect on the first of December this year, if a person with an 
arrest record applies for a gun, law enforcement will have three days 
to determine if that arrest resulted in a conviction. The measure we 
introduce today would give law enforcement five days.
  Mr. President, let me walk you through the process of buying a gun if 
this law were in place.
  If you are in a state that does not have a permit system in place, 
then you go into a store and fill out a purchase form. A copy of that 
form will be sent to the Insta-Check point of contact for your state 
and a copy will also be sent to the chief law enforcement officer for 
where you live. You will then need to wait three days whereupon, 
assuming that you do not have a criminal record or any of the other 
disqualifying characteristics, you will be able to pick up your gun.
  If on the other hand, when the Insta-Check is run, the FBI learns 
that you were arrested, then you will have to wait at least 5 days. 
That five days will be used to determine if the arrest resulted in a 
conviction. If it did not, then after 5 days you can get your gun. If 
you were arrested and convicted then you cannot get your gun and may be 
prosecuted.
  Enacting this law is only sensible. A cooling off period may be the 
only barrier between a woman and her abusive husband whose local 
restraining order doesn't show up on a computer check or the only 
obstacle in the way of a troubled person planning to commit suicide and 
take others with them. A cooling off period will prevent crimes of 
passion and spontaneous suicides. The list of people who have bought 
guns and used them within a few hours or a day to kill themselves or 
others is far too long.
  A recent study by the Center to Prevent Handgun Violence demonstrates 
a disturbing trend that reinforces the need for a cooling off period. 
Normally, 4 to 5 percent of all crime guns traced by the police were 
used in murders. But the study found that 20 percent of all guns traced 
within 7 days of purchase were used in murders. That is a startlingly 
high incidence of guns being bought and used very soon thereafter to 
commit a murder.
  But this measure has a second, equally important justification.
  That the Insta-Check system is in very good shape, but it will never 
be perfect. For example, it will not have a lot of mental health 
records. And it is unlikely to have information like restraining orders 
entered in domestic violence cases. Letting local law enforcement know 
about a potential gun purchase is a good idea--the local sheriff may 
know that a person trying to buy a gun has a restraining order while 
the FBI's Insta-check computer might not. In short, then, this bill 
will help serve as a fail safe mechanism for the Insta-Check system. I 
for one do not want to learn a year from now that someone got a gun and 
used it to harm someone else when a simple check of local records in 
addition to the Insta-Check would have revealed that the purchaser had 
a history of mental instability.

[[Page 3050]]

  Making the Brady waiting period permanent is not about more 
government. It's about fewer gun crime victims. I hope that we can all 
agree on this goal. Thank you.
  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. 457

       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 referred to as the ``Permanent Brady 
     Waiting Period Act of 1999''.

     SEC. 2. ESTABLISHMENT OF MINIMUM 72-HOUR HANDGUN PURCHASE 
                   WAITING PERIOD.

       Section 922(t) of title 18, United States Code, is 
     amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A)--
       (i) by striking ``before the completion of the transfer, 
     the licensee'' and inserting ``after the most recent proposal 
     of the transfer by the transferee, the licensee, as 
     expeditiously as is feasible,''; and
       (ii) by inserting ``and the chief law enforcement officer 
     of the place of residence of the transferee'' after ``Act'';
       (B) in subparagraph (B)(ii)--
       (i) by striking ``3'' and inserting ``5''; and
       (ii) by striking ``and'' at the end;
       (C) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (D) by adding at the end the following:
       ``(D) if the firearm is a handgun--
       ``(i) not less than 72 hours have elapsed since the 
     licensee contacted the system;
       ``(ii) the transferee has presented to the transferor a 
     written statement, issued by the chief law enforcement 
     officer of the place of residence of the transferee during 
     the 10-day period ending on the date of the most recent 
     proposal of such transfer by the transferee, stating that the 
     transferee requires access to a handgun because of a threat 
     to the life of the transferee or of a member of the household 
     of the transferee; or
       ``(iii) the law of the State in which the proposed transfer 
     will occur requires, before any licensed importer, licensed 
     manufacturer, or licensed dealer completes the transfer of a 
     handgun to an individual who is not licensed under section 
     923, that an authorized State or local official verify that 
     the information available to the official does not indicate 
     that possession of a handgun by the transferee would be in 
     violation of the law, and the authorized State or local 
     official has provided such verification in accordance with 
     that law.''; and
       (2) by adding at the end the following:
       ``(7) In this subsection, the term `chief law enforcement 
     officer' means the chief of police, the sheriff, or an 
     equivalent officer of a law enforcement agency, or the 
     designee of any such officer.
       ``(8) A chief law enforcement officer who is contacted 
     under paragraph (1)(A) with respect to the proposed transfer 
     of a firearm shall, not later than 20 business days after the 
     date on which the contact occurs, destroy any statement or 
     other record containing information derived from the contact, 
     unless the chief law enforcement officer determines that the 
     transfer would violate Federal, State, or local law.
       ``(9) The Secretary of the Treasury shall promulgate 
     regulations regarding the manner in which information shall 
     be transmitted by licensees to the national instant criminal 
     background check system under paragraph (1)(A).''.

  Mr. CHAFEE. Mr. President, today, Senator Durbin and I are 
introducing ``Permanent Brady,'' which would establish a mandatory 
three-day cooling off period before the purchase of a handgun.
  I am under no illusion that Permanent Brady will cure the problem of 
handgun violence. But I do believe a waiting period helps. Prior to 
enactment of the Brady law, in some States, an individual could walk 
into a gun store and walk out with a handgun a few minutes later. Sure, 
the individual had to fill out a form certifying that he or she had not 
been convicted of a felony and is not mentally incompetent. But that 
form was meaningless until the police had a chance to check to see if 
the information provided was accurate. Now, the FBI has instituted an 
insta-check system, which is working well. But a permanent three-day 
waiting period gives local police the chance to conduct a check that 
could turn up information not known to the FBI. For example, local 
police could be aware of a restraining order against an individual for 
domestic violence, or could be aware of a potential gun purchaser's 
mental instability.
  A waiting period also can help prevent people temporarily under the 
influence of powerful emotions, drugs, or alcohol from obtaining a 
handgun on impulse, thereby giving them a time to ``cool off'' and 
reconsider before they do something rash.
  Last November the five-day waiting period established by the Brady 
Law was phased out and replaced with the NICS--National Instant Check 
System. Establishment of a nationwide instant background check is a 
good step, but I do not believe that an instant check renders a waiting 
period unnecessary. The bill we are introducing today would restore the 
waiting period.
                                 ______
                                 
      By Mr. HAGEL (for himself, Mr. Bayh, Mr. Lott, Mr. Bennett, Mr. 
        Grams, Mr. Kerrey, Mr. Johnson, Mr. DeWine, Mr. Conrad, Mr. 
        Inhofe, Mr. Murkowski, Mr. Brownback, Mr. Bryan, Mr. Roberts, 
        and Mr. Burns):
  S. 458. A bill to modernize and improve the Federal Home Loan Bank 
System, and for other purposes; to the Committee on Banking, Housing, 
and Urban Affairs.


        FEDERAL HOME LOAN BANK SYSTEM MODERNIZATION ACT OF 1999

 Mr. HAGEL. Mr. President, I rise today to introduce the 
Federal Home Loan Bank System Modernization Act of 1999. I am joined in 
this effort by my distinguished colleagues Senators Bayh, Lott, 
Bennett, Grams, Kerrey, Johnson, DeWine, Conrad, Inhofe, Murkowski, 
Brownback, Bryan, Roberts, and Burns. While we've made a few 
improvements, this is essentially the same legislation I introduced 
during the 105th Congress.
  The bill has the formal support of the American Bankers Association, 
the Independent Bankers Association of America, America's Community 
Bankers, the Council of Federal Home Loan Banks, and the National 
Association of Home Builders. Equally important, we have the support of 
the regulator, the Federal Housing Finance Board.
  The bill's main objective is to strengthen local community banks that 
are vital to the economic growth and viability of our communities. The 
Federal Home Loan Bank System Modernization Act of 1999 would ensure 
that, in an era of banking megamergers, smaller banks are able to 
compete effectively and continue to serve their customers' lending 
needs.
  Community banks are finding that, for a variety of reasons, their 
funding sources are shrinking. This makes it more difficult to fund the 
loan demands in their communities. During the 1980s in my state of 
Nebraska--as in much of America--many community banks and thrifts 
closed. As local credit dried up, local economies stagnated. Small 
businesses, our greatest engines for job growth, were the first to feel 
the crunch.
  The Federal Home Loan Bank System Modernization Act of 1999 
strengthens community banks in order to avoid a repeat of the 1980s. By 
ensuring the viability of the community bank and thrift, our bill will 
keep credit flowing to small businesses, farmers, and potential 
homeowners--and help our local communities to thrive as we enter the 
21st Century.
  There is plenty of evidence that small banks are facing growing 
deposit pressures. This problem has two causes: First, banks and 
thrifts are competing for deposits with brokerage firms and mutual 
funds--and local institutions are losing. That means that deposits that 
used to go to local institutions and were used for local lending are 
now going to major financial institutions outside the community.
  Second, we have an aging population in many rural communities. When a 
farmer dies, his inheritance goes to his children--who often have left 
the community. That means money flows out of the community--out of 
local financial institutions--and is no longer available for local 
economic development.
  These two factors mean less deposits in local banks. That means less 
local capital available for local loans. Less economic development. 
Less opportunity. And this problem won't fix itself--most of these 
local institutions are too small to go to the capital markets on their 
own.
  This is where the Federal Home Loan Banks can make a real difference. 
The

[[Page 3051]]

Home Loan Banks can be a critical source of liquidity for community 
banks and thrifts. I tend to focus on rural America because that is 
where I come from--but liquidity problems can be equally serious in 
urban areas. The Federal Home Loan Banks are an important tool for 
providing credit to consumers no matter where they live.
  A related problem our bill addresses is government subsidized 
competition with the private sector. Commercial banks compete with 
credit unions that pay no taxes and, therefore, have a lower cost of 
funding. The same can be said of the Farm Credit System. Its connection 
to the federal government gives it a funding advantage over commercial 
banks. The purpose of this legislation is not to drive the Farm Credit 
Banks or credit unions out of business--they play a vital role in our 
country. The purpose is to allow the Federal Home Loan Banks to help 
level the playing field for commercial banks and thrifts that must 
compete with these entities.
  I want to provide you with a real world example: the case of 
Commercial State Bank in Wausa, Nebraska. Commercial has served 
northeast Nebraska as an agricultural and business lender for more than 
70 years.
  Now, with a growing economy in the region, the bank is growing as 
well. In the small community of 600 people, deposits can't keep pace 
with the growing demand for loans--and that means the bank's liquidity 
is declining. With less liquidity, there just isn't as much money 
available for lending as the community demands.
  This bill would help banks like Commercial and communities like 
Wausa. As Doug Johnson, president of Commercial State Bank, wrote to me 
about this legislation:

       If banks like Commercial State Bank were able to access the 
     Federal Home Loan Bank, our customers would be better able to 
     be serviced with a consistent and competitive source of 
     funding. Denying credit to qualified borrowers is not 
     productive for Nebraska or the Midwest. Unfortunately, those 
     borrowers may miss the opportunities available to them at 
     this time to improve their economic prosperity.

  Mr. President, that's what this bill is all about--helping 
communities to better secure their economic futures.
  The Federal Home Loan Bank system was established in 1932, primarily 
to provide a source of credit to savings and loan institutions for home 
lending. Now, a majority of the members in the FHLB system are 
commercial banks. We should update this system to recognize this change 
in its membership.
  Not since 1989 has significant Federal Home Loan Bank legislation 
become law. The system is working well, but I believe Congress can make 
it better. It's time for Congress to act.
  This legislation has five main components:
  First, our legislation would ease membership requirements for smaller 
community banks and thrifts that are vital sources of credit in their 
local communities. It would allow the FHLB System to be more easily 
accessed as an important source of liquidity for community lenders. 
These institutions would be permitted to post different types of 
collateral for various kinds of lending. This critical change will 
facilitate more small business, rural development, agricultural, and 
low-income community development lending in rural and urban 
communities.
  The second main component of this bill is an issue of basic fairness. 
Federally chartered savings associations, or thrifts as they are called 
today, are required to be members of the Federal Home Loan Bank system. 
Commercial banks, on the other hand, are voluntary members. This 
disparity is unfair.
  Our legislation allows federally chartered thrifts to become 
voluntary members. This is important to these institutions, which are 
large stockholders in the Federal Home Loan Bank System. It is critical 
that all member financial institutions have the ability to choose 
whether Federal Home Loan Bank membership is appropriate or not. As a 
result of this action, we also equalize stock purchase requirements for 
all member institutions. We do this in a way that maintains and 
enhances the safety and soundness of the FHLB system.
  The third component of this legislation fixes an imbalance in the 
system's annual REFCORP obligation. Currently, the 12 FHLBanks must 
collectively pay a fixed $300 million obligation to service the REFCORP 
bonds that were issued to help pay for the S&L bailout. This fixed 
obligation has driven the banks to increase their levels of non-
mission-related investments.
  Under our legislation each FHLBank would be required to pay 20.75 
percent of its earnings to service the REFCORP debt. Freeing the 
FHLBanks of the obligation to generate a specific dollar figure would 
allow them to concentrate on their primary mission of housing finance 
and community lending. The Congressional Budget Office has indicated 
this change could bring in an additional $795 million over ten years to 
the U.S. Treasury. In other words, we have protected the taxpayer from 
picking up any additional cost of the S&L bailout.
  Fourth, the legislation addresses the issue of devolution of 
management functions from the Finance Board to the FHLBanks. On issues 
of day-to-day management, the FHLBanks should be able to govern 
themselves independently of their regulator. The function of the 
Finance Board should be mission regulation and safety-and-soundness 
regulation. The provisions of the legislation that accomplish this goal 
are non-controversial and enjoy broad support. In fact, they follow the 
recommendations of a recent General Accounting Office study.
  Finally, this legislation reforms the capital structure of the 
Federal Home Loan Bank system. Current law (established in 1932) 
dictates that the level of FHLBank capital is determined by the size 
and mix of a FHLBank's member assets, not by any rational capital 
standards. The result is the FHLBanks' capital levels don't reflect the 
risk profile of their lending activities. Furthermore, the FHLBanks' 
capital lacks permanence because it is withdrawable by members upon 
termination of their membership.
  Our bill changes the existing capital rules to include a risk-based 
capital requirement and a permanent capital requirement which ensures 
the FHLBanks maintain capital levels appropriate to the risk of their 
business activities. The new plan also encourages the FHLBanks to build 
up their retained earnings which act as an additional buffer and 
protection to the U.S. taxpayer.
  Mr. President, it's time to modernize the Federal Home Loan Bank 
System. The landscape of the financial services industry is rapidly 
evolving. The Federal Home Loan Banks should be allowed to modernize to 
keep pace with these changes. I am grateful to Senator Bayh, the 
principal cosponsor of the legislation, for his help in this endeavor. 
I am also grateful to the other cosponsors who have lent their names to 
this effort. Today, Congressmen Baker and Kanjorski are introducing the 
companion bill in the House of Representatives. Both are tireless 
proponents for Federal Home Loan Bank modernization and their help in 
the formulation of this legislation was critical.
  I sincerely hope the Senate Banking Committee and the full Senate 
will have the chance to consider this important legislation, and I 
encourage my colleagues to support it.
 Mr. BAYH. Mr. President, I rise this afternoon to join with my 
colleague Senator Hagel to introduce the Federal Home Loan Bank System 
Modernization Act of 1999. We are joined in this endeavor by Senators 
Lott, Kerrey, Bennett, Bryan, Johnson, Grams, Conrad, Burns, Brownback, 
DeWine, Murkowski, Roberts, and Inhofe.
  Let me begin by expressing my thanks and appreciation to Senator 
Hagel for spearheading this reform effort over the past two years. The 
Home Loan Bank System is not something that is on the lips of every 
Senator or every constituent and I commend him for mastering this 
difficult subject and for devising some changes that will allow this 
somewhat-obscure system to have a tangible positive impact upon the 
lives of people who might not even be aware that the system exists.
  Mr. President, the core element of our legislative proposal today 
would be

