[Congressional Record (Bound Edition), Volume 145 (1999), Part 20]
[Senate]
[Pages 28422-28434]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS OF INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. CAMPBELL:
  S. 1851. A bill to amend the Elementary and Secondary Education Act 
of 1965 to ensure that seniors are given an opportunity to serve as 
mentors, tutors, and volunteers for certain programs; to the Committee 
on Health, Education, Labor, and Pensions.


          THE SENIORS AS VOLUNTEERS IN OUR SCHOOLS ACT OF 1999

  Mr. CAMPBELL. Mr. President, today I introduce the ``Seniors As 
Volunteers in Our Schools Act of 1999,'' a bill which will be an 
important step in ensuring that our schools provide a safe and caring 
place for our children to learn and grow. This bill will help build 
lasting partnerships between our local school systems, our children and 
our country's growing number of senior citizens.
  Under the bill, school administrators and teachers are encouraged to 
use qualified seniors as volunteers in federally funded programs and 
activities authorized by the Elementary and Secondary Education Act 
(ESEA.) It specifically encourages the use of seniors as volunteers in 
the safe and drug free schools programs, Indian education programs, the 
21st Century Community before- and after-school programs and gifted and 
talented programs. I believe the best way to get older Americans to 
serve as volunteers is to ask them. My bill does just that.
  The Seniors as Volunteers in Our Schools Act creates no new programs; 
rather it suggests another allowable use of funds already allocated. 
The discretion whether to take advantage of this new resource continues 
to remain solely with the school systems.
  Studies show that consistent guidance by a mentor or caring adult can 
help reduce teenage pregnancy, substance abuse and youth violence. 
Evidence also shows that the presence of adults on playgrounds, and in 
hallways and study halls, stabilizes the learning environment. And 
recently, the Colorado School Safety Summit, convened by Governor Bill 
Owens, recommended connecting each child to a caring adult as a way to 
reduce youth violence.
  Our country is in the midst of an age revolution. There are twice as 
many older adults today as there were 30 years ago. America now 
possesses not only the largest, but also the healthiest, best-educated, 
and most vigorous group of seniors in history.
  In the years ahead, an increasing number of us will be living decades 
longer than our own parents and grandparents. We need to think of those 
extra years of life as a resource. I believe seniors can be role models 
and share the wisdom, experience, and skills they have acquired over a 
lifetime of learning.
  I know firsthand of the importance of mentoring based on my own 
experiences as a teacher. A mentor can have a profound positive impact 
on a child's life.
  What better way to expand the number of mentors than to invite our 
seniors/elders to volunteer in schools? What better way to make our 
schools safer for our children than to have more adults visibly 
involved?
  I do not expect this legislation to solve all the problems 
confronting our schools today. But, I see it as a practical way to help 
make our schools safer, more caring places for our children. If our 
institutions create opportunities that allow them to make a genuine 
contribution, I believe America's growing senior population can play an 
important role in supporting our nations' schools. And, older adults 
have what the working-age population lacks: time.
  I urge my colleagues to support passage of this legislation.
  I ask unanimous consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1851

       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 ``Seniors as Volunteers in Our 
     Schools Act''.

     SEC. 2. REFERENCES.

       Except as otherwise specifically provided, whenever in this 
     Act an amendment or repeal is expressed in terms of an 
     amendment to, or a repeal of, a section or other provision, 
     the reference shall be considered to be made to a section or 
     other provision of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 6301 et seq.).

     SEC. 3. GOVERNOR'S PROGRAMS.

       Section 4114(c) (20 U.S.C. 7114(c)) is amended--
       (1) in paragraph (11), by striking ``and'' after the 
     semicolon;

[[Page 28423]]

       (2) by redesignating paragraph (12) as paragraph (13); and
       (3) by inserting after paragraph (11) the following:
       ``(12) drug and violence prevention activities that use the 
     services of appropriately qualified seniors for activities 
     that include mentoring, tutoring, and volunteering; and''.

     SEC. 4. LOCAL DRUG AND VIOLENCE PREVENTION PROGRAMS.

       Section 4116(b) (20 U.S.C. 7116(b)) is amended--
       (1) in paragraph (2), by inserting ``(including mentoring 
     by appropriately qualified seniors)'' after ``mentoring'';
       (2) in paragraph (2)(C)--
       (A) in clause (ii), by striking ``and'' after the 
     semicolon;
       (B) in clause (iii), by inserting ``and'' after the 
     semicolon; and
       (C) by adding after clause (iii) the following:
       ``(iv) drug and violence prevention activities that use the 
     services of appropriately qualified seniors for such 
     activities as mentoring, tutoring, and volunteering;'';
       (3) in paragraph (4)(C), by inserting ``(including 
     mentoring by appropriately qualified seniors) after 
     ``mentoring programs''; and
       (4) in paragraph (8), by inserting ``and which may involve 
     appropriately qualified seniors working with students'' after 
     ``settings''.

     SEC. 5. NATIONAL PROGRAMS.

       Section 4121(a) (20 U.S.C. 7131(a)) is amended--
       (1) in paragraph (10), by inserting ``, including projects 
     and activities that promote the interaction of youth and 
     appropriately qualified seniors'' after ``responsibility''; 
     and
       (2) in paragraph (13), by inserting ``, including 
     activities that integrate appropriately qualified seniors in 
     activities, such as mentoring, tutoring, and volunteering'' 
     after ``title''.

     SEC. 6. GIFTED AND TALENTED CHILDREN.

       Section 10204(b)(3) (20 U.S.C. 8034(b)(3)) is amended by 
     striking ``and parents'' and inserting ``, parents, and 
     appropriately qualified senior volunteers''.

     SEC. 7. 21ST CENTURY COMMUNITY LEARNING CENTERS.

       Section 10904(a)(3) (20 U.S.C. 8244(a)(3)) is amended--
       (1) in subparagraph (D), by striking ``and'' after the 
     semicolon;
       (2) by redesignating subparagraph (E) as subparagraph (F); 
     and
       (3) by inserting after subparagraph (D) the following:
       ``(E) a description of how the school or consortium will 
     encourage and use appropriately qualified seniors as 
     volunteers in activities identified under section 10905; 
     and''.

     SEC. 8. AUTHORIZED SERVICES AND ACTIVITIES.

       Section 9115(b) (20 U.S.C. 7815(b)) is amended--
       (1) in paragraph (6), by striking ``and'' after the 
     semicolon;
       (2) in paragraph (7), by striking the period and inserting 
     ``; and''; and
       (3) by inserting after paragraph (7) the following:
       ``(8) activities that recognize and support the unique 
     cultural and educational needs of Indian children, and 
     incorporate appropriately qualified tribal elders and 
     seniors.''.

     SEC. 9. IMPROVEMENTS OF EDUCATIONAL OPPORTUNITIES FOR INDIAN 
                   CHILDREN.

       Section 9121(c) (20 U.S.C. 7831(c)) is amended--
       (1) by redesignating subparagraph (K) as subparagraph (L);
       (2) in subparagraph (J), by striking ``or'' after the 
     semicolon; and
       (3) by inserting after subparagraph (J) the following:
       ``(K) activities that recognize and support the unique 
     cultural and educational needs of Indian children, and 
     incorporate appropriately qualified tribal elders and 
     seniors; or''.

     SEC. 10. PROFESSIONAL DEVELOPMENT.

       Section 9122(d)(1) (20 U.S.C. 7832(d)(1)) is amended by 
     striking the period the second place it appears and inserting 
     ``, and may include programs designed to train tribal elders 
     and seniors.''.

     SEC. 11. NATIVE HAWAIIAN COMMUNITY-BASED EDUCATION LEARNING 
                   CENTERS.

       Section 9210(b) (20 U.S.C. 7910(b)) is amended--
       (1) by redesignating paragraph (3) as paragraph (4);
       (2) in paragraph (2), by striking ``and''; and
       (3) by inserting after paragraph (2) the following:
       ``(3) programs that recognize and support the unique 
     cultural and educational needs of Native Hawaiian children, 
     and incorporate appropriately qualified Native Hawaiian 
     elders and seniors; and''.

     SEC. 12. ALASKA NATIVE STUDENT ENRICHMENT PROGRAMS.

       Section 9306(b) (20 U.S.C. 7935(b)) is amended--
       (1) by redesignating paragraphs (3) and (4) as paragraphs 
     (4) and (5), respectively; and
       (2) by inserting after paragraph (2) the following:
       ``(3) activities that recognize and support the unique 
     cultural and educational needs of Alaskan Native children, 
     and incorporate appropriately qualified Alaskan Native elders 
     and seniors;''.
                                 ______
                                 
      By Mr. BENNETT:
  S. 1852. A bill to authorize the Secretary of the Interior to enter 
into contracts with the Weber Basin Water Conservancy District, Utah, 
to use Weber Basin Project facilities for the impounding, storage, and 
carriage of nonproject water for domestic, municipal, industrial, and 
other beneficial purposes; to the Committee on Energy and Natural 
Resources.


     the use of weber basin project facilities for nonproject water

 Mr. BENNETT. Mr. President, I am pleased to take a step in 
addressing the long-term water needs of Summit County, Utah. The bill I 
am introducing today authorizes the Secretary of the Interior to enter 
into contracts with the Weber Basin Water Conservancy District. This 
legislation would permit non-federal water intended for domestic, 
municipal, industrial, and other uses to utilize federal facilities of 
the original Weber Basin Project for various purposes such as storage 
and transportation.
  In this case, the Smith Morehouse Dam and Reservoir was constructed 
by the Weber Basin Water Conservancy District in the early 1980's using 
local funding resources in order to create a supply of non-federal 
project water. However, it has been determined that there is currently 
a need to deliver approximately 5,000 acre feet of this non-federal 
Smith Morehouse water in conjunction with approximately 5,000 acre feet 
of federal Weber Basin project water to the Snyderville Basin area of 
Summit County, Utah and to Park City, Utah.
  In 1996, the Weber Basin Water Conservancy District entered into a 
Memorandum of Understanding and Agreement to deliver this water 
approximately 14 miles from Weber Basin Weber River sources within a 
certain time frame and dependent upon the execution of an Interlocal 
Agreement with Park City and Summit County. The Warren Act requires 
that legislation be enacted to enable the District to move ahead with 
this agreement with Summit County and Park City to deliver the water 
utilizing built Weber Basin Project facilities built by the Bureau of 
Reclamation.
  There is an immediate need for the delivery of water to this area. 
The Utah State Engineer halted the approval of new groundwater 
developments in the area last year. At the same time, Summit county is 
experiencing tremendous growth; in fact it is one of the highest growth 
areas in the state. The areas to be served are within the area taxed by 
the Weber Basin District, and there is a definite need for a public 
entity to build a project to supply an adequate, reliable, and cost 
effective water delivery project to meet the future demands of this 
area.
  Since there is precedent allowing the wheeling of non-federal water 
through federal facilities, my colleagues should realize that this is a 
non-controversial piece of legislation. Therefore, I hope that Congress 
will move quickly to pass this legislation next session and I look 
forward to working closely with my colleagues on the Energy Committee 
to move it quickly.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Kohl, and Mr. DeWine):
  S. 1854. A bill to reform the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976; to the Committee on the Judiciary.


