[Congressional Record (Bound Edition), Volume 146 (2000), Part 7]
[Senate]
[Pages 10075-10110]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. MURKOWSKI (for himself and Mr. Stevens):
  S. 2693. A bill to amend title XIX of the Social Security Act to 
provide a more equitable Federal medical assistance percentage for 
Alaska; to the Committee on Finance.


                 the alaska medicaid equity act of 2000

 Mr. MURKOWSKI. Mr. President, for more than 30 years, the 
State of Alaska was subjected to an economic inequity in the 
administration of the national Medicaid program.
  With a poverty level 25 percent above the national average, and over 
one-sixth of the state's population Medicaid-eligible, Alaska delivers 
health care to many needy children, pregnant women, disabled and 
elderly poor Americans. These people deserve quality medical care, and 
Alaska delivers.
  But three years ago, Congress recognized that the federal government 
was not paying its fair share of Alaska's Medicaid program. The one-
size-fits-all formula that is used to calculate the federal Medicaid 
match is based upon the per capita income of individual states as it 
relates to the national per capita income. Simply put, states with 
higher per capita income pay a higher percentage of Medicaid costs. 
This formula works well for states that are near national norms for 
most economic indicators. But it certainly doesn't work in the State of 
Alaska, where most economic measurements are atypical compared with 
national averages.
  The reason is fairly simple. It just costs more to live and do 
business in Alaska. Per capita income isn't a fair indicator unless it 
takes into account the cost of delivering care in that area. Somehow, 
however, the Medicaid formula forgot this.
  In 1997, when Congress recognized this issue, it adopted legislation 
that reflected the state's higher costs and increased the federal 
Medicaid match. Instead of receiving a 50-50 match rate, as the formula 
would dictate, a 59.8-40.2 percent match rate was established.
  Unfortunately, this legislation was a short term fix. It only allowed 
the formula change to remain in effect for three years. As a result, 
unless we change the law, the formula will revert to the same 
inequitable standard that was used previously. And unless we extend the 
formula change, vital health care services to Alaska's neediest 
patients will be compromised.
  For this reason, I am introducing legislation that will extend the 
federal government's commitment to the health and well-being of 
Alaska's Medicaid beneficiaries. The ``Alaska Medicaid Equity Act of 
2000,'' which is co-sponsored by Senator Stevens, simply continues the 
spirit and intent of Congress by adjusting federal medical assistance 
percentage calculations to account for Alaska's unusually high delivery 
costs.
  Three years after we first passed this legislation, the reasons and 
justifications for the adjustment still exist. The formula is still 
fundamentally unfair to Alaska.
  Let me explain why. Alaska's per capita income is $28,523, the 17th 
highest in the country. In fact, it's right near the national average, 
which is $28,518. Although Alaska's per capita income suggests it is 
one of the richer states, it fails to take into account the high cost 
of living and the high cost of delivering health care.
  Some studies show that it costs 71 percent more to deliver health 
care in Alaska. But let's look at some real numbers. From coast to 
coast, the U.S. dollar buys more goods and services than it does in 
Alaska.
  In Portland, Oregon, it costs $66.00 to feed a family of four for one 
week. In Anchorage it costs $84.15. In Kodiak, that number jumps to 
$105.88. And out in Dillingham, that number rises to $144.57! We're 
comparing apples and oranges when we compare Alaska's per capita income 
to another state's average.
  And how about electricity? In Portland, 1000 kilowatt hours costs 
$60.88. Anchorage residents are paying $92.83. Out in Bethel, Alaska, 
residents are paying $202.68.
  When focusing solely on the delivery of health care services, the 
differences stand out even more. In Florida, a hospital room for one 
day costs, on average, $361. This is in line with lower 48 costs, which 
run between $350 and $450.

[[Page 10076]]

In Alaska, that same room costs $748--more than twice as much! A 
physician office visit is $53 in Florida. That visit costs $80 in 
Alaska--an increase of 66%!
  You can look at virtually any good or service and see a comparable 
difference. A dollar simply doesn't buy the same thing in Alaska that 
it does in the lower 48. The numbers prove this. The federal government 
has admitted this. Federal government employees receive a salary 
adjustment in Alaska--a 25% cost of living adjustment. Military 
personnel receive a similar increase. Medicare pays higher as well. 
Even the Federal Poverty Level is adjusted to reflect the unique costs 
in Alaska. So why doesn't Medicaid?
  Our bill merely continues the commitment Congress made to Alaska's 
Medicaid population three years ago. It's fair, and it makes sense. I 
ask my colleagues to assist me in rectifying this clear inequity for 
the state of Alaska; I ask my colleagues to support this bill.
  I ask unanimous consent that the text of the bill be included in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2693

       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 ``Alaska Medicaid Equity Act 
     of 2000''.

     SEC. 2. AMENDMENT TO THE SOCIAL SECURITY ACT.

       (a) In General.--The first sentence of section 1905(b) of 
     the Social Security Act (42 U.S.C. 1396d(b)) is amended--
       (1) by striking ``and (3)'' and inserting ``(3)''; and
       (2) by striking the period and inserting ``, and (4) for 
     purposes of this title and title XXI, with respect to Alaska, 
     the State percentage used to determine the Federal medical 
     assistance percentage shall be that percentage which bears 
     the same ratio to 45 percent as the square of the adjusted 
     per capita income of Alaska (determined by dividing the 
     State's 3-year average per capita income by 1.25) bears to 
     the square of the per capita income of the 50 States.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     take effect October 1, 2000.
                                 ______
                                 
      By Mr. CONRAD (for himself, Ms. Collins, and Mr. Robb):
  S. 2696. A bill to prevent evasion of United States excise taxes on 
cigarettes, and for other purposes; to the Committee on Finance.


              gray market cigarette compliance act of 2000

  Mr. CONRAD. Mr. President, I am pleased today to join my good friends 
from Maine and Virginia, Ms. Collins and Mr. Robb, in introducing the 
Gray Market Cigarette Compliance Act of 2000. The growth in this gray 
market in cigarettes represents not only an economic threat, but a 
significant public health menace as well. This legislation will provide 
law enforcement with better and more effective tools to fight this 
dangerous intrusion into our marketplace.
  This bill concerns itself with cigarettes manufactured for overseas 
markets that nevertheless find their way into our domestic stream of 
commerce. Even if they have been manufactured in the United States, 
they are not required to comply with U.S. content disclosure and health 
labeling requirements. Thus, when they are brought back into the U.S. 
by gray market profiteers, they represent a serious public health 
concern. And because they are often sold at prices below those of 
products manufactured to comply with our tough cigarette marketing 
laws, they become more attractive and available to children.
  The gray market is unfair competition, plain and simple. Consumers 
often purchase gray market products thinking they are the same as the 
legitimate products manufactured for sale in the U.S. When gray 
marketers bring in cigarettes that are not manufactured in full 
compliance with U.S. law, they mislead unwitting consumers.
  Consumers are not the only ones affected. Gray marketers also harm 
the legitimate wholesalers and retailers who work hard and play by the 
rules by exploiting gray areas in the law in order to gain this unfair 
competitive advantage.
  It is important to stress as well the implications of the gray market 
in cigarettes for states under the tobacco Master Settlement Agreement 
(MSA). One of the major components of the MSA provides that payments to 
states are based on a formula that takes into account the annual volume 
of tobacco sold in each state. Gray market cigarettes are not counted 
under that volume adjustment formula. Therefore, to the extent that 
gray market sales displace sales of cigarettes that are counted in the 
volume adjustment, states could lose a portion of the amounts they 
would otherwise receive under the MSA.
  The Gray Market Cigarette Compliance Act will help consumers, 
retailers, wholesalers, and federal and state governments. It will 
strengthen the hand of law enforcement to combat the sale of gray 
market cigarettes and close loopholes that gray markets have been able 
to exploit. But most importantly, it will help keep cheap cigarettes 
out of the hands of children.
  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. 2696

       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 ``Gray Market Cigarette 
     Compliance Act of 2000''.

     SEC. 2. FINDINGS.

       Congress finds that additional legislation is necessary to 
     prevent evasion of United States taxes on cigarettes, to 
     ensure that the packages of all cigarettes sold or 
     distributed in the United States bear the health warnings 
     required by Federal law, to ensure compliance with applicable 
     Federal ingredient reporting requirements, and to improve the 
     enforcement of existing United States trademark laws so as to 
     prevent consumer confusion and deception. In support of this 
     finding, Congress has determined that:
       (1) Prevention of federal tax evasion.--
       (A) Cigarettes manufactured in the United States that are 
     labeled and shipped for export are not subject to the excise 
     taxes that otherwise would be payable with respect to such 
     products when removed from the premises of the manufacturer.
       (B) Enforcement difficulties are created for the 
     authorities charged with ensuring that proper taxes are paid 
     whenever export-labeled cigarettes are sold or distributed in 
     the United States.
       (C) The Balanced Budget Act of 1997 imposed restrictions on 
     the domestic sale or distribution of export-labeled 
     cigarettes, but such provisions have not been adequate to 
     prevent continued evasion of United States taxes on 
     cigarettes.
       (D) Enforcement of Federal cigarette tax laws will be 
     enhanced substantially if cigarettes manufactured in the 
     United States and labeled for export are not sold or 
     distributed in the United States.
       (2) Ensuring compliance with federal health warnings and 
     ingredient reporting requirements.--
       (A) Congress has required that specified warnings appear on 
     the packages of all cigarettes manufactured, packaged, or 
     imported for sale or distribution in the United States.
       (B) Congress has required that each person who 
     manufactures, packages, or imports cigarettes for sale or 
     distribution in the United States annually provide the 
     Secretary of Health and Human Services with a list of the 
     ingredients added to tobacco in the manufacture of such 
     cigarettes.
       (C) The public health objectives of the foregoing 
     requirements will be advanced by adopting additional 
     mechanisms for ensuring that these requirements are met with 
     respect to all cigarettes for sale or distribution in the 
     United States.
       (3) Enforcement of federal trademark laws.--
       (A) Cigarettes manufactured for sale abroad have 
     characteristics that differentiate them in material respects 
     from cigarettes that bear the same trademarks but that are 
     manufactured for sale in the United States.
       (B) Such material differences may include tar and nicotine 
     yields, incentive programs, and quality assurances with 
     respect to distribution and storage.
       (C) When cigarettes bearing trademarks registered in the 
     United States are manufactured for sale or distribution 
     outside the United States but are diverted or reimported for 
     sale or distribution in the United States, there is a 
     substantial risk of consumer confusion and deception. 
     Stickers and other similar devices are inadequate to prevent 
     such confusion and deception.
       (D) In order to effectuate the purposes of the United 
     States trademark laws, including the prevention of consumer 
     confusion and deception, additional legislation is necessary

[[Page 10077]]

     to allow United States trademark holders to enforce fully 
     their rights against infringing cigarettes whether such 
     cigarettes were manufactured in the United States or abroad.

     SEC. 3. RESTRICTIONS ON TOBACCO PRODUCTS INTENDED FOR EXPORT.

       (a) Restrictions on Tobacco Products Intended for Export.--
     Section 5754 of the Internal Revenue Code of 1986 is amended 
     to read as follows:

     ``SEC. 5754. RESTRICTIONS ON TOBACCO PRODUCTS INTENDED FOR 
                   EXPORT.

       ``(a) Export-Labeled Tobacco Products.--Tobacco products 
     and cigarette papers and tubes manufactured in the United 
     States and labeled or shipped for exportation under this 
     chapter--
       ``(1) may be transferred to or removed from the premises of 
     a manufacturer or an export warehouse proprietor only if such 
     articles are being transferred or removed without tax in 
     accordance with section 5704;
       ``(2) except as provided in subsection (b), may be imported 
     or brought into the United States, after their exportation, 
     only if--
       ``(A) the requirements of section 4 of the Gray Market 
     Cigarette Compliance Act of 2000 are satisfied; and
       ``(B) such articles either are eligible to be released from 
     customs custody with the partial duty exemption provided in 
     section 5704(d) or are returned to the original manufacturer 
     of such article as provided in section 5704(c); and
       ``(3) may be sold or held for sale for domestic consumption 
     in the United States only if such articles are removed from 
     their export packaging and repackaged by the original 
     manufacturer or its authorized agent into new packaging that 
     does not contain the mark, label, or notice required by 
     section 5704(b) and complies with all other domestic law 
     applicable to such article.
     This section shall apply to articles labeled for export by 
     the original manufacturer even if the packaging or the 
     appearance of such packaging to the consumer of such articles 
     has been modified or altered by a person other than the 
     original manufacturer or its authorized agent so as to remove 
     or conceal or attempt to remove or conceal (including by the 
     placement of a sticker over) any mark, label, or notice 
     required by section 5704(b). For purposes of this section, 
     sections 5704(d) and 5761, and such other provisions as the 
     Secretary may specify by regulations, references to 
     exportation shall be treated as including a reference to 
     shipment to the Commonwealth of Puerto Rico.
       ``(b) Exceptions for Export-Labeled Tobacco Products for 
     Personal Use.--The restrictions of subsection (a)(2) and the 
     penalty and forfeiture provisions in section 5761(c) shall 
     not apply to personal use quantities of tobacco products and 
     cigarette papers and tubes, as defined in section 
     555(b)(8)(G) of the Tariff Act of 1930 (19 U.S.C 
     1555(b)(8)(G)).
       ``(c) Cross Reference.--Section 5761(c) contains civil 
     penalties related to violations of this section. Section 
     5762(b) contains a criminal penalty applicable to any 
     violation of this section. Section 5763(a)(3) contains 
     forfeiture provisions related to violations of this 
     section.''.
       (b) Clarification of Reimportation Rules.--Section 5704(d) 
     of the Internal Revenue Code of 1986 (relating to tobacco 
     products and cigarette papers and tubes exported and 
     returned) is amended by--
       (1) striking ``a manufacturer of'' and inserting ``the 
     original manufacturer, or its authorized agent, of such''; 
     and
       (2) inserting ``authorized by such manufacturer to receive 
     such articles'' after ``proprietor of an export warehouse''.
       (c) Conforming Amendments.--
       (1) Section 5761(e) is amended by adding at the end the 
     following: ``For an exception to the application of the 
     penalty under subsection (c), see section 5754(b).''.
       (2) Section 5763(a) of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new paragraph:
       ``(3) Export-labeled tobacco products or cigarette papers 
     or tubes.--Any tobacco product, cigarette paper, or tube that 
     was imported or brought into the United States, or is sought 
     to be imported or brought into the United States in violation 
     of section 5754(a)(2), or that is sold or being held for sale 
     in violation of section 5754(a)(3), shall be forfeited to the 
     United States. Notwithstanding any other provision of law, 
     any product forfeited to the United States pursuant to this 
     section shall be destroyed.''.
       (d) Clerical Amendment.--The item relating to section 5754 
     in the table of sections for subchapter F of chapter 52 of 
     the Internal Revenue Code of 1986 is amended to read as 
     follows:

Sec. 5754. Restrictions on tobacco products intended for export.

     SEC. 4. REQUIREMENTS APPLICABLE TO CIGARETTE IMPORTS.

       (a) Definitions.--As used in this section:
       (1) Secretary.--Except as otherwise indicated, the term 
     ``Secretary'' means the Secretary of the Treasury.
       (2) Primary packaging.--The term ``primary packaging'' 
     refers to the permanent packaging inside of the innermost 
     cellophane or other transparent wrapping and labels, if any. 
     Warnings or other statements shall be deemed ``permanently 
     imprinted'' only if printed directly on such primary 
     packaging and not by way of stickers or other similar 
     devices.
       (b) Requirements for Entry of Cigarettes.--
       (1) General rule.--Except as provided in paragraph (2), 
     cigarettes (whether originally manufactured in the United 
     States or in a foreign country) may be imported or brought 
     into the United States only if--
       (A) the manufacturer of those cigarettes has timely 
     submitted, or has certified that it will timely submit to the 
     Secretary of Health and Human Services the lists of the 
     ingredients added to the tobacco in the manufacture of such 
     cigarettes as described in section 7 of the Federal Cigarette 
     Labeling and Advertising Act (15 U.S.C. 1335a);
       (B) the precise warning statements in the precise format 
     specified in section 4 of such Act (15 U.S.C. 1333) are 
     permanently imprinted on both--
       (i) the primary packaging of all those cigarettes; and
       (ii) any other pack, box, carton, or container of any kind 
     in which those cigarettes are to be offered for sale or 
     otherwise distributed to consumers;
       (C) the manufacturer or importer of those cigarettes is in 
     compliance as to those cigarettes being imported or brought 
     into the United States with a rotation plan approved by the 
     Federal Trade Commission pursuant to section 4(c) of such Act 
     (15 U.S.C. 1333(c));
       (D) those cigarettes do not bear a trademark registered in 
     the United States for cigarettes, or if those cigarettes do 
     bear a trademark registered in the United States for 
     cigarettes, the owner of such United States trademark 
     registration for cigarettes (or a person authorized to act on 
     behalf of such owner) has consented to the importation of 
     such cigarettes into the United States; and
       (E) the importer has submitted at the time of entry all of 
     the certificates described in paragraph (3).
       (2) Exemptions.--Cigarettes satisfying the conditions of 
     any of the following subparagraphs shall not be subject to 
     the requirements of paragraph (1):
       (A) Personal-use cigarettes.--Cigarettes that are imported 
     or brought into the United States in personal use quantities 
     as defined in section 555(b)(8)(G) of the Tariff Act of 1930 
     (19 U.S.C 1555(b)(8)(G)).
       (B) Cigarettes brought into the united states for 
     analysis.--Cigarettes that are imported or brought into the 
     United States solely for the purpose of analysis in 
     quantities suitable for such purpose, but only if the 
     importer submits at the time of entry a certificate signed, 
     under penalties of perjury, by the consignee (or a person 
     authorized by such consignee) providing such facts as may be 
     required by the Secretary to establish that such consignee is 
     a manufacturer of cigarettes, a Federal or State government 
     agency, a university, or is otherwise engaged in bona fide 
     research and stating that such cigarettes will be used solely 
     for analysis and will not be sold in domestic commerce in the 
     United States.
       (C) Cigarettes intended for noncommercial use, reexport, or 
     repackaging.--Cigarettes--
       (i) that are being imported or brought into the United 
     States for delivery to the original manufacturer of such 
     cigarettes, or to a cigarette manufacturer or an export 
     warehouse authorized by such original manufacturer;
       (ii) that do not bear a trademark registered in the United 
     States for cigarettes, or if those cigarettes do bear a 
     trademark registered in the United States for cigarettes, 
     cigarettes for which the owner of such United States 
     trademark registration for cigarettes (or a person authorized 
     to act on behalf of such owner) has consented to the 
     importation of such cigarettes into the United States; and
       (iii) for which the importer submits a certificate signed 
     by the manufacturer or export warehouse (or a person 
     authorized by such manufacturer or export warehouse) to which 
     such cigarettes are to be delivered (as provided in clause 
     (i)) stating, under penalties of perjury, with respect to 
     those cigarettes, that it will not distribute those 
     cigarettes into domestic commerce unless prior to such 
     distribution all steps have been taken to comply with 
     subparagraphs (A), (B), and (C) of paragraph (1), and, to the 
     extent applicable, section 5754(a)(3) of the Internal Revenue 
     Code of 1986.
     For purposes of this subsection, a trademark is registered in 
     the United States if it is registered in the Patent and 
     Trademark Office under the provisions of title I of the Act 
     of July 5, 1946 (popularly known as the Trademark Act of 
     1946), and a copy of the certificate of registration of such 
     mark has been filed with the Secretary. The Secretary shall 
     make available to interested parties a current list of the 
     marks so filed.
       (3) Customs certifications required for cigarette 
     imports.--The certificates that must be submitted by the 
     importer of cigarettes at the time of entry in order to 
     comply with paragraph (1)(E) are--
       (A) a certificate signed by the manufacturer of such 
     cigarettes or an authorized official of such manufacturer 
     stating under penalties of perjury with respect to those 
     cigarettes, that such manufacturer has timely submitted, and 
     will continue to submit timely, to the Secretary of Health 
     and Human

[[Page 10078]]

     Services the ingredient reporting information required by 
     section 7 of the Federal Cigarette Labeling and Advertising 
     Act (15 U.S.C. 1335a);
       (B) a certificate signed by such importer or an authorized 
     official of such importer stating under penalties of perjury 
     that--
       (i) the precise warning statements in the precise format 
     required by section 4 of the such Act (15 U.S.C. 1333) are 
     permanently imprinted on both--

       (I) the primary packaging of all those cigarettes; and
       (II) any other pack, box, carton, or container of any kind 
     in which those cigarettes are to be offered for sale or 
     otherwise distributed to consumers; and

       (ii) with respect to those cigarettes being imported or 
     brought into the United States, such importer has complied, 
     and will continue to comply, with a rotation plan approved by 
     the Federal Trade Commission pursuant to section 4(c) of such 
     Act (15 U.S.C. 1333(c)); and
       (C) either--
       (i) a certificate signed by such importer or an authorized 
     official of such importer stating under penalties of perjury 
     that those cigarettes and the packages containing those 
     cigarettes do not bear a trademark registered in the United 
     States for cigarettes; or
       (ii) if those cigarettes do bear a trademark registered in 
     the United States for cigarettes--

       (I) a certificate signed by the owner of such United States 
     trademark registration for cigarettes (or a person authorized 
     to act on behalf of such owner) stating under penalties of 
     perjury that such owner (or authorized person) consents to 
     the importation of such cigarettes into the United States; 
     and
       (II) a certificate signed by such importer or an authorized 
     official of such importer stating under penalties of perjury 
     that the consent referred to in clause (i) is accurate, 
     remains in effect, and has not been withdrawn.

     The Secretary may provide by regulation for the submission of 
     certifications under this subsection in electronic form if 
     prior to the entry of any cigarettes into the United States, 
     the person required to provide such certifications submits to 
     the Secretary a written statement, signed under penalties of 
     perjury, verifying the accuracy and completeness of all 
     information contained in such electronic submissions.
       (c) Enforcement.--
       (1) Civil penalty.--Any person who violates a provision of 
     subsection (b) shall, in addition to the tax and any other 
     penalty provided by law, be liable for a civil penalty for 
     each violation equal to the greater of $1,000 or 5 times the 
     amount of the tax imposed by chapter 52 of the Internal 
     Revenue Code of 1986 on all cigarettes that are the subject 
     of such violation.
       (2) Forfeitures.--Any tobacco product, cigarette papers, or 
     tube that was imported or brought into the United States or 
     is sought to be imported or brought into the United States in 
     violation of, or without meeting the requirements of, 
     subsection (b) shall be forfeited to the United States. 
     Notwithstanding any other provision of law, any product 
     forfeited to the United States pursuant to this section shall 
     be destroyed.
       (3) Cross reference.--Section 1621 of title 18, United 
     States Code, contains criminal penalties applicable to the 
     commission of perjury under this section.

     SEC. 5. PENALTIES APPLICABLE TO THE SALE OF CIGARETTES NOT IN 
                   COMPLIANCE WITH LABELING REQUIREMENTS.

       (a) Civil Penalty.--Any person who sells or holds for sale 
     for domestic consumption any cigarettes for which the precise 
     warning statements in the precise format required by section 
     4 of the Cigarette Labeling and Advertising Act (15 U.S.C. 
     1333) are not permanently imprinted on both--
       (1) the primary packaging of all those cigarettes; and
       (2) any other pack, box, carton, or container of any kind 
     in which those cigarettes are offered for sale, sold, or 
     otherwise distributed to consumers,
     shall, in addition to the tax and any other penalty provided 
     in this title, be liable for a penalty for each violation 
     equal to the greater of $1,000 or 5 times the amount of the 
     tax imposed by chapter 52 of the Internal Revenue Code of 
     1986 on all cigarettes that are the subject of such 
     violation.
       (b) Forfeitures.--Cigarettes that are sold, or are being 
     held for domestic sale, in the United States (and not for 
     export or duty-free sale) shall be forfeited to the United 
     States if the precise warning statements in the precise 
     format required by section 4 of the Federal Cigarette 
     Labeling and Advertising Act (15 U.S.C. 1333) are not 
     permanently imprinted on both--
       (1) the primary packaging of all those cigarettes; and
       (2) any other pack, box, carton, or container of any kind 
     in which those cigarettes are offered for sale, sold, or 
     otherwise distributed to consumers.
       (c) Enforcement.--The provisions of this section shall be 
     enforced by the Secretary of the Treasury through the Bureau 
     of Alcohol, Tobacco, and Firearms and such other agencies 
     within the Department of the Treasury as the Secretary may 
     determine.
       (d) Treatment of transfers.--Transfers of cigarettes that 
     meet the requirements for transfer or removal free of tax 
     under section 5704 of the Internal Revenue Code of 1986 and 
     transfers of cigarettes pursuant to section 4(b) of this Act 
     shall not be treated as sales for domestic consumption under 
     this section.
       (e) Destruction of Forfeited Articles.--Notwithstanding any 
     other provision of law, any article forfeited to the United 
     States pursuant to this section shall be destroyed.
       (f) Definitions.--For purposes of this section, the term 
     ``primary packaging'' shall refer to the permanent packaging 
     inside of the innermost cellophane or other transparent 
     wrapping and labels, if any. Warnings or other statements 
     shall be deemed ``permanently imprinted'' only if printed 
     directly on such primary packaging and not by way of stickers 
     or other similar devices.

     SEC. 6. EFFECTIVE DATES.

       (a) In General.--Except as provided in subsection (b), this 
     Act, and the amendments made by this Act, shall take effect 
     upon the date of enactment of this Act. Nothing in this 
     subsection shall be construed to affect the effective date of 
     the provisions of section 9302 of the Balanced Budget Act of 
     1997 (Public Law 105-33).
       (b) Exceptions.--The amendments to sections 5754(a)(3) and 
     5763(a)(3) of the Internal Revenue Code of 1986, and the 
     provisions of sections 4 and 5 of this Act shall take effect 
     after the date which is 60 days after the date of enactment 
     of this Act.

     SEC. 7. STUDY.

       The Director of the Bureau of Alcohol, Tobacco, and 
     Firearms shall study whether the penalties imposed under 
     sections 5761, 5762, and 5763 of the Internal Revenue Code of 
     1986 are adequate to enforce the provisions of sections 
     5704(d) and 5754 of such Code and report the results of such 
     study to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate 
     within 1 year of the date of enactment of this Act.

     SEC. 8. SEVERABILITY.

       If any provision of this section is held to be invalid as 
     it relates to any particular circumstance, such provision 
     shall remain valid under all other circumstances, and all 
     other provisions of this section shall remain in full force 
     and effect. If any provision of this section is held to be 
     invalid in its entirety, all other provisions of this section 
     shall remain in full force and effect.

     SEC. 9. SAVINGS.

       The civil or criminal penalties and remedies provided by 
     this Act and any other civil or criminal penalty and remedy 
     provided by chapter 52 of the Internal Revenue Code of 1986 
     and section 4 of this Act that are applicable to any 
     violation shall not be exclusive, but shall be in addition to 
     any other remedy provided by law.
                                 ______
                                 
      By Mr. LUGAR (for himself, Mr. Gramm, and Mr. Fitzgerald):
  S. 2697. A bill to reauthorize and amend the Commodity Exchange Act 
to promote legal certainty, enhance competition, and reduce systemic 
risk in markets for futures and over-the-counter derivatives, and for 
other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.


            the commodity futures modernization act of 2000

 Mr. LUGAR. Mr. President, I rise today with Senator Gramm, 
distinguished Chairman of the Senate Banking Committee, and Senator 
Fitzgerald, distinguished Chairman of the Subcommittee on Research, 
Nutrition and General Legislation of the Senate Agriculture Committee, 
to introduce legislation to reauthorize the Commodity Exchange Act 
(CEA), which lapses on September 30th of this year. The Commodity 
Futures Modernization Act of 2000 would reauthorize the Commodity 
Exchange Act (CEA) for five additional years and would reform the 
Commodity Exchange Act in three primary ways. First, it would 
incorporate the unanimous recommendations of the President's Working 
Group (PWG) on the proper legal and regulatory treatment of over-the-
counter (OTC) derivatives. Second, it would codify the regulatory 
relief proposal of the Commodity Futures Trading Commission (CFTC) to 
ensure that futures exchanges are appropriately regulated and remain 
competitive. Lastly, this legislation would reform the Shad-Johnson 
jurisdictional accord, which banned single stock futures 18 years ago.
  Derivative instruments, both exchange-traded and over-the-counter 
(OTC), have played a significant role in our economy's current 
expansion due to their innovative nature and their risk-transferring 
attributes. According to the International Swaps and Derivatives 
Association, the global derivatives market has a notional value that 
exceeds $58 trillion and it has grown at a rate exceeding 20 percent 
since 1990. Identified by Alan Greenspan as the

[[Page 10079]]

``most significant event in finance of the past decade,'' the 
development of the derivatives market has substantially added to the 
productivity and wealth of our nation.
  Derivatives enable companies to unbundle and transfer risk to those 
entities who are willing and able to accept it. By doing so, efficiency 
is enhanced as firms are able to concentrate on their core business 
objective. A farmer can purchase a futures contract, one type of 
derivative, in order to lock in a price for his crop at harvest. 
Automobile manufacturers, whose profits earned overseas can fluctuate 
with changes in currency values, can minimize this uncertainty through 
derivatives, allowing them to focus on the business of building cars. 
Banks significantly lessen their exposure to interest rate movements by 
entering into derivatives contracts known as swaps, which enable these 
institutions to hedge their risk by exchanging variable and fixed rates 
of interests.
  Signed into law in 1974, the Commodity Exchange Act requires that 
futures contracts be traded on a regulated exchange. As a result, a 
futures contract that is traded off an exchange is illegal and 
unenforceable. When Congress enacted the CEA and the Commodity Futures 
Trading Commission (CFTC) to enforce it, this was not a concern. The 
meanings of `futures' and `exchange' were relatively apparent. 
Furthermore, the over-the-counter derivatives business was in its 
infancy. However, in the 26 years since the statute's creation, the OTC 
swaps and derivatives market, sparked by innovation and technology, has 
significantly outpaced the exchange-traded futures markets. And along 
with this expansion, the definitions of a swap and a future began to 
blur.
  In 1998, the CFTC released a concept release on OTC derivatives, 
which was perceived by many as a precursor to regulating these 
instruments as futures. Just the threat of reaching this conclusion 
could have had considerable ramifications, given the size and 
importance of the OTC market. The legal uncertainty interjected by this 
dispute jeopardized the entirety of the OTC market and threatened to 
move significant portions of the business overseas. If we were to lose 
this market, most likely to London, it would take years to bring it 
back to U.S. soil. The resulting loss of business and jobs would be 
immeasurable.
  This threat led the Treasury Department, the Federal Reserve, and the 
SEC to oppose the concept release and request that Congress enact a 
moratorium on the CFTC's ability to regulate these instruments until 
after the President's Working Group (PWG) could complete a study on the 
issue. As a result, Congress passed a six-month moratorium on the 
CFTC's ability to regulate over-the-counter derivatives. Despite 
reservations, I supported this moratorium because it brought legal 
assurance to this skittish market and it allowed the President's 
Working Group time to develop recommendations on the most appropriate 
legal treatment of OTC derivatives. In November 1999, the President's 
Working Group completed its unanimous recommendations on OTC 
derivatives and presented Congress with these findings.
  This legislation adopts much of the recommendations of the PWG 
report. Our bill contains three mechanisms for ensuring that legal 
certainty is attained and that certain transactions remain outside the 
Commodity Exchange Act. The first, the electronic trading facility 
exclusion, would exclude transactions in financial and energy 
commodities from the Act if conducted: (1) on a principal to principal 
basis; (2) between institutions or sophisticated persons with high net 
worth; and (3) on an electronic trading facility. The second would 
exclude these transactions if (1) they are conducted between 
institutions or sophisticated persons with high net worth; and (2) they 
are not on a trading facility. The third exclusion clarifies the 
Treasury Amendment language already contained in the CEA. It would 
exclude all transactions in foreign currency and government securities 
from the Act unless those transactions are futures contracts and traded 
on an organized exchange. As recommended by the PWG, the bill would 
give the CFTC jurisdiction over non-regulated off-exchange retail 
futures transactions in foreign currency. Another important 
recommendation of the PWG was to authorize futures clearing facilities 
to clear OTC derivatives in an effort to lessen systemic risk and this 
bill incorporates this finding.
  As part of this legal certainty section, our legislation also 
addresses the concern that excluding OTC derivatives from the futures 
laws will invite the SEC to regulate these products as securities. With 
Senator Gramm's leadership, this legislation would adopt language that 
would ensure that these products maintain their current regulatory 
status and remain healthy and competitive.
  The second major section of this legislation addresses regulatory 
relief. In February of this year, the CFTC issued a regulatory relief 
proposal that would provide relief to futures exchanges and their 
customers. Instead of listing specific requirements for complying with 
the CEA, the proposal would require exchanges to meet internationally 
agreed-upon core principals. The CFTC proposal creates tiers of 
regulation for exchanges based on whether the underlying commodities 
being traded are susceptible to manipulation or whether the users of 
the exchange are limited to institutional customers.
  The legislation incorporates this framework. A board of trade that is 
designated as a contract market would receive the highest level of 
regulation due to the fact that these products are susceptible to 
manipulation or are offered to retail customers. Futures on 
agricultural commodities would fall into this category. This bill also 
sets out that in lieu of contract market designation, a board of trade 
may register as a Derivatives Transaction Execution Facility (DTEF) if 
the products being offered are not susceptible to manipulation and are 
traded among institutional customers or retail customers who use large 
Futures Commission Merchants (FCMs) who are members of a clearing 
facility. Lastly, a board of trade may choose to be an Exempt Board of 
Trade (XBOT) and not be subject to the Act (except for the CFTC's anti-
manipulation authority) if the products being offered are traded among 
institutional customers only (absolutely no retail) and the instruments 
are not susceptible to manipulation. Our bill would allow a board of 
trade that is a DTEF or an XBOT to opt to trade derivatives that are 
otherwise excluded from the Act on these facilities and to the extent 
that these products are traded on these facilities, the CFTC would have 
exclusive jurisdiction over them. With this provision, the intent is to 
provide these facilities that trade derivatives with a choice--if 
regulation is beneficial, the facility may choose to be regulated. If 
not, the facility may choose to be excluded or exempted from the Act.
  The bill's last section addresses the Shad-Johnson jurisdictional 
accord. In 1982, SEC Chairman John Shad and CFTC Chairman Phil Johnson 
reached an agreement on dividing jurisdiction between the agencies for 
those products that had characteristics of both securities and futures. 
Known as the Shad-Johnson Accord, this agreement prohibited single 
stock futures and delineated jurisdiction between the SEC and the CFTC 
on stock index futures and other options.
  Meant as a temporary agreement, many have suggested that the Shad-
Johnson accord should be repealed. The President's Working Group 
unanimously agreed that the Accord can be repealed if regulatory 
disparities are resolved between the regulation of futures and 
securities. Recently, the General Accounting Office (GAO) released a 
report that found that there is no legitimate policy reasons for 
maintaining the ban on single stock futures since they are being traded 
in foreign markets, in the OTC market, and synthetically in the options 
markets. Senator Gramm, chairman of the Senate Banking Committee, and I 
sent a letter in December requesting the CFTC and the SEC to make 
recommendations on reforming the Shad-Johnson. On March 2, the SEC and 
CFTC responded that, although progress had been made, the agencies 
could not resolve these issues