[[Page 3052]]

to allow community banks--defined as those institutions with assets of 
less than $500 million--to access the low cost capital of the Home Loan 
Bank System in order to make loans to small businesses, farmers and 
other types of loans that benefit their community.
  These small banks generally serve rural communities and small cities. 
The plain fact is that while, overall, the national economy is robust, 
there is still demand for credit and capital in rural communities that 
cannot be met by the existing financial structure. These communities, 
unfortunately, do not always attract the attention of the large banks 
and securities firms that have come to dominate the financial 
landscape. And since the community banks that serve these communities 
are constrained in the amount of lending they can do by the amount of 
deposits that they can raise from a limited geographic area, fueling 
economic growth requires us to develop additional sources of private 
sector funding.
  By opening up the Home Loan Bank System to these small, community 
banks, this legislation will, hopefully, not only allow the banks to 
meet the loan demand of their town or small city, but will also have 
the added effect of keeping interest rates down--or even lowering those 
rates--for these kind of loans.
  Let me also emphasize, Mr. President, that these benefits will accrue 
to these communities without a single dime of taxpayer money. Making 
these changes to the Home Loan Bank System frees up access to capital 
using existing private sector mechanisms.
  Mr. President, let me briefly outline why it is necessary for 
Congress to modernize the Federal Home Loan Bank System, and why 
opening up the system to these small banks is consistent with the 
mission that Congress endowed the system with in 1932.
  The Federal Home Loan Bank System was created in 1932 to serve as a 
public/private mechanism that would both regulate the thrift (S&L) 
industry and would help the industry obtain low-cost capital for the 
purpose of making home mortgages (at the time, the primary mission of 
Savings & Loans). Borrowing by the individual home loan banks is backed 
by the full faith and credit of the U.S. Government, thus allowing them 
to borrow at the lowest possible rates. In turn, the bank makes that 
money available to its members in the form of ``advances.''
  In 1989, as part of the clean-up of the S&L crisis, the Home Loan 
Bank System was dramatically changed. It was stripped of its regulatory 
authority (which was transferred to the newly created Office of Thrift 
Supervision) and of its authority to administer the deposit insurance 
fund (called FSLIC at the time and which was transferred to the FDIC 
which now administers the SAIF). The banks retained authority to 
provide low-cost capital to the thrift industry, though membership was 
also opened up to commercial banks. A Federal Housing Finance Board was 
created specifically to make sure that the activities of the 12 banks--
which were still controlled by their members--conformed to safety and 
soundness regulations.
  The Banks were also required to buy REFCORP bonds. As a result, the 
banks must pay a total of $300 million each year out of their earnings. 
The banks must also pay $100 million each year as part of the 
Affordable Housing Program. The REFCORP formula required a payment of a 
certain percentage of each banks annual earnings; if that failed to 
meet the annual $300 million payment, a further allocation system went 
into place with the heaviest burden placed on those banks with the 
greatest number of S&L failures.
  This legislation keeps in place all of the safety and soundness 
regulations put into place by FIRREA and FDICIA. But it would reform 
some of the basic management of the individual banks so that basic 
administrative decisions are placed in the hands of the men and women 
running the bank, rather than emanating from the Finance Board here in 
Washington. The bill also seeks to rationalize the capital structure of 
the individual banks so that the need to engage in non-advance 
investments is reduced and so that banks' capital reserves are secured 
by permanent--rather than tradeable--stock.
  With the rise of the secondary mortgage market--primarily driven by 
Fannie Mae and Freddie Mac--and the entry of other entities like 
mortgage brokers into the mortgage market, many people have been 
looking for ways to allow the banks to play a more relevant role in 
today's society. Expanding the Home Loan Banks ability to provide low-
cost capital to the smallest banks in principally rural areas is both a 
benefit to the banks and to communities that are still experiencing a 
credit crunch.
  In 1932, Congress correctly surmised that creating funding for 
housing was the cornerstone of rebuilding towns, villages and cities 
gripped in the vise of the Great Depression. Today, with the housing 
market flush with capital, it is appropriate for Congress to use this 
longstanding tool of community development--the Federal Home Loan Bank 
System--to address the pressing and serious capital needs of rural 
America.
  I urge my colleagues to join with Senator Hagel and myself to work 
towards enactment of this important legislation.
                                 ______
                                 
      By Mr. BREAUX (for himself and Mr. Hatch):
  S. 459. A bill to amend the Internal Revenue Code of 1986 to increase 
the State ceiling on private activity bonds; to the Committee on 
Finance.


         THE STATE AND LOCAL INVESTMENT OPPORTUNITY ACT OF 1999

 Mr. BREAUX. Mr. President, I am pleased to introduce today 
with my colleague, Senator Hatch, an important bill that will assist 
states and localities in working with private industry to foster 
economic development and provide home ownership opportunities to low-
income Americans. Specifically, our bill will increase the private 
activity tax-exempt bond cap to $75 per capita or $250 million, if 
greater, and index the cap to inflation.
  Congress created the private activity tax-exempt bond decades ago to 
apply to mortgage revenue bonds and other bonds for multifamily 
housing, redevelopment of blighted areas, student loans, manufacturing, 
and hazardous waste disposal facilities. However, Congress 
unintentionally restricted the growth of this program by imposing a cap 
on the bond volume of $50 per capita or $150 million that was not 
indexed to inflation. The resulting erosion in purchasing power has 
crippled the ability of states to meet the growing demand for these 
bonds.
  Congress took an important step to correct this problem in the Fiscal 
Year 1999 Omnibus Appropriations bill by approving a partial, phased-in 
increase in each state's bond cap. The bond cap will be increased by $5 
per capita beginning in 2003. The volume limit will reach $70 per 
capita, or $210 million if greater, in 2006. Unfortunately, inflation 
will have reduced the purchasing power of these bonds by nearly thirty-
three percent by the time the volume cap increase is fully phased in.
  Tax-exempt bonds are issued by state and local governments to provide 
below market interest rates to fund authorized programs and projects. 
Revenue bond investors accept lower interest from these bonds because 
the interest income is tax-exempt. For example, mortgage revenue bonds 
are issued to help lower income working families buy their first homes. 
These low interest loans significantly lower the cost of owning a home.
  In my own state, the Louisiana Housing Finance Agency has issued over 
$1.1 billion in mortgage revenue bonds for almost 16,000 affordable 
home mortgages since the program began. In 1996 alone, the agency 
issued over $112 million in mortgage revenue bonds for nearly 1,200 
home loans. That's 1,200 Louisiana families who now know the pride of 
owning their own home--Louisiana families that earned, on average, less 
than $28,000 last year. The Louisiana Housing Finance Agency estimates 
that it could have put another $50 million in bond authority to good 
use. Nationwide, states could have used an additional $7 billion in 
bond cap for mortgage revenue bonds, student loan

[[Page 3053]]

bonds, industrial revenue bonds, pollution control bonds and other 
worthy investments.
  Student loan bonds are also issued to raise a pool of money at tax-
exempt interest rates resulting in lower interest rate college loans. 
In my state, the Louisiana Public Facilities Authority has issued $745 
million in student loan bonds since 1984. These bonds have funded over 
80,000 college loans for deserving Louisiana students--students who 
otherwise might not have been able to afford to attend college.
  In Louisiana, the roughly $40 million of remaining 1997 volume cap 
will not come close to fulfilling the $330 million of demand for these 
bonds. The total 1997 volume cap for Louisiana was $217,500,000. After 
funding minimal housing and student loan needs, little volume cap 
remains available for industrial development bonds for manufacturing 
purposes. Many of the industrial and manufacturing facilities create 
substantial employment opportunities. Unfortunately, a deficiency in 
volume cap limits these opportunities.
  Our bill will correct this woeful situation and improve the ability 
of states and localities to provide home ownership opportunities to 
low-income families throughout the United States, to help fund student 
loans for college students and to help finance industrial and 
manufacturing facilities. These facilities will, in turn, increase 
employment and the tax base of local governments. I urge my colleagues 
to join me and Senator Hatch in this effort.
  Mr. HATCH. Mr. President, I am pleased to introduce with my good 
friend Senator Breaux the ``State and Local Investment Opportunity Act 
of 1999.'' This legislation would first, raise the annual limit on 
States' authority to issue their own tax-exempt ``Private Activity'' 
Bonds to the greater of $75 times population or $225 million and, 
second, index the limit to inflation.
  Tax-exempt Private Activity Bonds finance much needed municipal 
services, student loans, affordable housing, and economic development.
  In my home State, the Utah Housing Finance Agency has financed first-
time homes for nearly 41,000 working families with Mortgage Revenue 
Bonds. In addition, multifamily housing bonds have financed almost 
3,300 affordable apartments. Both of these bonds are subject to the 
cap.
  However, many more Utah families still need the housing help that 
these bonds provide. According to the National Council of State Housing 
Agencies, demand in Utah for these bonds and other Private Activity 
Bonds more than doubled supply. Nationwide, demand for bond authority 
exceeded supply by almost 50 percent in 1997.
  The current bond limit is the greater of $50 times population or $150 
million. Cap growth is restricted by State population growth, which has 
been less than 5 percent nationwide over the past decade. During the 
same period, inflation has sliced bond purchasing power nearly in half, 
as measured by the Consumer Price Index.
  Last year's Omnibus Appropriations Act included a partial, phased-in 
bond restoration among its limited tax provisions. However, the 
increase will not become effective until 2007. By then, nearly one-
third of the purchasing power of Private Activity Bonds will have been 
lost even with the phase-in.
  Bond restoration has strong bipartisan support. A majority of the 
Senate, and nearly three quarters of the House, cosponsored full 
restoration and indexation in the 105th Congress. Furthermore, three-
quarters of the House, including nearly three-quarters of the Ways and 
Means Committee, cosponsored identical House legislation.
  The Nation's governors and mayors, along with other State and local 
groups, and the public finance community strongly support full bond cap 
restoration.
  I encourage my colleagues to cosponsor the ``State and Local 
Investment Opportunity Act of 1999,'' so that their States can continue 
to make vital investments in their citizens and communities.

                                 S. 460

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

     SECTION 1. DESIGNATION OF ROBERT K. RODIBAUGH UNITED STATES 
                   BANKRUPTCY COURTHOUSE.

       The United States courthouse located at 401 South Michigan 
     Street in South Bend, Indiana, shall be known and designated 
     as the ``Robert K. Rodibaugh United States Bankruptcy 
     Courthouse''.

     SEC. 2. REFERENCES.

       Any reference in a law, map, regulation, document, paper, 
     or other record of the United States to the United States 
     courthouse referred to in section 1 shall be deemed to be a 
     reference to the ``Robert K. Rodibaugh United States 
     Bankruptcy Courthouse''.
                                 ______
                                 
      By Mr. HATCH (for himself, Mrs. Feinstein, and Mr. McConnell):
  S. 461. A bill to assure that innocent users and businesses gain 
access to solutions to the year 2000 problem-related failures through 
fostering an incentive to settle year 2000 lawsuits that may disrupt 
significant sectors of the American economy; to the Committee on the 
Judiciary.


               year 2000 fairness and responsibility act

  Mr. HATCH. Mr. President, I am pleased to introduce the ``Year 2000 
Fairness and Responsibility Act.'' This bill addresses what is 
popularly known as the ``Y2K Problem'' or the ``Millennium Bug.'' It is 
supported by over 85 industry organizations and is important to the 
state of Utah, our nation's fastest growing high-tech state.
  Due to a simple decision years ago to save space on computer punch 
cards, many computers and electronic devices around the world still 
express years in only two digits. As a result, these computers will be 
incapable of making a smooth transition to the next millennium. 
Technicians and economists have predicted that this problem, if not 
corrected in time, could result in either a recession or at least 
serious economic dislocation.
  Over the last several years, the U.S. government and the private 
sector have made great strides in aggressively targeting the technology 
side of the Y2K problem. Although there remains much to do, many 
critical areas have already been addressed.
  Last year, a unanimous Congress passed a bipartisan Senate Judiciary 
Committee-reported bill that unleashed the genius of the American 
private sector by fostering the sharing of remedial information on the 
Y2K problem. Prior to the bill's passage, various businesses were 
fearful of being sued if they shared corrective and other information 
concerning the Y2K problem. In essence, the bill insulates statements 
about Y2K information and solutions from being used as admissions in a 
court of law. This legislation has spurred solutions to the Y2K problem 
by increasing the amount of information available to address the Y2K 
challenge.
  But while this first step was important, additional reforms are 
needed to aid innocent users and manufacturers and to nurture an 
environment where solutions to the Y2K problem will be forged. Last 
year's advances are threatened by frivolous Y2K lawsuits--which will 
disrupt and perhaps even cripple our courts, our high-tech industry, 
and thousands of businesses, large and small, around our nation. 
Indeed, one respected analyst recently estimated that the world-wide 
cost of Y2K-related litigation would be a staggering one trillion 
dollars.
  The anticipated flood of lawsuits from those affected by the Y2K 
crisis may very well impede the progress we have been making in solving 
the problem. Companies of every variety will be forced to devote 
precious resources to litigation rather than to repairing and 
preventing computer problems, and many of these companies may even go 
bankrupt as a result. Our courts could very well be deluged with 
lawsuits, clogging the arteries of justice. These consequences must be 
addressed.
  The legislation introduced today will ameliorate the Y2K dilemma in a 
fair and reasonable manner. One of the main features of this new Y2K 
bill is that it provides for a problem-solving, cooling off period 
before Y2K-related litigation may commence. The problem-solving period 
is designed to allow prospective plaintiffs an opportunity to describe 
the nature of the problem of which they seek legal remedy and give

[[Page 3054]]

the prospective defendants an opportunity to respond and, if necessary, 
correct any material Y2K defect.
  The parties may be able to resolve their disputes during the 
mediation period, thus forestalling the need for costly and time-
consuming litigation. Correspondingly, the bill establishes an 
alternative dispute resolution mechanism to resolve private disputes 
and avoid litigation.
  Of particular significance is the bill's limitations on damages. The 
bill limits punitive damages in Y2K-related suits to three times 
economic damages or $250,000, whichever is greater, or, if a small 
business is a defendant, whichever is lesser. This and other provisions 
will prevent frivolous lawsuits while preserving the ability of the 
truly injured to recover damages and to deter future abuses.
  The bill also remediates potential problems arising out of Y2K-
related class suits. Class action cases are currently a source of 
abuse, and this bill seeks to limit such abuses by allowing class 
actions to proceed only if a majority of class members' claims involve 
material defects relating to Y2K problems. Thus, as a practical matter, 
specious class action suits are barred.
  The purpose of our bill is clear--to promote and increase the chances 
that innocent users and businesses gain access to solutions to the Y2K 
problem. And while the purpose is clear, we recognize that the solution 
is not simple, We have worked to produce a fair, reasoned bill that 
preserves the rights of all parties to settle disputes, but will help 
avert the potential disasters awaiting us if we choose not to act.
  This bill reflects the high levels of cooperation and broad consensus 
that large manufacturers, small businesses, the telecommunications 
industry, the information technology industry, electric utilities, and 
professional associations have been able to achieve. They are all to be 
commended for their efforts in supporting this vitally important 
legislation.
  Let me explain the bill in more detail.


