[Congressional Record (Bound Edition), Volume 146 (2000), Part 6]
[Senate]
[Pages 8087-8096]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 8087]]

   LEGISLATION TO SUSPEND THE DUTY ON CERTAIN CHEMICALS USED IN THE 
                         MANUFACTURING INDUSTRY

  Mr. THURMOND. Mr. President, I rise today to introduce four bills 
which will suspend the duties imposed on certain chemicals that are 
important components in a wide array of applications. Currently, these 
chemicals are imported for use in the United States because there are 
no known American producers or readily available substitutes. 
Therefore, suspending the duties on these chemicals would not adversely 
affect domestic industries.
  These bills would temporarily suspend the duty on the following:
  Mesamoll (alkyl sulfonic acid ester of phenol);
  Vulkalent E/C (N-phenyl-N-((trichloromethyl)thio)-benzenesulfonamide
  with calcium carbonate and mineral oil);
  Baytron M (3,4 ethylenedioxythiophene); and
  Baytron C-R (iron(III) toluenesulfonate).
  These chemicals are used in the manufacturing of a number of products 
including, but not limited to, solvents, PVC coated fabric, medical 
apparatus, rubber products for automobile hoses, circuit boards, and 
other electronic goods.
  Mr. President, suspending the duty on these chemicals will benefit 
the consumer by stabilizing the costs of manufacturing the end-use 
products. Further, these duty suspensions will allow U.S. manufacturers 
to maintain or improve their ability to compete internationally. I hope 
the Senate will consider these measures expeditiously.
  I ask unanimous consent that the text of these bills be printed in 
the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                S. 2560

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

     SECTION 1. REDUCTION OF DUTY ON MESAMOLL.

       (a) In General.--Subchapter II of chapter 99 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     inserting in numerical sequence the following new subheading:

       

``   9902.38.14    A certain              Free...........  No change......  No change......  On or before 12/
                    Alkylsulfonic Acid                                                        31/2003         ''
                    Ester of Phenol (CAS                                                                       .
                    No. 70775-94-9)
                    (provided for in
                    subheading
                    3812.20.10).........

       (b) Effective Date.--The amendment made by subsection (a) 
     applies to goods entered, or withdrawn from warehouse for 
     consumption, on or after the 15th day after the date of the 
     enactment of this Act.
                                  ____
                                  

                                S. 2561

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

     SECTION 1. REDUCTION OF DUTY ON VULKALENT E/C.

       (a) In General.--Subchapter II of chapter 99 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     inserting in numerical sequence the following new subheading:

       

``   9902.38.30    A mixture of N-Phenyl- Free...........  No change......  No change......  On or before 12/
                    N-                                                                        31/2003.......  ''
                    ((trichloromethyl)th                                                                       .
                    io)-
                    Benzenesulfonamide;
                    calcium carbonate;
                    and mineral oil (the
                    foregoing provided
                    for in subheading
                    3824.90.28).........

       (b) Effective Date.--The amendment made by subsection (a) 
     applies to goods entered, or withdrawn from warehouse for 
     consumption, on or after the 15th day after the date of the 
     enactment of this Act.
                                  ____
                                  

                                S. 2562

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

     SECTION 1. REDUCTION OF DUTY ON BAYTRON M.

       (a) In General.--Subchapter II of chapter 99 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     inserting in numerical sequence the following new subheading:

       

``   9902.29.34    A certain 3,4-         Free...........  No change......  No change......  On or before 12/
                    ethylenedioxythiophe                                                      31/2003.......  ''
                    ne (CAS No. 126213-                                                                        .
                    50-1) (provided for
                    in subheading
                    2934.90.90).........

       (b) Effective Date.--The amendment made by subsection (a) 
     applies to goods entered, or withdrawn from warehouse for 
     consumption, on or after the 15th day after the date of the 
     enactment of this Act.
                                  ____
                                  

                                S. 2563

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

     SECTION 1. REDUCTION OF DUTY ON BAYTRON C-R.

       (a) In General.--Subchapter II of chapter 99 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     inserting in numerical sequence the following new subheading:

       

``   9902.38.15    A certain catalytic    Free...........  No change......  No change......  On or before 12/
                    preparation based on                                                      31/2003.......  ''
                    Iron (III)                                                                                 .
                    toluenesulfonate
                    (CAS No. 77214-82-5)
                    (provided for in
                    subheading
                    3815.90.50).........


[[Page 8088]]

       (b) Effective Date.--The amendment made by subsection (a) 
     applies to goods entered, or withdrawn from warehouse for 
     consumption, on or after the 15th day after the date of the 
     enactment of this Act.
                                 ______
                                 
      By Ms. SNOWE:
  S. 2564. A bill to provide tax incentives for the construction of 
seagoing cruise ships in United States shipyards, and to facilitate the 
development of a United States-flag, United States-built cruise 
industry, and for other purposes; to the Committee on Finance.


                    all american cruise act of 2000

  Ms. SNOWE. Mr. President, I rise to introduce legislation designed to 
promote growth in the domestic cruise ship industry and at the same 
time enable U.S. shipyards to compete for cruise ship orders. The 
legislation would require that at least two U.S.-built ships be ordered 
for each foreign-built ship permitted to operate in the U.S. market, 
and provide tax incentives for U.S. cruise ship construction and 
operation.
  Current law prohibits non-U.S. vessels from carrying passengers 
between U.S. ports. As such, today's domestic cruise market is very 
limited. The cruise industry consists predominantly of foreign vessels 
which must sail to and from foreign ports. The vast majority of cruise 
passengers are Americans, but most of the revenues now go to foreign 
destinations. That is because the high cost of building and operating 
U.S.-flag cruise ships and competition from modern, foreign-flag cruise 
ships have deterred growth in the domestic cruise ship trade.
  By some estimates, a single port call by a cruise vessel generates 
between $300,000 and $500,000 in economic benefits. This is a very 
lucrative market, and I would like to see U.S. companies and American 
workers benefit from this untapped potential. However, domestic ship 
builders and cruise operations face a very difficult, up-hill battle 
against unfair competition from foreign cruise lines and foreign 
shipyards. Foreign cruise lines, for example, pay no corporate income 
tax. Nor are they held to the same demanding ship construction and 
operating standards imposed on U.S.-flag vessel operators. Foreign 
cruise lines are also free from the need to comply with many U.S. labor 
and environmental protection laws, and U.S. health, safety, and 
sanitation laws do not apply to the foreign ships.
  The legislation I am introducing today is designed to level the 
playing field between the U.S. cruise industry and the international 
cruise industry. It requires that at least two U.S.-built ships be 
ordered for each foreign-built ship permitted to operate on a temporary 
basis in the U.S. market, and provide tax incentive for U.S. cruise 
ship construction and operation. For example, it provides that a 
shipyard will pay taxes on the construction or overhaul of a cruise 
ship of 20,000 gross tons or greater only after the delivery of the 
ship.
  Under my bill, a U.S. company operating a cruise ship of 20,000 grt 
and greater may depreciate that vessel over a five-year period rather 
than the current 10-year depreciation period. The bill would also 
repeal the $2,500 business tax deduction limit for a convention on a 
cruise ship to provide a tax deduction limit equal to that provided to 
conventions held at shore-side hotels. The measure would authorize a 
20-percent tax credit for fuel operating costs associated with 
environmentally clean gas turbine engines manufactured in the U.S., and 
also allows use of investment of Capital Construction Funds to include 
not only the non-contiguous trades, but also the domestic point-to-
point trades and ``cruise to nowhere.''
  Finally, the bill provides that a foreign-built ship may be brought 
into the U.S. trades only after the owner or buyer of such vessel has 
entered into a binding contract for the construction of at least two 
cruise ships of equal or greater size in the U.S. The interim foreign-
built ship must be documented in the U.S. The contract must require 
that the first ship constructed in the U.S. be delivered no later than 
four years from the date of entering the binding contract with the 
delivery of a second ship within five years, and that the foreign-built 
ship must exit the U.S. trade within 12 months of the delivery of the 
last ship, provided there is no longer than a 24-month elapse between 
delivery of second and subsequent ships, should the contract provide 
for construction of more than two ships.
  Mr. President. I truly believe that this legislation would jumpstart 
the domestic cruise trade, benefit U.S. workers and companies, and 
promote economic growth in our ports. I strongly urge my colleagues to 
join me in a strong show of support for this legislation.
                                 ______
                                 
      By Mr. FRIST (for himself and Mr. McCain):
  S. 2566. A bill to amend the Federal Food, Drug, and Cosmetic Act to 
grant the Secretary of Health and Human Services the authority to 
regulate tobacco products, and for other purposes; to the Committee on 
Health, Education, Labor, and Pensions.