[[Page 10080]]

before October. Disappointment with this answer led Senator Gramm and I 
to once again ask SEC Chairman Arthur Levitt and CFTC Chairman Bill 
Rainer to attempt to resolve the problems surrounding lifting the ban. 
Unfortunately, the agencies were not able to reach an agreement within 
our time-frame.
  This legislation would repeal the prohibition on single stock futures 
and narrow-based stock index futures. It would allow these products, 
termed designated futures on securities, to trade on either a CFTC-
regulated contract market or a SEC-regulated national securities 
exchange or association. The SEC would maintain its insider trading and 
antifraud enforcement authority over these products traded on a 
contract market and the CFTC would maintain its anti-manipulation 
authority, including large trader reporting, over these products traded 
on a national securities exchange or association. Margin levels on 
these products would be harmonized with the options markets. The bill 
would provide the regulators with one year after enactment to resolve 
any remaining issues.
  The goal of this legislation is to ensure that the United States 
remains a global leader in the derivatives marketplace and that these 
markets are appropriately and effectively regulated. Due to the 
shortened legislative calendar in this election year, it will be 
difficult to pass this bill without momentum and a strong base of 
support. If Congress fails to enact a bill, we will begin the debate 
again next year. However, in this technology-driven economy, a one year 
delay is an eternity. Legal uncertainty for OTC derivatives will remain 
and our futures markets will continue to lose market share due in part 
to an outdated regulatory structure. For this reason, it is imperative 
that Congress enact thoughtful legislation this year when it has a 
golden opportunity to do so.
  I ask unanimous consent that a section by section analysis of this 
bill be included in the Record immediately after my statement.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  Section-by-Section Analysis--Commodity Futures Modernization Act of 
                                  2000

       Sec. 1. Short Title and Table of Contents. The Act is 
     entitled the Commodity Futures Modernization Act of 2000
       Sec. 2. Purposes. The section lists 8 purposes for the bill 
     including reauthorizing and streamlining the Commodity 
     Exchange Act (CEA); eliminating unnecessary regulation for 
     the futures exchanges; clarifying the jurisdiction of the 
     CFTC over certain retail foreign currency transactions; 
     transforming the role of the Commodities Futures Trading 
     Commission (CFTC); providing a legislative and regulatory 
     framework for the trading of futures on securities; promoting 
     innovation and reducing systemic risk for futures and over-
     the-counter (OTC) derivatives; allowing clearing of OTC 
     derivatives and enhancing the competitive position of the 
     U.S. financial institutions and markets.
       Sec. 3. Definitions. Adds definitions to section 1(a) of 
     the CEA for the following terms: derivatives clearing 
     organizations; designated future on a security; electronic 
     trading facility; eligible contract participant; energy 
     commodity; exclusion-eligible commodity; exempted security; 
     financial commodity; financial institution, hybrid 
     instrument; national securities exchange; option organized 
     exchange; registered entity; security and trading facility.
       Sec. 4. Agreements, Contracts, and Transactions in Foreign 
     Currency, Government Securities and Certain Other 
     Commodities. Strikes 2(a)(1)(A)(ii) (the current law Treasury 
     Amendment) and replaces it with a new subsection 2(c), which 
     states that nothing in the CEA applies to transactions in 
     foreign currency, government securities and other similar 
     instruments unless these instruments are futures traded on an 
     organized exchange. The bill defines ``organized exchange'' 
     as a trading facility that either allows retail customers, 
     permits agency trades, or has a self regulatory role. 
     Subparagraph (2)(B) provides the CFTC with jurisdiction over 
     retail foreign currency transactions that are not traded on 
     an organized exchange and that are not regulated by another 
     federal regulator.
       Sec. 5. Legal Certainty for Over-the-Counter Transactions. 
     Amends section 2 of the CEA to create a new subsection 2(d), 
     which provides two exclusions from the CEA for over-the-
     counter derivatives. Section 2(d)(1) provides that nothing in 
     the CEA applies to transactions in an exclusive-eligible 
     commodity if the transaction: (1) is between eligible 
     contract participants (large, institutional entities) and (2) 
     is not executed on a trading facility. The second exclusion 
     in paragraph (d)(2) provides that nothing in the CEA shall 
     apply to a transaction in exclusion-eligible commodity if the 
     transaction: (1) is entered into on a principal to principal 
     basis between parties trading for their own accounts; (2) is 
     between eligible contract participants (large, institutional 
     entities) and (3) is executed on an electronic trading 
     facility. Paragraph (d)(3) provides that derivatives on 
     energy commodities (i.e., energy swaps) that have been 
     excluded from the CEA would be subject to anti-manipulation 
     provisions of the CEA.
       Sec. 6. Excluded Electronic Trading Facilities. Amends 
     section 2 of the CEA to create a new subsection 2(e) that 
     provides that trading instruments that are otherwise excluded 
     from the CEA on an electronic trading facility does not 
     subject the transactions to the CEA. Paragraph (c)(2) states 
     that nothing in the DEA shall prohibit a contract market or 
     derivatives transaction execution facility from establishing 
     and operating an excluded electronic trading facility.
       Sec. 7. Hybrid Instruments. Amends section 2 of the CEA to 
     create a new subsection 2(f) that provides that nothing in 
     the CEA applies to a hybrid instrument that is predominantly 
     a security to mean any hybrid instrument in which (1) the 
     issuer of the instrument receives payment in full of the 
     purchase price at the time the instrument is delivered; (2) 
     the purchaser is not required to make additional payments; 
     (3) the issuer of the instrument is not subject to mark-to-
     market margining requirements; and (4) the instrument is not 
     marketed as a futures contract. Paragraph (f)(3) clarifies 
     that mark-to-market requirements do not include the 
     obligation of an issuer of a secured debt instrument to 
     increase the amount of collateral for the instrument.
       Sec. 8. Futures on Securities. Amends section 2 of the CEA 
     by adding a new subsection 2(g) that repeals the Shad Johnson 
     jurisdictional accord. The new section 2(g)(1) is a savings 
     clause to ensure that excluded OTC equity derivatives remain 
     outside the CEA and the jurisdiction of the CFTC. This 
     paragraph also prohibits the CFTC from designating a board of 
     trade as a contract market in options on securities (as in 
     current law).
       Paragraph (2) allows the trading of futures on security 
     indexes on contract markets. Gives the CETC exclusive 
     jurisdiction in regulating these futures. In order for these 
     products to be designated as a contract market, the contracts 
     must be cash settled and must not be susceptible to 
     manipulation (applies to both the price of the contract or 
     the underlying securities (or an option on such securities)).
       Paragraph (3) allows the trading of designated futures on 
     securities (defined in the bill as a contract for future 
     delivery on a single non-exempted security, an index based on 
     fewer than 5 non-exempted securities or an index in which a 
     single stock predominates by its value accounting for more 
     than 30 percent of the index's total value). The Act 
     authorizes these products to be traded on designated contract 
     markets and national securities exchanges or associations.
       Paragraph (4) provides criteria for contract market 
     designation of these products including: cash settlement; 
     real-time audit trails; insusceptibility to price 
     manipulation (both of the contract and the underlying stock 
     or an option on that stock); eligibility for listing on a 
     national securities exchange; margin requirements; conflict 
     of interest rules; and making information available to the 
     regulators.
       Paragraph (5) authorizes the SEC to enforce the securities 
     laws related to insider trading and fraud with respect to 
     designated futures on securities listed on a contract market. 
     This paragraph also requires the SEC and the CFTC, beginning 
     three years from the date of enactment, to jointly compile a 
     report on the implementation of this new authority and, four 
     years after the date of enactment, to submit the report to 
     Congress.
       Paragraph (6) authorizes the CFTC to enforce its large 
     trader reporting and other antifraud and antimanipulation 
     authorities for designated futures on securities listed on a 
     national securities exchange. It requires national securities 
     exchanges to provide the CFTC information to enforce these 
     provisions.
       Paragraph (7) provides the process for listing a designated 
     future on security on either a futures exchange or national 
     securities exchange.
       As in current law, paragraph (8) provides the Federal 
     Reserve with the authority to set margin and delegate this 
     authority. The paragraph would allow the Federal Reserve to 
     create a three member board consisting of members of the 
     CFTC, SEC and the Federal Reserve to set and maintain margin 
     levels on designated futures on securities.
       Sec. 9. Protection of the Public Interest. Replaces section 
     3 of the CEA with a new section listing the responsibilities 
     of the CFTC in protecting the public interest. These include: 
     ensuring the financial integrity of all transactions subject 
     to the Act; protecting market participants from fraud and 
     manipulation; preventing market manipulation and minimizing 
     the risk of systemic failure; and promoting financial 
     innovation and fair competition.

[[Page 10081]]

       Sec. 10. Prohibited Transactions. Re-writes the current 
     section 4c for clarity and adds a new provision (sec. 
     4c(a)(3)(B)) to allow futures commission merchants to trade 
     futures off the floor of a futures exchange as long as the 
     board of trade allows such transactions and the FCMs report, 
     record and clear the transactions in accordance with the 
     rules of the contract market or derivatives trading execution 
     facility.
       Sec. 11. Designation of Boards of Trade as Contract 
     Markets. Strikes current law sections 5 and 5a and adds a new 
     section 5 providing for the designation of boards of trade as 
     contract markets. Subsection (b) contains criteria that 
     boards of trade must meet in order to be designated as a 
     contract market. These include establishing and enforcing 
     rules preventing market manipulation; ensuring fair and 
     equitable trading; specifying how the trade execution 
     facility operates--including any electronic matching systems; 
     ensuring the financial integrity of transactions; 
     disciplining members or market participants who violate the 
     rules; allowing for public access to the board of trade rules 
     and enabling the board of trade to obtain information in 
     order to enforce its rules. Existing contract markets are 
     grand fathered in.
       The 17 core principles that must be met to maintain 
     designation as a contract market are contained in (d) and 
     provide that the board of trade must: monitor and enforce 
     compliance with the contract market rules; list only 
     contracts that are not susceptible to manipulation; monitor 
     trading to prevent manipulation, price distortion and 
     delivery or settlement disruptions; adopt position limits for 
     speculators; adopt rules to provide for the exercise of 
     emergency authority, including the authority to liquidate or 
     transfer open positions, suspend trading and make margin 
     calls; make available the terms and conditions of the 
     contracts and the mechanisms for executing transactions; 
     publish daily information on prices, bids, offers, volume, 
     open interest, and opening and closing ranges; provide a 
     competitive, open and efficient market and mechanism for 
     executing transactions; provide for the safe storage of all 
     trade information in a readily usable manner to assist in 
     fraud prevention; provide for the financial integrity of the 
     contracts, the futures commission merchants and customer 
     funds; protect market participants from abusive practices; 
     provide for alternative dispute resolutions for market 
     participants and intermediaries; establish and enforce rules 
     regarding fitness standards for those involved in market 
     governance; ensure that the governing board reflects the 
     composition of the market participants (in the case of 
     mutually owned exchanges); maintain records and make them 
     available at any time for inspection by the Attorney General; 
     and avoid taking any action that restrains trade or imposes 
     anticompetitive burdens on the markets.
       Sec. 12. Derivatives Transaction Execution Facilities. 
     Amends the CEA by adding a new section 5a authorizing a new 
     trading designation, derivatives transaction execution 
     facility (DTEF). Under (b), a board of trade may elect to 
     operate as a DTEF rather than a contract market if they meet 
     the DTEF designation requirements. A registered DTEF may 
     trade any non-designated futures contract if the commodity 
     underlying the contract has a nearly inexhaustible supply, is 
     not susceptible to manipulation and does not have a cash 
     market in commercial practice. Eligible DTEF traders include 
     authorized contract market participants and persons trading 
     through registered futures commission merchants with capital 
     of at least $20,000,000 that are members of a futures self-
     regulatory organization (SRO) and a clearing organization. 
     Boards of trade that have been designated as contract markets 
     may operate as DTEFs if they provide a separate location for 
     DTEF trading or, in the case of an electronic system, 
     identify whether the trading is on a DTEF or contract market.
       Subsection (c) provides requirements for boards of trade 
     that wish to register as DTEFs, including: establishing and 
     enforcing trading rules that will deter abuses and provide 
     market participants impartial access to the markets and 
     capture information that may be used in rule enforcement; 
     define trading procedures to be used; and provide for the 
     financial integrity of DTEF transactions.
       To maintain registration as a DTEF, the board of trade must 
     comply with 8 core principles listed in (d): maintain and 
     enforce rules; ensure orderly trading and provide trading 
     information to the CFTC; publicly disclose information 
     regarding contract terms, trading practices, and financial 
     integrity protections; provide information on prices, bids 
     and offers to market participants as well as daily 
     information in volume and open interest for the actively 
     traded contracts; establish and enforce rules regarding 
     fitness standards for those involved in DTEF governance; 
     maintain records and make them available at any time for 
     inspection by the Attorney General; and avoid taking any 
     action that restrains trade or imposes anticompetitive 
     burdens on the markets.
       Subsection (e) allows a broker-dealer or a bank in good 
     standing to act as an intermediary on behalf of its customers 
     and to receive customer funds serving as margin or security 
     for the customer's transactions. If the broker-dealer holds 
     the DTEF customer funds or accounts for more than 1 business 
     day, the broker-dealer must be a registered FCM and a member 
     of a registered futures association. The CFTC and SEC are to 
     coordinate in adopting rules to implement this subsection.
       Under (f), the CFTC may adopt regulations to allow FCMs to 
     give their customers the right to not segregate customer 
     funds for purposes of trading on the DTEF.
       Subsection (g) clarifies that a DTEF may trade derivatives 
     that otherwise would be excluded from the CEA and the CFTC 
     has exclusive jurisdiction only when these instruments are 
     traded on a DTEF.
       Sec. 13. Derivatives Clearing Organizations. Amends the CEA 
     to create a new section 5b regarding derivatives clearing 
     organizations. Under subsection (a), these clearing entities, 
     which are allowed to clear derivatives (that are not a 
     security), must register with the CFTC and meet a set of 14 
     core principals set out in subsection (d), including 
     principals on financial resources of the clearing facility, 
     participant eligibility, risk management systems, settlement 
     procedures, treatment of client funds, default rules, rule 
     enforcement, system safeguards, reporting, record keeping, 
     public information disclosure, information sharing, and 
     minimizing competitive restraints.
       Under subsection (b), a derivatives clearing organization 
     will not have to register with the CFTC if it is registered 
     with another federal financial regulator and it does not 
     clear futures. Under subsection (c), a derivatives clearing 
     organization that is exempt from registration may opt to 
     register with the CFTC. Subsection (e) provides that existing 
     clearing entities that clear futures contracts on a 
     designated contract market will be grand fathered in as a 
     derivatives clearing organization.
       Sec. 14. Common Provisions Applicable to Registered 
     Entities. Amends the CEA to create a new section 5c that 
     contains provisions affecting all registered entities 
     (contract markets, derivatives transaction execution 
     facilities and derivatives clearing organizations).
       Subsection (a) would allow the CFTC to issue or approve 
     interpretations to describe what would constitute an 
     acceptable business practice under the core principals for 
     registered entities.
       Subsection (b) would allow a registered entity to delegate 
     its self regulatory functions to a registered futures 
     association, while specifying that responsibility for 
     carrying out these functions remain with the registered 
     entity.
       Subsection (c) would enable the registered entity to trade 
     new products or adopt or amend rules by providing the CFTC a 
     written certification that the new contract or new rule or 
     amendment complies with the CEA. This subsection would allow 
     a registered entity to request that the CFTC grant prior 
     approval of a new contract, new rule or rule amendment. This 
     subsection would require the CFTC to pre-approve rule changes 
     to open agricultural contracts.
       Subsection (d) grants the CFTC the authority to informally 
     resolve potential violations of the core principals for 
     registered entities.
       Sec. 15. Exempt Boards of Trade. Amends the CEA to create a 
     new section 5d regarding exempt boards of trade. Under 
     subsections (a) and (b), futures contracts traded on an 
     exempt board of trade would be exempt from the CEA (except 
     section 2(g) regarding equity futures) if (1) participants 
     are eligible contract participants (large institutional 
     investors) and (2) the commodity underlying the futures 
     contract has an inexhaustible deliverable supply, is not 
     subject to manipulation, or has no cash market. Subsection 
     (c) subjects futures contracts traded on an exempt board of 
     trade to the anti-fraud and anti-manipulation provisions of 
     the CEA. Under subsection (d), if the CFTC finds that an 
     exempt board of trade is a significant source of price 
     discovery for the underlying commodity, the board of trade 
     shall disseminate publicly on a daily basis trading volume, 
     opening and closing price ranges, open interest, and other 
     trading data as appropriate to the market.
       Sec. 16. Suspension or Revocation of Designation as 
     Contract Market. Designates current section 5b as 5d and 
     amends it to authorize the CFTC to suspend the registration 
     of a registered entity for 180 days for any violation of the 
     CEA.
       Sec. 17. Authorization of Appropriations. Amends section 
     12(d) of the CEA by striking 2000 and reauthorizing 
     appropriations through fiscal year 2005.
       Sec. 18. Preemption. Rewrites paragraph 12(e)(2) of the CEA 
     for clarity and to conform with changes made in the bill. Re-
     states the current provisions that the CEA supercedes and 
     preempts other laws in the case of transactions conducted on 
     a registered entity or subject to regulation by the CFTC 
     (even if outside the United States), and adds that in the 
     case of excluded electronic trading facilities, and any 
     agreements, contracts or transactions that are excluded or 
     covered by a 4(c) exemption, the CEA supercedes and preempts 
     state gaming and bucket shop laws (except for the anti-fraud 
     provisions of those laws that are generally applicable).

[[Page 10082]]

       Sec. 19. Predispute Resolution Agreements for Institutional 
     Customers. Amends section 14 of the CEA to clarify that 
     futures commission merchants, as a condition of doing 
     business, may require customers, that are eligible contract 
     participants, to waive their right to file a reparations 
     claim with the CFTC.
       Sec. 20. Consideration of Costs and Benefits and Antitrust 
     Laws. Amends section 15 of the CEA to add a new subsection 
     (a) requiring the CFTC, before promulgating regulations and 
     issuing orders, to consider the costs and benefits of their 
     action. This does not apply to orders associated with an 
     adjudicatory or investigative process, emergency actions or 
     findings of fact regarding compliance with CFTC rules.
       Sec. 21. Contract Enforcement Between Eligible 
     Counterparties. Amends section 22 of the CEA to provide a 
     safe harbor so that transactions will not be voidable based 
     solely on the failure of the transaction to comply with the 
     terms or conditions of an exclusion or exemption from the Act 
     or CFTC regulations.
       Sec. 22. Legal Certainty for Swaps. Provides that the SEC 
     does not have jurisdiction over swap agreements. Places a one 
     year moratorium on banks being able to market swaps to the 
     retail public. Requests the President's Working Group to 
     conduct a study on the regulatory treatment of swaps offered 
     to retail customers.
       Sec. 23. Technical and Conforming Amendments. Makes 
     technical and conforming amendments throughout the CEA to 
     reflect changes made by the bill.
       Sec. 24. Effective Date. The Act takes effect on the date 
     of enactment, except section 8 (dealing with futures on 
     securities), which takes effect one year after 
     enactment.

  Mr. GRAMM. Mr. President, today I join with Senator Lugar, chairman 
of the Senate Agriculture Committee, to introduce the Commodity Futures 
Modernization Act of 2000. The formal purpose of this legislation is to 
reauthorize the Commodity Exchange Act, the legal authority for the 
Commodity Futures Trading Commission. As important as that is, this 
legislation does far more.
  This is a landmark bill, that addresses four chief goals that Senator 
Lugar and I set out to achieve when we first began discussing this 
legislation. First of all, this bill would repeal the so-called Shad-
Johnson Accord, the 18-year-old temporary prohibition on the trading of 
futures based on individual stocks. Second, the bill eliminates the 
legal uncertainly that today hangs as an ominous cloud over the $7 
trillion financial swaps markets. Third, the bill addresses the need to 
harmonize the treatment of margins among the futures, stock, and 
options markets. Fourth, the bill provides important and necessary 
regulatory relief to the futures and securities markets.
  One of the most notable aspects of this bill is that it brings 
together the chairmen of the two committees with jurisdiction over 
these issues, the Agriculture Committee and the Banking Committee. To 
start out with such cooperation speaks well, I believe, for the 
prospects for this legislation. While the Commodity Exchange Act is 
clearly within the jurisdiction of the Agriculture Committee, stocks, 
options, and swaps are within the jurisdiction of the Banking 
Committee.
  The next step for this bill will be joint hearings of our two 
committees to consider it. Few bills are in a perfected form when first 
introduced, and I fully expect that additional changes will be made to 
this one before it becomes law. For example, I hope to see additional 
measures of regulatory relief for the securities markets included.
  But this bill is a fine beginning, introduced in the best way. We 
bring together two committees that could choose to argue over turf but 
instead are choosing to cooperate to make changes in law that are 
needed to ensure that our financial market places continue to lead the 
world. At the same time, we will be providing the widest choice of 
investment opportunities for American businesses and families.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself, Mr. Kerry, Mr. Rockefeller, Ms. 
        Snowe, Mr. Allard, Mr. Baucus, Mr. Breaux, Mr. Brownback, Mr. 
        Bryan, Mr. Bunning, Mr. Burns, Mr. Daschle, Mr. Hollings, Mr. 
        Hutchinson, Mr. Johnson, Mr. Kennedy, Mr. Kerrey, Ms. Landrieu, 
        Mrs. Lincoln, Ms. Mikulski, Mr. Reid, Mr. Robb, Mr. Roberts, 
        Mr. Schumer, Mr. Thurmond, Mr. Enzi, Mrs. Boxer, and Mr. 
        DeWine):
  S. 2698. A bill to amend the Internal Revenue Code of 1986 to provide 
an incentive to ensure that all Americans gain timely and equitable 
access to the Internet over current and future generations of broadband 
capability; to the Committee on Finance.


                 broadband internet access act of 2000

  Mr. MOYNIHAN. Mr. President, today, joined by my colleagues Senators 
Kerry, Rockefeller, Snowe, Allard, Baucus, Breaux, Brownback, Bryan, 
Bunning, Burns, Daschle, Durbin, Enzi, Hollings, Hutchinson, Johnson, 
Kennedy, Kerrey, Landrieu, Lincoln, Mikulski, Reid, Robb, Roberts, 
Schumer, and Thurmond, I am introducing the Broadband Internet Access 
Act of 2000. This legislation provides a tax incentive to stimulate 
rapid deployment of high-speed communication services to residential, 
rural, and low-income areas.
  A term of art often used for high-speed communication service is 
``broadband.'' The term is a remnant from the era of analog systems. It 
refers to the size of spectral bandwidth over which signals can be 
transmitted. Even though it is not essential to have wide spectra in 
the digital world to transmit vast amounts of data, ``broadband'' 
remains in our digital society's lexicon for high-speed communication 
or throughput.
  In common use, broadband connotes fast Internet access, and that is 
certainly part of the goal of this legislation. The grander goal, 
however, extends beyond simply expediting traditional Internet use. It 
is to deliver, in the near future, a wide array of voice, video, and 
data communication services, at extremely fast speeds, to all 
Americans.
  The Broadband Internet Access Act of 2000 provides graduated tax 
credits for deployment of high-speed communications to residential and 
rural communities. It gives a 10-percent credit for the deployment of 
at least 1.5 million bits per second downstream and 200,000 bits per 
second upstream to all subscribers--residential, business, and 
institutions--in rural and low income areas. This is essentially 
``current generation'' broadband. The bill gives a 20-percent credit 
for the deployment of at least 22 million bits per second downstream 
and 10 million bits per second upstream to all subscribers in rural and 
low income areas, and to all residential customers in other areas. This 
is what we are calling ``next generation'' broadband.
  The bill does not dictate the technological means by which these 
broadband services are to be delivered. Today, the possibilities 
include telephone lines, cable modems, fiber optics, terrestrial 
wireless, and satellite wireless. In the future there may be others. 
Whether high-speed communications are delivered by electrons or by 
photons, with wires or without wires, by copper or by glass, by 
terrestrial or by extraterrestrial means, is immaterial. With a 
temporary tax credit, it is economically feasible to push national 
communication capabilities forward by ten or perhaps twenty years. The 
bill permits a variety of technological approaches to make under-served 
areas more economically attractive to broadband providers. Yesterday we 
had electronics. Today we have photonics. Tomorrow we will have some 
``future-onics.''
  Mr. President, as I stand before you today, the streets of 
Washington, D.C. and of many other major cities in this country are 
being torn-up to lay cables for high-speed communication. Line-of-sight 
communication ``dishes'' are being installed on office buildings 
permitting business-to-business voice, video, and data transmissions. 
The problem is, market forces are driving deployment of high-speed 
communication capabilities almost exclusively to urban businesses and 
wealthy households. Low-income families, exurban communities, rural 
businesses, and rural families are relegated to the back of the queue. 
The bill gives private industry economic incentives to accelerate high-
speed communication capabilities to Americans who are at the end-of-
the-line.
  Why is this important? Let me offer examples of this technology's 
power

[[Page 10083]]

and importance. I start with two historical cases.
  During the 1950's the National Institute of Mental Health funded a 
1,278- mile closed-circuit telephone system between seven state 
hospitals in Nebraska, Iowa, North Dakota, and South Dakota. Health 
care providers at the hospitals held weekly teleconferencing lectures 
via this system. By 1961, the system included both audio and video, and 
psychiatrists successfully used it to care for patients under a program 
called ``telepsychiatry.''
  At about the same time, radiologists in Montreal had a coaxial cable 
laid between two hospitals three miles apart, thus connecting them for 
audio and video communications. Doctors were regularly transmitting 
radiographic images to each other to consult on difficult cases and to 
conduct educational conferences.
  As a result of these two projects, patients were treated by 
physicians who were, in some cases, hundreds of miles away. The medical 
profession was able to share information and ideas, which improved 
healthcare in this country and Canada.
  Unfortunately, such ``telemedicine'' links are very few, even though 
our ability to transmit data has increased. Why? Because there is no 
nationwide high-speed data-transfer infrastructure. Instead, the 
standard business Internet speed in rural areas is 56,000 bits per 
second. What can be done at that speed? Printed matter can be sent and 
received reasonably quickly. But photographs or graphics, require long 
waits, and then often with poor image quality. More advanced uses, such 
as video conferencing, are out of the question. At faster Internet 
speeds of, say, 200,000 to 300,000 bits per second, information can be 
sent much faster. Photographs and graphics leap to the screen, instead 
of crawling. Video conferencing also is possible, although jittery 
images and low image resolution make it impractical. Music and movies 
can be downloaded slowly to a compact disk.
  At higher data transfer speeds--about 1.5 million bits per second--
the amount and quality of information that can be transmitted becomes 
quite good. Very good video conferencing is possible. Two or more 
people in different places can see and talk to each other as if in the 
same room, at a crisp image resolution and without image jitter.
  And at even higher speeds, extraordinarily rich images of movement, 
color, and detail can be transmitted as if one were looking at them in 
person. Complex medical images can be sent and received. At twenty 
million bits per second, a digitized mammography image can be 
transmitted in about fifteen seconds, and a standard chest x-ray in 
about four seconds.
  Twenty million bits per second is about 360 times faster than the 
fastest speeds available on a conventional modem attached to a Plain 
Old Telephone Service, or, as I am told, POTS. Is it really possible to 
do this? Indeed, it is. The technology exists now. Over ordinary copper 
wire, some of our communication companies are now offering data speeds 
of 26 million bits per second.
  Imagine the tremendous personal and economic benefits our nation will 
reap with universal high-speed communication access, including 
telemedicine; telecommuting; distance learning at all education levels; 
electronic commerce in low-income and rural communities; digital 
photography; and entertainment video. As a result, we will enjoy 
greater educational opportunities, greater geographic freedom, 
increased wealth in low-income areas, and even decreased urban 
congestion.
  So if the benefits are so great and the capability exists, why are 
these technologies not widely available? Simple economics. It is much 
more lucrative to provide services to business customers. Although a 
few affluent individuals in urban areas have high speed Internet 
access, the great majority of Americans are limited to extremely slow 
communication or to none at all.
  That is why it is appropriate for government to step in at this time 
and provide an incentive to stimulate deployment of high-speed 
communication service to residential areas and small businesses, 
especially in rural and low-income areas of the country. Our country 
has a proud history of supporting critical services in rural and under-
served communities.
  Three major examples are utilities, interstate highways, and the 
airline industries.
  The Rural Utilities Service is a federal credit agency within the 
Department of Agriculture that helps rural areas finance electric, 
telecommunications, water, and waste water projects. Its lending 
creates public-private partnerships to finance the construction of 
infrastructure in rural areas. Working in partnership with rural 
telephone cooperatives and companies, the Department of Agriculture 
helped boost the number of rural Americans with telephone service from 
38 percent in 1950 to more than 95 percent in 1999.
  The federal government funded 90 to 100 percent of the cost of 
building the interstate highway system. The Federal Aid Highway Act of 
1956 initiated a nationwide program that aimed to be completed within 
20 years. The bulk of the program was completed within this time 
period, although full implementation was not achieved until the early 
1990s.
  In the 1930s, the airline industry--much like today's Internet start-
ups--was operating at a loss. Believing airline service to be both 
unique and necessary, the federal government stepped-in with an airmail 
subsidy in 1938, and this federal funding made the industry instantly 
profitable. The airline industry then flourished, and the subsidy was 
removed in the mid 1950s.
  In a 1979 speech titled, ``Technology and Human Freedom,'' I stated, 
``I believe that government can and should seek to advance technology--
as a condition of social progress.'' I still believe that. In 1979, I 
went on to say, ``In my view, only a person of what St. Augustine would 
have termed `indomitable ignorance' could deny that technology has 
greatly enhanced human freedom. . . . Freedom is choice, and technology 
vastly enhances choice. . . . The relation between technology and 
democracy is intimate. . . . Experimentation, variety, optimism: these 
are the ingredients of both technology and democracy.''
  In 1978, the late Mancur Olson, an esteemed economist, cautioned that 
the very liberty of societies such as ours may be the source of 
developments that make innovation considerably more difficult. We 
should guard against the prospect of our government retarding 
technology as Professor Olson hypothesized. The bill I introduce today 
encourages technology, and extends its range to those residential and 
business areas it otherwise would not reach until much later.
  We need this legislation now to maintain our technological 
leadership. As the press has recently reported, Sweden, Japan, 
Singapore, and Canada are deploying broadband at levels higher than 
those called for in this bill. We cannot afford to fall behind in this 
critical area. History indicates that, if we do not act aggressively, 
it will take a very long time to deploy broadband services on a 
widespread basis. The first regular, sustained commercial telephone 
services were offered in 1876, but it took more than 90 years to make 
the service available to 90 percent of residences in the United States. 
It would be deplorable if it takes even half as long to bring existing 
broadband technology to the same number of Americans.
  If the Internet is the information superhighway, broadband 
communication is the information super sonic transport. I want to 
encourage the communications industry to accelerate deployment of the 
this super sonic transport to every community in the country.
  I want to thank my colleagues for their support and collaboration on 
this bill. Senator John Kerry and his staff have been involved in every 
aspect of this legislation, and we could not have formulated the bill 
without their detailed knowledge of the communications industry. And 
Senators Rockefeller and Snowe recently introduced a similar bill 
focusing on the deployment of broadband in rural areas, and

[[Page 10084]]

the legislation we introduce today incorporates and expands upon their 
work.
  This bill is meant to be a proposal. As we consider this measure, 
Congress may decide to modify it. Moreover, we have not yet received a 
revenue estimate on the bill, and if it proves to be too expensive, we 
will have to scale it back. It is time, however, to focus on this 
issue. Let us begin the discussion of how we can provide the stimulus 
necessary to ensure the availability of high-speed communication to 
every American. I urge the Senate to support this important 
legislation.
  Mr. President, I ask unanimous consent that a copy of the bill and 
letters of support from a number of organizations appear in the Record. 