        the hart-scott-rodino antitrust improvements act of 1999

  Mr. HATCH. Mr. President, I am pleased to introduce today the Hart-
Scott-Rodino Antitrust Improvements Act of 1999. I also am pleased to 
note that joining with me in sponsoring this important bipartisan 
legislation are Senators DeWine and Kohl the chairman and ranking 
member of the Antitrust, Business Rights and Competition Subcommittee 
of the Committee on the Judiciary. I thank my colleagues on both sides 
of the aisle for their efforts and cooperation in working to craft this 
balanced reform measure which is long overdue.
  The Hart-Scott-Rodino Antitrust Improvements Act of 1976 requires 
companies contemplating a merger of acquisition to file a premerger 
notification

[[Page 28424]]

with the Antitrust Division of the Department of Justice or the Federal 
Trade Commission if the size of the companies and the size of the 
proposed transaction are greater than certain monetary thresholds. 
These monetary thresholds have not been changed--even for inflation--
since the legislation was originally enacted in 1976, over 23 years 
ago. When the statute was first enacted, Congress intended to limit the 
scope of the Hart-Scott-Rodino Act to very large companies involved in 
very large transactions. At that time, the House Judiciary Committee 
reported that the statute would apply ``only to the largest 150 mergers 
annually: These are the most likely to `substantially lessen 
competition'--the legal standard of the Clayton act.'' However, because 
the monetary thresholds in the statute have never been updated, nearly 
5,000 transactions were reported.
  Because these monetary thresholds have not been kept current, 
companies frequently are required to notify the Antitrust Division and 
the FTC of proposed transactions that do not raise competitive issues. 
As a result, the agencies are required to expend valuable resources 
performing needless reviews of transactions that were never intended to 
be reviewed. In short, current law unnecessarily imposes a costly 
regulatory and financial burden upon companies, particularly upon small 
businesses, as well as a sizable drain on the resources of the 
agencies. Because of the unnecessarily low monetary thresholds, the 
current Act simply fails to reflect the true economic impact of mergers 
and acquisitions in today's economy.
  In addition, after a premerger notification is filed, the Hart-Scott-
Rodino Act imposes a 30-day waiting period during which the proposed 
transaction may not close and the Antitrust Division or the FTC 
conducts an antitrust investigation. Prior to the expiration of this 
waiting period, the agency investigating the transaction may make a 
``second request''--a demand for additional information or documentary 
material that is relevant to the proposed transaction. Unfortunately, 
many second requests require the production of an enormous volume of 
materials, many of which are unnecessary for even the most 
comprehensive merger review. Complying with such second requests has 
become very burdensome, often costing companies in excess of $1 million 
to comply. Second requests also extend the waiting period for an 
additional 20 days, a period of time which does not begin to run until 
the agencies have determined that the transacting companies have 
``substantially complied'' with the second request. This procedure 
results in many lawful transactions being unnecessarily delayed for 
extended periods of time.
  Mr. President, the legislation that I am introducing today will 
correct these problems with the Hart-Scott-Rodino Act. First, the 
legislation increases the size-of-transaction threshold from $15 
million to $35 million, effectively exempting from the Act's 
notification requirement mergers and acquisitions that, based on the 
FTC's data, do not pose any competitive concerns. Such mergers make up 
at least one-third of transactions reported in 1999. Therefore, this 
modest legislation provides significant regulatory and financial relief 
for small- and medium-sized companies. In addition, the legislation 
indexes the threshold for inflation, so that the problem of an 
expanding economy outgrowing the statute's monetary threshold will not 
recur.
  In addition to providing regulatory and financial relief for 
companies, another purpose of this legislation is to ensure that the 
Antitrust Division and the FTC efficiently allocate their finite 
resources to those transactions that truly deserve antitrust scrutiny. 
To ensure budget neutrality, the legislation adjusts the amount of the 
filing fee that parties must submit with their notification: For 
transactions valued between $35 million and $100 million, the filing 
fee remains unchanged at $45,000; for transactions valued at more than 
$100 million, the filing fee is increased to $100,000. I have worked 
with the business community to ensure that this filing fee adjustment 
is fair by imposing a higher fee on transactions which likely will 
require more of the agencies' resources to review. Although I would 
prefer that the filing fees be eliminated completely, in the interest 
of seeing the reforms in this bill become law, this legislation does 
not include such a measure.
  Second, this legislation reforms the second request process by 
limiting the scope of the information and documents that the agencies 
may require transacting companies to produce. Under this legislation, 
second requests must be limited to information that (1) is not 
unreasonably cumulative or duplicative and (2) does not impose a cost 
or burden on the transacting parties that substantially outweighs any 
benefit to the agencies in conducting their antitrust review. If a 
company believes that the second request does not meet this standard, 
then that company may petition a United States magistrate judge for 
review of the second request. Similarly, if the company produces 
information and documents pursuant to a second request, but the agency 
determines that the company has not ``substantially compiled'' with the 
request, then the company also may petition the magistrate judge for a 
determination on substantial compliance. To ensure that proposed 
transactions are not unreasonably delayed, the bill provides deadlines 
by which the agency must notify a company of its failure to comply with 
a second request and also imposes certain controls, so that the process 
is not tied up in litigation by either the transacting party or the 
government.
  Finally, this legislation requires that the Antitrust Division and 
the FTC jointly report to Congress annually regarding the second 
request process and jointly publish guidelines on how companies can 
comply with second requests.
  Mr. President, the bill that I am introducing today sets forth 
reforms to the Hart-Scott-Rodino Act that are long overdue. It provides 
significant regulatory and financial relief for businesses, while 
ensuring that transactions that truly deserve antitrust scrutiny will 
continue to be reviewed. As this bill moves through the legislative 
process, I remain willing to address any concerns any of my colleagues 
may have, and look forward to working with the Administration to see 
that this proposed legislation becomes law, thereby providing relief 
for small business that is long overdue. I urge my colleagues to 
support the Hart-Scott-Rodino Antitrust Improvements Act of 1999.
  Mr. KOHL. Mr. President, I rise today to co-sponsor the Hart-Scott-
Rodino Antitrust Improvements Act of 1999 and to commend Chairman Hatch 
for his efforts on this legislation. This measure would amend the Hart-
Scott-Rodino Act and make several changes to enhance the merger review 
process undertaken by the Antitrust Division of the Department of 
Justice and the Federal Trade Commission. We believe that reforms to 
this statute are long overdue--the threshold hasn't been changed since 
the statute's enactment in 1976--but we also view the proposals in this 
legislation as a starting point, and not necessarily the last word on 
this subject.
  The Hart-Scott-Rodino Act is crucial to the enforcement of 
competition policy in today's economy--it ensure that the antitrust 
agencies have sufficient time to review mergers and acquisitions prior 
to their completion. The statute requires that, prior to consummating a 
merger or acquisition of a certain minimum size, the companies involved 
must formally notify the antitrust agencies and must provide certain 
information regarding the proposed transaction. For those transactions 
covered by the Act, the parties to a merger or acquisition may not 
close their transaction until the expiration of a thirty day waiting 
period after making their Hart-Scott-Rodino Act filing. This waiting 
period may be extended by the antitrust agencies requesting additional 
information from the parties to the transaction in which case, under 
current law, the parties may not complete the deal until twenty days 
after supplying the government with the requested information.

[[Page 28425]]

  While this statute has a very laudable purpose, especially with the 
tremendous numbers of mergers and acquisitions taking place in recent 
years, some of its provisions are in need of revision. Most 
importantly, while inflation has caused the value of a dollar to drop 
by more than a half in the past 25 years, the monetary test that 
subjects a transaction to the provisions of the statute has not been 
revised since the law's enactment in 1976. As a result, many 
transactions that are of a relatively small size and pose little 
antitrust concerns are nevertheless swept into the ambit of the Hart-
Scott-Rodino review process. This legislation would raise the size of 
transaction covered by the Hart-Scott-Rodino Act from $15 million to 
$35 million. This will both lessen the agencies' burden of reviewing 
small transactions unlikely to seriously affect competition and enable 
the agencies to allocate their resources to properly focus on those 
transactions most worthy of scrutiny. Further, exempting smaller 
transactions from the Hart-Scott-Rodino process will significantly 
lessen regulatory burdens and expenses imposed on small businesses. The 
parties to these smaller transactions will no longer need to pay the 
$45,000 filing fee--or face the often even more onerous legal fees and 
other expenses typically incurred in preparing a Hart-Scott-Rodino 
filing--for mergers and acquisitions that usually don't pose any 
competitive concerns.
  In exempting this class of transactions from Hart-Scott-Rodino 
review, however, it is important that we not cause the antitrust 
agencies to lose the funding they need to carry out their increasingly 
demanding mission of enforcing the nation's antitrust laws. Therefore, 
we have attempted to ensure that our measure is revenue-neutral--
indeed, it would raise filing fees for transactions valued at over 
$100,000,000, which makes sense because these transactions require more 
scrutiny. In considering this legislation, of course, we will need to 
carefully study the budgetary implications of this reform to ensure 
that our goal of revenue-neutrality has been met. As this measure moves 
forward, however, we ought to consider whether bigger deals of, say, $1 
billion or $10 billion and over should require higher fees.
  This legislation makes other changes designed to enhance the 
efficiency of the pre-merger review process. The waiting period has 
been extended from twenty to thirty days after the parties' compliance 
with the government's request for additional information, a more 
realistic waiting period in this era of increasingly complex mergers 
generating enormous amounts of relevant information and documents. As 
in the Federal Rules of Civil Procedure, when a deadline for action 
occurs on a weekend or holiday, the deadline is extended to the next 
business day. This simple provision will eliminate gamesmanship by 
parties who currently may time their compliance so that the waiting 
period ends on a weekend or holiday, effectively shortening the waiting 
period to the previous business day.
  Mr. President, some have expressed concerns regarding the 
difficulties and expense imposed on business in complying with 
allegedly overly burdensome or duplicative government requests for 
additional information. So we believe that it is reasonable to consider 
methods to prevent abuse of this process by overbroad or unreasonable 
requests. Therefore, this legislation includes provisions to amend the 
statute to add a right of appeal to a U.S. Magistrate Judge to 
adjudicate disputes regarding the propriety of government requests for 
additional information. We have not reached any final conclusions 
regarding the wisdom of these provisions; they are certainly worth 
``floating'' as ideas, and the process will determine if they should be 
included as part of a final product. Further, we should keep in mind 
that if this right of appeal provision is enacted it will impose 
significant additional litigation burdens on the antitrust agencies 
which might require a corresponding increase in funding for these 
agencies. Our goal, again, is to improve the functioning of the pre-
merger review system which is so vital to antitrust enforcement and, in 
that context, this provision deserves at least a supportive ``look.''
  Mr. President, let me make one additional point. We recognize that 
all will not agree with the necessity or efficacy of all of these 
reform proposals. We are, of course, willing to consider any 
modification to this legislation that will advance our goals of a more 
efficient merger review process. But virtually everyone agrees that 
Hart-Scott-Rodino needs to be updated and we're pleased that this 
measure moves us forward.
                                 ______
                                 
