[Congressional Record (Bound Edition), Volume 146 (2000), Part 8]
[Senate]
[Pages 10986-11019]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. GRAMM:
  S. 2732. A bill to ensure that all States participating in the 
National Boll Weevil Eradication Program are treated equitably; to the 
Committee on Agriculture, Nutrition, and Forestry.


                 the boll weevil eradication equity act

 Mr. GRAMM. Mr. President, today I am introducing the Boll 
Weevil Eradication Equity Act. Boll weevil infestation has caused more 
than $15 billion worth of damage to the United States cotton crop, and 
the nation's cotton producers lose $300 million annually. Texas is the 
largest cotton producing state in the nation, yet the scope of this 
problem extends beyond Texas. The ability of all states to eradicate 
this pest would stop future migration to boll weevil-free areas and 
prevent reintroduction of the boll weevil into those areas which have 
already completed a successful eradication effort.
  We must continue to build upon the past success of the existing 
program that authorizes the Animal and Plant Health Inspection Service 
of the United States Department of Agriculture to join with individual 
states and provide technical assistance and federal cost-share funds. 
This highly successful partnership has resulted in complete boll weevil 
eradication in California, Florida, Arizona, Alabama, Georgia, Virginia 
and North Carolina. These states received an average federal cost-share 
of 26.9 percent, with producers and individual states paying the 
remaining cost.
  Since 1994, however, the program has expanded into Texas, 
Mississippi, Arkansas, Louisiana, Tennessee, Oklahoma and New Mexico, 
but the federal appropriation has remained relatively constant. The 
addition of this vast acreage has resulted in dramatically reducing the 
federal cost share to only 4 percent, leaving producers and individual 
states to fund the remaining 96 percent. This is not fair to the states 
now participating in the program because federal matching funds to the 
states enrolled in the early years of the program constituted almost 30 
percent of eradication costs.
  The National Cotton Council estimates that for every $1 spent on 
eradication, cotton farmers will accrue about $12 in benefits. The bill 
I am introducing today will authorize a federal cost share contribution 
of not less than 26.9 percent to the states and producers which still 
must contend with boll weevil infestation. I urge my colleagues to join 
this effort to ensure that these producers receive no less support than 
that which was provided during the earlier stages of the program.
  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. 2732

       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 ``Boll Weevil Eradication 
     Equity Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) as of the date of enactment of this Act, infestation by 
     Anthonomus grandis (commonly known as the ``boll weevil'') 
     has caused more than $15,000,000,000 in damage to cotton 
     crops of the United States and costs cotton producers in the 
     United States approximately $300,000,000 annually;
       (2) through the National Boll Weevil Eradication Program 
     (referred to in this Act as the ``program''), the Animal and 
     Plant Health Inspection Service of the Department of 
     Agriculture partners with producers to provide technical 
     assistance and Federal cost share funds to States in an 
     effort to eradicate the boll weevil;
       (3) States that enrolled in the program before 1994 have 
     since been able to complete boll weevil eradication and were 
     provided a Federal cost share that accounted for an average 
     of 26.9 percent of the total cost of eradication;
       (4) States that enrolled in the program in or after 1994 
     account for 65 percent of the national cotton acreage and are 
     now provided an average Federal cost share of only 4 percent, 
     placing a tremendous financial burden on the individual 
     producers;
       (5) the addition of vast acreage into the program has 
     resulted in an increased need for Federal cost share funds;
       (6) a producer that participates in the program today 
     deserves not less than the same level of commitment that was 
     provided to producers that enrolled in the program before 
     1994; and
       (7) the ability of all States to eradicate the boll weevil 
     would prevent further migration of the boll weevil to boll 
     weevil-free areas and reintroduction of the boll weevil in 
     those areas having completed boll weevil eradication.

     SEC. 3. BOLL WEEVIL ERADICATION ASSISTANCE.

       (a) In General.--Notwithstanding any other provision of 
     law, the Secretary of Agriculture shall provide funds to pay 
     at least 26.9 percent of the total program costs incurred by 
     producers participating in the program.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this Act such sums as are 
     necessary for fiscal years 2001 through 2004.
                                 ______
                                 
      By Mr. SANTORUM (for himself and Mr. Sarbanes):
  S. 2733. A bill to provide for the preservation of assisted housing 
for low income elderly persons, disabled persons, and other families; 
to the Committee on Banking, Housing, and Urban Affairs.


            affordable housing for seniors and families act

 Mr. SANTORUM. Mr. President, I rise with great pride to 
introduce the Affordable Housing for Seniors and Families Act. I am 
very pleased to say that Senator Kerry of Massachusetts and Senator 
Sarbanes are original cosponsors of this bill.
  Even as our national economy flourishes, many Americans are 
struggling

[[Page 10987]]

to find safe, decent, sanitary, affordable housing. HUD estimates that 
5.4 million families are either paying over half of their incomes for 
rent or living in substandard housing. Of these households, 1.4 
million, or 26%, are elderly or disabled. The scarcity of affordable 
housing is particularly troubling for seniors and the disabled who may 
require special structural accommodations in their homes.
  As Vice Chairman of the Subcommittee on Housing and Transportation, 
and as a member of the Aging Committee, I feel a heightened sense of 
urgency in helping these special populations find housing. Thus, I am 
pleased to offer a bill which: reauthorizes federal funding for elderly 
and disabled housing programs; expands supportive housing opportunities 
for these special populations; codifies options to enhance the 
financial viability of the projects; assists sponsors in offering a 
``continuum of care'' that allows people to live independently and with 
dignity; offers incentives to preserve the stock of affordable housing 
that is at risk of loss due to prepayment, Section 8 opt-out, or 
deterioration; and modernizes current laws allowing the FHA to insure 
mortgages on hospitals, assisted living facilities, and nursing homes. 
Together, I believe these measures will help to fill the critical 
housing needs of elderly and disabled families.
  On September 27, 1999, the House of Representatives overwhelmingly 
approved the Preserving Affordable Housing for Senior Citizens in the 
21st Century Act (H.R. 202) by a vote of 405-5. Several aspects of H.R. 
202, which protected residents in the event that their landlords did 
not renew their project based Section 8 contracts, were included in the 
FY 2000 VA-HUD appropriations bill. The legislation I offer today is 
modeled on the House-passed bill, without the preservation provisions 
that have already been enacted. I would like to take a few moments to 
highlight the major provisions of this bill.
  The Section 202 elderly housing program and the Section 811 disabled 
housing program each provide crucial affordable housing for very low-
income individuals, whose incomes are 50 percent or below of the area 
median income. By law, sponsors, or owners, of Section 202 or Section 
811 housing must be non-profit organizations. Many sponsors are faith-
based. The Affordable Housing for Seniors and Families Act will 
increase the stock of Section 202 and 811 housing in several ways. 
First, it reauthorizes funding for Section 202 and 811 housing programs 
in the amount of $700 million and $225 million, respectively, in FY 01. 
Such sums as are necessary are authorized for FY 02 through FY 04. 
Second, it creates an optional matching grant program that will enable 
sponsors to leverage additional money for construction. Third, it 
allows Section 202 housing sponsors to buy new properties.
  This legislation also codifies options giving owners financial 
flexibility to use sources of income besides the Section 202 and 
Section 811 funds. For instance, by requiring HUD to approve prepayment 
of the 202 mortgages, this bill allows sponsors to build equity in 
their projects, which can be used to leverage funding for capital 
improvements or services for tenants. It gives sponsors maximum 
flexibility to use all sources of financing, including federal money, 
for construction, amenities, and relevant design features. In order to 
raise additional outside revenue and offer a convenience to tenants, 
owners are permitted to rent space to commercial facilities. In the 
cases of both Section 202 and 811 housing, owners may use their project 
reserves to retrofit or modernize obsolete or unmarketable units. 
Finally, this bill allows project sponsors to form limited partnerships 
with for-profit entities. Through such a partnership, sponsors can also 
compete for the Low Income Housing Tax Credit, and build larger 
developments.
  The importance of providing a ``continuum of care'' for seniors and 
disabled persons to continue living independently is addressed in the 
Affordable Housing for Seniors and Families Act. For example, this bill 
helps seniors stay in their apartments as they become older and more 
frail by authorizing competitive grants for conversion of elderly 
housing and public housing projects designated for occupancy by elderly 
persons to assisted living facilities. Responding to obstacles the 
handicapped face in finding special-needs housing, it allows private 
non-profits to administer tenant-based rental assistance for the 
disabled. It also ensures that funding will continue to be invested in 
building housing for the disabled by limiting funding for tenant-based 
assistance under the Section 811 program to 25% of the program's 
appropriation. Funding for service coordinators, who link residents 
with supportive or medical services in the community, is authorized 
through FY 04. Moreover, service coordinators are permitted to assist 
low-income elderly or disabled families in the vicinity of their 
projects. Seniors who live in their own houses will be assisted by a 
provision in Title V which allows them to maximize the equity in their 
homes by streamlining the process of refinancing an existing federal-
insured reverse mortgage.
  Title IV of this legislation focuses on preserving the existing stock 
of federally assisted properties as affordable housing for low and very 
low-income families. Each year, 100,000 low-cost apartments across the 
country are demolished, abandoned, or converted to market rate use. For 
every 100 extremely low-income households, having 30% or less of area 
median income, only 36 units were both affordable and available. Even 
in rural areas, the potential loss of assisted, affordable housing is 
very real due to prepayment of mortgages, opt-out of assisted housing 
programs upon contract expirations, frustration with government 
bureaucracy, or simply a recognition that the building would be more 
profitable as market-rate housing. Title IV responds with a matching 
grant program to assist state and local governments who are devoting 
their own money to affordable housing preservation. Likewise, it 
authorizes a competitive grant program to assist nonprofits in buying 
federally assisted property.
  Current law allowing the Federal Housing Administration (FHA) to 
insure mortgages on hospitals, nursing homes, and assisted living 
facilities has become outdated. Title V modernizes the law and removes 
barriers to using FHA insurance for such facilities. Likewise, it 
recognizes the integrated nature of healthcare by allowing the FHA to 
provide mortgage insurance for ``integrated service facilities,'' such 
as ambulatory care centers, which treat sick, injured, disabled, 
elderly, or infirm persons.
  Mr. President, I urge my colleagues to cosponsor this important 
bipartisan legislation. In closing, I would like to express my 
gratitude to Senator Kerry for working closely with me on this 
important legislation. I also would like to thank Senator Sarbanes for 
his cosponsorship.
  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. 2733

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

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

Sec. 1. Short title and table of contents.
Sec. 2. Regulations.
Sec. 3. Effective date.

TITLE I--REFINANCING FOR SECTION 202 SUPPORTIVE HOUSING FOR THE ELDERLY

Sec. 101. Prepayment and refinancing.

 TITLE II--AUTHORIZATION OF APPROPRIATIONS FOR SUPPORTIVE HOUSING FOR 
               THE ELDERLY AND PERSONS WITH DISABILITIES

Sec. 201. Supportive housing for elderly persons.
Sec. 202. Supportive housing for persons with disabilities.
Sec. 203. Service coordinators and congregate services for elderly and 
              disabled housing.

[[Page 10988]]

TITLE III--EXPANDING HOUSING OPPORTUNITIES FOR THE ELDERLY AND PERSONS 
                           WITH DISABILITIES

                  Subtitle A--Housing for the Elderly

Sec. 301. Matching grant program.
Sec. 302. Eligibility of for-profit limited partnerships.
Sec. 303. Mixed funding sources.
Sec. 304. Authority to acquire structures.
Sec. 305. Mixed-income occupancy.
Sec. 306. Use of project reserves.
Sec. 307. Commercial activities.
Sec. 308. Mixed finance pilot program.
Sec. 309. Grants for conversion of elderly housing to assisted living 
              facilities.
Sec. 310. Grants for conversion of public housing projects to assisted 
              living facilities.
Sec. 311. Annual HUD inventory of assisted housing designated for 
              elderly persons.
Sec. 312. Treatment of applications.

           Subtitle B--Housing for Persons With Disabilities

Sec. 321. Matching grant program.
Sec. 322. Eligibility of for-profit limited partnerships.
Sec. 323. Mixed funding sources.
Sec. 324. Tenant-based assistance.
Sec. 325. Use of project reserves.
Sec. 326. Commercial activities.

                      Subtitle C--Other Provisions

Sec. 341. Service coordinators.