  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2698

       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 ``Broadband Internet Access 
     Act of 2000''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds the following:
       (1) The Internet has been the single greatest contributor 
     to the unprecedented economic expansion experienced by the 
     United States over the last 8 years.
       (2) Increasing the speed that Americans can access the 
     Internet is necessary to ensure the continued expansion.
       (3) Today, most residential Internet users, especially 
     those located in low income and rural areas, are extremely 
     limited in the type of information they can send and receive 
     over the Internet because their means of access is limited to 
     ``narrowband'' communications media, typically conventional 
     phone lines at a maximum speed of 56,000 bits per second.
       (4) Similarly, small businesses in low income and rural 
     areas are also deprived of full information access because of 
     their dependence on narrowband facilities.
       (5) By contrast, many residential users located in higher 
     income urban and suburban areas and urban business users can 
     access the Internet from a variety of carriers at current 
     generation broadband speeds in excess of 1,500,000 bits per 
     second, giving them a choice among carriers and high-speed 
     access to a wide array of audio and data applications.
       (6) The result is a growing disparity in the speed of 
     access to the Internet and the opportunities it creates 
     between subscribers located in low income and rural areas and 
     subscribers located in higher income urban and suburban 
     areas.
       (7) At the same time, experts project that, under current 
     financial and regulatory conditions, the facilities needed to 
     transmit next generation broadband services over the Internet 
     to residential users at speeds in excess of 10,000,000 bits 
     per second will not be as ubiquitously available as is 
     telephone service until sometime between the years 2030 and 
     2040.
       (8) Experts also believe that, under current financial and 
     regulatory conditions, the disparity in access will be 
     exacerbated with the deployment of next generation broadband 
     capability.
       (9) The disparity in current broadband access to the 
     Internet, the slow pace of deployment of next generation 
     broadband capability, and the projected disparity in access 
     to such capability will likely prove detrimental to the on-
     going economic expansion.
       (10) It is, therefore, appropriate for Congress to take 
     action to narrow the current and future disparity in the 
     level of broadband access to the Internet, and to accelerate 
     deployment of next generation broadband capability.
       (b) Purpose.--The purpose of this Act is to accelerate 
     deployment of current generation broadband access to the 
     Internet for users located in certain low income and rural 
     areas and to accelerate deployment of next generation 
     broadband access for all Americans.

     SEC. 3. BROADBAND CREDIT.

       (a) In General.--Subpart E of part IV of chapter 1 of the 
     Internal Revenue Code of 1986 (relating to rules for 
     computing investment credit) is amended by inserting after 
     section 48 the following new section:

     ``SEC. 48A. BROADBAND CREDIT.

       ``(a) General Rule.--For purposes of section 46, the 
     broadband credit for any taxable year is the sum of--
       ``(1) the current generation broadband credit, plus
       ``(2) the next generation broadband credit.
       ``(b) Current Generation Broadband Credit; Next Generation 
     Broadband Credit.--For purposes of this section--
       ``(1) Current generation broadband credit.--The current 
     generation broadband credit for any taxable year is equal to 
     10 percent of the qualified expenditures incurred with 
     respect to qualified equipment offering current generation 
     broadband services to rural subscribers or underserved 
     subscribers and taken into account with respect to such 
     taxable year.
       ``(2) Next generation broadband credit.--The next 
     generation broadband credit for any taxable year is equal to 
     20 percent of the qualified expenditures incurred with 
     respect to qualified equipment offering next generation 
     broadband services to all rural subscribers, all underserved 
     subscribers, or any other residential subscribers and taken 
     into account with respect to such taxable year.
       ``(c) When Expenditures Taken Into Account.--For purposes 
     of this section--
       ``(1) In general.--Qualified expenditures with respect to 
     qualified equipment shall be taken into account with respect 
     to the first taxable year in which current generation 
     broadband services or next generation broadband services are 
     offered by the taxpayer through such equipment to 
     subscribers.
       ``(2) Offer of services.--For purposes of paragraph (1), 
     the offer of current generation broadband services or next 
     generation broadband services through qualified equipment 
     occurs when such class of service is purchased by and 
     provided to at least 10 percent of the subscribers described 
     in subsection (b) which such equipment is capable of serving 
     through the legal or contractual area access rights or 
     obligations of the taxpayer.
       ``(d) Special Allocation Rules.--
       ``(1) Current generation broadband services.--For purposes 
     of determining the current generation broadband credit under 
     subsection (a)(1), if the qualified equipment is capable of 
     serving both the subscribers described under subsection 
     (b)(1) and other subscribers, the qualified expenditures 
     shall be multiplied by a fraction--
       ``(A) the numerator of which is the sum of the total 
     potential subscriber populations within the rural areas and 
     the underserved areas which the equipment is capable of 
     serving, and
       ``(B) the denominator of which is the total potential 
     subscriber population of the area which the equipment is 
     capable of serving.
       ``(2) Next generation broadband services.--For purposes of 
     determining the next generation broadband credit under 
     subsection (a)(2), if the qualified equipment is capable of 
     serving both the subscribers described under subsection 
     (b)(2) and other subscribers, the qualified expenditures 
     shall be multiplied by a fraction--
       ``(A) the numerator of which is the sum of--
       ``(i) the total potential subscriber populations within the 
     rural areas and underserved areas, plus
       ``(ii) the total potential subscriber population of the 
     area consisting only of residential subscribers not described 
     in clause (i),
     which the equipment is capable of serving, and
       ``(B) the denominator of which is the total potential 
     subscriber population of the area which the equipment is 
     capable of serving.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Antenna.--The term `antenna' means any device used to 
     transmit or receive signals through the electromagnetic 
     spectrum, including satellite equipment.
       ``(2) Cable operator.--The term `cable operator' has the 
     meaning given such term by section 602(5) of the 
     Communications Act of 1934 (47 U.S.C. 522(5)).
       ``(3) Commercial mobile service carrier.--The term 
     `commercial mobile service carrier' means any person 
     authorized to provide commercial mobile radio service as 
     defined in section 20.3 of title 47, Code of Federal 
     Regulations.
       ``(4) Current generation broadband service.--The term 
     `current generation broadband service' means the transmission 
     of signals at a rate of at least 1,500,000 bits per second to 
     the subscriber and at least 200,000 bits per second from the 
     subscriber.
       ``(5) Next generation broadband service.--The term `next 
     generation broadband service' means the transmission of 
     signals at a rate of at least 22,000,000 bits per second to 
     the subscriber and at least 10,000,000 bits per second from 
     the subscriber.
       ``(6) Nonresidential subscriber.--The term `nonresidential 
     subscriber' means a person or entity who purchases broadband 
     services which are delivered to the permanent place of 
     business of such person or entity.
       ``(7) Open video system operator.--The term `open video 
     system operator' means any person authorized to provide 
     service under section 653 of the Communications Act of 1934 
     (47 U.S.C. 573).
       ``(8) Other wireless carrier.--The term `other wireless 
     carrier' means any person (other than a telecommunications 
     carrier, commercial mobile service carrier, cable operator, 
     open video system operator, or satellite carrier) providing 
     current generation broadband services or next generation 
     broadband service to subscribers through the radio 
     transmission of energy.
       ``(9) Packet switching.--The term `packet switching' means 
     controlling or routing the path of a digitized transmission 
     signal which is assembled into packets or cells.
       ``(10) Qualified equipment.--
       ``(A) In general.--The term `qualified equipment' means 
     equipment capable of providing current generation broadband 
     services or next generation broadband services at any time to 
     each subscriber who is utilizing such services.

[[Page 10085]]

       ``(B) Only certain investment taken into account.--Except 
     as provided in subparagraph (C), equipment shall be taken 
     into account under subparagraph (A) only to the extent it--
       ``(i) extends from the last point of switching to the 
     outside of the unit, building, dwelling, or office owned or 
     leased by a subscriber in the case of a telecommunications 
     carrier,
       ``(ii) extends from the customer side of the mobile 
     telephone switching office to a transmission/receive antenna 
     (including such antenna) on the outside of the unit, 
     building, dwelling, or office owned or leased by a subscriber 
     in the case of a commercial mobile service carrier,
       ``(iii) extends from the customer side of the headend to 
     the outside of the unit, building, dwelling, or office owned 
     or leased by a subscriber in the case of a cable operator or 
     open video system operator, or
       ``(iv) extends from a transmission/receive antenna 
     (including such antenna) which transmits and receives signals 
     to or from multiple subscribers to a transmission/receive 
     antenna (including such antenna) on the outside of the unit, 
     building, dwelling, or office owned or leased by a subscriber 
     in the case of a satellite carrier or other wireless carrier, 
     unless such other wireless carrier is also a 
     telecommunications carrier.
       ``(C) Packet switching equipment.--Packet switching 
     equipment, regardless of location, shall be taken into 
     account under subparagraph (A) only if it is deployed in 
     connection with equipment described in subparagraph (B) and 
     it is uniquely designed to perform the function of packet 
     switching for current generation broadband services or next 
     generation broadband services, but only if such packet 
     switching is the last in a series of such functions performed 
     in the transmission of a signal to a subscriber or the first 
     in a series of such functions performed in the transmission 
     of a signal from a subscriber.
       ``(11) Qualified expenditure.--
       ``(A) In general.--The term `qualified expenditure' means 
     any amount chargeable to capital account with respect to the 
     purchase and installation of qualified equipment (including 
     any upgrades thereto) for which depreciation is allowable 
     under section 168.
       ``(B) Certain satellite expenditures excluded.--Such term 
     shall not include any expenditure with respect to the 
     launching of any satellite equipment.
       ``(12) Residential subscriber.--The term `residential 
     subscriber' means an individual who purchases broadband 
     services which are delivered to such individual's dwelling.
       ``(13) Rural subscriber.--
       ``(A) In general.--The term `rural subscriber' means a 
     residential subscriber residing in a dwelling located in a 
     rural area or nonresidential subscriber maintaining a 
     permanent place of business located in a rural area.
       ``(B) Rural area.--The term `rural area' means any census 
     tract which--
       ``(i) is not within 10 miles of any incorporated or census 
     designated place containing more than 25,000 people, and
       ``(ii) is not within a county or county equivalent which 
     has an overall population density of more than 500 people per 
     square mile of land.
       ``(14) Satellite carrier.--The term `satellite carrier' 
     means any person using the facilities of a satellite or 
     satellite service licensed by the Federal Communications 
     Commission and operating in the Fixed-Satellite Service under 
     part 25 of title 47 of the Code of Federal Regulations or the 
     Direct Broadcast Satellite Service under part 100 of title 47 
     of such Code to establish and operate a channel of 
     communications for point-to-multipoint distribution of 
     signals, and owning or leasing a capacity or service on a 
     satellite in order to provide such point-to-multipoint 
     distribution.
       ``(15) Subscriber.--The term `subscriber' means a person 
     who purchases current generation broadband services or next 
     generation broadband services.
       ``(16) Telecommunications carrier.--The term 
     `telecommunications carrier' has the meaning given such term 
     by section 3(44) of the Communications Act of 1934 (47 U.S.C. 
     153 (44)), but--
       ``(A) includes all members of an affiliated group of which 
     a telecommunications carrier is a member, and
       ``(B) does not include a commercial mobile service carrier.
       ``(17) Total potential subscriber population.--The term 
     `total potential subscriber population' means, with respect 
     to any area and based on the most recent census data, the 
     total number of potential residential subscribers residing in 
     dwellings located in such area and potential nonresidential 
     subscribers maintaining permanent places of business located 
     in such area.
       ``(18) Underserved subscriber.--
       ``(A) In general.--The term `underserved subscriber' means 
     a residential subscriber residing in a dwelling located in an 
     underserved area or nonresidential subscriber maintaining a 
     permanent place of business located in an underserved area.
       ``(B) Underserved area.--The term `underserved area' means 
     any census tract--
       ``(i) the poverty level of which is at least 30 percent 
     (based on the most recent census data),
       ``(ii) the median family income of which does not exceed--

       ``(I) in the case of a census tract located in a 
     metropolitan statistical area, 70 percent of the greater of 
     the metropolitan area median family income or the statewide 
     median family income, and
       ``(II) in the case of a census tract located in a 
     nonmetropolitan statistical area, 70 percent of the 
     nonmetropolitan statewide median family income, or

       ``(iii) which is located in an empowerment zone or 
     enterprise community designated under section 1391.
       ``(f) Designation of Census Tracts.--The Secretary shall, 
     not later than 90 days after the date of the enactment of 
     this section, designate and publish those census tracts 
     meeting the criteria described in paragraphs (13)(B) and 
     (18)(B) of subsection (e), and such tracts shall remain so 
     designated for the period ending with the termination date 
     described in subsection (g).
       ``(g) Termination.--This section shall not apply to 
     expenditures incurred after December 31, 2005.''
       (b) Credit To Be Part of Investment Credit.--Section 46 of 
     the Internal Revenue Code of 1986 (relating to the amount of 
     investment credit) is amended by striking ``and'' at the end 
     of paragraph (2), by striking the period at the end of 
     paragraph (3) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(4) the broadband credit.''
       (c) Special Rule for Mutual or Cooperative Telephone 
     Companies.--Section 501(c)(12)(B) of the Internal Revenue 
     Code of 1986 (relating to list of exempt organizations) is 
     amended by striking ``or'' at the end of clause (iii), by 
     striking the period at the end of clause (iv) and inserting 
     ``, or'', and by adding at the end the following new clause:
       ``(v) from sources not described in subparagraph (A), but 
     only to the extent such income does not in any year exceed an 
     amount equal to the credit for qualified expenditures which 
     would be determined under section 48A for such year if the 
     mutual or cooperative telephone company was not exempt from 
     taxation.''
       (d) Conforming Amendment.--The table of sections for 
     subpart E of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     the item relating to section 48 the following new item:

  ``Sec. 48A. Broadband credit.''
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to expenditures 
     incurred after December 31, 2000.
       (2) Special rule.--The amendments made by subsection (c) 
     shall apply to amounts received after December 31, 2000.

     SEC. 4. REGULATORY MATTERS.

       No Federal or State agency or instrumentality shall adopt 
     regulations or ratemaking procedures that would have the 
     effect of confiscating any credit or portion thereof allowed 
     under section 48A of the Internal Revenue Code of 1986 (as 
     added by section 3) or otherwise subverting the purpose of 
     this Act.

     SEC. 5. STUDY AND REPORT.

       (a) Sense of Congress.--It is the sense of Congress that in 
     order to maintain competitive neutrality, the credit allowed 
     under section 48A of the Internal Revenue Code of 1986 (as 
     added by section 3) should be administered in such a manner 
     so as to ensure that each class of carrier receives the same 
     level of financial incentive to deploy current generation 
     broadband services and next generation broadband services.
       (b) Study and Report.--The Secretary of the Treasury shall, 
     within 180 days after the effective date of section 3, study 
     the impact of the credit allowed under section 48A of the 
     Internal Revenue Code of 1986 (as added by section 3) on the 
     relative competitiveness of potential classes of carriers of 
     current generation broadband services and next generation 
     broadband services, and shall report to Congress the findings 
     of such study, together with any legislative or regulatory 
     proposals determined to be necessary to ensure that the 
     purposes of such credit can be furthered without impacting 
     competitive neutrality among such classes of carriers.
                                  ____



                                                 MCI WorldCom,

                                     Washington, DC, June 8, 2000.
     Hon. Daniel Patrick Moynihan,
     Senate Finance Committee,
     Washington, DC.
       Dear Senator Moynihan: Thank you for your leadership in 
     advancing the deployment of broadband technology to rural and 
     underserved areas of the country. WorldCom, a leading 
     Internet backbone provider, believes broadband technology 
     will improve the quality of life for millions of Americans 
     and assist in maintaining this country's leadership in the 
     worldwide information technology marketplace. Your support of 
     our efforts to modernize communications infrastructure dates 
     at least to the Tax Reform Act of 1986, when you supported 
     legislation designed to enhance advanced telecommunications 
     investment.
       Electronic commerce and its Internet medium is a thriving 
     environment. More jobs, more gross domestic product, and more 
     wealth have been created by the Internet

[[Page 10086]]

     than any other single innovation in recent memory. Electronic 
     commerce continues to grow apace, creating increased need for 
     continuing development and deployment of communications 
     technology.
       Your proposal, Senator Moynihan, is designed to support 
     that deployment and development at an advanced level. It is 
     designed not only to accelerate deployment of existing 
     technology, but also to encourage development and deployment 
     of next generation broadband technologies as well. 
     Acceleration is important. Persons needing distance education 
     cannot wait while job opportunities pass them by; businesses 
     facing competitive pressure cannot wait to engage in the 
     latest Internet based inventory planning; rural residents 
     with a great idea for a new dot.com need high speed 
     connectivity now; and persons suffering from serious disease 
     far from the right medical experts cannot wait for a 
     telemedicine connection.
       WorldCom appreciates your effort to support this critical 
     technology and supports your efforts through the Broadband 
     Internet Access Act of 2000. While we would like to see a 
     proposal broader than the ``last mile'', your bill initiates 
     this all-important process.
           Sincerely,
                                               Catherine R. Sloan,
     Chief Legislative Counsel.
                                  ____



                                                Bell Atlantic,

                                     Washington, DC, June 5, 2000.
     Re: Broadband Internet Access Act of 2000

     Hon. Daniel Patrick Moynihan,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senator Moynihan: Congratulations on your leadership 
     in developing and introducing the ``Broadband Internet Access 
     Act of 2000.'' I am writing to provide you with Bell 
     Atlantic's support and views regarding this important tax 
     legislation.
       As you know, Bell Atlantic is a leader in the deployment of 
     broadband capability, particularly in the state of New York. 
     As such, we are extremely familiar with the regulatory and 
     financial hurdles associated with deploying broadband to all 
     our business and residential customers. We believe that rapid 
     deployment of this capability will provide the basis for 
     sustained long-run economic growth in the economy. Our 
     experience with the Internet has taught us that the 
     convergence of communications and computing yields tremendous 
     benefits for the economy in terms of productivity growth.
       Unfortunately, other carriers and we face tremendous 
     government hurdles as we roll out this capability. These 
     hurdles arise from the unintended adverse effects of 
     regulation on investment that, in turn, increase the degree 
     of financial uncertainty associated with such investments. In 
     other words, we face a regulatory problem and a financial 
     problem in deploying broadband capability to our customers. 
     The Broadband Internet Access Act helps to overcome these 
     problems by encouraging Bell Atlantic and other carriers 
     through financial incentives to proceed with these 
     investments. More importantly, the targeted nature of the 
     incentives will help us reach customers in rural areas and 
     low-income areas that are otherwise difficult to serve 
     because of the high cost of deployment and other factors.
       The bill does not address the overwhelming regulatory 
     issues, which Bell Atlantic continues to face. We encourage 
     you to support legislation to address these problems as well 
     as the financial issues that are addressed in the Broadband 
     Act.
       We encourage you to enact the Broadband Internet Access Act 
     this year. We appreciate your leadership on this important 
     issue.
           Sincerely,

                                              Thomas J. Tauke,

                                           Senior Vice President--
     Government Relations.
                                  ____



                                                         NTCA,

                                      Arlington, VA, June 5, 2000.

     Re Broadband Internet Access Act of 2000.

     Hon. Daniel Patrick Moynihan,
     Ranking Minority Member, Senate Committee on Finance, 
         Washington, DC.
       Dear Senator Moynihan: During the course of the past year, 
     the term ``digital divide'' has quickly become the buzzword 
     of choice among policymakers. Coined ostensibly to describe 
     the absence of communications availability to certain 
     segments of the nation's population, the term has been 
     twisted to imply the issue of communications ``haves'' and 
     ``have-nots'' is merely a rural vs. urban matter.
       NTCA has vigorously moved to redirect the discussion to 
     fully recognize the achievements of small rural incumbent 
     local exchange carriers (ILECs) in deploying advanced 
     communications infrastructure and services. The facts bear 
     witness to the success of small rural ILECs in stepping up to 
     what we feel is better described as the ``Digital 
     Challenge.'' Recent surveys show that in many cases, markets 
     served by such entities are more technologically advanced 
     than their larger, urban counterparts. Likewise, they are 
     significantly more advanced than the rural markets served by 
     the nation's large ILECs. Other reports show that urban areas 
     in general are not the ``digital Mecca'' many would have us 
     believe. The reality is that the markets of the nation's 
     small rural ILECs are anything but communications technology 
     wastelands as many are portraying them to be.
       Nevertheless, there remains a substantial amount of costly 
     work to be done for all markets to be fully advanced service-
     capable. For this reason, we commend your effort, vis-a-vis 
     the Broadband Internet Access Act of 2000, to further 
     stimulate deployment of broadband services by granting tax 
     credits to telecommunications providers deploying advanced 
     technologies. Furthermore, we sincerely appreciate your 
     effort to recognize the special circumstances, with regard to 
     tax credits, of the nation's rural telecommunications 
     cooperatives by the inclusion of the Special Rule for Mutual 
     or Cooperative Telephone Companies.
       In addition, there are several existing tools such as the 
     universal service support program that, if allowed to 
     function appropriately, could help offset the tremendous 
     costs associated with the deployment of advanced services. We 
     continue to work with several of your colleagues to advance 
     legislation that will ensure the universal service program is 
     allowed to function as the Congress envisioned in helping 
     lead the deployment of new communications technologies and 
     services.
       It must be reiterated that small rural ILECs have long led 
     the way in meeting the Digitial Challenge by deploying new 
     technologies--not just to their most profitable customers, 
     but to every individual within their market that wishes to 
     receive service. With your assistance, the rural ILEC 
     industry will continue to maintain its unparalleled record of 
     service.
           Sincerely,

                                           Shirley Bloomfield,

                                        Vice President, Government
     Affairs & Association Services.
                                  ____

                                                  Bristol Bay Area


                                           Health Corporation,

                                     Dillingham, AK, May 31, 2000.

     Re Broadband Internet Access Act of 2000.

     Hon. Patrick Daniel Moynihan,
     Ranking Minority Member, Committee on Finance, U.S. Senate, 
         Washington, DC.
       Dear Senator Moynihan: We are writing to indicate our 
     support for your continued effort to pass the Broadband 
     Internet Access Act of 2000. If passed, this legislation 
     could significantly improve access of millions of Americans 
     to the Internet and its valuable resources, including 
     residents of rural Alaska communities.
       We provide health care services to 34 remote Alaska 
     communities, most of which can only be reached by small 
     airplane. The availability of affordable advanced 
     telecommunications including telemedicine and improved 
     Internet access would be beneficial in providing health 
     education to villagers; would help reduce feelings of 
     isolation of health care providers, teachers and other 
     professionals; and provide access to health care resources 
     for everyone. It would also provide faster and less expensive 
     access to all communication mediums.
       We believe that remote, rural areas such as those that make 
     up a large part of Alaska need and deserve the availability 
     of affordable high-speed Internet services like urban 
     communities currently enjoy. Without this availability, rural 
     communities will continue to be left behind and 
     technologically outdated as the rest of the U.S. moves 
     forward.
       Thank you for the opportunity to comment on this important 
     legislation. Please contact me at (907) 842-5201 if I can be 
     of further assistance.
           Sincerely,
                                                  Robert J. Clark,
     President/CEO.
                                  ____

                                             Georgetown University


                                               Medical Center,

                                                     May 25, 2000.

     Re Broadband Internet Access Act of 2000.

     Hon. Patrick Daniel Moynihan,
     Ranking Minority Member, Committee on Finance, U.S. Senate, 
         Washington, DC.
       Dear Senator Moynihan: We are writing to encourage you in 
     your effort to pass the Broadband Internet Access Act of 
     2000. If passed, this important legislation could 
     significantly improve the way millions of Americans gain 
     access to health information and receive health care.
       For many years the Imaging Sciences and Information Systems 
     (ISIS) Center at Georgetown University has been a successful 
     innovator of technologies that are used to improve the 
     quality and lower the cost of health care. This contribution, 
     however, accounts for only two-thirds of the receipt for 
     successful health care reform in America. The third element, 
     improved access to health services, has been one of the most 
     challenging, especially to health care providers and 
     consumers in rural America.
       Access to quality health care cannot be improved through 
     development of more efficient technologies, alone. We, and 
     with us many of our colleagues throughout America, believe 
     financial incentives are necessary to correct current 
     regulatory and market insufficiencies that inhibit assess to 
     emerging health services that increasingly rely on 
     telecommunications and Internet connectivity to reach 
     consumers. The creation of these incentives is outside the 
     purview of the health sector and that is why we

[[Page 10087]]

     look to you and your Senate colleagues. You can help remedy 
     the economic conditions that contribute to the growing 
     ``digital divide'', that made second class citizens out of 
     underserved people throughout the country.
       Specifically, we look to you for a remedy that will improve 
     access and availability of telephone, cable, fiber optic, 
     terrestrial, wireless, and satellite telecommunications 
     services at bandwidth capacities sufficient to carry high 
     resolution images, video and voice over the Internet, 
     increasingly the preferred mode of delivery. We believe your 
     proposed legislation addressed these problems through its 10% 
     tax credit for deployment of ``last-mile'' current generation 
     broadband capability to rural and underserved areas, and its 
     20% credit for ``next generation'' service.
       Therefore we applaud your sponsorship of the Broadband 
     Internet Access Act of 2000. We appreciate your vision and 
     look to you and your colleagues in the Senate to rapidly pass 
     this important legislation so that we can move on to a next 
     generation of health care with improved quality, cost and 
     access.
       Thank you for an opportunity to express our support for 
     your initiative. If you need any additional information, 
     please call us at 202-687-7955 or at 
     M[email protected].
           Sincerely,
     Dukwoo Ro, PhD,
       Associate Professor.
     Seong K. Mun, PhD,
       Professor, Director of ISIS Center.
                                  ____

                                            United States Distance


                                         Learning Association,

                                      Watertown, MA, May 19, 2000.

     Re Broadband Internet Access Act of 2000.

     Hon. Daniel Patrick Moynihan,
     U.S. Senate,
     Washington, DC.
       Dear Senator Moynihan:
       The United States Distance Learning Association supports 
     the Broadband Internet Access Act of 2000 to be introduced by 
     you.
       As Executive Director of the association I want to assure 
     you that our association applauds the initiative. The 
     Congress of the United States has the opportunity to help 
     deliver long needed Telecommunication Services to all 
     Americans. This act will serve two purposes--increasing 
     bandwidth availability and decreasing the well-documented 
     Digital Divide.
           Sincerely,
                                               Dr. John G. Flores,
                                               Executive Director.


                                         Corning Incorporated,

                                        Corning, NY, May 19, 2000.
     Hon. Daniel Patrick Moynihan,
     Ranking Minority Member, Committee on Finance, U.S. Senate, 
         Washington, DC.
       Dear Senator Moynihan: I am writing to endorse with 
     enthusiasm the Broadband Internet Access Act of 2000 and to 
     congratulate you for your leadership for introducing this 
     important legislation.
       As you may know, Corning is a leader in optical 
     communications systems. As such, we have great confidence in 
     the benefits that deployment of broadband to all Americans 
     can confer on the economy and society as a whole. As Alan 
     Greenspan has said many times, the Internet has contributed 
     significantly to the on-going economic expansion. The rapid 
     deployment of broadband access can extend the benefits of the 
     Internet well into the future.
       Unfortunately, broadband is being deployed very slowly in 
     this country. Two specific problems have arisen. First, 
     subscribers in rural and underserved low-income areas are 
     unlikely to gain access to the current generation broadband 
     capability any time soon, giving rise to a ``digital divide'' 
     between information haves and have-nots. Secondly, the 
     deployment of next generation broadband capability will take 
     30 to 40 years in the current regulatory and financial 
     environment. We think America can do better for its citizens 
     by immediate enactment of the Broadband Internet Access Act 
     of 2000.
       We believe your legislation addresses these problems 
     through its 10% tax credit for deployment of last-mile 
     current generation broadband capability to rural and 
     underserved areas, and its 20% credit of next generation 
     technology more generally. These incentives will correct 
     current regulatory and market failures that are inhibiting 
     the investment. Moreover, the credits are temporary, lasting 
     only five years, a sufficient time to kick-start the 
     deployment of the technology and to reduce costs in this very 
     dynamic sector.
       It is important to note that broadband infrastructure is a 
     common good. As such, we believe that a well-designed 
     initiative such as the Broadband Internet Access Act can cost 
     effectively enhance the national welfare.
       Again, I congratulate you for taking the leadership and for 
     developing a creative initiative that will benefit the 
     country for decades to come.
           All the best,
     Roger Ackerman.
                                  ____

                                             Association for Local


                                  Telecommunications Services,

                                     Washington, DC, June 7, 2000.
     Senator Daniel Patrick Moynihan,
     U.S. Senate,
     Washington, DC.
       Dear Senator Moynihan: The Association for Local 
     Telecommunications Services (ALTS) thanks you for your 
     leadership in drafting legislation to create financial 
     incentives for telecommunications companies to offer high-
     speed Internet broadband services. The legislation that you 
     introduce today will help companies expand their businesses 
     into rural and urban communities and will also provide them 
     with incentives to offer broadband service at even higher 
     speeds.
       We are especially grateful of your continuing efforts to 
     support competitive telecommunications companies in local 
     markets. While competitors have made enormous progress in 
     rolling out advanced telecommunications services to consumers 
     across the country, many markets remain uneconomic to serve. 
     Your legislation will help to accelerate the deployment of 
     these broadband services in rural, inner city and other 
     underserved areas. We have seen that the best way to 
     encourage deployment of advanced broadband technologies is to 
     encourage competition for local telecommunications services. 
     ALTS believes your legislation will provide significant 
     financial incentives to competitive companies to roll out 
     high speed broadband services for every consumer who wants to 
     receive the service.
       Your legislation is a realistic effort to close the 
     ``digital divide'' between rural and urban communities and to 
     ensure that all Americans have the fastest and best 
     telecommunications service in the world. We look forward to 
     continuing to work with you on this legislation in the coming 
     weeks.
       Thank you again for your support of competition and the 
     rapid deployment of advanced, broadband services to all 
     Americans.
           Sincerely yours,
                                             John Windhausen, Jr.,
     President.
                                  ____

                                                   Queens College,


                                      Department of Economics,

                                       New York, NY, June 1, 2000.

     Re The Broadband Internet Access Act of 2000.

     Hon. Daniel Patrick Moynihan,
     Ranking Minority Leader, Committee on Finance, U.S. Senate, 
         Washington, DC.
       Dear Senator Moynihan: I am aware that you and other 
     Senators are co-sponsors of ``The Broadband Internet Access 
     Act of 2000,'' a bill that is intended to alleviate the 
     disparity in high-speed access to the Internet. Preliminary 
     research undertaken by Florence Kwan and myself shows that 
     discrepancies in high-speed access do exist at this time. 
     Further, the study demonstrates the need for policy-makers to 
     examine the degree to which all members of society have high-
     speed access to the Internet.
       The study was based upon a sampling of residential lines in 
     the United States. The results suggest that income and 
     population density are significant predictors of access to 
     cable-modem or DSL service. High-speed access is less likely 
     to be available to Americans in rural and low-income 
     neighborhoods. As preliminary research, the study underscores 
     the need for further research that is comprehensive in scope 
     and that can serve as the basis for regulatory policy.
       I commend your efforts to address an issue that is critical 
     to the ability of all Americans to be part of the Information 
     Society and to participate in our system of democracy.
           Very truly yours,
                                                      David Gabel,
                                                        Professor.

  Mr. KERRY. Mr. President, I am very pleased to join Senator Moynihan 
in introducing the Broadband Internet Access Act of 2000. I commend the 
Senator from New York for his leadership on this issue, and I look 
forward to working with Senator Moynihan, Senator Rockefeller and 
others in this critical effort to ensure the rapid deployment of high-
speed telecommunications services to all Americans.
  Mr. President, throughout the course of history, prosperity has 
flowed to those economies that had ready access to avenues of commerce. 
Throughout the middle ages and up until the mid-19th century, that 
meant ready proximity to a waterway. The great cities of Italy, England 
and France all lay on oceans or rivers. In North America, the early 
trading points on or near the Atlantic thrived and became New York, 
Boston, Philadelphia and Baltimore. Throughout this time, the primary 
way to ship goods was over water, and economies prospered along oceans 
or major inland waterways because of the paramount importance of access 
to commerce. With the industrial revolution came the advent of the 
railroad and this new way of getting goods to market. If your town was 
fortunate to be along one of many rail lines, then good economic times 
often lay ahead.