                         I. purpose of the bill

  The bill's main purpose is to promote Y2K readiness and problem-
solving by discouraging a wasteful diversion of resources that would 
otherwise support readiness and problem-solving toward Y2K-related 
litigation. Such a costly diversion of resources could exacerbate the 
risk of nationwide economic dislocation that the Y2K problem poses. 
Accordingly, the bill aims to prohibit Y2K-related litigation but to 
impose a slight delay in its commencement so as to promote resolution 
of Y2K problems and disputes without resort to litigation. I believe 
this will benefit plaintiffs, defendants, consumers, businesses, and 
innocent users. We want to create an environment when people think, 
``Let's try to solve it'' before they say, ``Let's sue them.''


                  ii. summary of the bill's provisions

  Pre-litigation Remediation Period (Sec. 101):
  If a person aggrieved by a year-2000-related (Y2K-related) problem 
wants to file a lawsuit based on that problem, he must first provide 
the prospective defendant, at least 90 days before filing suit, with 
notice regarding how the Y2K defect manifests itself, what injury he 
suffered or risk he bore as a result, and what relief he seeks. The 
only exception to this mandatory 90-day remediation period is if the 
prospective plaintiff is party to a contract that provides for a period 
of delay before suit for breach of contract may commence. In that case, 
the contract's waiting period prevails over the bill's.
  If the prospective plaintiff fails to give notice to the prospective 
defendant, as outlined above, and sues anyway, the defendant can treat 
the plaintiff's lawsuit itself as a substitute notice, thus triggering 
the 90-day remediation period. If the 90-day remediation period is 
triggered by an actual lawsuit (instead of the notice) all discovery 
will be stayed and pleading deadlines will be tolled for the duration 
of the period.
  The bill imposes responsibilities on prospective defendants as well 
as plaintiffs. If a defendant has been given notice, as outlined above, 
he must respond to this notice within 30 days of receiving it. In this 
response, the prospective defendant must state in writing his 
acknowledgement of receipt of the notice and what actions he will take 
or has taken to address the Y2K problem identified in the plaintiff's 
notice. Even if the plaintiff has not given notice and the defendant 
treats his actual lawsuit as substitute notice, the defendant must 
still respond to that notice within 30 days with all required 
particulars.
  If the defendant fails to respond to the plaintiff's notice, then the 
remediation period terminates at the expiration of the defendant's 30-
day response deadline; the lawsuit can then proceed.
  Also of particular significance, the 90-day remediation period may be 
extended as part of mutual agreement of the parties to engage in 
alternative dispute resolution. See Sec. 102(a).
  Pleading Requirements (Sec. 103):
  The bill requires all Y2K plaintiffs seeking money damages to make a 
detailed statement in their lawsuits of the nature and amount of the 
damages they seek to recover, specific facts that form the basis for 
calculating those damages, and how material Y2K defects manifest 
themselves. In addition, if the claim being pursued requires proof that 
the defendant acted with a particular state of mind, the plaintiff must 
``state in detail the facts giving rise to a strong inference that the 
defendant acted with the required state of mind.''
  The bill allows the court to dismiss a Y2K lawsuit that fails to meet 
the above pleading requirements. However, the plaintiff can re-file his 
lawsuit with the required detailed statements and still get a chance to 
pursue his claim.
  Duty to Mitigate (Sec. 104):
  This provision codifies the common-law rule that bars recovery of 
damages for injuries that the plaintiff could reasonably have been 
avoided.
  Evidence of Reasonable Efforts and Contract Defenses (Sec. 202(a)):
  This provision allows a defendant, ``for the purpose of limiting or 
eliminating the defendant's liability,'' for breach of contract to 
offer evidence that his performance was ``reasonable in light of the 
circumstances.'' This would overcome any objection, based on Federal or 
State rules of evidence, that evidence of such reasonable-efforts 
performance is irrelevant to the issue of breach. Also, this provision 
expressly preserves the common-law and Uniform Commercial Code defenses 
of impossibility and impracticability.
  Contract Damages Limit (Sec. 203):
  Contract damages are limited either to those provided for in a 
liquidated damages clause or by operation of law that governed the 
contract's interpretation at the time of contract formation. This does 
not alter present-day contract law. Rather, it is designed to preempt 
any State's attempt to change its contract law relating to Y2K problems 
after the contract that is the subject of the lawsuit was entered into.
  Proportionate Liability in Tort Cases (Sec. 301(b)):
  This provision essentially codifies the tort doctrine of pure 
comparative negligence in that it requires the court to assign a 
percent share of liability to each person determined to have caused or 
contributed to the plaintiff's loss in proportion to the relative fault 
of each. Personal injury cases are exempt from this provision.
  State of Mind and Foreseeability Requirements in Tort Cases 
(Sec. 302):
  This provision establishes a heightened state-of-mind element for 
three types of lawsuits: For fraud and negligent misrepresentation 
cases, the plaintiff must, in addition to proving all other elements of 
the claim, prove by clear and convincing evidence that the defendant 
``actually knew, or recklessly disregarded a known and substantial 
risk, that [a Y2K] failure would occur.'' For cases that require proof 
of gross negligence or recklessness, the plaintiff must, in addition to 
proving all other elements of the claim, prove by clear and convincing 
evidence that the defendant ``actually knew, or recklessly disregarded 
a known and substantial risk, that plaintiff would suffer [actual or 
potential] harm. For ordinary negligence cases, the plaintiff must, in 
addition to proving all other elements of the claim, prove by clear and 
convincing evidence that the defendant ``knew or reasonably should have 
known that its actions would cause harm to the plaintiff.''

[[Page 3055]]

  Reasonable Efforts Defense in Tort Cases (Sec. 303):
  Under this provision, a plaintiff may not recover simply by showing 
that a Y2K failure occurred in something that was under the control of 
the defendant. This is intended to avoid a defendant being held 
strictly liable for harm caused by a Y2K failure. Also, the bill 
provides the defendant with a complete defense to liability if he can 
show that he took reasonable efforts under the circumstances to prevent 
the Y2K failure or its attendant damages. Breach of contract cases are 
exempt from this provision.
  Tort Punitive Damages Limit (Sec. 304):
  This provision limits punitive damages to either: (1) lesser of three 
times actual damages or $250,000 for individuals whose net worth is 
$500,000 or less and for small businesses; or (2) the greater of three 
times actual damages or $250,000 for all other defendants.
  Limit on Economic Loss Recovery in Tort Cases (Sec. 305):
  This provision essentially codifies the common-law economic loss 
doctrine found in section 766C of the Restatement of Torts. 
Accordingly, the provision allows recovery of economic losses only when 
permitted by statute or judicial decision and (1) where permitted under 
a contract to which the plaintiff is a party; (2) where permitted under 
applicable law that governed interpretation of the contract at the time 
of contract formation; (3) when they are incidental to a Y2K-related 
personal injury claim; or (4) when they are incidental to a Y2K-related 
property damage claim.
  Liability of Officers and Directors (Sec. 306):
  This provision limits the personal liability of corporate officers 
and directors to the greater of $100,000 or the amount of cash 
compensation such officer or director received in the year preceding 
the act or omission for which he was found liable. This limitation on 
personal liability does not apply where it is proven by clear and 
convincing evidence that the officer or director specifically intended 
to harm the plaintiff by (1) intentionally making materially misleading 
statements on which the plaintiff relied or (2) intentionally 
withholding material information regarding a Y2K failure that he had a 
duty to disclose. This provision expressly does not pre-empt State law 
on liability of officers and directors.
  Class Action Requirements:
  Regarding Y2K-related class suits, the bill allows these actions to 
proceed only if a majority of class members' claims involve material 
Y2K defects. Also, only those individuals who have actual notice, as 
certified by the court, of the suit are entitled to join the class, 
unless they inform the court in writing prior to commencement of trial 
or entry of judgment of their desire to join the class.
  Finally, the bill changes the requirements of Federal jurisdiction 
for Y2K-related actions in three respects: (1) there is no amount in 
controversy requirement for Federal diversity jurisdiction; (2) 
diversity of citizenship can be established as to any member of the 
class, not just the named members; and (3) plaintiffs as well as 
defendants can remove Y2K-related actions from state court to Federal 
court.
  In conclusion, Mr. President, I want to emphasize that the Y2K 
problem is not a partisan issue. This is a bipartisan, fair bill. We 
must all work together--now--to ensure that a rush to the courts does 
not cripple the ability of American businesses to solve the Y2K problem 
swiftly, efficiently, and without unnecessary distractions. The real 
beneficiaries of this bill will be individual consumers and businesses, 
the engine of the American economy. I ask my colleagues to support this 
worthwhile legislation.
  I ask unanimous consent that the bill in its entirety be printed in 
the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 461

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Year 2000 
     Fairness and Responsibility Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings, purposes, and scope.
Sec. 3. Definitions.

     TITLE I--PRELITIGATION PROCEDURES FOR YEAR 2000 CIVIL ACTIONS

Sec. 101. Pre-trial notice.
Sec. 102. Alternative dispute resolution.
Sec. 103. Pleading requirements.
Sec. 104. Duty to mitigate.

         TITLE II--YEAR 2000 CIVIL ACTIONS INVOLVING CONTRACTS

Sec. 201. Contract preservation.
Sec. 202. Evidence of reasonable efforts and defenses.
Sec. 203. Damages limitation.

      TITLE III--YEAR 2000 CIVIL ACTIONS INVOLVING TORT AND OTHER 
                         NONCONTRACTUAL CLAIMS

Sec. 301. Proportionate liability.
Sec. 302. State of mind and foreseeability.
Sec. 303. Reasonable efforts defense.
Sec. 304. Damages limitation.
Sec. 305. Economic losses.
Sec. 306. Liability of officers and directors.

           TITLE IV--CLASS ACTIONS INVOLVING YEAR 2000 CLAIMS

Sec. 401. Minimum injury requirement.
Sec. 402. Notification.
Sec. 403. Dismissal prior to certification.
Sec. 404. Federal jurisdiction in class actions involving year 2000 
              claims.

                        TITLE V--EFFECTIVE DATE

Sec. 501. Effective date.

     SEC. 2. FINDINGS, PURPOSES, AND SCOPE.

       (a) Findings.--Congress finds the following:
       (1)(A) Many information technology systems, devices, and 
     programs are not capable of recognizing certain dates in 1999 
     and after December 31, 1999, and will read dates in the year 
     2000 and thereafter as if those dates represent the year 1900 
     or thereafter or will fail to process those dates.
       (B) If not corrected, the problem described in subparagraph 
     (A) and resulting failures could incapacitate systems that 
     are essential to the functioning of markets, commerce, 
     consumer products, utilities, Government, and safety and 
     defense systems, in the United States and throughout the 
     world.
       (2) It is in the national interest that producers and users 
     of technology products concentrate their attention and 
     resources in the time remaining before January 1, 2000, on 
     assessing, fixing, testing, and developing contingency plans 
     to address any and all outstanding year 2000 computer date-
     change problems, so as to minimize possible disruptions 
     associated with computer failures.
       (3)(A) Because year 2000 computer date-change problems may 
     affect virtually all businesses and other users of technology 
     products to some degree, there is a substantial likelihood 
     that actual or potential year 2000 failures will prompt a 
     significant volume of litigation, much of it insubstantial.
       (B) The litigation described in subparagraph (A) would have 
     a range of undesirable effects including the following:
       (i) It would threaten to waste technical and financial 
     resources that are better devoted to curing year 2000 
     computer date-change problems and ensuring that systems 
     remain or become operational.
       (ii) It could threaten the network of valued and trusted 
     business and customer relationships that are important to the 
     effective functioning of the national economy.
       (iii) It would strain the Nation's legal system, causing 
     particular problems for the small businesses and individuals 
     who already find that system inaccessible because of its 
     complexity and expense.
       (iv) The delays, expense, uncertainties, loss of control, 
     adverse publicity, and animosities that frequently accompany 
     litigation of business disputes could exacerbate the 
     difficulties associated with the date change and work against 
     the successful resolution of those difficulties.
       (v) Concern about the potential for liability--in 
     particular, concern about the substantial litigation expense 
     associated with defending against even the most insubstantial 
     lawsuits--is prompting many persons and businesses with 
     technical expertise to avoid projects aimed at curing year 
     2000 computer date-change problems.
       (b) Purposes.--Based upon the power contained in article I, 
     section 8, clause 3 of the Constitution of the United States, 
     the purposes of this Act are--
       (1) to establish uniform legal standards that give all 
     businesses and users of technology products reasonable 
     incentives to solve year 2000 computer date-change problems 
     before they develop;
       (2) to encourage the resolution of year 2000 computer date-
     change disputes involving economic damages without recourse 
     to unnecessary, time consuming, and wasteful litigation; and
       (3) to lessen burdens on interstate commerce by 
     discouraging insubstantial lawsuits, while also preserving 
     the ability of individuals and businesses that have suffered 
     real injury to obtain complete relief.
       (c) Scope.--Nothing in this Act affects claims for personal 
     injury.

     SEC. 3. DEFINITIONS.

