[Congressional Record (Bound Edition), Volume 146 (2000), Part 2]
[Senate]
[Pages 2447-2477]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. GRASSLEY (for himself and Mr. Graham):
  S. 2225. A bill to amend the Internal Revenue Code of 1986 to allow 
individuals a deduction for qualified long-term care insurance 
premiums, use of such insurance under cafeteria plans and flexible 
spending arrangements, and a credit for individuals with long-term care 
needs; to the Committee on Finance.


         The Long-Term Care and Retirement Security Act of 2000

  Mr. GRASSLEY. Mr. President, long-term tax credits may seem like a 
dull topic. But the expenses of caring for an ailing family member are 
shocking. Millions of people bear these expenses every day, without any 
help.
  Here's a typical example: A state legislator from Ohio named Barbara 
Boyd testified before my Special Committee on Aging last year. Ms. Boyd 
cared at home for her mother who had Alzheimer's disease and breast 
cancer. Her mother had $20,000 in savings and a monthly Social Security 
check. That went quickly. Prescription drugs alone ran $400 a month.
  Antibiotics, ointments to prevent skin breakdown, incontinence 
supplies and other expenses cost hundreds of dollars a month. Ms. Boyd 
exhausted her own savings to care for her mother, and exhausted 
herself. She isn't complaining. Family caregivers don't complain. But 
we can and should use the tax code to ease their burden.
  Yesterday a bipartisan group of legislators, and two prominent 
groups--

[[Page 2448]]

AARP and the Health Insurance Association of America, announced a 
consensus agreement on a legislative package to help people with a 
variety of long-term care needs. Our bill contains a tax deduction to 
encourage individuals to buy long-term care insurance. We want to help 
people to prepare for their health needs in retirement.
  The bill also contains a $3,000 tax credit for family caregivers 
caring for a disabled relative at home. Under this legislation, Ms. 
Boyd's mother could have purchased long-term care insurance long before 
she developed Alzheimer's. In addition, Ms. Boyd could have used the 
tax credit to help with the costs of the medications and medical 
supplies for her mother.
  I'm pleased that we have so much agreement in Washington about 
helping people with long-term care expenses. The legislators sponsoring 
this legislation have pushed for long-term care relief for years. 
Today, my colleagues and I will introduce this bill. We'll work to get 
it passed into law as soon as possible. An aging nation has no time to 
waste in preparing for long-term care. Family caregivers need immediate 
relief from their expensive and exhausting work.
  Joining me in introducing this bill is Senator Bob Graham of Florida, 
Representative Nancy Johnson, and Representative Karen Thurman.
                                 ______
                                 
      By Mr. BAUCUS:
  S. 2226. A bill to establish a Congressional Trade Office; to the 
Committee on Finance.


                 to create a congressional trade office

 Mr. BAUCUS. Mr. President, last year I introduced a bill to 
create a Congressional Trade Office. That bill was designed to provide 
the Congress with new and additional trade expertise that would be 
independent, non-partisan, and neutral. Today, I am introducing the 
same bill with several small changes.
  The role of Congress in trade policy has expanded in the few short 
months since I introduced my bill in September. We went through Seattle 
and the failure to launch a new multilateral trade round. The public is 
more interested in trade issues than ever before. There is a new 
urgency to reconcile labor and environmental issues with trade. We are 
on the cusp of seeing China enter the WTO with permanent Normal Trade 
Relations with the United States. The General Accounting Office has 
told us of the deficiencies in the Executive Branch in following trade 
agreements and monitoring compliance. And, for the first time, trade 
will be an issue in the Presidential campaign, as well as in Senate and 
House races.
  Congress needs to be much better prepared. And that means we need 
access to more and better information, independently arrived at from 
people whose commitment is to the Congress, and only to the Congress.
  Congress has the Constitutional authority to provide more effective 
and active oversight of our Nation's trade policy. We must use that 
authority. Congress should be more active in setting the direction of 
trade policy. I believe strongly that we must re-assert Congress' 
constitutionally defined responsibility for international commerce.
  A Congressional Trade Office would provide the entire Congress, 
through the Senate Finance Committee and the House Ways and Means 
Committee, with this additional trade expertise. It would have three 
sets of responsibilities.
  First, it will monitor compliance with major bilateral, regional, and 
multilateral trade agreements. Last week, along with Senator Murkowski 
and several other Senators, I introduced the China WTO Compliance Act. 
That bill is designed to ensure continuing and comprehensive monitoring 
of China's WTO commitments. It is also designed to ensure aggressive 
Administration action to ensure compliance with those commitments. But 
that bill deals only with China. Congress needs the independent ability 
to look more closely at agreements with other countries. The 
Congressional Trade Office will analyze the performance under key 
agreements and evaluate success based on commercial results. It will do 
this in close consultation with the affected industries. The 
Congressional Trade Office will recommend to the Congress actions 
necessary to ensure that commitments made to the United States are 
fully implemented. It will also provide annual assessments about the 
agreements' compliance with labor and environmental goals.
  Second, the Congressional Trade Office will have an analytic 
function. For example, after the Administration delivers its annual 
National Trade Estimates report, the NTE, to Congress, it will analyze 
the major outstanding trade barriers based on the cost to the U.S. 
economy. It will also provide an analysis of the Administration's Trade 
Policy Agenda.
  The Congressional Trade Office will analyze proposed trade 
agreements, including agreements that do not require legislation to 
enter into effect. It will examine the impact of Administration trade 
policy actions, including an assessment of the Administration's 
argument for not accepting an unfair trade practices case. And it will 
analyze the trade accounts every quarter, including the global current 
account, the global trade account, and key bilateral trade accounts.
  Third, the Congressional Trade Office will be active in dispute 
settlement deliberations. It will evaluate each WTO decision where the 
U.S. is a participant. In the case of a U.S. loss, it will explain why 
it lost. In the case of a U.S. win, it will measure the commercial 
results from that decision. It will do a similar evaluation for NAFTA 
disputes. Congressional Trade Office staff should participate as 
observers on the U.S. delegation at dispute settlement panel meetings 
at the WTO.
  The Congressional Trade Office is designed to service the Congress. 
Its Director will report to the Senate Finance Committee and the House 
Ways and Means Committee. It will also advise other committees on the 
impact of trade negotiations and the impact of the Administration's 
trade policy on those committees' areas of jurisdiction.
  The staff will consist of professionals who have a mix of expertise 
in economics and trade law, plus in various industries and geographic 
regions. My expectation is that staff members will see this as a career 
position, thus, providing the Congress with long-term institutional 
memory.
  The Congressional Trade Office will work closely with other 
government entities involved in trade policy assessment, including the 
Congressional Research Service, the General Accounting Office, and the 
International Trade Commission. The Congressional Trade Office will not 
replace those agencies. Rather, the Congressional Trade Office will 
supplement their work, and leverage the work of those entities to 
provide the Congress with timely analysis, information, and advice.
  Dispute resolution and compliance with trade agreements are central 
elements of U.S. trade policy. The credibility of the global trading 
system, and the integrity of American trade law, depend on the belief, 
held by trade professionals, political leaders, industry 
representatives, workers, farmers, and the public at large, that 
agreements made are agreements followed. They must be fully 
implemented. There must be effective enforcement. Dispute settlement 
must be rapid and effective.
  Often more energy goes into negotiating new agreements than into 
ensuring that existing agreements work. The Administration has 
increased the resources it devotes to compliance, and I support that. 
But an independent and neutral assessment in the Congress of compliance 
is necessary. It is unrealistic to expect an agency that negotiated an 
agreement to provide a totally objective and dispassionate assessment 
of that agreement's success or failure.
  Looking at the WTO dispute settlement process, I don't think we even 
know whether it has been successful or not from the perspective of U.S. 
commercial interests. A count of wins versus losses tells us nothing. 
The Congressional Trade Office will give us the facts we need to 
evaluate this process properly.

[[Page 2449]]

  Article I, Section 8, of the U.S. Constitution says: ``The Congress 
shall have power . . . To regulate commerce with foreign nations.'' It 
is our responsibility to provide oversight and direction on U.S. trade 
policy. The Congressional Trade Office, as I have outlined it today, 
will provide us in the Congress with the means to do so.
                                 ______
                                 
      By Mr. BOND (for himself Ms. Landrieu, Mr. Craig, Mrs. Lincoln, 
        Mr. Johnson, Mr. Lieberman, Mr. Jeffords, Mr. Robb, Mr. 
        Stevens, and Mr. Warner):
  S. 2227. A bill to amend chapter 79 of title 5, United States Code, 
to allow Federal agencies to reimburse their employees for certain 
adoption expenses, and for other purposes; to the Committee on 
Governmental Affairs.


             the federal employees adoption assistance act

  Mr. BOND. Mr. President, today I join my colleagues in the House, 
Congressmen Bliley and Oberstar and 42 other House Members, as well as 
Senators Landrieu, Craig, Jeffords, Lincoln, Johnson, Lieberman, 
Jeffords, Robb, Stevens, and Warner, in introducing a bill to reimburse 
all federal employees up to $2,000 for qualified expenses associated 
with the adoption of a child and for special-needs adoptions--the 
Federal Employees Adoption Assistance Act of 2000.
  Every year, couples who are unable to have children of their own 
spend literally thousands of dollars to adopt a child. Statistics show 
that approximately 2.1 million couples in the Unites States are 
infertile. One of the main reasons for this is because couples are 
waiting longer to start a family in order to focus on careers. Many 
seek treatment to conceive a child, but are unsuccessful. For them, 
their only hope of having a child of their own is through adoption.
  The adoption process demands an incredible amount of time and money 
and creates stress that can affect job performance. For this reason 
many private-sector businesses, such as Microsoft, Hewlett-Packard, 
Sprint, Prudential, Home Depot, and Freddie Mac, now provide financial 
assistance to employees adopting a child, thus increasing employee 
satisfaction, productivity, and loyalty and commitment to the employer. 
Unfortunately, the largest employer in the U.S.--the federal 
government--currently provides no financial assistance for adoption 
expenses to its employees. That is why I am introducing the Federal 
Employees Adoption Assistance Act.
  This legislation would allow federal agencies to reimburse employees 
up to $2,000 for all qualified expenses associated with the adoption of 
a child, including special-needs children. Any benefit paid by this 
legislation would come out of funds available for salaries and expenses 
of the relevant agencies. Currently, active-duty armed services 
personnel receive this adoption benefit, $2,000 per adoption; however, 
no other branch of the federal government covers this expense.
  A key aspect of adoption that is frequently overlooked, and that I 
have made sure is addressed in this legislation, is that of special-
needs children. Recent estimates show there are currently around 
110,000 special-needs children in foster care who are eligible for 
adoption. Many of these children have physical or mental disabilities 
and need extensive care and therapy. Another common situation is two or 
more siblings in need of a family willing to take on the responsibility 
of more than one child. Most of these children are currently in foster 
care waiting to find a permanent home and family of their own, and are 
less likely to be adopted than non-special-needs children.
  Often, couples who may already have children of their own are 
interested in opening their home and their hearts to adopt a child or 
children with special needs, but are hesitant to do so due to the costs 
involved. By providing an adoption reimbursement benefit, many couples 
already considering adopting special-needs children decide to go ahead 
with the process. The Federal Employees Adoption Assistance Act 
broadens the adoption benefits package to include the costs associated 
with special-needs adoptions.
  Mr. President, this is why I, along with numerous colleagues on both 
sides of the aisle and in both chambers, are introducing and advocating 
the passage of this legislation. Additionally, this bipartisan and 
bicameral bill has the endorsement of numerous adoption advocacy 
groups, including:
  Bethany Christian Services in Grand Rapids, Michigan, Covenant House, 
The Dave Thomas Foundation for Adoption, The Edgewood Children's Center 
in St. Louis, Missouri, Family Voices, The National Adoption Center, 
The National Council for Adoption, The National Treasury Employees 
Union, and Voice for Adoption.
  As a member of the Congressional Coalition on Adoption, I believe we 
should provide incentives to make sure that more children find loving 
parents. I thank my colleagues, Senators Landrieu, Craig, Jeffords, 
Lincoln, Johnson, Lieberman, Jeffords, Robb, Stevens, and Warner, 
Congressmen Bliley and Oberstar, and the numerous other House and 
Senate sponsors, as well as the many adoption advocacy groups, for 
joining me in promoting adoption and supporting our civil servants by 
cosponsoring and endorsing this legislation.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                   Bethany Christian Services,

                                  Grand Rapids, MI, March 3, 2000.
     Hon. Christopher Bond,
     U.S. Senate,
     Washington, DC.
       Dear Senator Bond, I have read the draft of the Federal 
     Employees Adoptions Assistance Act that you have proposed. On 
     behalf of Bethany Christian Services, I express my support 
     for this legislation.
       Bethany is a national child welfare 501(c)3 organization 
     and is located in 31 states. We place close to 1500 children 
     for adoption each year and most of them have some form of 
     ``special need.'' The families that choose to adopt are 
     typically in need of some form of financial assistance.
       Thank you for your efforts to promote adoption with this 
     proposed legislation.
           Sincerely,
                                                    Glenn De Mots,
     President.
                                  ____

                                            Dave Thomas Foundation


                                                 for Adoption,

                                        Dublin, OH, March 8, 2000.
     Hon. Christopher Bond,
     U.S. Senate,
     Washington, DC.
       Dear Senator Bond: As you know, adoption is a personal 
     thing for me. I was adopted when I was six weeks old, and If 
     I hadn't had a family to care for me, I know, I wouldn't be 
     where I am now. Today over 110,000 children in the United 
     States foster care system are waiting to be adopted. I'd like 
     to see them have the same chance that I had for a loving home 
     and family. I support your efforts to help these children and 
     the families who adopt them through the introduction of the 
     Federal Employees Adoption Assistance Act of 2000.
       Wendy's began to offer adoption assistance to our employees 
     in 1990, and since then thirty-six employees have adopted. We 
     discovered many advantages to offering adoption benefits. 
     They are a highly valued part of employees' benefits and they 
     make the process of building a family more fair. When a 
     company offers adoptive parents financial assistance and 
     leave comparable to maternity benefits, they are doing what 
     is best for families--and employees appreciate it. Adoption 
     benefits also provide an opportunity to give back to the 
     community. By offering employers adoption benefits we are 
     making it possible for more children to be adopted from the 
     child welfare system. Through our work at Wendy's, we are 
     reminded that building and supporting families is the right 
     thing to do. It costs so little to make a tremendous 
     difference in the lives of families and children.
       We appreciate your hard work to ensure that this 
     legislation covers a broader range of adoption related 
     expenses. This is especially important because of the unique 
     costs that families who adopt children with special needs 
     incur.
       Again, thank you for your efforts to encourage the federal 
     government to join the growing number of employers who agree 
     that adoption benefits make good business sense. We commend 
     you for your leadership in this area and hope your fellow 
     Members of Congress will support it.
           Warm regards,
                                                      Dave Thomas,
                                                          Founder.

[[Page 2450]]

     
                                  ____
                                               Covenant House,

                                      New York, NY, March 8, 2000.
     Hon. Christopher Bond,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senator Bond: Covenant House is proud to be a 
     supporter of the Federal Employees Adoption Assistance Act of 
     2000. I would like to have joined you for the actual 
     announcement of this legislation but am unable to do so due 
     to a previous commitment.
       Each year, thousands of youth come to Covenant House 
     lacking the support of a stable family and desperately in 
     need of love and protection. This legislation will encourage 
     federal employees to adopt youth who have this great need and 
     hopefully set an example for employers throughout the nation 
     to provide similar encouragement to their employees who want 
     to adopt a youth. We know so many young people whose lives 
     would have been turned around if only adoption could have 
     been possible for them.
       Thank you so much for drafting and sponsoring this 
     important legislation.
           Sincerely,
                                   Sister Mary Rose McGeady, D.C.,
     President.
                                  ____



                                     Edgewood Children Center,

                                 St. Louis, MO, February 16, 2000.
     Hon. Christopher S. Bond,
     U.S. Senate,
     Washington, DC.
       Dear Senator Bond: As you know, at Edgewood Children's 
     Center we often work with children whose own families are 
     unable to care for them. Finding permanent families for those 
     children is usually more of a priority than anything else we 
     do.
       The ``Federal Employees Adoption Assistance Act'' will 
     support an important group of potential parents in their 
     desire to parent these and other children. Easing the 
     financial burden of adoption will increase the pool of 
     available families and make the way easier for those who 
     choose this important step.
       Thank for, once again, leading the way on behalf of kids. 
     Know of our strong support of this bill and please let me 
     know of anything we can do to be of assistance.
           Most sincerely,
                                               Susan S. Stepleton,
     Executive Director.
                                  ____



                                                Family Voices,

                                  Algodones, NM, February 9, 2000.
     Senator Christopher Bond,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senator Bond: Family Voices is pleased to write in 
     support of the ``Federal Employees Adoption Assistance Act'' 
     you have proposed. Family Voices, 30,000 members understand 
     the delicate nature of our children with special needs have a 
     loving home to grow up in and a nurturing family to support 
     them.
       We believe that any assistance that can be provided to help 
     families adopt children with special needs is crucial. 
     Today's changing health care environment and families 
     concerns about growing costs may provide barriers to the 
     adoption of our children with special needs. Your bill simply 
     equals the playing field for our children with special needs 
     and the families who wish to be apart of their lives. Our 
     children deserve a nurturing environment and this bill will 
     encourage adopting families to take a second look at our 
     kids. You have truly addressed a need our children and their 
     future families have and Family Voices stands behind your 
     efforts.
           Sincerely,

                                                Julie Beckett,

                                      National Policy Coordinator,
     Family Voices, Inc.
                                  ____

                                             Missouri Coalition of


                                          Children's Agencies,

                                Jefferson City, MO, March 4, 2000.
     Hon. Christopher S. Bond,
     U.S. Senate,
     Washington, DC.
       Dear Senator Bond: As you know, the Missouri Coalition of 
     Children's Agencies is the professional association 
     representing sixty-five private child caring agencies in 
     Missouri. The vast majority of these agencies spend a 
     considerable portion of their time attempting to find 
     permanent homes for the abused and neglected children in 
     their care. This function is second only to providing a safe 
     and caring environment for these children.
       The ``Federal Employees Adoption Assistance Act'' is a 
     great step in providing an important potential group of 
     adoptive parents for children in need of permanent homes. 
     Anything we can do to increase the pool of potential adoptive 
     families can only help increase the chances for the children 
     who most need the love and stability of a permanent home. 
     Reducing the financial burden of adoption is a great step 
     forward for these potential families.
       We truly appreciate your strong support of children. If 
     there is anything our association or its individual members 
     can do to help in this effort, please let me know.
           Sincerely,
                                                    Joe Ketterlin,
     Executive Director.
                                  ____



                                     National Adoption Center,

                                                 Philadelphia, PA.
     Hon. Christopher S. Bond,
     U.S. Senate,
     Washington, DC.
       Dear Senator Bond: For the past four years, the National 
     Adoption Center has been in the forefront of encouraging 
     employers to offer adoption benefits through its Adoption and 
     the Workplace project. During this time, more than 125 
     employers have implemented benefits' policies, including 
     financial reimbursement for adoption expenses. This support 
     allows families to consider adoption as a viable option and 
     to provide loving homes to children who need permanence.
       The reaction of adoptive families who receive adoption 
     benefits has been overwhelmingly positive. Many have spoken 
     of their appreciation of their employer's efforts to provide 
     fairness in relation to those who create families 
     biologically and often express their gratitude through 
     greater loyalty and commitment to their workplace.
       We support the Federal Employees Adoption Assistance Act 
     you are proposing as an effective way of providing financial 
     reimbursement to employees interested in adopting and as a 
     means of encouraging families to consider adoption as a 
     family-building alternative. We feel that this legislation 
     addresses the need for equity, recognizing that families who 
     adopt have traditionally had no employer-supported financial 
     benefits, unlike those who receive maternity coverage.
       We commend you for this farsighted bill and urge your 
     fellow legislators to support it.
           Sincerely,
                                               Carolyn L. Johnson,
     Executive Director.
                                  ____



                                National Council for Adoption,

                                 Washington, DC, February 8, 2000.
     Hon. Christopher S. Bond,
     U.S. Senate,
     Washington, DC.
       Dear Senator Bond: I reviewed the draft version of the 
     Federal Employees Adoption Assistance Act that you have 
     proposed and am in support of this legislation. As you know, 
     the National Council For Adoption has taken the position of 
     promoting adoption for the past 20 years. The Federal 
     Employees Adoption Assistance Act provides families with much 
     needed financial assistance to defray the cost of certain 
     adoption expenses. By providing this assistance, hopefully a 
     number of strong families that would not otherwise have the 
     financial ability to adopt a child will have the opportunity 
     to provide a loving home to a child in need of a family.
       As a supporter of companion legislation sponsored by 
     Representative Tom Bliley and Representative James Oberstar, 
     the National Council for Adoption supports your efforts to 
     enact the Federal Employees Adoption Assistance Act into law 
     this year.
           Sincerely,
                                               David M. Malutinok,
     President.
                                  ____


 Statement of Colleen M. Kelley, National President, National Treasury 
   Employees Union, in Support of the Federal Adoption Assistance Act

       The National Treasury Employees Union, which represents 
     over 155,000 federal workers in the Department of the 
     Treasury, Department of Energy, Federal Communications 
     Commission, Nuclear Regulatory Commission, Patent and 
     Trademark Office and other agencies announces its strong 
     support for the bipartisan legislation introduced by Senator 
     Kit Bond and Representative Tom Bliley to provide adoption 
     assistance for federal employees.
       Many federal employees are ready and willing to provide a 
     loving home for a child in need. Sadly, significant financial 
     barriers often exist particularly for the lower and middle 
     grade public servants that make up the membership of our 
     union. This legislation would lessen the financial burden 
     these hopeful parents would bear as they take on the duties 
     of providing love and care for a child in need of a home.
       The federal government should set the example for employers 
     everywhere in developing compassionate and socially 
     responsible employment and benefit policies. NTEU asks that 
     Congress move quickly on this important legislation.
                                  ____



                                           Voice for Adoption,

                                 Washington, DC, February 9, 2000.
     Hon. Christopher Bond,
     U.S. Senate,
     Washington, DC.
       Dear Senator Bond: On behalf of Voice for Adoption (VFA), I 
     applaud your efforts to help special needs children move from 
     foster care to permanent loving homes. VFA supports the 
     Federal Employees Adoption Assistance Act.
       Founded in 1996, VFA has more than 70 national and local 
     special needs adoption organizations as members. VFA 
     participants include professionals, parents, and advocates 
     committed to securing adoptive families for America's waiting 
     children.
       Our distinguished board of directors has more than two 
     hundred years combined experience in the adoption field. 
     VFA's board includes: North American Council on Adoptable 
     Children (NACAC), the National Adoption Center, Adoption 
     Exchange Association

[[Page 2451]]

     (AEA) Child Welfare League of America (CWLA), Children 
     Awaiting Parents (CAP), the Institute for Black Parenting, 
     Three River Adoption Council, Spaulding for Children, Family 
     Builders Adoption Network and The Evan B. Donaldson Adoption 
     Institute. Our aim is to ensure permanent, nurturing families 
     for our nation's most vulnerable children and to strengthen 
     support for families who adopt.
       In 1998, approximately 520,000 children were in out-of-
     home, foster, kinship, or residential care. The average age 
     of these children in foster care is 9.5 year old. These 
     children can expect to spend on average more than three years 
     in the foster care system and be moved more than three 
     different times during their stays.
       The Federal Employees Adoption Assistance Act, which allows 
     up to $2,000 reimbursement for adoption expenses, would 
     encourage employees of the federal government to adopt who 
     would not have been able to afford it otherwise.
       Again, VFA applauds your leadership with this important 
     piece of legislation.
           Sincerely,
                                            Courteney Anne Holden,
                                               Executive Director.

  Mr. CRAIG. Mr. President, I am pleased to join my colleagues and to 
acknowledge the leadership of Senator Bond in introducing the Federal 
Employees Adoption Assistance Act of 2000.
  Congress has repeatedly demonstrated strong support for adoption. I 
think there is a clear consensus here that adoption is a positive 
experience--for children needing homes, for birth parents, and for 
adoptive parents, not to mention for society at large. In recent years, 
we have shaped federal policies so that they do more to help waiting 
children find permanent, loving families.
  Now we have an opportunity to bring home our advocacy for adoption.
  The Federal Employees Adoption Assistance Act follows the lead of a 
growing number of private sector businesses in establishing an adoption 
benefit for employees. It is well known that family-friendly workforce 
policies help attract and retain qualified workers. While adoption 
benefits generate considerable good will and loyalty among employees, 
they cost little for employers, because they are relatively rarely 
used. Yet in view of what continues to be a huge price tag for 
adoption--in the tens of thousands of dollars--these benefits can truly 
make a difference in helping an employee choose this option for 
creating or expanding a family.
  By implementing these policies for federal workers, we can underscore 
our strong message of support for adoption and encourage more private 
sector employers to do likewise. At the same time, we will be improving 
the competitiveness of the federal government in recruiting good 
workers and helping to increase current workers' job satisfaction and 
commitment.
  The benefit that could be provided by the Federal Employees Adoption 
Assistance Act is by no means lavish, but it compares favorably with 
similar benefits in the private sector. This policy will be good for 
workers, good for the federal government, good for taxpayers, and--most 
important--good for the more than 100,000 children in this country who 
are eligible for adoption today but still awaiting a permanent, loving 
family.
  I congratulate Senator Bond for bringing this initiative to the 
Senate and encourage all our colleagues to join us in working to pass 
this important legislation.
  Mr. JEFFORDS. Mr. President, I rise today in support of the 
legislation that is being introduced by my friend and colleague from 
Missouri, Senator Bond. As Chairman of the Committee on Health, 
Education, Labor, and Pensions and a member of the Congressional 
Coalition on Adoption, I have been a long-standing supporter of 
legislation to make adoption easier. This bill does exactly that by 
requiring federal agencies to reimburse their employees up to $2,000 
for all qualified expenses associated with the adoption of a child. 
Both this bill and its House companion, introduced by Representatives 
Tom Bliley and James Oberstar last August, have gathered the support of 
a bipartisan group of legislators and numerous groups in the adoption 
community.
  Currently, many private sector businesses provide financial 
assistance to employees who wish to adopt a child. These businesses 
understand that adoption can be a very time-consuming, exhausting, and 
expensive process for parents. Relieving the financial burden on their 
employees will not only help encourage adoption, but also produce a 
happier and more productive work force.
  The legislation being introduced today provides a benefit for our own 
hard-working federal employees. In the process, it brings the federal 
government up to par with those private-sector businesses that already 
provide financial assistance to employees adopting a child. Even 
further, it establishes a leadership role for the federal government in 
this area. This hopefully will encourage even more businesses to assist 
their employees financially should they wish to adopt a child.
  I am proud to stand today with several of my colleagues as co-
sponsors of the Federal Employees Adoption Assistance Act of 2000. I 
hope the Senate will proceed quickly to pass this legislation. It makes 
sense, both for the approximately 110,000 children currently awaiting 
adoption in the United States, and for those federal employees who are 
willing and able to provide a home for them.
                                 ______
                                 
      By Mrs. MURRAY (for herself, and Mr. Gorton):
  S. 2228. A bill to require the Secretary of the Army to conduct 
studies and to carry out ecosystem restoration and other protective 
measures within Puget Sound, Washington, and adjacent waters, and for 
other purposes; to the Committee on Environment and Public Works.