      By Mr. MURKOWSKI:
  S. 1855. A bill to establish age limitations for airmen; to the 
Committee on Commerce, Science, and Transportation.


                    the airline pilot retirement age

  Mr. MURKOWSKI. Mr. President, I rise to introduce legislation that 
attempts to diminish the scope of a problem that is facing our air 
transport industry, namely a critical shortage of pilots. The pilot 
shortage is starting to have effects in many rural states.
  In response to this problem. I am today introducing a bill that would 
repeal the Federal Aviation Administration (FAA) rule which now 
requires pilots who fly under Part 121 to retire at ago 60. Under my 
legislation, pilots in excellent health would be allowed to continue to 
pilot commercial airliners until their 65th birthday.
  The Age 60 rule was instituted 40 years ago when commercial jets were 
first entering service. The rule was established without the benefit of 
medical or scientific studies or public comment. The most recent study, 
the results of which were released in 1993, examined the correlation 
between age and accident rate as pilots approach 60. That study found 
no increase in accidents.
  The FAA contends that although science does not dictate retirement at 
the age of 60, it is the age range when sharp increases in disease 
mortality and morbidity occur. In FAA's view it is too risky to allow 
older pilots to fly the largest aircraft, carrying the greatest number 
of passengers over the longest non-stop distances, in the highest 
density traffic.
  However, 44 countries worldwide have relaxed then age 60 rule within 
the last ten years primarily because the pilot shortage is a worldwide 
phenomenon. Many of these air carriers currently fly into U.S. 
airspace.
  One of the ways carriers are attempting to adapt to the shortage is 
to lower their flight time requirements. In my view, this is a risk 
factor the FAA should be concerned about.
  How did this shortage occur? The reason is simple: There has been an 
explosive growth of the major airlines worldwide, and there's a 
shortage of military pilots who used to feed the system. In addition, 
there is an aging pilot pool that must retire at age 60.
  Add to this domino effect the decline in the number of people 
learning to fly, due primarily to the cost, and the pool of available 
pilots has shrunk.
  The shortage acutely affects my home state of Alaska because we 
depend on air transport far more than any other state. Rural residents 
in Alaska have no way out other than by air service. There are no rural 
routes, state or interstate highways serving most rural residents in 
Alaska and the airplane for many of them is their lifeline to the 
outside world.
  The pilot shortage has left Alaskan carriers scrambling for pilots. 
Alaska's carriers must hire from the available pilot pool in the lower 
48. Many of these pilots view flying in Alaska as a stepping stone that 
allows them to build up flight time. Although they get great flying 
experience in my home state, in nearly all instances when a pilot gets 
a higher-pay job offer with a larger carrier in the lower 48, he leaves 
Alaska.
  According to the Alaska Air Carriers Association, raising the 
retirement age to 65 will help alleviate the shortage and keep 
experienced pilots flying and serving rural Alaskans.
  Mr. President, I would note that what is happening across the country 
is that the major carriers are luring pilots from commuter airlines, 
who in turn recruit from the air charter and

[[Page 28426]]

corporate industry, who in turn hire flight instructors, agriculture 
pilots, etc. Which leaves rural carriers strapped. The big fish are 
feeding off the little ones.
  Small carriers simply cannot compete with the salaries, benefits and 
training costs of the major carriers. They simply do not have the 
financial resources.
  According to figures provided by the Federal Aviation Administration, 
there were 694,000 pilots in 1988 and 616,342 in 1997. Within that 
number, private pilot certificates fell from approximately 300,000 in 
1988 to 247,604 in 1997. Commercial certificates, like air taxi and 
small commuter pilots, fell from 143,000 in 1988 to 125,300 in 1997. 
The number of total pilots in Alaska fell from more than 10,000 in 1988 
to approximately 8,700 in 1997.
  However, light is beginning to show at the end of the tunnel.
  Organizations such as the Aircraft Owners and Pilots Association 
(AOPA) and the General Aviation Manufacturers Association (GAMA) have 
been monitoring this shortage for some time and have stepped up to the 
plate to get people interested in flying. AOPA has started a pilot 
mentoring program in 1994 and approximately 30,000 have entered the 
program. GAMA's ``Be a Pilot'' program is starting to bring more 
potential pilots into flight training.
  Even the Air Force is starting to institute new programs to keep 
pilots.
  In Alaska, as a result of a precedent-setting program involving Yute 
Air, the Association of Village Council Presidents, the University of 
Alaska, Anchorage, Aero Tech Flight Service, Inc., and the FAA, a 
program was developed to train rural Alaska Natives to fly. Seven are 
on their way to pilot careers.
  Also, the number of students working on pilot licenses at the 
University's Flight Technology program has almost doubled in two years.
  It is my hope that the shortage has hit rock bottom. But even so, it 
will take years before a cadre of qualified pilots is ready to take to 
the friendly skies.
  Mr. President, the time has come for Congress to wrestle with this 
problem. As long as a pilot can pass the rigorous medical exam, he or 
she should be allowed to fly. Air service is critical to keep commerce 
alive, especially in rural states.
  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. 1855

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

     SECTION 1. AGE AND OTHER LIMITATIONS.

       (a) General.--Notwithstanding any other provision of law, 
     beginning on the date that is 30 days after the date of 
     enactment of this Act--
       (1) section 121.383(c) of title 14, Code of Federal 
     Regulations, shall not apply;
       (2) no certificate holder may use the services of any 
     person as a pilot on an airplane engaged in operations under 
     part 121 of title 14, Code of Federal Regulations, if that 
     person is 65 years of age or older; and
       (3) no person may serve as a pilot on an airplane engaged 
     in operations under part 121 of title 14, Code of Federal 
     Regulations, if that person is 65 years of age or older.
       (b) Certificate Holder.--For purposes of this section, the 
     term ``certificate holder'' means a holder of a certificate 
     to operate as an air carrier or commercial operator issued by 
     the Federal Aviation Administration.
                                 ______
                                 
      By Mr. DOMENICI:
  S. 1857. A bill to provide for conveyance of certain Navajo Nation 
lands located in northwestern New Mexico and to resolve conflicts among 
the members of such Nation who hold interests in allotments on such 
lands; to the Committee on Indian Affairs.
 Mr. DOMENICI. Mr. President, I am pleased today to be 
introducing the Bisti PRLA Dispute Resolution Act, which will resolve a 
conflict regarding coal mining leases in New Mexico. A coal company and 
the Navajo Nation have been deadlocked within the Department of 
Interior appeals process regarding preference right lease applications 
(PRLAs) in the Bisti region of northwestern New Mexico. When enacted, 
this legislation will resolve a complex set of issues arising from 
legal rights the Arch Coal Company acquired in federal lands, which are 
now situated among lands which constitute tribal property and the 
allotments of members of the Navajo Nation. Both the company and the 
Nation support this legislation to resolve the situation.
  There are many reasons the solution embodied in this bill achieves 
broad benefits to the interested parties and the public. It will allow 
the Navajo Nation to complete the land selections that were made in 
1981 to promote tribal member resettlement following the partition of 
lands in Arizona. It also guarantees that Arch Coal, Inc. will be 
compensated for the economic value of its coal reserves. An independent 
panel will make recommendations to the Secretary of Interior regarding 
the fair market value of the coal reserves, gives the company bidding 
rights, protects a state's financial interest in its share of federal 
Mineral Leasing Act payments, and allows the Navajo Nation full fee 
ownership in their lands.
  The Secretary of Interior will issue a certificate of bidding rights 
to Arch Coal upon relinquishment of its interests in the PLRAs. The 
amount of that certificate will equal the fair market value of the coal 
reserves as defined by the Department of Interior's regulations. A 
panel consisting of representatives of the Department of Interior, Arch 
Coal, and the Governors of Wyoming and New Mexico will help determine 
fair market value. While the Interior Department is authorized to 
exchange PRLAs for bidding rights, the Department has not done so, 
largely because of the difficulty it perceives in determining the fair 
market value of the coal reserves. The panel method in this legislation 
will promote the objectivity of that process.
  Upon the relinquishment of the PRLAs and the issuance of a 
certificate of bidding rights, the Department of Interior will execute 
patents to the Navajo Nation of the selected lands encompassed by the 
PRLAs. This is a win-win situation for all parties involved; is 
endorsed by the affected parties, and is a fair resolution to this on-
going problem. I hope for prompt action on this legislation early next 
year.
                                 ______
                                 
      By Mr. BREAUX:
  S. 1858. A bill to revitalize the international competitiveness of 
the United States-flag maritime industry through tax relief; to the 
Committee on Finance.


         The National Security Sealift Enhancement Act of 1999

  Mr. BREAUX. Mr. President, I am pleased today to introduce tax reform 
legislation that is long overdue in the effort to revitalize the 
nation's fourth arm of defense, the United States flag merchant marine. 
My bill, the National Security Sealift Enhancement Act of 1999, would 
provide targeted tax relief to enable the United States-flag oceangoing 
commercial fleet to better compete with foreign-flag commercial fleets 
registered in nations that have exempted companies from taxes.
  Currently, United States companies operating U.S.-flag vessels, and 
foreign-flag vessels operating under the application of national laws 
such as Japan or France, are forced to compete against companies that 
operate vessels under flag-of-convenience registries. Flag-of-
convenience shipping registries operate under the legal authority of 
nations such as Panama, Liberia, Vanuatu, or the Marshall Islands, and 
attract shipping companies because of the deminimus regulatory costs 
they impose on companies operating under their flag. All of these 
nations exempt companies from taxes on income, and employees operating 
on the vessels do not pay tax on income they earn working aboard. The 
owners can employ foreign laborers, usually from third world nations, 
for very little pay, often working in unacceptable conditions. 
Additionally, the vessel operations are not required to comply with 
rigorous United States Coast Guard safety and environmental standards, 
and these operators use private companies to inspect their vessels to 
ensure that they are in compliance with international safety laws.