           TITLE IV--PRESERVATION OF AFFORDABLE HOUSING STOCK

Sec. 401. Matching grant program for affordable housing preservation.
Sec. 402. Assistance for nonprofit purchasers preserving affordable 
              housing.
Sec. 403. Section 236 assistance.
Sec. 404. Preservation projects.

TITLE V--MORTGAGE INSURANCE FOR HEALTH CARE FACILITIES AND HOME EQUITY 
                          CONVERSION MORTGAGES

Sec. 501. Rehabilitation of existing hospitals, nursing homes, and 
              other facilities.
Sec. 502. New integrated service facilities.
Sec. 503. Hospitals and hospital-based integrated service facilities.
Sec. 504. Home equity conversion mortgages.

     SEC. 2. REGULATIONS.

       The Secretary of Housing and Urban Development (referred to 
     in this Act as the ``Secretary'') shall issue any regulations 
     to carry out this Act and the amendments made by this Act 
     that the Secretary determines may or will affect tenants of 
     federally assisted housing only after notice and opportunity 
     for public comment in accordance with the procedure under 
     section 553 of title 5, United States Code, applicable to 
     substantive rules (notwithstanding subsections (a)(2), 
     (b)(B), and (d)(3) of such section). Notice of such proposed 
     rulemaking shall be provided by publication in the Federal 
     Register. In issuing such regulations, the Secretary shall 
     take such actions as may be necessary to ensure that such 
     tenants are notified of, and provided an opportunity to 
     participate in, the rulemaking, as required by such section 
     553.

     SEC. 3. EFFECTIVE DATE.

       (a) In General.--The provisions of this Act and the 
     amendments made by this Act are effective as of the date of 
     enactment of this Act, unless such provisions or amendments 
     specifically provide for effectiveness or applicability upon 
     another date certain.
       (b) Effect of Regulatory Authority.--Any authority in this 
     Act or the amendments made by this Act to issue regulations, 
     and any specific requirement to issue regulations by a date 
     certain, may not be construed to affect the effectiveness or 
     applicability of the provisions of this Act or the amendments 
     made by this Act under such provisions and amendments and 
     subsection (a) of this section.

TITLE I--REFINANCING FOR SECTION 202 SUPPORTIVE HOUSING FOR THE ELDERLY

     SEC. 101. PREPAYMENT AND REFINANCING.

       (a) Approval of Prepayment of Debt.--Upon request of the 
     project sponsor of a project assisted with a loan under 
     section 202 of the Housing Act of 1959 (as in effect before 
     the enactment of the Cranston-Gonzalez National Affordable 
     Housing Act), the Secretary shall approve the prepayment of 
     any indebtedness to the Secretary relating to any remaining 
     principal and interest under the loan as part of a prepayment 
     plan under which--
       (1) the project sponsor agrees to operate the project until 
     the maturity date of the original loan under terms at least 
     as advantageous to existing and future tenants as the terms 
     required by the original loan agreement or any rental 
     assistance payments contract under section 8 of the United 
     States Housing Act of 1937 (or any other rental housing 
     assistance programs of the Department of Housing and Urban 
     Development, including the rent supplement program under 
     section 101 of the Housing and Urban Development Act of 1965 
     (12 U.S.C. 1701s)) relating to the project; and
       (2) the prepayment may involve refinancing of the loan if 
     such refinancing results in a lower interest rate on the 
     principal of the loan for the project and in reductions in 
     debt service related to such loan.
       (b) Sources of Refinancing.--In the case of prepayment 
     under this section involving refinancing, the project sponsor 
     may refinance the project through any third party source, 
     including financing by State and local housing finance 
     agencies, use of tax-exempt bonds, multi-family mortgage 
     insurance under the National Housing Act, reinsurance, or 
     other credit enhancements, including risk sharing as provided 
     under section 542 of the Housing and Community Development 
     Act of 1992 (12 U.S.C. 1707 note). For purposes of 
     underwriting a loan insured under the National Housing Act, 
     the Secretary may assume that any section 8 rental assistance 
     contract relating to a project will be renewed for the term 
     of such loan.
       (c) Use of Unexpended Amounts.--Upon execution of the 
     refinancing for a project pursuant to this section, the 
     Secretary shall make available at least 50 percent of the 
     annual savings resulting from reduced section 8 or other 
     rental housing assistance contracts in a manner that is 
     advantageous to the tenants, including--
       (1) not more than 15 percent of the cost of increasing the 
     availability or provision of supportive services, which may 
     include the financing of service coordinators and congregate 
     services;
       (2) rehabilitation, modernization, or retrofitting of 
     structures, common areas, or individual dwelling units;
       (3) construction of an addition or other facility in the 
     project, including assisted living facilities (or, upon the 
     approval of the Secretary, facilities located in the 
     community where the project sponsor refinances a project 
     under this section, or pools shared resources from more than 
     1 such project); or
       (4) rent reduction of unassisted tenants residing in the 
     project according to a pro rata allocation of shared savings 
     resulting from the refinancing.
       (d) Use of Certain Project Funds.--The Secretary shall 
     allow a project sponsor that is prepaying and refinancing a 
     project under this section--
       (1) to use any residual receipts held for that project in 
     excess of $500 per individual dwelling unit for not more than 
     15 percent of the cost of activities designed to increase the 
     availability or provision of supportive services; and
       (2) to use any reserves for replacement in excess of $1,000 
     per individual dwelling unit for activities described in 
     paragraphs (2) and (3) of subsection (c).
       (e) Budget Act Compliance.--This section shall be effective 
     only to extent or in such amounts that are provided in 
     advance in appropriation Acts.

 TITLE II--AUTHORIZATION OF APPROPRIATIONS FOR SUPPORTIVE HOUSING FOR 
               THE ELDERLY AND PERSONS WITH DISABILITIES

     SEC. 201. SUPPORTIVE HOUSING FOR ELDERLY PERSONS.

       Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q) is 
     amended by adding at the end the following:
       ``(m) Authorization of Appropriations.--There is authorized 
     to be appropriated for providing assistance under this 
     section $700,000,000 for fiscal year 2001 and such sums as 
     may be necessary for each of fiscal years 2002, 2003, and 
     2004. Of the amount provided in appropriation Acts for 
     assistance under this section in each such fiscal year, 5 
     percent shall be available only for providing assistance in 
     accordance with the requirements under subsection (c)(4) 
     (relating to matching funds), except that if there are 
     insufficient eligible applicants for such assistance, any 
     amount remaining shall be used for assistance under this 
     section.''.

     SEC. 202. SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES.

       Section 811 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 8013) is amended by striking 
     subsection (m) and inserting the following:
       ``(m) Authorization of Appropriations.--There is authorized 
     to be appropriated for providing assistance under this 
     section $225,000,000 for fiscal year 2001 and such sums as 
     may be necessary for each of fiscal years 2002, 2003, and 
     2004. Of the amount provided in appropriation Acts for 
     assistance under this section in each such fiscal year, 5 
     percent shall be available only for providing assistance in 
     accordance with the requirements under subsection (d)(5) 
     (relating to matching funds), except that if there are 
     insufficient eligible applicants for such assistance, any 
     amount remaining shall be used for assistance under this 
     section.''.

     SEC. 203. SERVICE COORDINATORS AND CONGREGATE SERVICES FOR 
                   ELDERLY AND DISABLED HOUSING.

       There is authorized to be appropriated to the Secretary 
     $50,000,000 for fiscal year 2001, and such sums as may be 
     necessary for each of fiscal years 2002, 2003, and 2004, for 
     the following purposes:
       (1) Grants for service coordinators for certain federally 
     assisted multifamily housing.--For grants under section 676 
     of the Housing and Community Development Act of 1992 (42 
     U.S.C. 13632) for providing service coordinators.
       (2) Congregate services for federally assisted housing.--
     For contracts under section 802 of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 8011) to provide 
     congregate services programs for eligible residents of 
     eligible housing projects

[[Page 10989]]

     under subparagraphs (B) through (D) of subsection (k)(6) of 
     such section.

TITLE III--EXPANDING HOUSING OPPORTUNITIES FOR THE ELDERLY AND PERSONS 
                           WITH DISABILITIES

                  Subtitle A--Housing for the Elderly

     SEC. 301. MATCHING GRANT PROGRAM.

       Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q) is 
     amended--
       (1) in subsection (b), in the second sentence, by inserting 
     ``or through matching grants under subsection (c)(4)'' after 
     ``subsection (c)(1)''; and
       (2) in subsection (c), by adding at the end the following:
       ``(4) Matching grants.--
       ``(A) In general.--
       ``(i) 15 percent minimum.--Amounts made available for 
     assistance under this paragraph shall be used only for 
     capital advances in accordance with paragraph (1), except 
     that the Secretary shall require that, as a condition of 
     providing assistance under this paragraph for a project, the 
     applicant for assistance shall supplement the assistance with 
     amounts from sources other than this section in an amount 
     that is not less than 15 percent of the amount of assistance 
     provided pursuant to this paragraph for the project.
       ``(ii) Preference.--In providing assistance under this 
     paragraph, the Secretary shall take into consideration the 
     degree to which the applicant will supplement that assistance 
     with amounts from sources other than this section and, all 
     other factors being equal, shall give preference to 
     applicants whose supplemental assistance is equal to the 
     highest percentage of the amount of assistance provided 
     pursuant to this paragraph for the project.
       ``(B) Requirement for non-federal funds.--Not less than 50 
     percent of supplemental amounts provided for a project 
     pursuant to subparagraph (A) shall be from non-Federal 
     sources. Such supplemental amounts may include the value of 
     any in-kind contributions, including donated land, 
     structures, equipment, and other contributions as the 
     Secretary considers appropriate, but only if the existence of 
     such in-kind contributions results in the construction of 
     more dwelling units than would have been constructed absent 
     such contributions.
       ``(C) Income eligibility.--Notwithstanding any other 
     provision of this section, the Secretary shall provide that, 
     in a project assisted under this paragraph, a number of 
     dwelling units may be made available for occupancy by elderly 
     persons who are not very low-income persons in a number such 
     that the ratio that the number of dwelling units in the 
     project so occupied bears to the total number of units in the 
     project does not exceed the ratio that the amount from non-
     Federal sources provided for the project pursuant to this 
     paragraph bears to the sum of the capital advances provided 
     for the project under this paragraph and all supplemental 
     amounts for the project provided pursuant to this 
     paragraph.''.

     SEC. 302. ELIGIBILITY OF FOR-PROFIT LIMITED PARTNERSHIPS.

       Section 202(k)(4) of the Housing Act of 1959 (12 U.S.C. 
     1701q(k)(4)) is amended by inserting after subparagraph (C) 
     the following:
     ``Such term includes a for-profit limited partnership the 
     sole general partner of which is an organization meeting the 
     requirements under subparagraphs (A), (B), and (C), or a 
     corporation wholly owned and controlled by an organization 
     meeting the requirements under subparagraphs (A), (B), and 
     (C).''.

     SEC. 303. MIXED FUNDING SOURCES.

       Section 202(h)(6) of the Housing Act of 1959 (12 U.S.C. 
     1701q(h)(6)) is amended by striking ``non-Federal sources'' 
     and inserting ``sources other than this section''.

     SEC. 304. AUTHORITY TO ACQUIRE STRUCTURES.

       Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q) is 
     amended--
       (1) in subsection (b), by striking ``from the Resolution 
     Trust Corporation''; and
       (2) in subsection (h)(2)--
       (A) in the paragraph heading, by striking ``RTC 
     properties'' and inserting ``Acquisition''; and
       (B) by striking ``from the Resolution'' and all that 
     follows through ``Insurance Act''.

     SEC. 305. MIXED-INCOME OCCUPANCY.