       In this Act:

[[Page 3056]]

       (1) Actual damages.--The term ``actual damages''--
       (A) means damages for physical injury to any person or 
     property; and
       (B) includes the cost of repairing or replacing a product 
     that has a material defect.
       (2) Contract.--The term ``contract'' means a contract, 
     tariff, license, or warranty.
       (3) Defendant.--The term ``defendant'' means any person 
     against whom a year 2000 claim is asserted.
       (4) Economic loss.--The term ``economic loss''--
       (A) means any damages other than damages arising out of 
     personal injury or damage to tangible property; and
       (B) includes damages for--
       (i) lost profits or sales;
       (ii) business interruption;
       (iii) losses indirectly suffered as a result of the 
     defendant's wrongful act or omission;
       (iv) losses that arise because of the claims of third 
     parties;
       (v) losses that are required to be pleaded as special 
     damages; or
       (vi) items defined as consequential damages in the Uniform 
     Commercial Code or an analogous State commercial law.
       (5) Material defect.--
       (A) In general.--The term ``material defect'' means a 
     defect in any item, whether tangible or intangible, or in the 
     provision of a service, that substantially prevents the item 
     or service from operating or functioning as designed or 
     intended.
       (B) Exclusions.--The term does not include any defect 
     that--
       (i) has an insignificant or de minimis effect on the 
     operation or functioning of an item;
       (ii) affects only a component of an item that, as a whole, 
     substantially operates or functions as designed; or
       (iii) has an insignificant or de minimis effect on the 
     efficacy of the service provided.
       (6) Person.--The term ``person'' means any natural person 
     and any entity, organization, or enterprise, including any 
     corporation, company (including any joint stock company), 
     association, partnership, trust, or governmental entity.
       (7) Personal injury.--
       (A) In general.--The term ``personal injury'' means any 
     physical injury to a natural person, including death of the 
     person.
       (B) Exclusions.--The term does not include mental 
     suffering, emotional distress, or like elements of injury 
     that do not constitute physical harm to a natural person.
       (8) Plaintiff.--The term ``plaintiff'' means any person who 
     asserts a year 2000 claim.
       (9) Punitive damages.--The term ``punitive damages'' means 
     damages, other than compensatory damages, that, in whole or 
     in part, are awarded against any person--
       (A) to punish that person; or
       (B) to deter that person, or other persons, from engaging 
     in similar behavior.
       (10) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Northern Mariana Islands, the U.S. Virgin 
     Islands, Guam, American Samoa, and any other territory or 
     possession of the United States, and any political 
     subdivision thereof.
       (11) Year 2000 civil action.--The term ``year 2000 civil 
     action'' means any civil action of any kind brought in any 
     court under Federal, State, or foreign law, in which--
       (A) a year 2000 claim is asserted; or
       (B) any claim or defense is related, directly or 
     indirectly, to an actual or potential year 2000 failure.
       (12) Year 2000 claim.--The term ``year 2000 claim'' means 
     any claim or cause of action of any kind, whether asserted by 
     way of claim, counterclaim, cross-claim, third-party claim, 
     or otherwise, in which the plaintiff's alleged loss or harm 
     resulted, directly or indirectly, from an actual or potential 
     year 2000 failure.
       (13) Year 2000 failure.--The term ``year 2000 failure'' 
     means any failure by any device or system (including any 
     computer system and any microchip or integrated circuit 
     embedded in another device or product), or any software, 
     firmware, or other set or collection of processing 
     instructions, however constructed, in processing, 
     calculating, comparing, sequencing, displaying, storing, 
     transmitting, or receiving date-related data, including--
       (A) the failure to accurately administer or account for 
     transitions or comparisons from, into, and between the 20th 
     and 21st centuries, and between 1999 and 2000; or
       (B) the failure to recognize or accurately process any 
     specific date, and the failure accurately to account for the 
     status of the year 2000 as a leap year.

     TITLE I--PRELITIGATION PROCEDURES FOR YEAR 2000 CIVIL ACTIONS

     SEC. 101. PRE-TRIAL NOTICE.

       (a) Notification Period.--
       (1) In general.--Before filing a year 2000 claim, except an 
     action for a claim that seeks only injunctive relief, a 
     prospective plaintiff shall be required to provide to each 
     prospective defendant a written notice that identifies and 
     describes with particularity--
       (A) any manifestation of a material defect alleged to have 
     caused injury;
       (B) the injury allegedly suffered or reasonably risked by 
     the prospective plaintiff; and
       (C) the relief or action sought by the prospective 
     plaintiff.
       (2) Commencement of action.--Except as provided in 
     subsections (c) and (e), a prospective plaintiff shall not 
     file a year 2000 claim in Federal or State court until the 
     expiration of the 90-day period beginning on the date on 
     which the prospective plaintiff provides notice under 
     paragraph (1).
       (b) Response to Notice.--Not later than 30 days after 
     receipt of the notice specified in subsection (a), each 
     prospective defendant shall provide each prospective 
     plaintiff a written statement that--
       (1) acknowledges receipt of the notice; and
       (2) describes any actions that the defendant will take, or 
     has taken, to address the defect or injury identified by the 
     prospective plaintiff in the notice.
       (c) Failure To Respond.--If a prospective defendant fails 
     to respond to a notice provided under subsection (a)(1) 
     during the 30-day period prescribed in subsection (b) or does 
     not include in the response a description of actions referred 
     to in subsection (b)(2)--
       (1) the 90-day waiting period identified in subsection (a) 
     shall terminate at the expiration of the 30-day period 
     specified in subsection (b) with respect to that prospective 
     defendant; and
       (2) the prospective plaintiff may commence a year 2000 
     civil action against such prospective defendant immediately 
     upon the termination of that waiting period.
       (d) Failure To Provide Notice.--
       (1) In general.--Subject to subsections (c) and (e), a 
     defendant may treat a complaint filed by the plaintiff as a 
     notice required under subsection (a) by so informing the 
     court and the plaintiff if the defendant determines that a 
     plaintiff has commenced a year 2000 civil action--
       (A) without providing the notice specified in subsection 
     (a); or
       (B) before the expiration of the 90-day waiting period 
     specified in subsection (a).
       (2) Stay.--If a defendant elects under paragraph (1) to 
     treat a complaint as a notice--
       (A) the court shall stay all discovery and other 
     proceedings in the action for a period of 90 days beginning 
     on the date of filing of the complaint; and
       (B) the time for filing answers and all other pleadings 
     shall be tolled during this 90-day period.
       (e) Effect of Contractual Waiting Periods.--In any case in 
     which a contract requires notice of nonperformance and 
     provides for a period of delay before the initiation of suit 
     for breach or repudiation of contract, the contractual period 
     of delay controls and shall apply in lieu of the waiting 
     period specified in subsections (a) and (d).
       (f) Sanction for Frivolous Invocation of the Stay 
     Provision.--If a defendant acts under subsection (d) to stay 
     an action, and the court subsequently finds that the 
     assertion by the defendant that the action is a year 2000 
     civil action was frivolous and made for the purpose of 
     causing unnecessary delay, the court may impose a sanction, 
     including an order to make payments to opposing parties in 
     accordance with Rule 11 of the Federal Rules of Civil 
     Procedure.
       (g) Computation of Time.--For purposes of this section, the 
     rules regarding computation of time shall be governed by the 
     applicable Federal or State rules of civil procedure.

     SEC. 102. ALTERNATIVE DISPUTE RESOLUTION.

       (a) Requests Made During Notification Period.--At any time 
     during the 90-day notification period under section 101(a), 
     either party may request the other party to use alternative 
     dispute resolution. If, based upon that request, the parties 
     enter into an agreement to use alternative dispute 
     resolution, the parties may also agree to an extension of 
     that 90-day period.
       (b) Request Made After Notification Period.--At any time 
     after expiration of the 90-day notification period under 
     section 101(a), whether before or after the filing of a 
     complaint, either party may request the other party to use 
     alternative dispute resolution.
       (c) Payment Date.--If a dispute that is the subject of the 
     complaint or responsive pleading is resolved through 
     alternative dispute resolution as provided in subsection (a) 
     or (b), the defendant shall pay any amount of funds that the 
     defendant is required to pay the plaintiff under the 
     settlement not later than 30 days after the date on which the 
     parties settle the dispute, and all other terms shall be 
     implemented as promptly as possible based upon the agreement 
     of the parties, unless another period of time is agreed to by 
     the parties or established by contract between the parties.

     SEC. 103. PLEADING REQUIREMENTS.

       (a) Nature and Amount of Damages.--In any year 2000 civil 
     action in which a plaintiff seeks an award of money damages, 
     the complaint shall state with particularity with regard to 
     each year 2000 claim--
       (1) the nature and amount of each element of damages; and
       (2) the factual basis for the calculation of the damages.
       (b) Material Defects.--In any year 2000 civil action in 
     which the plaintiff alleges that a product or service was 
     defective, the complaint shall, with respect to each year 
     2000 claim--
       (1) identify with particularity the manifestations of the 
     material defects; and
       (2) state with particularity the facts supporting the 
     conclusion that the defects were material.

[[Page 3057]]

       (c) Required State of Mind.--In any year 2000 civil action 
     in which a year 2000 claim is asserted with respect to which 
     the plaintiff may prevail only on proof that the defendant 
     acted with a particular state of mind, the complaint shall, 
     with respect to each element of the claim, state in detail 
     the facts giving rise to a strong inference that the 
     defendant acted with the required state of mind.
       (d) Motion To Dismiss; Stay of Discovery.--
       (1) Dismissal for failure to meet pleading requirements.--
     In any year 2000 civil action, the court shall, on the motion 
     of any defendant, dismiss without prejudice any year 2000 
     claim asserted in the complaint if any of the requirements 
     under subsection (a), (b), or (c) is not met with respect to 
     the claim.
       (2) Stay of discovery.--In any year 2000 civil action, all 
     discovery and other proceedings shall be stayed during the 
     pendency of any motion to dismiss, unless the court finds 
     upon the motion of any party that particularized discovery is 
     necessary to preserve evidence or prevent undue prejudice to 
     that party.
       (3) Preservation of evidence.--
       (A) In general.--
       (i) Treatment of evidence.--During the pendency of any stay 
     of discovery entered under this paragraph, unless otherwise 
     ordered by the court, any party to the action with actual 
     notice of the allegations contained in the complaint shall 
     treat the items described in clause (ii) as if they were a 
     subject of a continuing request for production of documents 
     from an opposing party under applicable Federal or State 
     rules of civil procedure.
       (ii) Items.--The items described in this clause are all 
     documents, data compilations (including electronically stored 
     or recorded data), and tangible objects that--

       (I) are in the custody or control of the party described in 
     clause (i); and
       (II) relevant to the allegations.

       (B) Sanction for willful violation.--A party aggrieved by 
     the willful failure of an opposing party to comply with 
     clause (A) may apply to the court for an order awarding 
     appropriate sanctions.

     SEC. 104. DUTY TO MITIGATE.

       (a) In General.--There shall be no recovery for any year 
     2000 claim on account of injury that the plaintiff could 
     reasonably have avoided in light of any disclosure or other 
     information with respect to which the plaintiff was, or 
     reasonably could have been, aware.
       (b) Damages.--The damages awarded for any claim described 
     in subsection (a) shall exclude any amount that the plaintiff 
     reasonably could have avoided in light of any disclosure or 
     information described in that subsection.

         TITLE II--YEAR 2000 CIVIL ACTIONS INVOLVING CONTRACTS

     SEC. 201. CONTRACT PRESERVATION.

       (a) In General.--Subject to subsections (b) and (c), 
     notwithstanding any other provision of Federal or State 
     statutory or case law, in any action in which a year 2000 
     claim is advanced, in resolving that claim all written 
     contractual terms, including limitations or exclusions of 
     liability or disclaimers of warranty, shall be fully 
     enforceable.
       (b) Interpretation of Contract.--In any case in which a 
     contract is silent as to a particular issue, the 
     interpretation of the contract as to that issue shall be 
     determined by applicable law in effect at the time that the 
     contract was entered into.
       (c) Unenforceable Contracts.--Subsection (a) does not apply 
     in any case in which a court determines that the contract as 
     a whole is unenforceable due to an infirmity in the formation 
     of the contract under applicable law in effect at the time 
     the contract was entered into.

     SEC. 202. EVIDENCE OF REASONABLE EFFORTS AND DEFENSES.

       (a) Reasonable Efforts.--In any action in which a year 2000 
     claim is advanced and in which a breach of contract or 
     related claim is alleged, in the resolution of that claim, in 
     addition to any other rights provided by applicable law, the 
     party against whom the claim of breach is asserted shall be 
     allowed, for the purpose of limiting or eliminating the 
     defendant's liability, to offer evidence that the 
     implementation of the contract by that party, or the efforts 
     made by that party to implement the contract, were reasonable 
     in light of the circumstances.
       (b) Impossibility or Commercial Impracticability.--
       (1) In general.--In any action in which a year 2000 claim 
     is advanced and in which a breach of contract or related 
     claim is alleged, in resolving that claim applicability of 
     the doctrines of impossibility and commercial 
     impracticability shall be determined by applicable law in 
     existence on January 1, 1999.
       (2) Rule of construction.--Nothing in this Act shall be 
     construed as limiting or impairing a party's right to assert 
     defenses based upon the doctrines referred to in paragraph 
     (1).

     SEC. 203. DAMAGES LIMITATION.

       In any action in which a year 2000 claim is advanced and 
     that involves a breach of contract, warranty, or related 
     claim, in resolving that claim the court shall not award any 
     damages--
       (1) unless those damages are provided for by the express 
     terms of the contract; or
       (2) if the contract is silent on those damages, by 
     operation of the applicable Federal or State law that 
     governed interpretation of the contract at the time the 
     contract was entered into.

      TITLE III--YEAR 2000 CIVIL ACTIONS INVOLVING TORT AND OTHER 
                         NONCONTRACTUAL CLAIMS

     SEC. 301. PROPORTIONATE LIABILITY.

       (a) In General.--Except in cases involving personal injury, 
     a person against whom a final judgment is entered on a year 
     2000 claim shall be liable solely for the portion of the 
     judgment that corresponds to the percentage of responsibility 
     of that person, as determined under subsection (b).
       (b) Determination of Responsibility.--
       (1) In general.--As to any year 2000 claim, the court shall 
     instruct the jury to answer special interrogatories, or if 
     there is no jury, make findings, with respect to each 
     defendant and plaintiff, and each of the other persons 
     claimed by any of the parties to have caused or contributed 
     to the loss incurred by the plaintiff, including persons who 
     have entered into settlements with the plaintiff or 
     plaintiffs, concerning the percentage of responsibility of 
     that person, measured as a percentage of the total fault of 
     all persons who caused or contributed to the total loss 
     incurred by the plaintiff.
       (2) Contents of special interrogatories or findings.--The 
     responses to interrogatories, or findings, as appropriate, 
     under paragraph (1) shall specify--
       (A) the total amount of damages that the plaintiff is 
     entitled to recover; and
       (B) the percentage of responsibility of each person found 
     to have caused or contributed to the loss incurred by the 
     plaintiff or plaintiffs.
       (3) Factors for consideration.--In determining the 
     percentage of responsibility under this paragraph, the trier 
     of fact shall consider--
       (A) the nature of the conduct of each person alleged to 
     have caused or contributed to the loss incurred by the 
     plaintiff; and
       (B) the nature and extent of the causal relationship 
     between the conduct of each such person and the damages 
     incurred by the plaintiff or plaintiffs.
       (4) Nondisclosure to jury.--The standard for allocation of 
     damages under paragraph (1) shall not be disclosed to members 
     of the jury.

     SEC. 302. STATE OF MIND AND FORESEEABILITY.

