[Congressional Record (Bound Edition), Volume 145 (1999), Part 9]
[Senate]
[Pages 12102-12110]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Ms. COLLINS (for herself, Mr. Cleland, and Mr. Gregg):
  S. 1189. A bill to allow Federal securities enforcement actions to be 
predicated on State securities enforcement actions, to prevent 
migration of rogue securities brokers between and among financial 
services industries, and for other purposes; to the Committee on 
Banking, Housing, and Urban Affairs.


                 microcap fraud prevention act of 1999

  Ms. COLLINS. Mr. President, today I am introducing the Microcap Fraud 
Prevention Act of 1999 which will equip Federal law enforcement 
authorities with new tools to prosecute the fight against microcap 
securities fraud that costs unwary investors an estimated $6 billion 
annually.
  While cold-calling families at dinnertime and high-pressure sales 
remain a favorite tactic of microcap con artists, the Internet is 
providing a new and inviting frontier for the commission of microcap 
frauds. I find it particularly disturbing that despite the best efforts 
of regulatory authorities, microcap scam artists often commit repeat 
offenses. Similarly, under current law, persons barred from other 
segments of the financial industry, such as banking or insurance, can 
easily bring their deceptive practices into our securities markets.
  I am very pleased to have the cosponsorship of two of my 
distinguished colleagues in introducing this important legislation. 
Senator Cleland and Senator Gregg are united with me in a commitment to 
ensure that security regulators have the necessary authority to crack 
down on securities fraud. Senator Cleland has a longstanding interest 
in protecting investors from securities scams. Senator Gregg also has 
been a leader in this arena in his position as the chairman of the 
subcommittee with jurisdiction over the SEC's budgets.
  In drafting this legislation, I was also pleased to have the 
invaluable assistance of the Securities and Exchange Commission and the 
North American Securities Administrators Association which represents 
State securities regulators. In fact, Richard H. Walker, the SEC's 
Director of Enforcement, and Peter C. Hildreth, the President of NASAA, 
have submitted letters endorsing my legislation. I ask unanimous 
consent that these letters be printed in the Record following my 
statement.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Ms. COLLINS. Mr. President, the Collins-Cleland-Gregg legislation is 
the product of hearings of the Permanent Subcommittee on Investigations 
which I chair. We first started looking at this issue in 1997 and held 
our first hearing in September of that year. Those hearings revealed 
that microcap securities fraud is pervasive, so much so that regulators 
estimated that it cost investors $6 billion in losses annually, 
according to an article in the Wall Street Journal.
  The damage from these microcap scams, however, is not confined to 
investor losses. They also damage the reputation of legitimate small 
companies and limit their ability to raise capital through the 
securities markets. Ironically, the strong performance of the 
securities markets over the past several years has provided an ideal 
breeding ground for these microcap scams as more and more Americans 
invest in stocks. In fact, according to the SEC, in 1980, only 1 in 18 
individual Americans participated in the securities markets. Today, 1 
in 3 Americans participate in the securities markets. There has been a 
tremendous growth in more and more American households investing in 
equities.
  In a typical microcap fraud, an unscrupulous broker, often acting 
through an intermediary, purchases large blocks of shares in a small 
company with dubious business and financial prospects. The company 
stock may be nearly worthless, but the brokers repeatedly cold call 
customers, promise glowing returns and drive up the stock through high-
pressure sales tactics. Inevitably, after the manipulators sell their 
shares at a profit, the artificially inflated price plummets, leaving 
thousands of unsophisticated investors with worthless stock and heavy 
losses. The manipulators then count their ill-gotten gains and move on 
to their next target.
  The subcommittee's investigation demonstrated that the rapid growth 
of the Internet has also provided a new frontier for the commission of 
microcap securities frauds. At hearings held by the subcommittee last 
March, expert witnesses testified that while the Internet provides 
many, many benefits to online investors, such as lower trading costs 
and a wealth of investment information, the medium is inviting to con 
men as well.
  Specifically, the Internet makes it easier and cheaper for microcap 
scam artists to contact potential victims and to perpetrate pump-and-
dump schemes or related securities frauds. Rather than having to cold 
call potential victims one at a time, con men with home computers and 
Internet access can reach millions of potential investors with the 
click of a mouse. At a very low cost, these cybercrooks can deceive 
many more victims using professionally designed web sites, online 
financial newsletters or bulk e-mail. SEC officials testified that the 
agency now receives hundreds of e-mail complaints per day, an estimated 
70 percent of which involve potential Internet securities frauds.
  For example, a constituent of mine from Ellsworth, ME, who appeared 
at the subcommittee's hearings, testified that he lost more than 
$20,000 in a sophisticated Internet securities scam. My constituent has 
an engineering degree, and he has been investing for nearly 10 years. 
This demonstrates the potential risk that Internet fraud poses to even 
experienced investors. Although the SEC has brought charges against the 
alleged perpetrators of this scam, it is, unfortunately, very unlikely 
that my constituent will ever be able to recover his losses.
  Whether they use cold calls, the Internet, or both, microcap scam 
artists rarely strike only once. The subcommittee's investigations have 
found that when regulators close down one microcap scam, often after 
very lengthy proceedings, it is very common for the perpetrators to pop 
up in connection with yet another securities fraud.
  Moreover, individuals who have committed consumer frauds in other 
financial services industries, such as insurance or banking, frequently 
move on to work in the securities industry. Our

[[Page 12103]]