[[Page 28427]]

  Mr. President, we are all well aware of the critical role played by 
the American maritime industry in the economy of Louisiana and our 
nation. In my home state alone, the total economic impact of that 
industry was estimated in 1997 to be over $28 billion, supporting 
approximately 230,000 jobs throughout Louisiana. That economic impact 
constitutes almost 30 percent of the total gross state product for 
Louisiana. Louisiana companies were among the first to respond to the 
nation's call to provide for the rapid transport of critical equipment, 
munitions, and supplies to the Persian Gulf in those critical days 
following the 1990 Iraqi invasion of Kuwait. However, the very 
existence of the American flag fleet, and thus the related economic and 
national defense benefits that flow from that fleet, are severely 
threatened by U.S. tax rules that unfairly hamper and restrict American 
shipping.
  I have worked from the first days of my arrival in the Congress to 
strengthen the U.S.-flag maritime industry and level the playing field 
in international shipping. Despite the well-intentioned efforts of the 
Congress, the Maritime Administration and other federal agencies to 
support the U.S.-flag commercial fleet, unfavorable and clearly 
noncompetitive U.S. tax policies have led to the continuing decline of 
that fleet. In fact, according to statistics maintained by the Maritime 
Administration, the commercial fleet of the United States has fallen 
into 11th place internationally, in total carrying capacity, ranking 
behind those fleets of Panama, Liberia, Malta, the Bahamas, and other 
nations who offer significant economic and tax advantages to their 
commercial vessels and crews.
  These same issues have also plagued other industrialized nations that 
operate shipping under the application of national laws and policies. 
For instance, between the period of 1975 and 1992, the national flag 
fleet operations in terms of deadweight carrying capacity decreased by 
94% in the United Kingdom, 98% in Norway, 73% in France, 53% in 
Germany, 73% in Sweden, 98% in Denmark, and 47% in Japan.
  In order to combat decreases in the operation of shipping under 
national registries, nations have taken steps to provide direct 
subsidies or indirect support schemes that help owners offset the 
higher costs of operating under national laws. Other nations, such as 
Denmark and Norway, have created what are called international 
registries, or open registries, and have reduced taxes and societal 
costs to help offset the costs as compared to flag-of convenience 
vessels. Out of the eleven largest shipping registries, by carrying 
capacity, seven operate as flag-of-convenience registries or open 
registries. The other four nations are Greece, Japan, the People's 
Republic of China (which operates it's fleet as a governmentally 
controlled entity), and the United States.
  Mr. President, what is even more astounding is that the percentage of 
cargoes carried by U.S.-flag vessels in the foreign trades has also 
declined precipitously. At the end of World War II, after we had been 
forced to rebuild our shipping fleet in order to satisfy our defense 
logistic needs, almost 60 percent of the U.S. oceanborne commerce in 
international trade was carried aboard U.S.-flag vessels. Today, that 
figure is a mere 3 percent. To state this another way, 97 out of every 
100 tons of cargo imported into or exported from the United States is 
carried aboard foreign-flagged ships. Through a wide variety of 
favorable tax incentives, including in most cases a total exemption 
from taxation, many foreign jurisdictions have succeeded in developing 
commercial maritime fleets that far exceed the capacity of that in the 
U.S.
  What truly concerns me is that the United States is rapidly 
undermining its very national security through its failure to enable 
the U.S.-flag commercial fleet to compete on an equal footing with 
foreign-flagged shipping. I recognize the strategic importance of the 
U.S.-flag merchant marine and American merchant mariners, and share the 
views of other senior political and military leaders that the ability 
of the U.S. to move its military personnel and supplies overseas 
quickly and effectively is critical to its national security. The 
United States cannot rely on foreign allies to achieve our national 
security objectives. We must be able to act decisively, and to act 
unilaterally, when our strategic interests are jeopardized. To ensure 
the maritime industry's ability to accomplish this crucial task, the 
military utilizes privately-owned U.S.-flagged commercial vessels to 
supplement the military's own transportation systems in both times of 
war and peace. Without such capability, the military would have to 
build and operate, at a significantly greater expense to the government 
and ultimately the U.S. taxpayers, many more military transport vessels 
to ensure it can effectively respond to military contingencies in a 
timely manner.
  As General Colin Powell so accurately observed following the Persian 
Gulf War in 1991:

       Our [nation's] strategy requires us to be able to project 
     power quickly and effectively across the oceans to deal with 
     the crisis we couldn't avoid or predict. Sealift will be 
     critical to fulfilling this strategic requirement. . . . [The 
     military] also acknowledges that the merchant marine and our 
     maritime industry will be vital to our national security for 
     many years to come . . .

  We simply cannot stand idly by while this vital national security 
asset is undercut through counter productive tax policies that do not 
allow the U.S.-flag commercial fleet to operate competitively, in the 
most competitive of all markets--that of international shipping.
  Mr. President, to preserve that vital national security asset, I 
believe it is essential to provide a tax environment for U.S.-flag 
carriers that more closely approaches the favorable tax treatment 
provided by other maritime nations to their own merchant fleets, while 
also creating incentives for the construction of new vessels in U.S. 
shipyards. Foreign tax incentives have significantly undermined the 
ability of the U.S. to retain a viable commercial fleet for defense 
purposes and to enhance the balance of trade. By way of example, U.S.-
flag commercial vessel operators must pay a 34 percent tax on corporate 
income and a 50 percent duty on vessel repairs made in foreign 
countries; they are subject to far more restrictive (and expensive) 
Coast Guard and other federal operational and safety requirements; and 
their crewmembers engaged in the foreign trade do not share in the tax 
relief otherwise provided to U.S. citizens working abroad. On the other 
hand, owners of foreign-flagged vessels of the Bahamas, Liberia, Malta, 
Panama and many other countries are totally exempt from any taxation. 
Therefore, it is not surprising to see that the Bahamas, Liberia, 
Malta, and Panama have four of the top five commercial fleets in the 
world, and that vessel owners from around the world regularly register 
their ships with these countries to avoid taxation.
  Mr. President, I am not proposing to exempt U.S.-flag vessel owners 
from U.S. income taxes. Rather, I have developed a comprehensive yet 
narrowly focused bill that provides the necessary relief to alleviate 
the tax burden on the U.S.-flag fleet. This legislation is designed to 
provide a tax environment for U.S.-flag carriers that more closely 
approaches the favorable tax treatment provided by other maritime 
nations to their own merchant fleets. The Act includes the following 
provisions:
  Capital Construction Fund (CCF) Reform. Title I of the Act would 
expand the CCF to allow deposits of earnings from U.S. flag, foreign-
built ships to be contributed to a CCF for the construction of vessels 
in the United States. Qualified withdrawals from a CCF would continue 
to apply only to U.S. built vessels and would be expanded to include 
vessels that operate between coastwise points of the United States. 
Contributions to a CCF would no longer be treated as preference items 
under the corporate Alternative Minimum Tax, and owners of U.S. flag 
ships would also be allowed to deposit into a CCF the duty arising from 
foreign ship repairs.
  Election to Expense U.S. Flag Vessels. Significantly, for the 
majority of the foreign flag commercial fleet, there is no applicable 
depreciation schedule for commercial vessels because those

[[Page 28428]]

vessels and their corporate owners and operators are totally exempt 
from income taxation. Other maritime nations that impose income taxes 
on commercial vessel operations still have depreciation schedules far 
more lenient than the anti-competitive 10-year schedule applicable to 
U.S.-flagged vessels. Therefore, in order to be internationally 
competitive, Title II of the Act would enable the owner of any U.S. 
flag vessel engaged in the international trade of the U.S. to fully 
deduct that vessel in the year in which the vessel is acquired and 
documented under the U.S. flag.
  Seaman's Wage Exclusion. Consistent with the current policies and 
objectives of Section 911 of the Internal Revenue Code, Title III of 
the Act would extend the foreign earned income exclusion to American 
merchant mariners by changing the definition of ``foreign country'' to 
include a principal place of employment aboard a commercial vessel 
operating outside the United States, and amending the foreign residence 
test to include work aboard a vessel.
  Alternative Minimum Tax Relief. In order to be internationally 
competitive, Title IV of the Act repeals the Alternative Minimum Tax 
(AMT) with respect to shipping income. No such tax exists on commercial 
vessels of any other foreign country, and the changes proposed 
elsewhere in this Act will essentially be meaningless if the AMT 
continues to apply to shipping income.
  Deduction of Expenses. The existing tax provision which permits the 
deduction of expenses with respect to conventions, seminars or other 
meetings on U.S.-flag cruise vessels traveling between U.S. ports would 
be expanded by Title V of the Act to include U.S.-flag cruises between 
the United States and foreign ports.
  Mr. President, absent the tax reforms in the attached proposal, U.S.-
flag carriers in Louisiana and elsewhere will continue to face a 
formidable tax cost disadvantage against foreign flag carriers, who pay 
little or no tax to their home countries. This cost differential 
impedes the ability of U.S.-flag carriers to compete in the global 
marketplace, as evidenced by the ever growing share of non-U.S. flag 
carriers currently carrying this nation's imports and exports. It is 
universally recognized that key components of a strong national economy 
are a strong national merchant marine and shipyard industrial base, and 
it is now appropriate to alleviate the tax burden on the U.S.-flag 
fleet and simultaneously promote construction in U.S. shipyards. I urge 
my colleagues to strongly support this legislation for the good of our 
American flag fleet and the security of our nation.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1858

       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 ``National Security Sealift 
     Enhancement Act of 1999''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.

                   TITLE I--CAPITAL CONSTRUCTION FUND

Sec. 101. Amendments of Internal Revenue Code of 1986.
Sec. 102. Amendment to the Tariff Act of 1930.
Sec. 103. Effective date.

        TITLE II--ELECTION TO EXPENSE UNITED STATES FLAG VESSELS

Sec. 201. Election to expense certain United States flag vessels.

            TITLE III--INCOME EXCLUSION FOR MERCHANT SEAMEN

Sec. 301. Income of merchant seaman excludable from gross income as 
              foreign earned income.

            TITLE IV--EXEMPTION FROM ALTERNATIVE MINIMUM TAX

Sec. 401. Exemption from alternative minimum tax for corporations that 
              operate United States flag vessels.

        TITLE V--CONVENTIONS OF UNITED STATES-FLAG CRUISE SHIPS

Sec. 501. Conventions on United States-flag cruise ships.

                   TITLE I--CAPITAL CONSTRUCTION FUND

     SEC. 101. AMENDMENTS OF INTERNAL REVENUE CODE OF 1986.