       (a) Defendant's State of Mind as to Year 2000 Failure.--
     With respect to any year 2000 claim for money damages in 
     which the defendant's actual or constructive awareness of an 
     actual or potential year 2000 failure is an element of the 
     claim under applicable law, the defendant shall not be liable 
     unless the plaintiff, in addition to establishing all other 
     requisite elements of the claim, proves by clear and 
     convincing evidence that the defendant actually knew, or 
     recklessly disregarded a known and substantial risk, that the 
     failure would occur.
       (b) Injury to Plaintiff.--With respect to any year 2000 
     claim for money damages in which the defendant's actual or 
     constructive awareness of actual or potential harm to 
     plaintiff is greater than the standard for negligence in 
     subsection (c) and is an element of the claim under 
     applicable law, the defendant shall not be liable unless the 
     plaintiff, in addition to establishing all other requisite 
     elements of the claim, proves by clear and convincing 
     evidence that the defendant actually knew, or recklessly 
     disregarded a known and substantial risk, that plaintiff 
     would suffer that harm.
       (c) Negligence.--With respect to any year 2000 claim for 
     money damages, the defendant shall not be liable unless the 
     plaintiff establishes by clear and convincing evidence, in 
     addition to all other requisite elements of the claim, that 
     the defendant knew or should have known that the actions of 
     the defendant created an unreasonable risk of harm to the 
     plaintiff.
       (d) Preservation of Existing Law.--Nothing in subsection 
     (a), (b), or (c) shall be deemed to create any year 2000 
     claim or to relieve the plaintiff in any year 2000 civil 
     action of the obligation of that plaintiff to establish any 
     element of the cause of action of that plaintiff under 
     applicable law.

     SEC. 303. REASONABLE EFFORTS DEFENSE.

       Except for breach or repudiation of contract claims, as to 
     any year 2000 claim seeking money damages--
       (1) the fact that a year 2000 failure occurred in an 
     entity, facility, system, product, or component that was 
     within the control of the party against whom the claim is 
     asserted shall not constitute the sole basis for recovery; 
     and
       (2) the party against whom the claim is asserted shall be 
     entitled to establish, as a complete defense to the claim, 
     that the party took measures that were reasonable under the 
     circumstances to prevent the year 2000 failure from occurring 
     or from causing the damages upon which the claim is based.

     SEC. 304. DAMAGES LIMITATION.

       (a) In General.--As to any year 2000 claim in which 
     punitive damages may be awarded under applicable law and in 
     which a defendant is found liable for punitive damages, the 
     amount of punitive damages that may be awarded to a claimant 
     shall not exceed the greater of--

[[Page 3058]]

       (1) 3 times the amount awarded to the claimant for actual 
     damages; or
       (2) $250,000.
       (b) Special Rule.--
       (1) Rule.--
       (A) In general.--Notwithstanding subsection (a), as to any 
     year 2000 claim in which the defendant is found liable for 
     punitive damages and the defendant is an individual described 
     in subparagraph (B), the amount of punitive damages shall not 
     exceed the lesser of--
       (i) 3 times the amount awarded to the claimant for actual 
     damages; or
       (ii) $250,000.
       (B) Description of individual.--An individual described in 
     this clause is an individual whose net worth does not exceed 
     $500,000, is an owner of an unincorporated business that has 
     fewer than 25 full-time employees, or is any partnership, 
     corporation, association, unit of local government, or 
     organization that has fewer than 25 full-time employees.
       (2) Applicability.--For purposes of determining the 
     applicability of this subsection to a corporation, the number 
     of employees of a subsidiary of a wholly owned corporation 
     shall include all employees of a parent corporation or any 
     subsidiary of that parent corporation.
       (c) Application of Limitations by the Court.--The 
     limitations contained in subsection (a) or (b) shall be 
     applied by the court and shall not be disclosed to the jury.

     SEC. 305. ECONOMIC LOSSES.

       (a) In General.--Subject to subsection (b), a party to a 
     year 2000 civil action may not recover economic losses for a 
     year 2000 claim based on tort unless the party is able to 
     show that at least one of the following circumstances exists:
       (1) The recovery of these losses is provided for in the 
     contract to which the party seeking to recover such losses is 
     a party.
       (2) If the contract is silent on those losses, and the 
     application of the applicable Federal or State law that 
     governed interpretation of the contract at the time the 
     contract was entered into would allow recovery of such 
     losses.
       (3) These losses are incidental to a claim in the year 2000 
     civil action based on personal injury caused by a year 2000 
     failure.
       (4) These losses are incidental to a claim in the year 2000 
     civil action based on damage to tangible property caused by a 
     year 2000 failure.
       (b) Treatment of Economic Losses.--Economic losses shall be 
     recoverable in a year 2000 civil action only if applicable 
     Federal law, or applicable State law embodied in statute or 
     controlling judicial precedent as of January 1, 1999, permits 
     the recovery of such losses in the action.

     SEC. 306. LIABILITY OF OFFICERS AND DIRECTORS.

       (a) In General.--A director, officer, or trustee of a 
     business or other organization (including a corporation, 
     unincorporated association, partnership, or non-profit 
     organization) shall not be personally liable as to any year 
     2000 claim in the capacity of that individual as a director 
     or officer of the business or organization for an aggregate 
     amount greater than the greater of--
       (1) $100,000; or
       (2) the amount of cash compensation received by the 
     director or officer from the business or organization during 
     the 12-month period immediately preceding the act or omission 
     for which liability was imposed.
       (b) Exception.--The limitation in subsection (a) shall not 
     apply to any claim in which it is found by clear and 
     convincing evidence that the director or officer, with 
     specific intent to cause harm to the plaintiff--
       (1) intentionally made materially misleading statements 
     relied upon by the plaintiff regarding any actual or 
     potential year 2000 problem; or
       (2) intentionally withheld material information regarding 
     any actual or potential year 2000 problem of the business or 
     organization that the director or officer had a duty to 
     disclose.
       (c) Rule of Construction.--Nothing in this section shall be 
     deemed to impose, or to permit the imposition of, personal 
     liability on any director, officer, or trustee in excess of 
     the aggregate amount of liability to which such director, 
     officer, or trustee would be subject under applicable State 
     law in existence on January 1, 1999 (including any charter or 
     bylaw authorized by that State law).

           TITLE IV--CLASS ACTIONS INVOLVING YEAR 2000 CLAIMS

     SEC. 401. MINIMUM INJURY REQUIREMENT.

       (a) In General.--In any action involving a year 2000 claim 
     that a product or service is defective, the action may be 
     maintained as a class action in Federal or State court with 
     respect to that claim only if--
       (1) the claim satisfies all other prerequisites established 
     by applicable Federal or State law; and
       (2) the court finds that the alleged defect in the product 
     or service was a material defect with respect to a majority 
     of the members of the class.
       (b) Determination by Court.--
       (1) In general.--As soon as practicable after the 
     commencement of an action involving a year 2000 claim that a 
     product or service is defective and that is brought as a 
     class action, the court shall determine by order whether the 
     requirement stated in paragraph (1) is satisfied.
       (2) Orders.--An order under this subsection may be--
       (A) conditional; and
       (B) altered or amended before the decision on the merits.

     SEC. 402. NOTIFICATION.

       (a) Notice by Mail.--
       (1) In general.--In any year 2000 civil action that is 
     maintained as a class action, the court, in addition to any 
     other notice required by applicable Federal or State law, 
     shall direct notice of the action to each member of the class 
     by United States mail, return receipt requested.
       (2) Exclusion of certain persons.--Any person whose actual 
     receipt of the notice is not verified by the court or by 
     counsel for 1 of the parties shall be excluded from the class 
     unless that person informs the court in writing, on a date no 
     later than the commencement of trial or entry of judgment, 
     that the person wishes wish to join the class.
       (b) Contents of Notice.--In addition to any information 
     required by applicable Federal or State law, the notice 
     described in this subsection shall--
       (1) concisely and clearly describe the nature of the 
     action;
       (2) identify the jurisdiction whose law will govern the 
     action;
       (3) identify any potential claims that class counsel chose 
     not to pursue so that the action would satisfy class 
     certification requirements; and
       (4) describe the fee arrangement of class counsel.

     SEC. 403. DISMISSAL PRIOR TO CERTIFICATION.

       Before determining whether to certify a class in a year 
     2000 civil action, the court may decide a motion to dismiss 
     or for summary judgment made by any party if the court 
     concludes that decision will--
       (1) promote the fair and efficient adjudication of the 
     controversy; and
       (2) not cause undue delay.

     SEC. 404. FEDERAL JURISDICTION IN CLASS ACTIONS INVOLVING 
                   YEAR 2000 CLAIMS.

       (a) Diversity Jurisdiction.--Section 1332 of title 28, 
     United States Code, is amended--
       (1) by redesignating subsections (b), (c), and (d) as 
     subsections (c), (d), and (e), respectively; and
       (2) by inserting after subsection (a) the following:
       ``(b)(1)(A) The district courts shall, regardless of the 
     sum or value of the matter in controversy therein, have 
     original jurisdiction of any year 2000 civil action which is 
     brought as a class action and in which--
       ``(i) any member of a proposed plaintiff class is a citizen 
     of a State different from any defendant;
       ``(ii) any member of a proposed plaintiff class is a 
     foreign state or a citizen or subject of a foreign state and 
     any defendant is a citizen of a State; or
       ``(iii) any member of a proposed plaintiff class is a 
     citizen of a State and any defendant is a citizen or subject 
     of a foreign state.
       ``(B) As used in this paragraph, the term `foreign state' 
     has the meaning given that term in section 1603(a).
       ``(2)(A) The district court may, in its discretion, abstain 
     from hearing such action in a year 2000 civil action 
     described in paragraph (1) in which--
       ``(i) the substantial majority of the members of all 
     proposed plaintiff classes are citizens of a single State of 
     which the primary defendants are also citizens; and
       ``(ii) the claims asserted will be governed primarily by 
     the laws of that State, the district court should abstain 
     from hearing such action.
       ``(B) The district court may, in its discretion, abstain 
     from hearing such action in a year 2000 civil action 
     described in paragraph (1) in which--
       ``(i) all matters in controversy asserted by the individual 
     members of all proposed plaintiff classes in the aggregate do 
     not exceed the sum or value of $1,000,000, exclusive of 
     interest and costs;
       ``(ii) the number of members of all proposed plaintiff 
     classes in the aggregate is less than 100; or
       ``(iii) the primary defendants are States, State officials, 
     or other governmental entities against whom the district 
     court may be foreclosed from ordering relief, the district 
     court may, in its discretion, abstain from hearing such 
     action.
       ``(3)(A) Paragraph (1) and section 1453 shall not apply to 
     any class action that is brought under the Securities Act of 
     1933 (15 U.S.C. 77a et seq.).
       ``(B) Paragraph (1) and section 1453 shall not apply to a 
     class action described in subparagraph (C) that is based upon 
     the statutory or common law of the State in which the issuer 
     concerned is incorporated (in the case of a corporation) or 
     organized (in the case of any other entity).
       ``(C) A class action is described in this subparagraph if 
     it involves--
       ``(i) the purchase or sale of securities by an issuer or an 
     affiliate of an issuer exclusively from or to holders of 
     equity securities of the issuer; or
       ``(ii) any recommendation, position, or other communication 
     with respect to the sale of securities of an issuer that--

[[Page 3059]]

       ``(I) is made by or on behalf of the issuer or an affiliate 
     of the issuer to holders of equity securities of the issuer; 
     and
       ``(II) concerns decisions of those equity holders with 
     respect to voting their securities, acting in response to a 
     tender or exchange offer, or exercising dissenters' or 
     appraisal rights.
       ``(D) As used in this paragraph, the terms `issuer', 
     `security', and `equity security' have the meanings given 
     those terms in section 3 of the Securities Exchange Act of 
     1934 (15 U.S.C. 78c).''.
       (b) Conforming Amendment.--Section 1332(c) of title 281 
     United States Code, (as redesignated by this section) is 
     amended by inserting after ``pursuant to subsection (a)'' 
     after ``Federal courts''.
       (c) Determination of Diversity.--Section 1332, as amended 
     by this section, is further amended by adding at the end the 
     following:
       ``(f) For purposes of subsection (b), a member of a 
     proposed class shall be deemed to be a citizen of a State 
     different from a defendant corporation only if that member is 
     a citizen of a State different from all States of which the 
     defendant corporation is deemed a citizen.''.
       (d) Removal of Class Actions.--Chapter 89 of title 28, 
     United States Code is amended by adding at the end the 
     following:

     ``Sec. 1453. Removal of class actions

       ``(a) In General.--A year 2000 civil action that is brought 
     as a class action may be removed to a district court of the 
     United States in accordance with this chapter, except that 
     such action may be removed--
       ``(1) by any defendant without the consent of all 
     defendants; or
       ``(2) by any plaintiff class member who is not a named or 
     representative class member of the action for which removal 
     is sought, without the consent of all members of such class.
       ``(b) When Removable.--This section shall apply to any year 
     2000 civil action that is brought as a class action before or 
     after the entry of any order certifying a class.
       ``(c) Procedure for Removal.--
       ``(1) In general.--The provisions of section 1446(a) 
     relating to a defendant removing a case shall apply to a 
     plaintiff removing a case under this section.
       ``(2) Application.--With respect to the application of 
     section 1446(b), the requirement relating to the 30-day 
     filing period shall be met if a plaintiff class member who is 
     not a named or representative class member of the action for 
     which removal is sought files notice of removal within 30 
     days after receipt by such class member, through service or 
     otherwise, of the initial written notice of the class action 
     provided at the trial court's direction.''.
       (e) Removal Limitations.--Section 1446(b) is amended in the 
     second undesignated paragraph--
       (1) by inserting ``, by exercising due diligence,'' after 
     ``ascertained''; and
       (2) by striking ``section 1332'' and inserting ``section''.
       (f) Technical and Conforming Amendments.--The table of 
     sections for chapter 89 of title 28, United States Code, is 
     amended by adding after the item relating to section 1452 the 
     following:

``1453. Removal of class actions.''.

       (g) Procedure After Removal.--Section 1447 of title 28, 
     United States Code, is amended by adding at the end the 
     following:
       ``(f)(1) If, after removal, the court determines that no 
     aspect of an action that is subject to its jurisdiction 
     solely under the provisions of section 1332(b) may be 
     maintained as a class action under Rule 23 of the Federal 
     Rules of Civil Procedure, the court shall strike the class 
     allegations from the action and remand the action to the 
     State court.
       ``(2) Upon remand of the action, the period of limitations 
     for any claim that was asserted in the action on behalf of 
     any named or unnamed member of any proposed class shall be 
     deemed tolled to the full extent provided under Federal 
     law.''.
       (h) Application of Substantive State Law.--Nothing in the 
     amendments made by this section shall alter the substantive 
     law applicable to an action to which such amendments apply.

                        TITLE V--EFFECTIVE DATE

     SEC. 501. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on January 1, 1999.