       (a) In General.--The first sentence of section 202(i)(1) of 
     the Housing Act of 1959 (12 U.S.C. 1701q(i)(1)) is amended by 
     striking ``and (B)'' and inserting the following: ``(B) 
     notwithstanding subparagraph (A) and in the case only of a 
     supportive housing project for the elderly that has a high 
     vacancy level (as defined by the Secretary, except that such 
     term shall not include vacancy upon the initial availability 
     of units in a building), consistent with the purpose of 
     improving housing opportunities for very low- and low-income 
     elderly persons; and (C).''.
       (b) Availability of Units.--Section 202(i) of the Housing 
     Act of 1959 (12 U.S.C. 1701q(i)) is amended by adding at the 
     end the following:
       ``(3) Availability of units.--In the case of a supportive 
     housing project described in paragraph (1)(B) that has a 
     vacant dwelling unit, an owner may not make a dwelling unit 
     available for occupancy by, nor make any commitment to 
     provide occupancy in the unit to--
       ``(A) a low-income family that is not a very low-income 
     family unless each eligible very low-income family that has 
     applied for occupancy in the project has been offered an 
     opportunity to accept occupancy in a unit in the project; and
       ``(B) a low-income elderly person who is not a very low-
     income elderly person, unless the owner certifies to the 
     Secretary that the owner has engaged in affirmative marketing 
     and outreach to very low-income elderly persons.''.
       (b) Conforming Amendments.--Section 202 of the Housing Act 
     of 1959 (12 U.S.C. 1701q) is amended--
       (1) in subsection (c)--
       (A) in paragraph (1), by inserting before ``in accordance 
     with this section'' the following: ``, and for low-income 
     elderly persons to the extent such occupancy is made 
     available pursuant to subsection (i)(1)(B),'';
       (B) in the first sentence of paragraph (2), by inserting 
     after ``elderly persons'' the following: ``or by low-income 
     elderly persons (to the extent such occupancy is made 
     available pursuant to subsection (i)(1)(B))''; and
       (C) in paragraph (3), by inserting after ``very low-income 
     person'' the following: ``or a low-income person (to the 
     extent such occupancy is made available pursuant to 
     subsection (i)(1)(B))'';
       (2) in subsection (d)(1), by inserting after ``elderly 
     persons'' the following: ``, and low-income elderly persons 
     to the extent such occupancy is made available pursuant to 
     subsection (i)(1)(B),''; and
       (3) in subsection (k)--
       (A) by redesignating paragraphs (3) through (8) as 
     paragraphs (4) through (9), respectively; and
       (B) by inserting after paragraph (2) the following:
       ``(3) Low-income.--The term `low-income' has the meaning 
     given the term `low-income families' under section 3(b)(2) of 
     the United States Housing Act of 1937 (42 U.S.C. 
     1437a(b)(2)).''.

     SEC. 306. USE OF PROJECT RESERVES.

       Section 202(j) of the Housing Act of 1959 (12 U.S.C. 
     1701q(j)) is amended by adding at the end the following:
       ``(8) Use of project reserves.--Amounts for project 
     reserves for a project assisted under this section may be 
     used for costs, subject to reasonable limitations as the 
     Secretary determines appropriate, for reducing the number of 
     dwelling units in the project. Such use shall be subject to 
     the approval of the Secretary to ensure that the use is 
     designed to retrofit units that are currently obsolete or 
     unmarketable.''.

     SEC. 307. COMMERCIAL ACTIVITIES.

       Section 202(h)(1) of the Housing Act of 1959 (12 U.S.C. 
     1701q(h)(1)) is amended by adding at the end the following: 
     ``Neither this section nor any other provision of law may be 
     construed as prohibiting or preventing the location and 
     operation, in a project assisted under this section, of 
     commercial facilities for the benefit of residents of the 
     project and the community in which the project is located, 
     except that assistance made available under this section may 
     not be used to subsidize any such commercial facility.''.

     SEC. 308. MIXED FINANCE PILOT PROGRAM.

       (a) Authority.--The Secretary shall carry out a pilot 
     program under this section to determine the effectiveness and 
     feasibility of providing assistance under section 202 of the 
     Housing Act of 1959 (12 U.S.C. 1701q) for housing projects 
     that are used both for supportive housing for the elderly and 
     for other types of housing, which may include market rate 
     housing.
       (b) Scope.--Under the pilot program the Secretary shall 
     provide, to the extent that sufficient approvable 
     applications for such assistance are received, assistance in 
     the manner provided under subsection (d) for not more than 5 
     housing projects.
       (c) Mixed Use.--The Secretary shall, for a project to be 
     assisted under the pilot program--
       (1) require that a minimum number of the dwelling units in 
     the project be reserved for use in accordance with, and 
     subject to, the requirements applicable to units assisted 
     under section 202 of the Housing Act of 1959, such that the 
     ratio that the number of dwelling units in the project so 
     reserved bears to the total number of units in the project is 
     not less than the ratio that the amount of assistance from 
     such section 202 used for the project pursuant to subsection 
     (d) bears to the total amount of assistance provided for the 
     project under this section; and
       (2) provide that the remainder of the dwelling units in the 
     project may be used for assistance to persons who are not 
     very low-income.
       (d) Financing.--The Secretary may use amounts provided for 
     assistance under section 202 of the Housing Act of 1959 for 
     assistance under the pilot program for capital advances in 
     accordance with subsection (c)(1) of such section and project 
     rental assistance in accordance with subsection (c)(2) of 
     such section, only for dwelling units described in subsection 
     (c)(1) of this section. Any assistance provided pursuant to 
     subsection (c)(1) of such section 202 shall be provided in 
     the form of a capital advance, subject to repayment as 
     provided in such subsection, and shall not be structured as a 
     loan. The Secretary shall take such action as may be 
     necessary to ensure that the repayment contingency under such 
     subsection is enforceable for projects

[[Page 10990]]

     assisted under the pilot program and to provide for 
     appropriate protections of the interests of the Secretary in 
     relation to other interests in the projects so assisted.
       (e) Report.--Not later than 2 years after assistance is 
     initially made available under the pilot program under this 
     section, the Secretary shall submit to Congress a report on 
     the results of the pilot program.

     SEC. 309. GRANTS FOR CONVERSION OF ELDERLY HOUSING TO 
                   ASSISTED LIVING FACILITIES.

       Title II of the Housing Act of 1959 is amended by inserting 
     after section 202a (12 U.S.C. 1701q-1) the following:

     ``SEC. 202B. GRANTS FOR CONVERSION OF ELDERLY HOUSING TO 
                   ASSISTED LIVING FACILITIES.

       ``(a) Grant Authority.--The Secretary of Housing and Urban 
     Development may make grants in accordance with this section 
     to owners of eligible projects described in subsection (b) 
     for 1 or both of the following activities:
       ``(1) Repairs.--Substantial capital repairs to a project 
     that are needed to rehabilitate, modernize, or retrofit aging 
     structures, common areas, or individual dwelling units.
       ``(2) Conversion.--Activities designed to convert dwelling 
     units in the eligible project to assisted living facilities 
     for elderly persons.
       ``(b) Eligible Projects.--
       ``(1) In general.--An eligible project described in this 
     subsection is a multifamily housing project that is--
       ``(A) described in subparagraph (B), (C), (D), (E), (F), or 
     (G) of section 683(2) of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 13641(2)), or (B) only to 
     the extent amounts of the Department of Agriculture are made 
     available to the Secretary of Housing and Urban Development 
     for such grants under this section for such projects, subject 
     to a loan made or insured under section 515 of the Housing 
     Act of 1949 (42 U.S.C. 1485);
       ``(B) owned by a private nonprofit organization (as such 
     term is defined in section 202); and
       ``(C) designated primarily for occupancy by elderly 
     persons.
       ``(2) Unused or underutilized commercial property.--
     Notwithstanding any other provision of this subsection or 
     this section, an unused or underutilized commercial property 
     may be considered an eligible project under this subsection, 
     except that the Secretary may not provide grants under this 
     section for more than 3 such properties. For any such 
     projects, any reference under this section to dwelling units 
     shall be considered to refer to the premises of such 
     properties.
       ``(c) Applications.--Applications for grants under this 
     section shall be submitted to the Secretary in accordance 
     with such procedures as the Secretary shall establish. Such 
     applications shall contain--
       ``(1) a description of the substantial capital repairs or 
     the proposed conversion activities for which a grant under 
     this section is requested;
       ``(2) the amount of the grant requested to complete the 
     substantial capital repairs or conversion activities;
       ``(3) a description of the resources that are expected to 
     be made available, if any, in conjunction with the grant 
     under this section; and
       ``(4) such other information or certifications that the 
     Secretary determines to be necessary or appropriate.
       ``(d) Funding for Services.--The Secretary may not make a 
     grant under this section for conversion activities unless the 
     application contains sufficient evidence, in the 
     determination of the Secretary, of firm commitments for the 
     funding of services to be provided in the assisted living 
     facility, which may be provided by third parties.
       ``(e) Selection Criteria.--The Secretary shall select 
     applications for grants under this section based upon 
     selection criteria, which shall be established by the 
     Secretary and shall include--
       ``(1) in the case of a grant for substantial capital 
     repairs, the extent to which the project to be repaired is in 
     need of such repair, including such factors as the age of 
     improvements to be repaired, and the impact on the health and 
     safety of residents of failure to make such repairs;
       ``(2) in the case of a grant for conversion activities, the 
     extent to which the conversion is likely to provide assisted 
     living facilities that are needed or are expected to be 
     needed by the categories of elderly persons that the assisted 
     living facility is intended to serve, with a special emphasis 
     on very low-income elderly persons who need assistance with 
     activities of daily living;
       ``(3) the inability of the applicant to fund the repairs or 
     conversion activities from existing financial resources, as 
     evidenced by the applicant's financial records, including 
     assets in the applicant's residual receipts account and 
     reserves for replacement account;
       ``(4) the extent to which the applicant has evidenced 
     community support for the repairs or conversion, by such 
     indicators as letters of support from the local community for 
     the repairs or conversion and financial contributions from 
     public and private sources;
       ``(5) in the case of a grant for conversion activities, the 
     extent to which the applicant demonstrates a strong 
     commitment to promoting the autonomy and independence of the 
     elderly persons that the assisted living facility is intended 
     to serve;
       ``(6) in the case of a grant for conversion activities, the 
     quality, completeness, and managerial capability of providing 
     the services which the assisted living facility intends to 
     provide to elderly residents, especially in such areas as 
     meals, 24-hour staffing, and on-site health care; and
       ``(7) such other criteria as the Secretary determines to be 
     appropriate to ensure that funds made available under this 
     section are used effectively.
       ``(f) Definitions.--In this section--
       ``(1) the term `assisted living facility' has the meaning 
     given such term in section 232(b) of the National Housing Act 
     (12 U.S.C. 1715w(b)); and
       ``(2) the definitions in section 202(k) shall apply.
       ``(g) Authorization of Appropriations.--There is authorized 
     to be appropriated for providing grants under this section 
     such sums as may be necessary for each of fiscal years 2001, 
     2002, 2003, and 2004.''.

     SEC. 310. GRANTS FOR CONVERSION OF PUBLIC HOUSING PROJECTS TO 
                   ASSISTED LIVING FACILITIES.

       Title I of the United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.) is amended by adding at the end the following:

     ``SEC. 36. GRANTS FOR CONVERSION OF PUBLIC HOUSING TO 
                   ASSISTED LIVING FACILITIES.

       ``(a) Grant Authority.--The Secretary may make grants in 
     accordance with this section to public housing agencies for 
     use for activities designed to convert dwelling units in an 
     eligible projects described in subsection (b) to assisted 
     living facilities for elderly persons.
       ``(b) Eligible Projects.--An eligible project described in 
     this subsection is a public housing project (or a portion 
     thereof) that has been designated under section 7 for 
     occupancy only by elderly persons.
       ``(c) Applications.--Applications for grants under this 
     section shall be submitted to the Secretary in accordance 
     with such procedures as the Secretary shall establish. Such 
     applications shall contain--
       ``(1) a description of the proposed conversion activities 
     for which a grant under this section is requested;
       ``(2) the amount of the grant requested;
       ``(3) a description of the resources that are expected to 
     be made available, if any, in conjunction with the grant 
     under this section; and
       ``(4) such other information or certifications that the 
     Secretary determines to be necessary or appropriate.
       ``(d) Funding for Services.--The Secretary may not make a 
     grant under this section unless the application contains 
     sufficient evidence, in the determination of the Secretary, 
     of firm commitments for the funding of services to be 
     provided in the assisted living facility.
       ``(e) Selection Criteria.--The Secretary shall select 
     applications for grants under this section based upon 
     selection criteria, which shall be established by the 
     Secretary and shall include--
       ``(1) the extent to which the conversion is likely to 
     provide assisted living facilities that are needed or are 
     expected to be needed by the categories of elderly persons 
     that the assisted living facility is intended to serve;
       ``(2) the inability of the public housing agency to fund 
     the conversion activities from existing financial resources, 
     as evidenced by the agency's financial records;
       ``(3) the extent to which the agency has evidenced 
     community support for the conversion, by such indicators as 
     letters of support from the local community for the 
     conversion and financial contributions from public and 
     private sources;
       ``(4) extent to which the applicant demonstrates a strong 
     commitment to promoting the autonomy and independence of the 
     elderly persons that the assisted living facility is intended 
     to serve;
       ``(5) the quality, completeness, and managerial capability 
     of providing the services which the assisted living facility 
     intends to provide to elderly residents, especially in such 
     areas as meals, 24-hour staffing, and on-site health care; 
     and
       ``(6) such other criteria as the Secretary determines to be 
     appropriate to ensure that funds made available under this 
     section are used effectively.
       ``(f) Definition.--In this section, the term `assisted 
     living facility' has the meaning given such term in section 
     232(b) of the National Housing Act (12 U.S.C. 1715w(b)).
       ``(g) Authorization of Appropriations.--There is authorized 
     to be appropriated for providing grants under this section 
     such sums as may be necessary for each of fiscal years 2001, 
     2002, 2003, and 2004.''.