                   Puget sound ecosystem restoration

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

                                S. 2228

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

     SECTION. 1. PUGET SOUND ECOSYSTEM RESTORATION.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Secretary of the Army (in this 
     section referred to as the ``Secretary'') shall conduct 
     studies and carry out ecosystem restoration and other 
     protective measurers within Puget Sound, Washington, and 
     adjacent waters and associated estuary and near-shore 
     habitat, including--
       (1) the 17 watersheds that drain directly into Puget Sound;
       (2) Admiralty Inlet;
       (3) Hood Canal;
       (4) Rosario Strait; and
       (5) the eastern portion of the Strait of Juan de Fuca.
       (b) Implementation.--
       (1) In general.--The Secretary shall use funds made 
     available to carry out this section to carry out ecosystem 
     restoration and other protective measures (including 
     environmental improvements related to facilities of the Corps 
     of Engineers in existence on the date of enactment of this 
     Act) determined by the Secretary to be feasible based on--
       (A) the studies conducted under subsection (a); or
       (B) analyses conducted before such date of enactment by 
     non-Federal interests.
       (2) Criteria and procedures for review and approval.--In 
     consultation with the Secretary of Commerce and the Governor 
     of the State of Washington, the Secretary shall develop 
     criteria and procedures consistent with the National Marine 
     Fisheries Service and State fish restoration goals and 
     objectives for reviewing and approving analyses described in 
     paragraph (1)(B) and the protective measures proposed in 
     those analyses. The Secretary shall use prior studies and 
     plans to identify project needs and priorities wherever 
     practicable.
       (3) Prioritization of projects.--In prioritizing projects 
     for implementation under this subsection, the Secretary shall 
     consult with public and private entities active in watershed 
     planning and ecosystem restoration in Puget Sound watersheds, 
     including the Salmon Recovery Funding Board, the Northwest 
     Straits Commission, the Hood Canal Coordinating Council, 
     county watershed planning councils, and salmon enhancement 
     groups, and shall give full consideration to their priorities 
     for projects.
       (c) Public Participation.--In developing and implementing 
     protective measures under subsections (a) and (b), the 
     Secretary shall provide for public review and comment in 
     accordance with applicable Federal law, including--
       (1) providing advance notice of public meetings;
       (2) providing adequate opportunity for public input and 
     comment;

[[Page 2452]]

       (3) maintaining appropriate records; and
       (4) compiling a record of the proceedings of meetings.
       (d) Compliance With Applicable Law.--In developing and 
     implementing protective measures under subsections (a) and 
     (b), the Secretary shall comply with applicable Federal law, 
     including the National Environmental Policy Act of 1969 (42 
     U.S.C. 4321 et seq.).
       (e) Cost Sharing.--
       (1) In general.--Studies and technical assistance provided 
     to determine the feasibility of protective measures under 
     subsections (a) and (b) shall--
       (A) be considered to be project costs; and
       (B) be shared by non-Federal interests during project 
     implementation in accordance with this subsection.
       (2) Non-federal share.--Subject to paragraph (4), the non-
     Federal share of the cost of the protective measures shall be 
     35 percent; except that if a project would otherwise be 
     eligible for cost-sharing under section 1135 of the Water 
     Resources Development Act of 1986 (33 U.S.C. 2294 note), the 
     non-Federal share of the cost of the protective measures for 
     the project shall be 25 percent.
       (3) In-kind contributions.--Not more than 80 percent of the 
     non-Federal share may be provided in the form of services, 
     materials, supplies, or other in-kind contributions necessary 
     to carry out the protective measures.
       (4) Federal share.--The Federal share of the cost of any 
     single protective measure shall not exceed $5,000,000.
       (5) Operation and maintenance.--The operation and 
     maintenance of the protective measures shall be a non-Federal 
     responsibility.
       (6) Tribal cost-sharing.--The Secretary shall waive the 
     first $200,000 in non-Federal cost share for all studies and 
     projects cosponsored by federally recognized Indian tribes.
       (f) Authorization of Appropriations.--There is authorized 
     to be appropriated to not to exceed $125,000,000 to pay the 
     Federal share of the cost of carrying out this section.

                          ____________________



  By Ms. MIKULSKI (for herself, Mr. Kennedy, Mr. Bingaman, Mr. Levin, 
Mr. Sarbanes, Mrs. Murray, Mrs. Lincoln, Mr. Johnson, Mr. Kerry, Mr. 
Durbin, Mr. Hollings, Mr. Reid, Mr. Rockefeller, Mr. Breaux, Mr. 
Dorgan, Mr. Torricelli, Mr. Baucus, Mr. Dodd, Mr. Cleland, and Mrs. 
Feinstein):
  S. 2229. A bill to provide for digital empowerment, and for other 
purposes; to the Committee on Finance.


                        digital empowerment act

  Ms. MIKULSKI. Today, I introduce the Digital Empowerment Act. The 
goal of this legislation is to ensure that every child is computer 
literate by the eighth grade regardless of race, ethnicity, income, 
gender, geography, or disability.
  Yesterday, the Senate's Education Committee voted for my amendment to 
establish this as our national goal. This vote was taken on a 
bipartisan basis and was unanimous. Today, I am introducing this 
legislation to make this goal a reality. This bill has been a team 
effort. I reached out to the Congressional Hispanic Caucus, the 
Congressional Black Caucus, to my colleagues, the people throughout 
Maryland, ministers in Baltimore, business leaders, educators, and 
political leadership. Why? It is because a digital divide exists in 
America. Those who have access to technology and know how to use it 
will be ready for the new digital economy. Those who don't will be left 
out and left behind.
  Low-income urban and rural families are less likely to have access to 
the Internet and computers. Black and Hispanic families are only two-
fifths as likely to have Internet access as their white counterparts. 
Some schools have 10 computers in every classroom. In other schools, 
there are 200 students who share one computer. The private sector is 
doing important and exciting work, such as Power Up from AOL, but 
technology empowerment can't be limited to a few zip codes. What we 
need is a national policy and national programs.
  Mr. President, I believe the best antipoverty program is an 
education. If we practice the ABCs, we will ensure that our children 
have a good education and will cross this digital divide. Crossing the 
digital divide is about technology and about children having access to 
technology. It is about teachers knowing how to teach children the 
tools of technology so they can cross this digital divide.
  The ABCs are simply this: Access--each child must have universal 
access to computers, whether it is in a school, a library, or a 
community center. Many families cannot afford to buy computers for 
their homes, but children in America should have access to them through 
public institutions.
  We also need to practice the B--best-trained teachers and, I might 
add, better-paid teachers.
  But C would be computer literacy for all students by the time they 
finish eighth grade.
  My Digital Empowerment Act will, first of all, create a one-stop shop 
for Federal education technology programs at the Department of 
Education. Why do we need this? Well, right now, our programs are 
scattered throughout the Department. School superintendents have to 
forage to be able to find that information, and when they do, they find 
the funding is absolutely spartan or skimpy. That is why my legislation 
also improves our schools in terms of access to technology and teacher 
training.
  Teachers want to help their students cross the digital divide, but 
they are facing three major problems. One, they need technology. They 
need hardware and software. They need training to use the technology 
because without training of the teachers or librarians, it is a hollow 
opportunity.
  In my own home State of Maryland, over 600 teachers from across the 
State volunteered to participate in a tech-prep academy so they could 
be ready. But hundreds were turned away. For every one teacher who can 
sign up for tech-prep training, four or five are standing in line to do 
so.
  My bill addresses these concerns. We are going to double funding for 
school technology and for teacher training. We now spend less than half 
a billion dollars on training and technology for our schools. We would 
double that to $850 million. But we also have to make sure we go where 
children learn, and that is in the community. Right now, what we find 
is that the only reliable source of revenue for wiring schools and 
libraries is the E-rate. But, the E-rate does not go to community 
centers.
  Whether it is an African-American church or a community center in an 
Appalachian region or rural parts of the South or the upper regions of 
Alaska, what my legislation would do is help community centers. My 
legislation would create an E-corps within the AmeriCorps national 
service program. It would bring AmeriCorps volunteers with special 
technology training into our schools and into our communities.
  I recently had a town hall meeting in an elementary school in 
Riverdale, MD. The teachers and students told me they need extra pairs 
of hands to help out in the computer lab to be able to teach the 
children. Also, we want to create 1,000 community tech centers. 
Community leaders have told me we need to bring technology to where 
kids learn, not just where we want them to learn. Our legislation would 
create 1,000 community-based centers that would be run by community 
organizations such as the YMCA and YWCA, Urban League, or a faith-based 
organization, where children could be there for structured afterschool 
activities, and also adults could be there earlier in the day to 
develop their job skills.
  Government cannot do this alone. We want public-private partnerships. 
I want to use our Tax Code to encourage public-private partnerships. 
This bill uses our Tax Code to encourage the donations of technology, 
technology training, and technology maintenance for schools, libraries 
and community centers.
  Mr. President, that is the core of our program. We are living in 
exciting times. The opportunities are tremendous to use technology to 
improve our lives, to use technology to remove the barriers caused by 
income, race, or ethnicity. Technology could mean the death of distance 
as a barrier for bringing jobs into the rural areas of our country. We 
want technology to be the death of discrimination where children have 
been left out or left aside. Bringing this technology into schools and 
libraries would enable children to leapfrog into the future.
  Technology is the tool, but empowerment is the outcome. We want to be

[[Page 2453]]

sure each child in the United States of America, by being computer 
literate by the time they are in the eighth grade, will be ready for 
the new economy. We hope that by setting that as a national goal we 
will get children to stay in school and know that the future lies in 
working in this new economy.
  I thank everybody who worked on this bill with me. I thank everyone 
on my staff who helped me, including Julia Frifield, Jill Shapiro, and 
Andrea Vernot. This has truly been a team effort. I am pleased that I 
have 25 cosponsors from the U.S. Senate on this legislation. I hope 
that kind of bipartisan support will move this legislation forward.
  I will conclude by saying this is a tremendous opportunity. This is 
not about a laundry list of new Government programs. We are here to 
make the highest and best use of the programs that exist, a wise and 
prudent use of taxpayer funds, and also to say to each child in America 
if you want to learn and get ready for the new economy, your Federal 
Government is on your side.
  I give all praise and thanks to the Dear Lord who has inspired me to 
do this and gives me the opportunity to serve in the Senate. I truly 
believe one person can make a difference. I am trying to do that with 
this legislation. If we can work together, I know we will be able to 
bring about change--change for our children and change for the better.
  Mr. LEVIN. Mr. President, it is my pleasure to join Senator Mikulski 
in introducing the National Digital Empowerment Act, which seeks to 
close the gap between those who have technology available to them and 
those who do not. I commend Senator Mikulski for her commitment to 
connect every school and community to the Information Superhighway. The 
legislation we are introducing will help to achieve this goal. It will 
enable students and teachers in all communities to have access to 
computers, as well as the training that is necessary to use this 
technology effectively.
  The widening digital divide falls heaviest on those who can least 
afford to be left behind. Recent studies show that the Digital divide 
for the poorest Americans has grown by 29 percent since 1997, and that 
over 50 percent of schools lack the infrastructure needed to support 
new technology. In addition, approximately 4 out of 10 teachers report 
that they have had no training in using the Internet; and a mere 10 
percent of new teachers reported that they felt prepared to use 
technology in their classrooms, while only 13 percent of all public 
schools reported that technology-related training for teachers was 
mandated by the school, district, or teacher certification agencies. 
This legislation will provide the necessary tools to reverse this 
trend.
  It will substantially increase funding for teacher training in 
technology, including the creation of Teacher Technology Preparation 
Academies--teachers who are trained by the Academies would be 
encouraged to return to their schools and act as technology instructors 
for other teachers; increase funding for school technology; extend the 
current enhanced deduction for computer technology which is currently 
due to expire in 2001; require HUD to establish e-Villages in all HUD 
housing programs; authorize and increase funding for the creation of 
Community Technology Centers and e-corps within the AmeriCorps; create 
a one stop shop clearinghouse of public and private technology efforts 
within the U.S. Department of Education to be headed by an Assistant 
Secretary for Technology Education. In addition, the legislation 
directs the Secretary to implement an Internet-based, one-to-one pilot 
project that specifically targets the educational needs of K-12 
students in low-income school districts, including hardware, software 
and ongoing support and professional development; and improve the e-
Rate program.
  After two funding cycles the total e-Rate funding that went to our 
nation's schools and libraries was $3.6 billion nationally, including 
$137.15 million for Michigan. That is a good investment to help prepare 
our children and citizens for the information age of the 21st century. 
But it is still not sufficient to provide all qualified schools and 
libraries with the e-Rate discounts they have requested. This 
legislation would improve the Universal Service Fund by making the e-
Rate application process simpler, and would increase the current cap of 
$2.25 billion and expand eligibility to include structured after school 
programs, Head Start centers and programs receiving federal job 
training funds. The e-Rate has proven itself to be a successful and 
popular program and its time to make it available to everyone who needs 
it.
  I am especially pleased to be a part of this legislative effort 
because it supports some model initiatives that I have established in 
my home state of Michigan, to create ways in which teachers can become 
more computer literate and able to integrate technology into the 
curriculum and to bring technology into every classroom.
  About 2 years ago, I convened an education technology summit that 
brought together over 400 business leaders, school administrators, 
school board members, foundation representatives, deans of Michigan's 
colleges of education and others to identify ways in which Michigan 
could excel in the area of Education technology. What I learned was 
that one of the biggest obstacles to technologically up-do-date 
classrooms is the lack of training of our teachers in the use of 
technology. If teachers don't understand how to integrate computers, 
the Internet, and other technology into the instructional program, 
students won't get full advantage of these innovations, no matter how 
much hardware and wiring have been installed.
  Despite impressive achievements in the utilization of education 
technology in a few localities, Michigan as a whole was below the 
national average in every measure of the use of technology in our 
schools. It ranked 44 in teacher training in the use of technology; and 
10 percent of teachers reported that they had less than 9 hours of 
technology training. In addition, Michigan ranked 32 among the states 
in the ratio of students per computer. I have subsequently hosted a 
number of working sessions which have resulted in a specific plan of 
action to advance education technology in Michigan.
  Some key elements of the plan of action include the formation of a 
consortium that will establish the nation's highest standards for 
training new teachers to use technology in the classroom. Beginning 
with the 1999-2000 academic year, the Consortium for Outstanding 
Achievement in Teaching with Technology {COATT} will award certificates 
of recognition to new teachers who have demonstrated an exceptional 
ability to use information technology as a teaching tool.
  COATT membership includes an impressive slate of higher educational 
institutions from Michigan: Albion College, Andrews University, Eastern 
Michigan University, Ferris State University, Lake Superior State 
University, Michigan State University, Oakland University, University 
of Detroit-Mercy, University of Michigan, University of Michigan-
Dearborn, Wayne State University and Western Michigan University. 
Neither the education nor the certificate is mandatory. However, new 
teachers with certificates will have an advantage in the job market and 
school districts will benefit by knowing which applicants are qualified 
in using technology effectively in their instruction. The letter of 
agreement signed by each COATT member in committing their institution 
to provide the resources to achieve the success of the COATT initiative 
which is included at the end of my remarks.
  Michigan is already recognized as a leader in producing new teachers 
and if we set our minds to it, I'm convinced we can be the best in the 
nation when it comes to teaching teachers how to integrate technology 
in the classroom.
  Another key element of my plan of action to advance Michigan's 
standing in education technology is the establishment of the Teach for 
Tomorrow Project, TFT, an online delivery system for educational 
technology training and credentialing of in-service teachers. By using 
technology to teach the technology, lessons can be accessed statewide 
and at time and location

[[Page 2454]]

which are convenient to the learners. An added bonus, which results in 
an expansion of the use of technology in the classroom, is that 
teachers who complete TFT teach other teachers what they have learned. 
Central Michigan University has approved the use of TFT materials as a 
professional development course eligible for 3 graduate credit hours 
when done in conjunction with local onsite training.
  The legislation before us, the National Digital Empowerment Act, will 
speed the closing of the digital divide not only in my state of 
Michigan, but nationwide. Time is of the essence. We must act 
responsibly and we must act now!
  Mr. President, I ask unanimous consent to print in the Record the 
COATT member agreement signed by higher education institutions in 
Michigan.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  Consortium for Outstanding Achievement in Teaching with Technology 
                          Letter of Agreement

       We, the undersigned, commit our institutions to be members 
     of the Consortium for Outstanding Achievement in Teaching 
     with Technology (COATT). In doing so our institutions accept 
     the following requirements:
       (1) Each institution shall designate a facility liaison to 
     COATT. This person will participate in an annual review of 
     the COATT standards and participate in periodic meetings with 
     other core members of the COATT organization.
       (2) Each institution shall designate a person to act as a 
     point of contact within the institution for potential COATT 
     candidates.
       (3) Each institution shall promote COATT to potential 
     candidates. This might occur through flyers, regular 
     newsletters, publications, placement files, etc.
       (4) Each institution shall provide adequate and relevant 
     learning opportunities in the application of educational 
     technology for students who wish to acquire COATT 
     certification.
       (5) Each institution shall provide adequate resources for 
     COATT applicants to produce, maintain, and gain access to 
     their COATT digital portfolios.
       (6) Each institution shall be responsible for recommending 
     and pre-certifying COATT applicants.
       (7) Each institution shall involve its faculty and other 
     qualified personnel in COATT evaluation teams.
       By signing below, we understand that we are committing our 
     institutions to provide the personnel, resources, and 
     opportunities described in the above seven points. We 
     recognize that this level of commitment is crucial to the 
     success of the COATT initiative.
         Reuben Rubio, Director of the Ferguson Center for 
           Technology-Aided Teaching, Albion College; Dr. Niels-
           Erik Andreasen, President, Andrews University; Dr. 
           Jerry Robbins, Dean of the School of Education, Eastern 
           Michigan University; Dr. Nancy Cooley, Dean of the 
           College of Education, Ferris State University; Dr. 
           David L. Toppen, Executive Vice President and Provost, 
           Lake Superior State University; Dr. Carole Ames, Dean 
           of the College of Education, Michigan State University; 
           Dr. James Clatworthy, Associate Dean of the School of 
           Education and Human Resources, Oakland University; 
           Aloha Van Camp, Acting Dean of the College of Education 
           and Human Services, University of Detroit-Mercy; Dr. 
           Karen Wixson, Dean of the School of Education, 
           University of Michigan; Dr. Robert Simpson, Provost, 
           University of Michigan-Dearborn; Dr. Paula Wood, Dean 
           of the College of Education, Wayne State University; 
           and Dr. Alonzo Hannaford, Associate Dean of the College 
           of Education, Western Michigan University.
                                 ______
                                 
      By Mr. GRAMS:
  S. 2230. A bill to provide tax relief in relation to, and modify the 
treatment of, members of a reserve component of the Armed Forces, and 
for other purposes; to the Committee on Finance.


          THE MILITARY GUARD AND RESERVE FAIRNESS ACT OF 2000

  Mr. GRAMS. Mr. President, I rise today to introduce legislation 
addressing a very important issue-fairness for the Guard and Reserve 
members in our armed forces.
  Let me begin with a February 3rd report from the Washington Post 
titled ``A Tough Goodbye: Guard Members Leave for Nine Months in 
Bosnia.'' It reads ``Sgt. Deedra Lavoie was alone, after leaving her 
two young children with her ex-husband. Sgt. Bill Wozniak, hugging his 
3-year-old daughter, was worried about not having the same job when he 
returns in nine months. Staff Sgt. Stephen Smith won't have a home to 
come back to: Movers have cleared out his Annapolis apartment, which he 
can't afford to keep while overseas.''
  This brings home, Mr. President, the real hardship that thousands of 
Guards and Reservists, and their families, are facing today.
  The traditional duty of the National Guards and reservists was to 
keep domestic peace or fight in wars. But as the number of our Armed 
Forces has fallen by more than 1 million personnel since 1988, 
increasing numbers of our Guards and Reserve members are being pulled 
out of the private sector and into what amounts to at times to be full-
time military service.
  They are often called on to carry out overseas peacekeeping, 
humanitarian and other missions. Their deployment time is longer than 
ever before in peacetime. Today we rely heavily on our Guardsmen and 
Reservists to support overseas contingency operations. Since 1990, they 
have been called to service in Operation RESTORE HOPE in Somalia, 
Operation UPHOLD DEMOCRACY in Haiti, Operation JOINT ENDEAVOR/JOINT 
GUARD in Bosnia, Operation STABILIZE in Southeast Asia and Operation 
TASK FORCE FALCON in Kosovo.
  Mr. President, the statistics speak for themselves:
  Work days contributed by Guardsmen and Reservists have risen from 1 
million days in 1992, to over 13 million days last year. Without the 
service of these citizen soldiers, we would need an additional force of 
35,000 soldiers to do the job.
  43,000 Guardsmen and Reservists have served in Bosnia and Kosovo from 
December 1995 through March 1, 2000. This is 33 percent of the total 
Armed Forces personnel participating in that region during that period.
  Mr. President, Guardsmen and Reservists are willing to do their duty 
and serve when they are called, but increasingly frequent overseas 
deployments create tremendous hardship for them, and their families, as 
well their employers. We need to give our reserve forces fair treatment 
by improving the quality of life both for them and their dependents. We 
must help their employers adjust as well.
  That's why I am introducing the Military Guard and Reserve Fairness 
Act of 2000. This bill would do the following:
  First, my legislation would exempt federal tax on the base pay for 
enlisted Guardsmen and Reservists and exempt federal tax on the base 
pay of Guard and Reserve officers up to the highest level of that if 
enlisted Guardsmen and Reservists' base pay during their overseas 
deployment.
  The majority of Guardsmen and Reservists take pay cuts when called up 
for involuntary overseas deployment, and sustain a huge financial loss. 
Our active duty military personnel enjoy federal tax exemption on their 
base pay, why not our Guardsmen and Reservists who perform the same 
duty as full-time military personnel?
  Secondly, my legislation would provide a tax credit to employers who 
employ Guardsmen and Reservists. The tax credit would be equal to 50 
percent of the amount of compensation that would have been paid to an 
employee during the time that the employee participates in contingency 
operations. However, the credit is capped at $2000 for each individual 
Reservist employee and a maximum of $30,000 for all employees. This 
provision would apply to the self-employed as well.
  Despite the fact that most businesses are fully supportive of the 
military obligations of their employees, studies show that the 
increasingly long overseas deployments have created a new strain on 
Guard/Reserve-employer relations. One of the reasons is that the 
unplanned absence of Guard/Reservist-employees creates a variety of 
problems for employers. Employers have to hire and train temporary 
employees, budget for overtime, or reschedule work and deadlines. As a 
result, it increases employer costs, reducing revenue and profits. This 
is particularly problematic for small business and the self-employed.
  The Defense Department acknowledges the increased use of the Guard 
and Reserve and that unplanned contingency operations do create 
problems

[[Page 2455]]

for employers. DOD suggests that a financial incentive may help to 
correct some of the problems.
  The tax credit included in my bill would offset at least some of the 
expense that Guard and Reserve employers face, and help reduce tension 
with employees.
  Third, the Military Guard and Reserve Fairness Act would provide 
federal income tax deductions for transportation, meals and lodging 
expenses incurred in performance of Guard and Reserve military duty.
  Mr. President, many Guardsmen and Reservists have to travel to a 
Reserve center, such as a National Guard Armory, far away from their 
home areas for drills or training.
  Often Guardsmen and Reservists incur expenses for transportation, 
meals, lodging and other necessities. Before 1986, members of the Guard 
and Reserve could deduct these costs as business expenses. But the Tax 
Reform Act of 1986 eliminated this deduction.
  This is not fair. This nation requires our Guard and Reserve members 
to perform their duty but also expects them to bear the expense. 
Restoring the deductibility would help restore fairness for Reservists.
  The Military Guard and Reserve Fairness Act would also include a 
number of provisions that would give our Guard and Reserve members fair 
treatment by improving their quality of life.
  It would extend space-available travel (``Space-A'') to Reservists 
and the National Guard, to travel outside of the United States--the 
same level as retired military, and gives the Guardsmen and Reservists 
the same priority status as active duty personnel when traveling for 
their monthly drills.
  It would grant so-called ``gray area retirees'' the right to travel 
Space-A under the same conditions as the retired military receiving 
retired pay as well.
  In addition, my legislation would provide Guardsmen and Reservists, 
when traveling to attend monthly military drills, the same billeting 
privileges as active duty personnel.
  The bill would also remove the annual Guard and Reserve retirement 
point maximum--upon which retirement pensions are based--and allow 
retirement pensions to be based upon the actual number of points earned 
annually.
  Finally, my legislation would extend free legal services to Guardsmen 
and Reservists by Judge Advocate General officers for a time equal to 
twice the length of their last period of active duty service.
  Mr. President, our Guard and Reserve members are being called upon to 
perform more overseas active duty assignments to keep pace with the 
rising number of U.S. peacekeeping and humanitarian missions. I believe 
that this increase in overseas active-duty assignments for Guard and 
Reserve component members merits the extension of military benefits for 
our Nation's citizen soldiers. It is only fair to close these 
disparities.
  The passage of my Military Guard and Reserve Fairness Act would 
restore fairness to our Guard and Reserve members, and it would greatly 
increase morale and the quality of life for our National Guard and 
Reserves and prevent problems of recruitment and retention in the 
future. Hence, it would strengthen our national defense and increase 
our military readiness. I urge my colleagues to join me in support of 
our military Guard and Reserves.
                                 ______
                                 
