[Congressional Record (Bound Edition), Volume 146 (2000), Part 11]
[Senate]
[Pages 15813-15818]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. ABRAHAM:
  S. 2903. A bill to amend the Internal Revenue Code of 1986 to expand 
the child tax credit; to the Committee on Finance.


                   expansion of the child tax credit

  Mr. ABRAHAM. Mr. President, I rise today to introduce legislation to 
provide a $1,000 per child tax credit for America's working families.
  Mr. President, this legislation builds on the $500 per child tax 
credit passed in 1997. The passage of the $500 per child tax credit was 
the culmination of an effort that began in 1994 with a proposal 
contained in the ``Contract with America.'' A child tax credit 
provision also was part of the Balanced Budget Act of 1995 which 104th 
Congress passed, but President Clinton vetoed.
  Even with the $500 per child tax credit in place, today's total tax 
burden on families is still far too high. During this era of budget 
surpluses, we must remember that these surplus funds are tax 
overpayments that should be returned to the people who overpaid them, 
and not spent on wasteful government programs. American families will 
spend the money better.
  The child tax credit will help hard working families who pay federal 
income tax and have children to support. Under this proposal, a working 
family with two children will receive $2,000 in the form of a tax 
credit to help pay their children's health, education and food 
expenses. Being a parent is not always easy. It becomes even more 
difficult if a family has trouble paying for necessities such as food, 
clothes, education, and health care for their children. This tax credit 
will help those families.
  Mr. President, increasing the child tax credit to $1,000 is a 
statement by our government and our society that all our families and 
all of our children will not be left behind. Increasing the $500 per 
child tax credit to $1,000 would provide parents more than 38 million 
children, including roughly 1.5 million of my constituents in Michigan.
  With that in mind, I urge my colleagues to join me in supporting 
American families by supporting this legislation.
  Mr. President, I ask unanimous consent that the full text be printed 
in the Record and yield the floor.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2903

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

     SECTION 1. EXPANSION OF CHILD TAX CREDIT.

       (a) Increase in Amount Allowed.--Subsection (a) of section 
     24 of the Internal Revenue Code of 1986 (relating to 
     allowance of credit) is amended by striking ``$500 ($400 in 
     the case of taxable years beginning in 1998)'' and inserting 
     ``$1,000''.
       (b) Repeal of Phaseout of Credit.--Section 24 of such Code 
     is amended by striking subsection (b) and redesignating 
     subsections

[[Page 15814]]

     (c), (d), (e), and (f), as subsections (b), (c), (d), and 
     (e), respectively.
       (c) Conforming Amendments.--
       (1) Section 32(n)(1)(B)(ii) of such Code is amended by 
     striking ``section 24(d)'' and inserting ``section 24(c)''.
       (2) Section 501(c)(26) of such Code is amended by striking 
     ``section 24(c)'' and inserting ``section 24(b)''.
       (3) Section 6213(g)(2)(I) of such Code is amended by 
     striking ``section 24(e)'' and inserting ``section 24(d)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.
                                 ______
                                 
      By Mr. BINGAMAN (for himself, Mr. Daschle, Mr. Baucus, Mr. Byrd, 
        Mr. Bayh, Mr. Levin, Mr. Rockefeller, and Mr. Johnson):
  S. 2904. A bill to amend the Internal Revenue Code of 1986 to provide 
tax incentives to encourage the production and use of efficient energy 
sources, and for other purposes; to the Committee on Finance