regulatory system must be able to prevent these individuals who have 
violated the law from migrating freely from one financial sector to 
another.
  I commend the actions of the Securities and Exchange Commission and 
the State securities regulators in aggressively fighting microcap 
securities fraud, but they are simply overwhelmed with the magnitude of 
the problem.
  The SEC has established a special unit to monitor the Internet for 
potential microcap or similar stock securities scams and has initiated 
83 enforcement actions against approximately 250 individuals and 
companies who have allegedly committed Internet securities frauds.
  Similarly, in July of 1998, the State securities regulators, 
represented by NASAA, announced that the State securities regulators 
had filed 100 enforcement actions in a ``sweep'' against illegal boiler 
room operations. Approximately 64 of these enforcement actions involved 
brokers peddling microcap stocks. Despite these commendable efforts, 
however, the SEC and State regulators face significant challenges just 
to keep up with the explosive growth of microcap securities fraud, 
particularly on the Internet.
  The legislation that I am introducing today is designed to bolster 
the SEC's ability to protect investors from ever-increasing microcap 
frauds while ensuring that legitimate small companies can continue to 
raise capital through securities offerings. To accomplish these 
objectives, the bill will streamline the microcap fraud investigative 
process and provide the SEC with the tools it needs to suspend or ban 
rogue brokers, particularly those who have a history of committing 
fraudulent offenses.
  Specifically, our legislation will do the following:
  First, it will allow the SEC to bring enforcement actions against 
securities fraud violators on the basis of enforcement actions brought 
by State securities regulators. Currently, State regulators can rely on 
SEC-initiated enforcement actions, but the SEC does not have reciprocal 
authority. Consequently, the SEC must often conduct duplicative 
investigations before the agency can bring enforcement actions against 
microcap securities frauds first identified at the State level but 
which operate on a nationwide basis. With the new authority proposed by 
our legislation, the SEC and the State regulators will be able to 
maximize the impact of their limited enforcement resources.
  Second, our legislation would permit the SEC to keep out of the 
securities business unscrupulous individuals from other sectors of the 
financial services industry. As I stated previously, persons with 
histories of violations too often roam freely throughout the financial 
services industry and commit new frauds. The bill would allow the SEC 
to prevent individuals who have ripped off consumers in insurance or 
banking scams from similarly defrauding America's small investors.
  Third, our legislation will broaden the current penny stock bar to 
include fraudulent violations in the microcap markets. Under current 
law, the SEC can suspend or bar individuals who commit serious penny 
stock frauds involving stocks that cost less than $5. You may be 
surprised to learn, however, that the law permits such violators to 
participate in micro-cap securities offerings, because even though the 
total capitalization of these companies is small, each of their shares 
costs more than $5. Our bill will close this loophole by allowing the 
SEC to suspend or bar individuals who have committed serious penny 
stock fraud from participating in both the penny stock and micro-cap 
securities markets either as registered brokers or in related 
positions, such as promoters.
  Fourth, our proposal will expand the statutory officer and director 
bar to include all publicly traded companies. Current law applies only 
to companies that report to the SEC, leaving the door open for 
violators to serve as officers or directors of all other companies. Our 
proposal would extend the bar to include all publicly traded 
businesses, including ``Pink Sheet'' or Over The Counter (``OTC'') 
Bulletin Board companies, which are often the vehicles for micro-cap 
fraud schemes.
  Finally, our bill will strengthen the SEC's ability to take 
enforcement actions against repeat violators. Currently, the SEC must 
request that the Justice Department initiate criminal contempt 
proceedings against individuals who violate SEC orders or court 
injunctions, which can be a very burdensome and timely process. Our 
legislation would allow the SEC to seek immediate civil penalties for 
repeat violators without the need to file criminal contempt 
proceedings.
  Our Nation is blessed with the strongest and safest security markets 
in the world. This is a tribute to both the industry and its 
regulators. Unfortunately, as our markets bring benefits to more and 
more Americans, they also attract those who would exploit unsuspecting 
investors through manipulative practices.
  By virtue of their small size and relative obscurity, microcap 
securities are the most susceptible to manipulation. By giving the SEC 
the tools it needs to combat this fraud, this legislation will benefit 
not only individual investors, but also the vast majority of legitimate 
small businesses who contribute so much to our Nation's growth and 
prosperity.
  I urge my colleagues to join in supporting the Microcap Fraud 
Prevention Act of 1999.
  I ask unanimous consent that a section-by-section analysis of the 
legislation be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 2.)
  Ms. COLLINS. Thank you, Mr. President.

                             Exhibit No. 1


                           Securities and Exchange Commission,

                                     Washington, DC, May 24, 1999.
     Hon. Susan M. Collins,
     Chairman, Permanent Subcommittee on Investigations, Committee 
         on Governmental Affairs, U.S. Senate, Washington, DC.
       Dear Chairman Collins: I commend both you and your 
     Subcommittee for addressing the important issue of fraud in 
     the market for microcap securities. As I said in my March 23, 
     1999 testimony before your Subcommittee, fighting fraud in 
     this market has been one of the Commission's more significant 
     challenges this decade. The hearings you held help to focus 
     the issues and educate investors, and the principles in the 
     bill you plan to introduce will help leverage the 
     Commission's resources to combat microcap fraud.
       As you know, Chairman Levitt testified on microcap fraud 
     before your Subcommittee in September 1997. He noted then 
     that with our resources remaining relatively constant, we 
     must ``rely increasingly on innovative and efficient ways of 
     minimizing fraud and of maximizing the deterrence achievable 
     with the Commission's limited resources.'' In my own view, 
     the concepts underlying ``The Microcap Fraud Prevention Act 
     of 1999'' would be of great assistance to us in this regard. 
     Most importantly, the bill would give us valuable new tools 
     to close off participation in the microcap market by those 
     who would prey on innocent investors.
       In recent years, the Commission has made significant 
     inroads in the fight against microcap fraud. I appreciate 
     your efforts to address this serious problem through hearings 
     and legislation that support our enforcement efforts. I 
     believe your bill would significantly advance the cause and 
     help make our markets safer for investors. My staff and I 
     look forward to continuing to work with you and your 
     Subcommittee on this legislation.
           Very truly yours,

                                            Richard H. Walker,

                                                         Director,
     Division of Enforcement.
                                  ____

                                        North American Securities,


                             Administrators Association, Inc.,

                                     Washington, DC, May 17, 1999.
     Hon. Susan M. Collins,
     U.S. Senate,
     Washington, DC.
       Dear Chairman Collins: On behalf of the membership of North 
     American Securities Administrators Association, Inc. 
     (``NASAA'') \1\, I commend you for recognizing and 
     confronting the problem of fraud in the microcap securities 
     market. At your invitation NASAA testified before you and the 
     members of the Permanent Subcommittee on Investigations, and 
     took part in your fact-finding mission. We appreciate your 
     efforts to protect the investing public from frauds and for 
     introducing legislation to enhance enforcement efforts in 
     this area.
       As you know, several years ago, state securities 
     administrators recognized the problem of fraud in the 
     microcap market. Since then the states have led enforcement 
     efforts and filed numerous actions against microcap

[[Page 12104]]

     firms. There are systematic problems in this area, but they 
     can be addressed effectively if state and federal regulators 
     and policymakers work together on meaningful solutions.
       NASAA wholeheartedly supports the intent of The Microcap 
     Fraud Prevention Act of 1999. It would be an important step 
     in combating abuses in the microcap market and maintaining 
     continued public confidence in our markets.
       I pledge the support of NASAA's membership to continue to 
     work with you to secure passage of this important 
     legislation.
           Sincerely,

                                            Peter C. Hildreth,

                                New Hampshire Securities Director,
                                                  NASAA President.

                             Exhibit No. 2

  S. 1189, Microcap Fraud Prevention Act of 1999--Section-by-Section 
                                Summary


     sec. 1. short title: ``microcap fraud prevention act of 1999''

       Explanation: The purpose of the bill is to protect 
     investors against fraud in the micro-cap securities market, 
     and for other purposes.


       sec. 2. amendments to the securities exchange act of 1934

       This section amends the Securities Exchange Act of 1934 to 
     grant the SEC authority to take actions against registered 
     persons who have violated the law. It allows SEC enforcement 
     actions to be predicated on state enforcement actions and 
     take steps to prevent the entry into the securities industry 
     of individuals who have committed fraud in other sectors of 
     the financial services industry.
       Explanation: Currently, state securities laws do not allow 
     state regulators to obtain civil relief having nation-wide 
     effect. Rather, state regulators only have jurisdiction to 
     prohibit defendants from doing business in their state. 
     Wrongdoers are thus free to perpetrate fraud in any other 
     state where they have not been separately barred. This 
     section amends Exchange Act section 15(b)(4)(G) to allow the 
     SEC to bring a follow-up administrative proceeding to suspend 
     or bar regulated persons who either (1) have been barred by a 
     state securities administrator from operating within that 
     state or (2) is subject to a final order for fraudulent, 
     manipulative, or deceitful conduct.
       The SEC would not have the authority to follow-up on ex 
     parte temporary restraining orders. Such orders are imposed 
     immediately by state regulators and do not provide alleged 
     violators with a chance to present a defense until after the 
     order has already been entered. The SEC would have the 
     ability to act on these state actions if, after adjudication, 
     the defendant were ultimately found to have committed a 
     violation or reached a settlement agreement.
       Currently, the Securities Exchange Act does not permit the 
     SEC to take administrative actions to bar or suspend from the 
     securities industry individuals who have committed serious 
     violations--i.e. fraud--in other financial industries, such 
     as the insurance or banking sectors. This section amends 
     Exchange Act 15(b)(4)(G) to authorize the SEC (1) to take 
     administrative action seeking bars or suspensions against a 
     broker-dealer or associated person based on orders issued by 
     federal regulators of other financial services industries and 
     (2) to allow the SEC to take follow-up actions when a foreign 
     financial regulatory authority has previously found 
     violations in other financial sectors. To ensure parity and 
     close off any remaining loopholes, corresponding changes have 
     also been made to Exchange Act sections 15B(c), 15C(c), and 
     17A(c) to extend this provision to those who seek to 
     associate with municipal securities dealers, government 
     securities dealers, and transfer agents.