                  national youth smoking reduction act

  Mr. FRIST. Mr. President, I rise today to introduce the National 
Youth Smoking Reduction Act, along with my colleague, Senator McCain. 
The purpose of this bill is to diminish the number of children who 
start to smoke or use other tobacco products, while at the same time 
trying to reduce the risk such products pose to adults who make the 
ill-advised--but legal--choice to use these products.
  Mr. President, each day, more than 3,000 kids become regular smokers. 
That's about one million per year. Currently more than 4 million 
children 12 to 17 years old smoke. Sadly, more than 5 million children 
alive today will die prematurely from smoking-related illnesses, unless 
current trends are reversed.
  Adults almost always start smoking as children. According to a 1994 
Surgeon General report, nearly 90 percent of adults who smoke took his 
or her first puff at or before the age of 18. Moreover, youth smoking 
is on the rise! The Centers for Disease Control and Prevention have 
determined that smoking rates for students in grades 9 through 12 
increased from 27.5 percent in 1991 to 36.4 percent in 1997. In my own 
state of Tennessee, 38 percent of all high school students smoke 
compared to just 26 percent of Tennessee adults.
  Mr. President, we should all be alarmed by these statistics. Before 
my election to the United States Senate, I was a heart and lung 
transplant surgeon. I have held hundreds and hundreds of lungs in my 
hands that were ravaged by years of smoking. I've performed hundreds of 
coronary artery bypass heart operations to repair damage accelerated by 
smoking. When you've seen the damage that cigarettes can cause to the 
human body, it is a powerful motive to find a way to try to prevent 
children from ever starting the habit. After all, as the statistics 
suggest, if you keep a child from smoking, he'll probably never start 
as an adult.
  Many factors account for a child's decision to smoke. One concerns 
the easy access of tobacco products to our nation's youth. For too 
long, cigarettes have been readily available to those who are too young 
to purchase them legally, whether through vending machines or by 
pilfering them from self-service displays.
  Another heavily-researched factor is the role that advertising has in 
stimulating children to smoke. According to a 1995 study published in 
the Journal of the National Cancer Institute, teens are more likely to 
be influenced to smoke by cigarette advertising than they are by peer 
pressure. In 1994 the CDC determined that 86 percent of children who 
smoke prefer Marlboro, Camel and Newport--the three most heavily 
advertised brands--compared to only about one-third of adult smokers. 
When advertising for the ``Joe Camel'' campaign jumped from $27 million 
to $43 million, between 1989 and 1993, Camel's share among youth 
increased by more than 50 percent, while its adult market share did not 
change at all.
  There have been efforts made during the last decade to curb and 
eliminate children smoking. In 1996, the Food and Drug Administration 
promulgated a rule which would have reduced youth

[[Page 8089]]

access to tobacco by banning most cigarette vending machines and 
requiring that retailers verify the age of all over the counter sales. 
The rule would also address advertising to children by restricting 
advertising within 1,000 feet of schools and playgrounds, restricting 
outdoor ads and ads in publication with a significant teen readership 
to black and white text only.
  The rule was controversial, particularly some of the advertising 
restrictions. It was made even more controversial by the fact that many 
in Congress did not believe that FDA had ever been given the authority 
to regulate tobacco.
  During the 105th Congress, Senator McCain introduced S. 1415, the 
tobacco settlement bill, which was a comprehensive response to the 
landmark tobacco settlement of 1997. As part of that bill, I drafted 
provisions which set up a framework for the FDA to regulate tobacco. 
The tobacco settlement bill did not pass the Senate, which killed my 
effort during the 105th Congress to have FDA regulate tobacco in an 
attempt to keep the product away from children.
  Thus, Congress has never delegated to the FDA the authority to 
regulate tobacco. On March 21, 2000, the U.S. Supreme Court ruled that 
FDA lacked any authority to regulate tobacco products. It was obvious 
to the Court that Congress never intended for the FDA to treat tobacco 
products as drugs subject to regulation under the Federal Food, Drug 
and Cosmetic Act.
  The National Youth Smoking Reduction Act, which we introduce today, 
would for the first time give the FDA authority to regulate tobacco.
  This authority would not flow from treating nicotine as a drug and 
tobacco products as drug delivery devices. That's what the FDA has 
already tried to do, by trying to force tobacco products under Chapter 
5 of the existing Act. To me, this is like taking a square peg and 
trying to put it in a round hole; it just doesn't fit. Chapter 5 calls 
on the Secretary to determine whether the regulatory actions taken will 
provide reasonable assurance of the ``safety and effectiveness'' of the 
drug or the device. Well, clearly, tobacco is neither safe nor 
effective, as those terms are understood in the Act. We know that 
tobacco kills. That has clearly been demonstrated over the last 35 
years. You can talk about the effectiveness of a pacemaker or a heart 
valve or an artificial heart; you can talk about those devices as being 
safe and effective. You really cannot apply that standard to tobacco. 
Therefore, instead of taking tobacco and ramming it through the drug 
and device provisions, I felt it was important to look at the unique 
nature of tobacco, and regulate it under a new chapter, which we 
designate as Chapter 9. This gives FDA the flexibility to create a new 
standard that was appropriate for tobacco products.
  Chapter 9 requires manufacturers to submit to the FDA information 
about the ingredients, components and substances in their products. It 
empowers the FDA to set performance standards for tobacco products, by 
which FDA can try to reduce the risk posed by these products. It gives 
FDA the power to regulate the sale, distribution, access to, and 
advertising of tobacco products to try to prevent children from 
smoking. It also gives the FDA the power to revise and improve the 
warning labels contained on tobacco product packages and advertising. 
Last, it gives FDA the power to encourage tobacco manufacturers--who 
probably know more about the products than even FDA's scientists--to 
develop and market ``reduced risk'' products for adults who are regular 
users of tobacco.
  In short, our bill represents a powerful, initial grant of authority 
to the FDA to regulate tobacco.
  We think the bill, as a whole, strikes a fair balance between the 
need to promote the public health and the recognition that adults may 
legally choose to smoke. I very strongly believe that, should Congress 
act to give FDA authority to regulate tobacco products, this 
legislation will be the template.
  Six years ago, I was saving lives as a heart and lung surgeon. I saw 
the ravages of tobacco in the operating room. The people of Tennessee 
elected me to use common sense to advance the public good. I submit 
that crafting a comprehensive approach to keep children from smoking is 
a chance for the Senate to save lives through the exercise of common 
sense.
  Mr. McCAIN. Mr. President, I am pleased to co-sponsor this important 
legislation aimed at reducing youth smoking. This legislation addresses 
the void in federal regulatory authority over tobacco left by the 
recent Supreme Court ruling that FDA has no current power to regulate 
tobacco products.
  Dr. Frist provided excellent guidance and leadership on FDA authority 
in 1998. In this legislation he is continuing that role by proposing 
legislation which I believe can gain support of enough of our 
colleagues to actually make this the law. Right now FDA has no 
authority whatsoever. While I supported the even more stringent 
measures proposed in 1998, I concur with Senator Frist that our chief 
responsibility this year is to pass legislation which will actually 
result in reductions in the number of kids smoking. We should pass this 
legislation and see results, not simply talk for several more years 
about how much more we would like to do.
  The statistics on youth smoking are clear and alarming: 3000 kids 
start smoking every day; 1000 of them will die early from smoking 
related disease; and one of three adolescents is using tobacco by age 
18.
  We're not talking about kids who sneak a cigarette out of their 
mother's purse. According to a Surgeon General's report 71 percent of 
youth smokers use tobacco daily, but 90 percent of lifetime smokers 
take up the habit before the age of 18--the legal age to buy tobacco 
products in every state in the union--so if we can limit the number of 
kids smoking, we will eventually decrease the number of adults smoking.
  Specifically, what the legislation will do is:
  1. FDA will oversee ingredients in tobacco products to ensure that 
they are adulterated with ``putrid'' or ``poisonous substances,'' and 
may regulate the manufacturing process to require the sanitary 
conditions one would normally expect in dealing with agricultural 
products.
  2. It includes the very stringent and specific warning labeling 
requirements from the 1998 legislation. FDA will have the authority to 
revise and enforce labeling requirements, and to ensure that tobacco 
products are not misbranded or misrepresented to the public.
  3. FDA will serve as the clearinghouse for information about tobacco 
products, the ingredients used by manufacturers, and will approve new 
products and formulas to ensure that they protect public health.
  4. FDA will have the authority to establish advertising and access 
limitations designed to ensure that kids are not the target of 
marketing by tobacco companies, and to prevent kids from easily 
shoplifting or buying cigarettes.
  5. It provides a mechanism for lower risk tobacco products to be 
tested, reviewed and approved.
  6. It allows FDA to regulate tobacco products and nicotine to 
decrease the harm caused by them as much as feasible.
  What the legislation does not do is permit FDA to ban tobacco 
products directly, or indirectly. That authority remains with Congress. 
There are an estimated 40-50 million smokers in this country, and it is 
neither practical nor in the public interest to vest that authority 
with a federal agency which is unaccountable to the public at large. We 
do not gain by driving current smokers to black markets. It is better 
to regulate tobacco products to prevent them from becoming worse and to 
focus on decreasing the number of kids who take up smoking or using 
chewing tobacco.
  The legislation also does not raise prices--it does not raise taxes. 
No new government programs or agencies are created. No liability issues 
are addressed. This is simple and straightforward legislation to give 
the FDA authority to regulate tobacco products and to promulgate 
regulations to prevent advertising, marketing and access for kids.
  The legislation does not permit a broad ban or control over 
advertising.