     SEC. 311. ANNUAL HUD INVENTORY OF ASSISTED HOUSING DESIGNATED 
                   FOR ELDERLY PERSONS.

       Subtitle D of title VI of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 13611 et seq.) is amended 
     by adding at the end the following:

     ``SEC. 662. ANNUAL INVENTORY OF ASSISTED HOUSING DESIGNATED 
                   FOR ELDERLY PERSONS.

       ``(a) In General.--The Secretary shall establish and 
     maintain, and on an annual basis

[[Page 10991]]

     shall update and publish, an inventory of housing that--
       ``(1) is assisted under a program of the Department of 
     Housing and Urban Development, including all federally 
     assisted housing; and
       ``(2) is designated, in whole or in part, for occupancy by 
     elderly families or disabled families, or both.
       ``(b) Contents.--The inventory required under this section 
     shall identify housing described in subsection (a) and the 
     number of dwelling units in such housing that--
       ``(1) are in projects designated for occupancy only by 
     elderly families;
       ``(2) are in projects designated for occupancy only by 
     disabled families;
       ``(3) contain special features or modifications designed to 
     accommodate persons with disabilities and are in projects 
     designated for occupancy only by disabled families;
       ``(4) are in projects for which a specific percentage or 
     number of the dwelling units are designated for occupancy 
     only by elderly families;
       ``(5) are in projects for which a specific percentage or 
     number of the dwelling units are designated for occupancy 
     only by disabled families; and
       ``(6) are in projects designed for occupancy only by both 
     elderly or disabled families.
       ``(c) Publication.--The Secretary shall annually publish 
     the inventory required under this section in the Federal 
     Register and shall make the inventory available to the public 
     by posting on a World Wide Web site of the Department.''.

     SEC. 312. TREATMENT OF APPLICATIONS.

       Notwithstanding any other provision of law or any 
     regulation of the Secretary, in the case of any denial of an 
     application for assistance under section 202 of the Housing 
     Act of 1959 (12 U.S.C. 1701q) for failure to timely provide 
     information required by the Secretary, the Secretary shall 
     notify the applicant of the failure and provide the applicant 
     an opportunity to show that the failure was due to the 
     failure of a third party to provide information under the 
     control of the third party. If the applicant demonstrates, 
     within a reasonable period of time after notification of such 
     failure, that the applicant did not have such information but 
     requested the timely provision of such information by the 
     third party, the Secretary may not deny the application 
     solely on the grounds of failure to timely provide such 
     information.

           Subtitle B--Housing for Persons With Disabilities

     SEC. 321. MATCHING GRANT PROGRAM.

       Section 811 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 8013) is amended--
       (1) in subsection (b)(2)(A), by inserting ``or through 
     matching grants under subsection (d)(5)'' after ``subsection 
     (d)(1)''; and
       (2) in subsection (d), by adding at the end the following:
       ``(5) Matching grants.--
       ``(A) In general.--
       ``(i) 15 percent minimum.--Amounts made available for 
     assistance under this paragraph shall be used only for 
     capital advances in accordance with paragraph (1), except 
     that the Secretary shall require that, as a condition of 
     providing assistance under this paragraph for a project, the 
     applicant for assistance shall supplement the assistance with 
     amounts from sources other than this section in an amount 
     that is not less than 15 percent of the amount of assistance 
     provided pursuant to this paragraph for the project.
       ``(ii) Preference.--In providing assistance under this 
     paragraph, the Secretary shall take into consideration the 
     degree to which the applicant will supplement that assistance 
     with amounts from sources other than this section and, all 
     other factors being equal, shall give preference to 
     applicants whose supplemental assistance is equal to the 
     highest percentage of the amount of assistance provided 
     pursuant to this paragraph for the project.
       ``(B) Requirement for non-federal funds.--Not less than 50 
     percent of supplemental amounts provided for a project 
     pursuant to subparagraph (A) shall be from non-Federal 
     sources. Such supplemental amounts may include the value of 
     any in-kind contributions, including donated land, 
     structures, equipment, and other contributions as the 
     Secretary considers appropriate, but only if the existence of 
     such in-kind contributions results in the construction of 
     more dwelling units than would have been constructed absent 
     such contributions.
       ``(C) Income eligibility.--Notwithstanding any other 
     provision of this section, the Secretary shall provide that, 
     in a project assisted under this paragraph, a number of 
     dwelling units may be made available for occupancy by persons 
     with disabilities who are not very low-income persons in a 
     number such that the ration that the number of dwelling units 
     in the project so occupied bears to the total number of units 
     in the project does not exceed the ratio that the amount from 
     non-Federal sources provided for the project pursuant to this 
     paragraph bears to the sum of the capital advances provided 
     for the project under this paragraph and all supplemental 
     amounts for the project provided pursuant to this 
     paragraph.''.

     SEC. 322. ELIGIBILITY OF FOR-PROFIT LIMITED PARTNERSHIPS.

       Section 811(k)(6) of the Housing Act of 1959 (42 U.S.C. 
     8013(k)(6)) is amended by inserting after subparagraph (D) 
     the following:
     ``Such term includes a for-profit limited partnership the 
     sole general partner of which is an organization meeting the 
     requirements under subparagraphs (A), (B), (C), and (D) or a 
     corporation wholly owned and controlled by an organization 
     meeting the requirements under subparagraphs (A), (B), (C), 
     and (D).''.

     SEC. 323. MIXED FUNDING SOURCES.

       Section 811(h)(5) of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 8013(h)(5)) is amended by 
     striking ``non-Federal sources'' and inserting ``sources 
     other than this section''.

     SEC. 324. TENANT-BASED ASSISTANCE.

       Section 811 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 8013) is amended--
       (1) in subsection (d), by striking paragraph (4) and 
     inserting the following:
       ``(4) Tenant-based rental assistance.--
       ``(A) Administering entities.--Tenant-based rental 
     assistance provided under subsection (b)(1) may be provided 
     only through a public housing agency that has submitted and 
     had approved an plan under section 7(d) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437e(d)) that provides for 
     such assistance, or through a private nonprofit organization. 
     A public housing agency shall be eligible to apply under this 
     section only for the purposes of providing such tenant-based 
     rental assistance.
       ``(B) Program rules.--Tenant-based rental assistance under 
     subsection (b)(1) shall be made available to eligible persons 
     with disabilities and administered under the same rules that 
     govern tenant-based rental assistance made available under 
     section 8 of the United States Housing Act of 1937, except 
     that the Secretary may waive or modify such rules, but only 
     to the extent necessary to provide for administering such 
     assistance under subsection (b)(1) through private nonprofit 
     organizations rather than through public housing agencies.
       ``(C) Allocation of assistance.--In determining the amount 
     of assistance provided under subsection (b)(1) for a private 
     nonprofit organization or public housing agency, the 
     Secretary shall consider the needs and capabilities of the 
     organization or agency, in the case of a public housing 
     agency, as described in the plan for the agency under section 
     7 of the United States Housing Act of 1937.''; and
       (2) in subsection (l)(1)--
       (A) by striking ``subsection (b)'' and inserting 
     ``subsection (b)(2)'';
       (B) by striking the last comma and all that follows through 
     ``subsection (n)''; and
       (C) by adding at the end the following: ``Notwithstanding 
     any other provision of this section, the Secretary may use 
     not more than 25 percent of the total amounts made available 
     for assistance under this section for any fiscal year for 
     tenant-based rental assistance under subsection (b)(1) for 
     persons with disabilities, and no authority of the Secretary 
     to waive provisions of this section may be used to alter the 
     percentage limitation under this sentence.''.

     SEC. 325. USE OF PROJECT RESERVES.

       Section 811(j) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 8013(j)) is amended by adding at the 
     end the following:
       ``(7) Use of project reserves.--Amounts for project 
     reserves for a project assisted under this section may be 
     used for costs, subject to reasonable limitations as the 
     Secretary determines appropriate, for reducing the number of 
     dwelling units in the project. Such use shall be subject to 
     the approval of the Secretary to ensure that the use is 
     designed to retrofit units that are currently obsolete or 
     unmarketable.''.

     SEC. 326. COMMERCIAL ACTIVITIES.

       Section 811(h)(1) of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 8013(h)(1)) is amended by 
     adding at the end the following: ``Neither this section nor 
     any other provision of law may be construed as prohibiting or 
     preventing the location and operation, in a project assisted 
     under this section, of commercial facilities for the benefit 
     of residents of the project and the community in which the 
     project is located, except that assistance made available 
     under this section may not be used to subsidize any such 
     commercial facility.''.

                      Subtitle C--Other Provisions

     SEC. 341. SERVICE COORDINATORS.

       (a) Increased Flexibility for Use of Service Coordinators 
     in Certain Federally Assisted Housing.--Section 676 of the 
     Housing and Community Development Act of 1992 (42 U.S.C. 
     13632) is amended--
       (1) in the section heading, by striking ``MULTIFAMILY 
     HOUSING ASSISTED UNDER NATIONAL HOUSING ACT'' and inserting 
     ``CERTAIN FEDERALLY ASSISTED HOUSING'';
       (2) in subsection (a)--
       (A) in the first sentence, by striking ``(E) and (F)'' and 
     inserting ``(B), (C), (D), (E), (F), and (G)''; and
       (B) in the last sentence--
       (i) by striking ``section 661'' and inserting ``section 
     671''; and
       (ii) by adding at the end the following: ``A service 
     coordinator funded with a grant under this section for a 
     project may provide services to low-income elderly or 
     disabled

[[Page 10992]]

     families living in the vicinity of such project.'';
       (3) in subsection (d)--
       (A) by striking ``(E) or (F)'' and inserting ``(B), (C), 
     (D), (E), (F), or (G)''; and
       (B) by striking ``section 661'' and inserting ``section 
     671''; and
       (4) by striking subsection (c) and redesignating subsection 
     (d) (as amended by paragraph (3) of this subsection) as 
     subsection (c).
       (b) Requirement To Provide Service Coordinators.--Section 
     671 of the Housing and Community Development Act of 1992 (42 
     U.S.C. 13631) is amended--
       (1) in the first sentence of subsection (a), by striking 
     ``to carry out this subtitle pursuant to the amendments made 
     by this subtitle'' and inserting the following: ``for 
     providing service coordinators under this section'';
       (2) in subsection (d), by inserting ``)'' after ``section 
     683(2)''; and
       (3) by adding at the end following:
       ``(e) Services for Low-Income Elderly or Disabled Families 
     Residing in Vicinity of Certain Projects.--To the extent only 
     that this section applies to service coordinators for covered 
     federally assisted housing described in subparagraphs (B), 
     (C), (D), (E), (F), and (G) of section 683(2), any reference 
     in this section to elderly or disabled residents of a project 
     shall be construed to include low-income elderly or disabled 
     families living in the vicinity of such project.''.
       (c) Protection Against Telemarketing Fraud.--
       (1) Supportive housing for the elderly.--The first sentence 
     of section 202(g)(1) of the Housing Act of 1959 (12 U.S.C. 
     1701q(g)(1)) is amended by striking ``and (F)'' and inserting 
     the following: ``(F) providing education and outreach 
     regarding telemarketing fraud, in accordance with the 
     standards issued under section 671(f) of the Housing and 
     Community Development Act of 1992 (42 U.S.C. 13631(f)); and 
     (G)''.
       (2) Other federally assisted housing.--Section 671 of the 
     Housing and Community Development Act of 1992 (42 U.S.C. 
     13631), as amended by subsection (b) of this section, is 
     further amended--
       (A) in the first sentence of subsection (c), by inserting 
     after ``response,'' the following: ``education and outreach 
     regarding telemarketing fraud in accordance with the 
     standards issued under subsection (f),''; and
       (B) by adding at the end the following:
       ``(f) Protection Against Telemarketing Fraud.--
       ``(1) In general.--The Secretary, in coordination with the 
     Secretary of Health and Human Services, shall establish 
     standards for service coordinators in federally assisted 
     housing who are providing education and outreach to elderly 
     persons residing in such housing regarding telemarketing 
     fraud. The standards shall be designed to ensure that such 
     education and outreach informs such elderly persons of the 
     dangers of telemarketing fraud and facilitates the 
     investigation and prosecution of telemarketers engaging in 
     fraud against such residents.
       ``(2) Contents.--The standards established under this 
     subsection shall require that any such education and outreach 
     be provided in a manner that--
       ``(A) informs such residents of--
       ``(i) the prevalence of telemarketing fraud targeted 
     against elderly persons;
       ``(ii) how telemarketing fraud works;
       ``(iii) how to identify telemarketing fraud;
       ``(iv) how to protect themselves against telemarketing 
     fraud, including an explanation of the dangers of providing 
     bank account, credit card, or other financial or personal 
     information over the telephone to unsolicited callers;
       ``(v) how to report suspected attempts at telemarketing 
     fraud; and
       ``(vi) their consumer protection rights under Federal law;
       ``(B) provides such other information as the Secretary 
     considers necessary to protect such residents against 
     fraudulent telemarketing; and
       ``(C) disseminates the information provided by appropriate 
     means, and in determining such appropriate means, the 
     Secretary shall consider on-site presentations at federally 
     assisted housing, public service announcements, a printed 
     manual or pamphlet, an Internet website, and telephone 
     outreach to residents whose names appear on `mooch lists' 
     confiscated from fraudulent telemarketers.''.