      By Mr. GRAHAM (for himself, Mr. Jeffords, Mr. Bingaman, Mr. 
        Bryan, Mr. L. Chafee, Mr. Kerry, Mr. Rockefeller, Mr. Moynihan, 
        Mrs. Murray, Mr. Lugar, and Ms. Snowe):
  S. 2232. A bill to promote primary and secondary health promotion and 
disease prevention services and activities among the elderly, to amend 
title XVIII of the Social Security Act to add preventive benefits, and 
for other purpose; to the Committee on Finance.


                     medicare wellness act of 2000

 Mr. GRAHAM. Mr. President, today, along with my colleagues, 
Senator Jeffords, Senator Bingaman, Senator Chafee, Senator Bryan, 
Senator Rockefeller, Senator Kerry, Senator Murray, Senator Moynihan, 
Senator Lugar, and Senator Snowe, I introduce the Medicare Wellness Act 
of 2000.
  The Medicare Wellness Act represents a concerted effort by myself and 
my distinguished colleagues to change the fundamental focus of the 
Medicare program.
  it changes the program from one that simply treats illness and 
disability, to one that is also proactive.
  Enhancing the focus on health promotion and disease prevention for 
Medicare beneficiaries.
  Mr. President, despite common misperceptions, declines in health 
status are not inevitable with age. A healthier lifestyle, even one 
adopted later in life, can increase active life expectancy and decrease 
disability.
  This fact is a major reason why The Medicare Wellness Act has support 
from a broad range of groups, including the National Council on Aging, 
Partnership for Prevention, American Heart Association, and the 
National Osteoporosis Foundation.
  The most significant aspect of this bill is its addition of several 
new preventative screening and counseling benefits to the Medicare 
program.
  The benefits being added focus on some of the most prominent, 
underlying risk factors for illness that face all Medicare 
beneficiaries, including: screening for hypertension, counseling for 
tobacco cessation, screening for glaucoma, counseling for hormone 
replacement therapy, screening for vision and hearing loss, nutrition 
therapy, expanding screening and counseling for osteoporosis, and 
screening for cholesterol.
  The new benefits added by The Medicare Wellness Act represent the 
highest recommendations for Medicare beneficiaries of the Institute of 
Medicine and the U.S. Preventative Services Task Force--recognized as 
the gold standard within the prevention community.
  Attaching these prominent risk factors will reduce Medicare 
beneficiaries' risk for health problems such as stroke, diabetes, and 
osteoporosis, heart disease, and blindness.
  The addition of these new benefits would accelerate the fundamental 
shift, that began in 1997 under the Balanced Budget Act, in the 
Medicare program from a sickness program to a wellness program.
  Prior to 1997, only three preventive benefits were available to 
beneficiaries, pneumococcal vaccines, pap smears, and mammography. 
Other major components of our bill include the establishment of the 
Healthy Seniors Promoting Program.
  This program will be led by an interagency workgroup within the 
Department of Health and Human Services.
  It will bring together all the agencies within HHS that address the 
medical, social and behavioral issues affecting the elderly and 
instructs them to undertake a series of studies which will increase 
knowledge about the utilization of prevention services among the 
elderly.
  In addition, The Medicare Wellness Act incorporates an aggressive 
applied and original research effort that will investigate ways to 
improve the utilization of current and new preventive benefits and to 
investigate new methods of improving the health of Medicare 
beneficiaries.
  Mr. President, this latter point is critical. The fact is that there 
are a number of prevention-related services available to Medicare 
beneficiaries today, including mammograms and colorectal cancer 
screening. But those services are seriously underutilized.
  In a study published by Dartmouth University this spring (The 
Dartmouth Atlas of Health Care 1999), it was found that only 28 percent 
of women age 65-69 receive mammograms and only 12 percent of the 
beneficiaries were screened for colorectal cancer.
  These are disturbing figures and they clearly demonstrate the need to 
find new and better ways to increase the rates of utilization of 
proven, demonstrated prevention services.
  Our bill would get us the information we need to increase rates of 
utilization for these services. Further, our bill would establish a 
health risk appraisal and education program aimed at major behavioral 
risk factors such as diet, exercise, alcohol and tobacco use, and 
depression.

[[Page 2456]]

  This program will target both pre-65 individuals and current Medicare 
beneficiaries. The main goal of this program is to increase awareness 
among individuals of major risk factors that impact on health, to 
change personal health habits, improve health status, and save the 
Medicare program money. Our bill would require the Medicare Payment 
Advisory Commission, known as MedPAC, to report to Congress every two 
years and assess how the program needs to change over time in order to 
reflect modern benefits and treatment.
  Shockingly, this is information that Congress currently does not 
receive on a routine basis. And this is a contributing factor to why we 
find ourselves today in a quandary over the outdated nature of the 
Medicare program. Quite frankly, Medicare hasn't kept up with the rest 
of the health care world. While a vintage wine from the 1960s may be 
desirable, a health care system that is vintage 1965 is not. We need to 
do better.
  Our bill would also require the Institute of Medicine (IOM) to 
conduct a study every five years to assess the scientific validity of 
the entire preventive benefits package. The study will be presented to 
Congress in a manner that mirrors The Trade Act of 1974. The IOM's 
recommendations would be presented to Congress in legislative form. 
Congress would then have 60 days to review and then either accept or 
reject the IOM's recommendations for changes to the Medicare program. 
But Congress could not change the IOM's recommendations.
  This ``fast-track'' process is a deliberate effort to get Congress 
out of the business of micro-managing the Medicare program. While 
limited to preventive benefits, this will offer a litmus test on a new 
approach to future Medicare decision making.
  In the aggregate, The Medicare Wellness Act represents the most 
comprehensive legislative proposal in the 106th Congress for the 
Medicare program focused on health promotion and disease prevention for 
beneficiaries. It provides new screening and counseling benefits for 
beneficiaries, it provides critically needed research dollars, and it 
tests new treatment concepts through demonstration programs.
  The Medicare Wellness Act represents sound health policy based on 
sound science.
  Before I conclude, I have a few final thoughts.
  There are many here in Congress who argue that at a time when 
Medicare faces an uncertain financial future, this is the last time to 
be adding new benefits to a program that can ill afford the benefits it 
currently offers. Normally I would agree with this assertion. But the 
issue of prevention is different. The old adage of ``an ounce of 
prevention is worth a pound of cure'' is very relevant here. Does 
making preventive benefits available to Medicare beneficiaries ``cost'' 
money? Sure it does.
  But the return on the investment, the avoidance of the pound of cure 
and the related improvement in quality of life is unmistakable.
  Along these lines, a longstanding problem facing lawmakers and 
advocates of prevention has been the position taken by the 
Congressional Budget Office, as it evaluates the budgetary impact of 
all legislative proposals.
  Only costs incurred by the Federal Government over the next 10 years 
can be considered in weighing the ``cost'' of adding new benefits. From 
a public health and quality of life standpoint, this premise is 
unacceptable.
  Among the problems with this practice is that ``savings'' incurred by 
increasing the availability and utilization of preventive benefits 
often occur over a period of time greater than 10 years.
  This problem is best illustrated in an examination of the 
``compression of morbidity'' theory developed by Dr. James Fries of 
Stanford University over 20 years ago.
  According to Dr. Fries, by delaying the onset of chronic illness 
among seniors, there is a resulting decrease in the length of time 
illness or disability is present in the latter stages of life. This 
``compression'' improves quality of life and reduces the rate of growth 
in health care costs.
  But, these changes are gradual and occur over an extended period of 
time--10, 20, even 30 years.
  With the average life expectancy of individuals who reach 65 being 
nearly 20 years--20 years for women and 18 years for men--it only makes 
sense to look at services and benefits that improve quality of life and 
reduce costs to the Federal Government for that 20 year lifespan.
  In addition to increased lifespan, a 10 year budget scoring window 
doesn't factor into consideration the impact of such services on the 
private sector, such as increased productivity and reduced absenteeism, 
for the many seniors that continue working beyond age 65.
  The bottom line is, the most important reason to cover preventive 
services is to improve health.
  While prevention services in isolation won't reduce costs, they will 
moderate increases in the utilization and spending on more expensive 
acute and chronic treatment services.
  As Congress considers different ways to reform Medicare, two basic 
questions regarding preventive services and the elderly must be part of 
the debate.
  (1) Is the value of improved quality of life worth the expenditure? 
And,
  (2) How important is if for the Medicare population to be able to 
maintain healthy, functional and productive lives?
  These are just some of the questions we must answer in the coming 
debate over Medicare reform.
  While improving Medicare's financial outlook for future generations 
is imperative, we must do it in a way that gives our seniors the 
ability to live longer, healthier and valued lives.
  I believe that by pursuing a prevention strategy that addresses some 
of the most fundamental risk factors for chronic illness and disability 
that face seniors, we will make an invaluable contribution to the 
Medicare reform debate and, more importantly, to our children and 
grandchildren.
  Finally, Mr. President, I would be remiss in pointing out that the 
Medicare Wellness Act represents the first time in this Congress that 
Republicans and Democrats have gotten together in support of a major 
piece of Medicare reform legislation.
  This bill represents a health care philosophy that bridges political 
boundaries. It just makes sense. And you see that common sense approach 
today from myself and my esteemed colleagues who have joined me in the 
introduction of this bill.
  Mr. President, I encourage my colleagues to join us on this important 
bill and to work with us to ensure that the provisions of this bill are 
reflected in any Medicare reform legislation that is debated and voted 
on this year in the Senate.
 Mr. JEFFORDS. Mr. President, I am pleased to join Senator 
Graham today in introducing the Medicare Wellness Act of 2000. Our 
nation's rapidly growing senior population and the ongoing search for 
cost-effective health care have led to the development of this 
important bipartisan legislation. The goal of the Medicare Wellness Act 
is to increase access to preventive health services, improve the 
quality of life for America's seniors, and increase the cost-
effectiveness of the Medicare program.
  Congress created the Medicare program in 1965 to provide health 
insurance for Americans age 65 and over. From the outset, the program 
has focused on coverage for hospital services needed for an unexpected 
or intensive illness. In recent years, however, a great escalation in 
program expenditures and an increase in knowledge about the value of 
preventive care have forced policy makers to re-evaluate the current 
Medicare benefit package.
  The Medicare Wellness Act adds to the Medicare program those benefits 
recommended by the Institute of Medicine and the U.S. Preventive 
Services Task Force. These include: screening for hypertension, 
counseling for tobacco cessation, screening for glaucoma, counseling 
for hormone replacement therapy, screening for vision and hearing loss, 
cholesterol screening, expanded screening and counseling for 
osteoporosis, and nutrition therapy

[[Page 2457]]

counseling. These services address the most prominent risk facing 
Medicare beneficiaries.
  In 1997, Congress added several new preventive benefits to the 
Medicare program through the Balanced Budget Act. These benefits 
included annual mammography, diabetes self-management, prostate cancer 
screening, pelvic examinations, and colorectal cancer screening. 
Congress's next logical step is to incorporate the nine new screening 
and counseling benefits in the Medicare Wellness Act. If these symptoms 
are addressed regularly, beneficiaries will have a head start on 
fighting the conditions they lead to, such as diabetes, lung cancer, 
heart disease, blindness, osteoporosis, and many others.
  Research suggests that insurance coverage encourages the use of 
preventive and other health care services. The Medicare Wellness Act 
also eliminates the cost-sharing requirement for new and current 
preventive benefits in the program. Because screening services are 
directed at people without symptoms, this will further encourage the 
use of services by reducing the cost barrier to care. Increased use of 
screening services will mean that problems will be caught earlier, 
which will permit more successful treatment. This will save the 
Medicare program money because it is cheaper to screen for an illness 
and treat its early diagnosis than to pay for drastic hospital 
procedures at a later date.
  However, financial access is not the only barrier to the use of 
preventive care services. Other barriers include low levels of 
education of information for beneficiaries. That is why the Medicare 
Wellness Act instructs the Secretary of Health and Human Services to 
coordinate with the Centers for Disease Control and Prevention and the 
Health Care Financing Administration to establish a Risk Appraisal and 
Education Program within Medicare. This program will target both 
current beneficiaries and individuals with high risk factors below the 
age of 65. Outreach to these groups will offer questions regarding 
major behaviorial risk factors, including the lack of proper nutrition, 
the use of alcohol, the lack of regular exercise, the use of tobacco, 
and depression. State of the art software, case managers, and nurse 
hotlines will then identify what conditions beneficiaries are at risk 
for, based on their individual responses to the questions, then refer 
them to preventive screening services in their area and inform them of 
actions they can take to lead a healthier life.
  The Medicare Wellness Act also establishes the Healthy Seniors 
Promotion Program. This program will bring together all the agencies 
within the Department of Health and Human Services that address the 
medical, social and behavorial issues affecting the elderly to increase 
knowledge about and utilization of prevention services among the 
elderly, and develop better ways to prevent or delay the onset of age-
related disease or disability.
  Mr. President, now is the time for Medicare to catch up with current 
health science. We need a Medicare program that will serve the health 
care needs of America's seniors by utilizing up-to-date knowledge of 
healthy aging. Effective health care must address the whole health of 
an individual. A lifestyle that includes proper exercise and nutrition, 
and access to regular disease screening ensures attention to the whole 
individual, not just a solitary body part. It is time we reaffirm our 
commitment to provide our nation's seniors with quality health care.
  It is my hope that my colleagues in Congress will examine this 
legislation and realize the inadequacy of the current package of 
preventive benefits in the Medicare program. We have the opportunity to 
transform Medicare from an out-dated sickness program to a modern 
wellness program. I want to thank Senator Bob Graham and all the other 
cosponsors of the Medicare Wellness Act who are supporting this bold 
step towards successful Medicare reform.
  Mr. BINGAMAN. Mr. President, I rise today to join my colleagues, 
Senator Graham of Florida and Senator Jeffords of Vermont, in the 
introduction of the ``Medicare Wellness Act of 2000.''
  This bipartisan, bicameral measure represents a recognition of the 
role that health promotion and disease prevention should play in the 
care available to Medicare beneficiaries. The bill adds several new 
preventative screening and counseling benefits to the Medicare program. 
Specifically, the act adds screening for hypertension, counseling for 
tobacco cessation, screening for glaucoma, counseling for hormone 
replacement therapy, and expanded screening and counseling for 
osteoporosis.
  My colleagues have addressed most of these aspects of the bill so I 
will focus my remarks on one additional provision that is pivotal in 
achieving improved health outcomes of beneficiaries with several 
chronic diseases. Specifically, the Medicare Wellness Act of 2000 
provides for coverage under Part B of the Medicare program for medical 
nutrition therapy services for beneficiaries who have diabetes, 
cardiovascular disease, or renal disease.
  Medical nutrition therapy refers to the comprehensive nutrition 
services provided by registered dietitians as part of the health care 
team. Medical nutrition therapy has proven to be a medically necessary 
and cost effective way of treating and controlling heart disease, 
stroke, diabetes, high cholesterol, and various renal diseases. 
Patients who receive this therapy require fewer hospitalizations and 
medications and have fewer complications.
  The treatment of patients with diabetes and cardiovascular disease 
accounts for a full 60 percent of Medicare expenditures. In my home 
state of New Mexico, Native Americans are experiencing an epidemic of 
Type II diabetes. Medical nutrition therapy is integral to their 
diabetes care and to the prevention of progression of the disease. 
Information from the Indian Health Service shows that medical nutrition 
therapy provided by professional dietitians results in significant 
improvements in medical outcomes in Type II diabetics.
  Mr. President, while medical nutrition therapy services are currently 
covered under Medicare Part A for inpatient services, there is no 
consistent Part B coverage policy for medical nutrition.
  Nutrition counseling is best conducted outside the hospital setting. 
Today, coverage for nutrition therapy in ambulatory settings is at best 
inconsistent, but most often, non existent.
  Because of the comparatively low treatment costs and the benefits 
associated with nutrition therapy, expanded coverage will improve the 
quality of care, outcomes and quality of life for Medicare 
beneficiaries.
  Two years ago, my colleague from Idaho, Senator Craig and I requested 
that the National Academy of Sciences' Institute of Medicine study the 
issue of medical nutrition therapy as a benefit for Medicare 
beneficiaries. The Institute of Medicine released this study last 
December entitled: ``The Role of Nutrition in Maintaining Health in the 
Nation's Elderly: Evaluating Coverage of Nutrition Services for the 
Medicare Populations.'' This IOM study reaffirms what I have been 
working toward the past few years. Namely, it recommended that medical 
nutrition therapy, ``upon referral by a physician, be a reimbursable 
benefit for Medicare beneficiaries.'' The study substantiates evidence 
of improved patient outcomes associated with nutrition care provided by 
registered dietitians.
  Mr. President, I again want to thank my colleagues for including 
medical nutrition therapy as a key component of the Medicare Wellness 
Act. I look forward to working with them toward passage of the act this 
Congress.
                                 ______
                                 
      By Mr. FITZGERALD (for himself, Mr. Bayh, Mr. Abraham, Mr. Kohl, 
        Mr. Grassley, Mr. Durbin, Mr. Brownback, and Mr. Grams):
  S. 2233. A bill to prohibit the use of, and provide for remediation 
of water contaminated by, methyl tertiary butyl ether; to the Committee 
on Environment and Public Works.


                          MTBE ELIMINATION ACT

  Mr. FITZGERALD. Mr. President, I rise to introduce legislation called 
the ``MTBE Elimination Act of 2000.'' As I

[[Page 2458]]

so rise, I thank my colleagues who have cosponsored this legislation. 
They are Senators Bayh, Abraham, Kohl, Grassley, Durbin, Brownback, and 
Grams. I appreciate their support and I look forward to talking to each 
of my colleagues about this very important piece of legislation we are 
introducing today.
  Mr. President, the MTBE Elimination Act would ban all across the 
country, the chemical compound which is termed MTBE for short. Its 
longer chemical name is methyl tertiary butyl ether.
  MTBE is one of the world's most widely used chemicals, and is found 
anywhere in the United States. In fact, it is added to approximately 30 
percent of our Nation's gasoline supplies. Its use in this country 
dates back at least to about 1979 and was originally added to gasoline 
to boost the octane. For many years, oil companies had added lead to 
fuel in order to improve its performance and to boost octane. The 
Federal Government banned lead in the 1970s, and ultimately it was 
replaced in many cases by MTBE.
  Later on, in 1990, Congress amended the Clean Air Act and President 
Bush at the time signed those amendments. Those amendments required all 
the smog filled large cities in this country to have an additive in 
their gasoline that would make the gasoline approximately 2.7 percent 
oxygen by weight. This is commonly referred to as the oxygenate 
requirement in our Nation's Clean Air Act.
  The purpose of that oxygenate requirement was to make the oil 
companies produce, and our cars use, a cleaner burning fuel. The idea 
was to clean up the smog in some of our Nation's largest and most 
congested cities. That program has worked very well over the last 10 
years in cleaning up the smog all across the country, in cities like 
New York, Los Angeles, and San Francisco. My home State of Illinois, of 
course, has a large metropolitan area in Chicago. The reformulated fuel 
requirements that were implemented by the 1990 amendments to the Clean 
Air Act have helped greatly in reducing the emissions from our 
automobiles, in providing cleaner burning fuels, at least as far as our 
air quality is concerned.
  As I said earlier, about 30 percent of the gasoline used in this 
country is reformulated and has an additive in it, most of which is 
MTBE. In the parts of this country that are required to use 
reformulated fuel, over 80 percent of them are using MTBE as their 
oxygenate. The other areas are using another oxygenate known as ethanol 
to meet the requirements of the Clean Air Act. In fact, Chicago and 
Milwaukee both use ethanol as opposed to MTBE.
  It turns out now that we have mounting evidence that MTBE, while it 
works well in cleaning up smog, has a problem we had not anticipated, 
and one which very regrettably had not been fully investigated before 
we started down the path that encouraged a dramatic increase in the 
usage of MTBE. MTBE has, in recent years, been detected in the nation's 
drinking water all across the country, from the east coast to the west 
coast. In fact, right now the U.S. Geological Survey is performing an 
ongoing evaluation of our nation's drinking water, groundwater supplies 
all across the country. They have not yet completed this survey. If you 
look at this chart, in the States that are in white, the U.S. 
Geological Survey analysis has not yet been performed.
  But in the States that are in red, those are the States where they 
have found MTBE in the groundwater. Incidentally, I believe it is 
somewhere in the neighborhood of 22 States where they have found methyl 
tertiary butyl ether in the groundwater.
  In my home State of Illinois, we do not use much MTBE; ethanol is the 
oxygenate of choice. But nonetheless, the Illinois Environmental 
Protection Agency has been finding MTBE in our groundwater. So far, 
they have found MTBE in at least 25 different cities all across the 
State, and many Illinois municipalities have not tested the 
groundwater. Three of these cities have had to switch their source of 
drinking water and go to other wells because there was a sufficient 
amount of MTBE in that water to make it undrinkable.
  About a month ago, CBS News, in their program ``60 Minutes,'' did a 
report on how MTBE has been turning up with greater and greater 
frequency in our Nation's drinking water supplies. During that report, 
which seemed to me to be very well researched, it was noticed that this 
chemical, MTBE, has some very interesting properties.
  Unlike most of the other components of gasoline which, when it leaks 
out accidentally from underground storage tanks or out of pipes which 
carry fuel--there are leaks now and then; we try to prevent them, but 
they do occur--most of the components of gasoline are absorbed in the 
soil and do not make it down to the ground water.
  MTBE is a pesky substance, however, that resists microbial degrading 
in the ground and rapidly seeks out the ground water. It resists 
degrading as it finds its way to the water. Then once it gets into the 
water, it rapidly spreads. It has properties that, when it is in 
drinking water in very minute quantities, between 20 to 40 parts per 
billion, make the drinking water undrinkable. I say undrinkable because 
it makes the water smell and taste like turpentine.
  There have been studies that have shown that a single cup of MTBE 
renders 5 million gallons of water undrinkable. I say it makes the 
water undrinkable. The fact is, we do not know exactly what health 
effects it has on humans who ingest the water. Very few studies have 
been done on what happens to humans who consume MTBE. There have been 
studies of laboratory rats that suggest it is a possible carcinogen, 
and the EPA has recognized MTBE as a possible cause of cancer.
  We need to do more research on MTBE's effects on human health. We 
simply do not know all that much about this chemical. However, we do 
know that most people, when they smell the turpentine-like smell or 
taste of it, it inspires an instant revulsion and they do not want to 
drink the water. It is almost a moot point as to whether it has ill 
health effects because it makes the water undrinkable. Most humans will 
recoil at the thought of drinking that type of water.
  In the ``60 Minutes'' segment I referred to earlier, they went to a 
town in California where literally most of the town has left because 
their water has this MTBE in it. Many of the businesses have closed up, 
many of the people have left, and for those remaining in that 
community, the State of California is trucking in fresh water for them 
to drink. It is a very serious problem.
  There have been a few cities around the country--I believe there is 
one in the Carolinas, and also Santa Barbara, CA--where they had sued 
oil companies and won judgments to clean up the ground water in which 
they detected MTBE.
  In order to address this alarming trend of finding this pesky, 
horrible chemical in our drinking water all across the country with 
increasing frequency, I, with my colleagues, am introducing the MTBE 
Elimination Act. This act will do four things: First, it will phase 
MTBE out gradually over 3 years. The way the bill accomplishes that is 
it amends the Toxic Substances Control Act to add methyl tertiary butyl 
ether to the list of proscribed toxic substances in this country.
  It will eliminate the MTBE over 3 years because it will be hard to 
simply switch our Nation's gasoline supply overnight. To be realistic, 
it will take a period of time. The bill allows discretion for the EPA 
to establish a timetable and a framework for this MTBE phase-out.
  Secondly, the bill will require that gasoline which is dispensed at 
the pump containing MTBE be labeled so people know when they are 
filling up their car with gasoline that it contains this additive, and 
this chemical is being used in their community. In many cases, of 
course, people are not even aware of this chemical. They have never 
heard of it. We were very surprised in Illinois. We did not think much 
MTBE was even used in Illinois. Then we found it in our ground water.

[[Page 2459]]

  Third, the bill authorizes grants for research on MTBE ground water 
contamination and remediation. It directs resources to do more research 
on the health effects of this chemical too. We need to know more about 
this chemical in order to combat it. Right now we do not fully 
understand the health risks. Most of the studies that have been done, 
of which I am aware, are on laboratory mice, and there have been very 
few studies, if any, on the effects to humans who ingest or inhale this 
chemical.
  We also need research on how we remediate the chemical, how we clean 
it up because, in addition to all of its other properties, it turns out 
it is very difficult to eliminate. Our normal processes for eliminating 
hazardous chemicals from ground water, in many cases, according to the 
literature, do not seem to work on MTBE. EPA needs to research this 
issue and help the rest of the country have a body of knowledge, so 
when they find MTBE contamination, they know how to clean it up or 
remediate it.
  The bill contains a section which expresses the sense of the Senate 
that the EPA, our national Environmental Protection Agency, should 
provide technical assistance, information, and matching funds to our 
local communities that are testing their underground water supplies and 
also trying to remediate and clean up MTBE that has been detected in 
those water supplies.
  Finally, as an afterthought, some of my colleagues may be asking: 
What will we do about that portion of the Clean Air Act that requires 
our fuel in this country, at least in the smog-filled large cities, to 
have an oxygenate in it to reduce smog emissions? There is an answer. 
We do have an alternative--a renewable source produced from corn or 
other biomass products. It is called ethanol.
  In my judgment, ethanol will allow us to meet the requirements of the 
Clean Air Act all across the country, and it will not require us to 
make that terrible choice between clean air and clean water. I want our 
country to have clean air and clean water and never one at the expense 
of the other. Ethanol, in my judgment, provides the answer to that 
problem.
  The USDA recently did a study using ethanol to replace MTBE all 
across the country. It would mean, on average, about $1 billion in 
added income to our farmers every year.
  Mr. DURBIN. Would my colleague yield for a question?
  Mr. FITZGERALD. Yes.
  Mr. DURBIN. First, I congratulate my colleague for the introduction 
of this legislation. I am happy to cosponsor it. It is truly bipartisan 
legislation which is of benefit not only to the farmers in our State of 
Illinois but to our Nation.
  We understand, as most people do in Washington, the benefits of 
ethanol when it comes to reducing air pollution. We also understand the 
dangers of MTBE. Where it is used in other States, it has contaminated 
water supplies.
  We are in the process of working with the Environmental Protection 
Agency to discuss the future of ethanol and hope it will remain strong.
  I ask my colleague from Illinois--and I again congratulate him for 
his leadership in this area--if he can tell me whether his legislation 
on the elimination of MTBE is done on a phaseout basis or whether it is 
done to a date certain?
  Mr. FITZGERALD. Yes. I thank the Senator and appreciate his support. 
I appreciate his cosponsorship of this legislation.
  My bill would ban MTBE within 3 years after the enactment of this 
law. It would leave the exact timetable up to the EPA. They could set 
parameters within that 3 years. But within 3 years after the bill is 
signed into law, we would expect MTBE to be gone.
  Following up on that, as Senator Durbin said, we have been working 
very hard, particularly with Senator Grassley, Senator Harkin, and 
Senators from all over the country, in trying to clean up MTBE, and 
also trying to promote renewable sources of fuels, such as ethanol. 
That discussion about the importance of renewable fuels is made much 
more important now as we see our dependence on foreign oil and the high 
prices of oil in recent weeks.
  But this is an issue that has bipartisan support. Senator Durbin is a 
Democrat; I am a Republican. But the ethanol issue has always been 
bipartisan. I look forward to working with my friends and colleagues on 
both sides of the aisle so that we can continue to work on improving 
our Nation's clean air and water and also our farm economy.
  Mr. President, I ask unanimous consent to print the bill in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2233

       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 ``MTBE Elimination Act''.