[[Page 8090]]

Instead, it vests authority with FDA to regulate advertising aimed at 
kids. This limitation allows FDA sufficient authority to address Joe 
Camel type advertising, while providing the best opportunity for 
success against constitutional challenges.
  While I strongly advocate against kids smoking, I recognize that it 
is the right of an adult to make a stupid choice--to smoke--knowing of 
the consequences. This legislation protects that right. It provides a 
delicate balance between protecting a person from himself, and letting 
each individual make individual choices, and suffer the consequences of 
those choices.
  This legislation will draw attacks from both sides--from those who 
think the bill is too stringent, and from those who think the 
legislation does not go far enough. I say to my friends on both sides, 
this is a reasonable and practical solution to a serious problem. I 
urge an end to the posturing and a dedication to making sure that we do 
not leave this session without providing FDA with some authority over 
tobacco products. I pledge to both sides that I will work with them to 
refine the language, to address their legitimate concerns. But, we will 
have gained nothing if we allow this to become the political football 
that it became two years ago.
  Make no mistake, this is not perfect legislation. I would like to do 
more. But I think it is more important to move forward with this very 
good proposal than to wait for some distant time, if ever, when we can 
pass a perfect bill.
  This legislation is a major step in the right direction. I think we 
can get enough support to pass it. I support its early consideration 
and action.
                                 ______
                                 
      By Mrs. BOXER.
  S. 2567. A bill to provide Outer Continental Shelf Impact Assistance 
to State and local governments, to amend the Land and Water 
Conservation Fund Act of 1965, the Urban Park and Recreation Recovery 
Act of 1978, and the Federal Aid in Wildlife Restoration Act (commonly 
referred to as the Pittman-Robertson Act) to establish a fund to meet 
the outdoor conservation and recreation needs of the American people, 
and for other purposes; read the first time.


                   conservation and reinvestment act

  Mrs. BOXER. Mr. President, earlier today, I introduced in the Senate 
a bill that passed the House of Representatives on Thursday, May 11--
the Conservation and Reinvestment Act of 2000. I introduced the bill 
and asked that it be put on the Senate calendar for one simple reason. 
I believe that the fastest way to pass legislation to protect our 
national lands legacy is to take up where the House left off last week.
  I know that the Energy and Natural Resources Committee has been 
trying for many months to get a lands legacy bill, and I commend the 
efforts of Senator Bingaman, Senator Landrieu and others. But I am also 
aware of the great differences of opinion on the Committee. I 
personally support the Bingaman bill, which is similar to legislation I 
introduced last year, the Resources 2000 Act. Some Senators support the 
Landrieu bill. Others oppose both approaches.
  Thus, it may not be possible to get a strong bill out of the Energy 
Committee this year. And, Mr. President, we are running out of time. 
There are probable fewer than 60 working days left in the 106th 
Congress. So that is why I have asked that the House bill be placed on 
the Senate calendar, so that at any time the Majority Leader can take 
it up and place it before the Senate.
  The House bill isn't perfect. I would like to see further changes. 
But it would be a good start for the Senate. We must not let this 
session of Congress end without passing this critical legislation to 
protect our natural heritage.
                                 ______
                                 
      By Mr. KENNEDY (for himself, Mr. Lautenberg, Mr. Durbin, Mr. 
        Kerry, and Mr. Wellstone):
  S. 2568. A bill to protect the public health by providing the Food 
and Drug Administration with certain authority to regulate tobacco 
products; to the Committee on Health, Education, Labor, and Pensions.


       youth smoking prevention and public health protection act

  Mr. KENNEDY. Mr. President, today, I am introducing legislation to 
give the Food and Drug Administration board authority to regulate 
tobacco products for protection of the public health. With the recent 5 
to 4 decision by the Supreme Court rejecting FDA's claim that it had 
authority to regulate tobacco products under current law, it is now 
essential for Congress to act. We cannot in good conscience allow the 
federal agency most responsible for protecting the public health to 
remain powerless to deal with the enormous risk of tobacco, the most 
deadly of all consumer products.
  The provisions in this bill are identical to those in the bipartisan 
compromise reached during Senate consideration of comprehensive tobacco 
control legislation in 1998. Fifty eight Senators supported it at that 
time. That legislation was never enacted because of disputes over 
tobacco taxation and litigation, not over FDA authority.
  This FDA provision is a fair and balanced approach to FDA regulation. 
It creates a new section in FDA jurisdiction for the regulation of 
tobacco products, with standards that allow for consideration of the 
unique issues raised by tobacco use. It is sensitive to the concerns of 
tobacco farmers, small businesses, and nicotine-dependent smokers. But, 
it clearly gives FDA the authority it needs in order to prevent youth 
smoking and to reduce addiction to this highly lethal product.
  I had hoped to be introducing this bill with the same bipartisan 
support we had for this FDA provision in 1998. Unfortunately, we have 
not been able to reach agreement. I believe the changes in the 1998 
language now being proposed by Republicans will undermine the FDA's 
ability to deal effectively with the enormous health risks posed by 
smoking. This concern is shared by a number of independent public 
health experts who have reviewed the proposed Republican changes and by 
the FDA officials who would be responsible for administering the law. 
The bipartisan compromise agreed to in 1998 is still the best 
opportunity for Senators to come together and grant FDA the regulatory 
authority it needs to substantially reduce the number of children who 
start smoking and to help addicted smokers quit. Nothing less will do 
the job.
  The stakes are vast. Three thousand children begin smiling every day. 
A thousand of them will die prematurely from tobacco-induced diseases. 
Smoking is the number one preventable cause of death in the nation 
today. Cigarettes kill well over four hundred thousand Americans each 
year. That is more lives lost than from automobile accidents, alcohol 
abuse, illegal drugs, AIDS, murder, suicide, and fires combined. Our 
response to a public health problem of this magnitude must consist of 
more than half-way measures.
  We must deal firmly with tobacco company marketing practices that 
target children and mislead the public. The Food and Drug 
Administration needs broad authority to regulate the sale, 
distribution, and advertising of cigarettes and smokeless tobacco.
  The tobacco industry currently spends five billion dollars a year to 
promote its products. Much of that money is spent in ways designed to 
tempt children to start smoking, before they are mature enough to 
appreciate the enormity of the health risk. The industry knows that 
more than 90% of smokers begin as children and are addicted by the time 
they reach adulthood.
  Documents obtained from tobacco companies prove, in the companies' 
own words, the magnitude of the industry's efforts to trap children 
into dependency on their deadly product. Recent studies by the 
Institute of medicine and the Centers for Disease Control show the 
substantial role of industry advertising in decisions by young people 
to use tobacco products. If we are serious about reducing youth 
smoking, FDA must have the power to prevent industry advertising 
designed to appeal to children wherever it will be seen by children. 
This legislation

[[Page 8091]]