             the energy security tax and policy act of 2000

  Mr. BINGAMAN. Mr. President, I rise today to introduce a bill, on 
behalf of myself and Senators Daschle, Byrd, Baucus, Bayh, Johnson, 
Levin, and Rockefeller, that offers a comprehensive approach to energy 
policy. This bill, the Energy Security Tax and Policy Act of 2000, 
incorporates many of the provisions of S. 1833, a comprehensive package 
of broad energy tax incentives introduced by Senator Daschle last year 
that I cosponsored along with a number of other Democratic Senators. We 
have updated and modified the bill after having worked closely with 
many stakeholders, from the auto manufacturers, to the oil and gas 
producers, to the energy efficiency community.
  The Energy Security Tax and Policy Act of 2000 addresses a broad 
range of technologies and industries necessary to meet our energy 
needs. The bill includes incentives to ensure we maintain production of 
our domestic resources, but the overarching emphasis is on stimulating 
more efficient use of energy in its many forms. Specific incentives 
address:
  Purchase of more efficient appliances, homes, and commercial 
buildings.
  Greater use of distributed generation--fuel cells, microturbines, 
combined heat and power systems and renewables.
  Purchase of hybrid and alternative fueled vehicles and development of 
the infrastructure to service those vehicles.
  Investment in clean coal technologies and generation of electricity 
from biomass, including co-firing with coal.
  Countercyclical tax incentives for production from domestic oil and 
gas marginal wells.
  Provisions to ensure diverse sources of electric supply are developed 
in the U.S. and to continue our investment in demand side management.
  In addition, the bill reauthorizes the President's emergency energy 
authorities, including establishing a northeastern heating oil reserve.
  We have tried to take a balanced approach, both supply side and 
demand side. Many of the provisions in this bill have strong bipartisan 
support, and I believe would receive the support of the White House as 
part of a comprehensive package.
  After my 17 years in the Senate and on the Energy Committee, I have 
to note that the same issues have been with us in varying degrees for 
years. Our current energy situation is the result of the policies and 
decisions of many Administrations, Congresses, companies and 
individuals, not to mention the vagaries of the marketplace.
  Finding solutions will take serious bipartisan effort and long term 
commitment. While we have the attention of the Congress, the White 
House and the public, I hope we can work together in the remaining days 
of this Congress to enact as many of these measures as possible to 
protect our energy security and our economy.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 2905. A bill to amend title XVIII of the Social Security Act to 
make improvements to the Medicare+Choice program under part C of the 
Medicare Program; to the Committee on Finance.


          the medicare+choice program improvement act of 2000

  Mr. BINGAMAN. Mr. President, I am pleased to introduce a bill today--
the Medicare+Choice Improvement Act of 2000--that would correct several 
of the inequities in the complex formula that is used to determine 
payment rates for Medicare+Choice plans. As many of my colleagues know, 
the passage of the Balanced Budget Act of 1997 created a new optional 
Medicare+Choice managed care program for the aged and disabled 
beneficiaries of the Medicare program. This new program replaced the 
previous risk program and established a payment structure that was 
designed to reduce the variation across the country by increasing 
payments in areas with traditionally low payments. However, although 
payment variation has been somewhat reduced, substantial payment 
differentials remain nationwide. In New Mexico, for example, the 
Medicare+Choice plan payment for 2000 in Albuquerque is $430.44 monthly 
per beneficiary vs. $814.32 for NYC. Because these payments are so low 
in some places it has caused a devastating result--seniors are being 
dropped in large numbers.
  The bill I am introducing today will correct inequities in the 
current formula that is used to develop payment rates for 
Medicare+Choice managed care plans and keep them as a viable 
alternative to traditional fee-for-service Medicare. Medicare+Choice 
plans are a popular alternative to traditional Medicare fee-for-service 
health care coverage for aged and disabled Americans because they help 
contain the beneficiary's out-of-pocket expenses, coordinate health 
care, and increase important benefits.
  Mr. President, the sad reality is that Medicare+Choice plans are 
suffering financially under the new payment system and are no longer 
able to maintain enrollment of Medicare+Choice beneficiaries.
  As you can see from this chart, New Mexico Medicare+Choice plans have 
announced plans to drop 15,700 beneficiaries from their rolls on 
January 1, 2001.
  And, as you can see from this chart, nationally, the number of Medi-
care+Choice plan beneficiaries that will be dropped on January 1, 2001 
are expected to be 711,000. Since 1999, 735,000 beneficiaries have been 
dropped. This would mean that as of January 1, 2001, 1,445,000 
beneficiaries will have been dropped.
  This is a terrible situation. Even though beneficiaries that are 
dropped from Medicare+Choice plans will revert to traditional Medicare 
and will be able to purchase Medicare supplemental health insurance 
plans, the high cost associated with the purchase of these plans will 
put an additional financial burden on these aged and disabled Americans 
living on fixed incomes. Additionally, they will not have the 
additional health care benefits available to them under Medicare+Choice 
plans, including routine physicals, vision care, and prescription 
drugs.
  Because Medicare+Choice plans are offered by private managed care 
companies and because of their unique structure, these plans were able 
to limit out of pocket expenses, provide additional benefits to 
beneficiaries, and control health care costs to the Federal government.
  As you can see from this chart, Medicare+Choice plans offer a host of 
important benefits and options over and above traditional Medicare. 
These include: prescription drugs, lower cost sharing with a 
catastrophic cap on expenditures, care coordination, routine physicals, 
health education, vision services and, hearing exams/aids.
  Mr. President, the loss of this important health care coverage option 
for the aged and disabled will be devastating for some. This situation 
will probably cause many of those on marginal incomes to lose the 
ability to afford normal living expenses that may effectively require 
them to enroll in Medicaid and state financial assistance programs. If 
a beneficiary, who was dropped from a Medicare+Choice plan, has a fall 
and is admitted into the hospital they will be responsible for all 
deductible expenses and when they are