  Mrs. FEINSTEIN. Mr. President, I rise along with my colleague from 
Utah, Senator Hatch, to introduce the Year 2000 Fairness and 
Responsibility Act. This bill, supported by more than 80 industry 
organizations, is especially important to California, where over 20 
percent of the nation's high-tech jobs are located.
  The genesis of the bill was a request by several industry groups--
including the Semiconductor Industry Association (SIA), the National 
Association of Manufacturers (NAM), the Chamber of Commerce and the 
Information Technology Association of America--to develop legislation 
to prevent frivolous and baseless lawsuits that could jeopardize 
companies actually solving Y2K problems.
  In concert with Senator Hatch and industry groups, a bill has been 
drafted that is narrow in focus and moderate in application. In 
developing this legislation, we have sought to solve an important 
problem and feel we have worked to develop a fair bill. We remain 
willing to address concerns with this legislation. It is a starting 
point, not a final piece of legislation.
  This bill is a bill that will prevent frivolous and baseless 
litigation, but will not restrict an individual's right to sue to 
mitigate real damages.
  Let me outline a few key provisions of the legislation.
  First, this bill provides a 90-day ``cooling off period,'' during 
which no Y2K lawsuit may be filed and a three-step process must be 
followed:
  A. Anyone alleging harm due to a Y2K failure must first provide 
written notice to the potential defendant of the problem.
  B. The defendant then has 3 days to respond in writing.
  C. The defendant also has 60 additional days to fix the problem.
  This cooling off period is important because it allows companies to 
concentrate on solving the problem before suits are filed and 
hopefully, it will eliminate the rush to litigation that many 
anticipate.
  Obviously, the hope is that if a company is given an opportunity to 
solve a Y2K problem, that company will proceed to do so with dispatch. 
Therefore, there will be fewer injured parties, ergo, fewer will need 
to file suit.
  Second, the bill limits punitive damages to $250,000 or three times 
economic loss, whichever is greater. However, for individuals whose net 
worth does not exceed $500,000 or for small businesses, of fewer that 
25 full-time employees, punitive damages would be limited to the lesser 
of $250,000 or three times economic damages.
  Third, this bill provides for proportionate liability, so that a 
defendant would be limited to the percentage proportion of that 
defendant's fault in causing the alleged harm. In other words, ``no 
deep pockets.''
  Fourth, the bill establishes requirements that the plaintiffs must 
allege specific harm and damages when filing suit, including the 
factual basis for the calculation of damages.
  The bill also provides either party the opportunity to request 
Alternative Dispute Resolution at any time during the 90-day cooling 
off period provided for in this bill. If the parties agree to use 
Alternative Dispute Resolution and the dispute is settled, the 
defendant must pay the settlement in 30 days unless other arrangements 
are agreed to.
  Sixth, the bill provides that if a contract specifically limits 
liability for actions that would include a Y2K action, no recovery is 
available beyond the contract terms. Recovery, however, is available if 
the contract does not mention liability limitations. Recovery is also 
available for any contract entered into without a true ``meeting of the 
minds.'' This would include contracts, for instance, between large 
companies and ordinary consumers. Even if the terms of use within a 
product box state a limit on liability, courts can award Y2K damages.
  The bill also sets minimum injury requirements for class action 
lawsuits to prevent attorneys from gathering large numbers of 
plaintiffs that have not really even been harmed by a given Y2K defect.
  Additionally, the bill requires that all potential class members be 
notified of a Y2K class action by U.S. mail, return receipt requested. 
That notice must include information about the nature of the action, 
the jurisdiction, claims that are not being pursued, and the 
arrangement for attorneys fees.
  Ninth, the bill provides federal courts with jurisdiction over Y2K 
lawsuits so long as any member of the class is a citizen of a State 
different from the defendant (or is a citizen of a foreign country). 
Current law states that if any class representative of the class action 
is a citizen of the State in which the business is located, the federal 
courts have no diversity jurisdiction. This makes it easy for the 
attorneys filing a class action to have it heard in state court.

[[Page 3060]]

  However, the bill does allow a federal court to abstain from exerting 
jurisdiction in cases where most class members are in the same State as 
the defendant and the case will be governed primarily by that State's 
law, or if the class is small or the amount in controversy is less than 
$1 million.
  In summary, it is clear that there are consumers and businesses that 
have been and will be harmed by Y2K defects. For these companies and 
individuals impacted by Y2K problems, the Hatch-Feinstein bill 
preserves the right to sue and to recover damages, and actually 
increases their chances of finding a quick solution to their problems.
  But the bill also prevents the kind of litigation nightmares that 
would distract from Y2K solutions and drain resources from already 
burdened companies throughout the country.
  Mr. President, we believe that this bill represents a fair and 
reasoned approach to what is surely a real problem. But as I have said, 
this bill also represents a starting point, not an ending point. I look 
forward to working with my colleagues on both sides of the aisle to 
continue developing a fair bill that can pass in the near future. We 
must give businesses the reasonable protections they require to solve 
Y2K problems efficiently, quickly and without unnecessary distractions. 
I thank Senator Hatch for working with me on this issue, I urge my 
colleagues to contact us and to work towards a bipartisan, reasonable 
solution to this problem.
                                 ______
                                 
      By Mr. DeWINE (for himself, Mr. Cochran, and Mr. Voinovich):
  S. 462. A bill to amend the Internal Revenue Code of 1986, the Social 
Security Act, the Wagner-Peyser Act, and the Federal-State Extended 
Unemployment Compensation Act of 1970 to improve the method by which 
Federal unemployment taxes are collected and to improve the method by 
which funds are provided from Federal unemployment tax revenue for 
employment security administration, and for other purposes; to the 
Committee on Finance.


             THE EMPLOYMENT SECURITY FINANCING ACT OF 1999

  Mr. DeWINE. Mr. President, I rise today, on behalf of myself and 
Senators Cochran and Voinovich, to introduce the ``Employment Security 
Financing Act of 1999.''
  As you may know, our nation's employment security system was 
established as a federal-state partnership more than 60 years ago. This 
system has not undergone major restructuring since its inception; 
however, a ``temporary'' .2% surtax was enacted in the 1970's. Today, 
this system overtaxes and overburdens employers, shortchanges states, 
and, most importantly, underserves those who need it most--the 
involuntarily unemployed.
  Two separate payroll taxes fund the employment security system. The 
most onerous and inefficient of these is the FUTA (Federal Unemployment 
Tax Act) tax. FUTA is a payroll tax collected by the IRS, dedicated to 
provide administrative funding for states through allocation from the 
Department of Labor (DOL). Unfortunately, FUTA taxes sent to Washington 
rarely find their way back to the states. In Fiscal Year 1997, DOL 
estimated that states sent more than $6 billion in FUTA taxes to 
Washington, but received only $3.1 billion in return.
  Mr. President, reform of the unemployment insurance program is 
essential to a state like Ohio, which receives less than 39 cents of 
each employer FUTA dollar. This shortfall in funding has led to the 
closing of 22 local employment service offices during the last four 
years. In order to make up for the shortfall of FUTA dollars, the Ohio 
legislature has appropriated more than $50 million during the last four 
years to pay for the administration of employment services, something 
that should be funded by FUTA taxes. This appropriation of state tax 
dollars forces Ohio taxpayers to pay twice to fund these services.
  Ohio is not alone. Since 1990, less than 59 cents of every FUTA 
dollar has been sent back to the states. In fact, in 1997, states 
received a paltry 52% return on their FUTA tax dollars. As a result, 
many states are being forced to make up the shortfall from their own 
general funds, and cut back on other services provided to the 
unemployed.
  For businesses, the system's consequences are equally severe. 
Employers are forced to pay two separate taxes. The current FUTA net 
tax rate is .8%, or a maximum of $56 per employee. In addition, 
employers must pay a similar state payroll tax to finance unemployment 
benefits. It is estimated that the nation's 6 million FUTA-paying 
employers spend a total of $1 billion annually simply complying with 
FUTA reporting requirments.
  Mr. President, the Employment Security Financing Act is designed to 
address the problems the current system has imposed on the states and 
FUTA taxpayers. Specifically, it would: reduce the tax burden by 
repealing the ``temporary'' .2% FUTA surtax; streamline filings by 
transferring responsibility for collection of the FUTA tax from the IRS 
to the states; improve administration by ensuring that states get a 
greater return on their employers' FUTA tax dollars; improve services 
with an emphasis on reemployment; and combat fraud and abuse.
  This is an important issue that Congress needs to consider. I look 
forward to working with others on legislation that can meet the budget 
rules, yet still achieve necessary reform of the unemployment insurance 
program.
  I ask unanimous consent that letters of support from the National 
Federation of Independent Business, and Strategic Services on 
Unemployment & Workers' Compensation be printed in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

       Strategic Services on Unemployment & Workers' Compensation,
                                Washington, DC, February 19, 1999.
     Hon. Mike DeWine,
     U.S. Senate, Washington, DC.
       Dear Senator DeWine: On behalf of the business community, 
     UWC enthusiastically endorses your proposal, the Employment 
     Security Financing Reform Act, which will save employers $4 
     billion in unemployment tax and claim costs each year and 
     provide a permanent fix for the chronic under-funding of 
     state unemployment insurance (UI) and employment service 
     agencies. UWC is the only national association specializing 
     exclusively in unemployment and workers' compensation issues 
     on behalf of business. Our members include large and small 
     employers and national and state business organizations 
     around the country. Enactment of your proposal is a top 
     priority for UWC.
       Only 50 cents out of each dollar now collected from 
     employers under the Federal Unemployment Tax (FUTA) is used 
     as intended for administering the state UI program. The 
     balance of FUTA revenue is effectively diverted to other 
     programs, disguising the true deficit in federal general 
     revenues and accumulating IOU's in a sham Unemployment 
     ``Trust Fund'' whose apparent buildup will later be used to 
     justify higher unemployment benefits--all at employer 
     expense. This charade would end under your proposal, which is 
     a win/win/win for workers, business, and government. It will 
     save money for employers and make government more efficient 
     and responsive to local needs and conditions. The proposal 
     achieves these results by reducing the FUTA rate and allowing 
     states to fund their agencies at a level closer to the amount 
     actually needed to administer unemployment benefits and help 
     match jobless workers with employers eager to fill widespread 
     job vacancies. It cuts paperwork for employers by eliminating 
     the separate FUTA tax forms; gives each state rather than 
     Washington responsibility to determine how much it needs to 
     administer its unemployment and employment services agencies; 
     and puts 100% of FUTA funds to work reducing state 
     unemployment taxes on business.
       As a business organization, UWC supports adequate but not 
     excessive FUTA taxes. It is inexcusable that the federal 
     government collects more under FUTA than is needed for sound 
     UI administration and yet under-finances the agencies which 
     are responsible for efforts to move UI claimants off the 
     unemployment rolls and match workers with jobs. This under-
     funding directly inflates the cost of state unemployment 
     benefits, which are financed through business payroll taxes 
     at the state level. It has also caused the states to impose 
     $200 million in additional state taxes to make up for the 
     shortfall in FUTA funds doled out by the federal government. 
     It's long past time to fix this problem, and we heartily 
     applaud your leadership in seeking permanent FUTA reform.
           Sincerely,
                                                   Eric J. Oxfeld,
                                                        President.

[[Page 3061]]

     
                                  ____
                                            National Federation of


                                         Independent Business,

                                Washington, DC, February 22, 1999.
     Hon. Mike DeWine,
     U.S. Senate, Washington, DC.
       Dear Senator DeWine: On behalf of the 600,000 small 
     business owners of the National Federation of Independent 
     Business (NFIB), I want to commend you for introducing ``The 
     Employment Security Financing Act of 1999.'' One of our top 
     legislative priorities this year is to encourage Congress to 
     cut payroll taxes and return the unemployment system to the 
     states. Your legislation will ease the burden of unemployment 
     taxes on small business and overhaul an inefficient and 
     duplicative system.
       Small businesses tend to be labor intensive, so they are 
     disproportionately affected by taxes on labor. And unlike 
     income taxes, payroll taxes must be paid whether a business 
     makes a profit or loss. Most of our members survive on a thin 
     margin of positive cash flow. Payroll taxes make that margin 
     even thinner.
       Importantly, your legislation takes steps to begin reducing 
     the burden of one payroll tax--the Federal Unemployment Tax 
     Act (FUTA). Specifically, it repeals the ``temporary'' FUTA 
     surtax put in place in 1976 in order to repay loans from the 
     federal unemployment trust fund. Even though this money was 
     fully repaid in 1987, Congress has extended this temporary 
     tax four times, imposing an annual $1.4 billion tax burden on 
     America's employers and employees. Repeal of the surtax is 
     long overdue.
       As this legislation progresses through Congress, we hope 
     that you will look for opportunities to further reduce FUTA 
     taxes. Even with the elimination of the surtax, FUTA taxes 
     collect far more than is needed for the program. In FY 1997, 
     the Department of Labor estimates that states received only 
     $3.1 billion of the $6 billion in FUTA taxes sent to 
     Washington. Permanent FUTA taxes should be cut to reflect the 
     lower costs of the program.
       Finally, we support language in your legislation that 
     transfers responsibility for collecting the FUTA tax from the 
     IRS to the states. This will provide a much needed paperwork 
     reduction boost for small business owners who currently have 
     to fill our separate state and federal unemployment tax 
     forms.
       We thank you for introducing this important legislation and 
     look forward to working with you in the coming months to 
     enact it into law.
           Sincerely,
                                                       Dan Danner,
                            Vice President, Federal Public Policy.
                                 ______
                                 
      By Mr. WELLSTONE (for himself, Mr. Kennedy, and Ms. Landrieu):
  S. 465. A bill to meet the mental health substance abuse treatment 
needs of incarcerated children and youth; to the Committee on the 
Judiciary.