       sec. 3. amendments to the investment advisers act of 1940

       This section amends Investment Advisers Act section 203 to 
     allow the SEC to bring a follow-up administrative proceeding 
     to suspend or bar investment advisors who are subject to 
     certain federal, state, or foreign orders. This sections also 
     amends section 203(f) of the act to permit the SEC to bar a 
     person associated with an investment adviser on the basis of 
     a felony conviction.
       Explanation: This section makes the same changes to the 
     Investment Adviser Act that Section 2 of the bill makes to 
     the Exchange Act. Both allow SEC enforcement actions to be 
     predicated on certain federal, state, or foreign enforcement 
     actions against individuals found to have committed 
     fraudulent or similar acts in the financial services sector.


        sec. 4. amendments to the investment company act of 1940

       This section amends Investment Company Act section 9(b)(4) 
     to allow the SEC to bring a follow-up administrative 
     proceeding to suspend or bar individuals covered by the 
     Investment Company Act who are subject to certain federal, 
     state, or foreign orders.
       Explanation: This section makes the same changes to the 
     Investment Company Act that Section 2 of the bill makes to 
     the Exchange Act. Both allow SEC enforcement actions to be 
     predicated on certain federal, state, or foreign enforcement 
     actions against individuals found to have committed 
     fraudulent or similar acts in the financial services sector.


                     sec. 5. conforming amendments

       This section amends various provisions of the Securities 
     Exchange Act of 1934 to authorize the SEC to take 
     administrative actions against individuals--based on the 
     findings of certain federal, state, or foreign enforcement 
     actions--who seek to associate with municipal securities 
     dealers, government securities brokers and dealers, and 
     clearing agencies. The section also amends the Securities 
     Exchange Act of 1934, so that actions by state securities 
     commissions and other regulators can trigger a statutory 
     disqualification. This section will focus statutory 
     disqualifications on serious violations of state law, 
     particularly fraud and similar offenses.
       Explanation: This section seeks to prevent individuals who 
     have committed fraud in other financial services sectors from 
     entering the securities industry. The section also expands 
     the definition of violations that trigger automatic statutory 
     bars from the securities industry.


                 Sec. 6. broadening of penny stock bar

       This section amends Exchange Act section 15(b)(6) to expand 
     the penny stock bar to cover a broader category of offerings.
       Expanation: This section would extend the penny stock bar 
     to all offerings other than those involving securities traded 
     on the NYSE, AMEX, NASDAQ, NMS, or investment company 
     securities. While there is no formal definition of ``micro-
     cap'' security, this statutory amendment would cover what are 
     generally referred to as ``micro-cap'' securities.


sec. 7. court authority to prohibit offerings of non-covered securities

       This section amends Exchange Act section 21(d)(5) to 
     provide federal court judges the authority to impose the 
     remedy outlined in Section 9 of the bill.
       Explanation: This section would allow the SEC to obtain all 
     necessary relief more efficiently and expeditiously by 
     requesting, in appropriate cases, a district court to issue a 
     penny stock bar order. This authority would be provided as an 
     alternative to the SEC's current ability to seek such orders 
     only through administrative proceedings.


             sec. 8. broadening of officer and director bar

       This section amends Exchange Act section 21(d)(2) in order 
     to broaden the scope of the officer and director bar.
       Explanation: Current law allows persons barred from serving 
     as an officer or director of companies that report to the SEC 
     to serve as officers or directors of other companies. This 
     section removes the limitation to SEC reporting companies, 
     and instead covers all publicly traded companies--those 
     registered pursuant to Exchange Act section 12, those 
     required to file reports pursuant to Exchange Act section 
     15(d), and those whose securities are ``quoted in any 
     quotation medium.''


                sec. 9. violations of court ordered bars

       This section adds section 21(i) to the Exchange Act to give 
     the SEC a more direct remedy against recidivist violators of 
     prior bar orders.
       Explanation: This section makes it a stand-alone violation 
     of the securities laws for a person to engage in conduct that 
     violated a prior order barring him from acting as an officer, 
     director or promoter. It allows the SEC to take direct 
     enforcement action (seeking per-day money penalties, among 
     other remedies) against a recidivist without the need for 
     criminal authorities to bring a contempt proceeding.
                                 ______
                                 
      By Mr. DORGAN (for himself, Mr. Wellstone, Ms. Snowe, and Mr. 
        Johnson):
  S. 1191. A bill to amend the Federal Food, Drug, and Cosmetic Act to 
provide for facilitating the importation into the United States of 
certain drugs that have been approved by the Food and Drug 
Administration, and for other purposes; to the Committee on Health, 
Education, Labor, and Pensions.


               INTERNATIONAL PRESCRIPTION DRUG PARITY ACT

  Mr. DORGAN. Mr. President, I rise to introduce a piece of legislation 
on behalf of myself, Mr. Wellstone, Ms. Snowe, and Mr. Johnson. These 
three Senators, and I hope others as well, have joined me in 
introducing this bill, the International Prescription Drug Parity Act, 
today.
  This piece of legislation deals with the question of prescription 
drugs. By consent of the Chair, I would like to show on the floor of 
the Senate today examples of the issue that is addressed by this piece 
of legislation.
  With your consent, I will show two bottles of the drug Claritin, a 
medication most people are familiar with. Claritin is a popular anti-
allergy drug. These two bottles contain the same pills, produced by the 
same company, in the same strength, in the same quantity. One 
difference: a big difference in price. This bottle is purchased in the 
United States--in North

[[Page 12105]]

