[Congressional Record (Bound Edition), Volume 146 (2000), Part 18]
[Senate]
[Pages 27230-27243]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      Mr. McCONNELL (for himself, Mr. Torricelli, Mrs. Feinstein, Mr. 
        Allard, Mr. Smith of Oregon, Ms. Landrieu, Mr. Burns, and Mr. 
        Bennett):
       S. 1. A bill to establish an Election Administration 
     Commission to study Federal, State, and local voting 
     procedures and election administration and provide grants to 
     modernize voting procedures and election administration, and 
     for other purposes; to the Committee on Rules and 
     Administration.


                          election reform act

  Mr. McCONNELL Mr. President, I rise today to introduce the Election 
Reform Act. As chairman of the Senate Rules Committee, I am pleased to 
be introducing along with Senators Torricelli, Feinstein, Allard, 
Smith, and Landrieu meaningful, bipartisan legislation to reform the 
administration of our nation's elections. As we move into the twenty-
first century it is inexcusable that the world's most advanced 
democracy relies on voting systems designed shortly after the Second 
World War. The Election Reform Act will ensure that our nation's 
electoral process is brought up to twenty-first century standards.
  By combining the Federal Election Commission's Election Clearinghouse 
and the Department of Defenses' Office of Voting Assistance, which 
facilitates voting by American civilians and servicemen overseas, into 
the Election Administration Commission, the bill will create one agency 
that can bring focused expertise to bear on the administration of 
elections. This Commission will consist of four Commissioners appointed 
by the President with the advice and consent of the Senate. It will 
continue to carry out the functions of the two entities that are being 
combined to create it. These include advising states on the 
requirements of the Voting Accessibility for the Elderly and 
Handicapped Act, carrying out the Federal functions under the Uniformed 
and Overseas Voting Act, and servicing as a clearinghouse for 
information on federal elections and election administration.
  In addition, the new Commission will engage in ongoing study and make 
periodic recommendations on the best practices relating to voting 
technology and ballot design as well as polling place accessibility. 
The Commission will also study and recommend ways to improve voter 
registration, verification of registration, and the maintenance and 
accuracy of voter rolls. This is of special urgency in view of the 
allegations surfacing in this election of hundreds of felons being 
listed on voting rolls and illegally voting, as reported last week in 
the Miami Herald, while other law abiding citizens who allegedly 
registered were not included on the voting rolls and were unable to 
vote. Such revelations from this year's elections coupled with the 
well-known report by ``60 Minutes'' of the prevalence of dead people 
and pets both registering and voting in past elections make clear the 
need for thoughtful study and recommendations to ensure that everyone 
who is legally entitled to vote is able to do so and that everyone who 
votes is legally entitled to do so--and does so only once. In addition 
to its studies and recommendations, the Commission will provide 
matching grants to states working to improve election administration.
  I think it is important that this Commission be established as a 
permanent, ongoing body. Many issues of election administration, such 
as polling place accessibility and alternative voting methods require 
ongoing examination in view of ever-changing technology. A permanent 
Commission will be able to better facilitate timely information about 
new, cost-effective technologies that can improve election 
administration, such as technology to enable physically-challenged 
citizens to vote with the same degree of privacy and dignity enjoyed by 
other citizens.

[[Page 27231]]

In this age of rapid technological innovation, continuous, ongoing 
assessment of the ways technology can improve election administration 
serves our nation's interest by ensuring that outmoded technology and 
procedures never again impede democracy in our great nation.
  I am pleased to announce that Representative Tom Davis, along with 
Representatives Rothman and Kennedy, are introducing the House 
companion to our bill today. And finally, I would like to mention some 
of the citizens organizations that have announced their support for our 
bill. They include the Paralyzed Veterans of America, The Voting 
Integrity Project, The National Council on Disability, and the National 
Foundation for the Blind.
  Mr TORRICELLI. Mr. President, I am pleased to join Senators 
McConnell, Feinstein, Allard, Landrieu, Smith and Bennett to introduce 
the Election Reform Act of 2000, bipartisan legislation that seeks to 
modernize and improve the nation's election procedures. Although there 
is much about the aftermath of the November 7th elections upon which 
Americans can disagree, this much should be clear: the United States is 
a 21st century democracy with a 19th century election system. In order 
to maintain the legitimacy of our country's democratic institutions, we 
must have an election system that is fair and accurate.
  The antiquated voting equipment used in most counties around the 
country is perhaps the most startling revelation from this year's 
election. Election Data Services reports that eighteen percent of 
Americans vote using technology that prevailed around the time Thomas 
Edison invented the lightbulb and nearly thirty-three percent of 
Americans vote by punching out unpredictable little chads, a system 
implemented during the Johnson administration. In a nation where people 
can confidently access the balance in their checking account on any 
street corner, it is unacceptable to have any less confidence in the 
exercise of the most fundamental of rights. Many states and localities 
continue to use outdated systems because of the cost of replacing them. 
Electronic voting machines with touch screens similar to bank ATMs, 
which are the most modern and accurate systems, cost about $5,000 each 
while replacing a punch-card system costs only about $225.
  The inequity in quality of voting machines across the country raises 
fundamental questions of fairness and equal protection. Statistics from 
Florida demonstrate that those individuals who voted in areas with 
punch cards had a much higher chance that their vote would not register 
than those who voted with more modern equipment. For example, in 
Florida predominantly African-American neighborhoods lost many more 
presidential votes than other areas largely because of the inferiority 
of their voting machines. Thus, thousands of legally qualified voters 
were disenfranchised as a direct result of the financial resources of 
their community.
  Therefore, in order to help improve and modernize the nation's 
election procedures, the Election Reform Act establishes a permanent, 
federal commission charged solely with the improvement of election 
administration. By combining the Federal Election Commission's Office 
of Election Administration (OEC) and the Department of Defenses' Office 
of Voting Assistance which facilitates voting by American civilians and 
servicemen overseas, into the Election Administration Commission, the 
bill will create one agency that can bring focused expertise to bear on 
the administration of elections. This Commission will engage in ongoing 
study and make periodic, recommendations on the best practices relating 
to voting technology and ballot design as well as polling place 
accessibility. The Commission will also study and recommend ways to 
improve voter registration, verification of registration, and the 
maintenance and accuracy of voter rolls. Finally, to help diminish the 
cost to states and localities of updating their election procedures, 
the Commission will provide at least $100 million a year in matching 
grants to states working to improve election administration.
  There can never be a sense again that an election in the United 
States is settled on an arbitrary basis or that elections are an 
approximation. Constitutional guarantees of one person, one vote mean 
nothing in theory if they do not have any meaning in practice. So long 
as one voter, whether it be a senior citizen, an African-American, or 
one in service to their country has doubt about whether their vote was 
counted, our democracy suffers. That is an American, not a partisan 
problem. The challenge before Congress is to make sure that the legacy 
of this election is not the confusion that has reigned for the past 
five weeks but an enhancement of the legitimacy and credibility of our 
democratic processes.
  Therefore, I look forward to working with the chairman of the Rules 
Committee as well as my colleagues on both sides of the aisle to see 
that this bipartisan legislation is the first priority of the 107th 
Congress. I am encouraged that both Vice-President Elect Cheney and 
Senator Joseph Lieberman have expressed their strong desire to make 
election reform legislation their immediate priority in the next 
administration and Congress. I am also pleased that Representatives 
Rothman, Davis, Kennedy, and Alcee Hastings are introducing the House 
companion of this legislation today. Their support along with the 
endorsements of the Voting Integrity Project, Paralyzed Veterans of 
America, the National Organization on Disability, and the National 
Foundation for the Blind gives me great confidence that this 
legislation will gather strong support progress quickly.
  Mrs. FEINSTEIN. Mr. President, I rise today to join with Senators 
McConnell and Torricelli to introduce the Election Reform Act. I 
believe that this legislation will play an important role in improving 
elections in the United States.
  The situation in Florida with different counties using different 
equipment, different standards and different methodologies in the 
conduct of the election is a clear indication that reform is needed. 
Although elections are within the purview of the states, if the Federal 
government can provide incentives and financial assistance to update 
equipment and administration to ensure that every vote counts, that 
would be a giant step forward.
  Our democracy is based on the principle that our political leaders 
are chosen through a fair and accurate election process. While the 
aftermath of this year's election brought much disagreement, it is 
clear that the voting system is antiquated and in need of reform.
  This legislation establishes a permanent, federal Commission 
dedicated to election administration. This Commission will consist of 
four Commissioners appointed by the President with the advice and 
consent of the Senate. The Commissioners will serve four-year terms, 
with no more than two Commissioners affiliated with the same political 
party.
  The Commission would do the following: study various aspects of 
election administration and make periodic recommendations on such 
topics as ballot design, accuracy, security, and technological advances 
in voting equipment; develop and update voluntary standards for voting 
systems at least every four years; study accessibility to polling 
places and recommend voluntary guidelines to increase access to polling 
places; allocate $100 million in matching funds to States and 
localities that improve their voting systems in a manner consistent 
with voluntary recommendations developed by the Commission.
  This legislation has the support of the Voting Integrity Project, the 
Committee for the Study of the American Electorate and the National 
Organization on Disability, the American Foundation for the Blind, and 
the Paralyzed Veterans of America.
  As we move forward in the 21st century, it is essential that the all 
Americans, and nations throughout the world, continue to have 
confidence in our electoral process. This means modernizing the system 
to include new, cost-effective technologies that can

[[Page 27232]]

improve election administration. The reforms embodied in this 
legislation will permit these advances. I am hopeful one of the first 
acts of the 107th Congress will be to pass this legislation.
  Mr. SMITH of Oregon. Mr. President, I am pleased today to join 
Senators McConnell, Torricelli, Feinstein, and Allard in the 
introduction of the Election Reform Act. I think this last election 
made it abundantly clear that the time has come to streamline and 
update our voting system's outmoded technology and procedures. As my 
colleague Senator McConnell has pointed out, it is inexcusable that the 
world's most advanced democracy relies on voting systems designed 
shortly after the Second World War.
  The Election Reform Act will combine the functions of the Federal 
Election Commission's Election Clearinghouse and the Department of 
Defense Office of Voting Assistance, which facilitates voting by 
American civilians and servicemen overseas, into a single Election 
Administration Commission which will provide grants to states to 
modernize their voting procedures. It is important to note that the 
Commission will in no way usurp what is rightfully the responsibility 
of the states to determine the times, places and manner of holding 
elections.
  The Commission will study Federal, State, and local voting procedures 
and election administration and will develop, update and adopt every 4 
years, voluntary engineering and procedural performance standards for 
voting systems. In addition, the Commission will engage in ongoing 
studies of procedures and make periodic recommendations on the best 
practices relating to voting technology and ballot design. Another very 
important responsibility of the Commission will be to advise States 
regarding compliance with the requirements of the Voting Accessibility 
for the Elderly and Handicapped Act and develop, update, and adopt 
voluntary procedures for enhancing voting methods for voters, including 
disabled voters. It is imperative that, as we pursue improvements in 
the administration of our elections, we also have the most up-to-date 
information about new technologies to enable the elderly and the 
disabled to vote with the same degree of privacy and dignity enjoyed by 
other citizens.
  Mr. President, I believe this legislation will go a long way toward 
restoring confidence in our voting systems, and I am hopeful that the 
Senate will pass the Election Reform Act very early in the new 
Congress.
                                 ______
                                 
      Mr. SPECTER:
  S. 3280. A bill to prohibit assistance to the Palestinian Authority 
unless and until certain conditions are met; to the Committee on 
Foreign Relations.


    legislation conditioning assistance to the palestinian authority

  Mr. SPECTER. Mr. President, I rise to introduce legislation at this 
time which will put on the record factors which have been enormously 
harmful in the current violence which now occurs in Israel. This bill 
would prohibit assistance to the Palestinian Authority or Palestinian 
projects, unless and until certain conditions are met. The Oslo Interim 
Agreement of 1995 provided that the Palestinian Authority would:

       . . . ensure that their respective educational systems 
     contribute to the peace between the Israeli and Palestinian 
     peoples and to peace in the entire region, and will refrain 
     from the introduction of any motifs that could adversely 
     affect the process of reconciliation.