[[Page 15815]]

discharged and sent home with a doctor's order for physical therapy, 
occupational therapy and visiting nurse service they would be 
responsible for all Medicare deductibles. This event could cost the 
beneficiary several thousand dollars. This acute episode could force a 
beneficiary living on a marginal income to be unable to pay for their 
deductibles, cease treatment prematurely, or even worse, avoid return 
visits to the doctor until they are in another emergency situation. 
Additionally, they would be forced to enroll on a state Medicaid 
program for the indigent.
  Sadly, Mr. President, the formula that was developed for 
Medicare+Choice plans was intended to address geographic variation in 
the payment rates has gone too far in controlling costs and missed the 
boat with respect to geographic variability. Sure, the goal of managed 
care is to save money for the taxpayer and coordinate quality care for 
the beneficiary, but there is a point at which a health plan cannot 
afford financially to operate. This forces the beneficiary onto 
traditional Medicare with its higher costs for both the taxpayer and 
beneficiary.
  Mr. President, this point has been reached in New Mexico and other 
areas of the country. We may not be able to have Medicare+Choice plans 
take back their dropped beneficiaries but, we can prevent more from 
being dropped by acting favorably on this bill. The bottom line is 
this: As a nation, we need to do all we can to provide a viable option 
to traditional fee-for-service Medicare that provides coordinated 
managed care at a savings to both the beneficiary and the Federal 
Government.
  The bill that I am introducing has provisions to raise the minimum 
payment floor, move to a 50:50 blend rate between local and national 
rates in 2002, set a ten-year phase-in of risk adjustment and allow 
plans to negotiate a rate of payment with HCFA regardless of the 
county-specific rate, as long as the negotiated rate does not exceed 
the national average per-capita cost, and delay from July to November 
2000 the deadline for offering and withdrawing Medicare+Choice plans 
for 2001.
  I urge my colleagues to support this effort and to join me in taking 
an important step toward maintaining Medicare+Choice managed care plans 
as a positive alternative to traditional fee-for-service Medicare, and 
prevent more enrollees from being dropped while we try to reform 
Medicare. We owe it to our nation to take care of our elderly and aged 
citizens and not expose them to more hardship.
  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. 2905

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Medicare+Choice Program Improvement Act of 2000''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Increase in national per capita Medicare+Choice growth 
              percentage in 2001 and 2002.
Sec. 3. Increasing minimum payment amount.
Sec. 4. Allowing movement to 50:50 percent blend in 2002.
Sec. 5. Increased update for payment areas with only one or no 
              Medicare+Choice contracts.
Sec. 6. Permitting higher negotiated rates in certain Medicare+Choice 
              payment areas below national average.
Sec. 7. 10-year phase-in of risk adjustment based on data from all 
              settings.
Sec. 8. Delay from July to October 2000 in deadline for offering and 
              withdrawing Medicare+Choice plans for 2001.

     SEC. 2. INCREASE IN NATIONAL PER CAPITA MEDICARE+CHOICE 
                   GROWTH PERCENTAGE IN 2001 AND 2002.

       Section 1853(c)(6)(B) of the Social Security Act (42 U.S.C. 
     1395w-23(c)(6)(B)) is amended--
       (1) in clause (iii), by adding ``and'' at the end;
       (2) by striking clauses (iv) and (v);
       (3) by redesignating clause (vi) as clause (iv); and
       (4) in clause (iv), as so redesignated, by striking ``after 
     2002'' and inserting ``after 2000''.

     SEC. 3. INCREASING MINIMUM PAYMENT AMOUNT.

       (a) In General.--Section 1853(c)(1)(B)(ii) of the Social 
     Security Act (42 U.S.C. 1395w-23(c)(1)(B)(ii)) is amended--
       (1) by striking ``(ii) For a succeeding year'' and 
     inserting ``(ii)(I) Subject to subclause (II), for a 
     succeeding year''; and
       (2) by adding at the end the following new subclause:
       ``(II) For 2002 for any of the 50 States and the District 
     of Columbia, $500.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to years beginning with 2002.

     SEC. 4. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND IN 2002.

       Section 1853(c)(2) of the Social Security Act (42 U.S.C. 
     1395w-23(c)(2)) is amended--
       (1) by striking the period at the end of subparagraph (F) 
     and inserting a semicolon; and
       (2) by adding at the end the following flush matter:
     ``except that a Medicare+Choice organization may elect to 
     apply subparagraph (F) (rather than subparagraph (E)) for 
     2002.''.