Dakota, to be exact. This bottle of 10 milligram, 100 tablets cost 
North Dakotans $218, wholesale price. This bottle--same drug, same 
company, same strength, same quantity--was purchased in Canada. They 
didn't pay $218 in Canada; they paid $61. Why the difference for the 
same drug, same dosage, same quantity, same company? In Canada, it 
costs $61; U.S. consumers pay $218.
  Here is another example--and I have a lot of examples. But with the 
consent of the Chair, I will only use two today.
  This is Cipro, a prescription drug to treat infections. Both bottles 
are made by the same company. We have the same number of pills, 500 
milligram, 100 tablets--same drug, same company, same pill. In North 
Dakota, the wholesale price for this bottle is $399; in Canada, it is 
$171. The North Dakotan pays--or the U.S. consumer pays because this is 
true all over our country--$399, or 233 percent more than for the same 
drug in Canada. The question is, Why? The question is, With a global 
economy, why would a pharmacist simply not drive up to Canada and buy 
the same drugs and offer them for a lower price to their customers? The 
answer to that is, there is a law that restricts the importation of 
drugs into this country, except by the manufacturers of the drug 
themselves. That is kind of a sweetheart law, it seems to me. We want 
to change that.
  If the manufacturer that produces these pills has been inspected by 
the Food and Drug Administration and the same drugs are marketed 
everywhere, why on Earth, in a global economy, cannot our consumers 
access a lesser price? Incidentally, this pricing inequity does not 
just exist with Canada; it is the same with Mexico, Germany, France, 
Italy, England, Germany--you name it. It is true around the world. We 
pay a much higher price for most prescription drugs than consumers 
anywhere else in the world. The United States is the consumer that pays 
a much higher price for the same pill, in the same bottle, produced by 
the same manufacturer.
  With our bill we say, let's decide that what is good for the goose is 
good for the gander. If the pharmaceutical companies can access the raw 
materials which they use to produce their medicine from all around the 
world and produce a pill and put it in a bottle, it seems to me that 
the customer here in the United States ought to also benefit from free 
trade, as long as the drug is FDA approved and comes from a plant that 
is inspected by the FDA.
  The drug industry will say that safety is an issue. It is no issue 
with respect to my bill. Safety is not an issue here at all. I am 
saying--and my colleagues are as well--if medicine approved by the FDA 
and produced in a plant inspected by the FDA is to be marketed around 
the world, but the American is to pay the highest price--in some cases 
by multiples of four and five --let us use the global economy to let 
U.S. pharmacists and prescription drug distributors access that 
medicine wherever it exists at a lower price, and pass along those 
savings to American consumers.
  Back in 1991, the General Accounting Office studied 121 drugs and 
found that, on average, prescription drugs in the United States are 
priced 34 percent higher than the exact same products in Canada. I just 
did a comparison of the retail prices on both sides of the border of 12 
of the most prescribed drugs, and discovered that, on average, U.S. 
prices exceeded the Canadian prices by 205 percent.
  I mentioned before that Claritin costs the American consumer 358 
percent more. We American consumers pay 358 percent more than the 
consumer does north of the border. And incidentally, the Canadian 
prices have been adjusted to U.S. dollars. Does this make sense? Of 
course not. Studies show that the same drug that costs $1 in our 
country costs 71 cents in Germany, 65 cents in the United Kingdom, 57 
cents in France, and 51 cents in Italy. All we are saying is that if 
this global economy is good for companies that produce the drugs, it 
ought to be good for the consumer.
  In 1997, the top 10 pharmaceutical companies had an average profit 
margin of 28 percent. The Wall Street Journal reported that profit 
margins in the drug industry are the ``envy of the corporate world.'' 
The manufacturers produce wonderful medicines, and I am all for it. But 
I want them at an affordable price for the American consumer. I am flat 
sick and tired of the American consumer being the consumer of last 
resort who pays a much higher price than anybody else in the world for 
the same drug, in the same bottle, produced by the same company. It 
doesn't make sense.
  Mr. President, how much time have I consumed?
  The PRESIDING OFFICER. The Senator has consumed 7 minutes.
  Mr. DORGAN. Let me go for another minute, and then I will yield to my 
colleague from Minnesota, who will have 7 minutes remaining on the 15 
minutes.
  As I have indicated, Senator Johnson from South Dakota and Senator 
Snowe from Maine are also cosponsors. We expect other cosponsors to 
join us. Frankly, the reason we have introduced this legislation is 
that there is an unfair pricing practice that exists with respect to 
prescription drugs in this country. It is fundamentally unfair for a 
pharmaceutical manufacturer to say that we will produce a drug, and, by 
the way, when we decide to sell it we will sell it all around the 
world, but we will choose to sell it to the American consumer at a much 
higher price than any other customer in the world.
  That is unfair to the American consumer.
  What prevents the local corner pharmacist from going elsewhere to buy 
these prescription drugs in France or in Canada or elsewhere? A law 
that says you can't import a drug into this country unless it is 
imported by the manufacturer. What a ridiculous piece of legislation 
that was passed over a decade ago.
  If this global economy works, let's make it work for the consumers 
and not just for the big companies.
  Our legislation only pertains to this circumstance: If the drug has 
been approved by the FDA and the facility where that drug is bought are 
inspected by the FDA, then those drugs have a right to come into this 
country not just by the manufacturer but by local pharmacists and 
distributors who want to access that drug at a less expensive price in 
other parts of the world and pass along the savings to American 
consumers. That makes good sense to me.
  I have a lot more to say, but I will say it at a later time. I yield 
my remaining time to my colleague, Senator Wellstone from Minnesota, 
who is joined by Senator Johnson of South Dakota and Senator Snowe of 
Maine as cosponsors of this legislation.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, let me first of all say to my colleague 
from North Dakota that I am really pleased to join him in this effort, 
along with Senator Snowe and Senator Johnson.
  The International Prescription Drug Parity Act makes prescription 
drugs more affordable for millions of Americans by applying the 
principles of free trade and competition.
  I want to give special thanks to a wonderful grassroots citizen 
organization from Minnesota called the Minnesota Senior Federation. If 
we had organizations such as this all around the country, we would have 
such effective citizen politics, and I guarantee we would be passing 
legislation that would make an enormous positive difference in the 
lives of the people in our country.
  This legislation provides relief from price gouging of American 
consumers by our own pharmaceutical industry. Those who really pay the 
price are those who are chronically ill. Many of those who are 
clinically ill are the elderly. It is not uncommon anywhere in our 
country to run across an elderly couple or single individual who is 
paying up to 30, 40, or 50 percent of their monthly budget just for 
prescription drug costs.
  In my State of Minnesota, only 35 percent of senior citizens have any 
prescription drug cost coverage at all.
  This legislation is very simple. I say to Senator Dorgan that what I 
liked the best about this legislation, and the

[[Page 12106]]