       (a) Treatment of Certain Lease Payments.--
       (1) Paragraph (1) of section 7518(e) of the Internal 
     Revenue Code of 1986 is amended by striking ``or'' at the end 
     of subparagraph (B), by striking the period at the end of 
     subparagraph (C) and inserting ``, or'', and by inserting 
     after subparagraph (C) the following new subparagraph:
       ``(D) the payments of amounts which reduce the principal 
     amount (as determined under regulations) of a qualified lease 
     of a qualified vessel or container which is part of the 
     complement of an eligible vessel.''.
       (2) Paragraph (4) of section 7518(f) of such Code is 
     amended by inserting ``or to reduce the principal amount of 
     any qualified lease'' after ``indebtedness''.
       (b) Authority To Make Deposits Under The Tariff Act of 
     1930.--
       (1) Paragraph (1) of section 7518(a) of such Code is 
     amended by striking ``and'' at the end of subparagraph (C), 
     by striking the period at the end of subparagraph (D) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(E) the amount elected for deposit under subsection (i) 
     of section 466 of the Tariff Act of 1930 (19 U.S.C. 1466).''.
       (2) Subparagraph (A) of section 7518(d)(2) of such Code is 
     amended to read as follows:
       ``(A) amounts referred to in subsections (a)(1)(B) and 
     (E).''.
       (c) Authority To Make Deposits for Prior Years Based on 
     Audit Adjustments.--Subsection (a) of section 7518 of such 
     Code is amended by adding at the end thereof the following 
     new paragraph:
       ``(4) Deposits for prior years.--To the extent permitted by 
     joint regulations, deposits may be made in excess of the 
     limitation described in paragraph (1) (and any limitation 
     specified in the agreement) for the taxable year if, by 
     reason of a change in taxable income for a period taxable 
     year that has become final pursuant to a closing agreement or 
     other similar agreement entered into during the taxable year, 
     the amount of the deposit could have been made for such prior 
     taxable year.''.
       (d) Treatment of Capital Gains and Losses.--
       (1) Paragraph (3) of section 7518(d) of such Code is 
     amended to read as follows:
       ``(3) Capital gain account.--The capital gain account shall 
     consist of--
       ``(A) amounts representing long-term capital gains (as 
     defined in section 1222) on assets held in the fund, reduced 
     by
       ``(B) amounts representing long-term capital losses (as 
     defined in such section) on assets held in the fund.''.
       (2) Subparagraph (B) of section 7518(d)(4) of such Code is 
     amended to read as follows:
       ``(B)(i) amounts representing short-term capital gains (as 
     defined in section 1222) on assets held in the fund, reduced 
     by
       ``(ii) amounts representing short-term capital losses (as 
     defined in such section) on assets held in the fund,''.
       (3) Subparagraph (B) of section 7518(g)(3) of such Code is 
     amended by striking ``gain'' and all that follows and 
     inserting ``long-term capital gain (as defined in section 
     1222), and''.
       (4) The last sentence of subparagraph (A) of section 
     7518(g)(6) of such Code is amended by striking ``20 percent 
     (34 percent in the case of a corporation)'' and inserting 
     ``the rate applicable to net capital gain under such section 
     1(h)(1)(C) or 1201(a), as the case may be''.
       (e) Computation of Interest With Respect to Nonqualified 
     Withdrawals.--
       (1) Subparagraph (C) of section 7518(g)(3) of such Code is 
     amended--
       (A) by striking clause (i) and inserting the following new 
     clause:
       ``(i) no addition to the tax shall be payable under section 
     6651, and'', and
       (B) by striking ``paid at the applicable rate (as defined 
     in paragraph (4))'' in clause (ii) and inserting ``paid in 
     accordance with section 6601''.
       (2) Subsection (g) of section 7518 of such Code is amended 
     by striking paragraph (5) and (6) as paragraphs (4) and (5), 
     respectively.
       (3) Subparagraph (A) of section 7518(g)(5) of such Code, as 
     redesignated by paragraph (2), is amended by striking 
     ``paragraph (5)'' and inserting ``paragraph (4)''.
       (f) Other Changes.--
       (1) Paragraph (2) of section 7518(b) of such Code is 
     amended by striking ``interest-bearing securities approved by 
     the Secretary'' and inserting ``interest-bearing securities 
     and other income-producing assets (including accounts 
     receivable) approved by the Secretary''.
       (2) The last sentence of paragraph (1) of section 7518(e) 
     of such Code is amended by striking ``and containers'' each 
     place it appears.
       (3) Subparagraph (B) of section 543(a)(1) of such Code is 
     amended to read as follows:
       ``(B) interest on amounts set aside in a capital 
     construction fund under section 607 of the Merchant Marine 
     Act, 1936 (46 App. U.S.C. 1177), or in a construction reserve 
     fund under section 511 of such Act (46 App. U.S.C. 1161),''.
       (4) Subsection (c) of section 56 of such Code is amended by 
     striking paragraph (2) and by redesignating paragraph (3) as 
     paragraph (2).

[[Page 28429]]

       (5) Section 7518(e) is amended by adding at the end the 
     following new paragraph:
       ``(3) Qualified withdrawal.--In the case of amounts in any 
     fund as of the date of the enactment of this paragraph, and 
     any earnings thereon, for purposes of this subsection, the 
     term `qualified withdrawal' has the meaning given such term 
     by applying subsection (i)(2) as of such date.''
       ``(g) Definitions.--Subsection (i) of Section 7518 of such 
     Code is amended to read as follows:
       ``(i) Definitions.--
       ``(1) In general.--Except as provided in paragraph (2), 
     terms used in this section shall have the same meaning as in 
     section 607(k) of the Merchant Marine Act, 1936.
       ``(2) Other definitions.--For the purposes of this 
     section--
       ``(A) The term `eligible vessel' means any vessel--
       ``(i) documented under the laws of the United States, and
       ``(ii) operated in the foreign or domestic commerce of the 
     United States or in the fisheries of the United States.
       ``(B) Qualified vessel.--The term `qualified vessel' means 
     any vessel--
       ``(i) constructed in the United States and, if 
     reconstructed, reconstructed in the United States,
       ``(ii) documented under the laws of the United States, and
       ``(iii) which the person maintaining the fund agrees with 
     the Secretary will be operated in the fisheries of the United 
     States, or in the United States foreign, Great Lakes, 
     noncontiguous domestic trade, or other oceangoing domestic 
     trade between two coastal points in the United States or in 
     support of operations conducted on the Outer Continental 
     shelf.
       ``(C) Vessel.--The term `vessel' includes containers or 
     trailers intended for use as part of the complement of one or 
     more eligible vessels and cargo handling equipment which the 
     Secretary determines is intended for use primarily on the 
     vessel. The term `vessel' also includes an ocean-going towing 
     vessel or an ocean-going barge or comparable towing vessel or 
     barge operated on the Great Lakes.
       ``(D) Foreign commerce.--The terms `foreign commerce' and 
     `foreign trade' have the meanings given such terms in section 
     905 of the Merchant Marine Act, 1936, except that these terms 
     should include commerce or trade between foreign ports.
       ``(E) Qualified lease.--The term `qualified lease' means 
     any lease with a term of at least 5 years.''

     SEC. 102. AMENDMENT TO THE TARIFF ACT OF 1930.

       Section 466 of the Tariff Act of 1930 (19 U.S.C. 1466) is 
     amended by adding at the end the following new subsection:
       ``(i) Election to Deposit Duty into a Capital Construction 
     Fund in Lieu of Payment to the Secretary of the Treasury.--At 
     the election of the owner or master of any vessel referred to 
     in subsection (a) of this section which is an eligible vessel 
     (as defined in section 7518(i)(2) of the Internal Revenue 
     Code of 1986), the portion of any duty imposed by subsection 
     (a) which is deposited in a fund established under section 
     607 of the Merchant Marine Act, 1936 shall be treated as paid 
     to the Secretary of the Treasury in satisfaction of the 
     liability for such duty.''

     SEC. 103. EFFECTIVE DATE.

       (A) In General.--Except as otherwise provided in this 
     section, the amendments made by this title shall apply to 
     taxable years ending after the date of the enactment of this 
     Act.
       (b) Changes in Computation of Interest.--The amendments 
     made by section 101(e) shall apply to withdrawals made after 
     December 31, 1998, including for purposes of computing 
     interest on such a withdrawal for periods on or before such 
     date.
       (c) Qualified Leases.--The amendments made by section 
     101(a) shall apply to leases in effect on, or entered into 
     after, December 31, 1998.
       (d) Amendment to the Tariff Act of 1930.--The amendment 
     made by section 102 shall apply with respect to entries not 
     yet liquidated by December 31, 1998, and to entries made on 
     or after such date.

        TITLE II--ELECTION TO EXPENSE UNITED STATES FLAG VESSELS

     SEC. 201. ELECTION TO EXPENSE CERTAIN UNITED STATES FLAG 
                   VESSELS.

       (a) In General.--Part VI of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 is amended by inserting 
     after section 179A the following new section:

     ``SEC. 179B. DEDUCTION FOR UNITED STATES FLAG VESSELS.

       ``(a) Treatment as Expenses.--A taxpayer may elect to treat 
     the cost of any vessel that is a qualified United States flag 
     vessel as an expense which is not chargeable to its capital 
     account.
       ``(b) Year in Which Deduction Allowed. The deduction under 
     subsection (a) shall be allowed for the taxable year in which 
     the vessel first becomes a qualified United States flag 
     vessel.
       ``(c) Definitions.--
       ``(1) Qualified United States Flag Vessel.--For purposes of 
     this section, the term `qualified United States flag vessel'' 
     means a United States flag vessel that is operated 
     exclusively in the foreign trade of the United States.
       ``(2) Cost.--For purposes of this section, the term `cost' 
     means an amount equal to the lesser of--
       ``(A) the purchase price of the vessel, or
       ``(B) the adjusted basis of the vessel, determined under 
     section 1011, at the time that the vessel becomes a qualified 
     United States flag vessel.
       ``(d) Basis Reduction.--
       (1) In general.--For purposes of this title, the basis of 
     any property shall be reduced by the portion of the cost of 
     such property taken into account under subsection (a).
       (2) Ordinary income recapture.--For purposes of section 
     1245, the amount of the deduction allowable under subsection 
     (a) with respect to any property which is of a character 
     subject to the allowance for depreciation shall be treated as 
     a deduction allowed for depreciation under section 167.''
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 263(a) of such Code is amended 
     by striking ``or'' at the end of subparagraph (G), by 
     striking the period at the end of subparagraph (H) and 
     inserting ``; or'', and by adding at the end the following 
     new subparagraph:
       ``(I) expenditures for which a deduction is allowed under 
     section 179B.''.
       (2) Subparagraph (B) of section 312(k)(3) of such Code is 
     amended by striking ``or 179A'' each place it appears and 
     inserting ``, 179A, or 179B''.
       (3) Subparagraph (C) of section 1245(a)(2) of such Code is 
     amended by inserting ``179B,'' after ``179A,''.
       (4) The table of sections for part VI of subchapter B of 
     chapter 1 of such Code is amended by inserting after the item 
     relating to section 179A the following new item:
``Sec. 179B. Deduction for United States flag vessels.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

            TITLE III--INCOME EXCLUSION FOR MERCHANT SEAMEN

     SEC. 301. INCOME OF MERCHANT SEAMAN EXCLUDABLE FROM GROSS 
                   INCOME AS FOREIGN EARNED INCOME.

       (a) Section 911 Exclusion.--Section 911(d) of the Internal 
     Revenue Code of 1986 (relating to citizens or residents of 
     the United States living abroad) is amended by redesignating 
     paragraph (9) as paragraph (10) and by inserting after 
     paragraph (8) the following:
       ``(9) Application to certain merchant marine crews.--In 
     applying this section to an individual who is a citizen or 
     resident of the United States and who is employed for a 
     minimum of 90 days during a taxable year as a regular member 
     of the crew of a vessel or vessels owned, operated, or 
     chartered by a United States citizen--
       ``(A) the individual shall be treated as a qualified 
     individual without regard to the requirements of paragraph 
     (1); and
       ``(B) any earned income attributable to services performed 
     by that individual so employed on such vessel while it is 
     engaged in transportation between the United States and a 
     foreign country or possession of the United States shall be 
     treated (except as provided by subsection (b)(1)(B)) as 
     foreign earned income regardless of where payments of such 
     income are made.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

            TITLE IV--EXEMPTION FROM ALTERNATIVE MINIMUM TAX

     SEC. 401. EXEMPTION FROM ALTERNATIVE MINIMUM TAX FOR 
                   CORPORATIONS THAT OPERATE UNITED STATES FLAG 
                   VESSELS.