[[Page 10088]]

If your town was not along the railroad, then you were at a serious 
economic disadvantage. We read today about the ``ghost towns'' of the 
old West--these were the towns left behind because the railroad passed 
them by. And even then, one hundred seventy years ago, we know that 
Americans did all they could to connect themselves to the networks--
waterways, railroads--that delivered goods to market: along the 
Panhandle, the entire town of Ivanhoe, Oklahoma literally uprooted 
itself--picked up the church, the school, the buildings--and moved 
across the Texas border to be closer to the railroad lines.
  In many ways, that is precisely the challenge facing thousands of 
communities across the nation today: communities are rushing and 
hurrying--and too many are struggling and finding it enormously 
difficult--to get connected to the networks on which we conduct 
business in the New Economy. And, Mr. President, unless we are willing 
to countenance thousands of ghost towns across the landscape of the 
21st century--ghost towns of inner city and rural America--we must work 
together to empower every community to meet that challenge.
  Mr. President, today, the major product in the United States is 
information. The ability to send and receive vast amounts of 
information, quickly and efficiently, often determines the success or 
failure of a company in our new information age. For this reason, 
companies are locating where they have high-speed access to this new 
avenue of commerce, and they are shying away from areas where such 
excess is either prohibitively expensive or unavailable. High-speed 
access is also providing new opportunities in terms of educating our 
children and caring for the sick. However, those opportunities are 
available only to those communities with efficient and affordable 
access to high-speed lines.
  Herein lies the problem. As would be expected, telecommunications 
companies are deploying advanced networks initially in areas where 
there are lots of attractive consumers, but are often taking their time 
to build-out elsewhere, such as in low-income urban and rural areas. 
That's why a downtown business consumer has a myriad of choices for 
high-speed access. And most residential consumers living in reasonable 
well-off urban and suburban areas also have a choice. However, many, 
many regions of our country still have little or no ability to obtain 
high-speed access to the Internet.
  According to the Massachusetts Technology Collaborative, of the 351 
towns in Massachusetts, only 164 are wired to receive high-speed DSL 
Internet service, and only 145 are wired to receive high-speed cable 
modem service. Significantly, 151 towns have no DSL or cable modem 
option, only 56 kilobit dial-up Internet service. Moreover, this 
situation is not expected to change anytime soon. The Legg Mason 
Precursor groups estimates that even three or fours years down the 
road, half of America will have either one or zero broadband providers 
to choose from.
  We need to address this problem in order to ensure that no area is 
left behind--to ensure that all Americans are able to benefit from our 
new high-tech economy. Many telecommunications companies legitimately 
argue that deploying in certain areas makes little sense because the 
opportunity to recoup the investment is so small. It's time we listened 
and offered an economic incentive to change the equation. To this end, 
our bill establishes a generous 10 percent tax credit to all companies 
willing to deploy and offer 1.5 megabit high-speed Internet service in 
rural and low-income urban areas. We are advocating such an approach 
because we have heard from industry that this will provide a needed 
incentive to deploy in areas that are presently neglected. 
Significantly, this credit is open to all companies be they telephone 
or cable, wireline or wireless, MMDS or satellite. The bill is 
concerned only with encouraging widespread deployment, and is 
absolutely technology neutral.
  Mr. President, our legislation addresses not only the digital divide 
that exists today, but also looks to the future and to the next 
generation of high-speed services. The next generation of advanced 
services will require substantially higher transmission speeds like 4 
megabits for one channel of standard television, 20 megabits for one 
channel of HDTV, and 10 to 100 megabits for Ethernet data. These 
transmission speeds can only be achieved with more advanced technology 
such as fiber optics, very high speed digital subscriber line, 50-home-
node cable modems, and next-generation wireless.
  The services available at such speeds will truly revolutionize and 
improve our daily lives. However, according to economists from the 
American Enterprise Institute, at the current rate of deployment, such 
advanced technology will not achieve universal penetration until 
somewhere between 2030 and 2040. Furthermore, such delay may seriously 
undermine our global leadership in technology. Indeed, according to a 
recent report in the Wall Street Journal, the Japanese company NTT will 
start bringing optical fiber lines directly to homes in Tokyo and Osaka 
by the end of this year. Such networks will have capabilities of up to 
10 megabits downstream--several times faster than most of the high-
speed services offered today in America.
  Such Internet capability will transform American life in ways we can 
only imagine today. Children can download educational video in real 
time on nearly any subject. Adults can train for new jobs from their 
homes. Complex medical images such as MRIs and x-rays that today take 
several minutes to download can be transmitted in a matter of seconds. 
Telecommuting, business teleconferencing and personal communication 
will all rise to new levels.
  To accelerate the roll-out of such next-generation systems in the US, 
we propose to establish a 20 percent tax credit for companies that 
deploy systems capable of providing 22 megabit downstream/10 megabit 
upstream service to residential consumers everywhere and business 
consumers in low-income urban and rural areas. Such bits speeds will 
allow for different users in a home to simultaneously watch 3 different 
channels of digital television and utilize high-speed Ethernet-
comparable Internet access.
  Mr. President, this measure is intended to begin the debate in the 
Senate on how best to address the growing digital divide and to 
accelerate the deployment of next-generation technologies across our 
nation. I want to thank Senator Moynihan for his extraordinary 
leadership on this issue and his staff for their continued hard work in 
crafting this bill. I also wish to commend Senators Rockefeller and 
Snowe for their work on tax credit legislation which we incorporate and 
expand on in this bill. Finally, I wish to extend my gratitude to all 
the members of industry who worked with us over these past few months 
in crafting this bill. Clearly, this is a very complex topic and we are 
continuing to work to find the right solution. I look forward to 
continuing our partnership and to passing meaningful legislation this 
year.
  The challenge today is extraordinary--its implications absolutely 
unmistakable for our country. Too often we talk about a digital divide 
in the United States as if it were unchangeable, as if it were a simple 
fact of life in this nation that some communities will be empowered by 
technology while others will be left behind. But this is a false 
choice--and we ought to be doing everything in our power as policy 
makers, working harmoniously with industry, to offer a new choice: 
every community connected to the new technology, every citizen provided 
with the tools to make the most of their own talents in the New 
Economy.
  Mr. President, The Broadband Internet Access Act of 2000 is not a 
panacea for every challenge before us in the New Economy; significant 
questions of education reform workforce development, and technology 
training must be resolved and reinvented before mere access to 
technology will allow full participation for every citizen in the 
Information Age. But Mr. President, I ask that--as we work in a 
bipartisan way to address those other vital areas

[[Page 10089]]

of public policy-- we remember the lessons of our nation's economic 
history and take this absolutely critical first step towards meeting 
the most basic needs of any community--a connection to the New Economy.
  Mr. BAUCUS. Mr. President, I am very pleased today to join with 
Senator Moynihan in introducing the Broadband Internet Access Act of 
2000. This legislation provides a tax incentive to stimulate rapid 
deployment of high-speed communication services to residential, rural, 
and low-income areas.
  Although our nation continues to experience a period of unprecedented 
economic growth, it is important to remember that this growth is not 
shared evenly throughout the country. My State, Montana, is 
unfortunately an example of areas in which the economy continues to lag 
behind the rest of the nation. Montana is ranked last in per-capita 
earned income and first in the number of people holding multiple jobs. 
Our children and grandchildren are constantly faced with a difficult 
dilemma--will they be able to find jobs in Montana, where they can 
continue to enjoy living in ``the last great place'', or will they be 
forced to move elsewhere just to be able to earn a decent wage. More 
and more of them are choosing to leave, costing Montana some of her 
best and brightest young people, and along with them much of our hope 
for the future.
  One of the keys to turning our State's economy around is to make sure 
the appropriate infrastructure is in place so that we can attract the 
kinds of businesses that will provide jobs for ourselves and our 
children. I have worked for years as ranking Member of the Environment 
and Public Works Committee to ensure that Montana and other rural 
states receive our fair share of highway construction funds, so that 
the transportation infrastructure of our great State can support 
economic growth.
  But today's economy is not just about bricks and mortar. Technology 
is transforming traditional ways of doing business, as it is creating 
entirely new forms of business that never existed before. And high-
speed Internet access is the key to advancing technological growth.
  The Broadband Internet Access Act of 2000 provides graduated tax 
credits for deployment of high-speed communications to residential and 
rural communities. It gives a 10 percent credit for the deployment of 
at least 1.5 million bits per second downstream and 200,000 bits per 
second upstream to all subscribers--residential, business, and 
institutions--in rural and low income areas. This is what we call the 
``current generation'' broadband. The bill also gives a 20 percent 
credit for the deployment of at least 22 million bits per second 
downstream and 10 million bits per second upstream to all subscribers 
in rural and low income areas, and to all residential customers in 
other areas. This is what we are calling ``next generation'' broadband.
  Mr. President, as we look around us today and see the many streets 
that are being torn-up to lay cables for high-speed communication, and 
the communication dishes that are constantly ``sprouting'' from our 
buildings, we may wonder why we need a tax credit to advance an 
industry that is already growing by leaps and bounds. The reason, 
again, is that this growth is most extensive in selected areas. Market 
forces are driving deployment of high-speed communication capabilities 
almost exclusively to urban businesses and wealthy households. Rural 
businesses and rural families like those in Montana again find 
themselves at the back of the line. And by the time our turn comes for 
this technology, the rest of the country will already be well into the 
next technological generation. The Digital Divide, which is already a 
wedge between our citizens, will be perpetuated and grow into a chasm.
  This bill is designed to even the playing field. By giving private 
industry economic incentives to accelerate high-speed communication 
capabilities to Americans who are at the end of the line, we will help 
people like my constituents in Montana share in our nation's economic 
growth.
  As a member of the Senate Broadband Caucus, which was established to 
develop solutions to the problem of bringing high-speed Internet access 
to rural and underserved areas, I have worked hard on initiatives which 
would help rural areas bridge the Digital Divide. These initiatives 
include: the Rural Broadband Enhancement Act, which provides $5 billion 
in low interest loans for broadband development; the Rural Telework Act 
of 2000, to provide grants to develop National Centers for Distance 
Working which would provide access to technology and training for rural 
residents; the Universal Service Support Act, which lifts the cap on 
the universal service support fund for rural telecommunications 
providers; and the amendment I offered to the Rural Television Bill, to 
give consideration to projects which offer high speed Internet access 
in addition to television programming.
  I believe these initiatives, along with the Broadband Internet Access 
Act we are introducing today, will go a long way toward finally 
bridging the growing Digital Divide and help rural areas grow and 
flourish. With this legislation, I hope to create an economic 
environment that will make sure Montana's children and grandchildren 
will no longer have to sacrifice enjoying the beauty of the ``last 
great place'' in order to earn a living wage.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 2699. A bill to strengthen the authority of the Federal Government 
to protect individuals from certain acts and practices in the sale and 
purchase of social security numbers and social security account 
numbers, and for other purposes; to the Committee on Finance.


             SOCIAL SECURITY NUMBER PROTECTION ACT OF 2000

  Mrs. FEINSTEIN. Mr. President, I am pleased today to join the 
administration and, particularly the Vice President, in introducing the 
Social Security Number Protection Act of 2000.
  This legislation is designed to curb the unregulated sale and 
purchase of Social Security numbers, which have contributed 
significantly to a growing range of illegal activities, including 
fraud, identity theft, and, in some cases, stalking and other violent 
crimes.
  Mr. President, in 1997, I introduced S. 600, the Personal Privacy 
Information Act, with Senator Grassley after watching in dismay as one 
of my staff downloaded my own Social Security number off of the 
Internet in less than three minutes.
  Nothing much has changed. For a mere $45, one can go online and 
purchase a person's Social Security number from a whole host of web 
businesses--no questions asked.
  Why is it so important to stop the commercial sale of individuals' 
personal Social Security numbers? Once a criminal has a potential 
victim's Social Security number, that person becomes extremely 
vulnerable to having his or her whereabouts tracked and his or her 
identity stolen.
  The Social Security number is the Nation's de facto national 
identifier. It is a key to one's public identity. The Federal 
Government uses it as a taxpayer identification number, the Medicare 
number, and as a soldier's serial number. States use the Social 
Security number as the identification number on drivers' licenses, 
fishing licenses, and other official records. Banks use it to establish 
personal identification for credit. The number is requested by 
telephone companies, gas companies, and even by brokerages when 
consumers set-up personal accounts.
  Thus, a criminal who purchases a Social Security number is well on 
his way to fraudulently obtaining numerous services in the name of an 
unsuspecting American.
  Partly due to this unrestricted traffic in Social Security numbers, 
our country is facing an explosion in identity theft crimes. The Social 
Security Administration recently reported that it had received more 
than 30,000 complaints about the misuse of Social Security numbers, 
last year, most of which had to do with identity theft. This is an 
increase of 350% from 1997, when there were 7,868 complaints. In

[[Page 10090]]

total, Treasury Department officials estimate that identity theft 
causes between $2 and $3 billion in losses each year--just from credit 
cards.
  According to a recent survey of identity theft victims published 
jointly by the Privacy Rights Clearinghouse and CALPIRG, the average 
identity theft victim has fraudulent charges of $18,000 made in his 
name. Typically, an identity theft victim spends approximately 175 
hours of personal time over a two-year period to clean-up his credit 
record.
  Sometimes, this unrestricted sale of personal information can have 
tragic results. Amy Boyer, a twenty-year old dental assistant in New 
Hampshire, was killed last year by a stalker who bought her Social 
Security number off an Internet web site for $45. Armed with this 
critical information, he tracked her down to her work address.
  Here are some other examples of Social Security number misuse. Kim 
Brady, a constituent from Castro Valley, California, wrote to me that 
an identity thief obtained a credit card in her name on the Internet. 
The application ``was approved in 10 seconds even though the 
application only had [her] name, Social Security number, and birth date 
correct.'' When Ms. Bradbury contacted credit card companies and asked 
how a credit card was issued in her name despite false information on 
the application, the companies said they only look to ``see that the 
name and the Social Security number match.''
  Another California constituent, Michelle Brown of Hermosa Beach, 
informed me that a criminal used her Social Security number to 
fraudulently assume her identity. The perpetrator rang up a total of 
$50,000 in charges including a $32,000 truck and $5,000 worth of 
liposuction. In addition, the perpetrator used Michelle's identity to 
establish wireless and residential telephone service, utilities 
service, and to obtain a year-long residential lease.
  Michelle notes that she has spent hundreds of hours trying to restore 
her good name and has endured ``weeks of sleepless nights, suffering 
from nearly no appetite, and nerve-shattering moments of my life 
spinning out of control.''
  In another case, a retired air force officer was falsely billed for 
$113,000 on 33 different credit accounts after identity thieves stole 
his Social Security number. He and his wife have dealt with over a 
dozen third party collection agencies. They are also being sued by a 
furniture store in Texas and have had five automobiles purchased in 
their name.
  I am pleased to work with the Administration on this bill because no 
one should seek to profit from the sale of Social Security numbers in 
circumstances that create a substantial risk of physical, emotional, or 
financial harm to the person to whom these numbers are assigned.
  What would this bill do? The Social Security Number Protection Act 
would impose criminal and civil penalties for the sale and purchase of 
Social Security numbers. Specifically, it would direct the Federal 
Trade Commission to issue regulations prohibiting this sale.
  The legislation would direct the FTC to permit exceptions to this ban 
in a very narrow range of circumstances, including where an individual 
has consented to the sale, for law enforcement or national security 
reasons, in emergency situations to protect an individual's health and 
safety, for research or public health purposes, and where the use of 
the Social Security number is for a lawful purpose and is unlikely to 
result in serious bodily, emotional, or financial harm of a Social 
Security number holder.
  Mr. President, I think this is a very important step forward. The 
bill is carefully drawn. It simply prevents the sale of Social Security 
numbers for profit, which can result in enormous wrongdoing to the 
individual Social Security number holder.
  I yield the floor.
                                 ______
                                 
      By Mr. L. CHAFEE (for himself, Mr. Lautenberg, Mr. Smith of New 
        Hampshire, and Mr. Baucus):
  S. 2700. A bill to amend the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980 to promote the cleanup and 
reuse of brownfields, to provide financial assistance for brownfields 
revitalization, to enhance State response programs, and for other 
purposes; to the Committee on Environment and Public Works.


  BROWNFIELDS REVITALIZATION AND ENVIRONMENTAL RESTORATION ACT OF 2000

  Mr. L. CHAFEE. I rise today to introduce the Brownfields 
Revitalization and Environmental Restoration Act of 2000 together with 
Senator Lautenberg, Senator Smith of New Hampshire, and Senator Baucus. 
We are introducing this bill today because we support legislation that 
will expedite cleanup of our nation's hazardous waste sites. We support 
economic development in our neighborhoods and job creation in our 
cities. We also support invigorating our urban cores and bolstering 
local governments. Mr. President, we are introducing this legislation 
today because, if enacted, it has the potential to fulfill these 
objectives, which are important to me and I believe to every Senator.
  Brownfields are typically older commercial or industrial properties 
at which development is hindered by the presence--or even the potential 
presence--of hazardous substances. Countless numbers of brownfield 
sites blight our communities, pose health and environmental hazards, 
erode our cities' tax base, and contribute to urban sprawl. In fact, 
the U.S. Conference of Mayors has estimated that more than 450,000 
brownfield sites exist nationwide. But, we stand to reap enormous 
economic, environmental, and social benefits with the successful 
redevelopment of brownfield sites. The redevelopment of brownfields 
capitalizes on existing infrastructure, creates a robust tax base for 
local governments, attracts new businesses and jobs, reduces the 
environmental and health risks to communities, and preserves community 
character. This can truly be a victory for everyone.
  While everyone agrees that brownfield sites should be cleaned up, 
presently there are many problems that prevent us from cleaning up 
these sites. Let me address the problems and how our legislation poses 
solutions.
  Problem: There is not enough funding to address the large number of 
brownfield sites that exist.
  Solution: The bill authorizes $150 million per year to state and 
local governments to perform assessments and cleanup at brownfield 
sites. It also authorizes $50 million per year to establish and enhance 
State brownfield programs.
  Problem: Communities that strive to clean up sites, such as Riverside 
Mills alongside the Woonasquatucket River in Providence, in order to 
turn them into greenspace, cannot since there will be no future income 
stream to repay a loan.
  Solution: The bill will allow EPA to issue grants to state and local 
governments to clean up sites that will be converted into parks or open 
space.
  Problem: People who bought brownfield sites and did not cause the 
contamination could be liable under Superfund.
  Solution: The bill clarifies that innocent landowners, that act 
appropriately, are not responsible for paying cleanup costs.
  Problem: Developers that want to purchase brownfield sites may be 
liable for future cleanup costs.
  Solution: The bill encourages developers to purchase and develop 
brownfield sites by exempting from liability prospective purchasers 
that do not cause or worsen the contamination at a site.
  Problem: Superfund liability issues prevent development of areas near 
contaminated sites.
  Solution: The bill includes an exemption from Superfund liability for 
contiguous property owners.
  Problem: Investors do not clean up brownfield sites because for fear 
that EPA will ``second-guess'' their actions.
  Solution: The bill offers finality by precluding EPA from taking an 
action at a site being addressed under a state cleanup program unless 
there is an ``imminent and substantial endangerment'' to public health 
or the

[[Page 10091]]

environment, and additional work needs to be done.
  I am proud to introduce this bill with my esteemed colleagues from 
the Environment and Public Works Committee. The fact that this bill is 
sponsored by the Chairman and Ranking Minority Member of the Superfund 
Subcommittee and the Environment and Public Works Committee speaks very 
highly for the bipartisan efforts to achieve consensus on this issue. A 
factor critical to the success of this legislation, will be continued 
bipartisanship. We must continue to reach across the aisle; we must 
continue to find common ground; and we must continue to work 
cooperatively to move this legislation. I urge all Senators to support 
this legislation, which can--and should--be enacted this year.
  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. 2700

       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 
     ``Brownfields Revitalization and Environmental Restoration 
     Act of 2000''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

              TITLE I--BROWNFIELDS REVITALIZATION FUNDING

Sec. 101. Brownfields revitalization funding.

             TITLE II--BROWNFIELDS LIABILITY CLARIFICATIONS

Sec. 201. Contiguous properties.
Sec. 202. Prospective purchasers and windfall liens.
Sec. 203. Innocent landowners.

                   TITLE III--STATE RESPONSE PROGRAMS

Sec. 301. State response programs.
Sec. 302. Additions to National Priorities List.

              TITLE I--BROWNFIELDS REVITALIZATION FUNDING

     SEC. 101. BROWNFIELDS REVITALIZATION FUNDING.

       (a) Definition of Brownfield Site.--Section 101 of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601) is amended by adding 
     at the end the following:
       ``(39) Brownfield site.--
       ``(A) In general.--The term `brownfield site' means real 
     property, the expansion, redevelopment, or reuse of which may 
     be complicated by the presence or potential presence of a 
     hazardous substance, pollutant, or contaminant.
       ``(B) Exclusions.--The term `brownfield site' does not 
     include--
       ``(i) a facility that is the subject of a planned or 
     ongoing removal action under this title;
       ``(ii) a facility that is listed on the National Priorities 
     List or is proposed for listing;
       ``(iii) a facility that is the subject of a unilateral 
     administrative order, a court order, an administrative order 
     on consent or judicial consent decree that has been issued to 
     or entered into by the parties under this Act;
       ``(iv) a facility that is the subject of a unilateral 
     administrative order, a court order, an administrative order 
     on consent or judicial consent decree that has been issued to 
     or entered into by the parties, or a facility to which a 
     permit has been issued by the United States or an authorized 
     State under the Solid Waste Disposal Act (42 U.S.C. 6901 et 
     seq.), the Federal Water Pollution Control Act (33 U.S.C. 
     1321), the Toxic Substances Control Act (15 U.S.C. 2601 et 
     seq.), or the Safe Drinking Water Act (42 U.S.C. 300f et 
     seq.);
       ``(v) a facility that--

       ``(I) is subject to corrective action under section 3004(u) 
     or 3008(h) of the Solid Waste Disposal Act (42 U.S.C. 
     6924(u), 6928(h)); and
       ``(II) to which a corrective action permit or order has 
     been issued or modified to require the implementation of 
     corrective measures;

       ``(vi) a land disposal unit with respect to which--

       ``(I) a closure notification under subtitle C of the Solid 
     Waste Disposal Act (42 U.S.C. 6921 et seq.) has been 
     submitted; and
       ``(II) closure requirements have been specified in a 
     closure plan or permit;

       ``(vii) a facility that is subject to the jurisdiction, 
     custody, or control of a department, agency, or 
     instrumentality of the United States, except for land held in 
     trust by the United States for an Indian tribe;
       ``(viii) a portion of a facility--

       ``(I) at which there has been a release of polychlorinated 
     biphenyls; and
       ``(II) that is subject to remediation under the Toxic 
     Substances Control Act (15 U.S.C. 2601 et seq.); or

       ``(ix) a portion of a facility, for which portion, 
     assistance for response activity has been obtained under 
     subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et 
     seq.) from the Leaking Underground Storage Tank Trust Fund 
     established under section 9508 of the Internal Revenue Code 
     of 1986.
       ``(C) Site-by-site determinations.--Notwithstanding 
     subparagraph (B) and on a site-by-site basis, the President 
     may authorize financial assistance under section 128 to an 
     eligible entity at a site included in clause (i), (iv), (v), 
     (vi), (viii), or (ix) of subparagraph (B) if the President 
     finds that financial assistance will protect human health and 
     the environment, and either promote economic development or 
     enable the creation of, preservation of, or addition to 
     parks, greenways, undeveloped property, other recreational 
     property, or other property used for nonprofit purposes.
       ``(D) Additional areas.--For the purposes of section 128, 
     the term `brownfield site' includes--
       ``(i) a site that is contaminated by a controlled substance 
     (as defined in section 102 of the Controlled Substances Act 
     (21 U.S.C. 802)); and
       ``(ii) mine-scarred land.''.
       (b) Brownfields Revitalization Funding.--Title I of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601 et seq.) is amended by 
     adding at the end the following:

     ``SEC. 128. BROWNFIELDS REVITALIZATION FUNDING.

       ``(a) Definition of Eligible Entity.--In this section, the 
     term `eligible entity' means--
       ``(1) a general purpose unit of local government;
       ``(2) a land clearance authority or other quasi-
     governmental entity that operates under the supervision and 
     control of or as an agent of a general purpose unit of local 
     government;
       ``(3) a government entity created by a State legislature;
       ``(4) a regional council or group of general purpose units 
     of local government;
       ``(5) a redevelopment agency that is chartered or otherwise 
     sanctioned by a State;
       ``(6) a State; or
       ``(7) an Indian Tribe.
       ``(b) Brownfield Site Characterization and Assessment Grant 
     Program.--
       ``(1) Establishment of program.--The Administrator shall 
     establish a program to--
       ``(A) provide grants to inventory, characterize, assess, 
     and conduct planning related to brownfield sites under 
     paragraph (2); and
       ``(B) perform targeted site assessments at brownfield 
     sites.
       ``(2) Assistance for site characterization and 
     assessment.--
       ``(A) In general.--On approval of an application made by an 
     eligible entity, the Administrator may make a grant to the 
     eligible entity to be used for programs to inventory, 
     characterize, assess, and conduct planning related to 1 or 
     more brownfield sites.
       ``(B) Site characterization and assessment.--A site 
     characterization and assessment carried out with the use of a 
     grant under subparagraph (A) shall be performed in accordance 
     with section 101(35)(B).
       ``(c) Grants and Loans for Brownfield Remediation.--
       ``(1) Grants provided by the president.--Subject to 
     subsections (d) and (e), the President shall establish a 
     program to provide grants to--
       ``(A) eligible entities, to be used for capitalization of 
     revolving loan funds; and
       ``(B) eligible entities or nonprofit organizations, where 
     warranted, as determined by the President based on 
     considerations under paragraph (3), to be used directly for 
     remediation of 1 or more brownfield sites that is owned by 
     the entity or organization that receives the grant and in 
     amounts not to exceed $200,000 for each site to be 
     remediated.
       ``(2) Loans and grants provided by eligible entities.--An 
     eligible entity that receives a grant under paragraph (1)(A) 
     shall use the grant funds to provide assistance for the 
     remediation of brownfield sites in the form of--
       ``(A) 1 or more loans to an eligible entity, a site owner, 
     a site developer, or another person; or
       ``(B) 1 or more grants to an eligible entity or other 
     nonprofit organization, where warranted, as determined by the 
     eligible entity that is providing the assistance, based on 
     considerations under paragraph (3), to remediate sites owned 
     by the eligible entity or nonprofit organization that 
     receives the grant.
       ``(3) Considerations.--In determining whether a grant under 
     paragraph (1)(B) or (2)(B) is warranted, the President or the 
     eligible entity, as the case may be, shall take into 
     consideration--
       ``(A) the extent to which a grant will facilitate the 
     creation of, preservation of, or addition to a park, a 
     greenway, undeveloped property, recreational property, or 
     other property used for nonprofit purposes;
       ``(B) the extent to which a grant will meet the needs of a 
     community that has an inability to draw on other sources of 
     funding for environmental remediation and subsequent 
     redevelopment of the area in which a brownfield site is 
     located because of the small population or low income of the 
     community;

[[Page 10092]]

       ``(C) the extent to which a grant will facilitate the use 
     or reuse of existing infrastructure;
       ``(D) the benefit of promoting the long-term availability 
     of funds from a revolving loan fund for brownfield 
     remediation; and
       ``(E) such other factors as the Administrator considers 
     appropriate to consider for the purposes of this section.
       ``(4) Compliance with applicable laws.--An eligible entity 
     that provides assistance under paragraph (2) shall include in 
     all loan and grant agreements a requirement that the loan or 
     grant recipient shall comply with all laws applicable to the 
     cleanup for which grant funds will be used and ensure that 
     the cleanup protects human health and the environment.
       ``(5) Transition.--Revolving loan funds that have been 
     established before the date of enactment of this section may 
     be used in accordance with this subsection.
       ``(d) General Provisions.--
       ``(1) Maximum grant amount.--
       ``(A) Brownfield site characterization and assessment.--
       ``(i) In general.--A grant under subsection (b)--

       ``(I) may be awarded to an eligible entity on a community-
     wide or site-by-site basis; and
       ``(II) shall not exceed, for any individual brownfield site 
     covered by the grant, $200,000.

       ``(ii) Waiver.--The Administrator may waive the $200,000 
     limitation under clause (i)(II) to permit the brownfield site 
     to receive a grant of not to exceed $350,000, based on the 
     anticipated level of contamination, size, or status of 
     ownership of the site.
       ``(B) Brownfield remediation.--
       ``(i) Grant amount.--A grant under subsection (c)(1)(A) may 
     be awarded to an eligible entity on a community-wide or site-
     by-site basis, not to exceed $1,000,000 per eligible entity.
       ``(ii) Additional grant amount.--The Administrator may make 
     an additional grant to an eligible entity described in clause 
     (i) for any year after the year for which the initial grant 
     is made, taking into consideration--

       ``(I) the number of sites and number of communities that 
     are addressed by the revolving loan fund;
       ``(II) the demand for funding by eligible entities that 
     have not previously received a grant under this section;
       ``(III) the demonstrated ability of the eligible entity to 
     use the revolving loan fund to enhance remediation and 
     provide funds on a continuing basis; and
       ``(IV) any other factors that the Administrator considers 
     appropriate to carry out this section.

       ``(2) Prohibition.--
       ``(A) In general.--No part of a grant or loan under this 
     section may be used for the payment of--
       ``(i) a penalty or fine;
       ``(ii) a Federal cost-share requirement;
       ``(iii) an administrative cost;
       ``(iv) a response cost at a brownfield site for which the 
     recipient of the grant or loan is potentially liable under 
     section 107; or
       ``(v) a cost of compliance with any Federal law (including 
     a Federal law specified in section 101(39)(B)).
       ``(B) Exclusions.--For the purposes of subparagraph 
     (A)(iii), the term `administrative cost' does not include the 
     cost of--
       ``(i) investigation and identification of the extent of 
     contamination;
       ``(ii) design and performance of a response action; or
       ``(iii) monitoring of a natural resource.
       ``(3) Assistance for development of local government site 
     remediation programs.--A local government that receives a 
     grant under this section may use not to exceed 10 percent of 
     the grant funds to develop and implement a brownfields 
     program that may include--
       ``(A) monitoring the health of populations exposed to 1 or 
     more hazardous substances from a brownfield site; and
       ``(B) monitoring and enforcement of any institutional 
     control used to prevent human exposure to any hazardous 
     substance from a brownfield site.
       ``(e) Grant Applications.--
       ``(1) Submission.--
       ``(A) In general.--
       ``(i) Application.--An eligible entity may submit to the 
     Administrator, through a regional office of the Environmental 
     Protection Agency and in such form as the Administrator may 
     require, an application for a grant under this section for 1 
     or more brownfield sites (including information on the 
     criteria used by the Administrator to rank applications under 
     paragraph (3), to the extent that the information is 
     available).
       ``(ii) NCP requirements.--The Administrator may include in 
     any requirement for submission of an application under clause 
     (i) a requirement of the National Contingency Plan only to 
     the extent that the requirement is relevant and appropriate 
     to the program under this section.
       ``(B) Coordination.--The Administrator shall coordinate 
     with other Federal agencies to assist in making eligible 
     entities aware of other available Federal resources.
       ``(C) Guidance.--The Administrator shall publish guidance 
     to assist eligible entities in applying for grants under this 
     section.
       ``(2) Approval.--The Administrator shall--
       ``(A) complete an annual review of applications for grants 
     that are received from eligible entities under this section; 
     and
       ``(B) award grants under this section to eligible entities 
     that the Administrator determines have the highest rankings 
     under the ranking criteria established under paragraph (3).
       ``(3) Ranking criteria.--The Administrator shall establish 
     a system for ranking grant applications received under this 
     subsection that includes the following criteria:
       ``(A) The extent to which a grant will stimulate the 
     availability of other funds for environmental assessment or 
     remediation, and subsequent reuse, of an area in which 1 or 
     more brownfield sites are located.
       ``(B) The potential of the proposed project or the 
     development plan for an area in which 1 or more brownfield 
     sites are located to stimulate economic development of the 
     area on completion of the cleanup.
       ``(C) The extent to which a grant would address or 
     facilitate the identification and reduction of threats to 
     human health and the environment.
       ``(D) The extent to which a grant would facilitate the use 
     or reuse of existing infrastructure.
       ``(E) The extent to which a grant would facilitate the 
     creation of, preservation of, or addition to a park, a 
     greenway, undeveloped property, recreational property, or 
     other property used for nonprofit purposes.
       ``(F) The extent to which a grant would meet the needs of a 
     community that has an inability to draw on other sources of 
     funding for environmental remediation and subsequent 
     redevelopment of the area in which a brownfield site is 
     located because of the small population or low income of the 
     community.
       ``(G) The extent to which the applicant is eligible for 
     funding from other sources.
       ``(H) The extent to which a grant will further the fair 
     distribution of funding between urban and nonurban areas.
       ``(I) The extent to which the grant provides for 
     involvement of the local community in the process of making 
     decisions relating to cleanup and future use of a brownfield 
     site.
       ``(f) Implementation of Brownfields Programs.--
       ``(1) Establishment of program.--The Administrator may 
     provide, or fund eligible entities to provide, training, 
     research, and technical assistance to individuals and 
     organizations, as appropriate, to facilitate the inventory of 
     brownfield sites, site assessments, remediation of brownfield 
     sites, community involvement, or site preparation.
       ``(2) Funding restrictions.--The total Federal funds to be 
     expended by the Administrator under this subsection shall not 
     exceed 15 percent of the total amount appropriated to carry 
     out this section in any fiscal year.
       ``(g) Audits.--
       ``(1) In general.--The Inspector General of the 
     Environmental Protection Agency shall conduct such reviews or 
     audits of grants and loans under this section as the 
     Inspector General considers necessary to carry out this 
     section.
       ``(2) Procedure.--An audit under this paragraph shall be 
     conducted in accordance with the auditing procedures of the 
     General Accounting Office, including chapter 75 of title 31, 
     United States Code.
       ``(3) Violations.--If the Administrator determines that a 
     person that receives a grant or loan under this section has 
     violated or is in violation of a condition of the grant, 
     loan, or applicable Federal law, the Administrator may--
       ``(A) terminate the grant or loan;
       ``(B) require the person to repay any funds received; and
       ``(C) seek any other legal remedies available to the 
     Administrator.
       ``(h) Leveraging.--An eligible entity that receives a grant 
     under this section may use the grant funds for a portion of a 
     project at a brownfield site for which funding is received 
     from other sources if the grant funds are used only for the 
     purposes described in subsection (b) or (c).
       ``(i) Agreements.--Each grant or loan made under this 
     section shall be subject to an agreement that--
       ``(1) requires the recipient to comply with all applicable 
     Federal and State laws;
       ``(2) requires that the recipient use the grant or loan 
     exclusively for purposes specified in subsection (b) or (c), 
     as applicable;
       ``(3) in the case of an application by an eligible entity 
     under subsection (c)(1), requires the eligible entity to pay 
     a matching share (which may be in the form of a contribution 
     of labor, material, or services) of at least 20 percent, from 
     non-Federal sources of funding, unless the Administrator 
     determines that the matching share would place an undue 
     hardship on the eligible entity; and
       ``(4) contains such other terms and conditions as the 
     Administrator determines to be necessary to carry out this 
     section.
       ``(j) Facility Other Than Brownfield Site.--The fact that a 
     facility may not be a brownfield site within the meaning of 
     section 101(39)(A) has no effect on the eligibility of the 
     facility for assistance under any other provision of Federal 
     law.
       ``(k) Funding.--There is authorized to be appropriated to 
     carry out this section $150,000,000 for each of fiscal years 
     2001 through 2005.''.