  Notwithstanding that commitment, the Palestinian Authority has filled 
the textbooks with the most vitriolic condemnation of Israel and the 
Jews. For example, the ninth graders are taught:

       One must beware of the Jews, for they are treacherous and 
     disloyal.

  The ninth graders are further instructed:

       One must beware of civil war, which the Jews try to incite, 
     and of scheming against the Muslims.

  There are some extraordinarily vitriolic comments which are inciting 
the young people, the Arabs, to turn to violence in the name of Allah, 
with the instruction directing them that they will be doing Allah's 
work, and if they are killed, they will go to heaven as Allah's 
messengers, as Allah's assistants.
  There are reports of 12-year-old boys who leave their homes telling 
their parents they are off to throw stones and otherwise incite 
violence. The parents permit this under a fatalistic attitude of ``what 
will be will be,'' and that it is something to be desired--incite to 
violence and be killed in doing Allah's work.
  The difficulties in the peace process are enormous. They are 
generational. There is absolutely no likelihood of success if the 
schoolchildren in the Palestinian Authority schools are going to be 
taught hatred and violence and the most extraordinary forms of 
misleading comment--about how to please Allah and how to go to heaven 
by getting themselves killed in the process of killing others and 
destroying the peace process.
  The United States and our allies have contributed very substantially 
to projects in the West Bank and Gaza. While the United States has not 
given aid directly to the Palestinian Authority since 1995, in fiscal 
year 2000, the United States allocated $485 million in development 
assistance to non-governmental organizations working in the West Bank 
and Gaza. Between 1995 and 1998, international aid provided by 21 
countries and 4 international organizations amounted to almost $227 
million. Between 1993 and 1999, the international community pledged a 
total of $5.7 billion for assistance in the West Bank and Gaza, and 
over $2.7 billion was disbursed by the end of 1999, according to the 
World Bank. I will go into the funding which the United States has 
provided and which our allies have provided in greater detail.
  This legislation would condition any assistance by the United States 
to the Palestinian Authority on changing those textbooks in accordance 
with their commitments under the Oslo agreement, ceasing to publish 
maps which omit Israel but instead refer only to Palestine, and 
changing the vitriol which appears on the state-sponsored television. 
These are absolutely minimal steps which have to be taken if there is 
to be any opportunity for success in the Mideast peace process.
  In 1995, Senator Shelby and I introduced legislation which was 
enacted which conditioned U.S. aid on the Palestinian Authority 
changing its charter which called for the destruction of Israel. That, 
in fact, did happen and perhaps our legislation was somewhat helpful in 
getting that done. The legislation also conditioned aid on maximum 
efforts of the Palestinian Authority and Chairman Arafat to restrain 
terrorists. For a time, I think there was a real effort by Chairman 
Arafat and many in the Palestinian Authority to do that, but that has 
totally broken down.
  Notwithstanding those grave difficulties, efforts must continue on 
the peace process to try to terminate the violence there. I note in 
this morning's press there are reports of additional meetings. I have 
both privately and publicly commended President Clinton for his efforts 
in trying to mediate the difficulties between the Israelis and the 
Palestinians.
  This business about teaching sixth graders, seventh graders, eighth 
graders, and ninth graders to hate and to incite violence is just 
absolutely intolerable if there is to be any chance at all for the 
peace process to succeed, and even in the next generation to find a way 
for people to live in peace with the Jewish State of Israel, the 
Palestinian Authority and the Arabs, who are citizens of Israel, for 
that matter.
  I am introducing this bill on what is probably going to be the last 
day of our session so that these educational tools may become better 
known. People will understand them and will join the fight to insist 
that they be terminated.
  Mr. President, to reinterate, I have sought recognition today to 
introduce legislation to condition aid to the Palestinian Authority 
upon the removal of all anti-Semitic and anti-Israel content from their 
school textbooks, and

[[Page 27233]]

radio and television broadcasts at publically funded facilities. The 
Palestinian Authority deliberately and consciously disseminates 
messages filled with anti-Semitic and anti-Israel hatred with the clear 
aim of promoting violence against Israel and the Jewish people. This is 
a clear violation of the spirit of the peace process.
  A study by the Center for Monitoring the Impact of Peace, a 
Jerusalem-based non-governmental organization, found that there is not 
one example in the entire Palestinian school system of a positive 
reference to a Jew, Judaism, or to peace with Israel. I urge the 
passage of this legislation to send a clear signal to the Palestinian 
people that the international community will not accept the fostering 
of hatred in textbooks and broadcast media in the West Bank and Gaza. 
The United States provides assistance to the region in support of the 
peace process, and we must condition this assistance upon each party's 
fulfillment of the commitments made to bring peace to the region. 
Furthermore, we must vigorously press for our allies to do the same.
  In years past, Palestinian schools in the West Bank used Jordanian 
textbooks and the schools in Gaza used Egyptian textbooks. While the 
areas were under the control of the Israeli government, these books 
continued to be used but anti-Semitic and anti-Israel material was 
removed. As a result of the 1993 Oslo Accords, the responsibility for 
education in the West Bank and Gaza was transferred from the Israeli 
government to the Palestinian Ministry of Education. While beginning to 
develop their own curriculum, the Palestinian Ministry of Education 
continued to use Egyptian and Jordanian books, but failed to remove the 
anti-Israel and anti-Semitic material. Currently, the Palestinian 
Ministry of Education is directly supervising the production of new 
textbooks which are the first Palestinian-produced textbooks.
  As part of a pilot program, the first new textbooks were introduced 
in the first and sixth grades in September 2000, as part of the new 
curriculum which the Palestinian Authority plans to expand to cover the 
grades first through twelfth over the next fours years. Many Israelis 
and others hoped these books would promote the peace process and teach 
cooperation and tolerance among the Israelis and the Palestinians. 
Instead, the new Palestinian textbooks continue to contain anti-Israel 
material, such as a map denying the existence of Israel. The continued 
promotion of hatred by the Palestinian Authority is unacceptable, as it 
not only violates the spirit of the peace process but also the letter 
of the Oslo Accords. The United States and the rest of the 
international community must send a message to the Palestinian 
Authority that this will not be tolerated.
  By means of both the new and old textbooks in their schools, the 
Palestinian Authority is raising an entire generation of Palestinian 
children to despise Jews and Israel. These teachings foster an 
environment of hatred and violence, not peace and conciliation. 
Palestinian school children are actively taught that the Jewish people 
and Israel are the enemy in a broad range of contexts, and that Jews 
are not to be trusted. For example, on page 79 of the textbook entitled 
the Islamic Education for Ninth Grade, the book outlines lessons to be 
learned by the students. Specifically, it says ``One must beware of the 
Jews, for they are treacherous and disloyal.'' The book goes on to say 
on page 94, ``one must beware of civil war, which the Jews try to 
incite, and of scheming against the Muslims.'' Reinforcing this 
message, students read on page 182, ``The Jews . . . have killed and 
evicted Muslim and Christian inhabitants of Palestine, whose 
inhabitants are still suffering oppression and persecution under racist 
Jewish Administration.''
  Another textbook, the Islamic Religious Education for Fourth Grade, 
on page 44, states ``. . . the Jews--as is their way--do not want 
people to live in peace. . .'' In the Reader and Literary Texts for 
Eighth Grade, on pages 96 through 99, students are taught ``The Jews 
have clear greedy designs on Jerusalem.'' Students are then asked to 
think about the following question: ``What can we do to rescue 
Jerusalem and to liberate it from the thieving enemy. . .?'' The 
authors of these textbooks clearly intended not to foster an 
environment of trust between the Palestinian people and their Jewish 
neighbors. Without a foundation of trust in the hearts and minds of the 
Palestinian people, the peace process is doomed to failure.
  The school books also include lessons equating Zionism with Nazism, 
Fascism, and racism. For example, the textbook entitled The 
Contemporary History of the Arabs and the World, on page 123, states 
``The clearest examples of racist belief and racial discrimination in 
the world are Nazism and Zionism.'' Lessons such as this one are 
clearly not intended to support peace between the Palestinians and 
Israelis.
  More alarmingly, in addition to anti-Semitic material, these 
textbooks also teach children to pursue violence and the destruction of 
Israel. The calls to fight and eliminate Israel through Jihad, holy 
war, and martyrdom for Allah, appear frequently in the school 
textbooks. The need to fight Israel is portrayed as a religious 
imperative in the books.
  For example, a fifth grade textbook, Our Arabic Language for Fifth 
Grade on page 69 and 70, teaches children that ``there will be a Jihad 
and our country shall be freed. This is our story with the thieving 
conquerors. You must know, my boy, that Palestine is your grave 
responsibility.'' The book also teaches children to ``remember: The 
Arabs and the Muslims are fighting the Jews who fought against them and 
oppressed them and drove them from their homes unjustly. The final and 
inevitable result will be the victory of the Muslims over the Jews.''
  The violent message continues in the seventh grade textbook, Islamic 
Education for Seventh Grade, on page 108, which states ``if the enemy 
has conquered part of its land and those fighting for it are unable to 
repel the enemy, then Jihad becomes the individual religious duty of 
every Muslim man and woman, until the attack is successfully repulsed 
and the land liberated from conquest and to defend Muslim honor. . .''.
  In addition to lessons on Jihad, students are instructed to adopt 
hostile attitudes on a particularly divisive topic--their 
responsibility regarding holy sites. The seventh grade textbook, 
Islamic Education for Seventh Grade, on page 184, states ``Muslims must 
protect all mosques. . . They must devote all their efforts and 
resources to repairing them and to protecting them and must wage a 
Jihad both of life and property to liberate al-Aqsa Mosque from the 
Zionist conquest.'' The inflammatory language is also included on page 
50, ``The Muslim connects the holiness of al-Aqsa Mosque, and its 
precincts, with the holiness of the `Sacred Mosque' and Mecca. 
Therefore, any aggression against one is an aggression against the 
other and to defend them is to defend Islam. Disregard of the duty in 
respect of them is a crime for which Allah will punish every believer 
in Allah and His Prophet.'' The aggressive message clearly encourages 
the violence which is currently taking place in the Middle East.
  The same seventh grade book also teaches children to fight and 
conquer Israel's capital, Jerusalem. For example, the book contains a 
composition question which asks: ``How are we going to liberate our 
stolen land? Make use of the following ideas: Arab unity, genuine faith 
in Allah, most modern weapons and ammunition, using oil and other 
precious natural resources as weapons in the battle for liberation.'' 
It is this type of violent message which leads young children to take 
to the streets and engage in stone-throwing and other violence.
  However, this message is not limited to schoolbooks. The same hateful 
portrayal of Jews and Israel found in the school books is promoted 
regularly on Palestinian Television, which is also under direct control 
of the Palestinian Authority. For example, on May 14, 1998, Palestinian 
television broadcast statements such as ``The Jewish gangs waged racial 
cleansing wars against innocent Palestinians . . . large scale 
appalling massacres saving no women