reason I think it will command widespread support, is its eloquent 
simplicity.
  We are just saying that if you have drugs which are FDA approved and 
manufactured in our country, and now they are in Canada, for example, 
and cost half of what they cost senior citizens to pay for that drug in 
our own country, it shouldn't just be the pharmaceutical companies that 
can bring those drugs back in. You ought to enable pharmacists or 
distributors to go to Canada and purchase these drugs which have been 
FDA approved, and then bring them back to our country and sell these 
drugs at a discount rate for our citizens in our country.
  This is the best of competition. This is the best of what we mean by 
free trade.
  I want to be clear. This legislation will amend the Food, Drug and 
Cosmetic Act. The FDA Commissioner was in Minnesota 2 weeks ago and 
senior citizens were pressing her on this question. She was cautious. 
But what she was saying was that we would need some legislation; we 
would need some change to be able to do what Senator Dorgan is talking 
about. We would amend this piece of legislation to allow American 
pharmacists and distributors to import prescription drugs into the 
United States as long as these drugs meet strict FDA standards. That is 
it. The FDA isn't directly involved, but the FDA is critically involved 
in the sense that these drugs have to meet all the FDA standards.
  This piece of legislation is simple. It is straightforward. It is 
very proconsumer, very pro-senior citizen, very procompetition, very 
pro-free trade. As I think about the gatherings that I go to in my 
State--I bet this applies to New Jersey, I see Senator Torricelli here, 
and Senator Reed of Rhode Island--anywhere in the country. You can't go 
to a community meeting, and you can't go in into a cafe and meet with 
people without having people talk about the price of prescription 
drugs. It is just prohibitively expensive. This piece of legislation 
will make an enormous difference.
  It could be that there is some opposition to this piece of 
legislation. I can see some vested economic interests who may figure 
out reasons to be opposed to it, but I will say that this piece of 
legislation would go a long way in dealing with the problem of price 
gouging right now and making sure that these prescription drugs that 
can be so important to the health of senior citizens, the people in the 
disabilities community and other citizens as well that they will be 
able to purchase these drugs, and they will be able to afford these 
drugs, which can make an enormous difference in improving the quality 
of their health.
  I introduce this legislation, along with Senator Dorgan, and we are 
joined by Senator Johnson and Senator Snowe. I believe we will have 
strong bipartisan support for this bill.
  Mr. President, how much time do we have left?
  The PRESIDING OFFICER. The Senators have a total of 9 minutes 54 
seconds.
  Mr. DORGAN. Mr. President, if I might just make a comment to the 
Senator from Minnesota, all of us have the experience of going around 
our States and talking to especially senior citizens, who take a 
substantial amount of prescription drugs--many of them wonderful, 
lifesaving drugs but at a substantial cost. Many of them have no health 
insurance coverage for these costs.
  Let me say at the outset, lest anyone think I don't appreciate what 
goes on, that the research done at the Federal level and the research 
done by the pharmaceutical companies have produced lifesaving, 
remarkable medicines. I commend all of those folks for that, including 
these companies. I am only debating the price issue here.
  I ran into a woman one day. She was in her eighties. She had heart 
disease, diabetes, and was living on somewhere around $400 a month of 
total income. She said to me: Mr. Senator, I can't afford to take the 
drugs the doctor says I must take for my heart difficulties and for my 
diabetes. What I do is buy the drugs, and then I cut the pills in half 
and take half of the dose so it lasts twice as long. It is the only 
way. Even then I can hardly afford to pay for food.
  That is what the problem is here. The problem is that these 
pharmaceutical drugs are overpriced relative to what every other 
consumer in the rest of the world is paying for them. I am talking of 
other consumers in France, in Germany, Italy, England, Canada, and 
Mexico--you name it. That doesn't make any sense to me. Why should our 
senior citizens--all consumers for that matter--be paying 300-percent 
more for the same drug in virtually the same bottle produced by the 
same company inspected by the FDA than a consumer 20 miles north in 
Canada is paying?
  I just came from a meeting near the border of North Dakota and 
Canada. I was talking to people, again, about that disparity. The 
Senator from Minnesota has exactly the same situation.
  The pharmacists at the corner drugstore are saying: Why can't I go up 
there and buy some of these medications? I know that it is the same 
pill which comes from the same plant.
  The reason is the law prevents him from bringing it back, and we want 
to change that.
  Mr. WELLSTONE. Mr. President, I say to my colleagues, when we talk 
about citizens becoming frustrated and sometimes angry, either two 
things are going on.
  First of all, you can find people to talk to everywhere, especially 
senior citizens who are paying 30, 40, or 50 percent of their monthly 
budget just for these costs. They cut the pill in half and take only 
half of what they need, or they cut down on food. It is drugs versus 
food, or versus something else. They should not be faced with those 
choices.
  But what adds insult to injury is to then know that the same drug 
manufactured quite often in the same place with the same FDA approval 
purchased in Canada costs half the price.
  We are simply saying let our pharmacists and let our distributors in 
our country be able to purchase those prescription drugs in Canada and 
bring them back and sell them at a discount to our consumers. That is 
what this legislation says.
  If you want to talk about a piece of legislation that speaks to the 
interests and circumstances of people's lives, I think this legislation 
will make an enormous difference.
  I am prepared to fight very hard to make sure that we pass this 
legislation.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Mr. Reid, Mrs. Boxer, and Mr. 
        Bryan):
  S. 1192. A bill to designate national forest land managed by the 
Forest Service in the Lake Tahoe Basin as the ``Lake Tahoe National 
Scenic Forest and Recreation Area,'' and to promote environmental 
restoration around the Lake Tahoe Basin; to the Committee on Energy and 
Natural Resources.


                     THE LAKE TAHOE RESTORATION ACT

  Mrs. FEINSTEIN. Mr. President, I want to begin by thanking Senator 
Harry Reid who has worked so hard with me on the Lake Tahoe Restoration 
Act. I would also like to thank my friends and colleagues Senator 
Barbara Boxer and Senator Dick Bryan for cosponsoring this important 
legislation.
  This legislation really comes directly out of the Tahoe Summit. I am 
one that spent her childhood at lake Tahoe, but I had not been back for 
a number of years. When I went there for the Tahoe Summit in 1997 with 
the President, I saw things I had never seen before at Lake Tahoe.
  I saw the penetration of MTBE in the water. I saw the gasoline spread 
over the water surface. I saw that in fact 30 percent of the South Lake 
Tahoe water supply has been eliminated by MTBE. I saw 25 percent of the 
magnificent forest that surrounds the lake dead or dying. I saw land 
erosion problems on a major level that were bringing all kinds of 
sediment into the lake and which had effectively cut its clarity by 
thirty feet since the last time I had visited. And then I learned that 
the experts believe that in ten years the clouding of the amazing 
crystal water clarity would be impossible to reverse and in thirty 
years it would be lost forever.

[[Page 12107]]

  For me, that was a call to action, and today I am proud to introduce 
the Lake Tahoe Restoration Act. This legislation will designate federal 
lands in the Lake Tahoe Basin as a National Scenic Forest and 
Recreation area and will authorize $300 million of Federal monies on a 
matching basis over ten years for environmental restoration projects to 
preserve the region's water quality and forest health.
  Lake Tahoe is the crown jewel of the Sierra Nevada and its clear, 
blue water is simply remarkable. Some people may not know that Lake 
Tahoe contributes $1.6 billion dollars every year to the economy from 
tourism alone. However, one in every seven trees in the forest 
surrounding Emerald Bay is either dead or dying. Insect infestations 
and drought have killed over 25 percent of the trees in the forests 
surrounding Lake Tahoe, creating a severe risk of wildfire.
  The Tahoe Regional Planning Agency estimates that restoring the lake 
and its surrounding forests will cost $900 million dollars over the 
next ten years. This is not a cursory evaluation but a careful 
evaluation made by this agency over several years.
  Local governments and businesses in Lake Tahoe have agreed to raise 
$300 million locally in the next ten years for this effort. The Tahoe 
Transportation and Water Quality Coalition, a coalition of 18 
businesses and environmental groups, including Placer County, El Dorado 
County, the City of South Lake Tahoe, Douglass County in Nevada and 
Washoe County in Nevada have all agreed. This is an extraordinary 
commitment for a region with only 50,000 year round residents.
  The Governors of California and Nevada have pledged to provide 
another $300 million, but only if the Federal government will step up 
and provide $300 million of its own because we must remember that 77 
percent of the forest is owned by the Federal Government.
  President Clinton took an important first step in 1997 when he held 
an environmental summit at Lake Tahoe and promised $50 million over two 
years for restoration activities around the lake. These commitments 
included: $4.5 million to reduce fire risk at the lake; $3.5 million 
for public transportation; $4 million for acquisition of 
environmentally sensitive land; $1.3 million dollars to decommission 
old, unused logging roads that are a major source of sediment into Lake 
Tahoe; $7.5 million to replace an aging waste water pipeline that 
threatens to leak sewage into the lake; and $3 million for scientific 
research.
  Unfortunately, the President's commitments lasted for only two years, 
so important areas like land acquisition and road decommissioning were 
not funded at the levels the President tried to accomplish. So what is 
needed is a more sustained, long-term effort, and one that will meet 
the federal government's $300 million dollar responsibility to save the 
environment at Lake Tahoe.
  The Lake Tahoe Restoration Act will build upon the President's 
commitment to Lake Tahoe and authorize full funding for a new 
environmental restoration program at the lake.
  The bill designates U.S. Forest Service lands in the Lake Tahoe basin 
as the Lake Tahoe National Scenic Forest and Recreation Area. This 
designation, which is unique to Lake Tahoe, is strongly supported by 
local business, environmental, and community leaders. The designation 
will recognize Lake Tahoe as a priceless scenic and recreational 
resource.
  The legislation explicitly says that nothing in the bill gives the 
U.S. Forest Service regulatory authority over private or non-federal 
land. The bill also requires the Forest Service to develop an annual 
priority list of environmental restoration projects and authorizes $200 
million over ten years to the forest service to implement these 
projects on federal lands. The list must include projects that will 
improve water quality, forest health, soil conservation, air quality, 
and fish and wildlife habitat around the lake.
  In developing the environmental restoration priority list, the Forest 
Service must rely on the best available science, and consider projects 
that local governments, businesses, and environmental groups have 
targeted as top priorities. The Forest Service also must consult with 
local community leaders.
  The bill requires the Forest Service to give special attention on its 
priority list to four key activities: acquisition of environmentally 
sensitive land from willing sellers, erosion and sediment control, fire 
risk reduction, and traffic and parking management, including promotion 
of public transportation.
  The Lake Tahoe Restoration Act also requires that $100 million of the 
$300 million over ten years be in payments to local governments for 
erosion control activities on non-federal lands. These payments will 
help local governments conduct soil conservation and erosion mitigation 
projects, restore wetlands and stream environmental zones, and plant 
native vegetation to filter out sediment and debris.
  I have been working on the Lake Tahoe Restoration Act for over a 
year, in conjunction with Senator Reid and over a dozen community 
groups at Lake Tahoe. The Lake Tahoe Transportation and Water Quality 
Coalition, a local consensus group of 18 businesses and environmental 
groups, has worked extremely hard on this bill, and I am grateful for 
their input and support.
  Thanks in large part to their work, the bill has strong, bi-partisan 
support from nearly every major group in the Tahoe Basin. The bill is 
supported by the League to Save Lake Tahoe, the South Lake Tahoe 
Chamber of Commerce, and the Lake Tahoe Gaming Alliance, to name just a 
few. Major environmental groups also support the bill, including the 
Sierra Club, Wilderness Society, and California League of Conservation 
Voters.
  The bottom line is that time is running out for Lake Tahoe. We have 
ten years to do something major or the water quality deterioration is 
irreversible.
  We have a limited period of time, or the 25 percent of the dead and 
dying trees and the combustible masses that it produced are sure to 
catch fire, and a major forest fire will result.
  Mr. President, this crown jewel deserves the attention, and the fact 
that the federal government owns 77 percent of that troubled area makes 
the responsibility all so clear.
  I am hopeful that the United States Senate will move quickly to 
consider the Lake Tahoe Restoration Act. I urge my colleagues in the 
Senate to join me in preserving this national treasure for generations 
to come.
                                 ______
                                 