     SEC. 5. INCREASED UPDATE FOR PAYMENT AREAS WITH ONLY ONE OR 
                   NO MEDICARE+CHOICE CONTRACTS.

       (a) In General.--Section 1853(c)(1)(C)(ii) of the Social 
     Security Act (42 U.S.C. 1395w-23(c)(1)(C)(ii)) is amended--
       (1) by striking ``(ii) For a subsequent year'' and 
     inserting ``(ii)(I) Subject to subclause (II), for a 
     subsequent year''; and
       (2) by adding at the end the following new subclause:
       ``(II) During 2002, 2003, 2004, and 2005, in the case of a 
     Medicare+Choice payment area in which there is no more than 
     one contract entered into under this part as of July 1 before 
     the beginning of the year, 102.5 percent of the annual 
     Medicare+Choice capitation rate under this paragraph for the 
     area for the previous year.''.
       (b) Construction.--The amendments made by subsection (a) do 
     not affect the payment of a first time bonus under section 
     1853(i) of the Social Security Act (42 U.S.C. 1395w-23(i)).

     SEC. 6. PERMITTING HIGHER NEGOTIATED RATES IN CERTAIN 
                   MEDICARE+CHOICE PAYMENT AREAS BELOW NATIONAL 
                   AVERAGE.

       Section 1853(c)(1) of the Social Security Act (42 U.S.C. 
     1395w-23(c)(1)) is amended--
       (1) in the matter preceding subparagraph (A), by striking 
     ``or (C)'' and inserting ``(C), or (D)''; and
       (2) by adding at the end the following new subparagraph:
       ``(D) Permitting higher rates through negotiation.--
       ``(i) In general.--For each year beginning with 2001, in 
     the case of a Medicare+Choice payment area for which the 
     Medicare+Choice capitation rate under this paragraph would 
     otherwise be less than the United States per capita cost 
     (USPCC), as calculated by the Secretary, a Medicare+Choice 
     organization may negotiate with the Secretary an annual per 
     capita rate that--

       ``(I) reflects an annual rate of increase up to the rate of 
     increase specified in clause (ii);
       ``(II) takes into account audited current data supplied by 
     the organization on its adjusted community rate (as defined 
     in section 1854(f)(3)); and
       ``(III) does not exceed the United States per capita cost, 
     as projected by the Secretary for the year involved.

       ``(ii) Maximum rate described.--The rate of increase 
     specified in this clause for a year is the rate of inflation 
     in private health insurance for the year involved, as 
     projected by the Secretary, and includes such adjustments as 
     may be necessary--

       ``(I) to reflect the demographic characteristics in the 
     population under this title; and
       ``(II) to eliminate the costs of prescription drugs.

       ``(iii) Adjustments for over or under projections.--If this 
     subparagraph is applied to an organization and payment area 
     for a year, in applying this subparagraph for a subsequent 
     year the provisions of paragraph (6)(C) shall apply in the 
     same manner as such provisions apply under this paragraph.''.

     SEC. 7. 10-YEAR PHASE-IN OF RISK ADJUSTMENT BASED ON DATA 
                   FROM ALL SETTINGS.

       Section 1853(a)(3)(C)(ii) of the Social Security Act (42 
     U.S.C. 1395w-23(c)(1)(C)(ii)) is amended--
       (1) by striking the period at the end of subclause (II) and 
     inserting a semicolon; and
       (2) by adding at the end the following flush matter:
     ``and, beginning in 2004, insofar as such risk adjustment is 
     based on data from all settings, the methodology shall be 
     phased-in in equal increments over a 10-year period, 
     beginning with 2004 or (if later) the first year in which 
     such data is used.''.

     SEC. 8. DELAY FROM JULY TO NOVEMBER 2000 IN DEADLINE FOR 
                   OFFERING AND WITHDRAWING MEDICARE+CHOICE PLANS 
                   FOR 2001.