will give FDA the ability to stop tobacco advertising which glamorizes 
smoking from appearing in publications likely to be read by significant 
numbers of children.
  FDA authority must also extend to the sale of tobacco products. 
Nearly every state makes it illegal to sell cigarettes to children 
under 18, but surveys show that those laws are rarely enforced and 
frequently violated. FDA must have the power to limit the sale of 
cigarettes to face-to-face transactions in which the age of the 
purchaser can be verified by identification. This means an end to self-
service displays and vending machine sales. There must also be serious 
enforcement efforts with real penalties for those caught selling 
tobacco products to children. This is the only way to ensure that 
children under 18 are not able to buy cigarettes.
  The FDA conducted the longest rulemaking proceeding in its history, 
studying which regulations would most effectively reduce the number of 
children who smoke. Seven hundred thousand public comments were 
received in the course of that rulemaking. At the conclusion of its 
proceeding, the Agency promulgated rules on the manner in which 
cigarettes are advertised and sold. Due to litigation, most of those 
regulations were never implemented. If we are serious about curbing 
youth smoking as much as possible, as soon as possible; it makes no 
sense to require FDA to reinvent the wheel by conducting a new multi-
year rulemaking process on the same issues. This legislation will give 
the youth access and advertising restrictions already developed by FDA 
the immediate force of law, as if they had been issued under the new 
statute.
  The legislation also provides for stronger warnings on all cigarette 
and smokeless tobacco packages, and in all print advertisements. These 
warnings will be more explicit in their description of the medical 
problems which can result from tobacco use. The FDA is given the 
authority to change the text of these warning labels periodically, to 
keep their impact strong.
  Nicotine in cigarettes is highly addictive. Medical experts say that 
it is as addictive as heroin or cocaine. Yet for decades, tobacco 
companies have vehemently denied the addictiveness of their products. 
No one can forget the parade of tobacco executives who testified under 
oath before Congress as recently as 1994 that smoking cigarettes is not 
addictive. Overwhelming evidence in industry documents obtained through 
the discovery process proves that the companies not only knew of this 
addictiveness for decades, but actually relied on it as the basis for 
their marketing strategy. As we now know, cigarette manufacturers 
chemically manipulated the nicotine in their products to make it even 
more addictive.
  The tobacco industry has a long, dishonorable history of providing 
misleading information about the health consequences of smoking. These 
companies have repeatedly sought to characterize their products as far 
less hazardous than they are. They made minor innovations in product 
design seem far more significant for the health of the user than they 
actually were. It is essential that FDA have clear and unambiguous 
authority to prevent such misrepresentations in the future. The largest 
disinformation campaign in the history of the corporate world must end.
  Given the addictiveness of tobacco products, it is essential that the 
FDA regulate them for the protection of the public health. Over forty 
million Americans are currently addicted to cigarettes. No responsible 
public health official believes that cigarettes should be banned. A ban 
would leave forty million people without a way to satisfy their drug 
dependency. FDA should be able to take the necessary steps to help 
addicted smokers overcome their addiction, and to make the product less 
toxic for smokers who are unable or unwilling to stop. To do so, FDA 
must have the authority to reduce or remove hazardous ingredients from 
cigarettes, to the extent that it becomes scientifically feasible. The 
inherent risk in smoking should not be unnecessarily compounded.
  Recent statements by several tobacco companies make clear that they 
plan to develop what they characterize as ``reduced risk'' cigarettes. 
This legislation will require manufacturers to submit such ``reduced 
risk'' products to the FDA for analysis before they can be marketed. No 
health-related claims will be permitted until they have been verified 
to the FDA's satisfaction. These safeguards are essential to prevent 
deceptive industry marketing campaigns, which could lull the public 
into a false sense of health safety.
  Smoking is the number one preventable cause of death in America. 
Congress must vest FDA not only with the responsibility for regulating 
tobacco products, but with full authority to do the job effectively.
  This legislation will give the FDA the legal authority it needs to 
reduce youth smoking by preventing tobacco advertising which targets 
children--to prevent the sale of tobacco products to minors--to help 
smokers overcome their addiction--to make tobacco products less toxic 
for those who continue to use them--and to prevent the tobacco industry 
from misleading the public about the dangers of smoking.
  The 1998 compromise we reached in the Senate is still the right 
answer. We cannot allow the tobacco industry to stop us from doing what 
we know is right for America's children. I intend to do all I can to 
see that Congress enacts this legislation this year. The public health 
demands it.
                                 ______
                                 
       By Mr. BOND (for himself, Mr. Kerry, Mr. Campbell, Mr. 
        Murkowski, Mr. Stevens, Mr. Daschle, and Mr. Baucus):
  S. 2569. A bill to ensure and enhance participation in the HUBZone 
program by small business concerns in Native America, to expand 
eligibility for certain small businesses on a trial basis, and for 
other purposes; to the Committee on Small Business.


                 hubzones in native america act of 2000

 Mr. BOND. Mr. President, the bill I am introducing today with 
Senators Kerry, Campbell, Murkowski, Stevens, Daschle, and Baucus will 
expand economic opportunity in some of the most stubborn areas of 
poverty and unemployment in the entire country. It will do so by 
expanding the HUBZone program to ensure that Indian Tribal enterprises 
and Alaska Native Corporations are eligible to participate.
  The HUBZone program, enacted in 1997, directs a portion of Federal 
contracting dollars into areas of the country that have been out of the 
economic mainstream for far too long. HUBZone areas, which include, 
qualified census tracts, poor rural counties, and Indian reservations, 
often are relatively out-of-the-way places that the stream of commerce 
passes by. They tend to be low-traffic areas that do not have a 
reliable customer base to support business development. As a result, 
business has been reluctant to move into these areas. It simply has not 
been profitable, without a customer base to keep them operating.
  The HUBZone Act seeks to overcome this problem by making it possible 
for the Federal government to become a customer for small businesses 
that locate in HUBZones. While a small business works to establish its 
regular customer base, a Federal contract can help it stabilize its 
revenues and remain profitable. This gives small business a chance to 
get a foothold, and provides jobs to these areas. New business and new 
jobs mean new life and new hope for these communities.
  The HUBZone Act seeks to restart the economic engine in these 
communities and keep it running. Small business is the carburetor that 
makes that engine run smoothly. If a community seeks to attract a large 
business, often with expensive tax concessions and promises of public 
works, that community can find itself back where it started if that 
large business becomes unprofitable and closes its plant. However, if a 
community attracts a diversified base of small businesses its overall 
economic development does not stop just because one or two of those 
businesses close. That is why small business must be a central part of 
any economic development strategy.
  Unfortunately, when we wrote the HUBZone Act three years ago, we 
accidentally created a technical glitch that excludes Indian Tribal 
enterprises and

[[Page 8092]]

Alaska Native Corporations. These businesses must play a central role 
in improving life in rural Alaska and on Indian reservations. That is 
why we are here to propose a solution to this problem.
  In the HUBZone Act, we specified that participating small businesses 
must be 100 percent owned and controlled by U.S. citizens. However, 
since citizens are ``born or naturalized'' under the Fourteenth 
Amendment, ownership by citizens implies ownership by individual flesh-
and-blood human beings. Corporate owners and Tribal government owners 
are not ``born or naturalized'' in the usual meanings of those terms. 
Thus, the Small Business Administration found that it had no authority 
to certify small businesses owned wholly or partly by Alaska Native 
Corporations and Tribal governments.
  Although the legal logic of that view seems sound, the outcome is 
not. It certainly is not what we intended. On many reservations, 
particularly the desolate, isolated ones in western State, the only 
investment resources available are the Tribal governments. Excluding 
those governments from investing in their own reservations means, in 
practical terms, excluding those reservations from the HUBZone program 
entirely. Similarly, Alaska Native Corporations have the corporate 
resources that are necessary to make real investments in rural Alaska, 
to provide jobs to Alaska Natives who currently have no hope of getting 
them.
  That is why we are here to propose a legislative fix. In putting 
together this bill, we have sought to follow three broad principles.
  First, no firm should be made eligible solely by virtue of who they 
are. We should not, for example, make all Alaska Native Corporations 
eligible solely because they are Alaska Native Corporations. Instead, 
Alaska Native Corporations and Indian Tribal enterprises should be 
eligible only if they agree to advance the goals of the HUBZone 
program: job creation and economic development in the areas that need 
it most.
  Second, our legislation should seek to conform to existing Native 
American policy and not allow the HUBZone program to be used as a back 
door to change that policy. Some folks would like to change Alaska 
Native policy so that Alaska Natives exercise governmental jurisdiction 
over their lands, just like Tribes in the Lower 48 do on their 
reservations and trust lands. However, the Alaska Native Claims 
Settlement Act (ANCSA) of 1971 deliberately avoided that approach, and 
our legislation here simply recognizes existing practice in ANCSA.
  The third principle underlying this bill is that Alaska Natives and 
Indian Tribes should participate on more-or-less equal grounds. It is 
impossible to have exact equivalence because the Federal relationship 
with Alaska Natives is not equal to the relationship with Indian 
Tribes, and also because Alaska is a very different State from the 
Lower 48. However, ANCSA provided that Alaska Natives should be 
eligible to participate in Federal Indian programs ``on the same basis 
as other Native Americans.''
  Mr. President, with these principles in mind, we have finally come to 
the end of a long negotiation on these issues. This bill represents the 
outcome of that discussion, and it is a long step forward. I have a 
section-by-section discussion of the bill, and I ask unanimous consent 
that it be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                      Section-by-Section Analysis