     SEC. 2. FINDINGS; SENSE OF THE SENATE.

       (a) Findings.--Congress finds that--
       (1) a single cup of MTBE, equal to the quantity found in 1 
     gallon of gasoline oxygenated with MTBE, renders all of the 
     water in a 5,000,000-gallon well undrinkable;
       (2) the physical properties of MTBE allow MTBE to pass 
     easily from gasoline to air to water, or from gasoline 
     directly to water, but MTBE does not--
       (A) readily attach to soil particles; or
       (B) naturally degrade;
       (3) the development of tumors and nervous system disorders 
     in mice and rats has been linked to exposure to MTBE and 
     tertiary butyl alcohol and formaldehyde, which are 2 
     metabolic byproducts of MTBE;
       (4) reproductive and developmental studies of MTBE indicate 
     that exposure of a pregnant female to MTBE through inhalation 
     can--
       (A) result in maternal toxicity; and
       (B) have possible adverse effects on a developing fetus;
       (5) the Health Effects Institute reported in February 1996 
     that the studies of MTBE support its classification as a 
     neurotoxicant and suggest that its primary effect is likely 
     to be in the form of acute impairment;
       (6) people with higher levels of MTBE in the bloodstream 
     are significantly more likely to report more headaches, eye 
     irritation, nausea, dizziness, burning of the nose and 
     throat, coughing, disorientation, and vomiting as compared 
     with those who have lower levels of MTBE in the bloodstream;
       (7) available information has shown that MTBE significantly 
     reduces the efficiency of technologies used to remediate 
     water contaminated by petroleum hydrocarbons;
       (8) the costs of remediation of MTBE water contamination 
     throughout the United States could run into the billions of 
     dollars;
       (9) although several studies are being conducted to assess 
     possible methods to remediate drinking water contaminated by 
     MTBE, there have been no engineering solutions to make such 
     remediation cost-efficient and practicable;
       (10) the remediation of drinking water contaminated by 
     MTBE, involving the stripping of millions of gallons of 
     contaminated ground water, can cost millions of dollars per 
     municipality;
       (11) the average cost of a single industrial cleanup 
     involving MTBE contamination is approximately $150,000;
       (12) the average cost of a single cleanup involving MTBE 
     contamination that is conducted by a small business or a 
     homeowner is approximately $37,000;
       (13) the reformulated gasoline program under section 211(k) 
     of the Clean Air Act (42 U.S.C. 7545(k)) has resulted in 
     substantial reductions in the emissions of a number of air 
     pollutants from motor vehicles, including volatile organic 
     compounds, carbon monoxide, and mobile-source toxic air 
     pollutants, including benzene;
       (14) in assessing oxygenate alternatives, the Blue Ribbon 
     Panel of the Environmental Protection Agency determined that 
     ethanol, made from domestic grain and potentially from 
     recycled biomass, is an effective fuel-blending component 
     that--
       (A) provides carbon monoxide emission benefits and high 
     octane; and
       (B) appears to contribute to the reduction of the use of 
     aromatics, providing reductions in emissions of toxic air 
     pollutants and other air quality benefits;
       (15) the Department of Agriculture concluded that ethanol 
     production and distribution could be expanded to meet the 
     needs of the reformulated gasoline program in 4 years, with 
     negligible price impacts and no interruptions in supply; and
       (16) because the reformulated gasoline program is a source 
     of clean air benefits, and ethanol is a viable alternative 
     that provides air quality and economic benefits, research and 
     development efforts should be directed to assess 
     infrastructure and meet other challenges necessary to allow 
     ethanol use to expand sufficiently to meet the requirements 
     of the reformulated gasoline program as the use of MTBE is 
     phased out.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that the Administrator of the

[[Page 2460]]

     Environmental Protection Agency should provide technical 
     assistance, information, and matching funds to help local 
     communities--
       (1) test drinking water supplies; and
       (2) remediate drinking water contaminated with methyl 
     tertiary butyl ether.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Eligible grantee.--The term ``eligible grantee'' 
     means--
       (A) a Federal research agency;
       (B) a national laboratory;
       (C) a college or university or a research foundation 
     maintained by a college or university;
       (D) a private research organization with an established and 
     demonstrated capacity to perform research or technology 
     transfer; or
       (E) a State environmental research facility.
       (3) MTBE.--The term ``MTBE'' means methyl tertiary butyl 
     ether.

     SEC. 4. USE AND LABELING OF MTBE AS A FUEL ADDITIVE.

       Section 6 of the Toxic Substances Control Act (15 U.S.C. 
     2605) is amended by adding at the end the following:
       ``(f) Use of Methyl Tertiary Butyl Ether.--
       ``(1) Prohibition on use.--Effective beginning on the date 
     that is 3 years after the date of enactment of this 
     subsection, a person shall not use methyl tertiary butyl 
     ether as a fuel additive.
       ``(2) Labeling of fuel dispensing systems for mtbe.--Any 
     person selling oxygenated gasoline containing methyl tertiary 
     butyl ether at retail shall be required under regulations 
     promulgated by the Administrator to label the fuel dispensing 
     system with a notice that--
       ``(A) specifies that the gasoline contains methyl tertiary 
     butyl ether; and
       ``(B) provides such other information concerning methyl 
     tertiary butyl ether as the Administrator determines to be 
     appropriate.
       ``(3) Regulations.--As soon as practicable after the date 
     of enactment of this subsection, the Administrator shall 
     establish a schedule that provides for an annual phased 
     reduction in the quantity of methyl tertiary butyl ether that 
     may be used as a fuel additive during the 3-year period 
     beginning on the date of enactment of this subsection.''.

     SEC. 5. GRANTS FOR RESEARCH ON MTBE GROUND WATER 
                   CONTAMINATION AND REMEDIATION.

       (a) In General.--
       (1) Establishment.--There is established a MTBE research 
     grants program within the Environmental Protection Agency.
       (2) Purpose of grants.--The Administrator may make a grant 
     under this section to an eligible grantee to pay the Federal 
     share of the costs of research on--
       (A) the development of more cost-effective and accurate 
     MTBE ground water testing methods;
       (B) the development of more efficient and cost-effective 
     remediation procedures for water sources contaminated with 
     MTBE; or
       (C) the potential effects of MTBE on human health.
       (b) Administration.--
       (1) In general.--In making grants under this section, the 
     Administrator shall--
       (A) seek and accept proposals for grants;
       (B) determine the relevance and merit of proposals;
       (C) award grants on the basis of merit, quality, and 
     relevance to advancing the purposes for which a grant may be 
     awarded under subsection (a); and
       (D) give priority to those proposals the applicants for 
     which demonstrate the availability of matching funds.
       (2) Competitive basis.--A grant under this section shall be 
     awarded on a competitive basis.
       (3) Term.--A grant under this section shall have a term 
     that does not exceed 4 years.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $10,000,000 for 
     each of fiscal years 2001 through 2004.

  Mr. GRASSLEY. Mr. President, I am pleased to join my Illinois 
colleague, Senator Fitzgerald, as a cosponsor of his legislation 
banning MTBE. MTBE contaminates water, and it has been found in water 
throughout the United States.
  With every day that passes, more water is being contaminated. Oddly 
enough, we have passed a clean air bill to clean up the air, and the 
oil companies have used a product to meet the requirements of the clean 
air bill that contaminates the water.
  But there is an additive to the gasoline that will clean up the air 
as well as not contaminate the water. I will talk about that in just a 
minute.
  It is simple: With every day that passes, more water is being 
contaminated.
  Last August, the Senate soundly passed a resolution that I 
cosponsored with Senator Boxer of California calling for an MTBE ban.
  In the face of damaging, irresponsible action by the Clinton 
administration, it is time we put some force to our Senate position. 
How long must Americans suffer this dilatory charade by President 
Clinton's administration, also by the petroleum industry, and 
particularly by California officials? I say California officials 
because they have asked that the Clean Air Act of 1990 be gutted.
  I have intentionally held my fire until after the California primary 
because I would not want anyone to misconstrue my motives in an attempt 
to undermine Vice President Gore's political ambitions. But today I 
think it is time to say it as it really is: President Clinton, Vice 
President Gore, and the Environmental Protection Agency's 
Administrator, Carol Browner, have been dragging their feet--and 
dragging their feet too long.
  They gave the oil and the MTBE industry everything they wanted. At 
the request of big oil, they threw out regulations proposed by 
President Bush which would have, by some estimates, tripled and even 
quadrupled ethanol production. This was done on the first day of the 
Clinton administration.
  Instead, when they finally got around to putting some rules out, the 
administration approved regulations that guaranteed a virtual MTBE 
monopoly in the reformulated gasoline market.
  This decision by the Clinton administration, way back then in the 
early part of the administration, opened wide the door for petroleum 
companies to use MTBE and thus contaminate our water.
  With egg on its face, with an environmental disaster on its hands, 
the Clinton administration continues to delay and also duck its 
leadership responsibilities.
  A replacement for MTBE exists today, but most oil companies refuse to 
use it. The Environmental Protection Agency's Director, Carol Browner, 
has been told time and time again, in every imaginable way possible, 
how MTBE can be replaced, and in California totally replaced this very 
day.
  But she, as other Clinton-Gore officials, always seems to come up 
with some sort of excuse, a reason for delay, some other hurdle.
  Last week, as the congressional delegation met with our Governor from 
Iowa, we were told that Carol Browner asked for more information on 
this subject about the supply of an alternative to MTBE--which is 
ethanol--that she needed more information. It happens to be information 
that the Environmental Protection Agency already has.
  The new hurdle she is creating is the question: Is there enough of 
this alternative, ethanol? You might ask: Enough for what? To replace 
all MTBE today or tomorrow? That is kind of insulting. It is also 
incredible.
  I want to illustrate how it is insulting and incredible with this 
point. Imagine the following: You have a brush fire sweeping to the 
city's edge, devouring home after home. Panicked citizens call 911, but 
the fire engines remain silent. The home owners scream to the fire 
department: Why won't you come to our rescue? The fire chief says: We 
don't have enough water to save the whole city, and until we can save 
all, we will save none.
  It is absurd. Of course it is. Yet an equally absurd and dangerous 
line has been drawn by most California big oil companies and their 
political apologists. In the face of the largest environmental crisis 
of this generation--which is the contamination of water by the 
petroleum companies' controlled product, MTBE--Californians are being 
held hostage, forced to buy water-contaminating, MTBE-laced gasoline, 
even though a superior MTBE replacement is available, and available 
this very day--not tomorrow, not next year, but today.
  California Governor Davis' so-called ``ban'' allows MTBE to be sold 
``full bore, business-as-usual'' until the end of the year 2002.
  Worse yet, California legislators dropped the deadline altogether. 
But why the wait? Well, we are told there is not enough of this MTBE 
alternative and thus the illogical decree imposed: No MTBE will be 
removed until all MTBE is removed. And with every day

[[Page 2461]]

that passes, more of our water is contaminated. Think of this: A mere 
teacup of MTBE renders undrinkable 5 million gallons of water. CBS's 
``60 Minutes,'' referred to by my colleague from Illinois, reported 
California has already identified 10,000 ground water sites 
contaminated by MTBE and that ``one internal study conducted by Chevron 
found that MTBE has contaminated ground water at 80 percent of the 400 
sites that the company tested.''
  Yet big oil holds you hostage, forcing you to buy MTBE-laced gasoline 
until either the Clinton-Gore administration or Congress guts one of 
the most successful Clean Air Act programs, the reformulated gasoline 
oxygenate requirement. So big oil is hoping that gullible bureaucrats 
and politicians conclude that MTBE is not the real problem but, 
instead, the real problem happens to be the oxygenate provisions of the 
1990 Clean Air Act. Get rid of the oxygenate requirement and, presto, 
MTBE disappears.
  People in my State are not buying that line. Iowa has no oxygenate 
requirement. Yet MTBE has been found in 29 percent of our water 
supplies tested. Let it be clear, let there be absolutely no 
misunderstanding: Iowa's water and the water in every Senator's State 
was contaminated by a product that big oil added to their gasoline, and 
it was not contaminated by the Clear Air Act. Big oil did everything it 
could to persuade Clinton-Gore appointees and judges in our courts to 
guarantee that MTBE monopolized the Clean Air Act's oxygenate market.
  Our colleagues need to understand that nearly 500 million gallons of 
MTBE are sold every year throughout the United States, not to meet the 
oxygenate requirements of the Clean Air Act that I have been talking 
about up to this point, but as an octane enhancer in markets all over 
the United States where the oxygenate requirements under the Clean Air 
Act to clean up the smog don't even apply.
  So your water is in danger whether you live in a city that has to 
meet the oxygenate requirements of the 1990 Clean Air Act or not 
because big oil uses the poison MTBE as an octane enhancer lots of 
places. So that gets us to a point where they want us to believe that 
changing the 1990 Clean Air Act is the solution to all the problems. I 
ask, how will gutting the Clean Air Act's oxygenate requirements 
protect the rest of America's water, if most gallons of gasoline have 
MTBE in them for octane enhancement outside the Clean Air Act? Well, 
that answer is pretty simple. It is not going to clean it up until we 
get rid of all MTBE. We need to, then, ban MTBE, which this bill we are 
introducing today does, not ban the Clean Air Act, or at least not gut 
it by eliminating the oxygenate requirements of it, which big oil says 
is the solution to our problem.
  Then we get to what is the superior MTBE replacement that is 
available today. My colleagues don't have to wait for me to tell them 
what my answer is to that, but I will. It is ethanol, which is nothing 
more than grain alcohol. Let's get that clear. We are talking about 
MTBE, a poisonous product, poisoning the water in California, where the 
oxygenate requirements are, but also in the rest of the country where 
it is used as an octane enhancer, and grain alcohol on the other hand 
that you can drink. Ethanol can be made from other things as well. It 
can be made from California rice straw. It can be made from Idaho 
potato waste. It can be made from Florida sugarcane, North Dakota sugar 
beets, New York municipal waste, Washington wood and paper waste, and a 
host of other biodegradable waste products. Ethanol is not only good 
for your air, but if it did get into your water, your only big decision 
would be whether to add some ice and tonic before you drink it.
  As my colleagues know, I am a teetotaler, so I am not going to 
pretend to advise you on the proper cocktail mixes. Today there is 
enough ethanol in storage and from what can be produced from idle 
ethanol facilities to displace all of the MTBE California uses in a 
whole year. It is available today not tomorrow, not the year 2002. And 
more facilities to produce it are in the works.
  But big oil proclaims there is not enough ethanol. Translation, as 
far as I can tell: We, as big oil, don't control ethanol; farmers 
control it. So we don't want to use it.
  They argue that ethanol is too difficult to transport. Translation: 
We would rather import Middle East MTBE from halfway across the world 
than transport ethanol from the Midwest of our great country. Big oil 
whines: Keeping the oxygenate requirement will give ethanol a monopoly. 
This is a whale of a tale, and it is kind of hard to translate into 
sensible English. Since it takes half as much ethanol as MTBE to 
produce a gallon of reformulated gasoline, big oil will reap a 6.2-
percent increase in the amount of plain gasoline used in reformulated 
gasoline. So how in the world does boosting by a whopping 6.2 percent 
gasoline's share of the reformulated gasoline market constitute a 
monopoly for ethanol? That issue has been raised with Senators on the 
environmental committee.
  Currently, MTBE constitutes 3 percent of our total transportation 
fuel market. Ethanol, if it replaces all MTBE, would, therefore, gain a 
1.5-percent share. Think about that. A 1.5-percent market share, if it 
is ethanol, is defined as a monopoly share. But a 3-percent market 
share, if it is MTBE, is not a monopoly.
  I think it is pretty simple to get it because the translation of this 
big oil babble is this: Market share, as small as 1.5 percent, if not 
controlled by big oil, shall henceforth be legally defined as a 
monopoly. Market share at any level, 3 percent to 100 percent, if it is 
controlled by big oil, shall never be defined as a monopoly. It is such 
a bizarre proposition that a mere 1.5 percent of market equals a 
monopoly.
  Big oil claims ethanol is too expensive. Let me translate that for 
you: We prefer--meaning oil--our cozy relationship with OPEC that 
allows us to price gouge Americans rather than sell at half the price 
an oxygenate controlled by American farmers and ethanol producers.
  I hope you caught that. If not, you ought to brace yourself, sit down 
with your cup of coffee, get anything dangerous out of your hands. The 
March 7, 2000, west coast spot wholesale price for gasoline was $1.27 
per gallon. MTBE sold for just over $1.17 per gallon, 10 cents less. 
But ethanol came right in at the same price, $1.17 a gallon. Now, 
remember, it takes twice as much MTBE as it does ethanol to meet the 
Clean Air Act's oxygenate requirement. In other words, at the March 7 
prices, oxygenates made from ethanol cost petroleum marketers half as 
much as the oxygenate made from their product, MTBE.
  So even though big oil has at its disposal an oxygenated alternate to 
MTBE, which costs half as much, and that will protect our water 
supplies, big oil, with the help of the Clinton administration, 
continues to hold hostage the people of California and other Americans 
who are forced to use MTBE.
  Last summer, I asked President Clinton to announce that he would deny 
California's request to waive the oxygenate requirement. I asked him to 
announce that he would veto any legislation that would provide for such 
a waiver. I have heard nothing on this subject. No answer to my letter 
has come from the President. His silence, and that of Vice President 
Gore and the rest of the administration, is very deafening.
  American farmers are suffering the worst prices in about 23 to 25 
years. If farmers are allowed to replace MTBE with ethanol, farm income 
will jump $1 billion per year. But, no, increasing farm income through 
the marketplace, both domestic and foreign, seems to be of no interest 
to the Clinton-Gore administration, considering their unwillingness to 
act and make these public statements that would send a clear signal, as 
far as this consideration is concerned, that MTBE's days of poisoning 
the water are over, replacing that with something that is safe, 
something that will help the farmers, and something that will send a 
clear signal to OPEC that we are done with our days being dependent 
upon them for our oil supplies and our energy.

[[Page 2462]]

  In the process of doing that, they would help clean up our 
environment as well. But that doesn't seem to be of any concern to this 
administration either when it comes to MTBE. It seems, unfortunately, 
that the only thing on the collective mind of this administration is 
the Vice President running for President, his legacy, his partisan 
politics; everybody's eyes are on the next election.
  So I repeat, MTBE is the problem, not the Clean Air Act, as the big 
oil companies want us to believe. The answer to all this is so simple 
and clear:
  As our bill does, ban MTBE, but don't gut the Clean Air Act's 
oxygenate requirement.
  Let America's farmers fill this void with ethanol, and let them fill 
it today.
  It will boost farm income by $1 billion per year and help lessen our 
reliance upon foreign oil, and it will not keep us at the whims of OPEC 
quite so much.
  It will keep our air clean, and it will protect our water supplies.
  So all of those things sound good, don't they? Ethanol. It is that 
simple. It is good, good, good. I might be wasting my breath, but I 
will make this plea one more time. It is the same plea I made in a 
letter to the President last June or July, which was: President 
Clinton, reject the waiver request today and declare that you will veto 
any legislation that would allow a waiver of the oxygenate requirements 
of the 1990 Clean Air Act. I assure you, Mr. President, if you do that, 
the water-polluting MTBE will be replaced as fast as our farmers can 
deliver the ethanol, and that is pretty darned swift. Do it today, 
President Clinton. Please do it today.
  I yield the floor.
  Mr. BAYH. Mr. President, I am pleased to join with my colleagues 
today in introducing this timely and important legislation to help the 
nation respond to growing concerns about the threats to public health 
and the environment caused by methyl tertiary butyl ether, or MTBE.
  There is gathering evidence that MTBE, which is added to gasoline to 
reduce its impact on air quality, poses a threat to human health and 
the environment. Preliminary testing indicates groundwater has been 
contaminated in many areas of the country. The MTBE Elimination Act 
provides for a three-year phase out of the use MTBE. The legislation 
also provides resources for research, local testing programs, and 
labeling so that we can identify the size of the problem and move 
forward with meaningful solutions.
  Addressing the health and environmental threats posed by MTBE is only 
half of the answer. While we move to phase out MTBE, we also need to be 
making decisions about the future of the reformulated fuels program and 
the oxygenate requirement in the Clean Air Act. The Reformulated 
Gasoline Program has significantly reduced emissions of air pollutants 
from motor vehicles, including volatile organic compounds, carbon 
monoxide, and mobile-source air toxics, such as benzene. It is 
important that we evaluate the options available for maintaining and 
enhancing these benefits.
  The first step is evaluating the obvious options, ethanol. In its 
assessment of oxygenate alternatives, the EPA's Blue Ribbon Panel found 
that ethanol is ``an effective fuel-bending component, made from 
domestic grain and potentially from recycled biomass, that provides 
high octane, carbon monoxide emission benefits, and appears to 
contribute to the reduction of the use of aromatics with related toxics 
and other air quality benefits.''
  The U.S. Department of Agriculture, in its report ``Economic Analysis 
of Replacing MTBE with Ethanol in the United States, ``concluded that 
ethanol production and distribution could be expanded to meet the needs 
of the Reformulated Gasoline Program by 2004 with no supply 
interruptions or significant price impacts.
  We do not have to choose between clean air and clean water. Evidence 
that MTBE presents a risk to water quality does not mean that we have 
to end our efforts for cleaner fuels. Ethanol is a clean, safe 
alternative that has the potential to serve a larger national market. 
As a country, we are beginning to recognize the benefits that biofuels 
can provide to the environment. Recent oil price increases also remind 
us of how important domestic sources of energy are to our national 
security. This bill is a necessary step in minimizing the public health 
and environment damage attributable to MTBE. I believe it can also be 
the start of a serious discussion on the opportunities that ethanol and 
other biofuels provide to maximize clean, safe and economically viable 
energy options for America.
                                 ______
                                 
      By Mr. WARNER:
  S. 2234. A bill to designate certain facilities of the United States 
Postal Service; to the Committee on Governmental Affairs.


 joel t. broyhill postal building and the joseph l. fisher post office

  Mr. WARNER. Mr. President, I join my colleague in the House of 
Representatives, Congressman Wolf, in introducing legislation to honor 
two former Representatives from Virginia's 10th district which 
designates two postal buildings in Northern Virginia after Joel T. 
Broyhill and Joseph L. Fisher.
  The Honorable Joel Broyhill, was the first member elected to 
Virginia's newly created 10th district. He served in the House of 
Representatives for twenty-two years. A native of Hopewell, Virginia, 
Congressman Broyhill is also a decorated veteran and served as captain 
in the 106th Infantry Division in WWII. During the war, he was taken 
prisoner by the Germans and held in a POW camp after fighting in the 
infamous and costly ``Battle of Bulge.''
  Congressman Broyhill currently resides in Arlington, Virginia. I 
believe renaming the postal building at 8409 Lee Highway in Merrifield, 
Virginia would be appropriate in recognition of his honorable and 
extensive political and military careers.
  I would also like to honor another former Representative from the 
10th District, the late Honorable Joseph L. Fisher. Congressman Fisher 
had a notable political career in the local, state and federal 
government.
  Congressman Fisher, who held a Ph.D. in Economics from Harvard 
University, began his career in public service as an economist with the 
U.S. Department of State. After his service in World War II, he became 
a member of the Arlington County Board. He began a three-term service 
in the House of Representatives when he was elected in 1974, defeating 
the incumbent Republican Joel Broyhill.
  Subsequent to his service in the House, among other positions, 
Congressman Fisher served as secretary of the Virginia Department of 
Human Resources and was a professor of political economy at George 
Mason University.
  Congressman Fisher's commitment to public service should be 
recognized with the designation of the post office located at 3118 
Washington Boulevard in Arlington, Virginia as the Joseph L. Fisher 
Post Office.
  Joseph Fisher passed away in 1992 at his home in Arlington, Virginia. 
He is survived by his wife, Margaret, their seven children, sixteen 
grandchildren, and two great grandchildren.
  I seek my colleagues to support legislation to honor these two former 
members in recognition of their distinguished public service.
                                 ______
                                 
      By Ms. COLLINS: (for herself, Mr. Murkowski, Mr. Dodd, Mr. 
        Torricelli, and Mr. Hutchinson):
  S. 2235. A bill to amend the Public Health Act to revise the 
performance standards and certification process for organ procurement 
organizations; to the Committee on Health, Education, Labor, and 
Pensions.


        organ procurement organization certification act of 2000

 Ms. COLLINS. Mr. President, I rise today on behalf of myself 
and my colleagues, Senators Murkowski, Dodd, Torricelli, and Hutchinson 
to introduce the Organ Procurement Organization Certification Act to 
improve the performance evaluation and certification process that the 
Health Care Financing Administration currently uses for organ 
procurement organizations (OPOs).