           TITLE IV--PRESERVATION OF AFFORDABLE HOUSING STOCK

     SEC. 401. MATCHING GRANT PROGRAM FOR AFFORDABLE HOUSING 
                   PRESERVATION.

       (a) Findings and Purposes.--
       (1) Findings.--Congress finds that--
       (A) availability of low-income housing rental units has 
     declined nationwide in the last several years;
       (B) as rents for low-income housing increase and the 
     development of new units of affordable housing decreases, 
     there are fewer privately owned, federally assisted 
     affordable housing units available to low-income individuals 
     in need;
       (C) the demand for affordable housing far exceeds the 
     supply of such housing, as evidenced by recent studies; and
       (D) the efforts of nonprofit organizations have 
     significantly preserved and expanded access to low-income 
     housing.
       (2) Purposes.--The purposes of this section are--
       (A) to continue the partnerships among the Federal 
     Government, State and local governments, nonprofit 
     organizations, and the private sector in operating and 
     assisting housing that is affordable to low-income persons 
     and families;
       (B) to promote the preservation of affordable housing units 
     by providing matching grants to States and localities that 
     have developed and funded programs for the preservation of 
     privately owned housing that is affordable to low-income 
     families and persons; and
       (C) to minimize the involuntary displacement of tenants who 
     are currently residing in such housing, many of whom are 
     elderly or disabled persons and families with children.
       (b) Definitions.--In this section:
       (1) Capital expenditures.--The term ``capital 
     expenditures'' includes expenditures for acquisition and 
     rehabilitation.
       (2) Low-income affordability restrictions.--The term ``low-
     income affordability restrictions'' means, with respect to a 
     housing project, any limitations imposed by law, regulation, 
     or regulatory agreement on rents for tenants of the project, 
     rent contributions for tenants of the project, or income-
     eligibility for occupancy in the project.
       (3) Project-based assistance.--The term ``project-based 
     assistance'' has the meaning given such term in section 16(c) 
     of the United States Housing Act of 1937 (42 U.S.C. 
     1437n(c)), except that such term includes assistance under 
     any successor programs to the programs referred to in such 
     section.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (5) State.--The term ``State'' means each of the several 
     States and the District of Columbia.
       (c) Authority.--The Secretary shall, to the extent amounts 
     are made available in advance under subsection (k), award 
     grants under this section to States and localities for low-
     income housing preservation and promotion.
       (d) Applications.--The Secretary shall provide for States 
     and localities (through appropriate State and local agencies) 
     to submit applications for grants under this section. The 
     Secretary shall require the applications to contain any 
     information and certifications necessary for the Secretary to 
     determine who is eligible to receive such a grant.
       (e) Use of Grants.--
       (1) Eligible uses.--
       (A) In general.--Amounts from grants awarded under this 
     section may be used by States and localities only for the 
     purpose of providing assistance for acquisition, 
     rehabilitation, operating costs, and capital expenditures for 
     a housing project that meets the requirements under paragraph 
     (2), (3), (4), or (5).
       (B) Factors for consideration.--In selecting projects 
     described in subparagraph (A) for assistance with amounts 
     from a grant awarded under this section, the State or 
     locality shall--
       (i) take into consideration--

       (I) whether the assistance will be used to transfer the 
     project to a resident-endorsed nonprofit organization;
       (II) whether the owner of the project has extended the low-
     income affordability restrictions on the project for a period 
     of more than 15 years;
       (III) the extent to which the project is consistent with 
     the comprehensive housing affordability strategy approved in 
     accordance with section 105 of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 12705) for the jurisdiction 
     in which the project is located;
       (IV) the extent to which the project location provides 
     access to transportation, jobs, shopping, and other similar 
     conveniences;
       (V) the extent to which the project meets fair housing 
     goals;
       (VI) the extent to which the project serves specific needs 
     that are not otherwise met by the local market, such as 
     housing for the elderly or disabled, or families with 
     children;
       (VII) the extent of local government resources provided to 
     the project; and
       (VIII) such other factors as the Secretary or the State or 
     locality may establish; and

       (ii) States receiving funds shall ensure that, to the 
     maximum extent practicable, projects in both urban and rural 
     areas in the State receive assistance.
       (2) Projects with hud-insured mortgages.--A project meets 
     the requirements under this paragraph only if--
       (A) the project is financed by a loan or mortgage that is--
       (i) insured or held by the Secretary under section 
     221(d)(3) of the National Housing Act (12 U.S.C. 1715l(d)(3)) 
     and receiving loan management assistance under section 8 of 
     the United States Housing Act of 1937 (42 U.S.C. 1437f) due 
     to a conversion from section 101 of the Housing and Urban 
     Development Act of 1965 (12 U.S.C. 1701s);
       (ii) insured or held by the Secretary and bears interest at 
     a rate determined under the proviso of section 221(d)(5) of 
     the National Housing Act (12 U.S.C. 1715l(d)(5)); or

[[Page 10993]]

       (iii) insured, assisted, or held by the Secretary or a 
     State or State agency under section 236 of the National 
     Housing Act (12 U.S.C. 1715z-1);
       (B) the project is subject to an unconditional waiver of, 
     with respect to the mortgage referred to in subparagraph 
     (A)--
       (i) all rights to any prepayment of the mortgage; and
       (ii) all rights to any voluntary termination of the 
     mortgage insurance contract for the mortgage; and
       (C) if the low-income affordability restrictions on the 
     project are for less than 15 years, the owner of the project 
     has entered into binding commitments (applicable to any 
     subsequent owner) to extend those restrictions, including any 
     such restrictions imposed because of any contract for 
     project-based assistance for the project, for a period of not 
     less than 15 years (beginning on the date on which assistance 
     is made available for the project by the State or locality 
     under this section).
       (3) Projects with section 8 project-based assistance.--A 
     project meets the requirements under this paragraph only if--
       (A) the project is subject to a contract for project-based 
     assistance; and
       (B) the owner of the project has entered into binding 
     commitments (applicable to any subsequent owner)--
       (i) to continue to renew such contract (if offered on the 
     same terms and conditions) until the later of--

       (I) the last day of the remaining term of the mortgage; or
       (II) the date that is 15 years after the date on which 
     assistance is made available for the project by the State or 
     locality under this subsection; and

       (ii) to extend any low-income affordability restrictions 
     applicable to the project in connection with such assistance.
       (4) Projects purchased by residents.--A project meets the 
     requirements under this paragraph only if the project--
       (A) is or was eligible low-income housing (as defined in 
     section 229 of the Low-Income Housing Preservation and 
     Resident Homeownership Act of 1990 (42 U.S.C. 4119)) or is or 
     was a project assisted under section 613(b) of the Cranston-
     Gonzalez National Affordable Housing Act (12 U.S.C. 4125(b));
       (B) has been purchased by a resident council or resident-
     approved nonprofit organization for the housing or is 
     approved by the Secretary for such purchase, for conversion 
     to homeownership housing under a resident homeownership 
     program meeting the requirements under section 226 of such 
     Act (12 U.S.C. 4116); and
       (C) the owner of the project has entered into binding 
     commitments (applicable to any subsequent owner) to extend 
     such assistance for not less than 15 years (beginning on the 
     date on which assistance is made available for the project by 
     the State or locality under this section) and to extend any 
     low-income affordability restrictions applicable to the 
     project in connection with such assistance.
       (5) Rural rental assistance projects.--A project meets the 
     requirements of this paragraph only if--
       (A) the project is a rural rental housing project financed 
     under section 515 of the Housing Act of 1949 (42 U.S.C. 
     1485); and
       (B) the restriction on the use of the project (as required 
     under section 502 of the Housing Act of 1949 (42 U.S.C. 
     1472)) will expire not later than 12 months after the date on 
     which assistance is made available for the project by the 
     State or locality under this subsection.
       (f) Amount of State and Local Grants.--
       (1) In general.--Subject to subsection (g), in each fiscal 
     year, the Secretary shall award to each State and locality 
     approved for a grant under this section a grant in an amount 
     based upon the proportion of such State's or locality's need 
     for assistance under this section (as determined by the 
     Secretary in accordance with paragraph (2)) to the aggregate 
     need among all States and localities approved for such 
     assistance for such fiscal year.
       (2) Determination of need.--In determining the proportion 
     of a State's or locality's need under paragraph (1), the 
     Secretary shall consider--
       (A) the number of units in projects in the State or 
     locality that are eligible for assistance under section 6 
     that, due to market conditions or other factors, are at risk 
     for prepayment, opt-out, or otherwise at risk of being lost 
     to the inventory of affordable housing; and
       (B) the difficulty that residents of projects in the State 
     or locality that are eligible for assistance under subsection 
     (e) would face in finding adequate, available, decent, 
     comparable, and affordable housing in neighborhoods of 
     comparable quality in the local market, if those projects 
     were not assisted by the State or locality under subsection 
     (e).
       (g) Matching Requirement.--
       (1) In general.--The Secretary may not award a grant under 
     this section to a State or locality for any fiscal year in an 
     amount that exceeds twice the amount that the State or 
     locality certifies, as the Secretary shall require, that the 
     State or locality will contribute for such fiscal year, or 
     has contributed since January 1, 2000, from non-Federal 
     sources for the purposes described in subsection (e)(1).
       (2) Treatment of previous contributions.--Any portion of 
     amounts contributed after January 1, 2000, that are counted 
     for purposes of meeting the requirement under paragraph (1) 
     for a fiscal year may not be counted for such purposes for 
     any subsequent fiscal year.
       (3) Treatment of tax incentives.--Fifty percent of the 
     funds used for the project that are allocable to tax credits 
     allocated under section 42 of the Internal Revenue Code of 
     1986, revenue from mortgage revenue bonds issued under 
     section 143 of such Code, or proceeds from the sale of tax-
     exempt bonds by any State or local government entity shall be 
     considered non-Federal sources for purposes of this 
     subsection.
       (h) Treatment of Subsidy Layering Requirements.--Neither 
     subsection (g) nor any other provision of this section may be 
     construed to prevent the use of tax credits allocated under 
     section 42 of the Internal Revenue Code of 1986 in connection 
     with housing assisted with amounts from a grant awarded under 
     this section, to the extent that such use is in accordance 
     with section 102(d) of the Department of Housing and Urban 
     Development Reform Act of 1989 (42 U.S.C. 3545(d)) and 
     section 911 of the Housing and Community Development Act of 
     1992 (42 U.S.C. 3545 note).
       (i) Reports.--
       (1) Reports to secretary.--Not later than 90 days after the 
     last day of each fiscal year, each State and locality that 
     receives a grant under this section during that fiscal year 
     shall submit to the Secretary a report on the housing 
     projects assisted with amounts made available under the 
     grant.
       (2) Reports to congress.--Based on the reports submitted 
     under paragraph (1), the Secretary shall annually submit to 
     Congress a report on the grants awarded under this section 
     during the preceding fiscal year and the housing projects 
     assisted with amounts made available under those grants.
       (j) Regulations.--Not later than 12 months after the date 
     of enactment of this Act, the Secretary shall issue 
     regulations to carry out this section.
       (k) Authorization of Appropriations.--There is authorized 
     to be appropriated for grants under this section such sums as 
     may be necessary for each of fiscal years 2001 through 2004.