       Notwithstanding any other provision of law, the deadline 
     for a Medicare+Choice organization to withdraw the offering 
     of a Medicare+Choice plan under part C of title XVIII of the 
     Social Security Act (or otherwise to submit information 
     required for the

[[Page 15816]]

     offering of such a plan) for 2001 is delayed from July 1, 
     2000, to November 1, 2000, and any such organization that 
     provided notice of withdrawal of such a plan during 2000 
     before the date of enactment of this Act may rescind such 
     withdrawal at any time before November 1, 2000.
                                 ______
                                 
      By Mr. ALLARD:
  S. 2906. A bill to authorize the Secretary of the Interior to enter 
into contracts with the city of Loveland, Colorado, to use Colorado-Big 
Thompson 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.


                  northern colorado water legislation

  Mr. ALLARD. Mr. President, I am pleased to take a step in addressing 
the long-term water needs of the northern Colorado citizens whose water 
is provided by the City of Loveland, Colorado. The bill I am 
introducing today authorizes the Secretary of the Interior to enter 
into contracts with the City of Loveland to utilize federal facilities 
of the original Colorado-Big Thompson Project for various purposes such 
as the storage and transportation of non-federal water originating on 
the eastern slope of the Rocky Mountains and intended for domestic, 
municipal, industrial and other uses.
  Water supplies for Colorado cities are extremely limited. Whenever 
possible, cities attempt to use their water storage and conveyance 
systems in the most efficient ways they can. The City of Loveland is 
trying to use excess capacity in the federally built Colorado-Big 
Thompson conveyance facilities to deliver water to an enlarged city 
reservoir, but current law does not allow the City to use excess 
capacity in an existing Federal water delivery canal for domestic 
purposes.
  In this case, Loveland intends to convey up to 75 cubic feet per 
second of its native river water supply from the Big Thompson River to 
two city-owned facilities, Green Ridge Glade Reservoir and Chasteen 
Grove Water Treatment Plant. A contract with the Bureau of Reclamation 
and the Colorado-Big Thompson Project operator, Northern Colorado Water 
Conservancy District, will provide an economical and reliable means of 
delivering Loveland's native river water supplies. The City of Loveland 
simply desires to ``wheel'' some of its drinking water supply through 
excess capacity in a canal serving Colorado-Big Thompson Project, a 
water project built by the Bureau of Reclamation from 1938 to 1957. 
Loveland is prepared to pay appropriate charges for the use of this 
facility. In addition, any contract affecting the Colorado-Big Thompson 
Project would be conducted in full compliance with all applicable 
environmental requirements. In fact, the Final Environmental Assessment 
on use of C-BT facilities to convey City of Loveland Water Supplies to 
an expanded Green Ridge Glade Reservoir has already been completed, and 
permits have been issued by the Army Corps of Engineers.
  Allowing Loveland to use the Colorado-Big Thompson Project should be 
a simple matter, but it is not. Legislation is required to allow the 
City to use the Federal water project for carriage of municipal and 
industrial water. Historically when a party has desired to use 
Reclamation project facilities for the storage or conveyance of non-
project water, the authority cited was the Act of February 21, 1911, 
known as the Warren Act. The Warren Act provides for the utilization of 
excess capacity in Reclamation project facilities to store non-project, 
irrigation water. Based on the current interpretation of Reclamation 
law, the Warren Act does not provide authority to enter into long-term 
storage or conveyance contracts for non-irrigation, non-project water 
in Colorado-Big Thompson Project facilities.
  Congress in recent years has expanded the scope of the Warren Act to 
apply to communities in California and Utah where there existed a need 
for more water management flexibility. The legislation I am introducing 
today is similar to other legislation introduced and passed in the 
recent Congresses. It will simply extend similar flexibility to the 
Colorado-Big Thompson Project and to the City of Loveland. Since there 
is precedent allowing the wheeling of non-federal water through federal 
facilities, this is a non-controversial piece of legislation. 
Therefore, I hope that Congress will move quickly to pass this 
legislation and I look forward to working closely with my colleagues on 
the Energy and Natural Resources Committee to move it quickly.
                                 ______
                                 
      By Mr. FEINGOLD (for himself and Mr. Hutchinson):
  S. 2907. A bill to amend the provisions of titles 5 and 28, United 
States Code, relating to equal access to justice, award of reasonable 
costs and fees, taxpayers recovery of costs, fees, and expenses, 
administrative settlement offers, and for other purposes; to the 
Committee on the Judiciary.