       Section 1. The bill amends the definition of ``HUBZone 
     small business concern'' to include small businesses owned by 
     one or more U.S. citizens (current law), Alaska Native 
     Corporations and their subsidiaries, joint ventures, and 
     partnerships as defined under ANCSA, and Tribal enterprises. 
     Tribal enterprises refers to those wholly owned by one or 
     more Tribal governments, and to those partly owned by Tribal 
     governments if all other owners are small businesses or U.S. 
     citizens. Some Tribal governments have also created holding 
     companies to do their business for them, so they can waive 
     sovereign immunity against those companies without waiving it 
     against the Tribe itself. Small businesses owned by these 
     holding companies would also be eligible.
       Section 2. This amends the definition of ``qualified 
     HUBZone small business concern'' to indicate what each of the 
     ``HUBZone small business concerns'' must do in order to 
     advance the goals of the program and be qualified. Small 
     businesses in general must have a principal office in a 
     HUBZone, and 35% of their employees must reside in a HUBZone 
     (current law). This is also the underlying policy that would 
     apply to Alaska Native Corporations if the pilot program 
     described below were to become inactive; however, it is not 
     likely that Alaska Native Corporations would be able to 
     participate in the HUBZone program on this basis, for the 
     reasons in the discussion of the pilot program, below. Having 
     this as the fallback position in case the pilot program is 
     suspended, however, keeps Alaska Native Corporations and 
     small businesses in Alaska on the same footing. In this way, 
     a uniform standard will be in force in Alaska for all program 
     participants, either under the pilot program or under this 
     section. This prevents unnecessary confusion and complexity.
       Tribal enterprises would be required to have 35% of their 
     employees performing a HUBZone contract either reside on an 
     Indian reservation or on any HUBZone adjoining a reservation. 
     This allows Tribal enterprises to use a place-of-performance 
     standard similar to Alaska Native Corporations in the pilot 
     program, below. However, it is slightly more restrictive than 
     the rule that applies to small businesses in general, whose 
     employees may come from any HUBZone to meet the 35% 
     threshold. Since Tribal enterprises are government-owned 
     entities (owned wholly or partly by Tribal governments), this 
     provision limits their scope to the reservations governed by 
     their respective owners.
       The language about HUBZones ``adjoining'' a reservation is 
     also comparable to existing language in the Indian Education 
     Act that refers to activities ``on or near'' a reservation, 
     so the idea has a precedent in other Indian policy areas.
       In each of these cases, a firm added to the definition of 
     ``HUBZone small business concerns'' has a corresponding 
     obligation imposed on it to be ``qualified.'' They have to do 
     something in a HUBZone to participate.
       The final component of this section is the ``HUBZone Pilot 
     Program for Sparsely Populated Areas.'' This attempts to 
     address concerns that small businesses in Alaska, as well as 
     Alaska Native Corporations, are likely to face insurmountable 
     practical problems that prevent their participation in the 
     HUBZone program even if they are eligible on paper. Most of 
     the useful HUBZones are in rural areas (Anchorage has just a 
     handful of qualified census tracts, and two of those tracts 
     are military installations), but rural areas tend not to have 
     large residential populations and have little infrastructure 
     to support contract performance. Thus, Alaska Native 
     Corporations tend to be headquartered in Anchorage, and 50% 
     of the Native population lives in Anchorage, where HUBZones 
     are few. This makes it unlikely that an Alaska Native 
     Corporation would be able to meet the general HUBZone 
     program's criteria of having a principal office plus 35% of 
     their employees in a HUBZone.
       Other small businesses in Alaska are likely to confront 
     these same problems of population patterns and lack of 
     infrastructure that affect the Alaska Natives--and unlike the 
     Alaska Natives, regular small businesses will have fewer 
     corporate resources to call upon to overcome those problems. 
     It also makes sense administratively for all of Alaska to 
     have the same set of basic rules for the program at any given 
     time. Thus, the bill includes a three-year pilot program 
     providing that HUBZone participants must have their principal 
     office in a HUBZone in Alaska or 35% of their employees must 
     reside in a HUBZone in Alaska or in an Alaska Native village 
     in Alaska or 35% of the employees working on a contract 
     awarded through the HUBZone program must do their work in a 
     HUBZone in Alaska. This creates a rule unique to Alaska. 
     HUBZone participants in Alaska would not need to meet all 
     three criteria, just one of them.
       Under the pilot language, firms could relocate their 
     principal office to comply, or else they could hire 35% of 
     their employees from HUBZones. If neither of those is do-
     able, they would have a third option, of having 35% of their 
     employees working a specific HUBZone contract do so in an 
     Alaska HUBZone.
       However, since this does represent a relaxing of the 
     current HUBZone criteria, it is important to be on guard 
     against the possibility of relaxing the rules too much. Thus, 
     the pilot program has a cap. If more than 2% of the nation's 
     small business contract dollars are awarded to Alaska in any 
     fiscal year, the pilot would shut down for the next fiscal 
     year. Alaska Native Corporations and Alaska small businesses 
     would then fall back on the underlying, current-law criteria 
     of having a principal office in a HUBZone and 35% of their 
     employees residing in a HUBZone.
       Section 3. The definitions of Alaska Native Corporation and 
     Alaska Native Village are the same as in ANCSA. The 
     definition of ``Indian reservation'' refers generally to the 
     definition of ``Indian country'' at 18 U.S.C. 1151, with two 
     exceptions. It excludes lands taken

[[Page 8093]]

     into trust in any State where a Tribe did not exercise 
     governmental jurisdiction on the date of enactment (unless 
     the Tribe is recognized after the date of enactment). It also 
     excludes land acquisitions that are not within the external 
     boundaries of a reservation or former reservation or are 
     noncontiguous to trust or restricted lands as of the date of 
     enactment. Since reservation and trust areas are deemed 
     HUBZones without any explicit test of economic need, a Tribe 
     could otherwise purchase a plot of land in a prosperous area, 
     have it placed into trust status, and have it deemed a 
     HUBZone. Using scarce economic development resources like the 
     HUBZone program, on areas that are already developing without 
     such assistance, is not the highest and best use of those 
     limited resources. However, this definition would still allow 
     Tribes to continue current practices of trying to acquire 
     lots, within their reservations, to eliminate the 
     ``checkerboard'' pattern of reservations that have plots 
     within them not owned by the Tribe; it also allows Tribes to 
     expand existing trust areas.
       Finally, the definition of ``Indian reservation'' provides 
     a special rule for Oklahoma, which was all reservation at one 
     time. If all of Oklahoma were to be deemed a HUBZone, the 
     program benefits would flow to businesses in their current 
     locations, without requiring job creation in distressed areas 
     of Oklahoma. This would be corporate welfare, not economic 
     development. To avoid this problem, the definition focuses 
     the HUBZone program on Oklahoma lands currently in trust or 
     eligible for trust status under existing regulation.

 Mr. KERRY. Mr. President, I want to express my support for the 
HUBZones in Native America Act of 2000. This bill is designed to 
clarify eligibility requirements and enhance participation by Native 
American-owned small firms seeking certification in the Small Business 
Administration's Historically Underutilized Business Zone (HUBZone) 
government contracting program. The bill also sets up a temporary pilot 
program for Alaska Native Corporations under the HUBZone program.
  As ranking member of the Committee on Small Business, I was a 
cosponsor to the HUBZone legislation when it was enacted into law as 
part of the Small Business Reauthorization Act of 1997. The original 
bill language, because of some peculiarities in Native American and 
Alaska Native law, inadvertently exempted some Native American-owned 
firms located in economically distressed areas from participating in 
the HUBZone program. This bill is designed to make those firms eligible 
to participate.
  The HUBZone program, Mr. President, is designed to help qualified 
small businesses located in economically distressed areas--inner 
cities, rural areas, and Native American tribal lands--secure 
contracting opportunities with the Federal government. The program is 
also designed to create jobs in these areas by requiring that firms 
hire 35% of their workforce from economically distressed areas.
  According to the SBA, there are currently 1171 small businesses that 
are eligible to participate in the HUBZone program, and 114 of these 
are Native American-owned, 11 of which are located in the state of 
Alaska. This bill should provide the vehicle for more Native American-
owned firms to become eligible.
  Mr. President, Native Americans are one of the groups that the SBA 
presumes to be socially and economically disadvantaged for purposes of 
their Section 8(a) and Small Disadvantaged Business contracting 
programs. Unfortunately, Native American tribal areas have not been 
able to share in the remarkable economic growth that our country has 
enjoyed for the last few years. It is my hope that this bill, with its 
technical corrections to the HUBZone program, will in some part, 
provide greater economic opportunities in these areas that continue to 
suffer high levels of unemployment and desperately need this 
help.
 Mr. CAMPBELL. Mr. President, I am pleased today to join my 
fellow chairman Senator Bond in introducing the HUBZones in Native 
America Act of 2000.
  The act is designed to make sure that federal procurement dollars are 
targeted to the areas that are most in need of an economic boost. These 
areas are called ``historically underutilized business zones'' and 
under the Act, Indian reservations are defined as ``historically 
underutilized business zones''.
  Tribal economies continue to be among the most depressed and 
economically stagnant in the country. Though some well-situated tribes 
are benefiting from gambling, most tribes and Indian people live in 
Third World conditions.
  In the 106th Congress, the emphasis of the Committee on Indian 
Affairs has been that of Indian economic development. The ultimate goal 
for Native economies is self-sufficiency. Programs, such as this, 
bridge the gap between Native economies and private enterprise.
  On May 10, 1999, the Committee on Small Business and the Committee on 
Indian Affairs held a joint hearing on the implementation of the 
HUBZones Act of 1997 and its impact on Indian communities.
  During that hearing three main issues were aired that are remedied by 
the amendments we introduce today:
  Eligibility of Indian Lands in Oklahoma; Eligibility of Indian Lands 
in Alaska; and Eligibility of Tribally-owned enterprises.
  The original intent of the HUBZone program was to re-target existing 
federal contracting dollars into America's distressed communities, 
including Alaska Native and Indian communities. The changes reflected 
in the HUBZones in Native America Act of 2000 build on the original 
intent of the Act, and make further steps to ensure that Alaska Native 
and Indian communities fully participate in this competitive program. I 
look forward to perfecting the obstacles that remain.
  I am hopeful that the legislation introduced today will encourage 
long-term economic growth in Native communities by expanding business 
opportunities and job creation activities.
  Mr. STEVENS. Mr. President, today I join Senators Bond, Kerry, 
Campbell, Murkowski, Daschle, and Baucus, in introducing this bill. I 
want to focus on a few specific portions of this bill that would be 
beneficial to Alaska. this bill contains a provision to create a pilot 
program for small businesses in qualified areas of Alaska. The pilot 
program contained in this bill would alter the requirements for Alaska 
small Businesses to quality as HUBZone participants.
  The current HUBZone Program, as designed by the chairman of the Small 
Business Committee, Senator Bond, is a good tool for getting 
contracting dollars into distressed geographic areas and neighborhoods. 
A HUBZone is an area that is (1) located in a qualified census tract, 
(2) a qualified ``non-metropolitan county'' that is not located in a 
metropolitan statistical area, and in which the median household income 
is less than 80 percent of the non-metropolitan state median household 
income, or an area that has an unemployment rate that is not less than 
140 percent of the statewide average unemployment rate for the state in 
which the county is located, or (3) lands within the external 
boundaries of an Indian reservation. The current HUBZone program 
requires a small business to be located in one of these designated 
areas while also requiring at least 35 percent of the business' 
employees to live in a HUBZone. This helps get dollars circulating into 
areas of the community that have not enjoyed the economic growth of the 
last 10 years.
  The Alaska Pilot Program contained in this bill will modify the 
requirements to allow a small business to qualify as a HUBZone 
participant if they meet only one of the following conditions: Either 
(1) they have their principle place of business in a HUBZone, or (2) at 
least 35 percent of their employees live in a HUBZone, or (3) at least 
35 percent of the employees working on a qualified contract perform the 
work in a HUBZone. Rather than requiring a small business to meet all 
of the requirements for HUBZone contracts, this Alaska Pilot Program 
will allow small businesses in Alaska to compete for HUBZone contracts 
by fulfilling only one of the requirements. This should be beneficial 
for the communities and neighborhoods who have missed out on growth of 
the 1990's. In addition, it could mean more jobs for Alaskans and more 
money circulating into the Alaskan economy.
  The bill also fixes technical problems that kept Alaska native-owned 
firms