[[Page 2463]]

  Recent advantages in technology have dramatically increased the 
number of patients who could benefit from organ transplants. 
Unfortunately, however, while there has been some interest in the 
number of organ donors, the supply of organs in the United States has 
not kept pace with the growing number of transplant candidates, and the 
gap between transplant demand and organ supply continues to widen. 
According to the United Network for Organ Sharing (UNOS), there are now 
68,220 patients in the United States on the waiting list for a 
transplant.
  Our nation's 60 organ procurement organizations (OPOs) play a 
critical role in procuring and placing organs and are therefore key to 
our efforts to increase the number and quality of organs available for 
transplant. They provide all of the services necessary in a particular 
geographic region for coordinating the identification of potential 
donors, requests for donation, and recovery and transport of organs. 
The professionals in the OPOs evaluate potential donors, discuss 
donation with family members, and arrange for the surgical removal of 
donated organs. They are also responsible for preserving the organs and 
making arrangements for their distribution according to national organ 
sharing policies. Finally, the OPOs provide information and education 
to medical professionals and the general public to encourage organ and 
tissue donation to increase the availability of organs for 
transplantation.
  According to a 1999 report of the Institute of Medicine (IOM) 
entitled ``Organ Procurement and Transplantation: Assessing Current 
Policies and the Potential Impact of the DHHS Final Rule'', a major 
impediment to greater accountability and improved performance on the 
part of OPOs is the current lack of a reliable and valid method for 
assessing donor potential and OPO performance.
  The HCFA's current certification process for OPOs sets an arbitrary, 
population-based performance standard for certifying OPOs based on 
donors per million of population in their service areas. It sets a 
standard for acceptable performance based on five criteria: donors 
recovered per million, kidneys recovered per million, kidneys 
transplanted per million, extrarenal organs (heart, liver, pancreas and 
lungs) recovered per million, and extrarenal organs transplanted per 
million. The HCFA assesses the OPOs' adherence to these standards every 
two years. Each OPO must meet at least 75 percent of the national mean 
for four of these five categories to be recertified as the OPO for a 
particular area and to receive Medicare and Medicaid payments. Without 
HCFA certification, an OPO cannot continue to operate.
  The GAO, the IOM, the Harvard School of Public Health and others all 
have criticized HCFA's use of this population-based standard to measure 
OPO performance. According to the GAO, ``HCFA's current performance 
standard does not accurately assess OPOs' ability to meet the goal of 
acquiring all usable organs because it is based on the total 
population, not the number of potential donors, within the OPOs' 
service areas.''
  OPO service areas vary widely in the distribution of deaths by cause, 
underlying health conditions, age, and race. These variations can pose 
significant advantages or disadvantages to an OPO's ability to procure 
organs, and a major problem with HCFA's current performance assessment 
is that it does not account for these variations. An extremely 
effective OPO that is getting a high yield of organs from the potential 
donors in its service area may appear to be performing poorly because 
it has a disproportionate share of elderly people or a high rate of 
people infected with HIV or AIDS, which eliminates them for 
consideration as an organ donor. At the same time, an ineffective OPO 
may appear to be performing well because it is operating in a service 
area with a high proportion of potential donors.
  For example, organ donors typically die from head trauma and 
accidental injuries, and these rates can vary dramatically from region 
to region. According to the Centers for Disease Control and Prevention 
(CDC), in 1991, the number of drivers fatally injured in traffic 
accidents in Maine was 15.54 per 100,000 population. In Alabama, 
however, it was 29.56, giving the OPO serving that state a tremendous 
advantage over the New England Organ Bank, which serves Maine, but not 
for a very good reason!
  Use of this population-based method to evaluate OPO performance may 
well result in the decertification of OPOs that are actually excellent 
performers. Under HCFA's current regulatory practice, OPOs are 
decertified if they fail to meet the 75th percentile of the national 
means on 4 of the 5 performance areas. In this process, which resembles 
a game of musical chairs, it is a mathematical certainty that some OPOs 
will fail in each cycle, no matter how much they might individually 
improve.
  Moreover, unlike other HCFA certification programs, the certification 
process for OPOs lacks any provision for corrective action plans to 
remedy deficient performance and also lacks a clearly defined due 
process component for resolving conflicts. The current system therefore 
forces OPOs to compete on the basis of an imperfect grading system, 
with no guarantee of an opportunity for fair hearing based on their 
actual performance. This situation pressures many OPOs to focus on the 
certification process itself rather than on activities and methods to 
increase donation, undermining what should be the overriding goal of 
the program. Moreover, the current two-year cycle--which is shorter 
than other certification programs administered by HCFA--provides little 
opportunity to examine trends and even less incentive for OPOs to mount 
long-term interventions.
  The legislation we are introducing today has three major objectives. 
First, it imposes a moratorium on the current recertification process 
for OPOs and the use of population-based performance measurements. 
Under our bill, the certification of qualified OPOs will remain in 
place through January 1, 2002, for those OPOs that have been certified 
as a January 1, 2000, and that meet other qualification requirements 
apart from the current performance standards. Second, the bill requires 
the Secretary of Health and Human Services to promulgate new rules 
governing OPO recertification by January 1, 2002. These new rules are 
to rely on outcome and process performance measures based on evidence 
of organ donor potential and other relevant factors, and 
recertification for OPOs shall not be required until they are 
promulgated. Finally, the bill provides for the filing and approval of 
a corrective action plan by an OPO that fails to meet the standards, a 
grace period to permit corrective action, an opportunity to appeal a 
decertification to the Secretary on substantive and procedural grounds 
and a four-year certification cycle.
  Mr. President, the bill we are introducing today makes much needed 
improvements in the flawed process that HCFA currently uses to certify 
and assess OPO performance, and I urge all of my colleagues to join us 
as cosponsors.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2235

       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 ``Organ Procurement 
     Organization Certification Act of 2000''.

      SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Organ procurement organizations play an important role 
     in the effort to increase organ donation in the United 
     States.
       (2) The current process for the certification and 
     recertification of organ procurement organizations conducted 
     by the Department of Health and Human Services has created a 
     level of uncertainty that is interfering with the 
     effectiveness of organ procurement organizations in raising 
     the level of organ donation.
       (3) The General Accounting Office, the Institute of 
     Medicine, and the Harvard School of Public Health have 
     identified substantial limitations in the organ procurement 
     organization certification and recertification process and 
     have recommended changes in that process.

[[Page 2464]]

       (4) The limitations in the recertification process include:
       (A) An exclusive reliance on population-based measures of 
     performance that do not account for the potential in the 
     population for organ donation and do not permit consideration 
     of other outcome and process standards that would more 
     accurately reflect the relative capability and performance of 
     each organ procurement organization.
       (B) An immediate decertification of organ procurement 
     organizations solely on the basis of the performance 
     measures, without an appropriate opportunity to file and a 
     grace period to pursue a corrective action plan.
       (C) A lack of due process to appeal to the Secretary of 
     Health and Human Services for recertification on either 
     substantive or procedural grounds.
       (5) The Secretary of Health and Human Services has the 
     authority under section 1138(b)(1)(A)(i) of the Social 
     Security Act (42 U.S.C. 1320b-8(b)(1)(A)(i)) to extend the 
     period for recertification of an organ procurement 
     organization from 2 to 4 years on the basis of its past 
     practices in order to avoid the inappropriate disruption of 
     the nation's organ system.
       (6) The Secretary of Health and Human Services can use the 
     extended period described in paragraph (5) for 
     recertification of all organ procurement organizations to--
       (A) develop improved performance measures that would 
     reflect organ donor potential and interim outcomes, and to 
     test these measures to ensure that they accurately measure 
     performance differences among the organ procurement 
     organizations; and
       (B) improve the overall certification process by 
     incorporating process as well as outcome performance 
     measures, and developing equitable processes for corrective 
     action plans and appeals.

      SEC. 3. CERTIFICATION AND RECERTIFICATION OF ORGAN 
                   PROCUREMENT ORGANIZATIONS.

       Section 371(b)(1) of the Public Health Service Act (42 
     U.S.C. 273(b)(1)) is amended:
       (1) by redesignating subparagraphs (D) through (G) as 
     subparagraphs (E) through (H), respectively;
       (2) by realigning the margin of subparagraph (F) (as so 
     redesignated) so as to align with subparagraph (E) (as so 
     redesignated); and
       (3) by inserting after subparagraph (C) the following:
       ``(D) notwithstanding any other provision of law, has met 
     the other requirements of this section and has been certified 
     or recertified by the Secretary within the previous 4-year 
     period as meeting the performance standards to be a qualified 
     organ procurement organization through a process that 
     either--
       ``(i) granted certification or recertification within such 
     4-year period with such certification or recertification in 
     effect as of January 1, 2000, and remaining in effect through 
     the earlier of--
       ``(I) January 1, 2002; or
       ``(II) the completion of recertification under the 
     requirements of clause (ii); or
       ``(ii) is defined through regulations that are promulgated 
     by the Secretary by not later than January 1, 2002, that--
       ``(I) require recertifications of qualified organ 
     procurement organizations not more frequently than once every 
     4 years;
       ``(II) rely on outcome and process performance measures 
     that are based on empirical evidence of organ donor potential 
     and other related factors in each service area of qualified 
     organ procurement organizations;
       ``(III) use multiple outcome measures as part of the 
     certification process;
       ``(IV) provide for the filing and approval of a corrective 
     action plan by a qualified organ procurement organization 
     that fails to meet the performance standards and a grace 
     period of not less than 3 years during which such 
     organization can implement the corrective action plan without 
     risk of decertification; and
       ``(V) provide for a qualified organ procurement 
     organization to appeal a decertification to the Secretary on 
     substantive and procedural grounds;''.
                                 ______
                                 
      By Mr. FRIST (for himself and Mr. Dodd):
  S. 2236. A bill to establish programs to improve the health and 
safety of children receiving child care outside the home, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.


           day care health and safety improvement act of 2000

  Mr. FRIST. Mr. President, each day, more than 13 million children 
under the age of 6 spend some part of their day in child care. In my 
home state of Tennessee 264,000 children will attend day care, and half 
of all children younger than three will spend some or all of their day 
being cared for by someone other than their parents. With these large 
number of children receiving child care services, there has been some 
evidence to suggest that we need to work to make these settings safer 
while improving the health of children in child care settings.
  The potential danger in child care settings has been evident in my 
home state of Tennessee. Tragically, within the span of 2 years, there 
have been 4 deaths in child care settings in Memphis, Tennessee. 
Overall, reports of abandoned, mistreated, and unnecessarily endangered 
children have been reported in the Tennessee press over the last few 
years. I salute the Memphis Commercial Appeal, for their in-depth 
reporting on day care health and safety issues which has helped bring 
this serious matter to public attention.
  However, I would caution that this is not just a concern in Memphis 
or Tennessee; it is nationwide and it needs to be addressed. There is 
alarming evidence to suggest that more must be done to improve the 
health and safety of children in child care settings.
  For example, a 1998 Consumer Product Safety Commission Study revealed 
that two-thirds of the 200 licensed child care settings investigated 
exhibited safety hazards, such as insufficient child safety gates, 
cribs with soft bedding, and unsafe playgrounds.
  In 1997 alone, 31,000 children ages 4 and younger were treated in 
hospital emergency rooms for injuries sustained in child care or school 
settings. And, quite tragically, since 1990, more than 56 children have 
died in child care settings nationwide.
  Child care health and safety issues are regulated at the state and 
local levels, which work diligently to ensure that child care settings 
are as safe as possible. I have worked closely with the Tennessee 
Department of Human Services on how best to address the issue and 
quickly realized one of the main problems was the lack of resources 
that the state could draw upon to improve health and safety.
  To help address this issue and protect our children, I have joined 
with Senator Dodd, the recognized leader in Congress on child care 
issues, to introduce the ``Children's Day Care Health and Safety 
Improvement Act,'' which will establish a state block grant program, 
authorizing $200 million for states to carry out activities related to 
the improvement of the health and safety of children in child care 
settings.
  These grants may be used for the following activities:
  To train and educate child care providers to prevent injuries and 
illnesses and to promote health-related practices;
  To improve and enforce child care provider licensing, regulation, and 
registration, by conducting more inspections of day care providers to 
ensure that they are carrying out state and local guidelines to ensure 
that our children are safe;
  To rehabilitate child care facilities to meet health and safety 
standards, like the proper placement of fire exits and smoke detectors, 
the proper disposal of sewage and garbage, and ensuring that play 
ground equipment is safe;
  To employ health consultants to give health and safety advice to 
child care providers, such as CPR training, first aid training, 
prevention of sudden infant death syndrome, and how to recognize the 
signs of child abuse and neglect;
  To provide assistance to enhance child care providers' ability to 
serve children with disabilities;
  To conduct criminal background checks on child care providers, to 
ensure that day care providers are credible and reliable as they care 
for our children;
  To provide information to parents on what factors to consider in 
choosing a safe and healthy day care setting for their children. 
Parents must know that the setting they are choosing have a proven 
safety record; and
  To improve the safety of transportation of children in child care.
  I am pleased that Tennessee is carrying out many of the activities 
authorized under the ``Children's Day Care Health and Safety Act.'' 
Under this bill, Tennessee would receive an estimated $4.2 million to 
help expand health and safety activities.
  Mr. President, as a father, I understand the parental bond. A 
parent's number one concern is the safety, protection and health of 
their children. Parents need to be reassured their children are safe 
when they rely on others

[[Page 2465]]

to care for their children. I am hopeful that this legislation will 
give Tennessee, and all states, the needed resources to implement 
necessary reforms and activities which they determine will improve the 
health and safety conditions of child care providers as they care for 
our children.
  I want to thank Senator Dodd for joining me in this effort and for 
the work of his staff, Jeanne Ireland. I would also like to thank the 
American Academy of Pediatrics, the Children's Defense Fund and the 
National Association for the Education of Young children for their 
input and letters of support for this bill. I would also like to thank 
Governor Sundquist and members of the Tennessee Department of Human 
Services, especially, Ms. Deborah Neill, the Director of Child Care, 
Adult and Community Programs, for their input on this important and 
needed legislation. And finally, I would like to thank and acknowledge 
the assistance of the Mayor of Memphis, the Honorable W. W. Herenton 
and his staff, who have been of great help in developing this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill and 
letters of support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2236

       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 ``Children's Day Care Health 
     and Safety Improvement Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) of the 21,000,000 children under age 6 in the United 
     States, almost 13,000,000 spend some part of their day in 
     child care;
       (2) a review of State child care regulations in 47 States 
     found that more than half of the States had inadequate 
     standards or no standards for \2/3\ of the safety topics 
     reviewed;
       (3) a research study conducted by the Consumer Product 
     Safety Commission in 1998 found that \2/3\ of the 200 
     licensed child care settings investigated in the study 
     exhibited at least 1 of 8 safety hazards investigated, 
     including insufficient child safety gates, cribs with soft 
     bedding, and unsafe playground surfacing;
       (4) compliance with recently published voluntary national 
     safety standards developed by public health and pediatric 
     experts was found to vary considerably by State, and the 
     States ranged from a 20 percent to a 99 percent compliance 
     rate;
       (5) in 1997, approximately 31,000 children ages 4 and 
     younger were treated in hospital emergency rooms for injuries 
     in child care or school settings;
       (6) the Consumer Product Safety Commission reports that at 
     least 56 children have died in child care settings since 
     1990;
       (7) the American Academy of Pediatrics identifies safe 
     facilities, equipment, and transportation as elements of 
     quality child care; and
       (8) a research study of 133 child care centers revealed 
     that 85 percent of the child care center directors believe 
     that health consultation is important or very important for 
     child care centers.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Child with a disability; infant or toddler with a 
     disability.--The terms ``child with a disability'' and 
     ``infant or toddler with a disability'' have the meanings 
     given the terms in section 602 of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1401).
       (2) Eligible child care provider.--The term ``eligible 
     child care provider'' means a provider of child care services 
     for compensation, including a provider of care for a school-
     age child during non-school hours, that--
       (A) is licensed, regulated, registered, or otherwise 
     legally operating, under State and local law; and
       (B) satisfies the State and local requirements,

     applicable to the child care services the provider provides.
       (3) Family child care provider.--The term ``family child 
     care provider'' means 1 individual who provides child care 
     services for fewer than 24 hours per day, as the sole 
     caregiver, and in a private residence.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (5) State.--The term ``State'' means any of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, the United States Virgin 
     Islands, Guam, American Samoa, and the Commonwealth of the 
     Northern Mariana Islands.

     SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     Act $200,000,000 for fiscal year 2001 and such sums as may be 
     necessary for each subsequent fiscal year.

     SEC. 5. PROGRAMS.

       The Secretary shall make allotments to eligible States 
     under section 6. The Secretary shall make the allotments to 
     enable the States to establish programs to improve the health 
     and safety of children receiving child care outside the home, 
     by preventing illnesses and injuries associated with that 
     care and promoting the health and well-being of children 
     receiving that care.

     SEC. 6. AMOUNTS RESERVED; ALLOTMENTS.

       (a) Amounts Reserved.--The Secretary shall reserve not more 
     than \1/2\ of 1 percent of the amount appropriated under 
     section 4 for each fiscal year to make allotments to Guam, 
     American Samoa, the United States Virgin Islands, and the 
     Commonwealth of the Northern Mariana Islands to be allotted 
     in accordance with their respective needs.
       (b) State Allotments.--
       (1) General rule.--From the amounts appropriated under 
     section 4 for each fiscal year and remaining after 
     reservations are made under subsection (a), the Secretary 
     shall allot to each State an amount equal to the sum of--
       (A) an amount that bears the same ratio to 50 percent of 
     such remainder as the product of the young child factor of 
     the State and the allotment percentage of the State bears to 
     the sum of the corresponding products for all States; and
       (B) an amount that bears the same ratio to 50 percent of 
     such remainder as the product of the school lunch factor of 
     the State and the allotment percentage of the State bears to 
     the sum of the corresponding products for all States.
       (2) Young child factor.--In this subsection, the term 
     ``young child factor'' means the ratio of the number of 
     children under 5 years of age in a State to the number of 
     such children in all States, as provided by the most recent 
     annual estimates of population in the States by the Census 
     Bureau of the Department of Commerce.
       (3) School lunch factor.--In this subsection, the term 
     ``school lunch factor'' means the ratio of the number of 
     children who are receiving free or reduced price lunches 
     under the school lunch program established under the National 
     School Lunch Act (42 U.S.C. 1751 et seq.) in the State to the 
     number of such children in all States, as determined annually 
     by the Department of Agriculture.
       (4) Allotment percentage.--
       (A) In general.--For purposes of this subsection, the 
     allotment percentage for a State shall be determined by 
     dividing the per capita income of all individuals in the 
     United States, by the per capita income of all individuals in 
     the State.
       (B) Limitations.--If an allotment percentage determined 
     under subparagraph (A) for a State--
       (i) is more than 1.2 percent, the allotment percentage of 
     the State shall be considered to be 1.2 percent; and
       (ii) is less than 0.8 percent, the allotment percentage of 
     the State shall be considered to be 0.8 percent.
       (C) Per capita income.--For purposes of subparagraph (A), 
     per capita income shall be--
       (i) determined at 2-year intervals;
       (ii) applied for the 2-year period beginning on October 1 
     of the first fiscal year beginning after the date such 
     determination is made; and
       (iii) equal to the average of the annual per capita incomes 
     for the most recent period of 3 consecutive years for which 
     satisfactory data are available from the Department of 
     Commerce on the date such determination is made.
       (c) Data and Information.--The Secretary shall obtain from 
     each appropriate Federal agency, the most recent data and 
     information necessary to determine the allotments provided 
     for in subsection (b).
       (d) Definition.--In this section, the term ``State'' 
     includes only the several States of the United States, the 
     District of Columbia, and the Commonwealth of Puerto Rico.

     SEC. 7. STATE APPLICATIONS.

       To be eligible to receive an allotment under section 6, a 
     State shall submit an application to the Secretary at such 
     time, in such manner, and containing such information as the 
     Secretary may require. The application shall contain 
     information assessing the needs of the State with regard to 
     child care health and safety, the goals to be achieved 
     through the program carried out by the State under this Act, 
     and the measures to be used to assess the progress made by 
     the State toward achieving the goals.

     SEC. 8. USE OF FUNDS.

       (a) In General.--A State that receives an allotment under 
     section 6 shall use the funds made available through the 
     allotment to carry out 2 or more activities consisting of--
       (1) providing training and education to eligible child care 
     providers on preventing injuries and illnesses in children, 
     and promoting health-related practices;
       (2) strengthening licensing, regulation, or registration 
     standards for eligible child care providers;
       (3) assisting eligible child care providers in meeting 
     licensing, regulation, or registration standards, including 
     rehabilitating the facilities of the providers, in order to 
     bring

[[Page 2466]]

     the facilities into compliance with the standards;
       (4) enforcing licensing, regulation, or registration 
     standards for eligible child care providers, including 
     holding increased unannounced inspections of the facilities 
     of those providers;
       (5) providing health consultants to provide advice to 
     eligible child care providers;
       (6) assisting eligible child care providers in enhancing 
     the ability of the providers to serve children with 
     disabilities and infants and toddlers with disabilities;
       (7) conducting criminal background checks for eligible 
     child care providers and other individuals who have contact 
     with children in the facilities of the providers;
       (8) providing information to parents on what factors to 
     consider in choosing a safe and healthy child care setting; 
     or
       (9) assisting in improving the safety of transportation 
     practices for children enrolled in child care programs with 
     eligible child care providers.
       (b) Supplement, not Supplant.--Funds appropriated pursuant 
     to the authority of this Act shall be used to supplement and 
     not supplant other Federal, State, and local public funds 
     expended to provide services for eligible individuals.

     SEC. 9. REPORTS.

       Each State that receives an allotment under section 6 shall 
     annually prepare and submit to the Secretary a report that 
     describes--
       (1) the activities carried out with funds made available 
     through the allotment; and
       (2) the progress made by the State toward achieving the 
     goals described in the application submitted by the State 
     under section 7.
                                  ____



                               American Academy of Pediatrics,

                                    Washington, DC, March 8, 2000.
     Hon. Christopher Dodd,
     U.S. Senate, Washington, DC.
     Hon. Bill Frist,
     U.S. Senate, Washington, DC.
       Dear Senators Dodd and Frist: On behalf of the 55,000 
     members of the American Academy of Pediatrics, I would like 
     to applaud you for introducing the ``Children's Day Care 
     Health and Safety Improvement Act.''
       The Academy and its members, along with many others, have 
     been working for years attempting to ensure that all children 
     receive high-quality child care and early education. Yet, the 
     statistics about the health and safety of child care setting 
     are very disturbing. Multiple studies have found that many 
     child care arrangements not only fail to give children the 
     type of intellectual stimulation and emotional support they 
     need, but actually compromise the health and safety of the 
     youngsters in their care.
       One review of state child care regulations in 47 states 
     found that more than half of the states' safety-related 
     regulations had inadequate or no standards for 24 out of the 
     36 safety topics examined. Most notable were the inattention 
     to playground safety, choking hazards, and firearms. Studies 
     of child care settings themselves have also been 
     disheartening. One four-state study found that only one in 
     seven child care centers (14%) were rated as good quality. 
     Another study found that 13 percent of regulated and 50 
     percent of nonregulated family child care providers offer 
     care that is inadequate. The Consumer Product Safety 
     Commission reports that about 31,000 children, 4 years old 
     and younger, were treated in U.S. hospital emergency rooms 
     for injuries at child care/school settings in 1997, and that 
     the agency knows of at least 56 children who have died in 
     child care setting since 1990.
       By providing states with funds for activities specifically 
     aimed at improving the health and safety of child care, your 
     bill should help to reduce the incidence of preventable 
     illness, injury, disability, and even death, for the millions 
     of children who spend their days in out-of-home child care.
       The ``Children's Day Care Health and Safety Improvement 
     Act'' is much-needed legislation, and we look forward to 
     working with you to support its enactment. Thank you for your 
     continued dedication to improving children's lives.
           Sincerely,
                                                   Donald E. Cook,
     President,
                                  ____



                                      Children's Defense Fund,

                                    Washington, DC, March 8, 2000.
     Hon. Bill Frist,
     U.S. Senate, Washington, DC.
       Dear Senator Frist: Given the importance of high quality 
     child care to millions of young children and their families, 
     the Children's Defense Fund welcomes the introduction of the 
     Children's Day Care Health and Safety Improvement Act. The 
     bill recognizes the wide range of activities that must be 
     addressed in order to ensure the health and safety for 
     children in child care. New resources to states targeted on 
     these various activities will make a significant impact on 
     their efforts to move forward.
       We look forward to working with you towards the passage of 
     this important bill. Thank you for standing up for children.
           Sincerely yours,
     Marian Wright Edelman.
                                  ____



                                      Children's Defense Fund,

                                    Washington, DC, March 8, 2000.
     Hon. Christopher Dodd,
     U.S. Senate, Washington, DC.
       Dear Senator Dodd: Given the importance of high quality 
     child care to millions of young children and their families, 
     the Children's Defense Fund welcomes the introduction of the 
     Children's Day Care Health and Safety Improvement Act. The 
     bill recognizes the wide range of activities that must be 
     addressed in order to ensure the health and safety for 
     children in child care. New resources to states targeted on 
     these various activities will make a significant impact on 
     their efforts to move forward.
       We look forward to working with you towards the passage of 
     this important bill. Thank you for standing up for children.
           Sincerely yours,
     Marian Wright Edelman.
                                  ____

                                      National Association for the


                                  Education of Young Children,

                                    Washington, DC, March 9, 2000.
     Hon. Christopher Dodd,
     U.S. Senate, Washington, DC.
     Hon. William Frist,
     U.S. Senate, Washington, DC.
       Dear Senators Dodd and Frist: The National Association for 
     the Education of Young Children (NAEYC) is committed to 
     ensuring excellence in early childhood education, and to 
     working with health and other providers to support families 
     and children's well being. We are pleased that you share our 
     concerns, about the need to improve the health and safety of 
     children in a variety of child care settings and support a 
     federal partnership with states, communities, and providers 
     in meeting that goal.
       The Child Care Health and Safety Improvement Act that you 
     will be introducing today seeks to strengthen state licensing 
     and other regulatory standards and enforcement, linkages 
     between child care providers and health services providers, 
     and training to child care providers in injury prevention and 
     health promotion. This legislation addresses many of our 
     concerns and reflects NAEYC principles for ensuring that 
     child care settings are healthy and safe learning 
     environments.
       As this bill moves forward, we would be happy to work to 
     make further improvements in the legislation.
           Sincerely,
                                                   Adele Robinson,
                                   Director of Policy Development.