               equal access to justice reform legislation

  Mr. FEINGOLD. Mr. President, I rise today to introduce the Equal 
Access to Justice Reform Amendments of 2000. This legislation contains 
adjustments to the Equal Access to Justice Act (EAJA) that will 
streamline and improve the process of awarding attorney's fees to 
private parties who prevail in litigation against the Federal 
government. This is the third Congress in which I have introduced this 
legislation. I believe these reforms are an important step in reducing 
the burden of defending government litigation for many individuals and 
small businesses.
  I am very pleased to be joined in introducing this legislation this 
year by my friend from Arkansas, Sen. Tim Hutchinson. We hope that by 
working on a bipartisan basis on this important project we can improve 
the chances that it can become law.
  Over the years, and certainly now in this election year, members of 
Congress often speak of ``getting government off the backs of the 
American people.'' Sometimes we disagree about when government is a 
burden and when it is giving a helping hand. But all of us in the 
Senate want to reform government in ways that will improve the lives of 
people all across this nation. The legislation we are proposing today 
deals directly with a problem that affects everyday Americans who face 
legal battles with the federal government and prevail. Even if they win 
in court, they may still lose financially because of the expense of 
paying their attorneys.
  At the outset, it is important to understand what the Equal Access to 
Justice Act is, and why it exists. The premise of this statute is very 
simple. EAJA places individuals and small businesses who face the 
United States Government in litigation on more equal footing with the 
government by establishing guidelines for the award of attorney's fees 
when the individual or small business prevails. Quite simply, EAJA 
acknowledges that the resources available to the federal government in 
a legal dispute far outweigh those available to most Americans. This 
disparity is lessened by requiring the government in certain instances 
to pay the attorneys' fees of successful private parties. By giving 
successful parties the right to seek attorneys' fees from the United 
States, EAJA seeks to prevent small business owners and individuals 
from having to risk their companies or their family savings in order to 
seek justice.
  My interest in this issue predates my election to the Senate. It 
arises from my experience both as a private attorney and a Member of 
the state Senate in my home state of Wisconsin. While in private 
practice, I became aware of how the ability to recoup attorney's fees 
is a significant factor, and often one of the first considered, when 
deciding whether or not to seek redress in the courts or to defend a 
case. Upon entering the Wisconsin State Senate, I authored legislation 
modeled on the federal law, which had been championed by one of my 
predecessors in this body from Wisconsin, Senator Gaylord Nelson. 
Today, section 814.246 of the Wisconsin statutes contains provisions 
similar to the federal EAJA statute.
  It seemed to me then, as it does now, that we should do all that we 
can to

[[Page 15817]]

help ease the financial burdens on people who need to have their claims 
reviewed and decided by impartial decision makers. To this end, I have 
reviewed the existing federal statutes with an eye toward improving 
them and making them work better. The bill Senator Hutchinson and I are 
introducing today does a number of things to make EAJA more effective 
for individuals and small business men and women all across this 
country.
  First and most important, this legislation eliminates the provision 
in current law that allows the government to avoid paying attorneys' 
fees when it loses a suit if it can show that its position was 
substantially justified. I believe that this high threshold for 
obtaining attorneys' fees is unfair. If an individual or small business 
battles the federal government in an adversarial proceeding and 
prevails, the government should simply pay the fees incurred. Imagine 
the scenario of a small business that spends time and money dueling 
with the government and wins, only to find out that it must now 
undertake the additional step of litigating the justification of 
government's litigation position. For the government, with its vast 
resources, this second litigation over fees poses little difficulty, 
but for the citizen or small business it may simply not be financially 
feasible.
  Not only is this additional step a financial burden on the private 
litigant, but a 1992 study also reveals that it is unnecessary and a 
waste of government resources. University of Virginia Professor Harold 
Krent on behalf of the Administrative Conference of the United States 
found that only a small percentage of EAJA awards were denied because 
of the substantial justification defense. While it is impossible to 
determine the exact cost of litigating the issue of subtantial 
justification, it is Prof. Krent's opinion, based upon review of cases 
in 1989 and 1990, that while the substantial justification defense may 
save some money, it was not enough to justify the cost of the 
additional litigation. In short, eliminating this often burdensome 
second step is a cost effective step which will streamline recovery 
under EAJA and may very well save the government money in the long run.
  The second part of this legislation that will streamline and improve 
EAJA is a provision designed to encourage settlement and avoid costly 
and protracted litigation. Under the bill, the government can make an 
offer of settlement after an application for fees and other expenses 
has been filed. If the government's offer is rejected and the 
prevailing party seeking recovery ultimately wins a smaller award, that 
party is not entitled to the attorneys' fees and costs incurred after 
the date of the government's offer. Again, this will encourage 
settlement, speed the claims process, and thereby reduce the time and 
expense of the litigation.
  The final improvement to EAJA included in this legislation is the 
removal of the carve out of cases where the prevailing party is 
eligible to get attorneys fees under section 7430 of the Internal 
Revenue Code. Under current law, EAJA is inapplicable in cases where a 
taxpayer prevails against the government. I was an original cosponsor 
of a bill that suggested a similar reform introduced by Senator Leahy 
of Vermont in the last Congress. This provision helps to level the 
playing field between the IRS and everyday citizens. There is no reason 
that taxpayers should be treated differently than any other party that 
prevails in a case against the government. They deserve to have their 
fees paid if they win.
  We all know that the American small business owner has a difficult 
road to make ends meet and that unnecessary or overly burdensome 
government regulation can be a formidable obstacle to doing business. 
It can be the difference between success or failure. The Equal Access 
to Justice Act was conceived and implemented to help balance the 
formidable power of the federal government. It has already helped many 
Americans. The legislation we are offering today will make EAJA more 
effective for more Americans while at the same time helping to deter 
the government from acting in an indefensible and unwarranted manner.
  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. 2907