[[Page 10093]]



             TITLE II--BROWNFIELDS LIABILITY CLARIFICATIONS

     SEC. 201. CONTIGUOUS PROPERTIES.

       Section 107 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9607) is 
     amended by adding at the end the following:
       ``(o) Contiguous Properties.--
       ``(1) Not considered to be an owner or operator.--
       ``(A) In general.--A person that owns real property that is 
     contiguous to or otherwise similarly situated with respect 
     to, and that is or may be contaminated by a release or 
     threatened release of a hazardous substance from, real 
     property that is not owned by that person shall not be 
     considered to be an owner or operator of a vessel or facility 
     under paragraph (1) or (2) of subsection (a) solely by reason 
     of the contamination if--
       ``(i) the person did not cause, contribute, or consent to 
     the release or threatened release;
       ``(ii) the person is not--

       ``(I) potentially liable, or affiliated with any other 
     person that is potentially liable, for response costs at a 
     facility through any direct or indirect familial relationship 
     or any contractual, corporate, or financial relationship 
     (other than a contractual, corporate, or financial 
     relationship that is created by a contract for the sale of 
     goods or services); or
       ``(II) the result of a reorganization of a business entity 
     that was potentially liable;

       ``(iii) the person takes reasonable steps to--

       ``(I) stop any continuing release;
       ``(II) prevent any threatened future release; and
       ``(III) prevent or limit human, environmental, or natural 
     resource exposure to any hazardous substance released on or 
     from property owned by that person;

       ``(iv) the person provides full cooperation, assistance, 
     and access to persons that are authorized to conduct response 
     actions or natural resource restoration at the vessel or 
     facility from which there has been a release or threatened 
     release (including the cooperation and access necessary for 
     the installation, integrity, operation, and maintenance of 
     any complete or partial response action at the vessel or 
     facility);
       ``(v) the person--

       ``(I) is in compliance with any land use restrictions 
     established or relied on in connection with the response 
     action at a facility; and
       ``(II) does not impede the effectiveness or integrity of 
     any institutional control employed in connection with a 
     response action;

       ``(vi) the person is in compliance with any request for 
     information or administrative subpoena issued by the 
     President under this Act;
       ``(vii) the person provides all legally required notices 
     with respect to the discovery or release of any hazardous 
     substances at the facility; and
       ``(viii) at the time at which the person acquired the 
     property, the person--

       ``(I) conducted all appropriate inquiry within the meaning 
     of section 101(35)(B) with respect to the property; and
       ``(II) did not know or have reason to know that the 
     property was or could be contaminated by a release or 
     threatened release of 1 or more hazardous substances from 
     other real property not owned or operated by the person.

       ``(B) Demonstration.--To qualify as a person described in 
     subparagraph (A), a person must establish by a preponderance 
     of the evidence that the conditions in clauses (i) through 
     (viii) of subparagraph (A) have been met.
       ``(C) Bona fide prospective purchaser.--Any person that 
     does not qualify as a person described in this paragraph 
     because the person had knowledge specified in subparagraph 
     (A)(viii) at the time of acquisition of the real property may 
     qualify as a bona fide prospective purchaser under section 
     101(40) if the person is otherwise described in that section.
       ``(D) Ground water.--If a hazardous substance from 1 or 
     more sources that are not on the property of a person enters 
     ground water beneath the property of the person solely as a 
     result of subsurface migration in an aquifer, subparagraph 
     (A)(iii) shall not require the person to conduct ground water 
     investigations or to install ground water remediation 
     systems, except in accordance with the policy of the 
     Environmental Protection Agency concerning owners of property 
     containing contaminated aquifers, dated May 24, 1995.
       ``(2) Effect of law.--With respect to a person described in 
     this subsection, nothing in this subsection--
       ``(A) limits any defense to liability that may be available 
     to the person under any other provision of law; or
       ``(B) imposes liability on the person that is not otherwise 
     imposed by subsection (a).
       ``(3) Assurances.--The Administrator may--
       ``(A) issue an assurance that no enforcement action under 
     this Act will be initiated against a person described in 
     paragraph (1); and
       ``(B) grant a person described in paragraph (1) protection 
     against a cost recovery or contribution action under section 
     113(f).''.

     SEC. 202. PROSPECTIVE PURCHASERS AND WINDFALL LIENS.

       (a) Definition of Bona Fide Prospective Purchaser.--Section 
     101 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601) (as 
     amended by section 101(a)) is amended by adding at the end 
     the following:
       ``(40) Bona fide prospective purchaser.--The term `bona 
     fide prospective purchaser' means a person (or a tenant of a 
     person) that acquires ownership of a facility after the date 
     of enactment of this paragraph and that establishes each of 
     the following by a preponderance of the evidence:
       ``(A) Disposal prior to acquisition.--All disposal of 
     hazardous substances at the facility occurred before the 
     person acquired the facility.
       ``(B) Inquiries.--
       ``(i) In general.--The person made all appropriate 
     inquiries into the previous ownership and uses of the 
     facility in accordance with generally accepted good 
     commercial and customary standards and practices in 
     accordance with clauses (ii) and (iii).
       ``(ii) Standards and practices.--The standards and 
     practices referred to in clauses (ii) and (iv) of paragraph 
     (35)(B) shall be considered to satisfy the requirements of 
     this subparagraph.
       ``(iii) Residential use.--In the case of property in 
     residential or other similar use at the time of purchase by a 
     nongovernmental or noncommercial entity, a facility 
     inspection and title search that reveal no basis for further 
     investigation shall be considered to satisfy the requirements 
     of this subparagraph.
       ``(C) Notices.--The person provides all legally required 
     notices with respect to the discovery or release of any 
     hazardous substances at the facility.
       ``(D) Care.--The person exercises appropriate care with 
     respect to hazardous substances found at the facility by 
     taking reasonable steps to--
       ``(i) stop any continuing release;
       ``(ii) prevent any threatened future release; and
       ``(iii) prevent or limit human, environmental, or natural 
     resource exposure to any previously released hazardous 
     substance.
       ``(E) Cooperation, assistance, and access.--The person 
     provides full cooperation, assistance, and access to persons 
     that are authorized to conduct response actions at a vessel 
     or facility (including the cooperation and access necessary 
     for the installation, integrity, operation, and maintenance 
     of any complete or partial response actions at the vessel or 
     facility).
       ``(F) Institutional control.--The person--
       ``(i) is in compliance with any land use restrictions 
     established or relied on in connection with the response 
     action at a vessel or facility; and
       ``(ii) does not impede the effectiveness or integrity of 
     any institutional control employed at the vessel or facility 
     in connection with a response action.
       ``(G) Requests; subpoenas.--The person complies with any 
     request for information or administrative subpoena issued by 
     the President under this Act.
       ``(H) No affiliation.--The person is not--
       ``(i) potentially liable, or affiliated with any other 
     person that is potentially liable, for response costs at a 
     facility through--

       ``(I) any direct or indirect familial relationship; or
       ``(II) any contractual, corporate, or financial 
     relationship (other than a contractual, corporate, or 
     financial relationship that is created by the instruments by 
     which title to the facility is conveyed or financed or by a 
     contract for the sale of goods or services); or

       ``(ii) the result of a reorganization of a business entity 
     that was potentially liable.''.
       (b) Prospective Purchaser and Windfall Lien.--Section 107 
     of the Comprehensive Environmental Response, Compensation, 
     and Liability Act of 1980 (42 U.S.C. 9607) (as amended by 
     section 201) is amended by adding at the end the following:
       ``(p) Prospective Purchaser and Windfall Lien.--
       ``(1) Limitation on liability.--Notwithstanding subsection 
     (a)(1), a bona fide prospective purchaser whose potential 
     liability for a release or threatened release is based solely 
     on the purchaser's being considered to be an owner or 
     operator of a facility shall not be liable as long as the 
     bona fide prospective purchaser does not impede the 
     performance of a response action or natural resource 
     restoration.
       ``(2) Lien.--If there are unrecovered response costs 
     incurred by the United States at a facility for which an 
     owner of the facility is not liable by reason of paragraph 
     (1), and if each of the conditions described in paragraph (3) 
     is met, the United States shall have a lien on the facility, 
     or may by agreement with the party obtain from an appropriate 
     party a lien on any other property or other assurance of 
     payment satisfactory to the Administrator, for the 
     unrecovered response costs.
       ``(3) Conditions.--The conditions referred to in paragraph 
     (2) are the following:
       ``(A) Response action.--A response action for which there 
     are unrecovered costs of the United States is carried out at 
     the facility.
       ``(B) Fair market value.--The response action increases the 
     fair market value of the facility above the fair market value 
     of the

[[Page 10094]]

     facility that existed before the response action was 
     initiated.
       ``(4) Amount; duration.--A lien under paragraph (2)--
       ``(A) shall be in an amount not to exceed the increase in 
     fair market value of the property attributable to the 
     response action at the time of a sale or other disposition of 
     the property;
       ``(B) shall arise at the time at which costs are first 
     incurred by the United States with respect to a response 
     action at the facility;
       ``(C) shall be subject to the requirements of subsection 
     (l)(3); and
       ``(D) shall continue until the earlier of--
       ``(i) satisfaction of the lien by sale or other means; or
       ``(ii) notwithstanding any statute of limitations under 
     section 113, recovery of all response costs incurred at the 
     facility.''.

     SEC. 203. INNOCENT LANDOWNERS.

       Section 101(35) of the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
     9601(35)) is amended--
       (1) in subparagraph (A)--
       (A) in the first sentence, in the matter preceding clause 
     (i), by striking ``deeds or'' and inserting ``deeds, 
     easements, leases, or''; and
       (B) in the second sentence--
       (i) by striking ``he'' and inserting ``the defendant''; and
       (ii) by striking the period at the end and inserting ``, 
     provides full cooperation, assistance, and facility access to 
     the persons that are authorized to conduct response actions 
     at the facility (including the cooperation and access 
     necessary for the installation, integrity, operation, and 
     maintenance of any complete or partial response action at the 
     facility), and is in compliance with any land use 
     restrictions established or relied on in connection with the 
     response action at a facility, and does not impede the 
     effectiveness or integrity of any institutional control 
     employed at the facility in connection with a response 
     action.''; and
       (2) by striking subparagraph (B) and inserting the 
     following:
       ``(B) Reason to know.--
       ``(i) All appropriate inquiries.--To establish that the 
     defendant had no reason to know of the matter described in 
     subparagraph (A)(i), the defendant must demonstrate to a 
     court that--

       ``(I) on or before the date on which the defendant acquired 
     the facility, the defendant carried out all appropriate 
     inquiries, as provided in clauses (ii) and (iv), into the 
     previous ownership and uses of the facility in accordance 
     with generally accepted good commercial and customary 
     standards and practices; and
       ``(II) the defendant took reasonable steps to--

       ``(aa) stop any continuing release;
       ``(bb) prevent any threatened future release; and
       ``(cc) prevent or limit any human, environmental, or 
     natural resource exposure to any previously released 
     hazardous substance.
       ``(ii) Standards and practices.--Not later than 2 years 
     after the date of enactment of the Brownfields Revitalization 
     and Environmental Restoration Act of 2000, the Administrator 
     shall by regulation establish standards and practices for the 
     purpose of satisfying the requirement to carry out all 
     appropriate inquiries under clause (i).
       ``(iii) Criteria.--In promulgating regulations that 
     establish the standards and practices referred to in clause 
     (ii), the Administrator shall include each of the following:

       ``(I) The results of an inquiry by an environmental 
     professional.
       ``(II) Interviews with past and present owners, operators, 
     and occupants of the facility for the purpose of gathering 
     information regarding the potential for contamination at the 
     facility.
       ``(III) Reviews of historical sources, such as chain of 
     title documents, aerial photographs, building department 
     records, and land use records, to determine previous uses and 
     occupancies of the real property since the property was first 
     developed.
       ``(IV) Searches for recorded environmental cleanup liens 
     against the facility that are filed under Federal, State, or 
     local law.
       ``(V) Reviews of Federal, State, and local government 
     records, waste disposal records, underground storage tank 
     records, and hazardous waste handling, generation, treatment, 
     disposal, and spill records, concerning contamination at or 
     near the facility.
       ``(VI) Visual inspections of the facility and of adjoining 
     properties.
       ``(VII) Specialized knowledge or experience on the part of 
     the defendant.
       ``(VIII) The relationship of the purchase price to the 
     value of the property, if the property was not contaminated.
       ``(IX) Commonly known or reasonably ascertainable 
     information about the property.
       ``(X) The degree of obviousness of the presence or likely 
     presence of contamination at the property, and the ability to 
     detect the contamination by appropriate investigation.

       ``(iv) Interim standards and practices.--

       ``(I) Property purchased before May 31, 1997.--With respect 
     to property purchased before May 31, 1997, in making a 
     determination with respect to a defendant described of clause 
     (i), a court shall take into account--

       ``(aa) any specialized knowledge or experience on the part 
     of the defendant;
       ``(bb) the relationship of the purchase price to the value 
     of the property, if the property was not contaminated;
       ``(cc) commonly known or reasonably ascertainable 
     information about the property;
       ``(dd) the obviousness of the presence or likely presence 
     of contamination at the property; and
       ``(ee) the ability of the defendant to detect the 
     contamination by appropriate inspection.

       ``(II) Property purchased on or after May 31, 1997.--With 
     respect to property purchased on or after May 31, 1997, and 
     until the Administrator promulgates the regulations described 
     in clause (ii), the procedures of the American Society for 
     Testing and Materials, including the document known as 
     `Standard E1527-97', entitled `Standard Practice for 
     Environmental Site Assessment: Phase 1 Environmental Site 
     Assessment Process', shall satisfy the requirements in clause 
     (i).

       ``(v) Site inspection and title search.--In the case of 
     property for residential use or other similar use purchased 
     by a nongovernmental or noncommercial entity, a facility 
     inspection and title search that reveal no basis for further 
     investigation shall be considered to satisfy the requirements 
     of this subparagraph.''.

                   TITLE III--STATE RESPONSE PROGRAMS

     SEC. 301. STATE RESPONSE PROGRAMS.

       (a) Definitions.--Section 101 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601) (as amended by section 202) is amended 
     by adding at the end the following:
       ``(41) Eligible response site.--
       ``(A) In general.--The term `eligible response site' means 
     a site that meets the definition of a brownfield site in 
     subparagraphs (A) and (B) of paragraph (39), as modified by 
     subparagraphs (B) and (C) of this paragraph.
       ``(B) Inclusions.--The term `eligible response site' 
     includes--
       ``(i) notwithstanding paragraph (39)(B)(ix), a portion of a 
     facility, for which portion assistance for response activity 
     has been obtained under subtitle I of the Solid Waste 
     Disposal Act (42 U.S.C. 6991 et seq.) from the Leaking 
     Underground Storage Tank Trust Fund established under section 
     9508 of the Internal Revenue Code of 1986; or
       ``(ii) a site for which, notwithstanding the exclusions 
     provided in subparagraph (C) or paragraph (39)(B), the 
     President determines, on a site-by-site basis and after 
     consultation with the State, that limitations on enforcement 
     under section 129 at sites specified in clause (iv), (v), 
     (vi) or (viii) of paragraph (39)(B) would be appropriate and 
     will--

       ``(I) protect human health and the environment; and
       ``(II) promote economic development or facilitate the 
     creation of, preservation of, or addition to a park, a 
     greenway, undeveloped property, recreational property, or 
     other property used for nonprofit purposes.

       ``(C) Exclusions.--The term `eligible response site' does 
     not include--
       ``(i) a facility for which the President--

       ``(I) conducts or has conducted a remedial site 
     investigation; and
       ``(II) after consultation with the State, determines or has 
     determined that the site qualifies for listing on the 
     National Priorities List;

     unless the President has made a determination that no further 
     Federal action will be taken; or
       ``(ii) facilities that the President determines warrant 
     particular consideration as identified by regulation, such as 
     sites posing a threat to a sole-source drinking water aquifer 
     or a sensitive ecosystem.''.
       (b) State Response Programs.--Title I of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601 et seq.) (as amended by section 101(b)) 
     is amended by adding at the end the following:

     ``SEC. 129. STATE RESPONSE PROGRAMS.

       ``(a) Assistance to States.--
       ``(1) In general.--
       ``(A) States.--The Administrator may award a grant to a 
     State or Indian tribe that--
       ``(i) has a response program that includes each of the 
     elements, or is taking reasonable steps to include each of 
     the elements, listed in paragraph (2); or
       ``(ii) is a party to a memorandum of agreement with the 
     Administrator for voluntary response programs.
       ``(B) Use of grants by states.--
       ``(i) In general.--A State or Indian tribe may use a grant 
     under this subsection to establish or enhance the response 
     program of the State or Indian tribe.
       ``(ii) Additional uses.--In addition to the uses under 
     clause (i), a State or Indian tribe may use a grant under 
     this subsection to--

       ``(I) capitalize a revolving loan fund for brownfield 
     remediation under section 128(c); or
       ``(II) develop a risk sharing pool, an indemnity pool, or 
     insurance mechanism to provide financing for response actions 
     under a State response program.

       ``(2) Elements.--The elements of a State or Indian tribe 
     response program referred to in paragraph (1)(A)(i) are the 
     following:
       ``(A) Timely survey and inventory of brownfield sites in 
     the State.
       ``(B) Oversight and enforcement authorities or other 
     mechanisms, and resources, that are adequate to ensure that--

[[Page 10095]]

       ``(i) a response action will--

       ``(I) protect human health and the environment; and
       ``(II) be conducted in accordance with applicable Federal 
     and State law; and

       ``(ii) if the person conducting the response action fails 
     to complete the necessary response activities, including 
     operation and maintenance or long-term monitoring activities, 
     the necessary response activities are completed.
       ``(C) Mechanisms and resources to provide meaningful 
     opportunities for public participation, including--
       ``(i) public access to documents that the State, Indian 
     tribe, or party conducting the cleanup is relying on or 
     developing in making cleanup decisions or conducting site 
     activities; and
       ``(ii) prior notice and opportunity for comment on proposed 
     cleanup plans and site activities.
       ``(D) Mechanisms for approval of a cleanup plan, and a 
     requirement for verification by and certification or similar 
     documentation from the State, an Indian tribe, or a licensed 
     site professional to the person conducting a response action 
     indicating that the response is complete.
       ``(3) Funding.--There is authorized to be appropriated to 
     carry out this subsection $50,000,000 for each of fiscal 
     years 2001 through 2005.
       ``(b) Enforcement in Cases of a Release Subject to State 
     Program.--
       ``(1) Enforcement.--
       ``(A) In general.-- Except as provided in subparagraph (B) 
     and subject to subparagraph (C), in the case of an eligible 
     response site at which--
       ``(i) there is a release or threatened release of a 
     hazardous substance, pollutant, or contaminant; and
       ``(ii) a person is conducting or has completed a response 
     action regarding the specific release that is addressed by 
     the response action that is in compliance with the State 
     program that specifically governs response actions for the 
     protection of public health and the environment;
     the President may not use authority under this Act to take an 
     administrative or judicial enforcement action under section 
     106(a) or to take a judicial enforcement action to recover 
     response costs under section 107(a) against the person 
     regarding the specific release that is addressed by the 
     response action.
       ``(B) Exceptions.--The President may bring an enforcement 
     action under this Act during or after completion of a 
     response action described in subparagraph (A) with respect to 
     a release or threatened release at an eligible response site 
     described in that subparagraph if--
       ``(i) the State requests that the President provide 
     assistance in the performance of a response action;
       ``(ii) the Administrator determines that contamination has 
     migrated or will migrate across a State line, resulting in 
     the need for further response action to protect human health 
     or the environment, or the President determines that 
     contamination has migrated or is likely to migrate onto 
     property subject to the jurisdiction, custody, or control of 
     a department, agency, or instrumentality of the United States 
     and may impact the authorized purposes of the Federal 
     property;
       ``(iii) after taking into consideration the response 
     activities already taken, the Administrator determines that--

       ``(I) a release or threatened release may present an 
     imminent and substantial endangerment to public health or 
     welfare or the environment; and
       ``(II) additional response actions are likely to be 
     necessary to address, prevent, limit, or mitigate the release 
     or threatened release; or

       ``(iv) the Administrator determines that information, that 
     on the earlier of the date on which cleanup was approved or 
     completed, was not known by the State, as recorded in 
     documents prepared or relied on in selecting or conducting 
     the cleanup, has been discovered regarding the contamination 
     or conditions at a facility such that the contamination or 
     conditions at the facility present a threat requiring further 
     remediation to protect public health or welfare or the 
     environment.
       ``(C) Public record.--The limitations on the authority of 
     the President under subparagraph (A) apply only at sites in 
     States that maintain, update not less than annually, and make 
     available to the public a record of sites, by name and 
     location, at which response actions have been completed in 
     the previous year and are planned to be addressed under the 
     State program that specifically governs response actions for 
     the protection of public health and the environment in the 
     upcoming year. The public record shall identify whether or 
     not the site, on completion of the response action, will be 
     suitable for unrestricted use and, if not, shall identify the 
     institutional controls relied on in the remedy. Each State 
     and tribe receiving financial assistance under subsection (a) 
     shall maintain and make available to the public a record of 
     sites as provided in this paragraph.
       ``(D) EPA notification.--
       ``(i) In general.--In the case of an eligible response site 
     at which there is a release or threatened release of a 
     hazardous substance, pollutant, or contaminant and for which 
     the Administrator intends to carry out an action that may be 
     barred under subparagraph (A), the Administrator shall--

       ``(I) notify the State of the action the Administrator 
     intends to take; and
       ``(II)(aa) wait 48 hours for a reply from the State under 
     clause (ii); or
       ``(bb) if the State fails to reply to the notification or 
     if the Administrator makes a determination under clause 
     (iii), take immediate action under that clause.

       ``(ii) State reply.--Not later than 48 hours after a State 
     receives notice from the Administrator under clause (i), the 
     State shall notify the Administrator if--

       ``(I) the release at the eligible response site is or has 
     been subject to a cleanup conducted under a State program; 
     and
       ``(II) the State is planning to abate the release or 
     threatened release, any actions that are planned.

       ``(iii) Immediate federal action.--The Administrator may 
     take action immediately after giving notification under 
     clause (i) without waiting for a State reply under clause 
     (ii) if the Administrator determines that 1 or more 
     exceptions under subparagraph (B) are met.
       ``(E) Report to congress.--Not later than 90 days after the 
     date of initiation of any enforcement action by the President 
     under clause (ii), (iii), or (iv) of subparagraph (B), the 
     President shall submit to Congress a report describing the 
     basis for the enforcement action, including specific 
     references to the facts demonstrating that enforcement action 
     is permitted under subparagraph (B).
       ``(2) Savings provision.--
       ``(A) Costs incurred prior to limitations.--Nothing in 
     paragraph (1) precludes the President from seeking to recover 
     costs incurred prior to the date of enactment of this section 
     or during a period in which the limitations of paragraph 
     (1)(A) were not applicable.
       ``(B) Effect on agreements between states and epa.--Nothing 
     in paragraph (1)--
       ``(i) modifies or otherwise affects a memorandum of 
     agreement, memorandum of understanding, or any similar 
     agreement relating to this Act between a State agency or an 
     Indian tribe and the Administrator that is in effect on or 
     before the date of enactment of this section (which agreement 
     shall remain in effect, subject to the terms of the 
     agreement); or
       ``(ii) limits the discretionary authority of the President 
     to enter into or modify an agreement with a State, an Indian 
     tribe, or any other person relating to the implementation by 
     the President of statutory authorities.
       ``(3) Effective date.--This subsection applies only to 
     response actions conducted after June 8, 2000.
       ``(c) Effect on Federal Laws.--Nothing in this section 
     affects any liability or response authority under any Federal 
     law, including--
       ``(1) this Act, except as provided in subsection (b);
       ``(2) the Solid Waste Disposal Act (42 U.S.C. 6901 et 
     seq.);
       ``(3) the Federal Water Pollution Control Act (33 U.S.C. 
     1251 et seq.);
       ``(4) the Toxic Substances Control Act (15 U.S.C. 2601 et 
     seq.); and
       ``(5) the Safe Drinking Water Act (42 U.S.C. 300f et 
     seq.).''.

     SEC. 302. ADDITIONS TO NATIONAL PRIORITIES LIST.

       Section 105 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9605) is 
     amended by adding at the end the following:
       ``(h) NPL Deferral.--
       ``(1) Deferral to state voluntary cleanups.--At the request 
     of a State and subject to paragraphs (2) and (3), the 
     President generally shall defer final listing of an eligible 
     response site on the National Priorities List if the 
     President determines that--
       ``(A) the State, or another party under an agreement with 
     or order from the State, is conducting a response action at 
     the eligible response site--
       ``(i) in compliance with a State program that specifically 
     governs response actions for the protection of public health 
     and the environment; and
       ``(ii) that will provide long-term protection of human 
     health and the environment; or
       ``(B) the State is actively pursuing an agreement to 
     perform a response action described in subparagraph (A) at 
     the site with a person that the State has reason to believe 
     is capable of conducting a response action that meets the 
     requirements of subparagraph (A).
       ``(2) Progress toward cleanup.--If, after the last day of 
     the 1-year period beginning on the date on which the 
     President proposes to list an eligible response site on the 
     National Priorities List, the President determines that the 
     State or other party is not making reasonable progress toward 
     completing a response action at the eligible response site, 
     the President may list the eligible response site on the 
     National Priorities List.
       ``(3) Cleanup agreements.--With respect to an eligible 
     response site under paragraph (1)(B), if, after the last day 
     of the 1-year period beginning on the date on which the 
     President proposes to list the eligible response site on the 
     National Priorities List,

[[Page 10096]]

     an agreement described in paragraph (1)(B) has not been 
     reached, the President may defer the listing of the eligible 
     response site on the National Priorities List for an 
     additional period of not to exceed 180 days if the President 
     determines deferring the listing would be appropriate based 
     on--
       ``(A) the complexity of the site;
       ``(B) substantial progress made in negotiations; and
       ``(C) other appropriate factors, as determined by the 
     President.
       ``(4) Exceptions.--The President may decline to defer, or 
     elect to discontinue a deferral of, a listing of an eligible 
     response site on the National Priorities List if the 
     President determines that--
       ``(A) deferral would not be appropriate because the State, 
     as an owner or operator or a significant contributor of 
     hazardous substances to the facility, is a potentially 
     responsible party;
       ``(B) the criteria under the National Contingency Plan for 
     issuance of a health advisory have been met; or
       ``(C) the conditions in paragraphs (1) through (3), as 
     applicable, are no longer being met.''.

  Mr. LAUTENBERG. Mr. President, I'm very pleased to announce that, 
after months of very hard work, we have bipartisan legislation which 
will clean up and redevelop the abandoned industrial sites known as 
Brownfields--S. 2700, the Brownfields Revitalization and Environmental 
Restoration Act of 2000.
  I first introduced Brownfields legislation in the Senate in 1993, in 
the hopes of both protecting public health, and addressing the problems 
of blighted areas. Since that time, it has become clear that there are 
even more reasons to address Brownfields than we originally thought. In 
fact, there are few environmental issues which cut across so many 
problems and offer so many solutions.
  Mr. President, Brownfields threaten the health of our citizens--and 
the economic health of communities across the country, by leading to 
abandoned inner cities, increased crime, loss of jobs and declining tax 
revenues. Brownfields also lead to urban sprawl, loss of farmland, 
increased traffic and air pollution and loss of historic districts in 
older urban centers.
  But once they're cleaned up and made useful again, they also 
represent tremendous potential in new jobs and a cleaner environment. 
Now, finally, we have a bipartisan plan to achieve those goals.
  The legislation we're introducing today provides federal money to 
investigate and clean up Brownfields sites. State and local governments 
would use this money to determine which sites pose environmental 
problems, to decide which redevelopment options hold the greatest 
promise, and most important, to get these sites cleaned up.
  Second, the legislation promises important private investments in the 
cleanup effort--by providing liability protection for people interested 
in buying and cleaning up these sites and for people who bought a 
Brownfields site without knowing it was contaminated. It also removes 
potential liability for parties who own property which becomes 
contaminated through no fault of their own, from hazardous substances 
from an adjacent site. These liability limitations and clarifications 
will help innocent parties and provide incentives to get these 
properties cleaned up and back into use.
  Third, this bill does several new and positive things for communities 
and for the environment. For the first time, it creates a public record 
of Brownfield sites handled under state programs, because the public 
has a right to know what's happening at the sites near their homes. And 
it is the first Brownfields bill to provide funding not just to assist 
in redevelopment projects, but also to provide assistance to state and 
local governments to create and preserve open space, parklands and 
other recreational areas in former Brownfields sites.
  Finally, the bill gives states incentives and funding to develop 
state programs to clean up their Brownfield sites quickly and safely. 
It has provisions to encourage cooperation and coordination between the 
federal and state governments, both of whom play an active role in 
cleaning up these sites and protecting the citizens. The bill strikes a 
delicate balance. It provides deference to state cleanup programs but 
still ensures that the federal superfund program will be able to come 
in and address problems when a site poses a serious problem.
  The Brownfields cleanup and redevelopment strategy in this 
legislation is comprehensive. It's fiscally responsible. And it will 
improve the quality of life for people throughout the country. It 
promises thousands of new jobs and millions in new tax revenue. It 
promises increased momentum for smart growth, which means cleaner air 
and less congested roads.
  It promises a new focus on revitalizing downtown areas, which will 
reduce urban sprawl, lower rates and protect parkland and open space. I 
come from the most densely populated state in this country, and I 
understand the importance of protecting open space.
  Mr. President, the nation's mayors estimate that Brownfields cost 
between $200 million and $500 million a year in lost tax revenues. 
Returning these sites to productive use could create some 236,000 new 
jobs.
  Just look at the progress we've made even over the last few years. 
Grants from the EPA to aid in cleaning up Brownfields sites have helped 
generate more than 5,800 jobs and about $1.8 billion in revenues. In 
New Jersey alone, we've rescued more than 1,000 Brownfields sites, 
replacing polluted lagoons with office centers and covering abandoned 
rail yards with condominium complexes.
  These successes benefit everyone--both environmentally and 
economically. Which is why this legislation has strong support from 
both Democrats and Republicans.
  Mr. President, in the 1960s, this country turned its attention away 
from downtown areas and started focusing on the suburbs. We see now 
what that got us: clogged highways, overcrowded airports, and increased 
pollution.
  It's time to turn that trend around. And that's exactly what this 
legislation will do. I also want to thank my three colleagues for their 
determination and hard work in hammering out this compromise. Senator 
Smith, our new Chairman, has really reached out to all members of the 
Committee to try to craft good environmental legislation.
  Senator Baucus, the Democratic leader on our Committee, has been a 
stalwart advocate for a good Superfund program and a compromise 
Brownfields bill. We have fought many battles together over the years. 
Finally, Senator Chafee has shown great courage and energy, bringing us 
together to do what was once unthinkable, a Superfund related bill that 
has bipartisan support. I look forward to working with all of them to 
ensure that this bill is signed into law. Thank you. Following is a 
summary of the bill.