      By Mr. LAUTENBERG:
  S. 1193. A bill to improve the safety of animals transported on 
aircraft, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.


                  THE SAFE AIR TRAVEL FOR ANIMALS ACT

  Mr. LAUTENBERG. Mr. President, I have a piece of legislation which I 
rise to introduce. This legislation is designed to protect a segment of 
our population that can't protect itself. I am talking about pets--
dogs, cats, and others that travel by air. I want to put this into 
perspective. Over 70 million households in America have pets--70 
million. So it affects a significant portion of our population. Pets 
become family members and they become a source of significant affection 
and attachment. In some cases, they are the vision for those who are 
sightless. They establish precious relationships.
  Over the last 5 years, there have been over 2,500 documented 
instances of dogs and cats experiencing severe injury in air travel, 
and 108 cats and dogs have died just as a result of exposure to 
excessive temperatures.
  Pets aren't baggage. They are part of a family, in many instances, 
and they ought to be treated that way when they accompany their masters 
when they fly. Over 500,000 pets a year are transported by air across 
this country. News reports have detailed stories of pets being left out 
on hot days, sitting on tarmacs while flights were delayed, or stuffed 
into cargo holds with little or no airflow, causing them to injure 
themselves in the desperation to escape this entrapment and very 
difficult environment.
  Some pets have actually had heavy baggage placed directly on top of 
their

[[Page 12108]]

carriers. It is unacceptable. We can and must prevent these inhumane 
practices.
  So today I am introducing The Safe Air Travel for Animals Act. This 
bill responds to the tragic stories we have heard involving the death 
or injury of many beloved pets while traveling by airplane.
  The legislation has three goals. First, it ensures that airlines are 
held accountable for mistreatment of our pets, to ensure that animals 
are not treated like a set of golf clubs or other baggage. This 
legislation will put airlines on a tight leash.
  Second, the bill provides consumers with the right to know if an 
airline has a record of mistreatment or accidents with pets.
  Third, the bill addresses the problems of the aircraft themselves, 
making sure that the cargo hold is as safe as it possibly can be for 
animal travel.
  Airlines need to be held accountable for the harm they permit to 
happen to our pets. Right now, airlines are only liable to owners for 
up to $1,250 for losing, injuring, or killing a pet.
  That is no different from what they would be liable for if they lost 
your suitcase. Under my bill, that limit for liability will be double.
  Now, anyone who owns a pet knows how expensive veterinary bills can 
be. If an animal is injured or dies as a result of flying, my bill 
would require the airlines to pay for the costs of veterinary care.
  Mr. President, my bill also provides consumers with the right to know 
about the conditions they face when they transport their animals by 
plane. My bill requires airlines to immediately report any incidents 
involving loss, injury or death of animals.
  Most importantly, the bill puts this information into the hands of 
the flying public. Pet owners should know which airlines are doing a 
good job, and which need to do better. Just as consumers favor airlines 
with solid, on-time records, they will also favor the airlines that 
have a good safety record with our pets. And, an airline that does a 
good job will want this information in the hands of consumers.
  Finally, the bill addresses the problem of the aircraft themselves. 
The airline industry is undergoing a retrofitting process, as required 
by the FAA, of all ``class D'' cargo holds, to prevent fires.
  These are special holds that have the facility to turn off the oxygen 
in the event of smoke or fire. But that also means that that is an 
execution for the pets that are in those holds.
  I believe that the industry should use this opportunity to see what 
improvements can be made to allow for better oxygen flow and 
temperature control to protect our pets.
  Mr. President, we must do more to prevent unnecessary deaths caused 
by lack of oxygen flow or exposure to heat.
  With this bill, travelers will feel more secure about using air 
travel to transport their pets.
  I hope that my colleagues will join me in support of this 
legislation.
                                 ______
                                 
      By Mr. COVERDELL:
  S. 1196. A bill to improve the quality, timeliness, and credibility 
of forensic science services for criminal justice purposes; to the 
Committee on the Judiciary.


             THE NATIONAL FORENSIC SCIENCE IMPROVEMENT ACT

  Mr. COVERDELL. Mr. President, today I introduce the National Forensic 
Science Improvement Act, a bill designed to address the growing backlog 
in our nation's crime labs. Across the country, state and local crime 
labs, Medical Examiners' and Coroners' offices face alarming shortages 
in forensic science resources. While other areas of our criminal 
justice system such as the courts and prison systems have benefitted 
from federal assistance, the highly technical and expensive forensic 
sciences have received little attention. Mr. President, my bill will 
help correct this problem.
  There are 600 qualified state and local crime laboratories in the 
United States which deliver 90% of the total forensic science services 
in this country. In a 1996 national survey of 299 crime labs it was 
found that 8 out of 10 labs have experienced a growth in the caseload 
which exceeds the growth in budget and/or staff. Mr. President, I need 
go no further to demonstrate that this is a national problem. Without 
the swift processing of evidence our criminal justice system cannot 
operate as it is intended. I believe it is time to take a step to 
address specifically the problems our crime labs face.
  The National Forensic Science Improvement Act has been endorsed by 
organizations such as the National Governors Association, the National 
Association of Attorneys General, the Association of State Criminal 
Investigative Agencies and the International Association of Chiefs of 
Police who see it as a flexible approach to a problem that indeed has 
far-ranging consequences. Mr. President, it is my belief that Congress 
must work to ensure justice in this country is neither delayed nor 
denied. Right now across the country backlogs in crime labs are denying 
the swift administration of justice and with this bill we have a ready 
solution.
  In crafting this bill I have worked closely with the Georgia Bureau 
of Investigation which is suffering heavily under a growing caseload. 
At its headquarters in Decatur, GA the GBI has a number of cataloging 
systems that are not yet computerized. Further, they lack the funding 
to create computer networks that would connect not only their forensic 
equipment with internal computers, but would also allow them to share 
information with crime labs across the country. While the Governor has 
taken steps to provide the GBI with more funding for forensic sciences, 
it remains clear that federal assistance is needed.
  Last year the Senate passed the Crime Identification Technology Act. 
This important measure, which I supported, was a good step towards 
improving the technology employed by law enforcement across the 
country. I believe my bill is the next logical step in this body's 
effort to improve the manner in which justice is administered in this 
country.
                                 ______
                                 