[[Page 8094]]

from being able to participate in the HUBZone program. This will allow 
Alaska native-owned small businesses an opportunity to broaden their 
business activities in the state while also contributing economically 
to their local communities and shareholders.
  I would like to note that in providing benefits to native 
communities, this bill would not change Indian law, nor the State of 
Alaska's exclusive jurisdiction over lands in Alaska.
  I thank the members of the Small Business and Indian Affairs 
Committees who worked on this issue and for their willingness to take 
into account the unique circumstances in Alaska. I believe this program 
will help Alaska's economy to move forwarded and will afford hard 
working small business owners in Alaska new opportunities.
                                 ______
                                 
      By Mr. FRIST (for himself, Mr. Thompson, and Mr. Cochran):
  S. 2570. A bill to provide for the fair and equitable treatment of 
the Tennessee Valley Authority and its rate payers in the event of 
restricting of the electric utility industry.


   legislation to provide for fair treatment of the Tennessee valley 
                               authority

 Mr. FRIST. 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. 2570

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

     SECTION 1. DEFINITIONS.

       In this Act:
       (1) Commission.--The term ``Commission'' means the Federal 
     Energy Regulatory Commission.
       (2) Distributor.--The term ``distributor'' means a 
     cooperative organization, municipal, or other publicly owned 
     electric power system that, on December 31, 1997, purchased 
     all or substantially all of its wholesale power requirements 
     from the Tennessee Valley Authority under a long-term power 
     sales agreement.
       (3) Distributor service area.--The term ``distributor 
     service area'' means a geographic area within which a 
     distributor is authorized by State law to sell electric power 
     to retail electric consumers on the date of enactment of this 
     Act.
       (4) Electric utility.--The term ``electric utility'' has 
     the meaning given the term in section 3 of the Federal Power 
     Act (16 U.S.C. 796).
       (5) Excess electric power.--The term ``excess electric 
     power'' means the amount of the electric power and capacity 
     that--
       (A) is available to the Tennessee Valley Authority; and
       (B) exceeds the Tennessee Valley Authority's power supply 
     obligations to distributors and any Tennessee Valley 
     Authority retail electric consumers (or predecessors in 
     interest) that had a contract for the purchase of electric 
     power from the Tennessee Valley Authority on the date of 
     enactment of this Act.
       (6) Public utility.--The term ``public utility'' has the 
     meaning given the term in section 201 of the Federal Power 
     Act (16 U.S.C. 824).
       (7) Retail electric consumer.--The term ``retail electric 
     consumer'' has the meaning given the term in section 3 of the 
     Federal Power Act (16 U.S.C. 796).
       (8) Tennessee valley region.--The term ``Tennessee Valley 
     Region'' means the geographic area in which the Tennessee 
     Valley Authority or its distributors were the primary source 
     of electric power on December 31, 1997.

     SEC. 2. WHOLESALE COMPETITION IN THE TENNESSEE VALLEY REGION.

       (a) Amendments to the Federal Power Act.--
       (1) Wheeling orders.--Section 212(f) of the Federal Power 
     Act (16 U.S.C. 824k(f)) is repealed.
       (2) Transmission.--Section 212(j) of the Federal Power Act 
     (16 U.S.C. 824k(j)) is repealed.
       (b) Amendments to the Tennessee Valley Authority Act.--
       (1) Sale or delivery of electric power.--The third sentence 
     of the first undesignated paragraph of section 15d(a) of the 
     Tennessee Valley Authority Act of 1933 (16 U.S.C. 831n-4(a)) 
     is repealed.
       (2) Additional amendments.--The second and third 
     undesignated paragraphs of section 15d(a) of the Tennessee 
     Valley Authority Act of 1933 (16 U.S.C. 831n-4(a)) are 
     repealed.

     SEC. 3. TENNESSEE VALLEY AUTHORITY POWER SALES.

       (a) Limit on Retail Sales by Tennessee Valley Authority.--
     Notwithstanding sections 10, 11, and 12 of the Tennessee 
     Valley Authority Act (16 U.S.C. 831i, 831j, 831k), the 
     Tennessee Valley Authority may sell electric power at retail 
     only to--
       (1) a retail electric consumer (or predecessor in interest) 
     that had a contract for the purchase of electric power from 
     the Tennessee Valley Authority on the date of enactment of 
     this Act; or
       (2) a retail electric consumer that consumes the electric 
     power within a distributor service area, if the applicable 
     regulatory authority (other than the Tennessee Valley 
     Authority) permits any other power supplier to sell electric 
     power to the retail electric consumer.
       (b) Construction of Retail Electric Service Facilities.--No 
     person shall construct or modify a facility in the service 
     area of a distributor for the purpose of serving a retail 
     electric consumer within the distributor service area without 
     the consent of the distributor, except when the electric 
     consumer is already being served by such a person.
       (c) Wholesale Power Sales.--
       (1) Existing sales.--Nothing in this title shall modify or 
     alter the existing obligations of the Tennessee Valley 
     Authority under the first sentence of section 10 of the 
     Tennessee Valley Authority Act (16 U.S.C. 831i) to sell power 
     to a distributor, provided that this paragraph shall not 
     apply to access to power being supplied to another entity 
     under an existing contract with a term of 1 year or longer by 
     a distributor that--
       (A) has made a prior election under section 5(b); and
       (B) requests to increase its power purchases from the 
     Tennessee Valley Authority.
       (2) Sales of excess electric power.--
       (A) In general.--Notwithstanding sections 10, 11, and 12, 
     or any other provision of the Tennessee Valley Authority Act 
     of 1933 (16 U.S.C. 831i, 831j, 831k), the sale of electric 
     power at wholesale by the Tennessee Valley Authority for use 
     outside the Tennessee Valley Region shall be limited to 
     excess electric power.
       (B) No excess electric power.--The Tennessee Valley 
     Authority shall not offer excess electric power under a firm 
     power agreement with a term of 3 or more years to any new 
     wholesale customer at rates, terms, and conditions more 
     favorable than those offered to any distributor for 
     comparable electric power, taking into account such factors 
     as the amount of electric power sold, the firmness of such 
     power, and the length of the contract term, unless the 
     distributor or distributors that are purchasing electric 
     power under equivalent firm power contracts agree to the sale 
     to the new customer.
       (C) No effect on exchange power arrangements.--Nothing in 
     this subsection precludes the Tennessee Valley Authority from 
     making exchange power arrangements with other electric 
     utilities when economically feasible.
       (d) Application of Tennessee Valley Authority Act To Sales 
     Outside Tennessee Valley Region.--The third proviso of 
     section 10 of the Tennessee Valley Authority Act of 1933 (16 
     U.S.C. 831i) and the second and third provisos of section 12 
     of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 
     831k) shall not apply to any sale of excess electric power by 
     the Tennessee Valley Authority for use outside the Tennessee 
     Valley Region.