 Brownfields Revitalization and Environmental Restoration Act of 2000 
                       (S. 2700)--Key Provisions

       Provides critically needed funds to assess and clean up 
     abandoned and underutilized brownfield sites, which will 
     create jobs, increase tax revenues, preserve and create open 
     space and parks;
       Provides legal protections for innocent parties, such as 
     contiguous property owners, prospective purchasers, and 
     innocent landowners;
       Provides for funding and enhancement of state cleanup 
     programs, including limits where appropriate on enforcement 
     by the federal government at sites cleaned up under a State 
     response program. Provides a balance of certainty for 
     prospective purchasers, developers and others while ensuring 
     protection of the public health.
       Creates a public record of brownfield sites and enhances 
     community involvement in site cleanup and reuse.
       Provides for deferral of listing sites on the National 
     Priorities List if the state is taking action at the site.


               TITLE I: BROWNFIELD REVITALIZATION FUNDING

       Authorizes $150 million per year, for fiscal years 2001-
     2005, for grants to local governments, States and Indian 
     tribes to inventory, assess and cleanup contaminated 
     brownfield sites, either through establishing a Revolving 
     Loan Fund or, in some circumstances, by giving a grant. 
     Provides criteria to be used in awarding these funds, 
     including the extent to which the money will protect human 
     health, spur redevelopment and create jobs, preserve open 
     space and parks, and represent a fair distribution of money 
     between urban and rural areas.

[[Page 10097]]




             TITLE II: BROWNFIELD LIABILITY CLARIFICATIONS

       Contiguous Property Owners--Generally provides Superfund 
     liability relief for innocent persons who own property that 
     is contaminated solely due to a release from another 
     property, so long as the person did not cause or contribute 
     to the release, and provide cooperation and access for the 
     cleanup.
       Prospective Purchases--Generally provides Superfund 
     liability relief for innocent future buyers of brownfields 
     who are responsible for contamination and do not impede the 
     cleanup of the site, make all appropriate inquiry prior to 
     purchase, exercise appropriate care with respect to hazardous 
     substances, and provide cooperation and access to persons 
     cleaning up the site. The bill also provides for ``windfall 
     liens'' at sites where the government pays for the cleanup, 
     and the fair market value was enhanced by that effort.
       Innocent Landowners--Clarifies relief from Superfund 
     liability for landowners who had no reason to know of 
     contamination at the time of purchase, despite having made 
     all appropriate inquiry into prior ownership and use of the 
     facility. Provides certainty to parties by clarifying what 
     needs to be done to satisfy the ``appropriate inquiry'' 
     requirement in the current statute.


                   TITLE III: STATE RESPONSE PROGRAMS

       Authorizes $50 million per year in fiscal years 2001-2005 
     for grants to states and Indian tribes to establish and 
     enhance their cleanup programs, when the programs meet are 
     making progress toward meeting general criteria, such as 
     protection of human health and providing public involvement.
       Provides deference to state programs and provides 
     additional ``certainty'' to persons who conduct cleanups 
     under state programs by placing restrictions on the authority 
     of the Administrator to take an enforcement action under the 
     federal Superfield law, while preserving the President's 
     ability to address serious problems.
       Provides for states to keep a public record of sites, in 
     the state program to be eligible for the bar on federal 
     enforcement. This record will provide the public with 
     critical information about the sites in their neighborhoods.
       Provides a deferral for listing sites on the federal 
     Superfund list if the site is being adequately handled by the 
     state program.
  Mr. SMITH of New Hampshire. Today, the chairman of the Committee on 
Environment and Public Works, ranking minority member of the committee, 
chairman of the Subcommittee on Superfund, and ranking minority member 
of the subcommittee, have come together to introduce a bill that 
protects the environment, encourages community involvement, promotes 
economic redevelopment, encourages the preservation of green spaces, 
and sets the stage for future efforts of comprehensive Superfund 
reform.
  As a nation, our industrial heritage has left us with numerous 
contaminated abandoned or underutilized ``brownfield'' sites. Although 
the level of contamination at many of these sites is relatively low, 
and the potential value of the property may be quite high, developers 
often shy away from developing these sites. One reason for this is 
uncertainty regarding the extent of contamination, the extent of 
potential liability, or the potential costs of cleanup.
  With the introduction of the Brownfield Revitalization and 
Environmental Restoration Act of 2000, we focus on the uncertainty 
facing developers, property owners, and communities as to the status of 
low-risk contaminated sites.
  At the beginning of this Congress, Administrator Browner and 
Assistant Administrator of Office of Solid Waste and Emergency 
Response, Tim Fields, testified that EPA was interested in pursuing 
legislative reform only in some narrow property owner areas and in 
brownfields. We have worked to address their suggestions and hope that 
in the future they can work with us to address a broader comprehensive 
Superfund effort.
  Concerns exist for some Committee members that taking brownfields out 
of a comprehensive Superfund reform package will jeopardize future 
Superfund reform. Although I agree with my colleagues that 
comprehensive reform is needed, I feel that we can move forward with 
brownfield legislation without compromising comprehensive reform. 
450,000 brownfield sites exist in the United States. These sites are 
low risk sites and are not the traditional Superfund sites that would 
be affected by comprehensive Superfund reform. If States and citizens 
are discouraged from cleaning up these sites, continuing the barriers 
to redevelopment, these sites may someday become Superfund sites.
  As brownfield sites are outside of the scope of Superfund, I believe 
that liability carve-outs are outside of the scope of any brownfields 
legislation. As I have in the past, I continue to oppose narrow carve-
outs. Carveouts weaken attempts at overhauling the remedy selection and 
liability allocation provisions in the current Superfund statute and, 
frankly, make a bad system worse. This brownfield legislation does not 
affect the allocation of liability at Superfund sites, instead, it 
provides needed resources to address sites, provides certainty to those 
who voluntarily cleanup, and prevents brownfields from being included 
in the Superfund web. Brownfield legislation presents a win-win for all 
involved and should jumpstart action on substantive Superfund reform in 
the next Congress.
  This is a new era of environmental and infrastructure legislation. 
Since we have been paying down the debt, we are now able to return 
money to local communities to help them solve environmental problems 
and are encouraging partnerships are between federal entities, States, 
and local communities. It is an exciting time to be working and 
investing in our environment.
  Mr. BAUCUS. Mr. President, I am pleased to join Senators Chafee, 
Lautenberg, and Smith in introducing the Brownfields Revitalization and 
Environmental Restoration Act. This bill is a ``win-win.'' It is good 
for the environment. It is good for communities. And it is good for the 
economy. More hazardous waste sites will be cleaned up. We'll have more 
parks and open space, more economic redevelopment, and more jobs.
  I'd like to emphasize that this is not just an east-coast, big city 
bill. Montana may not have as many brownfields as some of our more 
industrialized and densely-populated states, but our economic history 
has left us with our share. Wood treatment facilities. Railroad yards. 
Sawmills. Getting these sites remediated and back in use makes good 
sense in Montana and throughout the country.
  The Brewery Flats site outside Lewistown is a perfect example of a 
place where this bill can really make a difference in Montana. This 57 
acre site is located on the Big Spring Creek flood plain, two miles 
south of Lewistown. It is a railroad site, consisting of a former 
branch line, railroad switching yard, and roundhouse locomotive service 
facility. Chicago-Milwaukee railroad operated the site, then sold it to 
Burlington Northern. The city would like to acquire the site and 
convert it to recreational and educational uses. The owner is willing 
to transfer the land to the city, but the city needs to have a more 
complete understanding of the extent of the contamination before moving 
acquiring the land and undertaking a cleanup.
  The site has outstanding potential to enhance the community. It is 
adjacent to land on the Big Spring Creek that is owned by Montana Fish 
and Wildlife, so cleaning it up will allow the expansion of existing 
open space. Big Spring Creek itself is a blue-ribbon trout stream, and 
the Brewery Flats site boasts several wetland areas. Local students 
have planted trees in the area, and the educational and recreational 
potential of these adjacent sites is excellent.
  Lewistown has worked hard to utilize existing programs and resources. 
Montana DEQ performed some initial sampling on the site several years 
ago. More recently, EPA conducted a targeted site assessment, which 
revealed light contamination on half of the site, and more extensive 
contamination near the roundhouse. Although EPA did not find anything 
alarming, the assessment is a first cut, and the city does not feel 
comfortable taking ownership of the property before more extensive 
sampling is done. Lacking the resources to do this work, Lewistown has 
applied for an EPA brownfields ``showcase communities'' grant. This 
process is still pending. In addition, the city has applied to the 
Montana DNRC for a cleanup grant.
  The brownfields bill could greatly help Lewistown acquire and clean 
up Brewery Flats. And it could do the same for hundreds of sites in 
Montana

[[Page 10098]]

and thousands around the country, by providing funding for brownfields 
revitalization programs, by giving liability protection in certain 
cases, and by providing funding and increased authority to state 
brownfields cleanup programs.
  Let me explain each of these provisions.
  Title I of the bill authorizes funding to states, tribes and local 
government to inventory, assess, and remediate brownfield sites. 
Funding is particularly critical for sites that will be used for non-
profit purposes, such as parks. In some cases, it is also needed to 
fill gaps in private financing at sites that will be redeveloped for 
commercial use. To make the funding as effective as possible, it is 
structured to provide states, tribes and local governments the 
flexibility to utilize the brownfields money and EPA's capacity in the 
way that best suits their particular needs.
  For site assessment, states, tribes and local governments can seek 
grants from EPA. For remediation, governments that wish to establish a 
program can seek grants to capitalize revolving loan funds for 
remediation. Out of these revolving loan funds, they can then provide 
loans, and grants to public and nonprofit entities, for remediation. 
Governments that do not wish to establish revolving loan funds, on the 
other hand, can seek grants from EPA for specific remediation projects. 
In addition, Title I authorizes EPA to conduct brownfields-related 
technical assistance and job training and facilitate community 
participation.
  This package of funding and EPA authority builds on the successes of 
EPA's existing brownfields program, and strengthens it by adding 
increased flexibility. To serve all of these purposes, Title I 
authorizes $150 million per year for five years. I note that, at my 
urging, the bill includes mine-scarred lands in the definition of 
brownfields and contains a provision that will ensure that funds are 
distributed fairly between urban and rural areas.
  Turning to Title II of the bill, Superfund's critics have long argued 
that the threat of Superfund liability has been a drag on the 
redevelopment of brownfields sites. Title II addresses this problem by 
protecting several classes of persons from Superfund liability. It 
protects contiguous property owners, whose property has been 
contaminated solely by migration of contamination from contiguous 
property. It protects bona fide prospective purchasers, who exercise 
appropriate care when purchasing property and did not contribute to any 
existing contamination. And it protects innocent landowners, who did 
not have reason to know of and did not contribute to contamination of 
property they already own.
  These provisions make Superfund more fair, and will promote 
brownfields redevelopment by providing certainty to property owners and 
developers about what they need to do to avoid Superfund liability.
  Title III clarifies the relationship between state cleanup programs 
and EPA's Superfund program. Superfund critics have long argued that 
the possibility that EPA could second-guess state-approved cleanups has 
discouraged brownfields remediation. At the same time, I and other have 
argued that we need to preserve the federal government's ability to use 
Superfund authorities to deal with dangerous situations at sites 
cleaned up under state programs in the rare case in which the cleanup 
is inadequate and there is a threat to human health or the environment.
  The tension between these two views has been one of the major 
obstacles to moving brownfields legislation in the past. This bill 
forges a new compromise on this issue, one that should appeal to both 
sides in the debate. On the one hand, it gives more certainty to those 
who clean up brownfield sites under state programs. On the other hand, 
it preserves EPA's ability to use Superfund authorities to address 
serious problems.
  Mr. President, putting these changes all together, the bill will 
expedite cleanups at Brewery Flats and all across the country. That, 
again, is good for the environment, good for communities, and good for 
the country.
  One final point. This bill reflects a moderate, bipartisan, 
compromise. It shows that we can roll up our sleeves and resolve our 
differences.
  For that, I complement the new chairman of the Environment and Public 
Works Committee, Senator Smith, and the chairman of the Superfund 
Subcommittee, Senator Chafee. They've done a great job.
  I'd also like to pay a special complement to the ranking member of 
the Subcommittee, Senator Lautenberg. He has accomplished many things 
during his 18 years in the Senate. One of the most important has been 
his leadership on environmental issues. More than anyone else, he has 
protected, and improved, the Superfund program.
  If we enact the Chafee-Lautenberg bill this year, and I believe we 
can, it will be a fitting capstone to his Senate career.
                                 ______
                                 
      By Mr. WYDEN (for himself, Mr. DeWine and Mr. Rockefeller):
  S. 2701. A bill to amend the Internal Revenue Code of 1986 to allow a 
tax credit for donations of computers to senior centers, to require a 
pilot program to enhance the availability of Internet access for older 
Americans, and for other purposes; to the Committee on Finance.


                INTERNET ACCESS FOR SENIORS ACT OF 2000

  Mr. WYDEN. Mr. President, today, the opportunity to live a healthy 
and productive life can be enriched by something new: access to the 
Internet. But according to a 1999 Forrester Research report, only 8 
percent of seniors age 65 and above have Internet access compared to 40 
percent of the population under age 65. According to an unpublished 
Department of Commerce study, the percentage of low-income seniors with 
Internet access is even less: only 1.5 percent. My bill, the Internet 
Access for Seniors Act of 2000, will help narrow this digital divide 
between seniors and the rest of the population. I am pleased to be 
joined by Senators DeWine and Rockefeller in introducing this bill.
  A recent study by Stanford's Institute for the Quantitative Study of 
Society shows the digital divide among different demographic groups. 
The variables are age, education, gender, race, ethnicity, and income. 
It shows that by far the most important factors facilitating or 
inhibiting Internet access are age and education--not income, not race, 
not ethnicity, and not gender. According to the study's authors, these 
variables account for less than 5 percent of the change in the rates of 
Internet access and are statistically insignificant. In contrast, and I 
quote, ``a college education boosts rates of Internet access by well 
over 40 percentage points compared to the less educated group, while 
people over 65 show a more than 40 percentage point drop in their rates 
of Internet access compared to those under 25.''
  Ironically, seniors, who have more limited access to the Internet, 
can benefit more from Internet access than others because, in addition 
to a digital divide, they suffer from a transportation divide. The 
ability to travel from one place to another is vital to our daily 
lives. In fact, good transportation access is vital for many of the 
same reasons as good Internet access. But seniors are the least mobile 
demographic segment of our adult population. One way that people cope 
with poor access to telecommunications is to rely on transportation. 
But seniors lack this coping mechanism. In other words, if any 
demographic group in our society actually needs superior access to the 
Internet, it is seniors.
  Our society has long recognized that access to certain kinds of 
information is a public good. That is why we have schools and 
libraries, and it is why we have the E-rate, which provides Internet 
access to schools and libraries. Until now, however, senior centers 
have been left out of the mix. Some may say, ``Why don't seniors go to 
the library to get Internet access?'' Many seniors prefer to go to 
senior centers because they are specifically designed to serve their 
needs. For example, senior centers routinely provide some type of 
special transportation for seniors to get to and from the senior 
centers. Asking libraries to take on the added

[[Page 10099]]

cost of providing such transportation is clearly less desirable from a 
cost--not to mention logistical--standpoint. When a senior makes the 
effort to get to a senior center, he can take advantage of a half dozen 
services specifically designed to serve his needs, and it seems 
wasteful to ask libraries to take on those additional services.
  There are many ways seniors can benefit from Internet access: taking 
courses, finding a job, becoming better-informed citizens, and shopping 
for essential goods and services. One application, access to health 
information, is obviously essential to seniors and is also an area of 
great interest to me.
  Mr. President, there is an explosion of useful health information 
being made available over the Internet. According to a recent front 
page New York Times story, there are now more than 100,000 healthcare 
websites available on the Internet. Health information is being made 
available on the Internet because consumers demand it.
  There are many reasons seniors may prefer to get health information 
over the Internet rather than in person.
  Some seniors may not want to wait until their next doctor appointment 
before finding out more about their ailment. For example, if a senior 
gets a diagnosis of cancer, she may not want to wait to find out more 
about the seriousness of her condition and the options available.
  Some seniors may find a trip to the clinician's office an onerous and 
often all-day activity. Clearly the ability to communicate with a 
clinician without making a special trip--and at odd hours--would be of 
great benefit. Recognizing these needs, some HMOs already allow seniors 
to communicate with their caregiver via the Internet to request 
relatively routine services such as a dosage change. This also saves on 
Medicare costs.
  Some seniors may want to talk to other people who share their 
condition. For example, most medical websites now have chat rooms where 
fellow sufferers can get together to share information about new 
treatment options and day-to-day tips for coping with specific 
conditions. These sites also provide advice and support to the spouses 
and other caregivers who must care for victims of Alzheimer's, heart 
disease, cancer, and other afflictions of the elderly.
  My legislation is designed to bring senior centers, particularly 
those in low-income or rural areas, into the digital age. I chose 
senior centers as a vehicle to alleviate the digital divide for seniors 
because these centers serve large numbers of seniors, especially the 
disadvantaged seniors targeted by this bill. Unfortunately, there are 
no national statistics regarding how many senior centers have computers 
with Internet access accessible to seniors. However, my office did a 
survey of Oregon senior centers. We found that 52 percent lacked access 
to computers and that 71 percent lacked access to the Internet. In many 
cases, the quality of computers and Internet access was low. Many 
computers were at least five years old. Some were ten or more years 
old. Internet connections were often made with older versions of 
browsers that could not access contemporary web sites.
  My bill has two major components. The first provides a tax credit for 
individuals and organizations that contribute computer equipment to 
senior centers. The second creates a pilot program, called the S-rate, 
to provide subsidies for qualified low-income or rural senior centers 
to access the Internet.
  The tax credit, essentially identical to the tax credit for computer 
equipment donated to schools passed March 1 of this year in the New 
Millennium Classrooms Act, is equal to 30 percent of the fair market 
value of the donated computer equipment. To receive the tax deduction, 
the computer equipment must be three years old or less. For donations 
to senior centers located within empowerment zones, enterprise 
communities, and Indian reservations, the tax credit is increased to 50 
percent. The tax deduction is terminated for taxable years beginning 
three years after the date of enactment of this act, and we impose a 
limit of 10 computers per senior center.
  The S-rate covers up to 90 percent of the costs associated with 
Internet access to senior centers. Covered costs include computers, 
software, training, and maintenance. Our bill seeks to narrow the 
increasingly important divide between information haves and have-nots 
in our society. Our bill is only a pilot program that will invest $10 
million a year in getting our seniors online. The program sunsets after 
3 years.
  The Secretary of the Department of Commerce will administer the S-
rate. In selecting among eligible senior centers, the Secretary will 
consider the senior center's need and proposed applications. Need 
includes the number of seniors served by the senior center, the extent 
to which the senior center already provides Internet access, and the 
extent to which the senior center serves an area with a high percentage 
of low-income or rural individuals. Applications include health 
information, job training, lifelong education, and any other 
applications that fulfill an important social need.
  One of the Secretary's tasks is to develop enabling tools for the 
senior centers. For example, the Secretary could offer an array of 
fill-in-the-blank web templates to make it easy for senior centers to 
post information on the web and create their own home pages. The 
Secretary could provide information to senior centers about privacy 
concerns, especially regarding sensitive matters such as health 
information. The Secretary could suggest minimum standards for web 
hosting services seeking to serve senior centers.
  One of the wonderful things about the Internet is the ability of one 
site to learn from another. The Secretary could create a web-based 
clearinghouse of all the senior centers funded under the pilot program. 
Innovative and outstanding web-based services could be specially marked 
so that other senior centers could quickly learn from the best 
practices of others. The Secretary could set up a technical chat room 
so that senior center administrators, in their role as webmasters, 
could share concerns and ideas. The Secretary could set up an Internet 
hotline for oversight; that is, to be alerted if an administrator 
doesn't use the S-rate for its stated purpose. And because the Internet 
can be used for distance education and online help, the Secretary could 
fund some senior centers to train other senior citizens.
  Let me close with one further thought. Closing the digital divide for 
seniors is not just about social justice; it's also about basic dollars 
and cents. Consider this: according to the National Institute of Aging, 
more than two-thirds of every healthcare dollar--much of it government 
funded--goes to seniors. If we can empower seniors to be wise health 
consumers, we can use market mechanisms, rather than government red 
tape, to make sure that seniors get the healthcare they need. The 
Internet now offers that opportunity. Let's not squander it.
  I ask unanimous consent that my statement and 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. 2701

       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 ``Internet Access for Seniors 
     Act of 2000''.

     SEC. 2. CREDIT FOR COMPUTER DONATIONS TO SENIOR CENTERS.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business related credits) is amended by adding at the end the 
     following:

     ``SEC. 45D. CREDIT FOR COMPUTER DONATIONS TO SENIOR CENTERS.

       ``(a) General Rule.--For purposes of section 38, the 
     computer donation credit determined under this section is an 
     amount equal to 30 percent of the qualified computer 
     contributions made by the taxpayer during the taxable year as 
     determined after the application of section 170(e)(6)(A).
       ``(b) Qualified Computer Contribution.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified computer 
     contribution' has the meaning given the term `qualified 
     elementary or secondary educational contribution' by section 
     170(e)(6)(B), except that--
       ``(A) clause (ii) of such section shall be applied by 
     substituting `3 years' for `2 years',

[[Page 10100]]

       ``(B) clause (iii) of such section shall be applied by 
     inserting `, the person from whom the donor reacquires the 
     property,' after `the donor', and
       ``(C) notwithstanding clauses (i) and (iv) of such section, 
     such term shall include the contribution of computer 
     technology or equipment to eligible senior centers to be used 
     by individuals who have attained 60 years of age to improve 
     job skills in computers.
       ``(2) Eligible senior center.--
       ``(A) In general.--The term `eligible senior center' means 
     any facility which is eligible--
       ``(i) to receive funding as a senior center under title III 
     of the Older Americans Act of 1965 (42 U.S.C. 3021 et seq.), 
     and
       ``(ii) to receive the qualified computer contribution as 
     determined under subparagraph (B).
       ``(B) Eligibility to receive contribution.--For purposes of 
     subparagraph (A)(ii), a senior center is eligible to receive 
     a qualified computer contribution in any calendar year if 
     such contribution when added to all preceding qualified 
     computer contributions for such year does not result in such 
     center receiving more than 10 computers through such 
     contributions.
       ``(c) Increased Percentage for Contributions to Entities in 
     Empowerment Zones, Enterprise Communities, and Indian 
     Reservations.--In the case of a qualified computer 
     contribution to an entity located in an empowerment zone or 
     enterprise community designated under section 1391 or an 
     Indian reservation (as defined in section 168(j)(6)), 
     subsection (a) shall be applied by substituting `50 percent' 
     for `30 percent'.
       ``(d) Certain Rules Made Applicable.--For purposes of this 
     section, rules similar to the rules of paragraphs (1) and (2) 
     of section 41(f) shall apply.
       ``(e) Termination.--This section shall not apply to taxable 
     years beginning on or after the date which is 3 years after 
     the date of the enactment of the Internet Access for Seniors 
     Act of 2000.''.
       (b) Current Year Business Credit Calculation.--Section 
     38(b) of the Internal Revenue Code of 1986 (relating to 
     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:
       ``(13) the computer donation credit determined under 
     section 45D(a).''.
       (c) Disallowance of Deduction by Amount of Credit.--Section 
     280C of the Internal Revenue Code of 1986 (relating to 
     certain expenses for which credits are allowable) is amended 
     by adding at the end the following:
       ``(d) Credit for Computer Donations.--No deduction shall be 
     allowed for that portion of the qualified computer 
     contributions (as defined in section 45D(b)) made during the 
     taxable year that is equal to the amount of credit determined 
     for the taxable year under section 45D(a). In the case of a 
     corporation which is a member of a controlled group of 
     corporations (within the meaning of section 52(a)) or a trade 
     or business which is treated as being under common control 
     with other trades or businesses (within the meaning of 
     section 52(b)), this subsection shall be applied under rules 
     prescribed by the Secretary similar to the rules applicable 
     under subsections (a) and (b) of section 52.''.
       (d) Limitation on Carryback.--Subsection (d) of section 39 
     of the Internal Revenue Code of 1986 (relating to carryback 
     and carryforward of unused credits) is amended by adding at 
     the end the following:
       ``(9) No carryback of computer donation credit before 
     effective date.--No amount of unused business credit 
     available under section 45D may be carried back to a taxable 
     year beginning on or before the date of the enactment of this 
     paragraph.''.
       (e) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by inserting after the item 
     relating to section 45C the following:

``Sec. 45D. Credit for computer donations to senior centers.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to contributions made in taxable years beginning 
     after the date of the enactment of this Act.

     SEC. 3. PILOT PROGRAM FOR ENHANCED INTERNET ACCESS FOR OLDER 
                   AMERICANS.

       (a) Requirement.--
       (1) In general.--The Secretary of Commerce shall, in 
     consultation with the Secretary of Health and Human Services, 
     carry out a pilot program to enhance the availability of 
     Internet access for older Americans. The pilot program shall 
     meet the requirements of this section.
       (2) Discharge of responsibilities.--The Secretary of 
     Commerce shall carry out the pilot program through the 
     Assistant Secretary of Commerce for Communications and 
     Information, and the Secretary of Health and Human Services 
     shall consult with the Secretary of Commerce under the pilot 
     program through the Assistant Secretary for Aging of the 
     Department of Health and Human Services.
       (b) Participation of Senior Centers.--
       (1) In general.--The Secretary of Commerce shall select 
     senior centers for participation in the pilot program under 
     this section from among senior centers.
       (2) Application.--
       (A) In general.--Except as provided in subparagraph (B), 
     each senior center seeking to participate in the pilot 
     program shall submit to the Secretary an application for 
     participation in the pilot program containing such 
     information as the Secretary shall require.
       (B) Applications for several centers.--An entity consisting 
     of or operating two or more senior centers may submit a 
     single application under this paragraph on behalf of such 
     senior centers that seek to participate in the pilot program.
       (3) Selection of senior centers.--In selecting a senior 
     center for participation in the pilot program, the Secretary 
     take into account the following:
       (A) The extent to which the senior center already provides 
     Internet access for older individuals.
       (B) The extent to which the senior center serves an area 
     with a high percentage of low-income older individuals, a 
     rural area, or both such areas.
       (C) The number of older individuals who will be provided 
     Internet access as a result of the participation of the 
     senior center in the pilot program.
       (D) The extent to which the participation of the senior 
     center in the pilot program will result in the receipt by 
     older individuals of health or education information or job 
     training through the Internet.
       (c) Grants.--
       (1) In general.--
       (A) In general.--The Secretary of Commerce shall make 
     grants to senior centers selected by the Secretary under 
     subsection (b) for participation in the pilot program under 
     this section.
       (B) Recipient of certain grants.--If the senior centers 
     selected by the Secretary include senior centers covered by 
     an application under subsection (b)(2)(B), the Secretary 
     shall make the grant to such centers as a single grant 
     through the entity submitting the application under that 
     subsection.
       (2) Amount of grants.--
       (A) In general.--Subject to subparagraphs (B) and (C), the 
     Secretary shall determine the amount of the grant to be made 
     to each senior center selected to participate in the pilot 
     program.
       (B) Larger amounts for certain centers.--The Secretary 
     shall, to the maximum extent practicable, make grants in 
     larger amounts to senior centers selected to participate in 
     the pilot program that serve areas with a high percentage of 
     low-income older individuals, rural areas, or both such 
     areas.
       (C) Annual limit.--The amount of the grant made to a given 
     senior center in any year may not exceed $25,000.
       (d) Use of Grant Amounts.--
       (1) In general.--A senior center receiving a grant under 
     the pilot program under this section shall use the amount of 
     the grant to cover or defray the costs of the senior center 
     in making available Internet access to or for older 
     individuals at or through the facilities of the senior 
     center, including costs relating to telecommunications 
     services, Internet access, internal connections, computers, 
     input and output devices, software, training, and operations 
     and maintenance.
       (2) Limitation on percentage of costs covered by grant.--
       (A) In general.--The Secretary shall specify in each grant 
     to a senior center selected to participate in the pilot 
     program the maximum percentage of the costs of the senior 
     center that may be covered or defrayed by such grant.
       (B) Higher percentage for certain centers.--In specifying 
     maximum percentages under this paragraph, the Secretary 
     shall, to the maximum extent practicable, specify higher 
     percentages for senior centers serving areas with a high 
     percentage of low-income older individuals, rural areas, or 
     both such areas.
       (C) Maximum percentage.--The highest maximum percentage 
     that may be specified by the Secretary under this paragraph 
     shall be 90 percent.
       (3) Additional limitation on use of funds.--Amounts 
     received by a senior center under a grant under subsection 
     (c) may not be used for any administrative purpose unless 
     such purpose relates directly to the participation of the 
     senior center in the pilot program under this section.
       (e) Duration.--
       (1) Commencement.--The Secretary of Commerce shall commence 
     the pilot program under this section as soon as practicable 
     after the date of the enactment of this Act.
       (2) Termination.--The Secretary may not make any grant 
     under the pilot program after the date that is three years 
     after the commencement of the pilot program under paragraph 
     (1).
       (f) Report.--
       (1) Requirement.--Not later than two years after the 
     commencement of the pilot program under subsection (e)(1), 
     the Secretary of Commerce shall submit to Congress a report 
     on the pilot program.
       (2) Elements.--The report under paragraph (1) shall set 
     forth the following:

[[Page 10101]]

       (A) An estimate of the cost per senior center of making 
     available Internet access to or for older individuals at or 
     through senior centers in rural areas and in non-rural areas, 
     including a separate estimate of the cost of--
       (i) purchasing computers and associated hardware;
       (ii) purchasing software;
       (iii) purchasing and installing internal connections;
       (iv) subscribing to Internet and telecommunications 
     services at narrowband data rates; and
       (v) operating and maintaining the systems which provide 
     such access.
       (B) An assessment of the extent to which computers and 
     Internet access are currently available to or for older 
     individuals at or through senior centers in the United 
     States, including--
       (i) a comparison of the availability of computers and 
     Internet access at or though senior centers in rural areas 
     with the availability of computers and Internet access at or 
     through senior centers in non-rural areas; and
       (ii) a comparison of the availability of computers and 
     Internet access at or through senior centers that serve a 
     high percentage of low-income older individuals with the 
     availability of computers and Internet access at or through 
     senior centers that do not serve a high percentage of low-
     income older individuals.
       (C) A proposal for a program to provide additional 
     subsidies or assistance to enhance the availability of 
     Internet access to or for older individuals, under which 
     program--
       (i) all senior centers would be eligible for such subsidies 
     or assistance; and
       (ii) priority would be given in the provision of such 
     subsidies or assistance to senior centers that serve a high 
     percentage of low-income older individuals or are located in 
     rural areas.
       (D) An estimate of the annual cost of the program proposed 
     under subparagraph (C).
       (g) Definitions.--In this section:
       (1) Low-income older individual.--The term ``low-income 
     older individual'' means an older individual whose income 
     level is at or below the poverty line (as that term is 
     defined in section 102(41) of the Older Americans Act of 1965 
     (42 U.S.C. 3002(41)).
       (2) Older individual.--The term ``older individual'' has 
     the meaning given that term in section 102(38) of the Older 
     Americans Act of 1965 (42 U.S.C. 3002(38)).
       (3) Senior center.--The term ``senior center'' means any 
     facility that is eligible to receive funding as a senior 
     center under title III of the Older Americans Act of 1965 (42 
     U.S.C. 3021 et seq.).
       (h) Authorization of Appropriations.--
       (1) Authorization of appropriations.--There is hereby 
     authorized to be appropriated $30,000,000 for purposes of the 
     pilot program required by this section.
       (2) Availability.--Amounts appropriated pursuant to the 
     authorization of appropriations in paragraph (1) shall remain 
     available until expended.
                                 ______
                                 
      By Mr. BENNETT (for himself and Mr. Schumer):
  S. 2702. A bill to require reports on the progress of the Federal 
Government in implementing Presidential Decision Directive No. 63 (PDD-
63); to the Committee on Armed Services.


reporting progress on implementing presidential decision directive no. 
                              63 (pdd-63)

 Mr. BENNETT. Mr. President, I rise today to introduce 
legislation with Senator Schumer. I wanted to thank my colleague and 
his staff for their hard work and full partnership in arriving at what 
I believe is a critical first step to insuring this nation's security 
in a world of growing cyber threats. I have been concerned for some 
time now that Presidential Decision Directive 63 (PDD 63) does not 
clearly define a role for the Department of Defense (DOD). In one 
sentence, PDD 63 states that the DOD is assigned the role of 
``defense'' but does not elaborate on how it will accomplish this vague 
assignment. Our legislation will require that the DOD begin the 
thinking process of how it is integrating its different capabilities 
and assets into an ``indications and warning architecture.'' Each of 
the Services is developing its individual information warfare 
capabilities at this moment, and it is not clear how they are being 
integrated or coordinated. The DOD was supposed to report on the future 
of the National Communications System (NCS) in 1996 and 1997, but as 
far as I know that report was never completed. NCS has been identified 
as a unique public-private partnership with major telephone carriers 
and information systems providers and could be a useful entity to 
defend against a widespread attack.
  This bill will require the DOD to describe how it is working with the 
intelligence community to identify, detect and counter the threat of 
information warfare programs of hostile states and potentially hostile 
sub-national organizations. One thing my Y2K experience has made very 
clear to me is that the coordination of intelligence and the proper 
identification of threat and intention is increasingly difficult. We 
often lack the human intelligence, just plain people on the ground, to 
meet the growing need for reconnaissance, and that makes coordinated 
and integrated technology all the more important.
  We must begin to work from a position of having a consistent 
understanding of the terms we use. It is central to this idea that we 
define the terms: nationally ``significant cyber event'' and ``cyber 
reconstitution.'' PDD 63 and the National Plan do not define what these 
are and the lack of definition causes confusion and impedes program 
development.
  Also, during Y2K we found that the DOD has a large dependency on 
foreign infrastructure and that we must develop a way to assure and 
defend that infrastructure electronically. Any collapse of an 
infrastructure would hurt our force projection capabilities.
  Our offensive and defensive information operations need to evolve 
together in an integrated fashion. We need to identify elements of a 
defense against an information warfare attack, including how the 
capability of the U.S. Space Command's Computer Network Attack 
Capability will be integrated into the overall cyber defense of the 
U.S.
  Mr. President, in closing I cannot overemphasis my concern for a 
thoughtful approach to cyber-defense. As many of us have become 
painfully aware, the threats are increasing at unheard of rates and our 
defenses, even in the government, have not kept pace.
  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. 2702

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

     SECTION 1. REPORTS ON FEDERAL GOVERNMENT PROGRESS IN 
                   IMPLEMENTING PRESIDENTIAL DECISION DIRECTIVE 
                   NO. 63 (PDD-63)

       (a) Findings.--Congress makes the following findings:
       (1) The protection of our Nation's critical infrastructure 
     is of paramount importance to the security of the United 
     States.
       (2) The vulnerability of our Nation's critical sectors--
     such as financial services, transportation, communications, 
     and energy and water supply--has increased dramatically in 
     recent years as our economy and society have become ever more 
     dependent on interconnected computer systems.
       (3) Threats to our Nation's critical infrastructure will 
     continue to grow as foreign governments, terrorist groups, 
     and cyber-criminals increasingly focus on information warfare 
     as a method of achieving their aims.
       (4) Addressing the computer-based risks to our Nation's 
     critical infrastructure requires extensive coordination and 
     cooperation within and between Federal agencies and the 
     private sector.
       (5) Presidential Decision Directive No. 63 (PDD-63) 
     identifies 12 areas critical to the functioning of the United 
     States and requires certain Federal agencies, and encourages 
     private sector industries, to develop and comply with 
     strategies intended to enhance the Nation's ability to 
     protect its critical infrastructure.
       (6) PDD-63 requires lead Federal agencies to work with 
     their counterparts in the private sector to create early 
     warning information sharing systems and other cyber-security 
     strategies.
       (7) PDD-63 further requires that key Federal agencies 
     develop their own internal information assurance plans, and 
     that these plans be fully operational not later than May 
     2003.
       (b) Report Requirements.--(1) Not later than July 1, 2001, 
     the President shall submit to Congress a comprehensive report 
     detailing the specific steps taken by the Federal Government 
     as of the date of the report to develop infrastructure 
     assurance strategies and the timetable of the Federal 
     Government for operationalizing and fully implementing 
     critical information systems defense by May, 2003. The report 
     shall include the following:
       (A) A detailed summary of the progress of each Federal 
     agency in developing an internal information assurance plan.
       (B) The progress of Federal agencies in establishing 
     partnerships with relevant private sector industries.
       (C) The status of cyber-security and information assurance 
     capabilities in the private sector industries at the 
     forefront of critical infrastructure protection.