     SEC. 402. ASSISTANCE FOR NONPROFIT PURCHASERS PRESERVING 
                   AFFORDABLE HOUSING.

       (a) Congressional Findings.--Congress finds that--
       (1) a substantial number of existing federally assisted or 
     federally insured multifamily properties are at risk of being 
     lost from the affordable housing inventory of the Nation 
     through market rate conversion, deterioration, or demolition;
       (2) it is in the interests of the Nation to encourage 
     transfer of control of such properties to competent national, 
     regional, and local nonprofit entities and intermediaries 
     whose missions involve maintaining the affordability of such 
     properties;
       (3) such transfers may be inhibited by a shortage of such 
     entities that are appropriately capitalized; and
       (4) the Nation would be well served by providing assistance 
     to such entities to aid in accomplishing this purpose.
       (b) Grants.--The Secretary may make grants, to the extent 
     amounts are made available for such grants, to eligible 
     entities under subsection (c) for use only for operational, 
     working capital, and organizational expenses of such entities 
     and activities by such entities to acquire eligible 
     affordable housing for the purpose of ensuring that the 
     housing will remain affordable, as the Secretary considers 
     appropriate, for low-income or very low-income families 
     (including elderly persons).
       (c) Eligible Entities.--The Secretary shall establish 
     standards for eligible entities under this subsection, which 
     shall include requirements that to be considered an eligible 
     entity for purposes of this section an entity shall--
       (1) be a nonprofit organization (as such term is defined in 
     104 of the Cranston-Gonzalez National Affordable Housing 
     Act);
       (2) have among its purposes maintaining the affordability 
     to low-income or very low-income families of multifamily 
     properties that are at risk of loss from the inventory of 
     housing that is affordable to low-income or very low-income 
     families; and
       (3) demonstrate need for assistance under this section for 
     the purposes under subsection (b), experience in carrying out 
     activities referred to in such subsection, and capability to 
     carry out such activities.
       (d) Definitions.--In this section:
       (1) Eligible affordable housing.--The term ``eligible 
     affordable housing'' means housing that--
       (A) consists of more than four dwelling units;
       (B) is insured or assisted under a program of the 
     Department of Housing and Urban Development or the Department 
     of Agriculture under which the property is subject to 
     limitations on tenant rents, rent contributions, or incomes; 
     and
       (C) is at risk, as determined by the Secretary, of 
     termination of any of the limitations referred to in 
     subparagraph (B).
       (2) Low-income families; very low-income families.--The 
     terms ``low-income families''

[[Page 10994]]

     and very low-income families'' have the meanings given such 
     terms in section 3(b) of the United States Housing Act of 
     1937.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated for grants under this section such sums as 
     may be necessary for each of fiscal years 2001, 2002, 2003, 
     and 2004.

     SEC. 403. SECTION 236 ASSISTANCE.

       Section 236(g) of the National Housing Act (12 U.S.C. 
     1715z-1(g)) is amended--
       (1) in paragraph (2), by striking ``Subject to paragraph 
     (3) and notwithstanding'' and inserting ``Notwithstanding''; 
     and
       (2) by striking paragraph (3) and redesignating paragraph 
     (4) as paragraph (3).

     SEC. 404. PRESERVATION PROJECTS.

       Section 524(e)(1) of the Multifamily Assisted Housing 
     Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) 
     is amended by striking ``amounts are specifically'' and 
     inserting ``sufficient amounts are''.

TITLE V--MORTGAGE INSURANCE FOR HEALTH CARE FACILITIES AND HOME EQUITY 
                          CONVERSION MORTGAGES

     SEC. 501. REHABILITATION OF EXISTING HOSPITALS, NURSING 
                   HOMES, AND OTHER FACILITIES.

       Section 223(f) of the National Housing Act (12 U.S.C. 
     1715n(f)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``the refinancing of existing debt of an''; 
     and
       (B) by inserting ``existing integrated service facility,'' 
     after ``existing board and care home,'';
       (2) in paragraph (4)--
       (A) by inserting ``existing integrated service facility,'' 
     after ``board and care home,'' each place it appears;
       (B) in subparagraph (A), by inserting before the semicolon 
     at the end the following: ``, which refinancing, in the case 
     of a loan on a hospital, home, or facility that is within 2 
     years of maturity, shall include a mortgage made to prepay 
     such loan'';
       (C) in subparagraph (B), by inserting after 
     ``indebtedness'' the following: ``, pay any other costs 
     including repairs, maintenance, minor improvements, or 
     additional equipment which may be approved by the 
     Secretary,''; and
       (D) in subparagraph (D)--
       (i) by inserting ``existing'' before ``intermediate care 
     facility''; and
       (ii) by inserting ``existing'' before ``board and care 
     home''; and
       (3) by adding at the end the following:
       ``(6) In the case of purchase of an existing hospital (or 
     existing nursing home, existing assisted living facility, 
     existing intermediate care facility, existing board and care 
     home, existing integrated service facility or any combination 
     thereof) the Secretary shall prescribe such terms and 
     conditions as the Secretary deems necessary to assure that--
       ``(A) the proceeds of the insured mortgage loan will be 
     employed only for the purchase of the existing hospital (or 
     existing nursing home, existing assisted living facility, 
     existing intermediate care facility, existing board and care 
     home, existing integrated service facility or any combination 
     thereof) including the retirement of existing debt (if any), 
     necessary costs associated with the purchase and the insured 
     mortgage financing, and such other costs, including costs of 
     repairs, maintenance, improvements, and additional equipment, 
     as may be approved by the Secretary;
       ``(B) such existing hospital (or existing nursing home, 
     existing assisted living facility, existing intermediate care 
     facility, existing board and care home, existing integrated 
     service facility, or any combination thereof) is economically 
     viable; and
       ``(C) the applicable requirements for certificates, 
     studies, and statements of section 232 (for the existing 
     nursing home, existing assisted living facility, intermediate 
     care facility, board and care home, existing integrated 
     service facility or any combination thereof, proposed to be 
     purchased) or of section 242 (for the existing hospital 
     proposed to be purchased) have been met.''.

     SEC. 502. NEW INTEGRATED SERVICE FACILITIES.

       Section 232 of the National Housing Act (12 U.S.C. 1715w) 
     is amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by striking ``are not acutely ill 
     and'';
       (B) in paragraph (2), by striking ``nevertheless''; and
       (C) by adding at the end the following:
       ``(4) The development of integrated service facilities for 
     the care and treatment of the elderly and other persons in 
     need of health care and related services, but who do not 
     require hospital care, and the support of health care 
     facilities which provide such health care and related 
     services (including those that support hospitals (as defined 
     in section 242(b))).'';
       (2) in subsection (b)--
       (A) in paragraph (1), by striking ``acutely ill and not'';
       (B) in paragraph (4), by inserting after the second period 
     the following: ``Such term includes a parity first mortgage 
     or parity first deed of trust, subject to such terms and 
     conditions as the Secretary may provide.'';
       (C) in paragraph (6)--
       (i) by striking subparagraph (A) and inserting the 
     following:
       ``(A) meets all applicable licensing and regulatory 
     requirements of the State, or if there is no State law 
     providing for such licensing and regulation by the State, 
     meets all applicable licensing and regulatory requirements of 
     the municipality or other political subdivision in which the 
     facility is located, or, in the absence of any such 
     requirements, meets any underwriting requirements of the 
     Secretary for such purposes;''; and
       (ii) in subparagraph (C), by striking ``and'' at the end;
       (D) in paragraph (7), by striking the period at the end and 
     inserting ``; and''; and
       (E) by adding at the end the following:
       ``(8) the term `integrated service facility' means a 
     facility--
       ``(A) providing integrated health care delivery services 
     designed and operated to provide medical, convalescent, 
     skilled and intermediate nursing, board and care services, 
     assisted living, rehabilitation, custodial, personal care 
     services, or any combination thereof, to sick, injured, 
     disabled, elderly, or infirm persons, or providing services 
     for the prevention of illness, or any combination thereof;
       ``(B) designed, in whole or in part, to provide a continuum 
     of care, as determined by the Secretary, for the sick, 
     injured, disabled, elderly, or infirm;
       ``(C) providing clinical services, outpatient services, 
     including community health services and medical practice 
     facilities and group practice facilities, to sick, injured, 
     disabled, elderly, or infirm persons not in need of the 
     services rendered in other facilities insurable under this 
     title, or for the prevention of illness, or any combination 
     thereof; or
       ``(D)(i) designed, in whole or in part to provide 
     supportive or ancillary services to hospitals (as defined in 
     section 242(b)), which services may include services provided 
     by special use health care facilities, professional office 
     buildings, laboratories, administrative offices, and other 
     facilities supportive or ancillary to health care delivery by 
     such hospitals; and
       ``(ii) that meet standards acceptable to the Secretary, 
     which may include standards governing licensure or State or 
     local approval and regulation of a mortgagor; or
       ``(E) that provides any combination of the services under 
     subparagraphs (A) through (D).'';
       (3) in subsection (d)--
       (A) in the matter preceding paragraph (1)--
       (i) by inserting ``board and care home,'' after 
     ``rehabilitated nursing home,'';
       (ii) by inserting ``integrated service facility,'' after 
     ``assisted living facility,'' the first 2 places it appears;
       (iii) by inserting ``board and care home,'' after 
     ``existing nursing home,''; and
       (iv) by striking ``or a board and care home'' and inserting 
     ``, board and care home or integrated service facility'';
       (B) in paragraph (2)--
       (i) in the matter preceding subparagraph (A), by inserting 
     before ``, including'' the following: ``or a public body, 
     public agency, or public corporation eligible under this 
     section''; and
       (ii) in subparagraph (B), by striking ``energy conservation 
     measures'' and all that follows through ``95-619)'' and 
     inserting ``energy conserving improvements (as defined in 
     section 2(a))''.
       (C) in paragraph (4)(A)--
       (i) in the first sentence--

       (I) by inserting ``, and integrated service facilities that 
     include such nursing home and intermediate care facilities,'' 
     before ``, the Secretary'';
       (II) by striking ``or section 1521 of the Public Health 
     Service Act'' and inserting ``of the Public Health Service 
     Act, or other applicable Federal law (or, in the absence of 
     applicable Federal law, by the Secretary),'';
       (III) by inserting ``, or the portion of an integrated 
     service facility providing such services,'' before ``covered 
     by the mortgage,''; and
       (IV) by inserting ``or for such nursing or intermediate 
     care services within an integrated service facility'' before 
     ``, and (ii)'';

       (ii) in the second sentence, by inserting ``(which may be 
     within an integrated service facility)'' after ``home and 
     facility'';
       (iii) in the third sentence--

       (I) by striking ``mortgage under this section'' and all 
     that follows through ``feasibility'' and inserting the 
     following: ``such mortgage under this section unless (i) the 
     proposed mortgagor or applicant for the mortgage insurance 
     for the home or facility or combined home or facility, or the 
     integrated service facility containing such services, has 
     commissioned and paid for the preparation of an independent 
     study of market need for the project'';
       (II) in clause (i)(II), by striking ``and its relationship 
     to, other health care facilities and'' and inserting ``or 
     such facilities within an integrated service facility, and 
     its relationship to, other facilities providing health 
     care'';
       (III) in clause (i)(IV), by striking ``in the event the 
     State does not prepare the study,''; and
       (IV) in clause (i)(IV), by striking ``the State or''; and
       (V) in clause (ii), by striking ``or section 1521 of the 
     Public Health Service Act'' and inserting ``of the Public 
     Health Service Act, or other applicable Federal law (or, in 
     the absence of applicable Federal law, by the Secretary),'';

[[Page 10995]]

       (iv) by striking the penultimate sentence and inserting the 
     following: ``A study commissioned or undertaken by the State 
     in which the facility will be located shall be considered to 
     satisfy such market study requirement. The proposed mortgagor 
     or applicant may reimburse the State for the cost of an 
     independent study referred to in the preceding sentence.''; 
     and
       (v) in the last sentence--

       (I) by inserting ``the proposed mortgagor or applicant for 
     mortgage insurance may obtain from'' after ``10 
     individuals,'';
       (II) by striking ``may'' and inserting ``and''; and
       (III) by inserting a comma before ``written support''; and

       (D) in paragraph (4)(C)(iii), by striking ``the appropriate 
     State'' and inserting ``any appropriate''; and
       (4) in subsection (i)(1), by inserting ``integrated service 
     facilities,'' after ``assisted living facilities,''.