       (a) In General.--Section 55 of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new 
     subsection:
       ``(f) Exemption for Corporations That Operate United States 
     Flag Vessels.--
       ``(1) In general.--The tentative minimum tax of a 
     corporation shall be zero for any taxable year in which the 
     corporation is a qualified corporation.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) Qualified corporation.--The term `qualified 
     corporation' means any domestic corporation if--
       ``(i) substantially all of the assets of such corporation 
     are related to the maritime transportation business, and
       ``(ii) such corporation owns or demise charters a fleet of 
     4 or more qualified United States flag vessels.
       ``(B) Qualified united states flag vessel.--The term 
     `qualified United States flag vessel' means a United States 
     flag vessel having a deadweight tonnage of not less than 
     10,000 deadweight tons that is operated exclusively in the 
     foreign trade of the United States during each of the 360 
     days immediately preceding the last day of the taxable year. 
     Days during which the vessel is drydocked, surveyed, 
     inspected, or repaired shall be considered days of operation 
     for purposes of this subsection.
       ``(C) Foreign trade.--The term `foreign trade' has the 
     meaning given to such term by section 7518(i)(2).''
       b. Effective Date.--The amendment made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

[[Page 28430]]



        TITLE V--CONVENTIONS ON UNITED STATES-FLAG CRUISE SHIPS

     SEC. 501. CONVENTIONS ON UNITED STATES-FLAG CRUISE SHIPS.

       (a) In General.--Section 274(h)(2) of the Internal Revenue 
     Code of 1986 (relating to conventions on cruise ships) is 
     amended by striking ``that--'' and all that follows through 
     ``possessions of the United States.'' and inserting ``that 
     the cruise ship is a vessel registered in the United 
     States.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.
                                 ______
                                 
      By Mr. GRAMS:
  S. 1859. A bill to amend the Internal Revenue Code of 1986 to provide 
a tax credit to taxpayers investing in economically distressed rural 
communities, and for other purposes; to the Committee on Finance.


                    rural revitalization act of 1999

  S. 1860. A bill to amend the Internal Revenue Code of 1986 to expand 
income averaging to small agriculture-related businesses; to the 
Committee on Finance.


                      income averaging legislation

  S. 1861. A bill to amend the Internal Revenue Code of 1986 to provide 
comprehensive tax relief for small family farmers, and for other 
purposes; to the Committee on Finance.


                     farmer tax relief act of 1999

  Mr. GRAMS. Mr. President, I rise today to offer a multi-faceted 
package of tax cuts and federal program changes to help our nation's 
farmers weather this period of low commodity prices. I will first note 
that this bill is obviously not a cure-all for the farmers' plight, but 
significant tax reform is an essential component of creating an 
environment where farmers can thrive. Regulatory reform, crop insurance 
reform, and improvements in our agriculture trade policies are also 
critical elements of boosting farm income.
  The bill I introduce is a collection of tax reform concepts that have 
been considered individually, but not as a package of comprehensive 
relief to farmers. Some were in the congressional tax cut package that 
the President summarily vetoed, denying relief to farmers, middle class 
workers, and small business owners. All of the provisions of this bill 
would benefit the farm community, and should not be tossed aside due to 
partisan posturing as was the case with this past summer's tax relief 
bill. By offering this multi-part legislation, I hope to provide a 
vehicle to move comprehensive tax relief for an important sector in the 
American economy and culture that has not shared in the prosperity of 
recent years.
  The first provision in this legislation is the Farm and Ranch Risk 
Management Accounts, which were also a part of the recent tax cut bill 
that the President vetoed. This provision would allow producers to put 
up to 20% of net farm income in a tax deferred account where the funds 
could be held in reserve for up to five years for financial 
emergencies. Farmers operate in a volatile market, and they need all 
the risk management tools we can provide. When farmers earn a profit 
they usually invest in additional farm assets, and this would give them 
a tax incentive and opportunity to instead save more income as a buffer 
during down cycles.
  The second provision of my tax bill would accelerate the 100% 
deductibility of health insurance premiums for the self-employed to 
make them immediately effective, rather than the full phase-in by 2003. 
I will note again that this was one of the critical provisions in the 
tax cut bill that was vetoed by the President, and is also included in 
my health care legislation. Farmers should not receive the same tax 
considerations on health benefits as everyone else who obtains 
insurance through their employment, so that they do not have to choose 
between decent health care and other necessities of life. This 
provision equalizes the tax treatment for these farmers.
  The third provision would raise the effective exemption from estate 
taxes to $5 million and raise the gift tax exemption to $25,000. 
According to USDA figures, farmers are six times more likely to face 
inheritance taxes than other Americans. Farmers must farm more and more 
acres now to just eke out a humble income. Thus, they accumulate large 
capital investments through the years that provide them a modest 
living, but when they die their estate is treated as if they were very 
rich, and many have never even had a new pickup. Many of these families 
want to leave their property to their children, so that they can 
continue the heritage of farming the land. However, the estate tax can 
reach such prohibitive levels that sometimes the property must be sold 
to satisfy the insatiable tax revenue appetite of the federal 
government.
  At the present time, the average age of farmers is 58 years old. We 
are just a few years from a period of significant transfers of real 
property from one generation to another. With all the obstacles to 
success that producers currently face, why is the federal government 
adding to their burdens by jeopardizing the time honored tradition of 
passing the family farm down from generation to generation, when it 
only generates one percent of federal taxes? Taxes should be gathered 
to pay for the necessities of government, not to transfer wealth from 
one segment of the population to another. And even if you believe that 
such wealth transfer is a legitimate function of tax policy, can we at 
least agree that family farms should be shielded from the takings? The 
estate tax can be as high as 55%, which is unfair, threatening the 
continuity of family-owned businesses.
  The next provision amends the tax code to treat lands which are 
contiguous to a principal residence and which were farmed for five 
years before the principal residence as part of such residence, 
allowing it to be part of the exclusion of gain from the sale of the 
principal residence. This allows older farmers to sell their property 
without facing extraordinary capital gains taxes as a consequence.
  The legislation also acknowledges that farm income can fluctuate 
significantly from year to year, and that farmers need a break when 
income goes does significantly after several good years. The bill thus 
includes a provision to reach back into a previous tax year and pull 
income from good years into a current down year. Farmers would then be 
recompensed for tax overpayments from previous years. Current law 
permits farmers to lower their tax burdens in good years by averaging 
in income from less profitable past periods, but it does not allow 
previous good years to be averaged in to current low income levels. 
This provision would provide this assistance to struggling farmers, 
again, giving them some tools to work within a very volatile market.
  The bill also includes a provision to exempt from the alternative 
minimum tax certain income from unincorporated farms. Thanks to 
initiatives to provide tax credits to working families, many farm 
families would be able to reduce their tax burden if they were not 
bumping up against the alternative minimum tax. This correction is 
needed because the alternative minimum tax also does not always permit 
farmers to take advantage of current laws concerning farmer income 
averaging.
  My legislation contains a provision to exclude from gross income up 
to $350,000 of capital gain from the transfer of property in complete 
or partial satisfaction of qualified farm indebtedness of a taxpayer, 
subject to means testing. This would exclude capital gains taxes from 
the forced liquidations of farm property.
  The bill also ensures that farm landlords are treated the same as 
small business people and other commercial landlords, and removes the 
requirement that they pay self-employment tax on cash rent income. This 
item corrects an IRS technical advice memorandum to ensure that 
farmers, like other real estate owners, do not have to pay self-
employment taxes on income from cash rent.
  The measure also amends current law to emphasis certain beneficial 
farm program goals. They include a requirement that USDA, when 
approving applications for loans and grants under the Consolidated Farm 
and Rural Development Act, places a high priority on projects that 
encourage the creation of farmer-owner facilities that process value-
added agricultural products; an

[[Page 28431]]

amendment to the Federal Agriculture Improvement and Reform Act to give 
USDA discretion to use funds for rural development technical 
assistance; an amendment to the Rural Development Act to emphasize 
market development education and technical assistance for operators of 
small- and medium-sized farms, in addition to production assistance. 
The amendment also requires USDA to explore new marketing avenues such 
as direct farm to consumer markets, local value-added processing, and 
farmer-owned cooperatives.
  We need a renaissance of new thinking and new marketing opportunities 
for our farmers. I want to ensure that existing programs are focused on 
helping farmers receive a larger share of the value of their products. 
As I have said before, I've always been struck by how we have a 
Department of Housing and Urban Development and a Department of 
Agriculture, but no real government emphasis on rural development. I 
hope that these provisions can help rebuild our rural economies.
  The next two components of the bill restore a tax-exemption for 
value-added farmer-owned cooperatives that was taken away by a recent 
IRS ruling, and extends declaratory judgment relief for the 
cooperatives affected by this ruling.
  Finally, the bill also includes a provision that increases the 
threshold amount that triggers when a farmer and employed farm worker 
would have to pay payroll taxes. The current threshold is $150, and 
this bill would raise it to $3,000. Farmers need the flexibility to be 
able to hire part-time workers, such as other nearby farmers or 
teenagers during the summer. We should free them from the burden and 
paperwork of having to pay payroll taxes on a minimal amount of 
expenditures on employees. This $150 figure in current law obviously 
does not reflect current realities on the farm, and Congress should 
make this much needed adjustment in the threshold figure.
  Again, I believe that it is important to emphasize that major tax 
relief for farmers is a critical component of making Freedom to Farm 
work, and that's why I'm introducing this bill. I hope that hearings 
will be held next year on Freedom to Farm, and some adjustments my need 
to be made to current law. In fact, I have my own bill pending that 
would extend the term for producers' marketing loans from nine months 
up to thirty-six months, to give farmers more flexibility, and thus 
more market power, in determining when to put their grain on the 
market. No one on this side of the aisle argues that Freedom to Farm is 
perfect, but there are fundamental concepts in the bill that farmers 
requested and I believe still want, such as the freedom to make their 
own decisions on what and how much to plant. I believe farmers want to 
plant for the market, not the government.
  This bill reflects my commitment to try to deliver on the promises to 
farmers that were made when Freedom to Farm was passed, such as trade 
expansion, fast track authority, regulatory reform, and crop insurance 
reform.
  Of course, if the administration was truly attempting to be 
accommodating the needs of the farm community, there would be less need 
for the regulatory reform bills currently pending. I know American 
farmers can complete worldwide, but we cannot drag our feet on creating 
a climate in which they can succeed. I believe this farmer tax relief 
bill is a critical piece of the puzzle.
  Mr. President, the second tax relief measure I am introducing today 
would expand income averaging to small agriculture-related businesses.
  Before 1986, American farmers, agricultural-related businesses and 
others could apply income averaging for tax purposes. But the Tax 
Reform Act of 1986 entirely eliminated income averaging. Congress acted 
primarily on the assumption that tax reduction would substantially 
reduce the number of taxpayers whose fluctuating incomes could subject 
them to higher progressive rates and there was no need for income 
average. While it was understandable that Congress took such action at 
that time, I believe it was clearly a mistake because Congress 
completely ignored the nature of agriculture and our rural communities.
  Today, low commodity prices have made the income of American farmers 
and agriculture-related businesses fluctuate more wildly than that of 
any other group of taxpayers. In my own state of Minnesota, income in 
farm communities had decreased dramatically in recent years.
  In response to this critical situation, Congress reinstated income 
averaging for individual farmers temporarily in the Taxpayer Relief Act 
of 1997, and last year Congress made it permanent for farmers. This was 
good change and I was pleased to join Senator Burns and others in 
passing this important legislation. In my package of tax relief for 
farmers just discussed, I have added new flexibility for farmers to use 
income averaging to their benefit.
  Unfortunately, Congress unintentionally left one important group out 
of last year's relief legislation. American small agriculture-related 
businesses, those who work hard to provide seeds, fertilizer, farming 
equipment and other farm products for farmers, whose income depends on 
farmers' income, are not included in current law providing income 
averaging. As a result, these small businesses are facing hardship and 
need this relief as well.
  Expanding income averaging to small agriculture-related businesses 
would provide modest, but much needed, assistance to these businesses 
and allow them to continue serving farmers and rural communities. It 
also is consistent with the approach Congress took in the past 
regarding income averaging. Unlike the permanent income averaging for 
farmers, my legislation would sunset income averaging for agriculture-
related businesses in three years. In addition, it only covers small 
businesses, not big corporations.
  Mr. President, the third tax bill I will introduce today is the Rural 
Revitalization Tax Credit (RRTC) Act. This bill fits into my overall 
goal of making rural America a better place to live.
  The objective is to attract business investment to rural areas to 
provide jobs for those who value life in the small towns of rural 
America. These jobs can also be invaluable for farm families suffering 
hard times through low commodity prices, crop diseases or weather 
disasters. Full or part time jobs can often help farmers help their 
family farms in down cycles.
  This legislation is designed to encourage business investment in high 
poverty rural communities. It would create rural revitalization tax 
credits which include a development credit that is provided to any 
company locating in high poverty rural communities. A company would 
receive a 6 percent tax credit annually of the amount of the 
investment, which amounts to about 25 percent of the value of the 
original investment over 7 years.
  It also creates a wage tax credit which allows employers in high 
poverty rural communities to receive up to $3,000 per employee hired in 
that community. In addition, qualified businesses are allowed to write 
off up to $37,500 as an expense the cost of depreciable, tangible 
personal property. This proposal is similar to urban empowerment zone 
proposals introduced in the Congress. We want to apply it to rural 
America as well.
  Mr. President, this measure will not solve all the problems that 
farmers and people in rural areas are facing, but I believe it is one 
way to create more economic opportunities in our rural communities to 
preserve and improve the excellent quality of life in these areas.
  I send the three bills to the desk and ask that they be assigned to 
the appropriate committees.
  The PRESIDING OFFICER. The bills will be received and appropriately 
referred.
  Mr. GRAMS. I thank the President. I yield the floor.
                                 ______
                                 