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

     SECTION 1. EQUAL ACCESS TO JUSTICE REFORM.

       (a) Short Title.--This Act may be cited as the ``Equal 
     Access to Justice Reform Amendments of 2000''.
       (b) Award of Costs and Fees.--
       (1) Administrative proceedings.--Section 504(a)(2) of title 
     5, United States Code, is amended by inserting after ``(2)'' 
     the following: ``At any time after the commencement of an 
     adversary adjudication covered by this section, the 
     adjudicative officer may ask a party to declare whether such 
     party intends to seek an award of fees and expenses against 
     the agency should such party prevail.''.
       (2) Judicial proceedings.--Section 2412(d)(1)(B) of title 
     28, United States Code, is amended by inserting after ``(B)'' 
     the following: ``At any time after the commencement of an 
     adversary adjudication covered by this section, the court may 
     ask a party to declare whether such party intends to seek an 
     award of fees and expenses against the agency should such 
     party prevail.''.
       (c) Payment From Agency Appropriations.--
       (1) Administrative proceedings.--Section 504(d) of title 5, 
     United States Code, is amended by adding at the end the 
     following: ``Fees and expenses awarded under this subsection 
     may not be paid from the claims and judgments account of the 
     Treasury from funds appropriated pursuant to section 1304 of 
     title 31.''.
       (2) Judicial proceedings.--Section 2412(d)(4) of title 28, 
     United States Code, is amended by adding at the end the 
     following: ``Fees and expenses awarded under this subsection 
     may not be paid from the claims and judgments account of the 
     Treasury from funds appropriated pursuant to section 1304 of 
     title 31.''.
       (d) Taxpayers' Recovery of Costs, Fees, and Expenses.--
       (1) Administrative proceedings.--Section 504 of title 5, 
     United States Code, is amended by striking subsection (f).
       (2) Judicial proceedings.--Section 2412 of title 28, United 
     States Code, is amended by striking subsection (e).
       (e) Offers of Settlement.--
       (1) Administrative proceedings.--Section 504 of title 5, 
     United States Code (as amended by subsection (d) of this 
     section), is amended by adding at the end the following:
       ``(f)(1) At any time after the filing of an application for 
     fees and other expenses under this section, an agency from 
     which a fee award is sought may serve upon the applicant an 
     offer of settlement of the claims made in the application. If 
     within 10 days after service of the offer the applicant 
     serves written notice that the offer is accepted, either 
     party may then file the offer and notice of acceptance 
     together with proof of service thereof.
       ``(2) An offer not accepted shall be deemed withdrawn. The 
     fact that an offer is made but not accepted shall not 
     preclude a subsequent offer. If any award of fees and 
     expenses for the merits of the proceeding finally obtained by 
     the applicant is not more favorable than the offer, the 
     applicant shall not be entitled to receive an award for 
     attorneys' fees or other expenses incurred in relation to the 
     application for fees and expenses after the date of the 
     offer.''.
       (2) Judicial proceedings.--Section 2412 of title 28, United 
     States Code (as amended by subsection (d) of this section), 
     is amended by inserting after subsection (d) the following:
       ``(e)(1) At any time after the filing of an application for 
     fees and other expenses under this section, an agency of the 
     United States from which a fee award is sought may serve upon 
     the applicant an offer of settlement of the claims made in 
     the application. If within 10 days after service of the offer 
     the applicant serves written notice that the offer is 
     accepted, either party may then file the offer and notice of 
     acceptance together with proof of service thereof.
       ``(2) An offer not accepted shall be deemed withdrawn. The 
     fact that an offer is made but not accepted shall not 
     preclude a subsequent offer. If any award of fees and 
     expenses for the merits of the proceeding finally obtained by 
     the applicant is not more favorable than the offer, the 
     applicant shall not be entitled to receive an award for 
     attorneys' fees or other expenses incurred in relation to the 
     application for fees and expenses after the date of the 
     offer.''.
       (f) Elimination of Substantial Justification Standard.--
       (1) Administrative proceedings.--Section 504 of title 5, 
     United States Code, is amended--
       (A) in subsection (a)(1), by striking all beginning with 
     ``, unless the adjudicative officer'' through ``expenses are 
     sought''; and
       (B) in subsection (a)(2), by striking ``The party shall 
     also allege that the position of the agency was not 
     substantially justified.''.