[[Page 10102]]

       (2)(A) Not later than 120 days after the date of the 
     enactment of this Act, the Secretary of Defense shall submit 
     to Congress a detailed report on Department of Defense plans 
     and programs to organize a coordinated defense against 
     attacks on critical infrastructure and critical information-
     based systems in both the Federal Government and the private 
     sector. The report shall be provided in both classified and 
     unclassified formats.
       (B) The report shall include the following:
       (i) A description of the current role of the Department of 
     Defense in implementing Presidential Decision Directive No. 
     63 (PDD-63).
       (ii) A description of the manner in which the Department is 
     integrating its various capabilities and assets (including 
     the Army Land Information Warfare Activity (LIWA), the Joint 
     Task Force on Computer Network Defense (JTF-CND), and the 
     National Communications System) into an indications and 
     warning architecture.
       (iii) A description of Department work with the 
     intelligence community to identify, detect, and counter the 
     threat of information warfare programs by potentially hostile 
     foreign national governments and sub-national groups.
       (iv) A definitions of the terms ``nationally significant 
     cyber event'' and ``cyber reconstitution''.
       (v) A description of the organization of Department to 
     protect its foreign-based infrastructure and networks.
       (vi) An identification of the elements of a defense against 
     an information warfare attack, including the integration of 
     the Computer Network Attack Capability of the United States 
     Space Command into the overall cyber-defense of the United 
     States.
                                 ______
                                 
      By Mr. AKAKA (for himself, Mr. Durbin, Mr. Sarbanes, Ms. 
        Mikulski, Mr. Edwards, and Mr. Baucus):
  S. 2703. A bill to amend the provisions of title 39, United States 
Code, relating to the manner in which pay policies and schedules and 
fringe benefit programs for postmasters are established; to the 
Committee on Governmental Affairs.


                the postmasters fairness and rights act

 Mr. AKAKA. Mr. President, I rise today to introduce the 
Postmasters Fairness and Rights Act, which will allow our nation's 
postmasters to take an active and constructive role in managing their 
post offices and discussing compensation issues. I am joined by 
Senators Durbin, Sarbanes, Mikulski, Edwards, and Baucus in offering 
this legislation.
  Currently, Postmasters lack an equitable process for discussing pay 
and benefits and have seen an erosion of their role in improving the 
quality of mail services to postal patrons and managing their local 
post offices. These inequities have contributed to the decline in the 
number of Postmasters since the reorganization of the Postal Service 30 
years ago.
  Our bill would create a positive and fair procedure to address the 
inequalities that have resulted from the present ``consultative 
process.'' This would foster better mail services by investing 
Postmasters with greater input in operational decision-making, 
improving Postmasters' morale, and helping attract and retain qualified 
Postmasters. The measure would also define ``Postmaster'' for the first 
time.
  Mr. President, the Postal Service estimates that seven million 
customers a day transact business at post offices. We expect timely 
delivery of the mail 6 days a week, and the Postal Service does not 
disappoint us. Given the regularity of mail delivery and the number of 
Americans visiting post offices daily, it is no wonder that we have 
come to view our neighborhood post offices as cornerstones of our 
communities. In fact, many of our towns and cities have developed 
around a post office where the postmaster served as the town's only 
link to the federal government.
  Our nation's postmasters are on the front line to ensure that the 
mail gets delivered in a timely manner, and they have helped fuel the 
infrastructure that boosted the performance ratings of the Postal 
Service to an all-time high in 1999.
  Despite these successes, there remains the question of pay and 
compensation, which this bill addresses. I would also like to note that 
a House companion bill, H.R. 3842, introduced on March 8, 2000, enjoys 
bipartisan support from 23 cosponsors. I urge my colleagues to support 
this legislation. Thank you Mr. President. I ask unanimous consent that 
the bill be printed in full in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2703

       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 ``Postmasters Fairness and 
     Rights Act''.

     SEC. 2. POSTMASTERS TO BE COVERED BY AGREEMENTS RELATING TO 
                   PAY POLICIES AND SCHEDULES AND FRINGE BENEFIT 
                   PROGRAMS.

       Section 1004 of title 39, United States Code, is amended by 
     redesignating subsections (g) and (h) as subsections (i) and 
     (j), respectively, and by inserting after subsection (f) the 
     following:
       ``(g)(1) The Postal Service shall, within 45 days of each 
     date on which an agreement is reached on a collective 
     bargaining agreement between the Postal Service and the 
     bargaining representative recognized under section 1203 which 
     represents the largest number of employees, make a proposal 
     for any changes in pay policies and schedules and fringe 
     benefit programs for postmasters which are to be in effect 
     during the same period as covered by such agreement.
       ``(2) The Postal Service and the postmasters' organization 
     (or, if more than 1, all postmasters' organizations) shall 
     strive to resolve any differences concerning the proposal 
     described in paragraph (1).
       ``(3) If, within 60 days following the submission of the 
     proposal, the Postal Service and the postmasters' 
     organization (or organizations) are unable to reach 
     agreement, either the Postal Service or the postmasters' 
     organization (or organizations jointly) shall have the right 
     to refer the dispute to an arbitration board established 
     under paragraph (4).
       ``(4) An arbitration board shall be established to consider 
     and decide a dispute arising under paragraph (3) and shall 
     consist of 3 members, 1 of whom shall be selected by the 
     Postal Service, 1 by the postmasters' organization (or 
     organizations jointly), and the third by the 2 thus selected. 
     If either the Postal Service or the postmasters' organization 
     (or organizations) fail to select a member within 30 days 
     after the dispute is referred to an arbitration board under 
     this subsection, or if the members chosen fail to agree on 
     the third person within 5 days after their first meeting, the 
     selection shall be made by the Director of the Federal 
     Mediation and Conciliation Service.
       ``(5) The arbitration board shall give the parties a full 
     and fair hearing, including an opportunity for each party to 
     present evidence in support of its claims and an opportunity 
     to present its case in person, by counsel, or by such other 
     representative as such party may elect. Decisions by the 
     arbitration board shall be conclusive and binding upon the 
     parties. The arbitration board shall render its decision 
     within 45 days after its appointment.
       ``(6) Costs of the arbitration board shall be shared 
     equally by the Postal Service and the postmasters' 
     organization (or organizations), with the Postal Service to 
     be responsible for one-half of those costs and the 
     postmasters' organization (or organizations) to be 
     responsible for the remainder.
       ``(7) Nothing in this subsection shall be considered to 
     affect the application of section 1005.''.

     SEC. 3. RIGHT OF POSTMASTERS' ORGANIZATIONS TO PARTICIPATE IN 
                   PLANNING AND DEVELOPMENT OF PROGRAMS.

       The second sentence of section 1004(b) of title 39, United 
     States Code, is amended by striking ``or that a managerial 
     organization (other than an organization representing 
     supervisors) represents a substantial percentage of 
     managerial employees,'' and inserting ``or that a managerial 
     organization (other than an organization representing 
     supervisors or postmasters) represents a substantial 
     percentage of managerial employees, or that an organization 
     qualifies as a postmasters' organization,''.

     SEC. 4. POSTMASTERS AND POSTMASTERS' ORGANIZATION DEFINED.

       Subsection (i) of section 1004 of title 39, United States 
     Code, as so redesignated by section 2, is amended by striking 
     ``and'' at the end of paragraph (1), by striking the period 
     at the end of paragraph (2) and inserting a semicolon, and by 
     adding at the end the following:
       ``(3) `postmaster' means an individual who manages, with or 
     without the assistance of subordinate managers or 
     supervisors, the operations of a post office; and
       ``(4) `postmasters' organization' means, with respect to a 
     year, any organization of postmasters whose membership as of 
     June 30th of the preceding year included not less than 20 
     percent of all individuals employed as postmasters as of that 
     date.''.

     SEC. 5. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Section 1001(e) of title 39, United States Code, is 
     amended (in the matter before paragraph (1)) by inserting 
     ``agreements under section 1004(g),'' after ``regulations,''.
       (b) Section 1003(a) of title 39, United States Code, is 
     amended in the first sentence by inserting ``section 1004(g) 
     of this title,'' before ``section 8G''.

[[Page 10103]]



     SEC. 6. EFFECTIVE DATE.

       The amendments made by this Act shall take effect after the 
     end of the 90-day period beginning on the date of enactment 
     of this Act.
                                 ______
                                 
      By Mr. KERREY (for himself, Mr. Bond, Mr. Daschle, Mr. Johnson, 
        Mr. Brownback, and Mr. Roberts):
  S. 2704. A bill to provide additional authority to the Army Corps of 
Engineers to protect, enhance, and restore fish and wildlife habitat on 
the Missouri River and to improve the environmental quality and public 
use and appreciation of the Missouri River; to the Committee on 
Environment and Public Works.


               the missouri river valley improvement act

 Mr. KERREY. Mr. President, one year ago I came to the floor of 
the United States Senate to introduce legislation designed to improve 
the environmental quality and public use and appreciation of the 
Missouri River. The Missouri River Valley Improvement Act of 1999, 
sought to also mark the upcoming bicentennial anniversary of the Lewis 
and Clark expeditions of this great river. At that time I asked my 
colleagues who represent the states and communities along the Missouri 
River to look closely at the bill and join me as cosponsors in support 
of the legislation.
  Through the hard work of state officials, river organizations and 
citizens throughout the Missouri River basin, many important 
improvements have been made to this bill. I believe these improvements 
strengthens our commitment to protecting the Missouri River. I am 
pleased, therefore, to introduce today, along with my Colleague's 
Senator Daschle, Senator Bond, Senator Johnson, Senator Brownback and 
Senator Roberts, the Missouri River Valley Improvement Act of 2000.
  This legislation maintains the commitment made in last year's bill to 
aid native river fish and wildlife, reduce flood loss, and enhance 
recreation and tourism throughout the basin. Additionally, this bill 
provides authorities for the revitalization of historic riverfronts, 
similar to the ongoing `Back to the River' revitalization project 
currently underway in my home state of Nebraska. The new legislation 
also recognizes the commitment Congress made last year to habitat 
restoration efforts along the Missouri River by authorizing resources 
for these projects.
  I am proud of the bipartisan support garnered for this legislation. 
This bill demonstrates that common ground exists when it comes to 
strengthening the health of the Missouri River. Those who use the river 
whether it be for recreational, commercial, or environmental purposes 
recognize the benefits of preserving this National treasure. Protecting 
native habitat along the Missouri River and enhancing environmental 
understanding through riverfront restoration and scientific monitoring 
is a legacy we should all want to leave our children and grandchildren.
  Mr. President, it is my hope that this bill becomes part of the 
growing recognition that the environmental revitalization of the 
Missouri River is in all of our interests. The Missouri River Valley 
Improvement Act of 2000 will help to restore and improve our access and 
enjoyment of the river, and will provide vital economic, recreational 
and education opportunities for everyone who lives along and visits 
this great river, the Crown Jewel of the Midwest.
                                  ____

      By Mr. THOMPSON (for himself, Mr. Lieberman, Mr. Akaka, Ms. 
        Collins, Mr. Durbin, Mr. Levin, and Mr. Voinovich):
  S. 2705. A bill to provide for the training of individuals, during a 
Presidential transition, who the President intends to appoint to 
certain key positions, to provide for a study and report on improving 
the financial disclosure process for certain Presidential nominees, and 
for other purposes; to the Committee on Governmental Affairs.


                THE PRESIDENTIAL TRANSITION ACT OF 2000

 Mr. THOMPSON. Mr. President, Senator Lieberman and I are today 
introducing the Presidential Transition Act of 2000 on behalf of 
ourselves and Senators Akaka, Durbin, Levin, and Voinovich. The ability 
of a President-elect to effectively transition from campaigning to 
governing is obviously of critical importance and this legislation is 
designed to initiate much needed improvements in the process.
  A President-elect must face the management challenge of transitioning 
from leading a successful campaign operation to leading the nation. 
There are only 73 days from election day to inauguration day. 
Transition planning should begin prior to election day. The President-
elect should have the ability to move immediately to put a new team in 
place. That team should receive the critical information it needs to be 
prepared to take over the management of the federal government on 
inauguration day. Potential nominees should be able to move through the 
nomination and confirmation process without unnecessary barriers.
  The magnitude of the need for an effective presidential transition 
and the recognized problems with past ones have led a number of private 
sector organizations to focus on the problem and solutions to it. 
Several, including the Presidential Appointee Initiative of the 
Brookings Institution, Transition to Governing of the American 
Enterprise Institute and Brookings, and the Heritage Foundation's 
Mandate for Leadership 2000, have contributed to our consideration of 
this problem. These groups and others are independently preparing a 
body of knowledge which will assist the new administration to get an 
effective, timely start. I ask unanimous consent that an article by 
Carl Cannon in National Journal and one by David Broder in the 
Washington Post, which describe the significant work which is underway, 
be printed at the conclusion of my remarks, followed by the text of our 
legislation.
  The legislation encompasses and expands on H.R. 3137, legislation 
sponsored by Representative Steve Horn, Chairman of the Committee on 
Government Reform Subcommittee on Government Management, Information 
and Technology and passed by the House of Representatives. 
Representative Horn's bill provides for the payment of expenses during 
the transition for briefings and other activities designed to transfer 
key policy and administrative information to prospective presidential 
staff in order to ensure a smooth transition from one administration to 
another. The current Administration has recognized the importance of 
these activities by including additional funds for it in its FY 2001 
budget request for the General Services Administration.
  Our bill supplements the framework established by H.R. 3137. Our bill 
includes the authorization of federal funds to be spent to provide for 
the training and orientation of officials a President intends to 
nominate to key positions. This important provision allows political 
appointees to hit the ground running by preparing for the job before 
they are nominated.
  Additionally, our bill requires the preparation of a ``transition 
directory.'' This valuable tool will be a compilation of materials that 
provide information to prospective appointees about the organization of 
federal departments and agencies, as well as the statutory and 
administrative authorities, functions, duties, and responsibilities of 
each federal department and agency. With this tool, prospective 
appointees can better manage the new, important positions they are 
preparing to undertake.
  Finally, the bill requires the Office of Government Ethics conduct a 
study and submit a report to Congress on potential improvements to the 
current financial disclosure process Presidential nominees are 
currently required to undergo. Certainly, nothing the Office of 
Government Ethics recommends should in any way lessen the requirement 
that potential nominees disclose possible conflicts of interest. But, 
the Office of Government Ethics should recommend ways to improve the 
process of obtaining, reviewing, and disclosing such information in 
order to reduce the burden the current process places on potential 
appointees and the people who review the information.
  Mr. President, we believe this legislation will help improve and 
smooth the

[[Page 10104]]

process by which elected Presidents and their political appointees 
transition to power and assume their responsibilities. We hope the 
incentives provided in this legislation will encourage and enable 
presidential candidates, presidents-elect and newly sworn presidents to 
be up and running on the day after the inauguration.
  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:

                 [From National Journal, May 13, 2000]

                    Improving the White House Memory

                          (By Carl M. Cannon)

       White House Chief of Staff John Podesta recalls being 
     jazzed his first day in the Clinton Administration--until he 
     saw his workstation. There wasn't a single piece of paper on 
     his desk, and not so much as a diagram telling him where the 
     men's room was. There was a computer monitor and processor, 
     but the monitor was blank and the processor had wires poking 
     out of it--someone had removed the hard drive. This was no 
     crime of vandalism. It was the law, at work.
       While the Constitution sets clear rules on how the country 
     goes about electing a President, there has always been a 
     haphazard quality to the transition. One reason is that both 
     long-standing custom and the Presidential Records Act of 1978 
     dictate that almost all White House offices be swept clean of 
     all records, including basic information that would help a 
     new President get off to a good start.
       ``By law, there's no institutional memory,'' says political 
     scientist Martha Joynt Kumar of Towson State University, the 
     author of two books on White House operations. ``A new 
     Administration, especially when there's a change of party, 
     begins without a written record compiled by the previous 
     occupants. Those who have worked there almost uniformly 
     describe this as a handicap.''
       The absence of a record can be an issue even in what ought 
     to be the least partisan of transitions--the ascendancy of a 
     Vice President to the Oval Office in midterm. When President 
     Franklin D. Roosevelt died in April 1945, Harry S. Truman's 
     incoming staff lacked access to key information, including 
     the fact that the United States was close to developing the 
     atomic bomb. As Vice President, Truman had not known the 
     weapon existed, and it was not until 13 days after he became 
     President that Secretary of War Henry L. Stimpson informed 
     him of the project.
       ``I felt,'' Truman explained of his sudden thrust into the 
     Oval Office. ``like the moon, the stars, and all the planets 
     had fallen on me.''
       Even when the nation is at peace, the lack of a written 
     record in the White House National Security Council is a 
     continuing problem. ``The new NSC staff spends months re-
     creating them or negotiating with the archivists to get 
     access to them,'' says John Fortier, a researcher at the 
     American Enterprise Institute. ``There has to be a better 
     way.''
       In other words, Podesta was hardly the first appointee to 
     wonder about this process. Michael Jackson, who held a 
     powerful post as the White House's Cabinet secretary, recalls 
     a scramble for furniture on the first day of the Bush 
     Administration more appropriate for the movie Animal House 
     than the White House.
       ``The first day what they did is, they pulled out a lot of 
     the furniture from the offices and into the halls, where 
     there were piles of credenzas, desks, wing chairs,'' Jackson 
     told Kumar. ``The people who were smart and knew the drill 
     got there early and went and just took stuff.
       Commentator David Gergen, who has served in two Republican 
     Administrations and one Democratic (Clinton's), maintains 
     that this early confusion in a cleaned-out, clueless White 
     House comes at a price for the new President--and the 
     country. ``The early months are so important because that's 
     when you have the most authority,'' Gergen said. But that's 
     when you also have the least capacity for making the right 
     decisions.''
       Other White House veterans assert that the lack of 
     institutional memory helps explain why incoming 
     Administrations seem to stubbornly repeat the mistakes of 
     their predecessors, especially in their first days. Jimmy 
     Carter, Ronald Regan, and Bill Clinton, for instance, all 
     vowed during their campaigns to cut the size of White House 
     staff, but their efforts to follow through on this ill-
     considered promise produced results ranging from poor to 
     disastrous.
       ``Cicero said that he who does not know history would 
     forever remain a child,'' says David M. Abshire, who heads 
     the Center for the Study of the Presidency and who assisted 
     in the Reagan transition. ``Believe it or not, some 
     Presidents have done childish things.''
       But such scholars as Abshir and Kumar insist that this is 
     hardly all presidential fault: Imagine a $1.8 trillion 
     company--that's the approximate size of the federal budget--
     in which the corporate headquarters is vacated every four or 
     eight years. Moreover, hardly any of the support staff stays 
     on, all the files vanish, and the shareholders are given only 
     two months' notice about the identity of the incoming CEO.
       ``The White House is not simply a spoil of victory,'' says 
     former Carter White House aide Harrison Wellford, an attorney 
     who now handles corporate mergers. ``It's the nerve center of 
     the greatest government in the world, and we ought to at 
     least give it the same respect that you do when you take over 
     a second-rate corporation.''
       A slew of presidential scholars and good-government 
     organizations are spending this year trying to do just that. 
     They have undertaken a series of projects designed to help 
     the new President hit the ground running when he takes office 
     on Jan. 22, 2001:
       Abshire's Center for the Study of the Presidency is working 
     on a special report intended to reach the President-elect on 
     the day after the election. The package will include several 
     case studies illustrating past Presidents' successes and 
     failures in policy-making, and an analysis of ``the art of 
     presidential leadership.''
       The Heritage Foundation is undertaking a project called 
     Mandate for Leadership 2000. Obviously, the conservative 
     Heritage folks are pulling for Republican Gov. George W. Bush 
     over Democratic Vice President Al Gore. Just as obviously, 
     some of the Heritage material, such as a proposed federal 
     spending blueprint, is geared for a GOP President. But 
     Heritage is also in the midst of a bipartisan effort 
     consisting of a series of seminars and publications designed 
     to guide the next Administration. Later this year, Heritage 
     plans to publish what it promises will be a nonpartisan 
     report drawing on the accumulated wisdom of a cast of former 
     White House aides, ranging from former Clinton Chief of Staff 
     Leon E. Panetta to Reagan confidant and Deputy White House 
     Chief of Staff Michael K. Deaver.
       Paul C. Light of the Brookings Institution has launched his 
     Presidential Appointee Initiative with the goal of helping a 
     new President get the best and the brightest Americans into 
     his Administration. This project, funded to the tune of $3.6 
     million for three years by the Pew Charitable Trusts, will 
     propose reforms that streamline and depoliticize the 
     appointment and confirmation process. ``The premise . . . is 
     that effective governance is impossible if the nation's most 
     talented citizens are reluctant to accept the President's 
     call to government service.'' Light says.
       At the American Enterprise Institute, Norman J. Ornstein 
     has teamed with Thomas E. Mann of the Brookings Institution 
     on a wide-ranging three-year mission called Transition to 
     Governing. Also funded by Pew, the $3.35 million project 
     targets the ``permanent campaign,'' which has made stars of 
     political consultants while reducing policy-makers to slaves 
     of the daily tracking polls.
       In the works at AEI are two conferences; a published set of 
     benchmarks by which to judge successful transitions; 
     recommendations for improving the confirmation process; a 
     book on the danger of the permanent campaign; and the 
     publication of transition memos written by Harvard scholar 
     Richard Neustadt for Presidents Kennedy, Reagan, and Clinton. 
     In addition, AEI intends to supplement Light's work by 
     developing ideas for accelerating the appointment process, 
     which took an average of two months in Kennedy's day but now 
     consumes more than nine months.
       One tool being created is a CD-ROM modeled on TurboTax 
     software that consolidates all of the questions asked on the 
     various government disclosure forms and in FBI background 
     checks. ``The purpose of it is to make it easy for nominees 
     to complete the blizzard of paperwork they have to 
     negotiate,'' says Terry Sullivan, the University of North 
     Carolina political scientist overseeing the project. ``One of 
     the things we know from interviews Paul Light's organization 
     has been conducting with these people is that they find all 
     this paperwork to be odious and repetitious. It discourages 
     some nominees. . . .''
       Finally, there is the White House interview program, the 
     brainchild of Martha Kumar and several of her fellow 
     presidential scholars. Also funded by Pew, but at only 
     $250,000 for three years, it may offer the biggest bang for 
     the buck. Kumar has conducted nearly 75 in-depth interviews 
     with former White House officials from seven key offices, 
     including chief of staff and communications, going back as 
     far as the Nixon Administration. ``The idea of these 
     interviews is to get into the workings of the White House'' 
     Kumar said, ``and to pass along their insights to those who 
     need it--when they need it most.''
       Her interviews will be made available, along with a 15-page 
     analysis on the office in question, to those hired during the 
     transition for positions such as White House chief of staff 
     and press secretary. Next year, they will be turned over to 
     the National Archives.
       The scholars themselves are aware that the reports they are 
     producing will compete with each other and with a thousand 
     other demands on the new appointees' time. For that reason, 
     there has been a good deal of cross-pollination of ideas and 
     cooperation among the scholars, many of whom are being tapped 
     for more than one of these projects. In the process, a loose 
     consensus has formed

[[Page 10105]]

     among them, one that David Abshire puts succinctly: ``The 
     most important decision a President makes is whom he picks to 
     make up that presidency.''

                [From the Washington Post, June 4, 2000]

                       Start Thinking Transition

                          (By David S. Broder)

       If you call the Bush or Gore campaigns, as I did last week 
     and ask if anyone is planning the transition to the 
     presidency, the answer is an astonished ``No!'' It's months 
     until the conventions and the focus is entirely on the fall 
     campaign, they say. First things first. It would be 
     presumptuous to think otherwise.
       But the strongly held view of those who have been through 
     this sequence before is that George W. Bush and Al Gore ought 
     to be thinking about the takeover of government now, and 
     starting to plan the process very soon, well before they know 
     which of them will be successful on Election Day.
       ``Remember you have only 73 days'' from election to 
     inauguration, Theodore C. Sorensen, the counsel in the 
     Kennedy White House, said last week at a conference sponsored 
     by the Heritage Foundation. ``You better begin planning 
     before Election Day.''
       That advice was echoed by veterans of the Johnson, Carter, 
     Reagan and Bush White Houses--and by a trio of scholars who 
     have been plumbing the records of past transitions.
       In fact, such advance planning has been done in many past 
     campaigns--but covertly, to avoid conveying a sense of smug 
     overconfidence to the voters. Jack Watson, who became Jimmy 
     Carter's chief of staff, told the Heritage audience that he 
     had retrieved a memo from the Carter archives he had written 
     the former Georgia governor on May 11, 1976, soon after 
     Carter won the Pennsylvania primary and established himself 
     as the favorite for the nomination. It suggested that as 
     outsiders to Washington, they needed to start organizing 
     themselves soon for the possibility of taking over the 
     executive branch. Carter gave him the go-ahead on May 27--
     just about this point in the cycle--but ordered secrecy.
       Why the need for such a long head start? Mainly because the 
     process of identifying the key officials and getting them in 
     place can be so agonizing. C. Boyden Gray, counsel in the 
     Bush White House, said the president-elect should be ready to 
     give the FBI the names of 100 to 150 people ``immediately 
     after the election,'' so the clearance procedures can begin. 
     ``Do it, even if you don't know what their jobs will be,'' 
     Gray said, ``because there will always be a glitch.''
       Who are those key officials? Richard E. Neustadt, the 
     Harvard professor whose work on the presidency has been a 
     handbook for several administrations, was unequivocal in his 
     answer. ``Choose the White House staff before you pick the 
     Cabinet,'' he said, ``so they can begin to relate to each 
     other in the process of Cabinet selection. Don't do the 
     Cabinet first.''
       President Clinton famously did the opposite and dallied so 
     long in Cabinet-making that he barely got his White House 
     aides named before he moved from Little Rock to Washington. 
     He paid a price; many of those last-minute White House 
     appointees turned out to be ill suited for their jobs and had 
     to be replaced.
       The Reagan transition is considered by scholars the best of 
     recent times. Planning began well before Election Day and was 
     aided by the outgoing administration, said Edwin Meese III, 
     the transition director who later became attorney general. 
     Carter and Watson were so grateful for the help they had 
     received four years before from defeated President Ford, 
     through his top aides Richard Cheney and John O. Marsh, that 
     they went out of their way to help the Reagan people.
       No one can predict how much help the retiring Clintonities 
     will give their successors, though it presumably would be 
     extended automatically to Gore's people. But plenty of 
     guidance will be available to the incoming president from 
     outside government.
       Four think tanks--Heritage, the American Enterprise 
     Institute, the Brookings Institution and the Center for the 
     Study of the Presidency--all have major transition studies 
     underway and will be ready with briefing papers for the 
     winners.
       In addition, the American Political Science Association 
     with a Few Charitable Trusts grant, has a White House 2001 
     project. Martha Kumar, a professor at Towson University, and 
     her colleagues have interviewed 75 officials from the past 
     six White Houses and are building what Kumar calls ``the 
     first institutional memory'' of seven key White House 
     offices, which together make up the nerve center of the 
     presidency.
       They will present the president-elect's team with seven 
     short essays, drawn from the interviews, on ``how the place 
     should work,'' plus something that never before existed--a 
     Rolodex of past officials in those offices and their phone 
     numbers.
       This may sound elementary, but the reality is that when a 
     new president moves in, his top aides find bare desks, empty 
     filing cabinets and disconnected computers. They need help.
       And it will be there, especially if Gore and Bush don't 
     procrastinate in starting their transition planning.