      By Mr. ROTH (for himself, Mr. Smith of New Hampshire, Mr. Levin, 
        and Mr. Schumer):
  S. 1197. A bill to prohibit the importation of products made with dog 
or cat fur, to prohibit the sale, manufacture, offer for sale, 
transportation, and distribution of products made with dog or cat fur 
in the United States, and for other purposes; to the Committee on 
Commerce, Science, and Transportation.


                   DOG AND CAT PROTECTION ACT OF 1999

  Mr. ROTH. Mr. President, I rise today to introduce legislation that 
runs to the heart of who we are and what we hold dear and meaningful in 
our lives.
  There is a special relationship between men, women, children, and 
their family pets--particularly their dogs and cats.
  I have been profoundly affected in my life because of the animals 
that transcended emotional boundaries to become true and meaningful 
friends--even a part of the family. I can name every dog I've owned 
since I was a boy.
  I can tell you their qualities, their peculiarities, their 
preferences and dislikes. Even now, my wife Jane and I--our children 
and grandchildren--are surrounded by the most loyal St. Bernards in the 
world. They--as all the pets we've had--speak volumes about strong and 
lasting friendship.
  You can understand, given this background, that I am outraged to 
learn that there are clothing articles imported into America that are 
made from the fur of these precious animals.
  I'm outraged to learn that dog and cat fur is being used in a wide 
variety of products, including fur coats and jackets.
  I'm outraged to learn from the Humane Society of the United States 
that more than two million dogs and cats are killed annually as part of 
the fur trade, and that many retailers in the U.S. who sell these items 
are doing so unaware of their content.
  To respond to this growing problem, I'm introducing legislation 
today, the Dog and Cat Protection Act of 1999, to prohibit the domestic 
sale, manufacture, transportation, and distribution of products made 
with cat or dog fur.

[[Page 12109]]

  My legislation requires all fur products to be labelled, closing a 
loophole in the current law, and it will ban deceptive or misleading 
labelling of these products so consumers and retailers can buy with 
confidence, knowing that they are not supporting this tragic process.
  With this legislation, our message will be clear: No matter where in 
the world this merchandise is made, there will be no legitimate market 
for it here--not in the United States.
  This is important legislation. It will provide uniformity of 
regulations and prevent conflicts between states. It will give the 
Justice Department the ability to enforce the law and prosecute those 
who may try to get around it.
  And the U.S. Customs Service would be able to function as the first 
line of defense. I appreciate the work being done by the Humane Society 
of the United States and many other important organizations to heighten 
our awareness of these kinds of issues.
  And I look forward to working with my colleagues to see this 
legislation enacted into law. Thank you, Mr. President.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1197

       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 ``Dog and Cat Protection Act 
     of 1999''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) An estimated 2,000,000 dogs and cats are slaughtered 
     and sold annually as part of the international fur trade. 
     Internationally, dog and cat fur is used in a wide variety of 
     products, including fur coats and jackets, fur-trimmed 
     garments, hats, gloves, decorative accessories, stuffed 
     animals, and other toys.
       (2) As demonstrated by forensic tests, dog and cat fur 
     products are being imported into the United States, in some 
     cases with deceptive labeling to conceal the use of dog or 
     cat fur.
       (3) Dog and cat fur, when dyed, is not easily 
     distinguishable to persons who are not experts from other 
     furs such as fox, rabbit, coyote, wolf, and mink. Dog and cat 
     fur is generally less expensive than other types of fur and 
     may be used as a substitute for more expensive types of furs.
       (4) Foreign fur producers use dogs and cats bred for their 
     fur, and also use strays and stolen pets.
       (5) The methods of housing, transporting, and slaughtering 
     dogs and cats for fur production are generally unregulated 
     and inhumane.
       (b) Purposes.--The purposes of this Act are--
       (1) to prohibit the sale, manufacture, offer for sale, 
     transportation, and distribution in the United States of dog 
     and cat fur products;
       (2) to require accurate labeling of fur species so that 
     consumers in the United States can make informed choices; and
       (3) to prohibit the trade in, both imports and exports of, 
     dog and cat fur products, to ensure that the United States 
     market does not encourage the slaughter of dogs or cats for 
     their fur, and to ensure that the purposes of this Act are 
     not undermined.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Dog fur.--The term ``dog fur'' means the pelt or skin 
     of any animal of the species canis familiaris.
       (2) Cat fur.--The term ``cat fur'' means the pelt or skin 
     of any animal of the species felis catus.
       (3) United states.--The term ``United States'' means the 
     customs territory of the United States, as defined in general 
     note 2 of the Harmonized Tariff Schedule of the United 
     States.
       (4) Commerce.--The term ``commerce'' means transportation 
     for sale, trade, or use between any State, territory, or 
     possession of the United States, or the District of Columbia, 
     and any place outside thereof.
       (5) Dog or cat fur product.--The term ``dog or cat fur 
     product'' means any item of merchandise which consists, or is 
     composed in whole or in part, of any dog fur, cat fur, or 
     both.
       (6) Person.--The term ``person'' includes any individual, 
     partnership, corporation, association, organization, business 
     trust, government entity, or other entity.
       (7) Interested party.--The term ``interested party'' means 
     any person having a contractual, financial, humane, or other 
     interest.
       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.
       (9) Duly authorized officer.--The term ``duly authorized 
     officer'' means any United States Customs officer, any agent 
     of the Federal Bureau of Investigation, or any agent or other 
     person authorized by law or designated by the Secretary to 
     enforce the provisions of this Act.

     SEC. 4. PROHIBITIONS.

       (a) Prohibition on Manufacture, Sale, and Other 
     Activities.--No person in the United States or subject to the 
     jurisdiction of the United States may introduce into 
     commerce, manufacture for introduction into commerce, sell, 
     trade, or advertise in commerce, offer to sell, or transport 
     or distribute in commerce, any dog or cat fur product.
       (b) Imports and Exports.--No dog or cat fur product may be 
     imported into, or exported from, the United States.

     SEC. 5. LABELING.

       Section 2(d) of the Fur Products Labeling Act (15 U.S.C. 
     69(d)) is amended by striking ``; except that such term shall 
     not include such articles as the Commission shall exempt by 
     reason of the relatively small quantity or value of the fur 
     or used fur contained therein''.

     SEC. 6. ENFORCEMENT.