[[Page 27234]]

or children.'' On May 14, 1998, Zionism was presented as ``a cancer in 
the body of the nation.''
  Palestinian television broadcasts a continuous flow of violent images 
with messages glorifying the children in the streets as martyrs 
participating in Jihad. For example, television stations around the 
world broadcast the image of Muhammad al-Durrah, the twelve year old 
boy who was killed while his father tried to shield him from the 
crossfire on September 30, 2000. However, the image of the young man, 
who had no intention when he left his house that day to become a 
martyr, was instantly the symbol used by Palestinian television of the 
continued victimization of the Palestinian people at the hands of the 
so-called Israeli ``occupiers.''
  By continually referring to the occupation of their land, Palestinian 
television refuses to acknowledge the legitimacy of Israel. On May 19, 
1998, Palestinian television reported `` . . . the war of 1948 brought 
about the establishment of the Zionist entity on Palestinian land.'' 
The television broadcasts also declared in May 1998: ``This is our 
Palestine. We defend it with blood.''
  The hate-filled broadcasts further reinforce the anti-Israel and 
anti-Semitic messages found in the school textbooks and explicitly aim 
to incite violence. We cannot tolerate this behavior by a society that 
claims to be committed to pursuing the peace process. These teachings 
send a direct message to young children to pursue violence and the 
destruction of Israel, and the message appears to be reaching the 
children.
  On October 6, 2000, the New York Times reported on Muhammad Ibrahim, 
a Palestinian teenager engaged in the current violence in the streets. 
Muhammad joins his young friends on the streets and throws stones at 
Israeli soldiers, even though his father asked him ``not to go down 
that road'' and telling him ``we do not need another generation of 
victims.'' When asked why he engaged in the stone throwing, Muhammad 
plainly stated, ``You want to express your anger. You know your stone 
might not hit an Israeli soldier or might not even hurt him. But you 
want to feel you've done something for the homeland.'' Muhammad made 
clear where he learned these lessons when he said, ``I was raised with 
stories of how they kicked us off our land.'' The young people out on 
the streets today throwing stones have been raised on anti-Israel and 
anti-Semitic stories, which is formally reinforced in the textbooks 
used in the schools in the West Bank and Gaza and the television and 
radio broadcasts. If there is any hope for lasting peace in the region, 
the next generation of leaders must not be raised on lessons of hatred 
and violence.
  In signing the 1995 Interim Agreement on the West Bank and Gaza, the 
Israeli government and the Palestinian Authority agreed to use their 
respective educational systems to support the peace process. 
Specifically, Article XXII of the Israeli-Palestinian Interim Agreement 
on the West Bank and the Gaza Strip of 1995 declares that Israel and 
the Palestinian Authority will ``ensure that their respective 
educational systems contribute to the peace between the Israeli and 
Palestinian peoples and to peace in the entire region, and will refrain 
from the introduction of any motifs that could adversely affect the 
process of reconciliation.'' The Palestinian Authority should be held 
to the commitments made in the peace process, not the least of which is 
to educate the young people of the West Bank and Gaza with a curriculum 
that will contribute to peace between the Israeli and Palestinian 
peoples.
  The United States provides assistance to the region in support of the 
peace process, and it is imperative to condition this assistance upon 
the fulfillment of the commitments made to bring peace to the region. 
While the United States has not given aid directly to the Palestinian 
Authority since 1995, in fiscal year 2000 the United States allocated 
$485 million in development assistance to non-governmental 
organizations working in the West Bank and Gaza, including funds for 
educational programs. It is of the utmost importance that the United 
States conditions any aid to the Palestinian Authority on their 
commitment to the peace process, which must be demonstrated by the 
removal of the anti-Semitic and anti-Israel material from their 
textbooks and radio and television broadcasts.
  It is also imperative that the United States urge our allies to 
condition their aid to the Palestinian Authority on this issue. Between 
1995 and 1998 international aid provided by twenty-one countries and 
four international organizations provided $226.9 million to educational 
projects in the Palestinian Territories. Between 1993 and 1999, the 
international community pledged a total of $5.7 billion in assistance 
for the West Bank and Gaza, and over $2.7 billion was disbursed by the 
end of 1999 according to the World Bank. From 1994 to 1999, the 
European Community committed over $600 million. Recently, on December 
6, 2000, the World Bank also agreed to a grant to the Palestinian 
Authority in the amount of $12 million.
  The assistance to the Palestinian Authority, whether through 
international institutions or our allies, must include conditions which 
will compel the Palestinian Authority to remove this unacceptable 
material from the textbooks and the broadcast media. The assistance is 
given to the Palestinian Authority with the intent to support peace in 
the region, and therefore, the aid should be conditioned on the removal 
of material which undermines the peace process from the Palestinian 
educational system and broadcast media. I urge my colleagues to join me 
in supporting this legislation which sends a clear signal to the 
Palestinian Authority that the use of anti-Semitic and anti-Israel 
material in their schools and television and radio broadcasts will not 
be tolerated.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3280

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

     SECTION I. FINDINGS.

       Congress makes the following findings:
       (1) Today in the West Bank and Gaza, textbooks used in 
     Palestinian schools are teaching hatred towards Jews and the 
     incitement towards violence.
       (2) Article XXII of the Israeli-Palestinian Interim 
     Agreement of the West Bank and the Gaza Strip of 1995 
     declares that Israel and the Palestinian Authority will 
     ``ensure that their respective educational systems contribute 
     to the peace between the Israeli and Palestinian peoples and 
     to peace in the entire region, and will refrain from the 
     introduction of any motifs that could adversely affect the 
     process of reconciliation''.
       (3) As a result of the Oslo Accords, the responsibility for 
     education in the West Bank and Gaza was transferred from the 
     Government of Israel to the Palestinian Ministry of 
     Education.
       (4) Since the early 1950s, Palestinian schools in the West 
     Bank have used Jordanian textbooks and the schools in Gaza 
     used Egyptian textbooks, but when these areas were under the 
     control of the Israeli government, anti-Semitic and anti-
     Israel content was removed from the school books.
       (5) While beginning to develop their own curriculum, the 
     Palestinian Ministry of Education continued to use Egyptian 
     and Jordanian books, but failed to remove the anti-Israel and 
     anti-Semitic content.
       (6) The Palestinian Ministry of Education directly 
     supervised the production of new textbooks which are now used 
     in schools in the West Bank and Gaza.
       (7) The new textbooks contain anti-Semitic and anti-Israel 
     content, and the Israeli government no longer has the 
     authority to change the content of the textbooks.
       (8) Palestinian Authority school children are actively 
     taught that the Jews and Israel are the enemy in a broad 
     range of contexts, and for example, page 79 of the Islamic 
     Education for Ninth Grade reads, ``One must beware of the 
     Jews, for they are treacherous and disloyal''.
       (9) The Islamic Education for Ninth Grade also instructs 
     that ``one must beware of civil war which the Jews try to 
     incite, scheming against the Muslims,'' on page 94.
       (10) On page 182, the text of the Islamic Education for 
     Ninth Grade reads ``The Jews--have killed and evicted Muslim 
     and Christian inhabitants of Palestine, whose inhabitants are 
     still suffering oppression and persecution under racist 
     Jewish administration.''

[[Page 27235]]

       (11) The Islamic Religious Education for the Fourth Grade 
     teaches students on page 44, ``. . . the Jews--as is their 
     way--do not want people to live in peace.''
       (12) The books include lessons equating Zionism with 
     Nazism, Fascism, and racism, and for example, The 
     Contemporary History of Arabs and the World, on page 123, 
     states ``The clearest examples of racist belief and racial 
     discrimination in the world are Nazism and Zionism.''
       (13) Islamic Education for the Fourth Grade teaches 
     children ``the Jews are the enemies'' on page 67.
       (14) The new textbooks do not acknowledge the State of 
     Israel, but rather the creation of Israel is explained as the 
     Israeli occupation of 1948.
       (15) All the maps of ``Palestine'', be they political, 
     historical, geographical, or natural resource maps in the 
     textbooks, erase mention of Israel.
       (16) The calls to fight and eliminate Israel through Jihad 
     (Holy War) and Martyrdom for Allah, appear frequently in the 
     school books.
       (17) In addition there is a separate recurring theme: the 
     children are taught to fight and conquer Israel's capital, 
     Jerusalem, and for example, the book Islamic Education for 
     Seventh Grade asks: ``How are we going to liberate our stolen 
     land? Make use of the following ideas: Arab unity, genuine 
     faith in Allah, most modern weapons and ammunition, using oil 
     and other precious natural resources as weapons in the battle 
     for liberation'' on page 15.
       (18) The need to fight Israel, all of which is said to be 
     on ``occupied Arab Land'' becomes a religious imperative, 
     with teachings like the following from Islamic Education for 
     Seventh Grade, page 108:``if the enemy has conquered part of 
     its land and those fighting for it are unable to repel the 
     enemy, then Jihad becomes the individual religious duty of 
     every Muslim man and woman, until the attack is successfully 
     repulsed and the land liberated from conquest and to defend 
     Muslim honor. . ''.
       (19) The same message appears in the fifth grade text Our 
     Arabic Language for Fifth Grade on pages 69 and 70, ``there 
     will be a Jihad and our country shall be freed. This is our 
     story with the thieving conquerors. You must know, my boy, 
     that Palestine is your grave responsibility.
       (20) Children are specifically taught to protect all 
     mosques, and for example, Islamic Education for the Seventh 
     Grade instructs students that ``they must devote all their 
     efforts and resources to repairing them and to protecting 
     them and must wage a Jihad both of life and property to 
     liberate al-Aqsa Mosque from the Zionist conquest'' on page 
     184.
       (21) Palestinian Authority television is under direct 
     control of the Palestinian Authority.
       (22) The same hateful portrayal of Jews and Israel found in 
     the school books is promoted regularly on Palestinian 
     television, and for example, on May 14, 1998, Palestinian 
     television broadcast statements such as ``The Jewish gangs 
     waged racial cleansing wars against innocent Palestinians. . 
     . large scale appalling massacres saving no women or 
     children''.
       (23) Also, radio and television broadcasts made by publicly 
     funded facilities in the Palestinian Authority-controlled 
     areas of the West Bank and Gaza include programs having an 
     anti-Semitic, anti-Israel content.
       (24) On May 14, 1998, on Palestinian Television Zionism was 
     presented as ``a cancer in the body of the nation.''
       (25) The Palestinian Television also refuses to acknowledge 
     the state of Israel, and broadcast in May 1998, ``the war of 
     1948 brought about the establishment of the Zionist entity on 
     Palestinian land.''
       (26) The message of Jihad is also conveyed on the 
     Palestinian Television, and for example, the broadcasts 
     declared in May 1998, ``This is our Palestine. We defend it 
     with blood.''
       (27) While the United States has not given aid directly to 
     the Palestinian Authority since 1995, in fiscal year 2000 the 
     United States allocated $485 million in development 
     assistance to non-governmental organizations working in the 
     West Bank and Gaza, including funds for education programs.
       (28) Between 1995 and 1998 international aid provided by 21 
     countries and 4 international organizations provided $226.9 
     million to educational projects in the Palestinian 
     Territories..
       (29) From 1994 to 1999, the European Community committed 
     over $600 million in assistance to the Palestinian 
     Territories, including funds for education programs.

     SEC. 2. RESTRICTION ON ASSISTANCE.

       (a) Restriction.--No assistance shall be provided to the 
     Palestinian Authority unless and until the President 
     certifies to Congress that the Palestinian Authority has 
     removed the anti-Semitic, anti-Israel content included in the 
     textbooks used in schools, and radio and television 
     broadcasts made by publicly funded facilities, in the 
     Palestinian Authority-controlled areas of the West Bank and 
     Gaza.
       (b) Sense of Congress.--It is the sense of Congress that 
     the President should urge allies of the United States to 
     apply an equivalent restriction on assistance as described in 
     subsection (a).
                                 ______
                                 
      Mr. BINGAMAN:
  S. 3282. A bill to authorize funding for University Nuclear Science 
and Engineering Programs at the Department of Energy for fiscal years 
2002 through 2006; to the Committee on Energy and Natural Resources.