  Mr. DODD. Mr. President, I am pleased to join Senator Frist in 
introducing The Children's Day Care Health and Safety Act, legislation 
that I believe will have a significant impact on the well-being of the 
13 million children who spend some part of every day in child care.
  Each morning, millions of parents drop their children off at a child 
care center, a neighbor's home, or their church's day care center, 
assuming--or at least hoping--that their children will be safe and well 
cared for. And, in the vast majority of circumstances that's the case. 
But, unfortunately, there is alarming evidence to suggest that, far too 
often, unsafe child care settings are compromising the health of our 
children.
  In 1997 alone, 31,000 children ages 4 and younger were treated in 
hospital emergency rooms for injuries sustained in child care or school 
settings. Since 1990, more than 55 children have died while in child 
care settings.
  Perhaps most tragically, many of these deaths and injuries were most 
likely preventable--if providers were knowledgeable about basic health 
and safety practices and if states did a better job of developing and 
enforcing strong health and safety regulations.
  Almost all child care providers want to give good care to the 
children in their charge. Despite the fact that we pay child care 
providers abysmally--typically below poverty wages with no paid sick 
leave--individuals join this profession because they love children and 
want to help them grow and thrive. But, we do far too little to support 
providers in making sure that the environment they provide to our 
children is a safe and healthy one.
  Many child care providers are unaware of the importance of removing 
soft bedding from cribs--which presents a suffocation hazard for 
infants and increases the likelihood of child dying from SIDS. Many 
child care providers are also unaware of the need to place window-blind 
cords out of reach. Consequently, one child every month strangles in 
the loop of a cord.
  An investigation by the Consumer Product Safety Commission revealed 
that two-thirds of licensed child care settings surveyed exhibited 
these type of safety hazards, as well as other, such as insufficient 
child safety gates and unsafe playgrounds.
  Some states have taken action to improve health and safety practices. 
For

[[Page 2467]]

example, Connecticut requires child care centers to receive at least 
monthly visits from a nurse or pediatrician, who can advise providers 
on concerns ranging from the basics, like the importance of handwashing 
after diaper-changing, to more complex issues, such as how to 
accommodate the special needs of a child with a disability.
  But, many states are hard-pressed simply to meet the enormous demand 
for child care from working families and families transitioning off 
welfare. With all the pressure to create child care slots and to help 
families find any kind of care, unfortunately, child care health and 
safety often becomes an afterthought.
  A survey of state child care standards found that only one-third of 
states had minimally acceptable child care quality regulations. Two-
thirds of states had regulations that didn't even address the basics--
provider training, safe environments and appropriate ratios. And in 
many cases, even when there are good standards on the books, 
enforcement is lax.
  Too often we view finding safe, high quality child care as a problem 
parents should struggle with on their own. It's time we recognize that 
unsafe child care is a public health crisis, not a personal problem.
  That's why I'm so pleased to join Senator Frist today in introducing 
legislation that would provide grants to the states to reduce child 
care health and safety hazards. Grants could be used for a broad range 
of activities that we know have the greatest impact on health and 
safety, such as training and educating providers on injury and illness 
prevention; improving health and safety standards; improving 
enforcement of standards, including increased surprise inspections; 
renovating child care centers and family day care homes; helping 
providers serve children with disabilities; and conducting criminal 
background checks on child care providers.
  I am also pleased that this legislation has been endorsed by the 
American Academy of Pediatrics, the Children's Defense Fund, and the 
National Association for the Education of Young Children.
  Sadly just as our children grow--the number of child care abuses and 
hazards has grown over the years, as well. This measure can help ensure 
that critically important safeguards are provided so that day care is a 
safe haven, not a hazard.
                                 ______
                                 
      By Mr. CRAIG:
  S. 2237. A bill to amend the Internal Revenue Code of 1986 to provide 
for the deductibility of premiums for any medigap insurance policy of 
Medicare+Choice plan which contains an outpatient prescription drug 
benefit, and to amend title XVIII of the Social Security Act to provide 
authority to expand existing medigap insurance policies; to the 
Committee on Finance.


                     SENIORS' SECURITY ACT OF 2000

 Mr. CRAIG. Mr. President, I rise today to introduce the 
``Seniors' Security Act of 2000--a bill that will address the growing 
problem of prescription drug coverage for senior citizens.
  As we are all aware, seniors' access to prescription drugs is an 
important issue. Currently, traditional fee-for service Medicare covers 
few drugs for seniors. At the same time, however, prescription drugs 
are an increasing component of seniors' health care. For these reasons, 
I believe that it is time Congress worked to increase American seniors' 
access to prescription drugs.
  The Senior's Security Act of 2000 will increase seniors' access to 
prescription drugs in two ways. First, it will extend tax equity to 
seniors by allowing them to deduct the cost of health insurance that 
contains a qualified prescription drug benefit. We already provide such 
favorable tax treatment for employer-provided health insurance and are 
moving toward doing so for the self-employed. If we are truly concerned 
about seniors' access to prescription drugs, we should do the same for 
them.
  In addition, SSA 2000 will also allow both current and future seniors 
to deduct the cost of long-term care insurance from their taxes and 
make long-term care insurance available through employer-provided 
flexible spending accounts (FSAs).
  SSA 2000 also provides for the design by National Association of 
Insurance Commissioners (NAIC) of additional Medigap policies in order 
to make prescription drug coverage more accessible and affordable. This 
process follows that which produced the existing Medigap policies. SSA 
2000 also directs the Medicare Payment Advisory Commission (MedPAC) to 
analyze and report on the salient issues in the design of prescription 
drug benefit policies. MedPAC is directed to issue their findings in a 
June 1, 2000 report to Congress and the NAIC in order to aid in 
designing new Medigap policies.
  I believe SSA 2000 will make prescription drug coverage cheaper, both 
directly and indirectly. More than 18 million seniors have an income 
tax liability that can be reduced by this reform; by increasing the 
number of participants and making new Medigap policies a available, the 
bill will indirectly reduce the cost of coverage, as well. Unlike some 
other proposed reform measures in this area, it preserves and 
strengthens the private insurance market--it contains no mandates, no 
price controls, and preserve all existing Medigap policies--rather than 
jeopardizing or eliminating it.
  This bill does not attempt to address the issue of prescription drug 
coverage for every senior; instead, it is the answer for a portion of 
the senior population who have been paying at least part of the costs 
for their health care and prescription drugs, but still need and 
deserve to have a reduction in their out-of-pocket expenses. The 
Seniors' Security Act of 2000 is the best way to provide relief to this 
group of seniors, while at the same time continuing to work towards 
solutions for those seniors who aren't as economically secure.
  Mr. President, I ask unanimous consent that a copy of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2237

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
Sec. 2. Deduction for premiums for medigap insurance policies and 
              Medicare+Choice plans containing outpatient prescription 
              drug benefits and for long-term care insurance.
Sec. 3. Determination of annual actuarial value of drug benefits 
              covered under a Medicare+Choice plan and a medigap 
              policy.
Sec. 4. Inclusion of qualified long-term care insurance contracts in 
              cafeteria plans and flexible spending arrangements.
Sec. 5. Authority to provide for additional medigap insurance policies.

     SEC. 2. DEDUCTION FOR PREMIUMS FOR MEDIGAP INSURANCE POLICIES 
                   AND MEDICARE+CHOICE PLANS CONTAINING OUTPATIENT 
                   PRESCRIPTION DRUG BENEFITS AND FOR LONG-TERM 
                   CARE INSURANCE.

       (a) In General.--Part VII of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to additional 
     itemized deductions) is amended by redesignating section 222 
     as section 223 and by inserting after section 221 the 
     following:

     ``SEC. 222. PREMIUMS FOR MEDIGAP INSURANCE POLICIES AND 
                   MEDICARE+CHOICE PLANS CONTAINING OUTPATIENT 
                   PRESCRIPTION DRUG BENEFITS AND FOR LONG-TERM 
                   CARE INSURANCE.

       ``(a) Deduction.--
       ``(1) In general.--There shall be allowed as a deduction an 
     amount equal to 100 percent of the amount paid during the 
     taxable year for--
       ``(A) any medicare supplemental policy (as defined in 
     section 1882(g)(1) of the Social Security Act) which contains 
     an outpatient prescription drug benefit with an annual 
     actuarial value that is equal to or greater than $500,
       ``(B) any Medicare+Choice plan (as defined in section 
     1859(b)(1) of such Act) which contains an outpatient 
     prescription drug benefit with an annual actuarial value that 
     is equal to or greater than $500, and
       ``(C) any coverage limited to qualified long-term care 
     services (as defined in section 7702B(c)) or any qualified 
     long-term care insurance contract (as defined in section 
     7702B(b)).

[[Page 2468]]

       ``(2) Inflation adjustment.--
       ``(A) In general.--In the case of any calendar year 
     beginning after 2000, each of the dollar amounts in 
     subparagraphs (A) and (B) of paragraph (1) shall be increased 
     by an amount equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) an adjustment for changes in per capita expenditures 
     under title XVIII of the Social Security Act for prescription 
     drugs as determined under the most recent Health Care 
     Financing Administration National Health Expenditure 
     projection.
       ``(B) Rounding.--If any dollar amount after being increased 
     under subparagraph (A) is not a multiple of $10, such dollar 
     amount shall be rounded to the nearest multiple of $10.
       ``(b) Limitations.--
       ``(1) Deduction not available to individuals eligible for 
     employer-subsidized coverage.--
       ``(A) In general.--In any taxable year--
       ``(i) subsection (a) shall not apply with respect to any 
     policy or coverage described in paragraph (1)(A) or (1)(B) of 
     such subsection if in such taxable year the taxpayer is 
     eligible to participate in any employer-subsidized plan for 
     individuals age 65 or older which contains an outpatient 
     prescription drug benefit described in such subsection, and
       ``(ii) subsection (a) shall not apply with respect to any 
     policy or coverage described in paragraph (1)(C) of such 
     subsection if in such taxable year the taxpayer is eligible 
     to participate in any employer-subsidized plan which includes 
     coverage for qualified long-term care services (as so 
     defined) or any qualified long-term care insurance contract 
     (as so defined).
       ``(B) Employer-subsidized plan.--For purposes of 
     subparagraph (A)--
       ``(i) In general.--The term `employer-subsidized plan' 
     means any plan described in subparagraph (A)--

       ``(I) which is maintained by any employer (or former 
     employer) of the taxpayer or of the spouse of the taxpayer, 
     and
       ``(II) 50 percent or more of the cost of the premium of 
     which (determined under section 4980B) is paid or incurred by 
     the employer.

       ``(ii) Employer contributions to cafeteria plans, flexible 
     spending arrangements, and medical savings accounts.--
     Employer contributions to a cafeteria plan, a flexible 
     spending or similar arrangement, or a medical savings account 
     which are excluded from gross income under section 106 shall 
     be treated for purposes of this subparagraph as paid by the 
     employer.
       ``(C) Aggregation of plans of employer.--A health plan 
     which is not otherwise described in subparagraph (A) shall be 
     treated as described in such subparagraph if such plan would 
     be so described if all health plans of persons treated as a 
     single employer under subsection (b), (c), (m), or (o) of 
     section 414 were treated as one health plan.
       ``(D) Separate application to health insurance and long-
     term care insurance.--Subparagraphs (A) and (C) shall be 
     applied separately with respect to--
       ``(i) plans which include coverage limited to qualified 
     long-term care services or are qualified long-term care 
     insurance contracts, and
       ``(ii) plans which do not include such coverage and are not 
     such contracts.
       ``(E) Deduction available with respect to policies and 
     plans containing outpatient prescription drug coverage if 
     disclosure requirements are met.--Subsection (a) shall apply 
     in any taxable year with respect to any policy or plan 
     described in paragraph (1)(A) or (1)(B) of such subsection 
     only if the issuer of such policy or the administrator of 
     such plan discloses to the taxpayer that such policy or plan 
     is intended to be a policy or plan so described.
       ``(2) Deduction not available for payment of part b 
     premiums.--Any amount paid as a premium under part B of title 
     XVIII of the Social Security Act shall not be taken into 
     account under subsection (a).
       ``(3) Limitation on long-term care premiums.--In the case 
     of a qualified long-term care insurance contract (as so 
     defined), only eligible long-term care premiums (as defined 
     in section 213(d)(10)) shall be taken into account under 
     subsection (a)(2).
       ``(c) Special Rules.--For purposes of this section--
       ``(1) Coordination with medical deduction, etc.--Any amount 
     paid by a taxpayer for insurance to which subsection (a) 
     applies shall not be taken into account in computing the 
     amount allowable to the taxpayer as a deduction under section 
     213(a).
       ``(2) Deduction not allowed for self-employment tax 
     purposes.--The deduction allowable by reason of this section 
     shall not be taken into account in determining an 
     individual's net earnings from self-employment (within the 
     meaning of section 1402(a)) for purposes of chapter 2.''
       (b) Conforming Amendments.--
       (1) Subsection (a) of section 62 of the Internal Revenue 
     Code of 1986 is amended by inserting after paragraph (17) the 
     following:
       ``(18) Medicare and long-term care insurance costs of 
     certain individuals.--The deduction allowed by section 222.''
       (2) The table of sections for part VII of subchapter B of 
     chapter 1 of such Code is amended by striking the last item 
     and inserting the following:

``Sec. 222. Premiums for medigap insurance policies and Medicare+Choice 
              plans containing outpatient prescription drug benefits 
              and for long-term care insurance.
``Sec. 223. Cross reference.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 3. DETERMINATION OF ANNUAL ACTUARIAL VALUE OF DRUG 
                   BENEFITS COVERED UNDER A MEDICARE+CHOICE PLAN 
                   AND A MEDIGAP POLICY.

       (a) In General.--For purposes of subparagraphs (A) and (B) 
     of section 222(a)(1) of the Internal Revenue Code of 1986 (as 
     added by section 2), the Secretary of Health and Human 
     Services shall establish procedures for a Medicare+Choice 
     organization offering a Medicare+Choice plan under part C of 
     title XVIII of the Social Security Act (42 U.S.C. 1395w-21 et 
     seq.) or an issuer of a medicare supplemental policy (as 
     defined in section 1882(g)(1) of such Act (42 U.S.C. 
     1395ss(g)(1))) to demonstrate that the annual actuarial value 
     of the outpatient prescription drug benefit offered under 
     such plan or policy is equal to or greater than the amount 
     described in section 222(a)(1) of the Internal Revenue Code 
     of 1986 that is applicable for the year involved.
       (b) Requirements.--The procedures established pursuant to 
     subsection (a)--
       (1) shall be based on--
       (A) a standardized set of utilization and price factors; 
     and
       (B) a standardized population that is representative of all 
     medicare enrollees and calculated based on projected 
     utilization if all enrollees have outpatient prescription 
     drug coverage;
       (2) shall apply the same principles and factors in 
     comparing the value of the coverage of different outpatient 
     prescription drug benefit packages; and
       (3) shall not take into account the method of delivery or 
     means of cost control or utilization used by the organization 
     offering the plan or the issuer of the policy.
       (c) Consultation.--In establishing the procedures described 
     in subsection (a), the Secretary of Health and Human Services 
     shall consult with an independent actuary who is a member of 
     the American Academy of Actuaries.
       (d) Update.--The Secretary shall periodically update the 
     procedures established under subsection (a).
       (e) Demonstration of Actuarial Value.--The actuarial value 
     of the outpatient prescription drug benefit shall be set 
     forth by the Medicare+Choice organization offering the 
     Medicare+Choice plan or the issuer of the medicare 
     supplemental policy in an actuarial report that has been 
     prepared--
       (1) by an individual who is a member of the American 
     Academy of Actuaries;
       (2) using generally accepted actuarial principles; and
       (3) in conformance with the requirements of subsection (b).

     SEC. 4. INCLUSION OF QUALIFIED LONG-TERM CARE INSURANCE 
                   CONTRACTS IN CAFETERIA PLANS AND FLEXIBLE 
                   SPENDING ARRANGEMENTS.

       (a) Cafeteria Plans.--Section 125(f) of the Internal 
     Revenue Code of 1986 (defining qualified benefits) is amended 
     by inserting before the period at the end ``; except that 
     such term shall include the payment of premiums for any 
     qualified long-term care insurance contract (as defined in 
     section 7702B) to the extent the amount of such payment does 
     not exceed the eligible long-term care premiums (as defined 
     in section 213(d)(10)) for such contract''.
       (b) Flexible Spending Arrangements.--Section 106 of the 
     Internal Revenue Code of 1986 (relating to contributions by 
     employer to accident and health plans) is amended by striking 
     subsection (c).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 5. AUTHORITY TO PROVIDE FOR ADDITIONAL MEDIGAP INSURANCE 
                   POLICIES.

       (a) In General.--
       (1) Expansion of number of benefit packages.--Section 
     1882(p) of the Social Security Act (42 U.S.C. 1395ss(p)) is 
     amended--
       (A) in paragraph (2)(B), by striking ``, and'' and 
     inserting ``other than the medicare supplemental policies 
     described in subsection (v); and''; and
       (B) in paragraph (2)(C), by striking the period and 
     inserting ``and the policies described in subsection (v).''.
       (2) Authority to provide for additional policies.--Section 
     1882 of the Social Security Act (42 U.S.C. 1395ss) is amended 
     by adding at the end the following:
       ``(v) Authority To Provide for Additional Policies.--
       ``(1) In general.--The standards under subsection (p) may 
     be modified (in the manner described in paragraph (1)(E) of 
     such subsection (applying paragraph (3)(A) of such subsection 
     as if the reference to `this subsection' were a reference to 
     `the Seniors' Security Act of 2000')) to establish additional 
     benefit packages consistent with the succeeding provisions of 
     this subsection.
       ``(2) Requirements for new packages that include 
     prescription drug coverage.--In the case of any benefit 
     package added under paragraph (1) that provides coverage for 
     outpatient prescription drugs, such benefit package--

[[Page 2469]]

       ``(A) shall not provide first-dollar coverage of outpatient 
     prescription drugs;
       ``(B) may provide a stop-loss coverage benefit for 
     outpatient prescription drugs that limits the application of 
     any beneficiary cost-sharing during a year after incurring a 
     certain amount of out-of-pocket covered expenditures;
       ``(C) shall not include benefits for prescription drugs 
     otherwise available under part A or B; and
       ``(D) shall be consistent with the requirements of this 
     section and applicable law.
       ``(3) Use of formularies.--In the case of any benefit 
     package added under paragraph (1) that provides coverage for 
     outpatient prescription drugs, the issuer of any policy 
     containing such a benefit package may use formularies.
       ``(4) Special open enrollment.--
       ``(A) Establishment.--If any benefit package is added under 
     paragraph (1), the Secretary shall establish an applicable 
     period in which any eligible beneficiary may enroll in any 
     medicare supplemental policy containing such benefit package 
     under the terms described in subparagraph (D).
       ``(B) Eligible beneficiary defined.--In this paragraph, the 
     term `eligible beneficiary' means a beneficiary under this 
     title who is enrolled in a medicare supplemental policy as of 
     the first day that any benefit package added under paragraph 
     (1) is available in the State in which such beneficiary 
     resides.
       ``(C) Applicable period defined.--In this paragraph, the 
     term `applicable period' means--
       ``(i) in the case of an eligible beneficiary who is 
     enrolled in a medicare supplemental policy which has a 
     benefit package classified as `H', `I', or `J' under the 
     standards established under subsection (p)(2), the 180-day 
     period that begins on the day described in subparagraph (B); 
     and
       ``(ii) in the case of an eligible beneficiary who is 
     enrolled in a medicare supplemental policy which has a 
     benefit package classified as `A' through `G' under the 
     standards established under subsection (p)(2), the 63-day 
     period that begins on the day described in subparagraph (B).
       ``(D) Terms described.--The terms described under this 
     subparagraph are terms which do not--
       ``(i) deny or condition the issuance or effectiveness of a 
     medicare supplemental policy described in subparagraph (A) 
     that is offered and is available for issuance to new 
     enrollees by such issuer;
       ``(ii) discriminate in the pricing of such policy, because 
     of health status, claims experience, receipt of health care, 
     or medical condition; or
       ``(iii) impose an exclusion of benefits based on a 
     preexisting condition under such policy.
       ``(5) Ability for issuer to cancel certain policies.--
     Notwithstanding subsection (q)(2), an issuer of a policy 
     containing a benefit package added under paragraph (1) that 
     provides coverage for outpatient prescription drugs may 
     terminate such a policy in a market but only if--
       ``(A) the termination is--
       ``(i) done in accordance with State law in such market; and
       ``(ii) applied uniformly to individuals enrolled under such 
     policy;
       ``(B) the issuer provides notice to each individual 
     enrolled under such policy of such termination at least 90 
     days prior to the date of the termination of coverage under 
     such policy; and
       ``(C) the issuer offers to each individual enrolled under 
     such policy, for at least 180 days after providing the notice 
     pursuant to subparagraph (B), the option to purchase all 
     other medicare supplemental policies currently being offered 
     by the issuer under the terms described in paragraph 
     (4)(D).''.
       (b) Sale of Non-Duplicative Medigap Insurance Policies 
     Authorized.--Section 1882(d)(3) of the Social Security Act 
     (42 U.S.C. 1395ss(d)(3)) is amended--
       (1) in subparagraph (A), by adding at the end the 
     following:
       ``(ix) Nothing in this subparagraph shall be construed as 
     preventing the sale of more than 1 medicare supplemental 
     policy to an individual, provided that the sale is of a 
     medicare supplemental policy that does not duplicate any 
     health benefits under a medicare supplemental policy owned by 
     the individual.''; and
       (2) in subparagraph (B)--
       (A) in clause (ii)(I), by inserting ``, unless a second 
     policy is designed to compliment the coverage under the first 
     policy'' before the comma at the end; and
       (B) in clause (iii)--
       (i) in subclause (I), by striking ``(II) and (III)'' and 
     inserting ``(II), (III), and (IV)'';
       (ii) by redesignating subclause (III) as subclause (IV); 
     and
       (iii) by inserting after subclause (II) the following:
       ``(III) If the statement required by clause (i) is obtained 
     and indicates that the individual is enrolled in 1 or more 
     medicare supplemental policies, the sale of another policy is 
     not in violation of clause (i) if such other policy does not 
     duplicate health benefits under any policy in which the 
     individual is enrolled.''.
       (c) NAIC to Consult With MedPAC in Revising Model 
     Standards.--
       (1) In general.--In revising the model regulation under 
     section 1882(v) of the Social Security Act (42 U.S.C. 
     1395ss(v)) (as added by subsection (a)), the National 
     Association of Insurance Commissioners (in this section 
     referred to as the ``NAIC'') should--
       (A) consult with the Medicare Payment Advisory Commission 
     established under section 1805 of such Act (42 U.S.C. 1395b-
     6) (in this subsection referred to as ``MedPAC''); and
       (B) consider the MedPAC report transmitted to NAIC in 
     accordance with paragraph (2)(B)(ii).
       (2) MedPAC analysis and report.--
       (A) Analysis.--MedPAC shall conduct an analysis of the 
     following issues:
       (i) The conditions necessary to create a well-functioning, 
     voluntary medicare supplemental insurance market that 
     provides coverage for outpatient prescription drugs.
       (ii) The scope of outpatient prescription drug coverage for 
     medicare beneficiaries, including individuals enrolled in 
     Medicare+Choice plans.
       (iii) The implications of a medicare supplemental policy 
     that would require issuers of medicare supplemental policies 
     to provide outpatient prescription drug coverage and a stop-
     loss benefit instead of providing coverage for other benefits 
     available through existing medicare supplemental policies.
       (iv) The portion of out-of-pocket spending of medicare 
     beneficiaries on health care expenses attributable to 
     outpatient prescription drugs.
       (v) The availability of private health insurance policies 
     that cover outpatient prescription drugs to beneficiaries 
     that are not entitled to benefits under the medicare program.
       (vi) The scope of outpatient prescription drug coverage 
     provided by employers to medicare beneficiaries.
       (vii) The impact of outpatient prescription drugs on the 
     overall health of medicare beneficiaries.
       (viii) The effect of providing coverage for outpatient 
     prescription drugs on the amount of funds expended by the 
     medicare program.
       (ix) Whether modifications of benefit packages of existing 
     medicare supplemental policies that provide coverage for 
     outpatient prescription drugs or the creation of new benefit 
     packages that provide coverage for outpatient prescription 
     drugs would allow payment for these policies to be integrated 
     with a Federal contribution.
       (x) Such other issues relating to outpatient prescription 
     drugs that would assist Congress in improving the medicare 
     program.
       (B) Report to congress.--
       (i) In general.--Not later than June 1, 2000, MedPAC shall 
     submit to Congress a report containing a detailed analysis of 
     the issues described in subparagraph (A) together with 
     recommendations for such legislation and administrative 
     actions as MedPAC considers appropriate.
       (ii) Transmission to naic.--At the same time MedPAC submits 
     the report to Congress under clause (i), MedPAC shall 
     transmit such report to the NAIC.
                                 ______
                                 
      By Mr. BAUCUS:
  S. 2238. A bill to designate 3 counties in the State of Montana as 
High Intensity Drug Trafficking Areas and authorize funding for drug 
control activities in those areas; to the Committee on the Judiciary.


             Admitting Montana to the Rocky Mountain HIDTA

  Mr. BAUCUS. Mr. President, I rise today to introduce critical 
legislation in the fight against methamphetamine use in rural America.
  Methamphetamine, also known as ``meth'' is a powerful and addictive 
drug. Considered by many youths to be a casual, soft-core drug with few 
lasting effects, meth can actually cause more long-term damage to the 
body than cocaine or crack.
  I recently invited General Barry McCaffrey, our drug czar, along with 
Dr. Don Vereen, his deputy, to Montana to focus attention on the 
problem of meth use. Their visit was well-received by residents of our 
state, and much-needed. The fact is, there are a good many talented 
Montanans working on the meth problem, but they have few resources with 
which to wage the battle. Moreover, their efforts are often fragmented, 
not coordinated to the extent they could be, particularly among the 
treatment, prevention, and law enforcement communities.
  To make their job easier, Montana has petitioned to be considered 
part of the Rocky Mountain High Intensity Drug Trafficking Area 
(HIDTA). Although the Rocky Mountain HIDTA authorities have stated 
their willingness to include Montana in its organization, they lack the 
resources to make that happen.
  The bill I am introducing today would authorize funding to make 
Montana's admission to the Rocky Mountain HIDTA a reality. Here's why 
that's necessary.