     SEC. 4. TENNESSEE VALLEY AUTHORITY ELECTRIC GENERATION 
                   FACILITIES.

       Section 15d(a) of the Tennessee Valley Authority Act of 
     1933 (16 U.S.C. 831n-4(a)) is amended--
       (1) in the second sentence, by inserting before the period 
     at the end the following: ``, if the Corporation determines 
     that the construction, acquisition, enlargement, improvement, 
     or replacement of any plant or facility used or to be used 
     for the generation of electric power is necessary to supply 
     the demands of distributors and retail electric consumers of 
     the Corporation''; and
       (2) by inserting after the second sentence the following: 
     ``Commencing on the date of enactment of this sentence, the 
     Tennessee Valley Authority shall provide to distributors and 
     their duly authorized representatives, on a confidential 
     basis, detailed information on its projections and plans 
     regarding the potential acquisition of new electric 
     generating facilities, and, not less than 45 days before a 
     decision by the Tennessee Valley Authority to make such an 
     acquisition, shall provide distributors an opportunity to 
     comment on the acquisition. Notwithstanding any other 
     provision of law, confidential information described in the 
     preceding sentence shall not be disclosed by a distributor to 
     a source other than the Tennessee Valley Authority, except 
     (1) in response to process validly issued by any court or 
     governmental agency having jurisdiction over the distributor; 
     (2) to any officer, agent, employee, or duly authorized 
     representative of a distributor who agrees to the same 
     confidentiality and non-disclosure obligation applicable to 
     distributor; (3) in any judicial or administrative proceeding 
     initiated by distributor contesting action by the Tennessee 
     Valley Authority to cause the construction of new electric 
     generation facilities; or (4) on or after a date that is at 
     least 3 years after the commercial operating date of the 
     electric generating facilities.''.

     SEC. 5. RENEGOTIATION OF POWER CONTRACTS.

       (a) Renegotiation.--The Tennessee Valley Authority and the 
     distributors shall make good faith efforts to renegotiate 
     their power contracts in effect on and after the date of 
     enactment of this Act.

[[Page 8095]]

       (b) Distributor Contract Termination or Reduction Right.--
     If a distributor and the Tennessee Valley Authority are 
     unable by negotiation to arrive at a mutually acceptable 
     replacement contract to govern their post-enactment 
     relationship, the Tennessee Valley Authority shall allow the 
     distributor to give notice 1 time each calendar year, within 
     the 60-day period beginning on the date of enactment of this 
     Act or on any anniversary of that date, of the distributor's 
     decision to (1) terminate the contract to purchase wholesale 
     electric energy from the Tennessee Valley Authority that was 
     in effect on the date of enactment of this Act, to take 
     effect on the date that is 3 years after the date on which 
     notice is given under this subsection; or (2) reduce the 
     quantity of wholesale power requirements under the contract 
     to purchase wholesale electric energy from the Tennessee 
     Valley Authority that was in effect on the date of enactment 
     of this Act by up to 10 percent of its requirements, to take 
     effect on the date that is 2 years after the date on which 
     notice is given under this subsection, or more than 10 
     percent of its requirements, to take effect on the date that 
     is 3 years after the date on which notice is given under this 
     subsection, and to negotiate with the Tennessee Valley 
     Authority to amend the contract that was in effect on the 
     date of enactment to reflect a partial requirements 
     relationship.
       (c) Partial Requirements Notice.--As part of a notice under 
     subsection (b), a distributor shall identify--
       (1) the annual quantity of electric energy that the 
     distributor will acquire from a source other than the 
     Tennessee Valley Authority as the result of an election by 
     the distributor; and
       (2) the times of the day and year that specified amounts of 
     the energy will be received by the distributor.
       (d) Nondiscrimination.--The Tennessee Valley Authority 
     shall not unduly discriminate against any distributor as the 
     result of--
       (1) the exercise of notice under paragraph (1) or (2) of 
     subsection (b) by the distributor; or
       (2) the status of the distributor as a partial requirements 
     customer.

     SEC. 6. REGULATION OF TENNESSEE VALLEY AUTHORITY TRANSMISSION 
                   SYSTEM.

       Notwithstanding sections 201(b)(1) and 201(f) of the 
     Federal Power Act (16 U.S.C. 824(b)(1), 824(f)), sections 
     202(h), 205, 206, 208, 210 through 213, 301 through 304, 306, 
     307 (except the last sentence of 307(c)), 308, 309, 313, and 
     317 of that Act (16 U.S.C. 824a(h), 824d, 824e, 824g, 824i-
     824l, 825-825c, 825e, 825f, 825g, 825h, 825l, 825p) apply to 
     the transmission and local distribution of electric power by 
     the Tennessee Valley Authority to the same extent and in the 
     same manner as the provisions apply to the transmission of 
     electric power in interstate commerce by a public utility 
     otherwise subject to the jurisdiction of the Commission under 
     part II of that Act (16 U.S.C. 824 et seq.).

     SEC. 7. REGULATION OF TENNESSEE VALLEY AUTHORITY 
                   DISTRIBUTORS.

       (a) Election To Repeal Tennessee Valley Authority 
     Regulation of Distributors.--On the election of a 
     distributor, the third proviso of section 10 of the Tennessee 
     Valley Authority Act of 1933 (16 U.S.C. 831i) and the second 
     and third provisos of section 12 of the Tennessee Valley 
     Authority Act of 1933 (16 U.S.C. 831k) shall not apply to a 
     wholesale sale of electric power by the Tennessee Valley 
     Authority in the Tennessee Valley Region after the date of 
     enactment of this Act, and the Tennessee Valley Authority 
     shall not be authorized to regulate, by means of a rule, 
     contract provision, resale rate schedule, contract 
     termination right, or any other method, any rate, term, or 
     condition that is--
       (1) imposed on the resale of the electric power by the 
     distributor; or
       (2) for the use of a local distribution facility.
       (b) Authority of Governing Bodies of Distributors.--
       (1) In general.--Any regulatory authority exercised by the 
     Tennessee Valley Authority over any distributor making an 
     election under subsection (a) shall be exercised by the 
     governing body of the distributor in accordance with the laws 
     of the State in which the distributor is organized.
       (2) No election.--If a distributor does not make an 
     election under subsection (a), the third proviso of section 
     10 of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 
     831i) and the second and third provisos of section 12 of the 
     Tennessee Valley Authority Act of 1933 (16 U.S.C. 831k) shall 
     continue to apply for the duration of any wholesale power 
     contract between the Tennessee Valley Authority and the 
     distributor, in accordance with the terms of the contract.
       (c) Use of Funds.--In any contract between the Tennessee 
     Valley Authority and a distributor for the purchase of at 
     least 70 percent of the distributor's requirements for the 
     sale of electric power, the Tennessee Valley Authority shall 
     include such terms and conditions as may be reasonably 
     necessary to ensure that the financial benefits of a 
     distributor's electric system operations are allocated to the 
     distributor's retail electric consumers.
       (d) Removal of PURPA Ratemaking Authority.--Section 3(17) 
     of the Public Utility Regulatory Policies Act of 1978 (16 
     U.S.C. 2602(17)) is amended by striking ``, and in the case 
     of an electric utility with respect to which the Tennessee 
     Valley Authority has ratemaking authority, such term means 
     the Tennessee Valley Authority''.

     SEC. 8. STRANDED COST RECOVERY.