  Department of energy university nuclear science and engineering act

  Mr. BINGAMAN. Mr. President. I rise today to introduce a bill 
authorizing the Secretary of Energy to provide for the Office of 
Nuclear Science and Technology to reverse a serious decline in our 
nation's educational capability to produce future nuclear scientists 
and engineers. Let me outline how serious this decline is, after doing 
so I will outline its impact on our nation and then discuss how this 
bill attempts to remedy this situation.
  As of this year, the supply of four-year trained nuclear scientists 
and engineers is at a 35-year low. The number of four-year programs 
across our nation to train future nuclear scientists has declined to 
approximately 25--a 50 percent reduction since about 1970. Two-thirds 
of the nuclear science and engineering faculty are over age 45 with 
little if any ability to draw new and young talent to replace them. 
Universities across the United States cannot afford to maintain their 
small research reactors forcing their closure at an alarming rate. This 
year there are only 28 operating research and training reactors, over a 
50 percent decline since 1980. Most if not all of these reactors were 
built in the late 1950's and early 60's and were licensed initially for 
30 to 40 years. As a result, within the next five years the majority of 
these 28 reactors will have to be relicensed. Relicensing is a long, 
lengthy process which most universities cannot and will not afford. 
Interestingly, the employment demand for nuclear scientists and 
engineers exceeds our nation's ability to supply them. This year, the 
demand exceeded supply by 350, by 2003 it will be over 400.
  These human resource and educational infrastructure problems are 
serious. The decline in a competently trained nuclear workforce affects 
a broad range of national issues.
  We need nuclear engineers and health physicists to help design, 
safely dispose and monitor nuclear waste, both civilian and military.
  We rely on nuclear physicists and scientists in the field of nuclear 
medicine to develop radio isotopes for the thousands of medical 
procedures performed everyday across our nation--to help save lives.
  We must continue to operate and safely maintain our existing supply 
of fission reactors and respond to any future nuclear crisis 
worldwide--it takes nuclear scientists, engineers and health physicists 
to do that.
  Our national security and treaty commitments rely on nuclear 
scientists to help stem the proliferation of nuclear weapons whether in 
our national laboratories or as part of worldwide inspection teams in 
such places as Iraq. Nuclear scientists are needed to convert existing 
reactors worldwide from highly enriched to low enriched fuels.
  Nuclear engineers and health physicists are needed to design, operate 
and maintain future Naval Reactors. The Navy by itself cannot train 
students for their four year degrees--they only provide advance 
postgraduate training on their reactor's operation.
  Basically, we are looking at the potential loss of a 50 year 
investment in a field which our nation started and leads the world in. 
What is worse, this loss is a downward self-feeding spiral. Poor 
departments cannot attract bright students and bright students will not 
carry on the needed cutting edge research that leads to promising young 
faculty members. Our system of nuclear education and training, in which 
we used to lead the world, is literally imploding upon itself.
  I've laid out in this bill some proposals that I hope will seed a 
national debate in the upcoming 107th Congress on what we as a nation 
need to do to help solve this very serious problem. It is not a perfect 
bill, but I think it should start the ball rolling. I welcome all forms 
of bipartisan input on it. My staff has worked from consensus reports 
from the scientific community

[[Page 27236]]

developed by the Nuclear Energy Advisory Committee to the Department of 
Energy's Office of Nuclear Science and Technology, in particular its 
Subcommittee on Education and Training. The report is available on the 
Office's website. I encourage everyone to read and look at these 
startling statistics.
  Here is an outline of what is in the bill.
  First and foremost, we need to concentrate on attracting good 
undergraduate students to the nuclear sciences. I have proposed 
enhancing the current program which provides fellowships to graduate 
students and extends that to undergraduate students.
  Second, we need to attract new and young faculty. I've proposed a 
Junior Faculty Research Initiation Grant Program which is similar to 
the NSF programs targeted only towards supporting new faculty during 
the first 5 years of their career at a university. These first five 
years are critical years that either make or break new faculty.
  Third, I've proposed enhancing the Office's Nuclear Engineering 
Education and Research Program. This program is critical to university 
faculty and graduate students by supporting only the most fundamental 
research in nuclear science and engineering. These fundamental programs 
ultimately will strengthen our industrial base and over all economic 
competitiveness.
  Fourth, I've strengthened the Office's applied nuclear science 
program by ensuring that universities play an important role in 
collaboration with the national labs and industry. This collaboration 
is the most basic form of tech transfer, it is face-to-face contact and 
networking between faculty, students and the applied world of research 
and industry. This program will ensure a transition between the student 
and their future employer.
  Finally, I've strengthened what I consider the most crucial element 
of this program--ensuring that future generations of students and 
professors have well maintained research reactors.
  I've proposed to increase the funding levels for refueling and 
upgrading academic reactor instrumentation.
  I propose to start a new program whereby faculty can apply for 
reactor research and training awards to provide for reactor 
improvements.
  I have proposed a novel program whereby as part of a student's 
undergraduate and graduate thesis project, they help work on the re-
licensing of their own research reactors. This program must be in 
collaboration with industry which already has ample experience in 
relicensing. Such a program will once again provide face-to-face 
networking and training between student, teacher and ultimately their 
employer.
  I have proposed a fellowship program whereby faculty can take their 
sabbatical year at a DOE laboratory. Under this program DOE laboratory 
staff can co-teach university courses and give extended seminars. This 
program also provides for part time employment of students at the DOE 
labs--we are talking about bringing in new and young talent.
  In making all of these proposals, let me emphasize that each one of 
these programs I have described is intended to be peer reviewed and to 
have awards made strictly on merit of the proposals submitted. This 
program is not a hand out. Each element that I am proposing requires 
that faculty innovate and compete for these funds. If they do not win, 
then their reactors will simply be shut down by their institutions.
  I have outlined a very serious problem that if not corrected now will 
cost far more to correct later on. If the program I have outlined is 
implemented, then it will strengthen our reputation as a leader in the 
nuclear sciences, strengthen our national security and our ability to 
compete in the world market place.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3282

       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 ``Department of Energy University 
     Nuclear Science and Engineering Act''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) U.S. university nuclear science and engineering 
     programs are in a state of serious decline. The supply of 
     bachelor degree nuclear science and engineering personnel in 
     the United States is at a 35-year low. The number of four 
     year degree nuclear engineering programs has declined 50 
     percent to approximately 25 programs nationwide. Over two-
     thirds of the faculty in these programs are 45 years or 
     older.
       (2) Universities cannot afford to support their research 
     and training reactors. Since 1980, the number of small 
     training reactors in the United States have declined by over 
     50 percent to 28 reactors. Most of these reactors were built 
     in the late 1950s and 1960s with 30- to 40-year operating 
     licenses, and will require re-licensing in the next several 
     years.
       (3) The neglect in human investment and training 
     infrastructure is affecting 50 years of national R&D 
     investment. The decline in a competent nuclear workforce, and 
     the lack of adequately trained nuclear scientists and 
     engineers, will affect the ability of the United States to 
     solve future waste storage issues, maintain basic nuclear 
     health physics programs, operate existing fission reactors in 
     the United States, respond to future nuclear events 
     worldwide, help stem the proliferation of nuclear weapons, 
     and design and operate naval nuclear reactors.
       (4) Further neglect in the nation's investment in human 
     resources for the nuclear sciences will lead to a downward 
     spiral. As the number of nuclear science departments shrink, 
     faculties age, and training reactors close, the appeal of 
     nuclear science will be lost to future generations of 
     students.
       (5) The Department of Energy's Office of Nuclear Science 
     and Technology is well suited to help maintain tomorrow's 
     human resource and training investment in the nuclear 
     sciences. Through its support of research and development 
     pursuant to the Department's statutory authorities, the 
     Office of Nuclear Science and Technology is the principal 
     federal agent for civilian research in the nuclear sciences 
     for the United States. The Office maintains the Nuclear 
     Engineering and Education Research Program which funds basic 
     nuclear science and engineering. The Office funds the Nuclear 
     Energy and Research Initiative which funds applied 
     collaborative research among universities, industry and 
     national laboratories in the areas of proliferation resistant 
     fuel cycles and future fission power systems. The Office 
     funds Universities to refuel training reactors from highly 
     enriched to low enriched proliferation tolerant fuels, 
     performs instrumentation upgrades and maintains a program of 
     student fellowships for nuclear science, engineering and 
     health physics.

     SEC. 3. DEPARTMENT OF ENERGY PROGRAM.

       (a) Establishment.--The Secretary of Energy, through the 
     Office of Nuclear Science and Technology, shall support a 
     program to maintain the nation's human resource investment 
     and infrastructure in the nuclear sciences and engineering 
     consistent with the Department's statutory authorities 
     related to civilian nuclear research and development.
       (b) Duties of the Office of Nuclear Science and 
     Technology.--In carrying out the program under this Act, the 
     Director of the Office of Nuclear Science and Technology 
     shall--
       (1) develop a robust graduate and undergraduate fellowship 
     program to attract new and talented students;
       (2) assist universities in recruiting and retaining new 
     faculty in the nuclear sciences and engineering through a 
     Junior Faculty Research Initiation Grant Program;
       (3) maintain a robust investment in the fundamental nuclear 
     sciences and engineering through the Nuclear Engineering 
     Education Research Program;
       (4) encourage collaborative nuclear research between 
     industry, national laboratories and universities through the 
     Nuclear Energy Research Initiative; and
       (5) support communication and outreach related to nuclear 
     science and engineering.
       (c) Maintaining University Research and Training Reactors 
     and Associated Infrastructure.--Within the funds authorized 
     to be appropriated pursuant to this Act, the amounts 
     specified under section 4(b) shall, subject to 
     appropriations, be available for the following research and 
     training reactor infrastructure maintenance and research:
       (1) Refueling of research reactors with low enriched fuels, 
     upgrade of operational instrumentation, and sharing of 
     reactors among universities.
       (2) In collaboration with the U.S. nuclear industry, 
     assistance, where necessary, in re-licensing and upgrading 
     training reactors as part of a student training program.
       (3) A reactor research and training award program that 
     provides for reactor improvements as part of a focused effort 
     that emphasizes research, training, and education.
       (d) University-DOE Laboratory Interactions.--The Secretary 
     of Energy, through the Office of Nuclear Science and 
     Technology, shall develop--

[[Page 27237]]

       (1) a sabbatical fellowship program for university 
     professors to spend extended periods of time at Department of 
     Energy laboratories in the areas of nuclear science; and
       (2) a visiting scientist program in which laboratory staff 
     can spend time in academic nuclear science and engineering 
     departments.

     The Secretary shall also provide for fellowships for students 
     to spend time at Department of Energy laboratories in the 
     area of nuclear science.
       (e) Merit Review Required.--All grants, contracts, 
     cooperative agreements, or other financial assistance awards 
     under this Act shall be made only after independent merit 
     review.

     SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       (a) Total Authorization.--The following sums are authorized 
     to be appropriated to the Secretary of Energy, to remain 
     available until expended, for the purposes of carrying out 
     this Act:
       (1) $44,200,000 for fiscal year 2002.
       (2) $56,450,000 for fiscal year 2003.
       (3) $63,100,000 for fiscal year 2004.
       (4) $61,100,000 for fiscal year 2005.
       (5) $71,700,000 for fiscal year 2006.
       (b) Graduate and Undergraduate Fellowships.--Of the funds 
     under subsection (a), the following sums are authorized to be 
     appropriated to carry out section 3(b)(1):
       (1) $5,000,000 for fiscal year 2002.
       (2) $5,100,000 for fiscal year 2003.
       (3) $5,200,000 for fiscal year 2004.
       (4) $5,200,000 for fiscal year 2005.
       (5) $5,200,000 for fiscal year 2006.
       (c) Junior Faculty Research Initiation Grant Program.--Of 
     the funds under subsection (a), the following sums are 
     authorized to be appropriated to carry out section 3(b)(2):
       (1) $10,000,000 for fiscal year 2002.
       (2) $11,000,000 for fiscal year 2003.
       (3) $11,500,000 for fiscal year 2004.
       (4) $11,500,000 for fiscal year 2005.
       (5) $11,500,000 for fiscal year 2006.
       (d) Nuclear Engineering and Education Research Program.--Of 
     the funds under subsection (a), the following sums are 
     authorized to be appropriated to carry out section 3(b)(3):
       (1) $10,000,000 for fiscal year 2002.
       (2) $15,000,000 for fiscal year 2003.
       (3) $20,000,000 for fiscal year 2004.
       (4) $21,000,000 for fiscal year 2005.
       (5) $22,000,000 for fiscal year 2006.
       (e) Communication and Outreach Related to Nuclear Science 
     and Engineering.--Of the funds under subsection (a), the 
     following sums are authorized to be appropriated to carry out 
     section 3(b)(5):
       (1) $200,000 for fiscal year 2002.
       (2) $250,000 for fiscal year 2003.
       (3) $300,000 for fiscal year 2004.
       (4) $300,000 for fiscal year 2005.
       (5) $300,000 for fiscal year 2006.
       (f) Refueling of Research Reactors and Instrumentation 
     Upgrades.--Of the funds under subsection (a), the following 
     sums are authorized to be appropriated to carry out section 
     3(c)(1):
       (1) $6,000,000 for fiscal year 2002.
       (2) $6,500,000 for fiscal year 2003.
       (3) $7,000,000 for fiscal year 2004.
       (4) $7,000,000 for fiscal year 2005.
       (5) $7,000,000 for fiscal year 2006.
       (g) Re-Licensing Assistance.--Of the funds under subsection 
     (a), the following sums are authorized to be appropriated to 
     carry out section 3(c)(2):
       (1) $2,000,000 for fiscal year 2002.
       (2) $2,500,000 for fiscal year 2003.
       (3) $3,000,000 for fiscal year 2004.
       (4) $3,000,000 for fiscal year 2005.
       (5) $4,500,000 for fiscal year 2006.
       (h) Reactor Research and Training Award Program.--Of the 
     funds under subsection (a), the following sums are authorized 
     to be appropriated to carry out section 3(c)(3);
       (1) $10,000,000 for fiscal year 2002.
       (2) $15,000,000 for fiscal year 2003.
       (3) $15,000,000 for fiscal year 2004.
       (4) $17,000,000 for fiscal year 2005.
       (5) $20,000,000 for fiscal year 2006.
       (i) University-DOE Laboratory Interactions.--Of the funds 
     under subsection (a), the following sums are authorized to be 
     appropriated to carry out section 3(d).
       (1) $1,000,000 for fiscal year 2002.
       (2) $1,100,000 for fiscal year 2003.
       (3) $1,100,000 for fiscal year 2004.
       (4) $1,100,000 for fiscal year 2005.
       (5) $1,200,000 for fiscal year 2006.
                                 ______
                                 
      By Mr. LUGAR (for himself, Mr. Gramm, Mr. Harkin, Mr. Fitzgerald, 
        Mr. Hagel, and Mr. Johnson):
  S. 3283. A bill to reauthorize and amend the Commodity Exchange Act 
to promote legal certainty, enhance competition, and reduce systematic 
risk in markets for futures and over-the-counter derivatives, and for 
other purposes; read the first time.


            THE COMMODITY FUTURES MODERNIZATION ACT OF 2000

  Mr. LUGAR. Mr. President, I am pleased to rise today with Senators 
Gramm, Harkin, Fitzgerald, Hagel, and Johnson to re-introduce the 
Commodity Futures Modernization Act of 2000. This legislation is the 
Senate companion to H.R. 5660, which Congressman Thomas Ewing 
introduced yesterday in the House of Representatives and which will be 
enacted as part of the final appropriations package today. This 
monumental legislation is the culmination of two years worth of 
hearings and hard-fought negotiations, but I am confident that the 
resulting legislation will greatly benefit the U.S. financial industry. 
I commend all the Members and staff who have contributed to this bill. 
In particular, I want to applaud Senator Gramm, Congressman Ewing and 
Senator Fitzgerald for their stewardship and determination in helping 
pass a bill this year. Its enactment would not have occurred without 
their efforts. I also want to recognize Treasury Secretary Summers, 
Commodity Futures Trading Commission, CFTC, Chairman Bill Rainer and 
Securities and Exchange Commission, SEC, Chairman Arthur Levitt as well 
as their staffs, who have played a pivotal role in bringing this bill 
together and garnering support for its passage.
  This bill, which re-authorizes the Commodity Exchange Act for five 
years, would reform our financial and derivatives laws in five primary 
ways. First, it would incorporate the unanimous recommendations of the 
President's Working Group on Financial Markets on the proper legal and 
regulatory treatment of over-the-counter, OTC, derivatives. Second, it 
would codify the regulatory relief proposal of the CFTC to ensure that 
futures exchanges are appropriately regulated and remain competitive. 
Third, this legislation would repeal the Shad-Johnson jurisdictional 
accord, which banned single stock futures 18 years ago. Fourth, this 
legislation provides certainty that products offered by banking 
institutions will not be regulated as futures contracts. Finally, this 
bill provides legal certainty for institutional equity swaps by 
providing the SEC with express but limited authorities over these 
instruments.
  Derivative instruments, both those that are exchange-traded and 
traded over-the-counter, have played a significant role in our 
economy's current expansion due to their innovative nature and risk-
transferring attributes. The global derivatives market has a notional 
value that now exceeds $90 trillion. Identified by Federal Reserve 
Chairman Alan Greenspan as the most significant event in finance of the 
past decade, the development of the derivatives market has 
substantially added to the productivity and wealth of our nation.
  Derivatives enable companies to unbundle and transfer risk to those 
entities who are willing and able to accept it. By doing so, efficiency 
is enhanced as firms are able to concentrate on their core business 
objective. A farmer can purchase a futures contract, one type of 
derivative, in order to lock in a price for his crop at harvest. 
Likewise, automobile manufacturers whose profits earned overseas can 
fluctuate with changes in currency values, can minimize this 
uncertainty through derivatives, allowing them to focus on the business 
of building cars. Banks significantly lessen their exposure to interest 
rate movements by entering into derivatives contracts known as swaps, 
which enable these institutions to hedge their risk by exchanging 
variable and fixed rates of interests.
  Signed into law in 1974, the Commodity Exchange Act, CEA, requires 
that futures contracts be traded on a regulated exchange. As a result, 
a futures contract that is traded off an exchange is illegal and 
unenforceable. When Congress enacted the CEA and authorized the CFTC to 
enforce it, this was not a concern. The meanings of ``futures'' and 
``exchange'' were relatively apparent. Furthermore, the over-the-
counter derivatives business was in its infancy. However, in the 26 
years since the statute's enactment, the OTC swaps and derivatives 
market, sparked by innovation and technology, has significantly 
outpaced the exchange-traded futures markets. Thus the definitions of a 
swap and a future began to blur.
  In 1998, the CFTC issued a document containing a concept release 
regarding

[[Page 27238]]

OTC derivatives, which was perceived by many as a precursor to 
regulating these instruments as futures. Just the threat of reaching 
this conclusion could have had considerable ramifications, given the 
size and importance of the OTC market. The legal uncertainty 
interjected by this dispute jeopardized the entirety of the OTC market 
and threatened to move significant portions of the business overseas. 
If we were to lose this market, most likely to London, it would take 
years to bring it back to U.S. soil. The resulting loss of business and 
jobs would be immeasurable.
  This threat led the Treasury Department, the Federal Reserve, and the 
SEC to oppose the concept release and request that Congress enact a 
moratorium on the CFTC's ability to regulate these instruments until 
after the President's Working Group could complete a study on the 
issue. As a result, Congress passed a six-month moratorium on the 
CFTC's ability to regulate over-the-counter derivatives. Despite 
reservations, I supported this moratorium because it brought legal 
assurance to this skittish market and it allowed the Working Group time 
to develop recommendations on the most appropriate legal treatment of 
OTC derivatives. In November 1999, the President's Working Group 
completed its unanimous recommendations on OTC derivatives and 
presented Congress with these findings. These recommendations remain 
the cornerstone of our bill.
  Our bill contains several mechanisms for ensuring that legal 
certainty is attained and that certain transactions remain outside the 
Commodity Exchange Act. The first, the electronic trading facility 
exclusion, would exclude transactions in financial commodities from the 
Act if conducted: (1) on a principal to principal basis; (2) between 
institutions or sophisticated persons with high net worth; and (3) on 
an electronic trading facility. The second would exclude these 
transactions if (1) they are conducted between institutions or 
sophisticated persons with high net worth; and (2) they are not on a 
trading facility.
  These exclusions attempt to address the advent of electronic trading 
and the changing and innovating nature of the financial industry. 
Indeed, we are keenly aware that there are newly emerging electronic 
systems that provide for the electronic negotiation of swaps agreements 
between and among large banks and other sophisticated major financial 
institutions acting as dealers. We do not intend for these systems to 
come within the definition of trading facilities.
  The third exclusion clarifies the Treasury Amendment language already 
contained in the CEA. It would exclude all transactions in foreign 
currency and government securities from the Act unless those 
transactions are futures contracts and traded on an organized exchange. 
As recommended by the Working Group, the bill would give the CFTC 
jurisdiction over non-regulated off-exchange retail transactions in 
foreign currency. Another important recommendation of the PWG was to 
authorize futures clearing facilities to clear OTC derivatives in an 
effort to lessen systemic risk and this bill incorporates this finding.
  As part of the legal certainty provisions, this legislation also 
addresses the concern that excluding OTC derivatives from the futures 
laws will cause these products to be fully regulated as securities. 
With Senator Gramm's leadership, this legislation adopts language that 
would provide the SEC with limited authority over institutional swaps 
for fraud, manipulation and insider trading. This language will help to 
provide the legal certainty that these institutional transactions lack 
under current law.
  Title four of this bill also provides legal certainty for banking 
products. Senator Gramm has appropriately raised the concern that 
traditional banking products should not be subject to the CEA. This 
language provides an exclusion for traditional banking products as well 
as hybrid products that are predominantly banking in nature. New 
products offered by banks that are not in existence on December 5, 
2000, or are otherwise not excluded from the CEA would fall under a 
``jump ball'' provision of the bill. This section provides a mechanism 
for the CFTC and the Federal Reserve to determine whether a new non-
traditional product offered by a bank should be regulated under the 
banking laws or the futures laws.
  The second major section of this legislation addresses regulatory 
relief. In February of this year, the CFTC issued a regulatory relief 
proposal that would provide relief to futures exchanges and their 
customers. Instead of listing specific requirements for complying with 
the CEA, the proposal would require exchanges to meet internationally 
agreed-upon core principals. The CFTC proposal creates tiers of 
regulation for exchanges based on whether the underlying commodities 
being traded are susceptible to manipulation or whether the users of 
the exchange are limited to institutional customers. Unsure of whether 
this legislation would be enacted, the CFTC went ahead and finalized 
its regulatory relief proposal on November 20, 2000.
  When enacted, this legislation will largely incorporate the CFTC's 
framework. A board of trade that is designated as a contract market 
would receive the highest level of regulation due to the fact that 
these products are susceptible to manipulation or are offered to retail 
customers. Futures on agricultural commodities would fall into this 
category. This bill also sets out that in lieu of contract market 
designation, a board of trade may register as a Derivatives Transaction 
Execution Facility, DTEF, if the products being offered are not 
susceptible to manipulation and are traded among institutional 
customers or retail customers who use large Futures Commission 
Merchants, FCMs, who are members of a clearing facility.
  Also, a board of trade may choose to be an Exempt Board of Trade, 
XBOT, and not be subject to the Act (except for the CFTC's anti-
manipulation authority) if the products being offered are traded among 
institutional customers only (absolutely no retail) and the instruments 
are not susceptible to manipulation. Our bill would allow a board of 
trade that is a DTEF or an XBOT to opt to trade derivatives that are 
otherwise excluded from the Act on these facilities and to the extent 
that these products are traded on these facilities, the CFTC would have 
exclusive jurisdiction over them. With this provision, the intent is to 
provide these facilities that trade derivatives with a choice--if 
regulation is beneficial, the facility may choose to be regulated. If 
not, the facility may choose to be excluded or exempted from the Act.
  By refraining from altering certain sections of the Act, this 
legislation re-affirms the importance of specific authorities granted 
the CFTC, including its anti-fraud and anti-manipulation powers. 
Section 4b is the principal anti-fraud provision of the Act and the 
Commission has consistently used Section 4b to combat fraudulent 
conduct by bucket shops and boiler rooms that entered into transactions 
directly with their customers and thus did not involve a traditional 
broker-client type of relationship. There have been cases involving the 
fraudulent sale of illegal precious metals futures contracts marketed 
as cash-forward transactions (CFTC v. P.I.E., Inc., 853 F.2d 721 (9th 
Cir. 1988)) as well as cases involving boiler room operations 
fraudulently selling illegal precious metals contracts to members of 
the general public. (CFTC v. Wellington Precious Metals, Inc., 950 F.2d 
1525 (11th Cir.), cert. denied, 113 S. Ct. 66 (1992)). This 
reaffirmation is consistent with both Congress' understanding of and 
past Congressional amendments to Section 4b that confirmed the 
applicability of Section 4b to fraudulent boiler rooms and bucket shops 
that enter into transactions directly with their customers.
  It is the intent of Congress in retaining Section 4b of the Act that 
the provision not be limited to fiduciary, broker/customer or other 
agency-like relationships. Section 4b provides the Commission with 
broad authority to police fraudulent conduct within its jurisdiction, 
whether occurring in boiler rooms and bucket shops, or in the e-
commerce markets that will develop under this new statutory framework.
  The bill's last section addresses the Shad-Johnson jurisdictional 
accord. In