                 the mental health juvenile justice act

  Mr. WELLSTONE. Mr. President, today, I am introducing legislation 
that outlines a comprehensive strategy for providing federal assistance 
to states and localities, to better serve children in need of mental 
health services who come in contact with our nation's juvenile justice 
system. I am pleased to be joined by Senators Kennedy and Landrieu in 
this effort. The bill has received the strong support of over forty 
organizations including the American Bar Association, the American 
Psychiatric Association, the Children's Defense Fund, the United Church 
of Christ, and from states judges, probation and police officers.
  Elie Wiesel once said: ``More than anything--more than hatred and 
torture--more than pain--do I fear indifference.'' We must be vigilant 
not to allow ourselves and our country to be indifferent to children's 
misery, particularly those children who may be sick, difficult, and 
test our patience, understanding, and compassion.
  Yet, today, throughout America, I fear that we have become deeply 
indifferent to how we treat juveniles in the justice system who live in 
the shadow of mental illness.
  Each year, more than one million youth come in contact with the 
juvenile justice system, and more than 100,000 of these youth are 
detained in some type of jail or prison. These children are 
overwhelmingly poor and a disproportionate number of children of color.
  By the time many of these children are arrested and incarcerated, 
they have a long history of problems in their short lives. As many as 
two-thirds suffer from a mental or emotional disturbance. One in five 
has a serious disorder. Many have substance abuse problems and learning 
disabilities. Most come from troubled homes.
  The `crimes' of these children vary. While some have committed 
violent crimes, some have committed petty theft or skipped school. 
Still others have simply run away from home to escape physical or 
sexual abuse from parents or other adults.
  Despite popular opinion, most of the children who are locked up are 
not violent. Justice Department studies show that only one in twenty 
youth in the juvenile system have committed violent offenses.
  Jails and juvenile detention centers often find themselves unprepared 
to deal with the mentally ill. For instance, medication may not be 
given or properly monitored. Or, guards may not know, for example, how 
to respond to disturbed youth who simply is not capable of standing in 
an orderly line for meals. A common result is that these kids are 
disciplined and put in solitary confinement.
  What is happening to these troubled children is national tragedy. 
Across the country, we are dumping emotionally disturbed kids into 
juvenile prisons.
  Why do so many youth with mental illness end up in the justice 
system? Children with mental disorders often behave in ways that bring 
them into conflict with family members, authority figures, and peers. 
Over the last ten years, the public attitude toward juvenile crime has 
grown tougher. Consequently, the juvenile justice system is casting a 
wider net. A growing fear and intolerance of children who misbehave or 
commit nonviolent offenses have pushed children into the juvenile 
system who would not have ended up there in earlier times.
  At the same time, our country has failed to invest adequately in 
services and programs that could reduce the need for incarceration. 
These include mental health services. The warning signs for delinquency 
are well known--school failure, drug and alcohol abuse, family violence 
and abuse, and poverty. Yet, we have failed to put in place community 
prevention, screening, and early intervention services for those 
children most at risk. Proper mental health treatment can prevent or 
reduce offending. But many communities don't have adequate treatment 
services for children and their families.
  For example, a recent report by Louisiana state officials 
acknowledged that secure facilities held many children who had been 
``discarded'' from the educational, child welfare and other systems of 
care. I have heard that social workers in a number of states have been 
even instructed desperate parents to have their children arrested in 
order to get services because community health services are so scarce.
  Last July, I went with the National Mental Health Association to the 
Tallulah Correctional Center for Youth, a privately-owned correctional 
facility for over 600 youth in northeast Louisiana, to see firsthand 
the shocking civil rights violations cited by the U.S. Department of 
Justice. I left with vivid and disturbing images of how we are dealing 
with youth with mental and emotional problems in this country.
  While in Tallulah, I saw one hallucinating and suicidal child in 
isolation for observation, yet his transfer to an appropriate mental 
health facility was uncertain. Another child I met was taking three 
different types of powerful psychiatric medications, but had only seen 
a psychiatrist twice in the last eight months. The Justice Department 
reports chronicled instances where boys were being repeatedly sexually 
and physically abused, and children with mental illnesses were being 
housed with youths who have committed violent crimes. Mentally ill 
children received no therapy, and when they were having symptoms, they 
were isolated or punished for their illness.
  Tallulah is not the only offending facility, however. The Justice 
Department has exposed gross abuses in Georgia, Kentucky, and other 
juvenile facilities in Louisiana. Other states are also experiencing 
similar problems. Investigators found extreme cases of physical abuse 
and neglect of mental health needs, including unwarranted

[[Page 3062]]

and prolonged isolation of suicidal children, hog-tie and chemical 
restraints used on youth with serious emotional disturbances, forced 
medication and even denial of medication. Children with extensive 
psychiatric histories who are prone to self-mutilation (e.g., cutting 
themselves with glass) never even saw a psychiatrist.
  In some cases, abusive treatment of these children results directly 
from their being emotionally disturbed. Staff in juvenile facilities 
fail to recognize, and in fact punish them for, the symptom of their 
disorders. Children have been punished for requesting treatment or put 
in isolation when they refused to accept treatment. One child in a boot 
camp was punished for making involuntary noises that were symptoms of 
his Tourette's syndrome. Mental disorders are being handled almost 
solely through discipline, isolation, and restraints according to 
investigations by the US Justice Department and human rights groups.
  A recent survey by the California Youth Authority found that 35 
percent of boys in its custody and 73 percent of girls need treatment. 
One reason for the higher percentage of young people with mental 
illness in jail, specialists say, is that many states have cut budgets 
for adolescent psychiatric care, even more than those for adults.
  If a child had a broken leg, would any institution leave that leg 
unattended? Why then, in America, are we dumping children with mental 
health problems in institutions without treatment, and under conditions 
which can only worsen their illnesses?
  Our current system fails mentally ill children. How? The screening 
and treatment of mental and emotional disorders are inadequate or 
nonexistent at correctional facilities. Mental illness is often 
addressed solely through discipline, isolation, and restraint. At 
Tallulah, children told us that they were beaten and were put in 
isolation for long periods, even months--echoing in painful detail what 
had been revealed in the Justice Department reports.
  The tragedy of this situation is that we know what works--treatment--
but our current system for children with mental illness favors 
punishment over treatment. For children, we know that family-focused, 
individualized treatment delivered in the child's community can improve 
children's mental health and prevent them from offending in the first 
place. It is proven that integrating these mental health and substance 
abuse services with schools and child welfare agencies produces even 
greater success. In fact, linked community services have been shown to 
reduce contact with the juvenile justice system by 46 percent.
  My legislation would help states provide critical assistance to these 
children who suffer from mental disorders. It focuses on providing 
appropriate services that can both prevent them from committing 
delinquent offenses and from reoffending, and it is structured so that 
services are planned and integrated at the local level.
  First, it provides funds to train juvenile justice personnel on the 
identification and appropriate treatment of mental illness in kids, and 
on the use of community-based alternatives to incarceration. Currently, 
juvenile justice system personnel lack routine training to deal with 
mentally ill youth, many of whose low risk factors make them good 
candidates for alternative treatment programs in the community.
  Second, it authorizes a new treatment and diversion block grant 
program to state and localities. Despite studies showing large numbers 
of incarcerated children having psychiatric disorders, we know that 
screening, assessment and treatment for children's mental disorders is 
grossly inadequate. Further, many of these kids have multiple problems 
before they are locked-up, and are involved with several different 
child agencies and systems. Typically, these agencies shift the care 
and costs for serving a child back and forth. The result is that the 
child and the family never receive the services they need. States will 
be able to access the new block grant funds to develop and implement 
integrated treatment and diversion programs for juveniles who come up 
against the police and the courts.
  Third, it will establish training and technical assistance centers. 
Now, States do not have the information and technical assistance they 
need to provide appropriate services for youth with mental health 
disorders. Further, it will establish a federal council which will 
report to Congress on recommendations to improve the treatment of 
mentally ill children who come into contact with the justice system.
  Next, it will give States the choice whether to use their federal 
prison construction funds for treatment of incarcerated mentally ill 
and children.
  Finally, it will amend the Prison Litigation Reform Act, by restoring 
to federal courts the authority to remedy abuse conditions in juvenile 
justice facilities. Congress passed the act in 1996 largely to reduce 
frivolous pro se lawsuits by prisoners, and nothing in my bill would 
affect those provisions of the PLRA. Yet, the PLRA has had a 
devastating effect on the conditions in which juvenile offenders and 
mentally ill prisoners are held. My provision would not repeal the PLRA 
or adversely effect the crackdown on frivolous lawsuits. Instead, it 
would carve out a narrow exception to the PLRA restrictions in limited 
circumstances, involving children and the mentally ill, for it has been 
shown again and again that they are particularly vulnerable to abuse 
and neglect in state institutions.
  We can no longer be indifferent to this national tragedy. What I saw 
in Tallulah, and what is happening in countless facilities across this 
country, is a disgrace. The wholesale neglect of juveniles with mental 
illness in our prisons must end. We as a society have the moral 
obligation to see they get the help they need. Treating young people 
with mental disorders in dehumanizing ways is not the answer to 
questions of crime prevention and public safety. And it's not the way 
to make children productive, law abiding, and caring citizens. I urge 
my colleagues to support this important legislation.
  I ask unanimous consent 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. 465

       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 ``Mental Health Juvenile 
     Justice Act''.

     SEC. 2. TRAINING OF JUSTICE SYSTEM PERSONNEL.

       Title II of the Juvenile Justice and Delinquency Prevention 
     Act of 1974 (42 U.S.C. 5611 et seq.) is amended by adding at 
     the end the following:

    ``PART K--ACCESS TO MENTAL HEALTH AND SUBSTANCE ABUSE TREATMENT

     ``SEC. 299AA. GRANTS FOR TRAINING OF JUSTICE SYSTEM 
                   PERSONNEL.

       ``(a) In General.--The Administrator shall make grants to 
     State and local juvenile justice agencies in collaboration 
     with State and local mental health agencies, for purposes of 
     training the officers and employees of the State juvenile 
     justice system (including employees of facilities that are 
     contracted for operation by State and local juvenile 
     authorities) regarding appropriate access to mental health 
     and substance abuse treatment programs and services in the 
     State for juveniles who come into contact with the State 
     juvenile justice system who have mental health or substance 
     abuse problems.
       ``(b) Use of Funds.--A State or local juvenile justice 
     agency that receives a grant under this section may use the 
     grant for purposes of--
       ``(1) providing cross-training, jointly with the public 
     mental health system, for State juvenile court judges, public 
     defenders, and mental health and substance abuse agency 
     representatives with respect to the appropriate use of 
     effective, community-based alternatives to juvenile justice 
     or mental health system institutional placements; or
       ``(2) providing training for State juvenile probation 
     officers and community mental health and substance abuse 
     program representatives on appropriate linkages between 
     probation programs and mental health community programs, 
     specifically focusing on the identification of mental 
     disorders and substance abuse addiction in juveniles on 
     probation, effective treatment interventions for those 
     disorders, and making appropriate contact with mental health 
     and substance abuse case managers and programs in the 
     community, in order to ensure that juveniles on probation 
     receive appropriate access to mental health and substance 
     abuse treatment programs and services.

[[Page 3063]]

       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated from the Violent Crime 
     Reduction Trust Fund, $50,000,000 for fiscal years 1999, 
     2000, 2001, 2002, and 2003 to carry out this section.''.

     SEC. 3. BLOCK GRANT FUNDING FOR TREATMENT AND DIVERSION 
                   PROGRAMS.

       Part K of title II of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5611 et seq.) is amended by 
     adding at the end the following:

     ``SEC. 299BB. GRANTS FOR STATE PARTNERSHIPS.

       ``(a) In General.--The Attorney General and the Secretary 
     of Health and Human Services shall make grants to 
     partnerships between State and local/county juvenile justice 
     agencies and State and local mental health authorities (or 
     appropriate children service agencies) in accordance with 
     this section.
       ``(b) Use of Funds.--A partnership described in subsection 
     (a) that receives a grant under this section shall use such 
     amounts for the establishment and implementation of programs 
     that address the service needs of juveniles who come into 
     contact with the justice system (including facilities 
     contracted for operation by State or local juvenile 
     authorities) who have mental health or substance abuse 
     problems, by requiring the following:
       ``(1) Diversion.--Appropriate diversion of those juveniles 
     from incarceration--
       ``(A) at imminent risk of being taken into custody;
       ``(B) at the time they are initially taken into custody;
       ``(C) after they are charged with an offense or act of 
     juvenile delinquency;
       ``(D) after they are adjudicated delinquent but prior to 
     case disposition; and
       ``(E) after they are released from a juvenile facility, for 
     the purposes of attending after-care programs.
       ``(2) Treatment.--
       ``(A) Screening and assessment of juveniles.--
       ``(i) In general.--Initial mental health screening shall be 
     completed for all juveniles immediately upon entering the 
     juvenile justice system or a juvenile facility. Screening 
     shall be conducted by qualified health and mental health 
     professionals or by staff who have been trained by qualified 
     health, mental health, and substance abuse professionals. In 
     the case of a screening by staff, the screening results 
     should be reviewed by qualified health, mental health 
     professionals not later than 24 hours after the screening.
       ``(ii) Acute mental illness.--Juveniles who suffer from 
     acute mental disorders, who are suicidal, or in need of 
     detoxification shall be placed in or immediately transferred 
     to an appropriate medical or mental health facility. They 
     shall be admitted to a secure correctional facility only with 
     written medical clearance.
       ``(iii) Comprehensive assessment.--All juveniles entering 
     the juvenile justice system shall have a comprehensive 
     assessment conducted and an individualized treatment plan 
     written and implemented within 2 weeks. This assessment shall 
     be conducted within 1 week for juveniles incarcerated in 
     secure facilities. Assessments shall be completed by 
     qualified health, mental health, and substance abuse 
     professionals.
       ``(B) Treatment.--
       ``(i) In general.--If the need for treatment is indicated 
     by the assessment of a juvenile, the juvenile shall be 
     referred to or treated by a qualified professional. A 
     juvenile who is currently receiving treatment for a mental or 
     emotional disorder shall have treatment continued.
       ``(ii) Period.--Treatment shall continue until additional 
     mental health assessment determines that the juvenile is no 
     longer in need of treatment. Treatment plans shall be 
     reevaluated at least every 30 days.
       ``(iii) Discharge plan.--An incarcerated juvenile shall 
     have a discharge plan prepared when the juvenile enters the 
     correctional facility in order to integrate the juvenile back 
     into the family or the community. This plan shall be updated 
     in consultation with the juvenile's family or guardian before 
     the juvenile leaves the facility. Discharge plans shall 
     address the provision of aftercare services.
       ``(iv) Medication.--Any juvenile receiving psychotropic 
     medications shall be under the care of a licensed 
     psychiatrist. Psychotropic medications shall be monitored 
     regularly by trained staff for their efficacy and side 
     effects.
       ``(v) Specialized treatment.--Specialized treatment and 
     services shall be continually available to a juvenile who--

       ``(I) has a history of mental health problems or treatment;
       ``(II) has a documented history of sexual abuse or 
     offenses, as victim or as perpetrator;
       ``(III) has substance abuse problems, health problems, 
     learning disabilities, or histories of family abuse or 
     violence; or
       ``(IV) has developmental disabilities.