       (a) Commission Jurisdiction.--
       (1) Recovery of costs.--
       (A) In general.--Subject to subparagraph (B), 
     notwithstanding the absence of 1 or more provisions 
     addressing wholesale stranded cost recovery in a power sales 
     agreement between the Tennessee Valley Authority and a 
     distributor that is executed after the date of enactment of 
     this Act, the Tennessee Valley Authority may recover any 
     wholesale stranded costs that may arise from the exercise of 
     rights by a distributor under section 5, to the extent 
     authorized by the Commission based on application of the 
     rules and principles that the Commission applies to wholesale 
     stranded cost recovery by other electric utilities within its 
     jurisdiction.
       (B) No recovery of costs related to loss of sales 
     revenues.--In any recovery under subparagraph (A), the 
     Tennessee Valley Authority shall not be authorized to recover 
     from any distributor any wholesale stranded costs related to 
     loss of sales revenues by the Tennessee Valley Authority, or 
     its expectation of continuing to sell electric energy, for 
     any period after September 30, 2007.
       (2) No effect on claim.--The exercise of rights by a 
     distributor under section 5 shall not affect any claim by the 
     Tennessee Valley Authority that the Tennessee Valley 
     Authority may have for the recovery of stranded costs before 
     October 1, 2007.
       (b) Debt.--
       (1) In general.--Stranded costs recovered by the Tennessee 
     Valley Authority under subsection (a) shall be used to pay 
     down the debt of the Tennessee Valley Authority, to the 
     extent determined by the Tennessee Valley Authority to be 
     consistent with proper financial management.
       (2) Generation capacity.--The Tennessee Valley Authority 
     shall not use any amount recovered under paragraph (1) to pay 
     for additions to the generation capacity of the Tennessee 
     Valley Authority.
       (c) Unbundling.--
       (1) In general.--Any stranded cost recovery charge to a 
     customer authorized by the Commission to be assessed by the 
     Tennessee Valley Authority shall be--
       (A) unbundled from the otherwise applicable rates and 
     charges to the customer; and
       (B) separately stated on the bill of the customer.
       (2) No wholesale stranded cost recovery.--The Tennessee 
     Valley Authority shall not recover wholesale stranded costs 
     from any customer through any rate, charge, or mechanism.
       (d) Report.--Beginning in fiscal year 2001, as part of the 
     annual management report submitted by the Tennessee Valley 
     Authority to Congress, the Tennessee Valley Authority shall 
     include in the report--
       (1) the status of the Tennessee Valley Authority's long-
     range financial plans and the progress toward its goal of 
     competitively priced electric power (including a general 
     discussion of the Tennessee Valley Authority's prospects on 
     meeting the objectives of the Ten Year Business Outlook 
     issued on July 22, 1997);
       (2) any changes in assumptions since the previous report 
     that may have a material effect on the Tennessee Valley 
     Authority's long-range financial plans;
       (3) the source of funds used for any generation and 
     transmission capacity additions;
       (4) the use or other disposition of amounts recovered by 
     the Tennessee Valley Authority under the Tennessee Valley 
     Authority Act of 1933 (16 U.S.C. 831 et seq.) and this Act;
       (5) the amount by which the Tennessee Valley Authority's 
     publicly held debt was reduced; and
       (6) the projected amount by which the Tennessee Valley 
     Authority's publicly held debt will be reduced.

     SEC. 9. APPLICATION OF ANTITRUST LAW

       (a) In General.--
       (1) Definition of antitrust laws.--
       (A) In general.--Except as provided in subparagraph (B), in 
     this section, the term ``antitrust laws'' has the meaning 
     given the term in subsection (a) of the first section of the 
     Clayton Act (15 U.S.C. 12(a)).
       (B) Inclusion.--In this section, the term ``antitrust 
     laws'' includes section 5 of the Federal Trade Commission Act 
     (15 U.S.C. 45), to the extent that section 5 applies to 
     unfair methods of competition.
       (2) Applicability of antitrust law.--Except as provided in 
     subsection (b), the Tennessee Valley Authority shall be 
     subject to the antitrust laws with respect to the operation 
     of its electric power and transmission systems.
       (b) Damages.--No damages, interest on damages, costs, or 
     attorneys' fees may be recovered under section 4, 4A, or 4C 
     of the Clayton Act (15 U.S.C. 15, 15a, 15c) from the 
     Tennessee Valley Authority.
       (c) Effect on Other Rights.--Nothing in this Act diminishes 
     or impairs any privilege, immunity, or exemption in effect on 
     the day before the date of enactment of this Act that would 
     have been accorded any person by virtue of the association of 
     the person together in advocating a cause or point of view 
     to--

[[Page 8096]]

       (1) the Tennessee Valley Authority; or
       (2) any other agency or branch of Federal, State or local 
     government.

     SEC. 10. SAVINGS PROVISION.

       Nothing in this Act shall affect section 15d(b) of the 
     Tennessee Valley Authority Act of 1933 (16 U.S.C. 831n-4(b)), 
     providing that bonds issued by the Tennessee Valley Authority 
     shall not be obligations of, nor shall payment of the 
     principal thereof or interest thereon be guaranteed by, the 
     United States.
                                 ______
                                 
      By Mr. WYDEN:
  S. 2571. A bill to provide for the liquidation or reliquidation of 
certain entries of athletic shoes; to the Committee on Finance.


               DUTY DRAWBACK FOR ENVIRONMENTAL RECYCLING

  Mr. WYDEN. Mr. President, I am introducing legislation today to help 
retain a unique environmental recycling program launched by Nike, a 
home-grown Oregon business, which involves recycling running shoes 
rather than dumping them in a landfill. The bill would resolve an issue 
on which the U.S. Customs Service has taken inherently conflicting 
positions: whether a duty drawback can be claimed on an item that has 
no commercial value and is no longer an item in United States commerce 
but which is recycled rather than destroyed. I believe recycling should 
be promoted and not punished, and that is what this legislation does.
  Under existing U.S. Customs law, an importer is entitled to import 
duty drawback on products that are returned to the importer because 
they are defective. The point of this provision is to safeguard against 
an import duty being imposed on a product that does not end up in 
United States commerce. Customs law and regulation ensures that a 
product will not end up in U.S. commerce by requiring that the product 
be completely destroyed to the extent that the product has no 
commercial value, or that it be exported from the United States. In 
certain cases Customs has allowed duty drawback: for example, alcohol 
salvaged from destroyed beer and malt liquor which was sold as scrap 
rather than dumped as waste was accorded duty drawback.
  Consistent with Customs' requirements, for a number of years Nike 
destroyed the shoes and placed them in a landfill. This amounted to 
thousands of tons of non-biodegradable shoes being dumped in landfills. 
Because shoes are not biodegradable, Nike developed a new, more 
environmentally-sustainable way to dispose of the defective shoes by 
chopping them into small pieces, called ``re-grind,'' and giving the 
regrind without charge or compensation to manufacturers of sport 
surfaces. The re-grind became part of playground, basketball and other 
surfaces that was used primarily for charitable purposes in poor urban 
centers around the country. The program, called the ``Re-Use A-Shoe,'' 
is one of the many initiatives Nike has undertaken to incorporate 
environmental sustainability into its operations.
  The issue Customs has been grappling with is whether the re-grind is 
``destroyed with no commercial value'' so as to qualify the destroyed 
shoes for duty drawback treatment. For several years Customs granted 
the re-grind shoes duty drawback, but a Customs audit team recently 
determined that the re-grind was not ``destroyed,'' as it had 
commercial value for court manufacturers and Customs recommended 
retroactive denial of Nike's drawback claims, totaling $11.6 million. 
Because Customs had already refunded the drawback, the audit team 
recommended that Nike repay the $11.6 million to Customs.
  It is clear from Customs' decisions that an article is considered 
destroyed when it has been rendered of no commercial value and is no 
longer an article of commerce. In this case, the defective footwear, 
once shred, is valueless and of no commercial interest to anyone. Even 
when the shredded material is subsequently processed by Nike to recover 
some material of limited use, the recovered material is not saleable to 
anyone and therefore has no commercial value.
  Mr. President, it seems to me that the position taken by the Customs 
audit team is not consistent with the intent of the duty drawback 
provision. There is no commercial value to Nike in the re-grind; the 
shoes have been destroyed. Nike gives the product to the manufacturer 
without charge or compensation, and the manufacturers have confirmed 
they would not pay for the material. I have copies of letters from each 
of the manufacturers attesting to the fact that they would not pay for 
the re-grind and that it is not commercially viable. It appears that 
the Customs audit team believes a more desirable outcome is to have 
Nike dump some 2 million pairs or 3.5 million pounds of shoes into a 
landfill rather than recycle the destroyed material. The outcome is the 
same: the shoes no longer have commercial value, nor are they a product 
in U.S. commerce. It would seem to me there is no public policy benefit 
in forcing Nike to dump the shoes in a landfill; but that there is much 
to be gained from recycling millions of pairs of shoes that would 
otherwise be dumped in a landfill.
  The legislation I am introducing today resolves the question in favor 
of recycling, in favor of the environment and in favor of a rational 
duty drawback policy. I ask unanimous consent that a copy of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2571

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

     SECTION 1. LIQUIDATION OR RELIQUIDATION OF CERTAIN ENTRIES.

       (a) In General.--Notwithstanding section 514 of the Tariff 
     Act of 1930 (19 U.S.C. 1514) or any other provision of law, 
     the United States Customs Service shall, not later than 90 
     days after the date of the enactment of this Act, liquidate 
     or reliquidate each drawback claim as filed described in 
     subsection (b).
       (b) Drawback Claims.--The drawback claims referred to in 
     subsection (a) are the following claims, filed between August 
     1, 1993 and June 1, 1998:

                            Drawback Claims

     221-0590991-9
     221-0890500-5 through 221-0890675-5
     221-0890677-1 through 221-0891427-0
     221-0891430-4 through 221-0891537-6
     221-0891539-2 through 221-0891554-1
     221-0891556-6 through 221-0891557-4
     221-0891559-0
     221-0891561-6 through 221-0891565-7
     221-0891567-3 through 221-0891578-0
     221-0891582-0
     221-0891584-8 through 221-0891587-1
     221-0891589-7
     221-0891592-1 through 221-0891597-0
     221-0891604-4 through 221-0891605-1
     221-0891607-7 through 221-0891609-3

       (c) Payment of Amounts Due.--Any amounts due pursuant to 
     the liquidation or reliquidation of the claims described in 
     subsection (b) shall be paid not later than 90 days after the 
     date of such liquidation or reliquidation.

                          ____________________