       (a) In General.--The Secretary, either independently or in 
     cooperation with the States, political subdivisions thereof, 
     and interested parties, is authorized to carry out operations 
     and measures to eradicate and prevent the activities 
     prohibited by section 4.
       (b) Inspections.--A duly authorized officer may, upon his 
     own initiative or upon the request of any interested party, 
     detain for inspection and inspect any product, package, 
     crate, or other container, including its contents, and all 
     accompanying documents to determine compliance with this Act.
       (c) Seizures and Arrests.--If a duly authorized officer has 
     reasonable cause to believe that there has been a violation 
     of this Act or any regulation issued under this Act, such 
     officer may search and seize, with or without a warrant, the 
     item suspected of being the subject of the violation, and may 
     arrest the owner of the item. An item so seized shall be held 
     by any person authorized by the Secretary pending disposition 
     of civil or criminal proceedings.
       (d) Burden of Proof.--The burden of proof shall lie with 
     the owner to establish that the item seized is not a dog or 
     cat fur product subject to forfeiture and civil penalty under 
     section 7.
       (e) Action by U.S. Attorney.--Upon presentation by a duly 
     authorized officer or any interested party of credible 
     evidence that a violation of this Act or any regulation 
     issued under this Act has occurred, the United States 
     Attorney with jurisdiction over the suspected violation shall 
     investigate the matter and shall take appropriate action 
     under this Act.
       (f) Citizen Suits.--Any person may commence a civil suit to 
     compel the Secretary to implement and enforce this Act, or to 
     enjoin any person from taking action in violation of any 
     provision of this Act or any regulation issued under this 
     Act.
       (g) Reward.--The Secretary may pay a reward to any person 
     who furnishes information which leads to an arrest, criminal 
     conviction, civil penalty assessment, or forfeiture of 
     property for any violation of this Act or any regulation 
     issued under this Act.
       (h) Regulations.--
       (1) In general.--The Secretary shall issue final 
     regulations, after notice and opportunity for public comment, 
     to implement this Act within 180 days after the date of 
     enactment of this Act.
       (2) Fees.--The Secretary may charge reasonable fees for 
     expenses to the Government connected with permits or 
     certificates authorized by this Act, including expenses for--
       (A) processing applications;
       (B) reasonable inspections; and
       (C) the transfer, handling, or storage of evidentiary items 
     seized and forfeited under this Act.
     All fees collected pursuant to this paragraph shall be 
     deposited in the Treasury in an account specifically 
     designated for enforcement of this Act and available only for 
     that purpose.

     SEC. 7. PENALTIES.

       (a) Civil Penalty.--Any person who violates any provision 
     of this Act or any regulation issued under this Act may be 
     assessed a civil penalty of not more than $25,000 for each 
     violation.
       (b) Criminal Penalty.--Any person who knowingly violates 
     any provision of this Act or any regulation issued under this 
     Act shall, upon conviction for each violation, be imprisoned 
     for not more than 1 year, fined in accordance with title 18, 
     United States Code, or both.
       (c) Forfeiture.--Any dog or cat fur product that is the 
     subject of a violation of this Act or any regulation issued 
     under this Act shall be subject to seizure and forfeiture to 
     the same extent as any merchandise imported in violation of 
     the customs laws.
       (d) Injunction.--Any person who violates any provision of 
     this Act or any regulation issued under this Act may be 
     enjoined from further sales of any fur products.
       (e) Applicability.--The penalties in this section apply to 
     violations occurring on or after the date of enactment of 
     this Act.

[[Page 12110]]


                                 ______
                                 
      By Mr. SHELBY (for himself, Mr. Bond, and Mr. Lott):
  S. 1198. A bill to amend chapter 8 of title 5, United States Code, to 
provide for a report by the General Accounting Office to Congress on 
agency regulatory actions, and for other purposes; to the Committee on 
Governmental Affairs.


  congressional accountability for regulatory information act of 1999

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

                                S. 1198

       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 ``Congressional Accountability 
     for Regulatory Information Act of 1999''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) many Federal regulations have improved the quality of 
     life of the American public, however, uncontrolled increases 
     in regulatory costs and lost opportunities for better 
     regulation cannot be continued;
       (2) the legislative branch has a responsibility to ensure 
     that laws passed by Congress are properly implemented by the 
     executive branch; and
       (3) in order for the legislative branch to fulfill its 
     responsibilities to ensure that laws passed by Congress are 
     implemented in an efficient, effective, and fair manner, the 
     Congress requires accurate and reliable information on which 
     to base decisions.

     SEC. 3. REPORTS ON REGULATORY ACTIONS BY THE GENERAL 
                   ACCOUNTING OFFICE.

       (a) In General.--Section 801(a)(2) of title 5, United 
     States Code, is amended by striking subparagraph (B) and 
     inserting the following:
       ``(B)(i) After an agency publishes a regulatory action, a 
     committee of either House of Congress with legislative or 
     oversight jurisdiction relating to the action may request the 
     Comptroller General to review the action under clause (ii).
       ``(ii) Of requests made under clause (i), the Comptroller 
     General shall provide a report on each regulatory action 
     selected under clause (iv) to the committee which requested 
     the report (and the committee of jurisdiction in the other 
     House of Congress) not later than 180 calendar days after the 
     committee request is received. The report shall include an 
     independent analysis of the regulatory action by the 
     Comptroller General using any relevant data or analyses 
     available to or generated by the General Accounting Office.
       ``(iii) The independent analysis of the regulatory action 
     by the Comptroller General under clause (ii) shall include--
       ``(I) an analysis by the Comptroller General of the 
     potential benefits of the regulatory action, including any 
     beneficial effects that cannot be quantified in monetary 
     terms and the identification of those likely to receive the 
     benefits;
       ``(II) an analysis by the Comptroller General of the 
     potential costs of the regulatory action, including any 
     adverse effects that cannot be quantified in monetary terms 
     and the identification of those likely to bear the costs;
       ``(III) an analysis by the Comptroller General of any 
     alternative regulatory approaches, which have been 
     identified, that could achieve the same goal in a more cost-
     effective manner or that could provide greater net benefits, 
     and, if applicable, a brief explanation of any statutory 
     reasons why such alternatives could not be adopted;
       ``(IV) an analysis of the extent to which the regulatory 
     action would affect State or local governments; and
       ``(V) a summary of how the results of the Comptroller 
     General's analysis differ, if at all, from the results of the 
     analyses of the agency in promulgating the regulatory action.
       ``(iv) In consultation with the Majority and Minority 
     Leaders of the Senate and the Speaker and Minority Leader of 
     the House of Representatives, the Comptroller General shall 
     develop procedures for determining the priority and number of 
     those requests for review under clause (i) that will be 
     reported under clause (ii).
       ``(C) Federal agencies shall cooperate with the Comptroller 
     General by promptly providing the Comptroller General with 
     such records and information as the Comptroller General 
     determines necessary to carry out this section.''.
       (b) Definitions.--Section 804 of title 5, United States 
     Code, is amended--
       (1) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (5), respectively;
       (2) by inserting after paragraph (1) the following:
       ``(2) The term `independent analysis' means a substantive 
     review of the agency's underlying assessments and assumptions 
     used in developing the regulatory action and any additional 
     analysis the Comptroller General determines to be 
     necessary.''; and
       (3) by inserting after paragraph (3) (as redesignated by 
     paragraph (1) of this subsection) the following:
       ``(4) The term `regulatory action' means--
       ``(A) notice of proposed rule making;
       ``(B) final rule making, including interim final rule 
     making; or
       ``(C) a rule.''.

     SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the General 
     Accounting Office to carry out chapter 8 of title 5, United 
     States Code, $5,200,000 for each of fiscal years 2000 through 
     2003.

     SEC. 5. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect 180 days after the date of enactment of this Act.

                          ____________________