 Mr. LIEBERMAN. Mr. President, I am pleased to join with 
Senators Thompson, Levin, Durbin, Voinovich, Collins and Akaka to 
introduce this legislation, which will help improve the transition from 
one Presidential Administration to the next by providing training and 
other assistance.
  Each newly elected President has the power to bring into government, 
with the advice and consent of the Senate, his or her own selection of 
political appointees to manage key agencies and offices within the 
Executive Branch. However, new administrations face a series of hurdles 
they must overcome to accomplish this essential task before they can 
begin to govern. For example, new administrations often lack critical 
information about the jobs they must fill. Individuals without prior 
government experience who are selected for key positions may be 
unfamiliar with how to work with Congress and the media and may run the 
risk of missteps early in their tenure. But perhaps most importantly, 
the process by which these individuals are nominated and confirmed has 
fallen into increasing disarray in recent years. Knowledgeable 
observers have warned that it could take until November 2001 before all 
the senior members of the new Administration are vetted and confirmed, 
due to factors such as lengthier background checks, burdensome and 
duplicative financial disclosure forms, and a more contentious Senate 
confirmation process.
  The bill we are introducing today is a first step in responding to 
these problems. It provides for training and orientation of high-level 
Presidential appointees, to better prepare them for the challenges of 
their new positions. It provides for the preparation of a ``transition 
directory'' containing essential information about the agency structure 
and responsibilities these new appointees will face. Our bill directs 
the Office of Government Ethics to study ways to streamline the current 
financial disclosure process, while still ensuring disclosure of 
possible conflicts of interest.
  More may need to be done. Several studies are underway to look at how 
we can further improve the transition process, including the 
Presidential Appointee Initiative and the Transition to Governing 
Project. I commend those undertaking these studies and their efforts to 
provide assistance to the upcoming crop of nominees, and I look forward 
to recommendations for future action.
                                 ______
                                 
      By Mr. SANTORUM (for himself and Mr. Kohl):
  S. 2706. A bill to amend the Agricultural Market Transition Act to 
establish a program to provide dairy farmers a price safety net for 
small- and medium-sized dairy producers; to the Committee on 
Agriculture, Nutrition, and Forestry.


              national dairy farmers fairness act of 2000

 Mr. SANTORUM. Mr. President, I rise today to introduce 
legislation that will assist our nation's dairy farmers at a time when 
the dairy industry is facing tremendous difficulty. This legislation 
proposes a regionally equitable plan that will bring some 
predictability to a business that is otherwise challenged by inherent 
variability that accompanies dairy farming.
  I am pleased to have Senator Herb Kohl of Wisconsin join with me 
today in this effort. Given the importance of the dairy industry to our 
respective states, Senator Kohl and I worked together over the past few 
months to forge a consensus plan that addresses the concerns of dairy 
farmers nationwide. For far too long, regional politics has plagued 
efforts to achieve a fair and equitable national dairy policy. As a 
result, milk pricing has become increasingly complex and overly 
prescriptive. Given that dairy farmers are receiving the lowest price 
for their milk in more than twenty years, I feel strongly that Congress 
needed to step to the plate and offer a fair and responsible solution--
the very reason for this action.
  The National Dairy Farmers Fairness Act has two major goals: 1. 
create a dairy policy that is equitable for farmers in all regions of 
the country; 2. provide more certainty for farmers in the prices they 
receive for their milk. To

[[Page 10106]]

accomplish these goals, this legislation creates a safety net for 
farmers by providing supplemental assistance when milk prices are low. 
Specifically, a sliding scale payment is made based upon the previous 
year's price for the national average of Class III milk. In short, the 
payment rate to farmers is highest when the prices they received were 
the lowest. In order to be eligible, a farmer must have produced milk 
for commercial sale in the previous year, and would be compensated on 
the first 26,000 hundredweight of production. All dairy producers would 
be eligible to participate under this scenario.
  Without a doubt, our dairy pricing policy is flawed. Many solutions--
modest to sweeping--have been proposed, discussed, and debated on the 
Senate floor yet final agreement among interested parties has so far 
eluded us. As a member of the Senate Agriculture Committee who 
represents the fourth largest dairy producing state in the nation, I am 
committed to preserving the viability of Pennsylvania's dairy farmers. 
This legislative proposal represents the strong concern and interest of 
mine to find a middle ground in the often heated debate on dairy 
policy. I am pleased to join with Senator Kohl in this effort, and I 
believe it sends a strong signal that compromise can be achieved even 
on the most contentious of issues.
  Mr. KOHL. Mr. President, I rise today and join my colleague Senator 
Rick Santorum of Pennsylvania to introduce legislation to provide much 
needed assistance to our nation's dairy producers who are facing the 
lowest milk prices in over two decades.
  Due to the failure of the federal order reform process and the 
Administration's failure to include a meaningful dairy price safety net 
in its Fiscal Year 2001 budget, this legislation is an appropriate and 
necessary response to the ongoing regional milk pricing inequities and 
the dairy income crisis affecting all producers. In the past, the 
divisive and controversial dairy compact system has hindered Congress's 
efforts to achieve a fair and equitable national dairy policy. I am 
pleased to join with Senator Santorum to introduce this legislation to 
create a regionally equitable plan will provide a price safety net for 
small and medium sized dairy producers throughout the country.
  The National Dairy Farmers Fairness Act of 2000 has two major goals: 
(1) to create a dairy policy that is equitable for farmers in all 
regions of the country; (2) provide stability for dairy producers in 
the prices they receive for their milk. To accomplish these goals, this 
legislation creates a price safety net for farmers by providing 
supplemental income payments when milk prices are low. A ``sliding-
scale'' payment is made based upon the previous year's price for the 
national average for Class III milk. In essence, the payment rate to 
farmers is highest when the national Class III average is the lowest. 
To participate in this program, a farmer must have produced milk for 
commercial sale in the previous year. Payments under the program are 
also capped for the first 26,000 hundredweight of production. Again, 
all dairy producers would be eligible to participate under this 
scenario.
  The fiscal year 2001 Agriculture Appropriations bill includes $443 
million in emergency direct payments to dairy producers for losses 
incurred this year. While this action is absolutely necessary to 
respond to the current crisis, it is time that an on-going program 
providing supplemental income payments to farmers when milk prices 
decline be established. This important legislation represents a 
bipartisan and national approach in providing predictability and price 
stability in this otherwise volatile industry. Again, I am pleased to 
join with Senator Santorum in introducing this legislation and look 
forward to working with him in passing this important legislation.
                                 ______
                                 
      By Mr. CRAPO (for himself, Mr. Craig, and Mr. Burns):
  S. 2707. A bill to help ensure general aviation aircraft access to 
Federal land and the airspace over that land; to the Committee on 
Energy and Natural Resources.


                the backcountry landing strip access act

 Mr. CRAPO. Mr. President, I am pleased to be joined today by 
my colleagues, Senator Craig and Senator Burns, to introduce the 
Backcountry Landing Strip Access Act. This bill will preserve our 
nation's backcountry airstrips and require a public review and comment 
period before airstrips are temporarily or permanently closed.
  Idaho is home to more than fifty backcountry airstrips and the state 
is known nationwide for its air access to wilderness and primitive 
areas. In testimony before Congress on the importance of preserving 
backcountry airstrips, Bart Welsh, Aeronautics Administrator for the 
Idaho Department of Transportation, stated that these airstrips are, 
``an irreplaceable state and national treasure.'' Unfortunately, the 
reality today is that many airstrips have been closed or rendered 
unserviceable through neglect by federal agencies responsible for land 
management. Even more troubling is that these closures occur without 
providing the public with a justification for such action or an 
opportunity to comment on them.
  Our bill would address this situation by preventing the Secretary of 
Interior and the Secretary of Agriculture from permanently closing 
airstrips without first consulting with state aviation agencies and 
users. The legislation would also require that proposed closures would 
be published in the Federal Register with a ninety-day public comment 
period. The bill directs the Secretary of Interior and the Secretary of 
Agriculture, after consultation with the FAA, to adopt a nationwide 
policy governing backcountry aviation. Finally, I would be remiss if I 
did not mention that this bill is a result of Congressman Jim Hansen's 
tireless efforts in promoting backcountry aviation access in the other 
body.
  Backcountry airstrips are disappearing and, because of existing 
statutes, they are irreplaceable. When the Frank Church Wilderness Act 
was established in Idaho, it incorporated a provision to provide for 
the continued operation of all existing landing strips. The Act states 
that existing landing strips cannot be closed permanently or rendered 
unserviceable without the written consent of the State of Idaho. This 
has created an effective partnership between personnel from the U.S. 
Forest Service and staff from the Idaho Division of Aeronautics along 
with other interested parties. My bill extends the success of the Frank 
Church Wilderness Act provision nationwide to preserve airstrips in 
Idaho as well as other states.
  I have heard from general aviation users and state aviation officials 
that pilots often discover that an airstrip is closed only when they 
attempt to use it. This represents a grave danger to those who have not 
been made aware of an airstrip's closure. The public process in this 
bill would rectify this problem by ensuring that everyone with an 
interest in backcountry aviation remains informed of a proposed closure 
and is allowed to comment on it.
  Backcountry airstrips are active and essential to citizens who depend 
on wilderness access. These airstrips are utilized by pilots and 
outdoor enthusiasts. In addition, access to the strips ensures a 
fundamental American service--universal postal delivery. Without access 
to backcountry airstrips, citizens who live and work in remote areas 
would not receive their mails.
  Among the other vital functions of backcountry airstrips is their use 
for firefighting, search and rescue, and especially their availability 
to pilots in emergencies. Backcountry airstrips are analogous to fire 
engines in a firehouse. Although the airstrip may not used daily, it is 
always available in an emergency. Likewise, backcountry airstrips are 
available as a safe haven for public flying in remote mountainous 
areas. Without the airstrips, these pilots would have little chance of 
survival while attempting an emergency landing.
  Let me be clear, the Backcountry Landing Strip Access Act does not 
harm our forests or our wilderness areas, as some might suggest. 
Moreover, backcountry airstrips are regularly used by forest officials 
to maintain forests and trails, conduct ecological management projects, 
and aerial

[[Page 10107]]

mapping. This bill is simply about access. It does not reopen airstrips 
that have already been closed, nor does it burden federal officials 
with maintenance requirements. In fact, pilots themselves regularly 
maintain backcountry strips.
  The Backcounty Landing Strip Access Act is commonsense legislation 
that allows those who used and benefit from the airstrips to be 
involved in the decision-making process. I have always found that 
decisions on the use of public land are best handled by those who are 
impacted the most, rather than federal bureaucrats in Washington, DC. 
In Idaho, we have evolved into a cooperative relationship with federal 
land managers. It makes sense that the rest of the country should 
benefit from this philosophy of cooperation. One we lose an airstrip it 
is gone forever. I urge my colleagues to join with us in an effort to 
preserve the remaining backcountry airstrips.
                                 ______
                                 
      By Mr. ASHCROFT:
  S. 2708. A bill to establish a Patients Before Paperwork Medicare Red 
Tape Reduction Commission to study the proliferation of paperwork under 
the medicare program; to the Committee on Finance.


 the patients before paperwork medicare red tape reduction act of 2000

  Mr. ASHCROFT. Mr. President, Medicare paperwork requirements burden 
America's seniors, health care providers, and federal government staff 
that manage Medicare.
  In 1998, the average processing time for appeals of claims denied 
under Medicare Part A was 310 days. For Medicare Part B, the average 
appeal time was 524 days. Waiting periods of a year or longer are too 
long for America's seniors to wait. These lengthy waiting periods tell 
me that there must be room for us to improve the way we administer 
Medicare.
  HCFA regulations governing Medicare consist of 110,000 pages--six 
times as long as the Tax Code, which is 17,000 pages. In addition, HCFA 
uses 23 different forms to administer the Medicare program.
  According to Dr. Nancy Dickey, Immediate Past President of the 
American Medical Association, for most doctors, ``the biggest challenge 
is getting through mountains of Medicare paperwork.''
  Let me give you some examples of how paperwork burdens and related 
regulations are affecting the Medicare program. Recently Dr. Joseph 
Marshall, a Washington, DC., gynecologist, became so frustrated with 
HCFA regulations that he chose to give his Medicare patients free 
visits, so that he would avoid sending a bill to Medicare. HCFA would 
not allow it. HCFA told him that if he did not bill HCFA, he could be 
fined and imprisoned.
  A nonprofit Minnesota organization, Allina, which serves 35,000 
seniors, expects to spend $2 million annually in paperwork related 
burdens. And Medicare paperwork burdens have forced increasing numbers 
of seniors to resort to ``insurance claim service'' firms to help them 
complete Medicare paperwork. These firms charge $20 to $75 an hour.
  This is not the tax code I am referring to. This is Medicare, the 
program that is supposed to bring health care to elderly Americans, not 
bury them and their doctors under mountains of paperwork.
  During the Clinton Administration, more than a quarter of the 110,000 
pages of Medicare regulations and paperwork have been added. In April 
of last year, HCFA proposed 93 new regulations based on the Balanced 
Budget Act alone.
  Mr. President, drowning doctors and patients alike in a morass of 
paperwork must end. The seniors who have been promised Medicare 
coverage throughout their working lives deserve the best possible 
coverage. The doctors who treat them deserve our gratitude, not 
bureaucratic burdens and indifference.
  Therefore, today I am introducing the ``Patients Before Paperwork 
Medicare Red Tape Reduction Act of 2000.'' This legislation would 
establish a Commission to examine inefficient and superfluous Medicare 
paperwork requirements and related regulations. The Commission will 
include physicians, hospital administrators, senior citizens, nursing 
home and long term care administrators, and health care plan 
representatives, the very people best able to determine which forms are 
necessary to ensure quality coverage, and which forms create unfair 
burdens and time-wasting mandates from Washington.
  The Commission will be responsible for reviewing existing paperwork 
burdens, with the goal of reducing those burdens. It will streamline 
and simplify the coding method for Medicare services, facilitate 
electronic filing and the elimination of paperwork, and demonstrate 
that existing and proposed paperwork requirements and related 
regulations have proven benefits, including a positive health benefit 
for consumers.
  The Commission will also explore the important issue of how patient-
doctor relationships have been impacted by onerous paperwork 
requirements that force doctors to spend more time examining forms than 
examining patients.
  This legislation would alleviate the burden that Medicare paperwork 
imposes on millions of Medicare beneficiaries, health care providers, 
and our own federal government. By establishing this Commission, we 
would create the opportunity to decrease Medicare paperwork burdens on 
seniors and promote efficiency within the health care industry and 
within the federal government.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2708

       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 ``Patients Before Paperwork 
     Medicare Red Tape Reduction Act of 2000''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Regulations promulgated by the Health Care Financing 
     Administration to administer the medicare program under title 
     XVIII of the Social Security Act are 3 times as long as the 
     regulations relating to the Internal Revenue Code of 1986.
       (2) During the Administration of President Clinton, more 
     than a quarter of the 110,000 pages of medicare regulations 
     and paperwork have been added.
       (3) According to American Medical Association Immediate 
     Past President Dr. Nancy W. Dickey, for most doctors, ``the 
     biggest challenge is getting through mountains of medicare 
     paperwork''.
       (4) According to the Wall Street Journal, Allina, a 
     nonprofit Minnesota organization serving 35,000 medicare 
     beneficiaries, expects to spend $2,000,000 annually in 
     paperwork-related burdens.
       (5) Medicare paperwork burdens have forced increasing 
     numbers of medicare beneficiaries to resort to the use of 
     ``insurance claim service'' firms that charge from $20 to $75 
     an hour.
       (6) The Health Care Financing Administration uses 23 
     different forms in the administration of the medicare 
     program.
       (7) In 1998, the average processing time for appeals of 
     claims denied under part A of the medicare program was 310 
     days and the average appeal time was 524 days under part B of 
     such program.

     SEC. 3. PATIENTS BEFORE PAPERWORK MEDICARE RED TAPE REDUCTION 
                   COMMISSION.

       (a) Establishment.--There is established a commission to be 
     known as the Patients Before Paperwork Medicare Red Tape 
     Reduction Commission (in this section referred to as the 
     ``Commission'').
       (b) Duties of the Commission.--The Commission shall--
       (1) review existing paperwork burdens and related 
     regulations under the medicare program under title XVIII of 
     the Social Security Act (42 U.S.C. 1395 et seq.), with the 
     goal of reducing the paperwork burdens under such program;
       (2) analyze whether existing and proposed paperwork 
     requirements and related regulations have proven benefits, 
     including a positive health benefit for medicare 
     beneficiaries;
       (3) make recommendations regarding methods to streamline 
     and to simplify the coding method for items and services for 
     which reimbursement is provided under the medicare program;
       (4) make recommendations regarding the facilitation of 
     electronic filing of claims for reimbursement and the 
     elimination of paperwork under the medicare program;

[[Page 10108]]

       (5) develop a standard form that will minimize any 
     duplication of data and that facilitates the creation of an 
     electronic system that relies on less paperwork than the 
     current system;
       (6) determine the effect of the paperwork requirements 
     under the medicare program on relationships between doctors 
     and patients; and
       (7) review and analyze such other matters relating to 
     paperwork reduction under the medicare program as the 
     Commission deems appropriate.
       (c) Membership.--
       (1) Number and appointment.--
       (A) In general.--Subject to subparagraph (B), the 
     Commission shall be composed of 11 members, of whom--
       (i) 3 shall be appointed by the President, of whom not more 
     than 2 shall be of the same political party;
       (ii) 3 shall be appointed by the Majority Leader of the 
     Senate, in consultation with the Minority Leader of the 
     Senate, of whom not more than 2 shall be of the same 
     political party;
       (iii) 3 shall be appointed by the Speaker of the House of 
     Representatives, in consultation with the Minority Leader of 
     the House of Representatives, of whom not more than 2 shall 
     be of the same political party;
       (iv) 1, who shall serve as Chairperson of the Commission, 
     appointed jointly by the President, Majority Leader of the 
     Senate, and the Speaker of the House of Representatives; and
       (v) 1, who shall be the Secretary of Health and Human 
     Services or the Administrator of the Health Care Financing 
     Administration, as determined by the President.
       (B) Membership.--
       (i) In general.--Each member appointed under this 
     paragraph, except for the member described in subparagraph 
     (A)(v), shall be--

       (I) a health care provider, insurer, or expert familiar 
     with the medicare program; or
       (II) a medicare beneficiary.

       (ii) Inclusion of practicing physicians.--At least 1 member 
     appointed under this paragraph shall be a practicing 
     physician.
       (2) Deadline for appointment.--Members of the Commission 
     shall be appointed by not later than August 1, 2000.
       (3) Terms of appointment.--The term of any appointment 
     under paragraph (1) to the Commission shall be for the life 
     of the Commission.
       (4) Meetings.--The Commission shall meet at the call of its 
     Chairperson or a majority of its members.
       (5) Quorum.--A quorum shall consist of a majority of the 
     members of the Commission, except that 3 members may conduct 
     a hearing under subsection (e)(1).
       (6) Vacancies.--A vacancy on the Commission shall be filled 
     in the same manner in which the original appointment was made 
     not later than 30 days after the Commission is given notice 
     of the vacancy and shall not affect the power of the 
     remaining members to execute the duties of the Commission.
       (7) Compensation.--Members of the Commission shall receive 
     no additional pay, allowances, or benefits by reason of their 
     service on the Commission.
       (8) Expenses.--Each member of the Commission shall receive 
     travel expenses and per diem in lieu of subsistence in 
     accordance with sections 5702 and 5703 of title 5, United 
     States Code.
       (d) Staff and Support Services.--
       (1) Executive director.--
       (A) Appointment.--The Chairperson shall appoint an 
     executive director of the Commission.
       (B) Compensation.--The executive director shall be paid the 
     rate of basic pay for level V of the Executive Schedule.
       (2) Staff.--With the approval of the Commission, the 
     executive director may appoint such personnel as the 
     executive director considers appropriate.
       (3) Applicability of civil service laws.--The staff of the 
     Commission shall be appointed without regard to the 
     provisions of title 5, United States Code, governing 
     appointments in the competitive service, and shall be paid 
     without regard to the provisions of chapter 51 and subchapter 
     III of chapter 53 of such title (relating to classification 
     and General Schedule pay rates).
       (4) Experts and consultants.--With the approval of the 
     Commission, the executive director may procure temporary and 
     intermittent services under section 3109(b) of title 5, 
     United States Code.
       (5) Physical facilities.--The Administrator of General 
     Services shall locate suitable office space for the operation 
     of the Commission. The facilities shall serve as the 
     headquarters of the Commission and shall include all 
     necessary equipment and incidentals required for the proper 
     functioning of the Commission.
       (e) Powers of Commission.--
       (1) Hearings and other activities.--For the purpose of 
     carrying out its duties, the Commission may hold such 
     hearings and undertake such other activities as the 
     Commission determines to be necessary to carry out its 
     duties.
       (2) Studies by gao.--Upon the request of the Commission, 
     the Comptroller General of the United States shall conduct 
     such studies or investigations as the Commission determines 
     to be necessary to carry out its duties.
       (3) Cost estimates by congressional budget office and 
     office of the chief actuary of hcfa.--
       (A) The Director of the Congressional Budget Office or the 
     Chief Actuary of the Health Care Financing Administration 
     shall provide to the Commission, upon the request of the 
     Commission, such cost estimates as the Commission determines 
     to be necessary to carry out its duties.
       (B) The Commission shall reimburse the Director of the 
     Congressional Budget Office for expenses relating to the 
     employment in the office of the Director of such additional 
     staff as may be necessary for the Director to comply with 
     requests by the Commission under subparagraph (A).
       (4) Detail of federal employees.--Upon the request of the 
     Commission, the head of any Federal agency is authorized to 
     detail, without reimbursement, any of the personnel of such 
     agency to the Commission to assist the Commission in carrying 
     out its duties. Any such detail shall not interrupt or 
     otherwise affect the civil service status or privileges of 
     the Federal employee.
       (5) Technical assistance.--Upon the request of the 
     Commission, the head of a Federal agency shall provide such 
     technical assistance to the Commission as the Commission 
     determines to be necessary to carry out its duties.
       (6) Use of mails.--The Commission may use the United States 
     mails in the same manner and under the same conditions as 
     Federal agencies and shall, for purposes of the frank, be 
     considered a commission of Congress as described in section 
     3215 of title 39, United States Code.
       (7) Obtaining information.--The Commission may secure 
     directly from any Federal agency information necessary to 
     enable it to carry out its duties, if the information may be 
     disclosed under section 552 of title 5, United States Code. 
     Upon request of the Chairperson of the Commission, the head 
     of such agency shall furnish such information to the 
     Commission.
       (8) Administrative support services.--Upon the request of 
     the Commission, the Administrator of General Services shall 
     provide to the Commission on a reimbursable basis such 
     administrative support services as the Commission may 
     request.
       (9) Printing.--For purposes of costs relating to printing 
     and binding, including the cost of personnel detailed from 
     the Government Printing Office, the Commission shall be 
     deemed to be a committee of Congress.
       (f) Report.--Not later than 1 year after the date on which 
     the final member of the Commission is appointed under 
     subsection (c), the Commission shall submit a report to the 
     President and Congress which shall contain a detailed 
     statement of only those recommendations, findings, and 
     conclusions of the Commission that receive the approval of at 
     least a majority of the members of the Commission.
       (g) Termination.--The Commission shall terminate 30 days 
     after the date of submission of the report required under 
     subsection (f).
       (h) Authorization of Appropriations.--There are authorized 
     to be appropriated $500,000 to carry out this section.
                                 ______
                                 
      By Mr. BAUCUS (for himself, Mr. Bond, Mr. Bingaman, Mr. Dorgan, 
        Mr. Daschle, and Mr. Kerrey):
  S. 2709. To establish a Beef Industry Compensation Trust Fund with 
the duties imposed on products of countries that fail to comply with 
certain WTO dispute resolution decisions; to the Committee on 
Agriculture, Nutrition, and Forestry.


                     trade injury compensation act

 Mr. BAUCUS. Mr. President, I rise today to introduce the Trade 
Injury Compensation Act of 2000. I am joined in this effort by Senator 
Bond, my fellow co-chairman of the Senate Beef Caucus, and Senators 
Bingaman, Dorgan, Daschle, and Kerrey.
  The Trade Injury Compensation Act establishes a Beef Industry 
Compensation Trust Fund to help the United States cattle industry 
withstand the European Union's illegal ban on beef treated with 
hormones.
  Over a year ago, the World Trade Organization endorsed retaliation 
when the EU refused to open to American beef. Since that time, the EU 
has continued to stall in its compliance which is frankly, outrageous. 
For over a decade we've fought the beef battle. Now its time to try 
something new to help producers who continue to be injured by the ban.
  The Trade Injury Compensation Act establishes a mechanism for using 
the tariffs imposed on the EU to directly aid U.S. beef producers. 
Normally, the additional tariff revenues received from retaliation go 
to the Treasury. This bill establishes a trust fund so that the 
affected industry will receive those revenues as compensation for its 
injury.

[[Page 10109]]

  Our legislation authorizes the Secretary of Agriculture to provide 
grants to a nationally recognized beef promotion and research board for 
the education and market promotion of the United States beef industry. 
In particular, the fund shall:
  (1) Provide assistance to United States beef producers to improve the 
quality of beef produced in the United States; and
  (2) Provide assistance to United States beef producers in market 
development, consumer education, and promotion of the beef industry in 
overseas markets.
  The Secretary of the Treasury shall cease the transfer of funds 
equivalent to the duties on the beef retaliation list only when the 
European Union complies with the World Trade Organization ruling 
allowing United States beef producers access to the European market.
  In a perfect world we would not need this legislation because the 
European Union would abide by its international trade commitments. And 
it is still my hope that the European Union simply comply with the WTO 
Dispute Settlement rulings and allow our beef to enter its borders.
  Mr. President, the WTO is a critically important institution that 
sets the foundation and framework to make world trade grow. We all 
recognize that it needs improvement, and I, along with many of my 
colleagues, are working on ways to fix it. We must bring credibility 
and compliance to the system. The Trade Injury Compensation Act will 
give some relief to our producers as we strive toward this endeavor.
  I thank my colleagues for their sponsorship of this measure and 
strongly urge support for its expeditious passage.
                                 ______
                                 
      By Mr. CAMPBELL (for himself, Mrs. Hutchison, Mr. Lautenberg, Mr. 
        Abraham, Mr. Brownback, Mr. Hutchinson, Mr. Graham, Mr. Dodd, 
        and Mr. Feingold):
  S.J. Res. 48. A joint resolution calling upon the President to issue 
a proclamation recognizing the 25th anniversary of the Helsinki Final 
Act; to the Committee on the Judiciary.


           the helsinki final act 25th anniversary resolution

  Mr. CAMPBELL. Mr. President. Today in my capacity as Co-Chairman of 
the Commission on Security and Cooperation in Europe, I introduce a 
resolution commemorating the 25th anniversary of the Helsinki Final 
Act, one of the key international agreements of our time. I am pleased 
to be joined by all Senate Commissioners, Senators Hutchison, 
Lautenberg, Abraham, Brownback, Hutchinson, Graham, Dodd, and Feingold, 
who are original cosponsors. A companion resolution also is being 
introduced today in the House by our colleague, Congressman Chris Smith 
of New Jersey, who chairs the Helsinki Commission.
  Five years ago, during the 20th anniversary celebrations in Helsinki, 
President Gerald Ford said: ``The Helsinki Accords, the Final Act, was 
the final nail in the coffin of Marxism and communism in many, many 
countries, and helped to bring about the change to a more democratic 
political system and a change to a more market-oriented economic 
system.'' Indeed, the Helsinki Final Act, signed by President Ford in 
1975, marked the beginning of a process which has served U.S. interests 
in advancing democracy, human rights and the rule of law within a 
comprehensive framework covering the security, economic and human 
dimensions.
  The legacy of Helsinki is especially historic with respect to what is 
now referred to as the ``human dimension.'' The Helsinki process--now 
named the Organization for Security and Cooperation in Europe (OSCE), 
is rightly credited with playing a contributing role in bringing down 
the Berlin Wall and Iron Curtain, and, in 1991, the Soviet Union. In 
short, the Helsinki process helped make it possible for the people of 
Central and Eastern Europe and the former Soviet Union to regain their 
freedom and independence.
  Both Western governments and private individuals increasingly cited 
the Final Act, adopted by consensus, as a yardstick for measuring human 
rights performance, citing commitments which the violating governments 
freely undertook.
  Human rights groups, including the Helsinki Monitoring Groups in 
Russia, Ukraine, Lithuania, Georgia, Armenia, as well as in 
Czechoslovakia and Poland grounded their activities in the Helsinki 
principles. During the communist era, members of these groups often 
sacrificed their personal freedom and in some instances their lives for 
their courageous and vocal support for the principles enshrined in the 
Helsinki Final Act. The pressure of governmental efforts and public 
opinion in both East and West contributed greatly to change in the 
Soviet Union and Eastern Europe.
  Responding to a dramatically changed, post-Cold War world, the OSCE 
has evolved into a useful institutional tool for addressing many of the 
challenges confronting Europe and the Euro-Atlantic community today. 
The OSCE is the one political organization that unites all the 
countries of Europe, including all of the former Soviet republics, the 
United States and Canada, to face today's challenges. One of the 
primary strengths of the Helsinki process is its comprehensive nature 
and membership, where current human rights, military security, and 
trade and economic issues can be pursued.
  The OSCE, now expanded to 55 from the original 35 countries, has been 
working hard to minimize conflict and bring all sides together, 
especially in the last decade which has seen several horrible regional 
conflicts, including in Bosnia, Kosovo, and Chechnya.
  The OSCE has played an increasingly active role in civilian police-
related activities, including training, as an integral part of the 
Organization's efforts in conflict prevention, crisis management and 
post-conflict rehabilitation. It has also played an important role in 
promoting greater transparency through the adoption and implementation 
of various confidence and security-building measures designed to reduce 
the risk of conflict in Europe. Other challenges that the OSCE is 
increasingly addressing include the promotion of economic reforms 
through enhanced transparency for market economic activity, 
environmental responsibility, the importance of the rule of law and 
fighting organized crime and corruption. And, of course, human rights 
remains very much on the OSCE's agenda, including but not limited to, 
the eradication of torture, free media, respect for the rights of 
individuals belonging to national minorities, and ending discrimination 
against Roma and Sinti. Unfortunately, serious human rights abuses 
continue in all too many OSCE countries. The main challenge facing the 
participating States of the OSCE remains the implementation of the 
commitments contained in the Helsinki Final Act and other OSCE 
documents. The Helsinki Commission, which I co-chair, will continue to 
work in accordance with our mandate to monitor and encourage compliance 
by all the signatory States with their Helsinki commitments.
  Mr. President, this resolution commemorates the 25th anniversary of 
the signing of the Helsinki Final Act and authorizes the President to 
issue a proclamation reasserting America's commitment to full 
implementation of the Helsinki Final Act, and request that he convey to 
all signatories that respect for human rights and fundamental freedoms, 
and democratic principles as well as economic liberty and the 
implementation of related commitments continue to be vital elements in 
promoting a new era of democracy, peace and unity in the OSCE region.
  Twenty-five years after the signing of the Helsinki Final Act, the 
principles enshrined in that historic document remain valid and 
continue to serve as an important tool in advancing U.S. interests in a 
region stretching from Vancouver to Vladivostok. Therefore, I urge my 
colleagues to support this resolution.
  Mr. President. I ask unanimous consent that the resolution be printed 
in the Record following my remarks.
  There being no objection, the resolution was ordered to be printed in 
the Record, as follows:

[[Page 10110]]



                              S.J. Res. 48

       Whereas August 1, 2000, is the 25th anniversary of the 
     Final Act of the Conference on Security and Cooperation in 
     Europe (CSCE), renamed the Organization for Security and 
     Cooperation in Europe (OSCE) in January 1995 (in this joint 
     resolution referred to as the ``Helsinki Final Act'');
       Whereas the Helsinki Final Act, for the first time in the 
     history of international agreements, accorded human rights 
     the status of a fundamental principle in regulating 
     international relations;
       Whereas during the Communist era, members of 
     nongovernmental organizations, such as the Helsinki 
     Monitoring Groups in Russia, Ukraine, Lithuania, Georgia, and 
     Armenia and similar groups in Czechoslovakia and Poland, 
     sacrificed their personal freedom and even their lives in 
     their courageous and vocal support for the principles 
     enshrined in the Helsinki Final Act;
       Whereas the United States Congress contributed to advancing 
     the aims of the Helsinki Final Act by creating the Commission 
     on Security and Cooperation in Europe to monitor and 
     encourage compliance with provisions of the Helsinki Final 
     Act;
       Whereas in the 1990 Charter of Paris for a New Europe, the 
     participating states declared, ``Human rights and fundamental 
     freedoms are the birthright of all human beings, are 
     inalienable and are guaranteed by law. Their protection and 
     promotion is the first responsibility of government'';
       Whereas in the 1991 Document of the Moscow Meeting of the 
     Conference on the Human Dimension of the CSCE, the 
     participating states ``categorically and irrevocably 
     declare[d] that the commitments undertaken in the field of 
     the human dimension of the CSCE are matters of direct and 
     legitimate concern to all participating States and do not 
     belong exclusively to the internal affairs of the State 
     concerned'';
       Whereas in the 1990 Charter of Paris for a New Europe, the 
     participating states committed themselves ``to build, 
     consolidate and strengthen democracy as the only system of 
     government of our nations'';
       Whereas the 1999 Istanbul Charter for European Security and 
     Istanbul Summit Declaration note the particular challenges of 
     ending violence against women and children as well as sexual 
     exploitation and all forms of trafficking in human beings, 
     strengthening efforts to combat corruption, eradicating 
     torture, reinforcing efforts to end discrimination against 
     Roma and Sinti, and promoting democracy and respect for human 
     rights in Serbia;
       Whereas the main challenge facing the participating states 
     remains the implementation of the principles and commitments 
     contained in the Helsinki Final Act and other OSCE documents 
     adopted on the basis of consensus;
       Whereas the participating states have recognized that 
     economic liberty, social justice, and environmental 
     responsibility are indispensable for prosperity;
       Whereas the participating states have committed themselves 
     to promote economic reforms through enhanced transparency for 
     economic activity with the aim of advancing the principles of 
     market economies;
       Whereas the participating states have stressed the 
     importance of respect for the rule of law and of vigorous 
     efforts to fight organized crime and corruption, which 
     constitute a great threat to economic reform and prosperity;
       Whereas OSCE has expanded the scope and substance of its 
     efforts, undertaking a variety of preventive diplomacy 
     initiatives designed to prevent, manage, and resolve conflict 
     within and among the participating states;
       Whereas the politico-military aspects of security remain 
     vital to the interests of the participating states and 
     constitute a core element of OSCE's concept of comprehensive 
     security;
       Whereas the OSCE has played an increasingly active role in 
     civilian police-related activities, including training, as an 
     integral part of OSCE's efforts in conflict prevention, 
     crisis management, and post-conflict rehabilitation; and
       Whereas the participating states bear primary 
     responsibility for raising violations of the Helsinki Final 
     Act and other OSCE documents: Now, therefore, be it
       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, That Congress 
     calls upon the President to--
       (1) issue a proclamation--
       (A) recognizing the 25th anniversary of the signing of the 
     Final Act of the Conference on Security and Cooperation in 
     Europe;
       (B) reasserting the commitment of the United States to full 
     implementation of the Helsinki Final Act;
       (C) urging all signatory states to abide by their 
     obligations under the Helsinki Final Act; and
       (D) encouraging the people of the United States to join the 
     President and the Congress in observance of this anniversary 
     with appropriate programs, ceremonies, and activities; and
       (2) convey to all signatory states of the Helsinki Final 
     Act that respect for human rights and fundamental freedoms, 
     democratic principles, economic liberty, and the 
     implementation of related commitments continue to be vital 
     elements in promoting a new era of democracy, peace, and 
     unity in the region covered by the Organization for Security 
     and Cooperation in Europe.

                          ____________________