[[Page 2470]]

  In 1998, the number of juveniles charged with drug-related or violent 
crimes in the Yellowstone County Youth Court rose by 30 percent. In 
Lame Deer--the community of the Northern Cheyenne Indian Reservation--
kids as young as 8 years old have been seen for meth addiction. Last 
November in our state, a meth lab blew up in Great Falls, leading to a 
half dozen arrests. Meth use in Montana has doubled in the past few 
years. Cases are growing and the states law enforcement can no longer 
fight the problem.
  Mr. President, the DEA reported an increase of meth lab seizures in 
Montana of 900% from 1993 to 1998. And according to the Office of 
National Drug Control Policy, based on methamphetamine admission rates 
per 100,000 persons, Montana is one of eight states with a ``serious 
methamphetamine problem.''
  The meth problem is particularly severe on Montana's Indian 
reservations, of which our state has seven. Life is hard there. In some 
reservation towns, over half of the working age adults are unemployed. 
Because meth is cheap and relatively easy to make, these lower-income 
individuals are a natural target for meth peddlers. Without viable 
employment options, too often these young people turn to drugs.
  And that's the case throughout Montana, not just on the reservations. 
In 1998, Montana ranked 47th in the nation in per-capita personal 
income, 50th in personal income from wages and salaries, and second in 
the nation for the number of people who work two or more jobs.
  Since poverty and drug use often go hand in hand, it came as little 
surprise to me when a recent report showed a dramatic uptick in the 
incidence of drug abuse in rural America.
  The report, commissioned by the Drug Enforcement Administration and 
funded by the National Institute on Drug Abuse, focused primarily on 
13- and 14-year-olds. It showed that eighth graders in rural America 
are 83 percent more likely to use crack cocaine than their urban 
counterparts. They are 50 percent more likely to use cocaine, 34 
percent more likely to smoke marijuana, 29 percent more likely to drink 
alcohol. Even more shocking, the report showed that rural eighth 
graders were 104 percent more likely to use amphetamines, including 
methamphetamine. Let me clarify, Mr. President. That is double the rate 
of urban eighth graders.
  The bill I am proposing today would provide Montana the resources to 
put forth a coordinated effort in the fight against meth in Montana. By 
admitting Yellowstone, Cascade and Missoula counties to the Rocky 
Mountain HIDTA, Montana can focus its efforts on the three largest 
problem areas for meth use. It would increase law enforcement and 
forensic personnel in Montana; coordinate efforts to exchange 
information among law enforcement agencies; and engage in a public 
information campaign to educate the public about the dangers of meth 
use.
  Mr. President, the time has come to fight this scourge. Montana is 
under seige by meth, and we must do all we can to stop it--for the good 
of our state and those around us.
                                 ______
                                 
      By Mr. ALLARD (for himself, Mr. Campbell, Mr. Hatch, Mr. Bennett, 
        and Mr. Bingaman):
  S. 2239. A bill to authorize the Bureau of Reclamation to provide 
cost sharing for the endangered fish recovery implementation programs 
for the Upper Colorado River and San Juan River basins; to the 
Committee on Energy and Natural Resources.


   cost sharing for endangered fish recovery implementation programs

  Mr. ALLARD. Mr. President, today I am introducing legislation to 
authorize the Bureau of Reclamation to provide cost sharing for the 
endangered fish recovery implementation programs for the Upper Colorado 
River and San Juan River basins.
  This legislation is the product of years of meetings between water 
districts, power users, state and federal government and environmental 
groups. It authorizes federal and non-federal funding of an Upper Basin 
Recovery Program for endangered species in the Colorado River Basin and 
the San Juan River Basin. The goal of the program is to recover the 
Colorado pikeminnow, humpback chub, razorback sucker and bonytail chub 
while continuing to meet future water supply needs in the Upper Basin 
states of Colorado, Utah, Wyoming and New Mexico.
  To date, more than $20 million has been spent for capital projects to 
recover the endangered fish. Failure to recover the endangered species 
could result in limitations on current and future water diversions and 
use in the Upper Basin states. The legislation provides Congress and 
the Upper Basin stakeholders a finite Recovery Program under an 
authorized spending cap.
  The legislation authorizes $100 million for capital construction, 
operations and maintenance to implement other aspects of the program 
that include fish ladders, hatchery facilities, removal of non-native 
species and habitat restoration. The cost sharing program authorizes 
$46 million of federal funds to the Bureau of Reclamation and the 
remaining $54 million will be generated from state contributions not to 
exceed $17 million; contributions from power revenues up to $17 million 
and the remaining $20 million from replacement power credit and capital 
cost of water.
  The States of Colorado, New Mexico, Utah and Wyoming all support the 
program. Other supporters include: the Colorado River Energy 
Distributors Association, the Upper Colorado River Endangered Fish 
Recovery Implementation Program, the Environmental Defense Fund, The 
Nature Conservancy, Northern Colorado Water Conservancy District, 
Colorado River Water Conservation District, Southern Ute Indian Tribe 
and Colorado Water Congress.
  It is critical to affirm the federal government's commitment to the 
implementation of the Recovery Programs. The bill reflects compromise 
on all sides of the issue and recognizes that protection of endangered 
species can coincide with water development and water use. The 
participants want to move ahead with this program and are willing to 
help share in the costs. I urge my Senate colleagues to support this 
important legislation.
                                 ______
                                 
      By Mr. CRAPO:
  S. 2241. A bill to amend title XVII of the Social Security Act to 
adjust wages and wage-related costs for certain items and services 
furnished in geographically reclassified hospitals; to the Committee on 
Finance.
 Mr. CRAPO. Mr. President, I rise today to introduce the 
Medicare Wage-Index Reclassification Act of 2000. This bill will amend 
the Social Security Act to redirect additional Medicare reimbursements 
to rural hospitals. Currently, hospitals throughout the country are 
losing Medicare reimbursements, which results in severe implications 
for surrounding communities.
  As you know, in an attempt to keep Medicare from consuming its 
limited reserves, Congress enacted the Balanced Budget Act of 1997 
(BBA), which made sweeping changes in the manner that health care 
providers are reimbursed for services rendered to Medicare 
beneficiaries. These were the most significant modifications in the 
history of the program.
  All of the problems with the BBA--whether hospitals, nursing 
facilities, home health agencies, or skilled nursing facilities--are 
especially acute in rural states, where Medicare payments are a bigger 
percentage of hospital revenues and profit margins are generally much 
lower. These facilities were already managed at a highly efficient 
level and had ``cut the fat out of the system.'' Therefore, the cuts 
implemented in the BBA hit the rural communities in Idaho and 
throughout the United States in a very significant and serious way.
  In the 1st session, the Senate Finance Committee did a tremendous job 
of bringing forth legislation that adjusted Medicare payments to health 
care providers hurt by cuts ordered in the BBA. While this was a 
meaningful step, the Senate must continue to address the inequities in 
the system.
  My bill would expand wage-index reclassification by requiring the 
Secretary of Health and Human Services

[[Page 2471]]

to deem a hospital that has been reclassified for purposes of its 
inpatient wage-index to also reclassify for purposes of other services 
which are provider-based and for which payments are adjusted using a 
wage-index. In other words, this legislation would require the 
Secretary to use a hospital's reclassification wage-index to adjust 
payments for hospital outpatient, skilled nursing facility, home 
health, and other services, providing those entities are provider-
based. This change should have been made in BBA when Congress required 
that prospective payment systems be established for these other 
services. As such, this change would address an issue that has been 
left unaddressed for several years.
  It makes sense that, if a hospital has been granted reclassification 
by the Medicare Geographic Classification Review Board for certain 
inpatient services, it also be granted wage-index reclassification for 
outpatient and other services. It is estimated that this provision 
would help approximately 400 hospitals, 90 percent which are rural. 
Furthermore, this provision would be budget neutral.
  I know my colleagues in the Senate share my commitment of promoting 
access to health care services in rural areas. Expanding wage-index 
geographic reclassification will allow hospitals to recoup lost funds 
and use those funds to address patients' needs in an appropriate, 
effective, and meaningful way. I encourage my colleagues to co-sponsor 
the Medicare Wage-Index Reclassification Act.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2241

       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 ``Medicare Wage-Index 
     Reclassification Act of 2000''.

     SEC. 2. HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR LABOR COSTS 
                   FOR ALL ITEMS AND SERVICES REIMBURSED UNDER 
                   PROSPECTIVE PAYMENT SYSTEMS.

       (a) In General.--Section 1886(d)(10) of the Social Security 
     Act (42 U.S.C. 1395ww(d)(10)) is amended by adding at the end 
     the following new subparagraph:
       ``(G) Application of hospital geographic reclassification 
     for inpatient services to all hospital-furnished items and 
     services reimbursed under prospective payment system.--
       ``(i) In general.--In the case of a hospital with an 
     application approved by the Medicare Geographic 
     Classification Review Board under subparagraph (C)(i)(II) to 
     change the hospital's geographic classification for a fiscal 
     year for purposes of the factor used to adjust the DRG 
     prospective payment rate for area differences in hospital 
     wage levels that applies to such hospital under paragraph 
     (3)(E), the change in the hospital's geographic 
     classification for such purposes shall apply for purposes of 
     adjustments to payments for variations in costs which are 
     attributable to wages and wage-related costs for all PPS-
     reimbursed items and services.
       ``(ii) PPS-reimbursed items and services defined.--For 
     purposes of clause (i), the term `PPS-reimbursed items and 
     services' means, for cost reporting periods beginning during 
     the fiscal year for which such change has been approved, 
     items and services furnished by the hospital, or by an entity 
     or department of the hospital which is provider-based (as 
     determined by the Secretary), for which payments--
       ``(I) are made under the prospective payment system for 
     hospital outpatient department services under section 
     1833(t); and
       ``(II) are adjusted for variations in costs which are 
     attributable to wages and wage-related costs.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to items and services furnished on or after 
     October 1, 2001.
                                 ______
                                 
      By Mr. THOMAS:
  S. 2242. A bill to amend the Federal Activities Inventory Reform Act 
of 1998 to improve the process for identifying the functions of the 
Federal Government that are not inherently governmental functions, for 
determining the appropriate organizations for the performance of such 
functions on the basis of competition, and for other purposes; to the 
Committee on Governmental Affairs.


                    THE FAIR ACT AMENDMENTS OF 2000

  Mr. THOMAS. Mr. President, I rise today to introduce legislation to 
improve the implementation of legislation that Congress passed in 1998, 
the Federal Activities Inventory Reform Act.
  It has been 45 years, since President Dwight D. Eisenhower issued 
Bureau of the Budget Bulletin 55-4, proclaiming, ``It is the policy of 
the Government to rely on the private sector to supply the products and 
services the Government needs.''
  Why is it, then, the Federal government has identified some one 
million positions on its payroll that are commercial in nature? As the 
author of the FAIR Act, I had hoped that my legislation would have put 
into place a process, albeit 45 years later, to substantively implement 
Ike's policy.
  Despite almost a half-century of policy that ``the Federal government 
should not start or carry on any activity to provide a commercial 
product or service if the product or service can be procured from the 
private sector'' more than 100 agencies have released FAIR Act 
inventories identifying some one million commercial Federal positions. 
Of these, 440,000 are in civilian agencies and more than 65 percent 
have been exempted from potential outsourcing. In the Department of 
Defense, 504,000 non-uniformed positions are considered commercial, but 
196,000 or 39 percent are exempt from outsourcing.
  The first year experience with the FAIR Act raises fundamental 
questions. If it has been the Federal Government's policy for 45 years 
to rely on the private sector for commercially available goods and 
services, how did we get to the point where despite claims of 
``reinventing government,'' ``the smallest Federal workforce since the 
Kennedy Administration'' and other political rhetoric, we have one 
million Federal employees engaged in commercial activities? How is it 
that of those one million positions, roughly half will not even be 
studied to determine if government or private sector performance 
provides the best value to the taxpayers?
  The FAIR Act was intended to shed sunshine on the Federal 
Government's commercial activities. Its purpose was to tell the 
American people what its government does and put in place a process to 
determine how to best get the job done. Unfortunately, implementation 
of the law has fallen short of these expectations.
  The law requires agencies to inventory activities and positions that 
are not inherently governmental. Inventories are published so that 
interested parties, both public and private, can challenge inclusions 
or omissions from the list. However, the Office of Management and 
Budget (OMB) has overstepped its authority by creating a series of 
``reason codes'' that enable agencies to declare activities commercial 
but exempt from potential outsourcing, and then declaring such reason 
code designations outside the challenge process. As a result, 482,000 
positions, roughly half the government's entire FAIR inventory, has 
been declared commercial, but exempt from potential outsourcing, 
public-private competition, or challenge. That is wrong, inconsistent 
with the law and down right un-FAIR.
  Manipulation of the process has also cast a long shadow on the 
sunshine Congress was seeking. Take for example the Department of 
Energy. Of 11,765 commercial positions on its inventory, just 618 are 
``commercial competitive.'' Within the agency's Bonneville Power 
Administration (BPA), 1,263 of the agency's 2,267 commercial positions 
were classified as ``management'' and of these 1,259 were considered 
``commercial, in-house core,'' exempt from further review. 
Unfortunately, DoE is not alone in gaming the system. The U.S. Army 
Corps of Engineers, which has 4,500 employees, has inventoried all its 
positions in just two categories.
  These practices, too, are un-FAIR, particularly for federal 
employees. How can BPA or Corps of Engineers' employees tell if their 
positions are slated for potential outsourcing? How is the private 
sector to determine if the positions the Corps has on its inventory 
involve management of campgrounds, integration of their computer 
systems, designing a dam, mapping a flood plain, or painting the walls 
of an

[[Page 2472]]

office building if all these activities are aggregated into two broad 
categories? These actions fail to shed sunshine and render the FAIR Act 
challenge process moot.
  The FAIR Act also requires a ``review'' of commercial activities that 
survive the inventory and challenge process ``within a reasonable 
time.'' The Act's legislative history clearly demonstrates Congress 
intended for such a review to be either direct outsourcing or a public-
private competition similar to that envisioned in OMB Circular A-76. To 
date, OMB has not issued guidance on how it will implement such 
reviews, nor has it established a timetable.
  Due to OMB's dismal performance thus far, it is clear that Congress 
will have to pass a package of FAIR Act amendments to make sure the job 
is done right. Today I introduce legislation to do just that.
  This legislation is largely technical in nature but the major 
provisions would improve the accuracy and usefulness of the 
inventories, make sure Federal employees are notified when their jobs 
appear on the inventories, fortify the review process, require a report 
on the portability of federal employees' pension benefits, ban federal 
agencies from performing any commercial activity for other federal 
agencies or state and local governments unless a cost comparison is 
conducted and prohibits the conversion of any activity on a FAIR Act 
inventory to Federal Prison Industries.
  I look forward to working with Chairman Thompson and Ranking Member 
Lieberman of the Government Affairs Committee to see that this common 
sense legislation is enacted into law this year.
                                 ______
                                 
      By Ms. LANDRIEU (for herself, Ms. Snowe, Mr. Kerry, Mr. Cleland, 
        Mrs. Murray, Ms. Mikulski, Mr. Abraham, and Mr. Jeffords):
  S. 2243. A bill to reauthorize certain programs of the Small Business 
Administration, and for other purposes; to the Committee on Small 
Business.


     National Women's Business Council Re-Authorization Act of 2000

  Ms. LANDRIEU. Mr. President, today I, along with Senators Snowe, 
Kerry, Cleland, Murray, Mikulski, Abraham, and Jeffords, am introducing 
the National Women's Business Council Re-authorization Act of 2000. 
This legislation would ensure that one of our most valued resources may 
continue its work in support of women's business ownership. The bi-
partisan National Women's Business Council has provided important 
advice and counsel to the Congress since it was established in 1988. At 
that time, there were 2.4 million women business owners documented; 
today, there are over 9 million women who own and operate businesses in 
every sector, from home based services to construction trades to high 
tech giants. Women are changing the face of our economy at an 
unprecedented rate, and the Council has been our eyes and ears as we 
anticipate the needs of this burgeoning entrepreneurial sector. The 15 
appointees to the Council, all prominent business women, have been hard 
at work during the last three years. Some of their accomplishments 
include: hosting Summit '98, a national economic forum that produced a 
Master Plan of initiatives and recommendations to sustain and grow the 
entrepreneurial economy; preparing a Best Practices Guide for 
Contracting with Woman, and issuing a comprehensive statistical study 
of 11 years of federal contracting with women owned businesses; co-
hosting a series of highly regarded policy forums with the Federal 
Reserve in 10 cities, including New Orleans, Louisiana, on capital 
access issues facing entrepreneurs and working to secure the collection 
of data on women-owned businesses by the Bureau of the Census, and 
funding new research on a range of issues concerning women's business 
development.
  Recently, the Council has stepped up efforts to increase access to 
credit for women-owned businesses. This spring, the Council will 
release a report in collaboration with the Milken Institute, which will 
identify model programs that have been successful in increasing the 
flow of credit to small, women owned businesses, especially those in 
the retail, service or high tech sectors. The Council is also working 
to increase investments in women-led firms by launching Springboard 
2000, a national series of women's venture capital forums. Building on 
the momentum of its highly successful Silicon Valley event in January, 
the Council will host at least two more forums showcasing women-led 
businesses before private, corporate and venture capital investors. As 
my colleague Senator Kerry has said so often, the equity markets are 
the last frontier for women entrepreneurs. The Council's venture 
capital fairs provide women entrepreneurs with much needed access to 
capital so that they can launch and grow their high tech businesses.
  The Council is leading the effort to increase access to competitive 
contracting opportunities by working with federal agencies and women's 
business organizations. Later this year, the Council will release an 
extensive report on the characteristics and experiences of the over 
5,000 women business owners who have been successful in receiving 
federal contracts. We eagerly look forward to reviewing their findings.
  Under the chairmanship of Kay Koplovitz, the Council has indeed taken 
a bold new approach in its advocacy of the fastest growing business 
sector. As a result of the Council's work this year, we will know more 
than ever about women's business enterprise, their economic trends, the 
characteristics of their owners and their public and private sector 
needs. The Council has been a powerful resource for policy makers by 
providing valuable data, information and recommendations which are 
essential if we are to assist our communities in sustaining the 
unparalleled number of new businesses launched in the last 7 years.
  It is for these reasons and more that I am introducing legislation to 
re-authorize the Council for another three years. It is imperative that 
the National Women's Business Council continues its great work and 
expands its activities to support initiatives that are creating the 
infrastructure for women's entrepreneurship at the state and local 
level.
                                 ______
                                 
      By Mr. WYDEN (for himself and Mr. Baucus):
  S. 2244. A bill to increase participation in employee stock purchase 
plans and individual retirement plans so that American workers may 
share in the growth in the United States economy attributable to 
international trade agreements; to the Committee on Finance.


                    working families trade bonus Act

  Mr. WYDEN. Mr. President, many working Americans fell like they've 
been left on the sidelines in the high-stakes game of international 
trade. As U.S. companies expand overseas, corporate profits soar. 
Workers standby watching for some tangible benefits for their own 
pocketbooks. A May 1999 Los Angeles Times story captured Americans' 
skepticism toward trade. The story found just over half the public in 
March 1994 believed that treaties such as NAFTA would create U.S. jobs, 
with only 32% fearing jobs loss. But by December 1998, the attitudes 
had flip-flopped. A Wall Street Journal/NBC News poll found that 58% of 
Americans believed that trade had reduced U.S. jobs and wages.
  Nowhere has Americans' growing alienation from the world trading 
system been more evident than at the November 1999 World Trade 
Organization (WTO) Ministerial meeting. The nightly news was filled 
with the pictures of workers protesting the WTO in the streets of 
Seattle. This sense of alienation will continue to grow unless workers 
themselves start to see more direct benefits from trade.
  The legislation I am pleased to introduce today with Senator Baucus 
is an effort to narrow America's dividend divide in world trade. Our 
bill, The Working Families Trade Bonus Act, says that when companies 
win from world trade, workers should win, too. The bill would do this 
by encouraging companies to give their workers added Trade Bonus stock 
options--which workers at

[[Page 2473]]

Fortune magazine's top 100 U.S. companies identified as one of the key 
reasons they work for the company. And for the millions of working 
Americans who don't have stock plans--farmers, self-employed and small 
business people--the bill would allow them to double the maximum 
allowable annual IRA contribution.
  The bill specifically targets workers who are often excluded by 
company stock option plans--those at the lower end of company pay 
scales. The Trade Bonus program prohibits a company from discriminating 
in favor of highly compensated employees and requires that all 
employees be allowed to purchase the maximum amount of stock allowed by 
law at the lowest price allowed by law. The program would not allow 
companies to substitute stock options for regular compensation. 
Together, these safeguards assure that all workers are included in the 
trade winner's circle.
  Proponents of free trade, like Senator Baucus and myself, have done a 
lot of talking about its benefits. Manufactured goods are the 
centerpiece of our nation's export--accounting for nearly two-thirds of 
total U.S. exports of goods and services. Exports support about one in 
every five American factory jobs. These jobs pay about 15 percent more 
on average than non-export-related jobs, require more skills and are 
less prone to economic downturns than those accounted for fully one-
third of our nation's economic growth, and since 1950, international 
trade flows have grown twice as fast as the economy. Yet, most workers 
have few good things to say about free trade because they've never seen 
any direct benefits from it. It's time to turn the rhetoric about free 
trade into real benefits for workers. It's time to widen the winner's 
circle to make sure that American workers share directly in the rewards 
of free trade.
  Our legislation would require the Secretary of Commerce to determine 
annually, beginning with 1998, whether international trade has 
contributed to an increase in U.S. GDP. This determination would be 
included in the President's budget for the subsequent fiscal year. For 
every year in which the Secretary makes a determination that trade has 
contributed to an increase in the U.S. GDP, employers would be 
encouraged to contribute additional compensation up to $2,000 per 
worker per year to employee stock purchase plans. These additional 
contributions to an employee's stock purchase plan--the Trade Bonus--
would not be subject to capital gains tax. For workers who are not 
eligible for an employee stock purchase plan Trade Bonus, the bill 
allows them to double the allowable annual amount of their IRA 
contribution--to a maximum of $4,000.
  For employers with 100 or fewer employees that do not have employee 
stock purchase plans, the bill would give them a significant incentive 
to create them; the bill offers a one-time tax credit to help offset 
all the administrative fees directly related to establishing an 
employee stock purchase plan. It would also provide limited tax credits 
for three subsequent years for costs directly related to IRS compliance 
and employee education about the Trade Bonus program. The language of 
this section is drawn from previous legislation and assures that the 
tax credit applies only to the actual cost of creating the employee 
stock purchase plan and not to services that may be related to 
retirement planning, such as tax preparation, accounting, legal or 
brokerage services.
  The bill sets out guidelines for employers establishing or expanding 
an employee stock purchase plan under the Trade Bonus program, 
including that employees be eligible for the maximum amount of $2,000 
at the lowest price allowed by law; that employers make the plan 
available to the widest range of employees without discrimination in 
favor of highly compensated employees; that employers ensure that the 
trade bonus is in addition to compensation an employee would normally 
receive (and that safeguards be in place to do so); and that it does 
not result in lack of diversification of an employee's assets.
  Here's how the Working Families Trade Bonus Act would work. As under 
current law, employee stock purchase plans offer stock to participants 
at a discount. The current minimum purchase price is the lesser of 85% 
of the value of the stock on the date of the grant of the options 
(usually the beginning of the purchase period) or 85% of the value of 
the stock when the option is exercised--usually the end of the purchase 
period. This means that, in the period during which the stock has 
appreciated, the employee can get the benefit of the appreciation and, 
in a period during which the stock has depreciated, the employee might 
still be able to buy employer stock at a discounted price, or, if the 
plan provides, could decline to purchase the stock.
  For example, let's say the President announces in the budget for FY 
2001 that international trade contributed to growth in US GDP in 1999. 
Fleet of Foot Shoes, an athletic shoe manufacturer in Florence, Oregon, 
decides to award its workers the full $2,000 trade bonus on February 1, 
2000. If a share of Fleet of Foot stock is worth $100 on the date of 
the grant of the option and $200 when the option is exercised, say 
December 2001, the employees' purchase price can be as low as $85. This 
means the employee can purchase stock worth $200 for only $85, so the 
employee is able to purchase more than 40 shares of stock for the price 
of only 20 shares. Alternatively, if the stock is worth $50 when the 
option is exercised, the employee is able to purchase stock worth $50 
for only $42.50.
  Here is how the tax benefit would work. Under current law, employees 
who hold qualified stock at least two years from the date of grant of 
the option and one year from the purchase of the stock are entitled to 
a capital gains tax break until the point they sell the stock. If an 
employee chooses to sell stock purchased through the Trade Bonus and 
the purchase price was less than the fair market value on the date the 
option was granted, then the difference between the purchase price and 
the fair market value will be taxed as ordinary income in the year the 
stock is sold. Under my proposal, the remainder of the gain that would 
otherwise be taxed as a capital gain in the same year would not be 
taxed. So, using the Trade Bonus, if an employee pays $85 to buy a 
share of stock whose fair market value is $100, holds onto the share 
for more than the required two years and then sells it for $150, the 
$15 discount on the original purchase price would be taxed as ordinary 
income, but the employee would not pay capital gains tax on the $50 
increase in the value of the share of stock.
  About one-half of all American adults own stock today, and stocks are 
now the largest asset families own, exceeding even home equity. 
Fortune's January 2000 survey found 36 of the 58 publicly held 
companies on the top 100 list offer options to all employees. According 
to a 1998 survey of Oregon technology companies, almost two-thirds of 
Oregon's technology companies offer stock options. In today's tight 
employment market where companies compete to attract and retain the 
best employees, stock purchase plans are becoming increasingly common. 
The National Center for Employee Ownership estimates that seven and a 
half million Americans work for companies that make stock options 
available, and that employees own nine percent of total corporate 
equity in the United States. A recent Federal Reserve study found that 
one-third of the firms it surveyed offer stock options to employees 
other than executives.
  Our legislation will build upon this trend. The Working Families 
Trade Bonus Opportunity Act will give workers the chance to share 
directly in the benefits of free trade. This legislation will help put 
real money into the pockets of working Americans, and help move stock 
options out of the corner office and onto the shop floor. I ask 
unanimous consent that a copy of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2244

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

[[Page 2474]]



     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

       (a) Short Title.--This Act may be cited as the ``Working 
     Families Trade Bonus Act''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) exports represent a growing share of United States 
     production, and exports have accounted for more than 10 
     percent of the United States gross domestic product in recent 
     years,
       (2) export growth represented more than 36 percent of 
     overall United States growth in gross domestic product 
     between 1987 and 1997,
       (3) international trade flows in the United States have 
     grown twice as fast as the economy since 1950, and, in real 
     terms, the growth rate for international trade has averaged 
     about 6.5 percent a year,
       (4) between 1987 and 1997, more than 5,500,000 United 
     States jobs have been created by international trade,
       (5) the globalization of the United States economy demands 
     that appropriate domestic policy measures be undertaken to 
     assure American workers enjoy the benefits of globalization 
     rather than be undermined by it, and
       (6) when the domestic economy and United States companies 
     achieve growth and profits from international trade, workers 
     ought to share in the benefits.
       (b) Purpose.--It is the purpose of this Act to assist 
     American workers in benefiting directly when international 
     trade produces domestic economic growth.