     SEC. 503. HOSPITALS AND HOSPITAL-BASED INTEGRATED SERVICE 
                   FACILITIES.

       Section 242 of the National Housing Act (12 U.S.C. 1715z-7) 
     is amended--
       (1) in subsection (b)--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by adding ``and'' at the end;
       (ii) by striking subparagraph (B); and
       (iii) by redesignating subparagraph (C) as subparagraph (B) 
     and striking ``and'' at the end;
       (B) in paragraph (2), by striking ``respectfully'' and all 
     that follows through the period at the end and inserting 
     ``given such terms in section 207(a), except that the term 
     `mortgage' shall include a parity first mortgage or parity 
     first deed of trust, subject to such terms and conditions as 
     the Secretary may provide; and''; and
       (C) by adding at the end the following:
       ``(3) the term `integrated service facility' has the 
     meaning given the term in section 232(b).'';
       (2) in subsection (c), by striking ``title VII of'' and 
     inserting ``title VI of'';
       (3) in subsection (d)--
       (A) in the matter preceding paragraph (1), by inserting 
     after ``operation,'' the following: ``or that covers an 
     integrated service facility owned or to be owned by an 
     applicant or proposed mortgagor that also owns a hospital in 
     the same market area, including equipment to be used in its 
     operation,'';
       (B) in paragraph (1)--
       (i) in the first sentence, by inserting before the period 
     at the end the following: ``and who, in the case of a 
     mortgage covering an integrated service facility, is also the 
     owner of a hospital facility''; and
       (ii) by adding at the end the following: ``A mortgage 
     insured hereunder covering an integrated service facility may 
     only cover the real and personal property where the eligible 
     facility will be located.'';
       (C) in paragraph (2)(A), by inserting ``or integrated 
     service facility'' before the comma; and
       (D) in paragraph (2)(B), by striking ``energy conservation 
     measures'' and all that follows through ``95-619)'' and 
     inserting ``energy conserving improvements (as defined in 
     section 2(a))'';
       (E) in paragraph (4)--
       (i) in the first sentence--

       (I) by inserting ``for a hospital'' after ``any mortgage''; 
     and
       (II) by striking ``or section 1521 of the Public Health 
     Service Act'' and inserting ``of the Public Health Service 
     Act, or other applicable Federal law (or, in the absence of 
     applicable Federal law, by the Secretary),'';

       (ii) by striking the third sentence and inserting the 
     following: ``If no such State agency exists, or if the State 
     agency exists but is not empowered to provide a certification 
     that there is a need for the hospital as set forth in 
     subparagraph (A) of the first sentence, the Secretary shall 
     not insure any such mortgage under this section unless: (A) 
     the proposed mortgagor or applicant for the hospital has 
     commissioned and paid for the preparation of an independent 
     study of market need for the proposed project that: (i) is 
     prepared in accordance with the principles established by the 
     Secretary, in consultation with the Secretary of Health and 
     Human Services (to the extent the Secretary of Housing and 
     Urban Development considers appropriate); (ii) assesses, on a 
     marketwide basis, the impact of the proposed hospital on, and 
     its relationship to, other facilities providing health care 
     services, the percentage of excess beds, demographic 
     projections, alternative health care delivery systems, and 
     the reimbursement structure of the hospital; (iii) is 
     addressed to and is acceptable to the Secretary in form and 
     substance; and (iv) is prepared by a financial consultant 
     selected by the proposed mortgagor or applicant and approved 
     by the Secretary; and (B) the State complies with the other 
     provisions of this paragraph that would otherwise be required 
     to be met by a State agency designated in accordance with 
     section 604(a)(1) of the Public Health Service Act, or other 
     applicable Federal law (or, in the absence of applicable 
     Federal law, by the Secretary). A study commissioned or 
     undertaken by the State in which the hospital will be located 
     shall be considered to satisfy such market study 
     requirement.''; and
       (iii) in the last sentence, by striking ``feasibility''; 
     and
       (4) in subsection (f), by inserting ``and public integrated 
     service facilities'' after ``public hospitals''.

     SEC. 504. HOME EQUITY CONVERSION MORTGAGES.

       (a) In General.--Section 255 of the National Housing Act 
     (12 U.S.C. 1715z-20) is amended--
       (1) by redesignating subsection (k) as subsection (l); and
       (2) by inserting after subsection (j) the following:
       ``(k) Insurance Authority for Refinancings.--
       ``(1) In general.--The Secretary may, upon application by a 
     mortgagee, insure under this subsection any mortgage given to 
     refinance an existing home equity conversion mortgage insured 
     under this section.
       ``(2) Anti-churning disclosure.--The Secretary shall, by 
     regulation, require that the mortgagee of a mortgage insured 
     under this subsection, provide to the mortgagor, within an 
     appropriate time period and in a manner established in such 
     regulations, a good faith estimate of--
       ``(A) the total cost of the refinancing; and
       ``(B) the increase in the mortgagor's principal limit as 
     measured by the estimated initial principal limit on the 
     mortgage to be insured under this subsection less the current 
     principal limit on the home equity conversion mortgage that 
     is being refinanced and insured under this subsection.
       ``(3) Waiver of counseling requirement.--The mortgagor 
     under a mortgage insured under this subsection may waive the 
     applicability, with respect to such mortgage, of the 
     requirements under subsection (d)(2)(B) (relating to third 
     party counseling), but only if--
       ``(A) the mortgagor has received the disclosure required 
     under paragraph (2);
       ``(B) the increase in the principal limit described in 
     paragraph (2) exceeds the amount of the total cost of 
     refinancing (as described in such paragraph) by an amount to 
     be determined by the Secretary; and
       ``(C) the time between the closing of the original home 
     equity conversion mortgage that is refinanced through the 
     mortgage insured under this subsection and the application 
     for a refinancing mortgage insured under this subsection does 
     not exceed 5 years.
       ``(4) Credit for premiums paid.--Notwithstanding section 
     203(c)(2)(A), the Secretary may reduce the amount of the 
     single premium payment otherwise collected under such section 
     at the time of the insurance of a mortgage refinanced and 
     insured under this subsection. The amount of the single 
     premium for mortgages refinanced under this subsection shall 
     be determined by the Secretary based on an actuarial study 
     conducted by the Secretary.
       ``(5) Fees.--The Secretary may establish a limit on the 
     origination fee that may be charged to a mortgagor under a 
     mortgage insured under this subsection, except that such 
     limitation shall provide that the origination fee may be 
     fully financed with the mortgage and shall include any fees 
     paid to correspondent mortgagees approved by the Secretary. 
     The Secretary shall prohibit the charging of any broker fees 
     in connection with mortgages insured under this 
     subsection.''.
       (b) Regulations.--
       (1) In general.--Notwithstanding sections 2 and 3 of this 
     Act, the Secretary shall issue any final regulations 
     necessary to implement the amendments made by subsection (a) 
     of this section, which shall take effect not later than the 
     expiration of the 180-day period beginning on the date of 
     enactment of this Act.
       (2) Procedure.--The regulations under this subsection shall 
     be issued after notice and opportunity for public comment in 
     accordance with the procedure under section 553 of title 5, 
     United States Code, applicable to substantive rules 
     (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of 
     such section).
  Mr. KERRY. Mr. President, today, along with my colleagues, Senators 
Santorum and Sarbanes, I am introducing legislation which will help 
address the lack of affordable housing for the most vulnerable 
Americans--the elderly, disabled persons, and low-income families. This 
bill closes a number of gaps in the federal housing assistance programs 
for these families, and ensures that programs designed to promote 
affordable housing can do so in this rapidly expanding economy.
  As our economy flourishes at an unprecedented rate, many Americans 
have prospered. However, as the economy grows, so too does the gap 
between rich and poor. Instead of finding opportunities in this new 
economy, some Americans have found closed doors. This is especially 
true for low-income people who are being squeezed out of tight housing 
markets in my home state of Massachusetts and around the Nation.
  Although a majority of elderly Americans live in decent, adequate and 
affordable housing, millions of elderly households require some 
assistance in order to afford housing that meets

[[Page 10996]]

their needs. In fact, there are eight elderly people waiting for each 
unit of assisted elderly housing in this country. Fourteen percent of 
people in Massachusetts are over 65 years of age, and one out of every 
ten of these elderly persons has an income below the poverty level.
  This bill expands upon the current program of providing affordable 
housing, increasing housing opportunities for low-income elderly and 
disabled persons, and bringing the program up-to-date. As Americans 
grow older, housing programs must be altered to address the changing 
needs of a generation that is living longer, and aging in place. This 
bill enables existing housing to be converted to assisted living 
facilities to meet the needs of the elderly and disabled.
  Assisted living is the fastest growing type of elderly housing in the 
U.S., and this legislation ensures that this supportive, and 
increasingly necessary living arrangement, is available to all elderly 
and disabled Americans, regardless of income. By 2030, 20 percent of 
this Nation's population will be over the age of 65, compared with only 
13 percent of the population today. As we make strides in medicine to 
allow older people to live longer, more active lives, we must also make 
sure that the services and structures are in place to support elderly 
Americans. This bill is a step in this direction.
  This bill also encourages the leveraging of federal funds, helping to 
increase the stock of affordable housing. Public dollars alone are 
unable to meet the needs of low-income families. This legislation makes 
it easier for federal funds for disabled and elderly housing to be 
combined with other sources of funding, including the Low-Income 
Housing Tax Credit, and private funds.
  Not only will this bill increase the supply of affordable housing for 
the elderly and disabled, it will help to preserve affordable housing 
for all low-income households. A record high number of households, 5.4 
million, have worst case housing needs, paying over 50 percent of their 
income to housing costs or living in substandard housing. This is a 12 
percent increase since 1991. At the same time that more Americans are 
finding it increasingly difficult to find suitable and affordable 
housing, the federal government has not been doing enough to preserve 
the affordable housing that exists.
  A number of provisions aim to ensure that affordable housing is 
preserved. This bill allows uninsured 236 project owners to retain 
their excess income for use in the project, helping to keep these 
owners in the program and ensuring that the units will remain 
affordable. In addition, this bill includes the preservation bill 
introduced earlier this Congress by Senator Jeffords and myself, S. 
1318, to provide matching grants to States and localities devoting 
resources to the preservation of affordable housing. Cities, like 
Boston, which have dedicated a substantial amount of funds to the 
production and preservation of affordable housing units, would receive 
federal funds to assist in their efforts under this provision, ensuring 
that an even greater number of units are preserved.
  I hope that this critical legislation will attract broad support. At 
this time of prosperity, we cannot forget that while many Americans 
have benefited, there are still too many people who cannot afford to 
meet their basic housing needs. These people cannot be overlooked in 
this era of economic growth. This legislation ensures that they won't 
be.
  Mr. SARBANES. Mr President, I come to the floor today in support of 
the Affordable Housing for Seniors and Families Act introduced by 
Senators Kerry and Santorum.
  This bill expands upon critical housing programs for both elderly and 
disabled Americans. The Nation's population of elderly is growing 
rapidly. Between 1980 and 1997, the number of people over the age of 65 
grew by 33 percent. AARP estimates that by 2030, 20 percent of the 
population will be over 65 years of age, compared to only 13 percent of 
the population today. We need to have programs in place to assist 
growing numbers of seniors.
  AARP also estimates that there will be 2.8 million elderly people 
who, by 2020, will have difficulty performing a number of basic 
functions such as eating, bathing, and dressing. As American's age, 
traditional housing will have to change to accommodate the unique needs 
of those in their golden years. This bill will ensure that additional 
housing opportunities exist where these Americans can receive the 
services they need. This legislation allows traditional elderly and 
disabled housing to be converted to assisted living facilities, to meet 
these growing needs.
  We must not only work to ensure that adequate services are available, 
we must work to increase the affordable housing stock. A recent study 
conducted by HUD indicates that 1.7 million low-income elderly are in 
urgent need of affordable housing. Nearly 7.4 million elderly 
households pay more than they can afford on housing, and there are more 
than eight elderly people waiting for every unit of assisted elderly 
housing.
  In addition, HUD estimates that 1.4 million disabled Americans have 
worst case housing needs, meaning they pay over half of their income 
for housing or live in substandard housing. The Consortium for Persons 
with Disabilities conducted a study in 1998 which showed that there was 
not one housing market in the U.S. where a disabled person receiving 
SSI benefits could afford rent based on federal guidelines.
  The federal government is not doing enough to meet the needs of these 
low-income people. This legislation assists us in meeting these needs. 
It expands access to capital from both federal and non-federal sources 
for elderly and disabled housing programs, helping to create new 
housing opportunities for these communities. Providers of elderly and 
disabled housing will be able to link with the Low-Income Housing Tax 
Credit, a crucial source of affordable housing funding, and other 
private funds.
  This bill also ensures that the affordable housing which exists in 
this country is maintained. This crucial stock of housing will be 
preserved through a matching grant preservation program authored by our 
colleagues, Senators Kerry and Jeffords, which will reward States and 
localities spending resources to preserve affordable housing by giving 
them federal dollars to assist in their efforts. This provision will 
help to ensure that as we increase the stock of affordable housing on 
the front end, we are not losing units on the back end--our goal is to 
increase available housing, not maintain the status quo.
  This bill is a step in the right direction towards providing 
necessary housing opportunities for those Americans that are too often 
forgotten. And many people in this nation enjoy the benefits of a 
prospering economy, so too are many Americans being left behind. This 
legislation will ensure that more Americans have the opportunity to 
live in safe and decent housing.
                                 ______
                                 