[[Page 15818]]

       (2) Judicial proceedings.--Section 2412(d) of title 28, 
     United States Code, is amended--
       (A) in paragraph (1)(A), by striking ``, unless the court 
     finds that the position of the United States was 
     substantially justified or that special circumstances make an 
     award unjust'';
       (B) in paragraph (1)(B), by striking ``The party shall also 
     allege that the position of the United States was not 
     substantially justified. Whether or not the position of the 
     United States was substantially justified shall be determined 
     on the basis of the record (including the record with respect 
     to the action or failure to act by the agency upon which the 
     civil action is based) which is made in the civil action for 
     which fees and other expenses are sought.''; and
       (C) in paragraph (3), by striking ``, unless the court 
     finds that during such adversary adjudication the position of 
     the United States was substantially justified, or that 
     special circumstances make an award unjust''.
       (g) Reports to Congress.--
       (1) Administrative proceedings.--Not later than 180 days 
     after the date of the enactment of this Act, the 
     Administrative Conference of the United States shall submit a 
     report to Congress--
       (A) providing an analysis of the variations in the 
     frequency of fee awards paid by specific Federal agencies 
     under the provisions of section 504 of title 5, United States 
     Code; and
       (B) including recommendations for extending the application 
     of such sections to other Federal agencies and administrative 
     proceedings.
       (2) Judicial proceedings.--Not later than 180 days after 
     the date of the enactment of this Act, the Department of 
     Justice shall submit a report to Congress--
       (A) providing an analysis of the variations in the 
     frequency of fee awards paid by specific Federal districts 
     under the provisions of section 2412 of title 28, United 
     States Code; and
       (B) including recommendations for extending the application 
     of such sections to other Federal judicial proceedings.
       (h) Effective Date.--The provisions of this Act and the 
     amendments made by this Act shall take effect 30 days after 
     the date of the enactment of this Act and shall apply only to 
     an administrative complaint filed with a Federal agency or a 
     civil action filed in a United States court on or after such 
     date.

  Mr. HUTCHINSON. Mr. President, I rise today, with my colleague 
Senator Feingold, to introduce the Equal Access to Justice, EAJA, 
Reform Amendments of 2000. I do so because I firmly believe that small 
business owners and individuals who prevail in court against the 
federal government should be automatically reimbursed for their legal 
expenses-- fulfilling the true intent of EAJA when passed in 1980.
  EAJA's initial premise was to reduce the vast disparity in resources 
and expertise which exists between small business owners or individuals 
and federal agencies and to encourage the government to ensure that the 
claims it pursues are worthy of its efforts. Twenty years ago, former 
Senator Gaylord Nelson, the author of the original, bipartisan EAJA 
bill, clearly explained EAJA's intent when he stated, ``All I can say 
is the taxpayer is injured, and if the taxpayer was correct, and that 
is the finding, then we ought to make the taxpayer whole.'' I commend 
former Senator Nelson. His steadfast commitment to our nation's 
businesses as Chairman of the Senate Small Business Committee is worthy 
of admiration. As a result of a political compromise, however, the 
final version of EAJA does not provide for an automatic award of 
attorneys' fees. Rather, it provides for an award of attorneys' fees 
only when an agency or a court determines that the government's 
position was not ``substantially justified'' or that ``special 
circumstances'' exist which would make an award unjust.
  Agencies and courts have strayed far from the original intent of EAJA 
by repeatedly using these provisions to avoid awarding attorneys' fees 
to small businesses and individuals who have successfully defended 
themselves. The bill that Senator Feingold and I are introducing today, 
the Equal Access to Justice Reform Amendments of 2000, would amend EAJA 
to provide that a small business owner or individual prevailing against 
the government will be automatically entitled to recover their 
attorneys' fees and expenses incurred in their defense.
  Unfortunately, EAJA is not making the taxpayers of this nation whole 
after they defend themselves against government action. Thus, I ask 
that my colleagues join Senator Feingold and myself in our effort to 
make these American taxpayers whole by cosponsoring and supporting the 
Equal Access to Justice Reform Amendments of 2000.

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