[[Page 27239]]

1982, SEC Chairman John Shad and CFTC Chairman Phil Johnson reached an 
agreement on dividing jurisdiction between the agencies for those 
products that had characteristics of both securities and futures. Known 
as the Shad-Johnson Accord, this agreement prohibited single stock 
futures and delineated jurisdiction between the SEC and the CFTC on 
stock index futures.
  Meant as a temporary agreement, many have suggested that the Shad-
Johnson accord should be repealed. The President's Working Group 
unanimously agreed that the Accord should be repealed if regulatory 
disparities are resolved between the regulation of futures and 
securities. In March 2000, the General Accounting Office released a 
report that found that there is no legitimate policy reason for 
maintaining the ban on single stock futures since these products are 
being traded in foreign markets, in the OTC market, and synthetically 
in the options markets. Chairman Gramm and I sent a letter requesting 
the CFTC and the SEC to make recommendations on reforming the Shad-
Johnson ban. On September 14, 2000, the SEC and CFTC reached an 
agreement on the proper regulatory treatment of these instruments, and 
we have incorporated this agreement into our legislation.
  Under the legislation, the SEC and the CFTC would jointly regulate 
the market for single stock futures and narrow-based stock index 
futures. These products will be allowed to trade on both futures and 
securities exchanges. Single stock futures and narrow-based stock index 
futures (i.e., security futures) would be statutorily defined as both 
securities and futures, allowing the agencies the authority to regulate 
these instruments. However, to avoid redundancy, our legislation 
exempts these products from a series of regulations and requirements 
under both the securities and futures laws.
  Margin levels, listing standards, and other key trading practices 
would be jointly supervised by the SEC and CFTC. At the outset, margin 
levels for security futures products could not be lower than comparable 
margin levels required in the options markets. The tax treatment of 
these products would be comparable to the tax treatment of options on 
securities to ensure a level playing field between the markets.
  Futures on broad-based indices would be under the exclusive 
jurisdiction of the CFTC. The agreement sets out a ``bright-line'' 
formula for determining when an index is broad-based using the number 
and weighting of the securities contained in the index. This formula 
would allow a broad-based index to contain as few as 9 securities.
  The goal of this legislation is to ensure that the United States 
remains a global leader in the derivatives marketplace and that these 
markets are appropriately and effectively regulated. I believe that 
this legislation meets these objectives while ensuring that the 
public's interest in the financial markets is protected.
  This long legislative journey began two years ago when the Senate and 
House Agriculture Committees held a two day roundtable, in which 
distinguished individuals from the financial community participated. 
One of those individuals was Merton H. Miller, the Nobel Prize winning 
professor of economics from the University of Chicago, who passed away 
this summer. Professor Miller, known for his disarming sense of humor, 
his plain-spokenness and his generosity, is dearly missed by his 
family, friends and colleagues. The impact of his death has been 
particularly hard felt by the community of friends at the Chicago 
futures markets. Professor Miller was the primary intellectual force 
behind the development of the modern financial futures market and a 
staunch defender of the free market system. His body of work helped 
bring academic legitimacy to these markets, and he is sorely missed by 
them. As part of our roundtable discussion, we allowed each of the 
participants to make one wish for the coming 106th Congress. True to 
his life's work in this area, Professor Miller told us that Congress 
needed to lessen the cost of regulation on the futures and other 
financial markets in order to allow these markets to survive and 
compete in the global economy. I find it particularly satisfying that 
we are able to pass this historic legislation at the end of the 106th 
Congress and provide Professor Miller with his wish. I am confident 
that his legacy will live on through the success and growth of the 
markets that are benefitted by this legislation.
  Mr. GRAMM. Mr. President, today I join with Senator Lugar, Chairman 
of the Senate Agriculture Committee, and several others of our 
colleagues to introduce the Commodity Futures Modernization Act of 
2000. The formal purpose of this legislation is to reauthorize the 
Commodity Exchange Act, the legal authority for the Commodity Futures 
Trading Commission. As important as that is, this legislation does far 
more.
  This is a landmark bill that addresses the two major purposes that 
Senator Lugar and I set out to achieve when we first began discussing 
this legislation. First of all, this bill would repeal the so-called 
Shad-Johnson Accord, the 18-year-old temporary prohibition on the 
trading of futures based on individual stocks. Second, the bill 
eliminates the legal uncertainty that today hangs as an ominous cloud 
over the $60 trillion financial swaps markets.
  We are introducing the bill today as the finished product of years of 
work involving half a dozen committees in both Houses of Congress, and 
as many agencies of the Federal government. This bill is identical to, 
and is the Senate companion to, H.R. 5660, introduced yesterday in the 
House and which will be approved by the House and the Senate today. We 
introduce this bill in the Senate to demonstrate the bicameral 
authorship and support for this important legislation.
  For legislative history, I would direct my colleagues to statements 
made elsewhere in the Record in connection with House and Senate action 
on the House companion, part of the package of legislation approved 
together with the Labor HHS appropriations bill for fiscal year 2001.
  I would take this opportunity to thank Chairman Lugar and all who had 
a hand in forming this important legislation. All who had a hand in it 
deserve to be proud of this product.
                                 ______
                                 
      Mr. DURBIN:
  S. 3284. A bill to amend title 5, United States Code, to establish a 
national health program administered by the Office of Personal 
Management to offer Federal employee health benefits plans to 
individuals who are not Federal employees, and for other purposes; to 
the Committee on Governmental Affairs.


                           OPTION ACT OF 2000

  Mr. DURBIN. Mr. President, today I am introducing legislation to make 
available to all of our constituents the same range of private health 
insurance plans available to Members of Congress and other federal 
employees through the Federal Employees Health Benefits Program, FEHBP.
  The OPTION Act--Offering People True Insurance Options Nationwide--
would expand insurance options by allowing individuals to enroll in 
private health insurance plans nearly identical to the plans federal 
employees currently choose from. Though the OPTION program would be 
separate from the federal employees program, it would be modeled after 
FEHBP and would draw from FEHBP's strengths: plan choice, group 
purchasing savings, comprehensive benefits, and open enrollment 
periods.
  Too many Americans do not have real insurance options. Many 
individuals lack insurance because no insurer is willing to cover them 
at a reasonable price. Others work for employers who do not provide 
health insurance or offer only one insurance provider. The OPTION Act 
addresses these issues by giving individuals and businesses access to 
the group purchasing power that undergirds FEHBP and the wide range of 
health plans in that program.
  Under this legislation, all FEHBP health plans would be required to 
offer an OPTION health plan to non-federal employees with the same 
benefits they offer federal employees through FEHBP.
  OPTION enrollees would be placed in a separate risk pool, to prevent 
any effect on current FEHBP employees, and

[[Page 27240]]

the OPTION Act would not result in any changes in the premiums or 
benefits of today's FEHBP health plans.
  One of the few differences from FEHBP is that OPTION plans would be 
allowed to vary premiums by age, so that younger enrollees would be 
more likely to enroll. OPTION plans also would be required to offer 
rebates or lower premiums for longevity of health coverage. These 
provisions would act as an incentive for people to sign up when they 
are young and to maintain continuous coverage.
  OPTION health plans would not be allowed to impose any preexisting 
condition exclusions on new OPTION enrollees who have at least one year 
of health insurance coverage immediately prior to enrollment in an 
OPTION plan. To prevent people from waiting until they get sick to 
enroll, health plans would be allowed to exclude coverage for 
preexisting conditions for up to one year for people without coverage 
immediately preceding enrollment.
  All employers would have the option of voluntarily participating in 
the OPTION program and providing OPTION health plans to their 
employees. To be eligible, a business would have to be willing to pay 
at least a minimum percentage of the premiums, varying from 30 percent 
to 50 percent depending on the size of the business. This innovative 
employer option would encourage employer health coverage rather than 
shifting coverage away from the private sector. I want to emphasize 
that employer participation would be entirely voluntary.
  Opening up these health plans to employers would give small 
businesses a new opportunity to provide health coverage to their 
employees. Premiums in today's market can be especially high for small 
businesses buying insurance on their own. The OPTION program will allow 
businesses to tap into the type of group buying power in the federal 
employees program.
  Premiums would not be government-subsidized and would instead be the 
responsibility of the participating enrollees and those employers who 
choose to participate.
  Mr. President, I support efforts to provide financial assistance to 
those who cannot afford health insurance and I have offered other 
pieces of legislation to provide that assistance. We need to address 
the fact that 42.6 million Americans, including 1.7 million 
Illinoisans, currently lack health insurance--up nearly 25 percent from 
the 34.4 million in 1990. However, I am offering this measure on its 
own to focus specifically on expanding health coverage options and 
encouraging businesses to provide coverage. No one should be living 
just a serious accident or major illness away from financial ruin. 
Making more insurance options available to a greater number of people 
in this country is a good first step toward universal coverage.
  The OPTION program would be administered by the Office of Personnel 
Management, OPM, which administers the FEHBP program, and would 
generally follow the rules for FEHBP. OPM has developed considerable 
expertise in negotiating and working with health plans and has shown 
that it can run a health program well at a minimum of cost. We can 
build on OPM's expertise to extend the same health insurance options to 
all Americans.
  Finally, once it is up and running, the program would pay for itself. 
Administrative costs would be covered from a portion of the OPTION 
premiums. Those who benefit from the program would pay for its overhead 
costs.
  Mr. President, this legislation could open the door for many 
Americans to obtain good health insurance coverage. I am introducing it 
at this late point in the session so that it can stimulate discussion 
over the next few months. I will reintroduce the measure next year. I 
welcome the input and support of my colleagues and hope the Senate will 
work next year to reduce the number of uninsured Americans and expand 
insurance options.
  I ask unanimous consent that a fuller summary of the bill and a copy 
of the bill itself be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 3284

       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 ``Offering People True 
     Insurance Options Nationwide Act of 2000''.

     SEC. 2. OPTION HEALTH INSURANCE.