      By Mr. JEFFORDS:
  S. 1862. A bill entitled ``Vermont Infrastructure Bank Program''; to 
the Committee on Environment and Public Works.


                  vermont infrastructure bank program

  Mr. JEFFORDS. Mr. President, I rise today to introduce legislation to 
permit my home state of Vermont to enter the State Infrastructure Bank

[[Page 28432]]

(SIB) program. Before the enactment of the Transportation Equity Act 
for the 21st Century (TEA-21) all 50 states were qualified for SIB 
revolving funds. These funds are capitalized with federal and state 
contributions and used to provide loans and other sorts of non-grant 
aid to transportation projects. TEA-21 expanded the SIB program to 
California, Florida, Missouri, and Rhode Island. With this bill, I am 
proposing to add Vermont as a participant in the SIB program.
  The SIB program functions to authorize loans to public or private 
organizations to cover the whole or partial costs of an approved 
project, and to make allowances for the planning and development of 
funding streams for repayment, which would not begin until five years 
after the completion of the project. Also, there is a provision in the 
TEA-21 for the creation of a multistate infrastructure bank system 
among the pilot states. In this system, states are encouraged to share 
both funds and ideas for curbing pollution and traffic problems and 
encouraging other forms of transportation.
  It is my feeling that Vermont can be a national model on the 
efficiency of meeting clean air standards and managing sprawl while 
promoting economic growth. Under the SIB program the Vermont Agency of 
Transportation (VAOT) will collaborate with other state agencies and 
local organizations such as the Chittenden County Metropolitan Planning 
Organization (CCMPO) in order to reduce traffic, pollution, and growth 
problems that arise.
  In order to fulfill these goals through creative, cutting-edge 
projects, VAOT will require sufficient funds. To secure these funds, 
the legislation that I am introducing today would extend the SIB 
program to include Vermont. This program will be an invaluable resource 
in the funding of projects that will prevent our beautiful state from 
moving in the direction of gridlock and congestion.
  Vermont can be a model for the nation--an example for other states 
facing similar issues of finding a balance between growth and 
livability. Vermont's participation in the SIB program would provide 
more options to find the solutions that will permit this proper balance 
to be attained.
  I ask unanimous consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1862

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

     SECTION 1. STATE INFRASTRUCTURE BANK PILOT PROGRAM.

       Section 1511(b)(1)(A) of the Transportation Equity Act for 
     the 21st Century (23 U.S.C. 181 note; 112 Stat. 251) is 
     amended by inserting ``Vermont,'' after ``Florida''.
                                 ______
                                 
      By Mr. BAUCUS:
  S. 1863. A bill to amend the Internal Revenue Code of 1986 to provide 
an incentive to small businesses to establish and maintain qualified 
pension plans by allowing a credit against income taxes for 
contributions to, and start-up costs of, the plan; to the Committee on 
Finance.


             small employer pension start-up incentive act

  Mr. BAUCUS. Mr. President, I rise to introduce a bill I believe will 
provide important benefits for our country's small businesses and the 
millions of people who work for them. The Small Employer Pension Start-
up Incentive Act (SEPSI) will provide help to small businesses who want 
to help their employees save for their retirement.
  Congress has spent a great deal of time recently exploring the impact 
on our country of the impending wave of baby boomer retirements. Much 
of this debate has centered around strengthening the Social Security 
Trust Fund, so we can keep the promise we made to all working Americans 
that Social Security will be there for them when they retire. During 
this debate, however, we have all but neglected the important role the 
private pension system plays in American's retirement security.
  Social Security was never intended to provide the sole source of 
income for our retirees. Despite that, however, it is the only source 
of retirement income for 16% of elderly Americans. And it is the 
primary source of income for two-thirds of all retirees. Unless we can 
change this disturbing trend, preserving Social Security for the 21th 
Century will not be enough--there will still be far too many Americans 
who will spend their retirement years one step away from poverty.
  In addition to preserving Social Security, we must help Americans 
better prepare for their retirement years. When the President submitted 
this budget this year, he proposed dedicating most of our projected 
surpluses to create Universal Savings Accounts for all Americans. I 
strongly believe the concept behind the USA proposal was a good one. If 
our projected surpluses actually materialize, we have an unprecedented 
opportunity to plan for our nation's future, to make the kinds of 
investments that will pay off for ourselves and for our children. 
Helping strengthen our private pension system is one of those key 
investments we should be making now, before the wave of retirements 
begins.
  An important place to start is with our small businesses and their 
employees. Over 38 million workers in this country work for small 
businesses, that is, companies with less than 100 employees each. And 
even though almost everyone employed by a large company has access to a 
pension plan through their employer, only 20% of small business 
employees have pension plans available where they work. This means 31 
million working Americans have no opportunity to save for their 
retirement through their employers.
  Small business owners don't offer plans, not because they don't want 
to, but because they simply can't afford to. Administrative costs are 
disproportionately high for businesses with few employees, as are the 
costs associated with meeting all of the regulatory requirements that 
can apply to pension plans. And their employees, who frequently earn 
minimum wage and don't have access to health insurance either, couldn't 
afford to set money aside for their retirement even if their employers 
offered pension plans.
  The bill I am introducing today will help reverse this trend. The 
Small Employer Pension Start-up Incentive Act will provide two new tax 
credits to small businesses that are providing pension plans to their 
employees for the first time. The first credit will help defray the 
administrative costs that accompany starting a new pension plan. It 
will provide up to $500 per year in tax relief for small businesses to 
compensate for the administrative costs they incur in providing a new 
plan. The credit would be available for three years, for employers with 
up to 100 workers.
  The second credit goes right to the heart of the pension problem--it 
helps subsidize the contributions employers make into a new plan on 
behalf of their employees. Studies have shown that pension 
participation increases dramatically when employers offer to match 
employee savings. But in far too many small businesses, neither the 
employer nor the employee can afford to set aside the money. My bill 
will provide a 50% tax credit for any employer contributions into a new 
pension plan on behalf of their lower paid employees, up to a maximum 
of 3% of the salaries of these workers. The credit will be available 
for the first 5 years of any new qualified pension plan offered by a 
small business employing up to 50 workers.
  I believe that enactment of the Small Employer Pension Start-up 
Incentive Act will help dramatically increase the number of Americans 
working for small businesses that can begin saving for their 
retirement. Providing these tax credits to small businesses, along with 
the other pension reform proposals that are included in S. 741, the 
Pension Coverage and Portability Act I introduced with Senators Graham 
and Grassley, will go a long way toward helping Americans plan for a 
secure retirement in the 21st century.
   Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

[[Page 28433]]



                                S. 1863

       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 ``Small Employer Pension 
     Start-up Incentive Act''.

     SEC. 2. CREDIT FOR SMALL EMPLOYER PENSION PLAN CONTRIBUTIONS 
                   AND START-UP COSTS.