                          TITLE I--TRADE BONUS

     SEC. 101. DETERMINATION AND ANNOUNCEMENT OF TRADE BONUS.

       (a) Determination.--
       (1) In general.--The Secretary of Commerce or the 
     Secretary's delegate shall, for each calendar year after 
     1998, determine whether international trade of the United 
     States contributed to an increase in the gross domestic 
     product of the United States for such calendar year.
       (2) Time for determination; submission.--The Secretary 
     shall make and submit to the President the determination 
     under paragraph (1) as soon as practicable after the close of 
     a calendar year, but in no event later than June 1 of the 
     next calendar year. Such determination shall be made on the 
     basis of the most recent available data as of the time of the 
     determination.
       (b) Inclusion in Budget.--The President shall include the 
     determination under subsection (a) with the supplemental 
     summary of the budget for the fiscal year beginning in the 
     calendar year following the calendar year for which the 
     determination was made.

      TITLE II--PROVISIONS TO ENSURE WORKERS SHARE IN TRADE BONUS

     SEC. 201. UNITED STATES POLICY ON INTERNATIONAL TRADE BONUS.

       (a) General Policy of the United States.--It is the policy 
     of the United States that if there is an increase in the 
     portion of the gross domestic product of the United States 
     for any calendar year which is attributable to international 
     trade of the United States--
       (1) workers ought to share in the benefits of the increase 
     through--
       (A) the establishment of employee stock purchase plans by 
     employers that have not already done so,
       (B) the expansion of employee stock purchase plans of 
     employers that have already established such plans, and
       (C) the opportunity to make additional contributions to 
     individual retirement plans if the workers are unable to 
     participate in employee stock purchase plans,
       (2) employers should contribute additional compensation to 
     such employee stock purchase plans in an amount up to $2,000 
     per employee, and
       (3) workers should contribute additional amounts up to 
     $2,000 to individual retirement plans.
       (b) Guidelines.--It is the policy of the United States that 
     any employer establishing or expanding an employee stock 
     purchase plan under the policy stated under subsection (a) 
     should--
       (1) provide that the amount of additional stock each 
     employee is able to purchase in any year there is a trade 
     bonus is the amount determined by the employer but not in 
     excess of $2,000,
       (2) make the plan available to the widest range of 
     employees without discriminating in favor of highly 
     compensated employees,
       (3) allow for the purchase of the maximum amount of stock 
     allowed by law at the lowest price allowed by law, and
       (4) ensure that the establishment or expansion of such 
     plan--
       (A) provides employees with compensation that is in 
     addition to the compensation they would normally receive, and
       (B) does not result in a lack of diversification of an 
     employee's assets, particularly such employee's retirement 
     assets.

     SEC. 202. ELIMINATION OF CAPITAL GAINS TAX ON GAIN FROM STOCK 
                   ACQUIRED THROUGH EMPLOYEE STOCK PURCHASE PLAN.

       (a) In General.--Part I of subchapter P of chapter 1 
     (relating to treatment of capital gains) is amended by adding 
     at the end the following new section:

     ``SEC. 1203. EXCLUSION FOR GAIN FROM STOCK ACQUIRED THROUGH 
                   EMPLOYEE STOCK PURCHASE PLAN.

       ``(a) General Rule.--Gross income of an employee shall not 
     include gain from the sale or exchange of stock--
       ``(1) which was acquired by the employee pursuant to an 
     exercise of a trade bonus stock option granted under an 
     employee stock purchase plan (as defined in section 423(b)), 
     and
       ``(2) with respect to which the requirements of section 
     423(a) have been met before the sale or exchange.
       ``(b) Trade Bonus Stock Option.--For purposes of this 
     section--
       ``(1) In general.--The term `trade bonus stock option' 
     means an option which--
       ``(A) is granted under an employee stock purchase plan (as 
     defined in section 423(b)) for a plan year beginning in a 
     calendar year following a calendar year for which a trade 
     bonus percentage has been determined under section 101 of the 
     Working Families Trade Bonus Act, and
       ``(B) the employer designates, at such time and in such 
     manner as the Secretary may prescribe, as a trade bonus stock 
     option.
       ``(2) Annual limitation.--Options may not be designated as 
     trade bonus stock options with respect to an employee for any 
     plan year to the extent that the fair market value of the 
     stock which may be purchased with such options (determined as 
     of the time the options are granted) exceeds $2,000.''
       (b) Conforming Amendments.--
       (1) Paragraph (9) of section 1(h) (relating to maximum 
     capital gains rate) is amended by striking ``and section 1202 
     gain'' and inserting ``section 1202 gain, and gain excluded 
     from gross income under section 1203(a)''.
       (2) Section 172(d)(2)(B) (relating to modifications with 
     respect to net operating loss deduction) is amended by 
     striking ``section 1202'' and inserting ``sections 1202 and 
     1203''.
       (3) Section 642(c)(4) (relating to adjustments) is amended 
     by inserting ``or 1203(a)'' after ``section 1202(a)'' and by 
     inserting ``or 1203'' after ``section 1202''.
       (4) Section 643(a)(3) (defining distributable net income) 
     is amended by striking ``section 1202'' and inserting 
     ``sections 1202 and 1203''.
       (5) Section 691(c)(4) (relating to coordination with 
     capital gain provisions) is amended by inserting ``1203,'' 
     after ``1202,''.
       (6) The second sentence of section 871(a)(2) (relating to 
     capital gains of aliens present in the United States 183 days 
     or more) is amended by inserting ``or 1203'' after ``section 
     1202''.
       (7) The table of sections of part I of subchapter P of 
     chapter 1 is amended by adding at the end the following:

``Sec. 1203. Exclusion for gain from stock acquired through employee 
              stock purchase plan.''

       (c) Effective Date.--The amendments made by this section 
     shall apply to stock acquired on and after the date of the 
     enactment of this Act.

     SEC. 203. TRADE BONUS CONTRIBUTIONS TO INDIVIDUAL RETIREMENT 
                   PLANS.

       (a) In General.--Section 219(b) (relating to maximum amount 
     of deduction) is amended by adding at the end the following 
     new paragraph:
       ``(5) Additional contributions in trade bonus years.--
       ``(A) In general.--If there is a determination under 
     section 101 of the Working Families Trade Bonus Act that 
     there is a trade bonus for any calendar year, then, in the 
     case of an eligible individual, the dollar amount in effect 
     under paragraph (1)(A) for taxable years beginning in the 
     subsequent calendar year shall be increased by $2,000.
       ``(B) Eligible individual.--For purposes of subparagraph 
     (A), the term `eligible individual' means, with respect to 
     any taxable year, any individual other than an individual who 
     is eligible to receive a trade bonus stock option (as defined 
     in section 1203(b)) for a plan year beginning in the taxable 
     year.''
       (b) Conforming Amendments.--
       (1) Section 408(a)(1) is amended by striking ``in excess of 
     $2,000 on behalf of any individual'' and inserting ``on 
     behalf of any individual in excess of the amount in effect 
     for such taxable year under section 219(b)(1)(A)''.
       (2) Section 408(b)(2)(B) is amended by striking ``$2,000'' 
     and inserting ``the dollar amount in effect under section 
     219(b)(1)(A)''.
       (3) Section 408(b) is amended by striking ``$2,000'' in the 
     matter following paragraph (4) and inserting ``the dollar 
     amount in effect under section 219(b)(1)(A)''.
       (4) Section 408(j) is amended by striking ``$2,000''.
       (5) Section 408(p)(8) is amended by striking ``$2,000'' and 
     inserting ``the dollar amount in effect under section 
     219(b)(1)(A)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 204. CREDIT FOR SMALL EMPLOYER STOCK PURCHASE PLAN 
                   START-UP COSTS.

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

[[Page 2475]]



     ``SEC. 45D. SMALL EMPLOYER STOCK PURCHASE PLAN CREDIT.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of an eligible employer, the small employer stock 
     purchase plan credit determined under this section for any 
     taxable year is an amount equal to the qualified start-up 
     costs paid or incurred by the taxpayer during the taxable 
     year.
       ``(b) Limits on Start-Up Costs.--In the case of qualified 
     start-up costs not paid or incurred directly for the 
     establishment of a qualified stock purchase plan, the amount 
     of the credit determined under subsection (a) for any taxable 
     year shall not exceed the lesser of 50 percent of such costs 
     or--
       ``(1) $2,000 for the first taxable year ending after the 
     date the employer established the qualified employer plan to 
     which such costs relate,
       ``(2) $1,000 for each of the second and third such taxable 
     years, and
       ``(3) zero for each taxable year thereafter.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Eligible employer.--
       ``(A) In general.--The term `eligible employer' means, with 
     respect to any year, an employer which has 100 or fewer 
     employees who received at least $5,000 of compensation from 
     the employer for the preceding year.
       ``(B) Requirement for new qualified employer plans.--Such 
     term shall not include an employer if, during the 3-taxable 
     year period immediately preceding the 1st taxable year for 
     which the credit under this section is otherwise allowable 
     for a qualified stock purchase plan of the employer, the 
     employer and each member of any controlled group including 
     the employer (or any predecessor of either) established or 
     maintained an employee stock purchase plan with respect to 
     which contributions were made, or benefits were accrued, for 
     substantially the same employees as are in the qualified 
     stock purchase plan.
       ``(2) Qualified start-up costs.--The term `qualified start-
     up costs' means any ordinary and necessary expenses of an 
     eligible employer which are paid or incurred in connection 
     with--
       ``(A) the establishment or maintenance of a qualified stock 
     purchase plan in which employees are eligible to participate, 
     and
       ``(B) providing educational information to employees 
     regarding participation in such plan and the benefits of 
     participating in the plan.
     Such term does not include services related to retirement 
     planning, including tax preparation, accounting, legal, or 
     brokerage services.
       ``(3) Qualified stock purchase plan.--
       ``(A) In general.--The term `qualified stock purchase plan' 
     means an employee stock purchase plan which--
       ``(i) allows an employer to designate options as trade 
     bonus stock options for purposes of section 1203,
       ``(ii) limits the amount of options which may be so 
     designated for any employee to not more than $2,000 per year, 
     and
       ``(iii) does not discriminate in favor of highly 
     compensated employees (within the meaning of section 414(q)).
       ``(B) Employee stock purchase plan.--The term `employee 
     stock purchase plan' has the meaning given such term by 
     section 423(b).
       ``(d) Special Rules.--
       ``(1) Aggregation rules.--All persons treated as a single 
     employer under subsection (a) or (b) of section 52, or 
     subsection (n) or (o) of section 414, shall be treated as one 
     person. All qualified stock purchase plans of an employer 
     shall be treated as a single qualified stock purchase plan.
       ``(2) Disallowance of deduction.--No deduction shall be 
     allowable under this chapter for any qualified start-up costs 
     for which a credit is determined under subsection (a).
       ``(3) Election not to claim credit.--This section shall not 
     apply to a taxpayer for any taxable year if such taxpayer 
     elects to have this section not apply for such taxable 
     year.''
       (b) Credit Allowed as Part of General Business Credit.--
     Section 38(b) (defining current year business credit) is 
     amended by striking ``plus'' at the end of paragraph (11), by 
     striking the period at the end of paragraph (12) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(13) in the case of an eligible employer (as defined in 
     section 45D(c)), the small employer stock purchase plan 
     credit determined under section 45D(a).''
       (c) Portion of Credit Refundable.--Section 38(c) (relating 
     to limitation based on amount of tax) is amended by adding at 
     the end the following new paragraph:
       ``(4) Portion of small employer pension plan credit 
     refundable.--
       ``(A) In general.--In the case of the small employer stock 
     purchase plan credit under subsection (b)(13), the aggregate 
     credits allowed under subpart C shall be increased by the 
     lesser of--
       ``(i) the credit which would be allowed without regard to 
     this paragraph and the limitation under paragraph (1), or
       ``(ii) the amount by which the aggregate amount of credits 
     allowed by this section (without regard to this paragraph) 
     would increase if the limitation under paragraph (1) were 
     increased by the taxpayer's applicable payroll taxes for the 
     taxable year.
       ``(B) Treatment of credit.--The amount of the credit 
     allowed under this paragraph shall not be treated as a credit 
     allowed under this subpart and shall reduce the amount of the 
     credit allowed under this section for the taxable year.
       ``(C) Applicable payroll taxes.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `applicable payroll taxes' 
     means, with respect to any taxpayer for any taxable year--

       ``(I) the amount of the taxes imposed by sections 3111 and 
     3221(a) on compensation paid by the taxpayer during the 
     taxable year,
       ``(II) 50 percent of the taxes imposed by section 1401 on 
     the self-employment income of the taxpayer during the taxable 
     year, and
       ``(III) 50 percent of the taxes imposed by section 
     3211(a)(1) on amounts received by the taxpayer during the 
     calendar year in which the taxable year begins.

       ``(ii) Agreements regarding foreign affiliates.--Section 
     24(d)(3)(C) shall apply for purposes of clause (i).''
       (d) Conforming Amendment.--The table of sections for 
     subpart D of part IV of subchapter A of chapter 1 is amended 
     by adding at the end the following new item:

``Sec. 45D. Small employer stock purchase plan credit.''

       (e) Effective Date.--The amendments made by this section 
     shall apply to costs paid or incurred in connection with 
     qualified stock purchase plans established after the date of 
     the enactment of this Act.
                                 ______
                                 
      By Mr. GRASSLEY:
  S. 2245. A bill to amend the Harmonized Tariff Schedule of the United 
States to modify the article description with respect to certain hand-
woven fabrics; to the Committee on Finance.


                 harmonized tariff schedule legislation

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

                                S. 2245

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

     SECTION 1. CERTAIN HAND-WOVEN FABRICS.

       (a) In General.--Subheadings 5111.11.30 and 5111.19.20 of 
     the Harmonized Tariff Schedule of the United States are 
     amended by striking ``, with a loom width of less than 76 
     cm'' each place it appears and inserting ``yarns of different 
     colors''.
       (b) Effective Date.--The amendment made by subsection (a) 
     applies with respect to goods entered, or withdrawn from 
     warehouse for consumption, on or after the 30th day after the 
     date of enactment of this Act.
                                 ______
                                 
      By Mr. BOND (for himself and Mr. Grassley):
  S. 2246. A bill to amend the Internal Revenue Code of 1986 to clarify 
that certain small businesses are permitted to use the cash method of 
accounting even if they use merchandise or inventory; to the Committee 
on Finance.


       small business accounting method clarification act of 1999

  Mr. BOND. Mr. President, I rise today to introduce a bill that 
addresses an issue of growing concern to small businesses across the 
nation--tax accounting methods. And I am pleased to be joined in this 
effort by my colleague from Iowa, Senator Grassley.
  While this topic may lack the notoriety of some other tax issues 
currently in the spotlight like the estate tax or alternative minimum 
tax, it goes to the heart of a business' daily operations--reflecting 
its income and expenses. And because it is such a fundamental issue, 
one may ask: ``What's the big deal?'' Hasn't this been settled long 
ago?'' Regrettably, recent efforts by the Treasury Department and 
Internal Revenue Service (IRS) have muddied what many small business 
owners have long seen as a settled issue.
  To many small business owners, tax accounting simply means that they 
record cash receipts when they come in and the cash they pay when they 
write a check for a business expense. The difference is income, which 
is subject to taxes. In its simplest form, this is known as the ``cash 
receipts and disbursements'' method of accounting--or the ``cash 
method'' for short. It is easy to understand, it is simple to undertake 
in daily business operations, and for the vast majority of small 
enterprises, it matches their income with the related expenses in a 
given year. Coincidentally, it's also the method of accounting used by 
the Federal Government to keep track of the $1.7 trillion in tax 
revenues it collects each

[[Page 2476]]

year as well as all of its expenditures for salaries and expenses, 
procurement, and the cost of various government programs.
  Unfortunately, the IRS has taken a different view in recent years 
with respect to small businesses on the cash method. In too many cases, 
the IRS contends that a small business should report its income when 
all events have occurred to establish the business' right to receipt 
and the amount can reasonably be determined. Similar principles are 
applied to determine when a business may recognize an expense. This 
method of accounting is known as ``accrual accounting.'' The reality of 
accrual accounting for a small business is that it may be deemed to 
have income well before the cash is actually received and an expense 
long after the cash is actually paid. As a result, accrual accounting 
can create taxable income for a small business that has yet to receive 
the cash necessary to pay the taxes.
  While the IRS argues that the accrual method of accounting produces a 
more accurate reflection of ``economic income,'' it also produces a 
major headache for small enterprise. Few entrepreneurs have the time or 
experience to undertake accrual accounting, which forces them to hire 
costly accountants and tax preparers. By some estimates, accounting 
fees can increase as much as 50% when accrual accounting is required, 
excluding the cost of high-tech computerized accounting systems that 
some businesses must install. For the brave few that try to handle the 
accounting on their own, the accrual method often leads to major 
mistakes, resulting in tax audits and additional costs for professional 
help to sort the whole mess out--not to mention the interest and 
penalties that the IRS may impose as a result of the mistake.
  To make matters even worse, the IRS recently began focusing on small 
service providers who use some merchandise in the performance of their 
service. In an e-mail sent to practitioners in my State of Missouri and 
in Kansas, the IRS' local district office took special aim at the 
construction industry asserting that ``[t]axpayers in the construction 
industry who are on the cash method of accounting may be using an 
improper method. The cash method is permissible only if materials are 
not an income producing factor.'' For these lucky service providers, 
the IRS now asserts that the use of merchandise requires the business 
to undertake an additional and even more onerous form of bookkeeping--
inventory accounting.
  Let's be clear about the kind of taxpayer at issue here. It's the 
home builder who by necessity must purchase wood, nails, dry wall, and 
host of other items to provide the service of constructing a house. 
Similarly, it's a painting contractor who will often purchase the paint 
when she renders the service of painting the interior of a house. These 
service providers generally purchase materials to undertake a specific 
project and at its end, little or no merchandise remains. They may even 
arrange for the products to be delivered directly to their client. In 
either case, the IRS insists that inventory accounting is now required.
  Mr. President, if we thought that accrual accounting is complicated 
and burdensome, imagining in having to keep track of all the boards, 
nails, and paint used in the home builder's and painter's jobs each 
year. And the IRS doesn't stop at inventory accounting for these 
service providers. Instead, they use it as the first step to imposing 
overall accrual accounting--a one-two punch for the small service 
provider when it comes to compliance burdens.
  Even more troubling is the cost of an audit for these unsuspecting 
service providers who have never known they were required to use 
inventories or accrual accounting. According to a survey of 
practitioners by the Padgett Business Services Foundation, audits of 
businesses on the issue of merchandise used in the performance of 
services resulted in tax deficiencies from $2,000 to $14,000, with an 
average of $7,200. That's a pretty steep price to pay for an accounting 
method error that the IRS has for years never enforced.
  In many cases, like retailing, inventory accounting makes sense. 
Purchasing or manufacturing products and subsequently selling them is 
the heart of a retail business, and keeping track of those products is 
a necessary reality. But for a service provider with incidental 
merchandise, like a roofing contractor, inventory accounting is nothing 
short of an unnecessary government-imposed compliance cost.
  The bill I'm introducing today, the Small Business Tax Accounting 
Simplification Act of 2000, addresses both of these issues. First, it 
establishes a clear threshold for when small businesses may use the 
cash method of accounting. Simply put, if a business has an average of 
$5 million in annual gross receipts or less during the preceding three 
years, it may use the cash method. Plain and simple--no complicated 
formula; no guessing if you made the right assumptions and arrived at 
the right answer. If the business exceeds the threshold, it may still 
seek to establish, as under current law, that the cash method clearly 
reflects its income.
  Some may argue that this provision is unnecessary because section 
448(b) and (c) already provide a $5 million gross receipts test with 
respect to accrual accounting. That's a reasonable position since many 
in Congress back in 1986 intended section 448 to provide relief for 
small business taxpayers using the cash method. Unfortunately, the IRS 
has twisted this section to support its quest to force as many small 
businesses as possible into costly accrual accounting. The IRS 
construes section 448 as merely a $5 million ceiling above which a 
business can never use the cash method. My bill corrects this 
misinterpretation once and for all--if a business has average gross 
receipts of $5 million or less, it is free to use cash accounting.
  Second, for small service providers, the Small Business Tax 
Accounting Simplification Act, creates a straightforward threshold for 
inventory accounting. If the amount paid for merchandise by a small 
service provider is less than 50% of its gross receipts, based on its 
prior year's figures, no inventory accounting would be required. Above 
that level, the taxpayer would look more like a retail business and 
inventory accounting may make sense.
  These two thresholds set forth in my bill are common sense answers to 
an increasing burden for small businesses in this country. In addition, 
it sends a clear signal to the IRS: stop wasting scarce resources 
forcing small businesses to adopt complex and costly accounting methods 
when the benefit to the Treasury is simply a matter of timing. Whether 
a small business uses the cash or accrual method or inventory 
accounting or not, in the end, the government will still collect the 
same amount of taxes--maybe not all this year, but very likely early in 
the next year. What small business can go very long without collecting 
what it is owed or paying its bills?
  To date, the Treasury Department's answer has been to suggest a $1 
million threshold under which a small business could escape accrual 
accounting and presumably inventories. While it is a step in the right 
direction, it simply doesn't go far enough. Even ignoring inflation, if 
a million dollar threshold were sufficient, why would Congress have 
tried to enact a $5 million threshold 14 years ago? My bill completes 
the job that the Treasury Department has been unable or unwilling to 
do.
  Mr. President, the legislation I introduce today is substantially 
similar to the bill introduced in the other body by my good friend and 
fellow Missourian, Jim Talent (H.R. 2273). With the strong support he 
has built among his colleagues in the other chamber and in the small 
business community, I expect to continue the momentum in the Senate and 
achieve some much needed relief from unnecessary compliance burdens and 
costs for America's small businesses.
  The call for tax simplification has been growing increasingly loud in 
recent years, and the bill I offer today provides an excellent 
opportunity for us to advance the ball well down the field. This is not 
a partisan issue; it's a small business issue. And I urge my colleagues 
on both sides of the aisle to

[[Page 2477]]

join me in this common sense legislation for the benefit of America's 
small enterprises, which contribute so greatly to this country's 
economic engine.
  Mr. President, I ask unanimous consent to print in the Record a copy 
of the bill and a description of its provisions.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2246

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Business Tax 
     Accounting Simplification Act of 2000''.

     SEC. 2. CLARIFICATION OF CASH ACCOUNTING RULES FOR SMALL 
                   BUSINESS.

       Section 446 of the Internal Revenue Code of 1986 (relating 
     to general rule for methods of accounting) is amended by 
     adding at the end the following new subsection:
       ``(g) Small Business Taxpayers Permitted To Use Cash 
     Accounting Method Without Limitation.--Notwithstanding any 
     other provision of law, a taxpayer shall not be required to 
     use an accrual method of accounting for any taxable year, if 
     the average annual gross receipts of such taxpayer (or any 
     predecessor) for the 3-year-period ending with the preceding 
     taxable year does not exceed $5,000,000. The rules of 
     paragraphs (2) and (3) of section 448(c) shall apply for 
     purposes of the preceding sentence. In the case of a C 
     corporation or a partnership which has a C corporation as a 
     partner, the first sentence of this subsection shall apply 
     only if such C corporation or partnership meets the 
     requirements of section 448(b)(3).''.
       (b) Clarification of Inventory Rules for Small Business.--
     Section 471 of the Internal Revenue Code of 1986 (relating to 
     general rule for inventories) is amended by redesignating 
     subsection (c) as subsection (d) and by inserting after 
     subsection (b) the following new subsection:
       ``(c) Small Business Service Providers Not Required To Use 
     Inventories.--A taxpayer shall not be required to use 
     inventories under this section for a taxable year if the 
     amounts paid for merchandise sold during the preceding 
     taxable year were less than 50 percent of the gross receipts 
     received during such preceding taxable year. For purposes of 
     this subsection, gross receipts for any taxable year shall be 
     reduced by returns and allowances made during such year.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                  ____


 Small Business Tax Accounting Simplification Act of 2000--Description 
                             of Provisions

       The bill amends section 446 of the Internal Revenue Code to 
     provide a clear threshold for small businesses to use the 
     cash receipts and disbursements method of accounting, instead 
     of accrual accounting. To qualify, the business must have $5 
     million or less in average annual gross receipts based on the 
     preceding three years.
       The bill also amends section 471 of the Internal Revenue 
     Code to provide a small service provider exception to the 
     inventory accounting rules. Under this provision, if the 
     amount spent on merchandise by a service provider is less 
     than 50% of its gross receipts, inventory accounting under 
     section 471 would not be required. This 50% test is based on 
     the service provider's purchases and gross receipts in the 
     preceding taxable year.
       Both provisions of the bill would be effective beginning on 
     the date of enactment.

                          ____________________