       ``(C) Medical and mental health emergencies.--All 
     correctional facilities shall have written policies and 
     procedures on suicide prevention. All staff working in 
     correctional facilities shall be trained and certified 
     annually in suicide prevention. Facilities shall have written 
     arrangements with a hospital or other facility for providing 
     emergency medical and mental health care. Physical and mental 
     health services shall be available to an incarcerated 
     juvenile 24 hours per day, 7 days per week.
       ``(D) Classification of juveniles.--
       ``(i) In general.--Juvenile facilities shall classify and 
     house juveniles in living units according to a plan that 
     includes age, gender, offense, special medical or mental 
     health condition, size, and vulnerability to victimization. 
     Younger, smaller, weaker, and more vulnerable juveniles shall 
     not be placed in housing units with older, more aggressive 
     juveniles.
       ``(ii) Boot camps.--Juveniles who are under 13 years old or 
     who have serious medical conditions or mental illness shall 
     not be placed in paramilitary boot camps.
       ``(E) Confidentiality of records.--Mental health and 
     substance abuse treatment records of juveniles shall be 
     treated as confidential and shall be excluded from the 
     records that States require to be routinely released to other 
     correctional authorities and school officials.
       ``(F) Mandatory reporting.--States shall keep records of 
     the incidence and types of mental health and substance abuse 
     disorders in their juvenile justice populations, the range 
     and scope of services provided, and barriers to service. The 
     State shall submit an analysis of this information yearly to 
     the Department of Justice.
       ``(G) Staff ratios for correctional facilities.--Each 
     secure correctional facility shall have a minimum ratio of no 
     fewer than 1 mental health counselor to every 50 juveniles. 
     Mental health counselors shall be professionally trained and 
     certified or licensed. Each secure correctional facility 
     shall have a minimum ratio of 1 clinical psychologist for 
     every 100 juveniles. Each secure correctional facility shall 
     have a minimum ratio of 1 licensed psychiatrist for every 100 
     juveniles receiving psychiatric care.
       ``(H) Use of force.--
       ``(i) Written guidelines.--All juvenile facilities shall 
     have a written behavioral management system based on 
     incentives and rewards to reduce misconduct and to decrease 
     the use of restraints and seclusion by staff.
       ``(ii) Limitations on restraint.--Control techniques such 
     as restraint, seclusion, chemical sprays, and room 
     confinement shall be used only in response to extreme threats 
     to life or safety. Use of these techniques shall be approved 
     by the facility superintendent or chief medical officer and 
     documented in the juvenile's file along with the 
     justification for use and the failure of less restrictive 
     alternatives.
       ``(iii) Limitation on isolation.--Isolation and seclusion 
     shall be used only for immediate and short-term security or 
     safety reasons. No juvenile shall be placed in isolation 
     without approval of the facility superintendent or chief 
     medical officer or their official staff designee. All cases 
     shall be documented in the juvenile's file along with the 
     justification. A juvenile shall be in isolation only the 
     amount of time necessary to achieve security and safety of 
     the juvenile and staff. Staff shall monitor each juvenile in 
     isolation once every 15 minutes and conduct a professional 
     review of the need for isolation at least every 4 hours. Any 
     juvenile held in seclusion for 24 hours shall be examined by 
     a physician or licensed psychologist.
       ``(I) IDEA and rehabilitation act.--All juvenile facilities 
     shall abide by all mandatory requirements and time lines set 
     forth under the Individuals with Disabilities Education Act 
     and section 504 of the Rehabilitation Act of 1973.
       ``(J) Advocacy assistance.--
       ``(i) In general.--The Secretary of Health and Human 
     Services shall make grants to the systems established under 
     part C of the Developmental Disabilities Assistance and Bill 
     of Rights Act (42 U.S.C. 6041 et seq.) to monitor the mental 
     health and special education services provided by grantees to 
     juveniles under paragraph (2) (A), (B), (C), (H), and (I) of 
     this section, and to advocate on behalf of juveniles to 
     assure that such services are properly provided.
       ``(ii) Appropriation.--The Secretary of Health and Human 
     Services will reserve no less than 3 percent of the funds 
     appropriated under this section for the purposes set forth in 
     paragraph (2)(J)(i).
       ``(c) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     from the Violent Crime Reduction Trust Fund, $500,000,000 for 
     fiscal years 1999, 2000, 2001, 2002, and 2003 to carry out 
     this section.
       ``(2) Allocation.--Of amounts appropriated under paragraph 
     (1)--
       ``(A) 35 percent shall be used for diversion programs under 
     subsection (b)(1); and
       ``(B) 65 percent shall be used for treatment programs under 
     subsection (b)(2).
       ``(3) Incentives.--The Attorney General and the Secretary 
     of Health and Human Services shall give preference under 
     subsection (b)(2) to partnerships that integrate treatment 
     programs to serve juveniles with co-occurring mental health 
     and substance abuse disorders.
       ``(4) Waivers.--The Attorney General and the Secretary of 
     Health and Human Services may grant a waiver of requirements 
     under subsection (b)(2) for good cause.

     ``SEC. 299CC. GRANTS FOR PARTNERSHIPS.

       ``(a) In General.--Any partnership desiring to receive a 
     grant under this part shall submit an application at such 
     time, in such manner, and containing such information as

[[Page 3064]]

     the Attorney General and the Secretary of Health and Human 
     Services may prescribe.
       ``(b) Contents.--In accordance with guidelines established 
     by the Attorney General and the Secretary of Health and Human 
     Services, each application submitted under subsection (a) 
     shall--
       ``(1) set forth a program or activity for carrying out one 
     or more of the purposes specified in section 299BB(b) and 
     specifically identify each such purpose such program or 
     activity is designed to carry out;
       ``(2) provide that such program or activity shall be 
     administered by or under the supervision of the applicant;
       ``(3) provide for the proper and efficient administration 
     of such program or activity;
       ``(4) provide for regular evaluation of such program or 
     activity;
       ``(5) provide an assurance that the proposed program or 
     activity will supplement, not supplant, similar programs and 
     activities already available in the community; and
       ``(6) provide for such fiscal control and fund accounting 
     procedures as may be necessary to ensure prudent use, proper 
     disbursement, and accurate accounting of funds receiving 
     under this part.''.

     SEC. 4. INITIATIVE FOR COMPREHENSIVE, INTERSYSTEM PROGRAMS.

       Subpart 3 of part B of title V of the Public Health Service 
     Act (42 U.S.C. 290bb-31 et seq.) is amended by adding at the 
     end the following:

     ``SEC. 520C. INITIATIVE FOR COMPREHENSIVE, INTERSYSTEM 
                   PROGRAMS.

       ``(a) In General.--The Attorney General and the Secretary, 
     acting through the Director of the Center for Mental Health 
     Services, shall award competitive grants to eligible entities 
     for programs that address the service needs of juveniles and 
     juveniles with serious mental illnesses by requiring the 
     State or local juvenile justice system, the mental health 
     system, and the substance abuse treatment system to work 
     collaboratively to ensure--
       ``(1) the appropriate diversion of such juveniles and 
     juveniles from incarceration;
       ``(2) the provision of appropriate mental health and 
     substance abuse services as an alternative to incarceration 
     and for those juveniles on probation or parole; and
       ``(3) the provision of followup services for juveniles who 
     are discharged from the juvenile justice system.
       ``(b) Eligibility.--To be eligible to receive a grant under 
     this section an entity shall--
       ``(1) be a State or local juvenile justice agency, mental 
     health agency, or substance abuse agency (including community 
     diversion programs);
       ``(2) prepare and submit to the Secretary an application at 
     such time, in such manner, and containing such information as 
     the Secretary may require, including--
       ``(A) an assurance that the applicant has the consent of 
     all entities described in paragraph (1) in carrying out and 
     coordinating activities under the grant; and
       ``(B) with respect to services for juveniles, an assurance 
     that the applicant has collaborated with the State or local 
     educational agency and the State or local welfare agency in 
     carrying out and coordinating activities under the grant;
       ``(3) be given priority if it is a joint application 
     between juvenile justice and substance abuse or mental health 
     agencies; and
       ``(4) ensure that funds from non-Federal sources are 
     available to match amounts provided under the grant in an 
     amount that is not less than--
       ``(A) with respect to the first 3 years under the grant, 25 
     percent of the amount provided under the grant; and
       ``(B) with respect to the fourth and fifth years under the 
     grant, 50 percent of the amount provided under the grant.
       ``(c) Use of Funds.--
       ``(1) Initial year.--An entity that receives a grant under 
     this section shall, in the first fiscal year in which amounts 
     are provided under the grant, use such amounts to develop a 
     collaborative plan--
       ``(A) for how the guarantee will institute a system to 
     provide intensive community services--
       ``(i) to prevent high-risk juveniles from coming in contact 
     with the justice system; and
       ``(ii) to meet the mental health and substance abuse 
     treatment needs of juveniles on probation or recently 
     discharged from the justice system; and
       ``(B) providing for the exchange by agencies of information 
     to enhance the provision of mental health or substance abuse 
     services to juveniles.
       ``(2) 2-5th years.--With respect to the second through 
     fifth fiscal years in which amounts are provided under the 
     grant, the grantee shall use amounts provided under the 
     grant--
       ``(A) to furnish services, such as assertive community 
     treatment, wrap-around services for juveniles, multisystemic 
     therapy, outreach, integrated mental health and substance 
     abuse treatment, case management, health care, education and 
     job training, assistance in securing stable housing, finding 
     a job or obtaining income support, other benefits, access to 
     appropriate school-based services, transitional and 
     independent living services, mentoring programs, home-based 
     services, and provision of appropriate after school and 
     summer programing;
       ``(B) to establish a network of boundary spanners to 
     conduct regular meetings with judges, provide liaison with 
     mental health and substance abuse workers, share and 
     distribute information, and coordinate with mental health and 
     substance abuse treatment providers, and probation or parole 
     officers concerning provision of appropriate mental health 
     and drug and alcohol addiction services for individuals on 
     probation or parole;
       ``(C) to provide cross-system training among police, 
     corrections, and mental health and substance abuse providers 
     with the purpose of enhancing collaboration and the 
     effectiveness of all systems;
       ``(D) to provide coordinated and effective aftercare 
     programs for juveniles with emotional or mental disorders who 
     are discharged from jail, prison, or juvenile facilities;
       ``(E) to purchase technical assistance to achieve the grant 
     project's goals; and
       ``(F) to furnish services, to train personnel in 
     collaborative approaches, and to enhance intersystem 
     collaboration.
       ``(3) Definition.--In paragraph (2)(B), the term `boundary 
     spanners' means professionals who act as case managers for 
     juveniles with mental disorders and substance abuse 
     addictions, within both justice agency facilities and 
     community mental health programs and who have full authority 
     from both systems to act as problem-solvers and advocates on 
     behalf of individuals targeted for service under this 
     program.
       ``(d) Area Served by the Project.--An entity receiving a 
     grant under this section shall conduct activities under the 
     grant to serve at least a single political jurisdiction.
       ``(e) Authorization of Appropriations.--There shall be made 
     available to carry out the section, not less than 10 percent 
     of the amount appropriated under section 1935(a) for each of 
     the fiscal years 1999 through 2003.''.

     SEC. 5. INTERAGENCY RESEARCH, TRAINING, AND TECHNICAL 
                   ASSISTANCE CENTERS.

       (a) Grants or Contracts.--The Secretary of Health and Human 
     Services, acting through the Substance Abuse and Mental 
     Health Services Administration and in consultation with the 
     Juvenile Justice and Delinquency Prevention Office and the 
     Justice Assistance Bureau, shall award grants and contracts 
     for the establishment of 4 research, training, and technical 
     assistance centers to carry out the activities described in 
     subsection (c).
       (b) Eligibility.--To be eligible to receive a grant or 
     contract under subsection (a), an entity shall--
       (1) be a public or nonprofit private entity; and
       (2) prepare and submit to the Secretary of Health and Human 
     Services an application, at such time, in such manner, and 
     containing such information as the Secretary may require.
       (c) Activities.--A center established under a grant or 
     contract under subsection (a) shall--
       (1) provide training with respect to state-of-the-art 
     mental health and justice-related services and successful 
     mental health and substance abuse-justice collaborations, to 
     public policymakers, law enforcement administrators, public 
     defenders, police, probation officers, judges, parole 
     officials, jail administrators and mental health and 
     substance abuse providers and administrators;
       (2) engage in research and evaluations concerning State and 
     local justice and mental health systems, including system 
     redesign initiatives, and disseminate information concerning 
     the results of such evaluations;
       (3) provide direct technical assistance, including 
     assistance provided through toll-free telephone numbers, 
     concerning issues such as how to accommodate individuals who 
     are being processed through the courts under the Americans 
     with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.), what 
     types of mental health or substance abuse service approaches 
     are effective within the judicial system, and how community-
     based mental health or substance abuse services can be more 
     effective, including relevant regional, ethnic, and gender-
     related considerations; and
       (4) provide information, training, and technical assistance 
     to State and local governmental officials to enhance the 
     capacity of such officials to provide appropriate services 
     relating to mental health or substance abuse.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated, $4,000,000 for each fiscal year to carry 
     out this section.

     SEC. 6. FEDERAL COORDINATING COUNCIL ON THE CRIMINALIZATION 
                   OF JUVENILES WITH MENTAL DISORDERS.

       (a) Establishment.--There is established a Federal 
     Coordinating Council on Criminalization of Juveniles With 
     Mental Disorders as an interdepartmental council to study and 
     coordinate the criminal and juvenile justice and mental 
     health and substance abuse activities of the Federal 
     Government and to report to Congress on proposed new 
     legislation to improve the treatment of mentally ill 
     juveniles who come in contact with the juvenile justice 
     system.

[[Page 3065]]

       (b) Membership.--The Council shall include representatives 
     from--
       (1) the appropriate Federal agencies, as determined by the 
     President, including, at a minimum--
       (A) the Office of the Secretary of Health and Human 
     Services;
       (B) the Office for Juvenile Justice and Delinquency 
     Prevention;
       (C) the National Institute of Mental Health;
       (D) the Social Security Administration;
       (E) the Department of Education; and
       (F) the Substance Abuse and Mental Health Services 
     Administration; and
       (2) children's mental health advocacy groups.
       (c) Duties.--The Council shall--
       (1) review Federal policies that hinder or facilitate 
     coordination at the State and local level between the mental 
     health and substance abuse systems on the one hand and the 
     juvenile justice and corrections system on the other;
       (2) study the possibilities for improving collaboration at 
     the Federal, State, and local level among these systems; and
       (3) recommend to Congress any appropriate new initiatives 
     which require legislative action.
       (d) Final Report.--The Council shall submit--
       (1) an interim report on current coordination and 
     collaboration, or lack thereof, 18 months after the Council 
     is established; and
       (2) recommendations for new initiatives in improving 
     coordination and collaboration in a final report to Congress 
     2 years after the Council is established.
       (e) Expiration.--The Council shall expire 2 years after the 
     Council is established.

     SEC. 7. MENTAL HEALTH SCREENING AND TREATMENT FOR PRISONERS.

       (a) Additional Requirements for the Use of Funds Under the 
     Violent Offender Incarceration and Truth-in-Sentencing Grants 
     Program.--Section 20105(b) of the Violent Crime Control and 
     Law Enforcement Act of 1994 is amended to read as follows:
       ``(b) Additional Requirements.--
       ``(1) Eligibility for grant.--To be eligible to receive a 
     grant under section 20103 or 20104, a State shall, not later 
     than January 1, 2001, have a program of mental health 
     screening and treatment for appropriate categories of 
     juvenile and other offenders during periods of incarceration 
     and juvenile and criminal justice supervision, that is 
     consistent with guidelines issued by the Attorney General.
       ``(2) Use of funds.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subtitle, amounts made available to a State under 
     section 20103 or 20104, may be applied to the costs of 
     programs described in paragraph (1), consistent with 
     guidelines issued by the Attorney General.
       ``(B) Additional use.--In addition to being used as 
     specified in subparagraph (A), the funds referred to in that 
     subparagraph may be used by a State to pay the costs of 
     providing to the Attorney General a baseline study on the 
     mental health problems of juvenile offenders and prisoners in 
     the State, which study shall be consistent with guidelines 
     issued by the Attorney General.''.

     SEC. 8. INAPPLICABILITY OF AMENDMENTS.

       Section 3626 of title 18 is amended by adding at the end 
     the following:
       ``(h) Inapplicability of Amendments.--A civil action that 
     seeks to remedy conditions which pose a threat to the health 
     of individuals who are--
       ``(1) under the age of 16; or
       ``(2) mentally ill;
     shall be governed by the terms of this section, as in effect 
     on the day before the date of enactment of the Prison 
     Litigation Reform Act of 1995 and the amendments made by that 
     Act (18 U.S.C. 3601 note).''.

                          ____________________