       (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 new section:

     ``SEC. 45D. SMALL EMPLOYER PENSION PLAN CREDIT.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of an eligible employer, the small employer pension plan 
     credit determined under this section for any taxable year is 
     an amount equal to the sum of--
       ``(1) 50 percent of the qualified employer contributions of 
     the taxpayer for the taxable year, and
       ``(2) the qualified start-up costs paid or incurred by the 
     taxpayer during the taxable year.
       ``(b) Limitations.--
       ``(1) Limits on contributions.--For purposes of subsection 
     (a)(1)--
       ``(A) qualified employer contributions may only be taken 
     into account for each of the first 5 taxable years ending 
     after the date the employer establishes the qualified 
     employer plan to which the contribution is made, and
       ``(B) the amount of the qualified employer contributions 
     taken into account with respect to any qualified employee for 
     any such taxable year shall not exceed 3 percent of the 
     compensation (as defined in section 414(s)) of the qualified 
     employee for such taxable year.
       ``(2) Limits on start-up costs.--The amount of the credit 
     determined under subsection (a)(2) for any taxable year shall 
     not exceed--
       ``(A) $500 for each of the first, second, and third taxable 
     years ending after the date the employer established the 
     qualified employer plan to which such costs relate, and
       ``(B) zero for each taxable year thereafter.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Eligible employer.--
       ``(A) In general.--The term `eligible employer'' means, 
     with respect to any year, an employer which has no more 
     than--
       ``(i) for purposes of subsection (a)(1), 50 employees, and
       ``(ii) for purposes of subsection (a)(2), 100 employees,
     who received at least $5,000 of compensation from the 
     employer for the preceding year.
       ``(B) 2-year grace period.--An eligible employer who 
     establishes and maintains a qualified employer plan for 1 or 
     more years and who fails to be an eligible employer for any 
     subsequent year shall be treated as an eligible employer for 
     the 2 years following the last year the employer was an 
     eligible employer.
       ``(C) Requirement for new qualified employer plans.--Such 
     term shall not include an employer if the employer (or any 
     predecessor employer) established or maintained a qualified 
     employer plan with respect to which contributions were made, 
     or benefits were accrued, for service in the 3 taxable years 
     ending prior to the first taxable year in which the credit 
     under this section is allowed.
       ``(2) Qualified employer contributions.--
       ``(A) In general.--The term `qualified employer 
     contributions' means, with respect to any taxable year, any 
     employer contributions made on behalf of a qualified employee 
     to a qualified employer plan for a plan year ending with or 
     within the taxable year.
       ``(B) Employer contributions.--The term `employer 
     contributions' shall not include any elective deferral 
     (within the meaning of section 402(g)(3)).
       ``(3) Qualified employee.--The term `qualified employee' 
     means an individual who--
       ``(A) is eligible to participate in the qualified employer 
     plan to which the employer contributions are made, and
       ``(B) is not a highly compensated employee (within the 
     meaning of section 414(q)) for the year for which the 
     contribution is made.
       ``(4) Qualified start-up costs.--The term `qualified start-
     up costs' means any ordinary and necessary expenses of an 
     eligible employer which are paid or incurred in connection 
     with--
       ``(A) the establishment or maintenance of a qualified 
     employer plan in which qualified employees are eligible to 
     participate, and
       ``(B) providing educational information to employees 
     regarding participation in such plan and the benefits of 
     establishing an investment plan.
       ``(5) Qualified employer plan.--The term `qualified 
     employer plan' has the meaning given such term in section 
     4972(d).
       ``(d) Special Rules.--
       ``(1) Aggregation rules.--All persons treated as a single 
     employer under subsection (a) or (b) of section 52, or 
     subsection (n) or (o) of section 414, shall be treated as one 
     person. All qualified employer plans of an employer shall be 
     treated as 1 qualified employer plan.
       ``(2) Disallowance of deduction.--No deduction shall be 
     allowable under this chapter for any qualified start-up costs 
     or qualified employer contributions for which a credit is 
     determined under subsection (a).
       ``(3) Election not to claim credit.--This section shall not 
     apply to a taxpayer for any taxable year if such taxpayer 
     elects to have this section not apply for such taxable 
     year.''.
       (b) Credit Allowed as Part of General Business Credit.--
     Section 38(b) of the Internal Revenue Code of 1986 (defining 
     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 new paragraph:
       ``(13) in the case of an eligible employer (as defined in 
     section 45D(c)), the small employer pension plan credit 
     determined under section 45D(a).''.
       (c) Conforming 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 new item:

``Sec. 45D. Small employer pension plan credit.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to costs paid or incurred or contributions made 
     in connection with qualified employer plans established after 
     December 31, 1999.
                                 ______
                                 
      By Mr. BURNS:
  S. 1864. A bill to amend the Internal Revenue Code of 1986 to provide 
a tax credit to primary health providers who establish practices in 
health professional shortage areas; to the Committee on Finance.


                 the health care access improvement act

 Mr. BURNS. Mr. President, I rise today to introduce a bill 
which will dramatically expand rural America's access to modern health 
care.
  The Health Care Access Improvement Act creates a significant tax 
incentive, which encourages doctors, dentists, physician assistants, 
licensed mental health providers, and nurse practitioners to establish 
practices in under-served areas. Until now, rural areas have not been 
able to compete with the financial draw of urban settings and therefore 
have had trouble attracting medical professionals to their communities. 
The $1,000 per month tax credit will allow health care workers to enjoy 
the advantages of rural life without drastic financial sacrifices. But 
the real winners in this bill are the thousands of Americans whose 
access to health care is almost impossible due to a lack of doctors and 
dentists in small town America.
  There are nine counties in the great state of Montana which do not 
have even one doctor. In these rural settings, agriculture is often the 
only employer. Farming and ranching is hard, dangerous work. Serious 
injuries can happen in an instant. And while Montanans have always been 
known as a heartier breed of people, we get sick too. It is 
unreasonable to expect the farmer who has had a run-in with an auger or 
the elderly rancher's widow to drive two hours or more to get stitched 
up or to have a crown on a tooth replaced. As doctors, dentists, 
physicians assistants, mental health providers, and nurse practitioners 
are attracted to under-served areas, Montanans and others in isolated 
communities will finally enjoy the medical treatment they deserve.
  Mr. President, everyone wins with this legislation. Rural Montana, 
rural America, and providers all benefit from increased access, service 
and a better quality of life. I look forward to this legislation's 
quick passage.
                                 ______
                                 
      By Mr. DeWINE (for himself and Mr. Domenici):
  S. 1865. A bill to provide grants to establish demonstration mental 
health courts; to the Committee on the Judiciary.


    AMERICA'S LAW ENFORCEMENT AND MENTAL HEALTH PROJECT ACT OF 1999

 Mr. DeWINE. Mr. President, I rise today to introduce 
``America's Law Enforcement and Mental Health Project. This bill is 
designed to address the impact that the increased 
deinstitutionalization of America's mentally ill has had on our 
criminal justice system. This is a serious problem affecting both the 
health and safety of our Nation. Essentially, the situation we have 
today in our prisons and jails is the result of over thirty years of 
cuts in the budgets of mental health institutions, as well as the 
outlawing of involuntary

[[Page 28434]]

commitments. Faced with fewer dollars and greater legal requirements, 
these mental health care facilities began de-institutionalizing 
America's mentally ill in record numbers. According to one estimate, 
the number of persons finding treatment in mental health facilities 
plummeted from 560,000 in 1955 to just 100,000 in 1989.
  A recent Justice Department study revealed that 16 percent of all 
inmates in America's State prisons and local jails today are mentally 
ill. The American Jails Association estimates that 600,000 to 700,000 
seriously mentally ill persons each year are being booked into local 
jails alone. In my own home State of Ohio, 18 percent of all prison 
inmates were in mental health programs last year. That's the highest 
percentage in the country.
  Far too many of our nation's mentally ill persons have ended up in 
our prisons and jails. In fact, today, the Los Angeles County Jail is 
the largest mental health care institution in our country. It treats 
3,200 seriously mentally ill people every day. The impact on law 
enforcement has been significant. Institutions and agencies designed to 
fight crime have had to spend valuable time and scarce resources 
providing mental health services to prisoners. In Ohio, nearly 1 in 5 
prisoners need special psychiatric services or accommodations.
  Tragically, many mentally ill inmates could have received proper 
treatment from a variety of private and public sources before they 
ended up in the prison system. Part of the problem is a serious lack of 
coordination between our local law enforcement and social service 
systems. The interaction within law enforcement--between our courts and 
prisons--is even worse. All too often, the mentally ill act out their 
symptoms on the streets. They are arrested for minor offenses and wind 
up in jail, where appropriate treatment simply does not exist. They 
serve their sentences or are paroled, but find themselves right back in 
the system after committing further crimes--often more serious--only a 
short time later.
  The Justice Department has found that over 75 percent of mentally ill 
inmates are repeat offenders. In some States, the problem is even 
worse. California's Department of Corrections, for example, recently 
reported that 94 percent of mentally ill parolees returned to prison 
within two years, versus 57 percent of the parolee population at large.
  Throughout this destructive cycle, law enforcement and corrections 
spend time and money trying to cope with the unique problems posed by 
these individuals. Certainly, some mentally ill offenders must be 
incarcerated because of the severity of their crimes. Many others who 
commit very minor offenses could receive appropriate care early on, 
reducing recidivism and unnecessary burdens on our police and 
corrections officials, as well as many mentally ill offenders, 
themselves.
  That's why, Mr. President, I am introducing America's Law Enforcement 
and Mental Health Project (LAMP), to begin to identify--early--those 
who are mentally ill within our justice system and to use the power of 
the court to assist them in obtaining the treatment they need. This 
will be a step toward making some of the changes necessary to 
effectively address the issues surrounding the mentally ill in our 
justice system.
  This bill would establish a federal grant program to help states and 
localities develop ``Mental Health Courts'' in their jurisdictions. 
These courts would be specialized courts with separate dockets. They 
would hear cases exclusively involving nonviolent of-

fenses committed by mentally ill or retarded individuals. 
Fundamentally, Mental Health Courts would enable state and local courts 
to offer alternative sentences or alternatives to prosecution for those 
offenders who could be served best by mental health services.
  To deal with the separate needs of mentally ill offenders, these 
Mental Health Courts would be staffed by a core group of specialized 
professionals, including a dedicated judge, prosecutor, public defender 
and court liaison to the mental health service community. The courts 
would promote efficiency and consistency by centrally managing all 
outstanding cases involving a mentally ill defendant admitted to the 
Mental Health Court.
  The Mental Health Court judge ultimately would decide whether or not 
to hear each case referred to the court. The Mental Health Court would 
not deal with defendants unless they are deemed mentally ill by a 
qualified mental professional or the mental health court judge. 
Similarly, participation in the court by the mentally ill would be 
completely voluntary. Once the defendant volunteers for the Mental 
Health Court, however, he or she would be expected to follow the 
decision of the court. For instance, in any given case, the Mental 
Health Court judge, attorneys, and health services liaison may all 
agree on a plan of treatment as an alternative sentence or in lieu of 
prosecution. The defendant must adhere strictly to this court-imposed 
treatment plan. The court must then provide supervision with periodic 
review. This way, the court could quickly deal with any failure of the 
defendant to fulfill the treatment plan obligations. In this sense, the 
Mental Heath Court would function similar to drug courts.
  Mr. President, the idea of Mental Health Courts is innovative, but 
not untested. Broward County, Florida, established the nation's first 
Mental Health Court almost two years ago. This court hears an average 
of 69 cases per month. Remarkably, Broward's Mental Health Court has 
been able to link over one-third of all its defendants with community 
health care providers or private psychiatric help. Notably, less than 
ten percent of all defendants were deemed inappropriate for mental 
health court and only eight percent refused community health services.
  Although a voluntary system, Broward has found that many mentally ill 
persons do choose to have their cases heard in the Mental Health Court. 
These defendants don't always know what treatment options are available 
to them before they fall into the hands of the criminal justice system. 
A judicial program offering the possibility of effective treatment--
rather than jail time--gives a measure of hope and a chance for 
rehabilitation to defendants.
  Other jurisdictions across America have studied the Broward County 
model and have established their own Mental Health Courts or seek to do 
so, such as Butler County in my state of Ohio. King County, Washington, 
also has developed a more expansive Mental Health Court this past year. 
Our nation's communities are trying desperately to find the best way to 
cope with the problems associated with mental illness. Law enforcement 
agencies and correctional facilities simply do not have the means, nor 
the expertise, to properly treat mentally ill inmates in general. 
Mental Health Courts offer an alternative.
  Mr. President, I urge my colleagues to join in support of this 
legislation.

                          ____________________