       Subpart G of part III of title 5, United States Code, is 
     amended by adding at the end the following:

       ``CHAPTER 90A--HEALTH INSURANCE FOR NON-FEDERAL EMPLOYEES

``Sec.
``9051. Definitions.
``9052. Health insurance for non-Federal employees.
``9053. Contract requirement.
``9054. Eligibility.
``9055. Alternative conditions to Federal employee plans.
``9056. Coordination with social security benefits.
``9057. Non-Federal employer participation.

     ``Sec. 9051. Definitions

       ``In this chapter--
       ``(1) the terms defined under section 8901 shall have the 
     meanings given such terms under that section; and
       ``(2) the term `Office' means the Office of Personnel 
     Management.

     ``Sec. 9052. Health insurance for non-Federal employees

       ``(a) The Office of Personnel Management shall administer a 
     health insurance program for non-Federal employees in 
     accordance with this chapter.
       ``(b) Except as provided under this chapter, the Office 
     shall prescribe regulations to apply the provisions of 
     chapter 89 to the greatest extent practicable to eligible 
     individuals covered under this chapter.
       ``(c) In no event shall the enactment of this chapter 
     result in--
       ``(1) any increase in the level of individual or Government 
     contributions required under chapter 89, including copayments 
     or deductibles;
       ``(2) any decrease in the types of benefits offered under 
     chapter 89; or
       ``(3) any other change that would adversely affect the 
     coverage afforded under chapter 89 to employees and 
     annuitants and members of family under that chapter.

     ``Sec. 9053. Contract requirement

       ``(a) Each contract entered into under section 8902 shall 
     require a carrier to offer to eligible individuals under this 
     chapter, throughout each term for which the contract remains 
     effective, the same benefits (subject to the same maximums, 
     limitations, exclusions, and other similar terms or 
     conditions) as would be offered under such contract or 
     applicable health benefits plan to employees, annuitants, and 
     members of family.
       ``(b)(1) The Office may waive the requirements of this 
     subsection, if the Office determines, based on a petition 
     submitted by a carrier that--
       ``(A) the carrier is unable to offer the applicable health 
     benefits plan because of a limitation in the capacity of the 
     plan to deliver services or assure financial solvency;
       ``(B) the applicable health benefits plan is not sponsored 
     by a carrier licensed under applicable State law; or
       ``(C) bona fide enrollment restrictions make the 
     application of this chapter inappropriate, including 
     restrictions common to plans which are limited to individuals 
     having a past or current employment relationship with a 
     particular agency or other authority of the Government.
       ``(2) The Office may require a petition under this 
     subsection to include--
       ``(A) a description of the efforts the carrier proposes to 
     take in order to offer the applicable health benefits plan 
     under this chapter; and
       ``(B) the proposed date for offering such a health benefits 
     plan.
       ``(3) A waiver under this subsection may be for any period 
     determined by the Office. The Office may grant subsequent 
     waivers under this section.

     ``Sec. 9054. Eligibility

       ``An individual shall be eligible to enroll in a plan under 
     this chapter, unless the individual is enrolled or eligible 
     to enroll in a plan under chapter 89.

     ``Sec. 9055. Alternative conditions to Federal employee plans

       ``(a) For purposes of enrollment in a health benefits plan 
     under this chapter, an individual who had coverage under a 
     health insurance plan and is not a qualified beneficiary as 
     defined under section 4980B(g)(1) of the Internal Revenue 
     Code of 1986 shall be treated in a similar manner as an 
     individual who begins employment as an employee under chapter 
     89.
       ``(b) In the administration of this chapter, covered 
     individuals under this chapter shall be in a risk pool 
     separate from covered individuals under chapter 89.
       ``(c)(1) Each contract under this chapter may include a 
     preexisting condition exclusion as defined under section 
     9801(b)(1) of the Internal Revenue Code of 1986.
       ``(2)(A) The preexisting condition exclusion under this 
     subsection shall provide for coverage of a preexisting 
     condition to begin not

[[Page 27241]]

     more than 1 year after the date of coverage of an individual 
     under a health benefits plan, reduced by 1 month for each 
     month that individual was covered under a health insurance 
     plan immediately preceding the date the individual submitted 
     an application for coverage under this chapter.
       ``(B) For purposes of this paragraph, a lapse in coverage 
     of not more than 31 days immediately preceding the date of 
     the submission of an application for coverage shall not be 
     considered a lapse in continuous coverage.
       ``(d)(1) Rates charged and premiums paid for a health 
     benefits plan under this chapter--
       ``(A) may be adjusted and differ from such rates charged 
     and premiums paid for the same health benefits plan offered 
     under chapter 89;
       ``(B) shall be negotiated in the same manner as negotiated 
     under chapter 89; and
       ``(C) shall be adjusted to cover the administrative costs 
     of this chapter.
       ``(2) In determining rates and premiums under this 
     chapter--
       ``(A) the age of covered individuals may be considered; and
       ``(B) rebates or lower rates and premiums shall be set to 
     encourage longevity of coverage.
       ``(e) No Government contribution shall be made for any 
     covered individual under this chapter.
       ``(f) If an individual who is enrolled in a health benefits 
     plan under this chapter terminates the enrollment, the 
     individual shall not be eligible for reenrollment until the 
     first open enrollment period following 6 months after the 
     date of such termination.

     ``Sec. 9056. Coordination with social security benefits

       ``Benefits under this chapter shall, with respect to an 
     individual who is entitled to benefits under part A of title 
     XVIII of the Social Security Act, be offered (for use in 
     coordination with those social security benefits) to the same 
     extent and in the same manner as if coverage were under 
     chapter 89.

     ``Sec. 9057. Non-Federal employer participation

       ``(a) In this section the term--
       ``(1) `employee', notwithstanding section 9051, means an 
     employee of a non-Federal employer; and
       ``(2) `non-Federal employer' means an employer that is not 
     the Federal Government.
       ``(b)(1) The Office shall prescribe regulations providing 
     for non-Federal employer participation under this chapter, 
     including--
       ``(A) the offering of health benefits plans under this 
     chapter to employees through participating non-Federal 
     employers; and
       ``(B) a requirement for participating non-Federal employer 
     contributions to the payment of premiums for employees who 
     enroll in a health benefits plan under this chapter.
       ``(2) A participating non-Federal employer shall pay an 
     employer contribution for the premiums of an employee or 
     other applicable covered individual as follows:
       ``(A) A non-Federal employer that employs not more than 2 
     employees shall not be required to pay an employer 
     contribution.
       ``(B) A non-Federal employer that employs more than 2 and 
     not more than 25 employees shall pay not less than 30 percent 
     of the total premiums.
       ``(C) A non-Federal employer that employs more than 25 and 
     not more than 50 employees shall pay not less than 40 percent 
     of the total premiums.
       ``(D) A non-Federal employer that employs more than 50 
     employees shall pay not less than 50 percent of the total 
     premiums.
       ``(3) Notwithstanding paragraph (2) (B), (C), or (D), a 
     non-Federal employer that employs more than 2 employees shall 
     pay not less than 20 percent of the total premiums with 
     respect to the first year in which that employer participates 
     under this chapter.''.

     SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Contract Requirement Under Chapter 89.--Section 8902 of 
     title 5, United States Code, is amended by adding after 
     subsection (o) the following:
       ``(p) Each contract under this chapter shall include a 
     provision that the carrier shall offer any health benefits 
     plan as required under chapter 90A.''.
       (b) Table of Chapters.--The table of chapters for part III 
     of title 5, United States Code, is amended by inserting after 
     the item relating to chapter 90 the following:

``90A. Health Insurance for Non-Federal Employees...........9051''.....

     SEC. 4. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on the date of enactment of this Act and shall apply 
     to contracts that take effect with respect to calendar year 
     2002 and each calendar year thereafter.
                                  ____


 The Offering People True Insurance Options Nationwide (OPTION) Act of 
                             2000--Summary

       The OPTION Act (Offering People True Insurance Options 
     Nationwide) would expand health insurance options for all 
     Americans by giving them access to the group purchasing power 
     and same range of private health insurance plans available to 
     Members of Congress and other federal employees. Under the 
     OPTION Act:
       All Americans would be eligible to enroll in OPTION health 
     plans nearly identical to the health plans from which federal 
     employees currently choose through the Federal Employees 
     Health Benefits Program (FEHBP).
       All FEHBP health plans would be required to offer an OPTION 
     health plan to non-federal employees with the same benefits 
     as they offer federal employees through FEHBP (with the 
     exception of plans designated for a specific federal agency 
     such as the foreign service and plans that apply for and 
     receive an exemption due to special circumstances).
       OPTION enrollees would be placed in a separate risk pool, 
     to prevent any effect on current FEHBP employees.
       The OPTION Act would not result in any changes in the 
     premiums, copayments, deductibles, or benefits of FEHBP 
     health plans, to avoid any adverse effect on the current 
     FEHBP coverage of federal employees and annuitants and their 
     families.
       All employers would have the option of voluntarily 
     participating in the OPTION program and providing OPTION 
     health plans to their employees. To be eligible, a business 
     would have to be willing to pay at least a minimum percentage 
     of the premiums for its employees, with the amount varying 
     depending on the size of the business. A small business with 
     3-25 employees would have to pay at least 30% of the premium 
     for its employees, a larger business with 26-50 employees 
     would have to pay at least 40%, and a business with more than 
     50 employees would have to pay at least 50%. Employers would 
     be offered an incentive to begin enrolling their employees by 
     allowing them to pay as little as 20% of the premium for the 
     first year only. This innovative employer option would 
     encourage employer health coverage rather than shifting 
     coverage away from the private sector. Employer participation 
     would be entirely voluntary.
       Under the OPTION Act, premiums would not be government-
     subsidized. Enrollees, and those employers who choose to 
     participate, would be responsible for the cost of the 
     premiums. (Senator Durbin supports and has offered separate 
     legislation to provide financial assistance to those who 
     cannot afford health insurance but is offering this measure 
     on its own to focus specifically on expanding health coverage 
     options and encouraging businesses to provide coverage.)
       One of the few differences from FEHBP is that OPTION plans 
     would be allowed to vary premiums by age, so that younger 
     enrollees would be more likely to enroll.
       OPTION plans also would be required to offer rebates or 
     lower premiums to encourage and reward longevity of health 
     coverage. This would create an incentive for people to sign 
     up when they are young and maintain continuous coverage.
       OPTION health plans would not be allowed to impose any 
     preexisting condition exclusions on new OPTION enrollees who 
     have at least one year of health insurance coverage 
     immediately prior to enrollment in an OPTION plan. To prevent 
     people from waiting until they get sick to enroll, health 
     plans would be allowed to exclude coverage for preexisting 
     conditions for up to one year for people without coverage 
     immediately prior to enrollment (reduced by one month for 
     each month of immediately previous coverage). OPTION 
     enrollees who terminate their coverage mid-year would have to 
     wait to re-join until the next annual open season that is at 
     least six months after the date of termination.
       People who lost their previous health coverage and are not 
     eligible for COBRA would be allowed to enroll in an OPTION 
     plan at the start of the next month, just as newly hired 
     federal employees can enroll in FEHBP.
       The benefits provided by OPTION plans would be the same as 
     the benefits in the corresponding FEHBP plans. (Current FEHBP 
     benefits include inpatient/outpatient hospital care; 
     physician services; surgical services; diagnostic tests; and 
     emergency care; as well as child immunizations; certain 
     cancer screening tests, including mammography; prescription 
     drugs, including contraceptives; mental health and substance 
     abuse treatment benefits with parity for mental and physical 
     health; organ transplantation; and a 48-hour minimum 
     inpatient stay for childbirth and mastectomies.)
       The OPTION program would be administered by the Office of 
     Personnel Management (OPM), which administers the FEHBP 
     program, and would generally follow the rules for FEHBP. For 
     example, OPM would conduct the same annual open season for 
     enrollment and would negotiate premiums and benefits with 
     OPTION health plans as it does with FEHBP plans. OPM has 
     developed considerable expertise in negotiating and working 
     with health plans and has shown that it can run a health 
     program well at a minimum of cost. Its expenses are currently 
     limited to no more than one percent of the total premiums for 
     the FEHBP program. Rather than reinventing the wheel, we can 
     build on OPM's expertise to extend the same health insurance 
     options to all Americans.
       Once it is up and running, the program would pay for 
     itself. Administrative costs would be covered from a portion 
     of the OPTION premiums.
                                 ______
                                 
      By Mr. DURBIN:

[[Page 27242]]

  S. 3285. A bill to amend the Internal Revenue Code of 1986 to exclude 
tobacco products from qualifying foreign trade property in the 
treatment of extraterritorial income; to the Committee on Finance.


               STOP GIVING SPECIAL TAX BREAKS TO TOBACCO

  Mr. DURBIN. Mr. President, today I am introducing legislation to 
exclude tobacco from the Extraterritorial Income Exclusion tax benefit, 
which has replaced the Foreign Sales Corporation tax benefit.
  This tax provision provides tax benefits to a variety of companies, 
including many in Illinois, and I understand how important it is to 
them. But one product should be clearly, in law, excluded from this 
benefit, and it is the one product which kills its user when used 
according to the manufacturer's directions--tobacco.
  The FSC replacement law already contains several exclusions from its 
benefits. Oil, gas, and other primary products are excluded to help 
ensure that natural resources in the United States are not depleted.
  Unprocessed timber is excluded in order to ensure no displacement of 
U.S. jobs.
  The law also excludes certain products in order to promote congruence 
with other federal government policies. For example, there are 
exclusions relating to items subject to the Export Administration Act, 
which prohibits or severely restricts export of certain civilian goods 
and technology that have military applications. Similarly, we should 
not be subsidizing tobacco products that are sold overseas while at the 
same time trying to cut smoking rates in the U.S. Our trade and health 
priorities should be on the same page.
  The biggest tobacco companies in America currently benefit handsomely 
from the Foreign Sales Corporation tax break and will benefit from the 
Extraterritorial Income Exclusion tax break. The latest available data 
from the Statistics of Income Division at the Internal Revenue Service 
show tobacco products sold through 10 Foreign Sales Corporations for 
domestic tobacco manufacturers accounted for about $100 million in lost 
tax revenue in 1996. There is no justification for compelling American 
taxpayers to support a $100 million tax subsidy annually for the 
benefit of U.S. tobacco companies.
  Since 1990, while Philip Morris's sales have grown minimally in the 
U.S., they have grown by 80 percent abroad. Smoking currently causes 
more than 3.5 million deaths each year throughout the world. Within 20 
years, that number is expected to rise to 10 million, with 70 percent 
of all deaths from smoking occurring in developing countries. Tobacco 
will soon be the leading cause of disease and premature death 
worldwide--surpassing communicable diseases such as AIDS, malaria, and 
tuberculosis.
  American taxpayers should not be partners in this export of disease 
and death where the result is more children around the globe smoking 
and more people getting sick and dying.
  While it is true that tobacco companies are not receiving any special 
treatment that other corporations don't get under the old FSC law or 
its recent replacement, we must remember that tobacco companies are not 
like any other company. Internal tobacco industry documents have 
established that, starting as early as the 1950s, cigarette companies 
intentionally withheld information about smoking, including scientific 
research about its risks; made false and misleading statements about 
the harm of tobacco products; attacked research findings despite 
knowing that the research was valid; failed to take steps to make their 
products safer; and marketed their products to children and youth.
  As a matter of fact, Philip Morris recently posted a statement on its 
website agreeing that smoking is harmful to your health and that there 
is no such thing as a safe or safer cigarette. The statement says, ``We 
agree with the overwhelming medical and scientific consensus that 
cigarette smoking causes lung cancer, heart disease, emphysema and 
other serious diseases in smokers. Smokers are far more likely to 
develop serious diseases, like lung cancer, than non-smokers. There is 
no `safe' cigarette. These are and have been the messages of public 
health authorities worldwide. Smokers and potential smokers should rely 
on these messages in making all smoking-related decisions.''
  It is about time that the tobacco companies faced up to the fact that 
their products are harmful and highly addictive. In the U.S. alone, 
smoking causes more than 400,000 deaths and costs more than $72 billion 
in health care costs every year.
  We should not be subsidizing such an inherently dangerous product 
that is being promoted and marketed so irresponsibly here and around 
the world. With its devastating health effects, tobacco should not 
enjoy the same taxpayer-subsidized federal assistance as other 
products.
  It's time to take another step toward bringing our nation's tax and 
trade priorities in line with our clear understanding of the health 
dangers of tobacco. My legislation simply adds one additional category 
to the list of products excluded from the special tax treatment in the 
FSC Repeal and Extraterritorial Income Exclusion Act of 2000, which was 
recently signed into law by the President. It shifts tobacco from being 
promoted by this tax benefit to being excluded from this tax benefit.
  In my legislation, tobacco is defined as it is defined in Section 
5702(c) of the Internal Revenue Code, so it includes cigars, 
cigarettes, smokeless tobacco, and pipe tobacco. It does not apply to 
raw tobacco, so this legislation will not affect tobacco farmers' 
ability to sell their product abroad.
  Is it fair to exclude a legal product from this tax benefit? 
Absolutely! Tobacco companies spend over $5 billion each year--that's 
nearly $14 million every day--in the U.S. alone to promote their 
products in order to replace the thousands of customers who either die 
or quit using tobacco products each day. In other countries, U.S. 
tobacco companies advertise their products near schools and in video-
game arcades. They also use children in other countries to peddle their 
products. Street lights with the Camel logo have been installed in 
Bucharest, Romania. Toy cars with the Camel insignia are sold to 
children in Buenos Aires. Children's tatoos sporting the Salem logo are 
distributed in Hong Kong. Arcade games in the Philippines are plastered 
with the Marlboro label.
  I urge my colleagues to send a message to U.S. tobacco companies as 
well as the next Administration to take the logical next step and make 
changes in the way tobacco products are sold and regulated to reflect 
the magnitude of the danger.
  The tobacco prevention agenda has been stalled in this Congress for 
far too long. Let's work together, in a bipartisan fashion, to stop 
marketing tobacco products to children, to regulate tobacco products in 
a sensible way, and to adopt larger and clearer warning labels 
commensurate with the risks of tobacco products. Let's take a close 
look at all the forms of tobacco, including the new fad of bidis and 
the resurgent use of cigars. They all have addictive levels of nicotine 
and deadly levels of carcinogens. It's time to put people's health 
ahead of tobacco company profits.
  Mr. President, I urge my colleagues to join me in cosponsoring this 
important legislation, to end the contradiction of using the tax code 
to continue to enrich U.S. tobacco companies, which export products 
that addict children abroad to nicotine and push them down a path to 
disease and death.
  I ask unanimous consent that a copy of the legislation be printed in 
the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3285

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

     SECTION 1. EXCLUSION OF TOBACCO PRODUCTS FROM QUALIFYING 
                   FOREIGN TRADE PROPERTY.

       (a) In General.--Section 943(a)(3) of the Internal Revenue 
     Code of 1986 (relating to excluded property) is amended by 
     striking ``or'' at the end of subparagraph (D), by striking 
     the period at the end of subparagraph (E) and inserting ``, 
     and'', and by inserting after subparagraph (E) the following 
     new subparagraph:

[[Page 27243]]

       ``(F) any tobacco products (as defined in section 
     5702(c)).''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the amendment made by 
     section 3(b) of the FSC Repeal and Extraterritorial Income 
     Exclusion Act of 2000.
                                 ______
                                 
      Mr. BINGAMAN (for himself, Mr. Daschle, and Mr. Baucus):
  S. 3286. A bill to provide permanent funding for the Bureau of Land 
Management Payment in Lieu of Taxes program and for other purposes; to 
the Committee on Energy and Natural Resources.


         pilt and refuge revenue sharing permanent funding act

  Mr. BINGAMAN. Mr. President, the bill I am introducing today, the 
PILT and Refuge Revenue Sharing Permanent Funding Act, deals with an 
issue that I believe must be addressed in the next Congress. The bill 
is a measure to make permanent funding for two important programs 
managed by the Department of the Interior: the Payment in Lieu of Taxes 
Program (or PILT) in the Bureau of Land Management and the Refuge 
Revenue Sharing Program in the Fish and Wildlife Service. These 
programs provide support to local governments in areas in which these 
two agencies hold land. Under the authorizations for these programs, 
the funds are to be provided as an offset to the local property tax 
base lost by virtue of the Federal ownership of these lands.
  Federal ownership of lands in the American West, in states like New 
Mexico, does not come without its share of burdens for local 
governments. If there is a fire or other emergency, they must help 
respond. If there is increased traffic to and from the site, they must 
maintain the public roads that provide the necessary access to the 
public. In enacting the original authorizing legislation, Congress 
decided that, as a matter of policy, it was appropriate for the Federal 
Government to bear a fair share in paying for these costs, in lieu of 
the taxes that would be levied on any private landowner in these 
localities.
  But in setting up these programs, Congress decided to make them 
subject to annual appropriations, either partially (in the case of 
Refuge Revenue Sharing) or completely (in the case of PILT). In 
retrospect, this was a mistake. The annual appropriations process has 
never come even close to providing the funds agreed upon by the 
underlying authorizing law. Moreover, the amount made available has 
changed significantly from one year to the next, frustrating the 
ability of localities to plan effectively for the use of these funds. 
Many of the burdens they face as a result of Federal land ownership 
require expenditures and commitments that are long-term. If you want to 
have a reasonable system of country roads, you need to have a 
consistent multi-year plan. If you want adequate fire protection, you 
can't be hiring a dozen new firefighters in one year and firing them 
the next, as appropriation levels gyrate up and down.
  The Federal Government needs to be a better neighbor and a more 
reliable partner to local governments in the rural West. Since the 
system of meeting our obligations to these localities through the 
annual appropriations process has not worked, I am proposing that we 
start treating our payments in lieu of taxes in the same way that we 
account for incoming tax revenues to the Federal Government--on the 
mandatory side of the Federal ledger. By making the funding for these 
crucial programs full and permanent, we will be keeping the commitments 
to rural communities throughout the West made in the original PILT and 
Refuge Revenue Sharing authorizing legislation. It's a matter of simple 
justice to rural communities. I hope that enacting legislation along 
the lines of what I am proposing today will receive high priority in 
the next Congress.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record following this statement.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3286

       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 ``PILT and Refuge Revenue 
     Sharing Permanent Funding Act''.

     SEC. 2. PERMANENT FUNDING FOR PILT AND REFUGE REVENUE 
                   SHARING.

       (a) Payments in Lieu of Taxes.--Section 6906 of title 31, 
     United States Code, is amended to read as follows:
       ``There is authorized to be appropriated such sums as may 
     be necessary to the Secretary of the Interior to carry out 
     this chapter. Beginning in fiscal year 2002 and each year 
     thereafter, amounts authorized under this chapter shall be 
     made available to the Secretary of the Interior, out of any 
     other funds in the Treasury not otherwise appropriated and 
     without further appropriation, for obligation or expenditure 
     in accordance with this chapter.''.
       (b) Refuge Revenue Sharing.--Section 401(d) of the Act of 
     June 15, 1935, as amended (16 U.S.C. 715s(d)) (relating to 
     refuge revenue sharing), is amended by adding at the end 
     thereof:
       ``Beginning in fiscal year 2002 and each year thereafter, 
     such amount shall be made available to the Secretary, out of 
     any other funds in the Treasury not otherwise appropriated 
     and without further appropriation, for obligation or 
     expenditure in accordance with this section.''.

                          ____________________