      By Mr. FITZGERALD:
  S. 2734. A bill to amend the United States Warehouse Act to authorize 
the issuance of electronic warehouse receipts, and for other purposes; 
to the Committee on Agriculture, Nutrition, and Forestry.


                 the Warehouse Improvement Act of 2000

 Mr. FITZGERALD. Mr. President, I rise today to introduce 
legislation to revitalize and streamline the federal program governing 
agricultural commodity warehouses. This legislation, entitled the 
``Warehouse Improvement Act of 2000,'' will make U.S. agriculture more 
competitive in foreign markets through efficiencies and cost savings 
provided by today's computer technology and information management 
systems.
  The Warehouse Act was originally enacted in 1916, and was 
subsequently amended in 1919, 1923, and 1931. However, since that time, 
the authorizing legislation for this program has seen little change. At 
the same time, U.S. agriculture and our society has seen drastic 
changes since the early part of the 20th century. Computer technology 
has revolutionized our world and laptops and handheld computers have 
become almost commonplace. Now is the time for us to bring USDA's 
agricultural warehouse program out of the

[[Page 10997]]

dark ages and into the information age.
  The U.S. Warehouse Act does not mandate participation by warehouse 
operators that it regulates; it simply offers those who apply and 
qualify for licenses an alternative to state regulation. Currently, 
warehouse licenses may be issued for the storage of cotton, grain, 
tobacco, wool, dry beans, nuts, syrup and cottonseed. According to the 
U.S. Department of Agriculture, 45.5 percent of the U.S. off-farm grain 
and rice storage capacity and 49.5 percent of the total cotton storage 
capacity is licensed under the Warehouse Act. In general, these paper 
warehouse receipts that are issued under the Warehouse Act are 
documents of title and represent ownership of the stored commodity.
  The Warehouse Improvement Act of 2000 will make this program more 
relevant to today's agricultural marketing system. The legislation 
would authorize and standardize electronic documents and allow their 
transfer from buyer to seller across state and international 
boundaries. This new paperless flow of agricultural commodities from 
farm gate to end-user would provide significant savings and 
efficiencies for farmers across the Nation.
  In 1992, the Congress directed the Secretary of Agriculture to 
establish electronic warehouse receipts for only the cotton industry. 
Since that time participation in the electronic-based program has grown 
to over half of the U.S. cotton crop. In 1996, for example, nearly 12 
million bales of cotton, out of the total crop of approximately 19 
million bales, were represented by electronic warehouse receipts. 
Recently, the cotton industry estimated that this electronic system 
saves them 5 to 15 dollars per bale, a savings of over $275 million per 
year. The legislation that I introduce today extends this electronic 
warehouse receipt program to all agricultural commodities covered by 
the U.S. Warehouse Act. This reduced paperwork, increased efficiency, 
and substantial time savings will certainly make U.S. agriculture more 
competitive in world markets, giving our U.S. farmers the upper hand.
  In the short year and a half I have served in the U.S. Senate, I have 
introduced two bills that have been delivered to the President's desk 
to help bring the United States Department of Agriculture into the 
information age. First, S. 1733, the Electronic Benefit Transfer 
Interoperability and portability Act of 2000, which improves the 
electronic benefits transfer system that has provided significant 
savings and efficiency to the food stamp program, was signed into law 
on February 11 of this year (P.L. 106-171). And second, S. 777, the 
Freedom to E-File Act, requires USDA to set up a system to allow 
farmers to file all USDA required paperwork over the internet. This 
legislation unanimously passed both the House and Senate recently and 
is currently awaiting the President's signature. The legislation I am 
introducing today follows these two pieces of legislation by requiring 
USDA to use computer technology and information management systems to 
better serve farmers and the American public.
  The Warehouse Improvement Act of 2000 is a positive step toward 
moving the Department of Agriculture from the computer technology 
``dirt road'' to the information superhighway of the 21st century. It 
is common sense legislation and I look forward to working with my 
colleagues on this issue as the legislative session moves forward. I 
would also like to thank a number of the Senate Agriculture Committee 
staff who have worked tirelessly on this issue, including Michael Knipe 
and Bob White on Senator Lugar's staff and Terry Van Doren on my staff. 
They have worked to build consensus among the USDA and the agricultural 
industry to bring about these needed changes to improve the efficiency 
of our grain marketing system. In fact, this legislation enjoys the 
support of USDA, the Association of American Warehouse Control 
Officials, the National Grain and Feed Association, the American Far 
Bureau Federation, and various other commodity groups.
  I ask unanimous consent that the bill be printed in the Record 
following the conclusion of my remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2734

       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 ``Warehouse Improvement Act of 
     2000''.

     SEC. 2. STORAGE OF AGRICULTURAL PRODUCTS IN WAREHOUSES.

       The United States Warehouse Act (7 U.S.C. 241 et seq.) is 
     amended to read as follows:

     ``SECTION 1. SHORT TITLE.

       ``This Act may be cited as the `United States Warehouse 
     Act'.

     ``SEC. 2. DEFINITIONS.

       ``In this Act:
       ``(1) Agricultural product.--The term `agricultural 
     product' means an agricultural commodity, as determined by 
     the Secretary, including a processed product of an 
     agricultural commodity.
       ``(2) Approval.--The term `approval' means the consent 
     provided by the Secretary for a person to engage in an 
     activity authorized by this Act.
       ``(3) Department.--The term ``Department'' means the 
     Department of Agriculture.
       ``(4) Electronic document.--The term `electronic document' 
     means a document authorized under this Act generated, sent, 
     received, or stored by electronic, optical, or similar means, 
     including electronic data interchange, electronic mail, 
     telegram, telex, or telecopy.
       ``(5) Electronic receipt.--The term `electronic receipt' 
     means a receipt that is authorized by the Secretary to be 
     issued or transmitted under this Act in the form of an 
     electronic document.
       ``(6) Holder.--
       ``(A) In general.--The term `holder' means a person, as 
     defined by the Secretary, that has possession in fact or by 
     operation of law of a receipt or any electronic document.
       ``(B) Inclusion.--The term `holder' includes a person that 
     has possession of a receipt or electronic document as a 
     creditor of another person.
       ``(7) Person.--The term `person' means--
       ``(A) a person (as defined in section 1 of title 1, United 
     States Code);
       ``(B) a State; and
       ``(C) a political subdivision of a State.
       ``(8) Receipt.--The term `receipt' means a warehouse 
     receipt issued in accordance with this Act, including an 
     electronic receipt.
       ``(9) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture.
       ``(10) Warehouse.--The term `warehouse' means a structure 
     or other approved storage facility, as determined by the 
     Secretary, in which any agricultural product may be stored or 
     handled for the purposes of interstate or foreign commerce.
       ``(11) Warehouse operator.--The term `warehouse operator' 
     means a person that is lawfully engaged in the business of 
     storing or handling agricultural products.

     ``SEC. 3. POWERS OF SECRETARY.

       ``(a) In General.--The Secretary shall have exclusive 
     power, jurisdiction, and authority, to the extent that this 
     Act applies, with respect to--
       ``(1) each warehouse operator licensed under this Act;
       ``(2) each person that has obtained an approval to engage 
     in an activity under this Act; and
       ``(3) each person claiming an interest in an agricultural 
     product by means of an electronic document or electronic 
     receipt subject to this Act.
       ``(b) Covered Agricultural Products.--The Secretary shall 
     specify, after an opportunity for notice and comment, those 
     agricultural products for which a warehouse license may be 
     issued under this Act.
       ``(c) Investigations.--The Secretary may investigate the 
     storing, warehousing, classifying according to grade and 
     otherwise, weighing, and certifying of agricultural products.
       ``(d) Inspections.--The Secretary may inspect or cause to 
     be inspected any person or warehouse licensed under this Act 
     and any warehouse for which a license is applied for under 
     this Act.
       ``(e) Suitability for Storage.--The Secretary may determine 
     whether a licensed warehouse, or a warehouse for which a 
     license is applied for under this Act, is suitable for the 
     proper storage of the agricultural product or products stored 
     or proposed for storage in the warehouse.
       ``(f) Classification.--The Secretary may classify a 
     licensed warehouse, or a warehouse for which a license is 
     applied for under this Act, in accordance with the ownership, 
     location, surroundings, capacity, conditions, and other 
     qualities of the warehouse and as to the kinds of licenses 
     issued or that may be issued for the warehouse under this 
     Act.
       ``(g) Warehouse Operator's Duties.--Subject to the other 
     provisions of this Act, the Secretary may prescribe the 
     duties of a warehouse operator operating a warehouse licensed 
     under this Act with respect to the warehouse operator's care 
     of and responsibility for agricultural products stored or 
     handled by the warehouse operator.

[[Page 10998]]

       ``(h) Systems for Conveyance of Title in Agricultural 
     Products.--The Secretary may approve 1 or more systems under 
     which title in agricultural products may be conveyed and 
     under which documents relating to the shipment, payment, and 
     financing of the sale of agricultural products may be 
     transferred, including conveyance of receipts and any other 
     written or electronic documents in accordance with a process 
     established by the Secretary.
       ``(i) Examination and Audits.--The Secretary may conduct an 
     examination, audit, or similar activity with respect to--
       ``(1) any person that is engaged in the business of storing 
     an agricultural product that is subject to this Act;
       ``(2) any State agency that regulates the storage of an 
     agricultural product by such a person; or
       ``(3) any commodity exchange with regulatory authority over 
     the storage of agricultural products that are subject to this 
     Act.
       ``(j) Licenses for Operation of Warehouses.--The Secretary 
     may issue to any warehouse operator a license for the 
     operation of a warehouse in accordance with this Act if--
       ``(1) the Secretary determines that the warehouse is 
     suitable for the proper storage of the agricultural product 
     or products stored or proposed for storage in the warehouse; 
     and
       ``(2) the warehouse operator agrees, as a condition of the 
     license, to comply with this Act (including regulations 
     promulgated under this Act).
       ``(k) Licensing of Other Persons.--
       ``(1) In general.--On presentation of satisfactory proof of 
     competency to carry out the activities described in this 
     paragraph, the Secretary may issue to any person a Federal 
     license--
       ``(A) to inspect any agricultural product stored or handled 
     in a warehouse subject to this Act;
       ``(B) to sample such an agricultural product;
       ``(C) to classify such an agricultural product according to 
     condition, grade, or other class and certify the condition, 
     grade, or other class of the agricultural product; or
       ``(D) to weigh such an agricultural product and certify the 
     weight of the agricultural product.
       ``(2) Condition.--As a condition of a license issued under 
     paragraph (1), the licensee shall agree to comply with this 
     Act (including regulations promulgated under this Act).
       ``(l) Examination of Books, Records, Papers, and 
     Accounts.--The Secretary may examine, using designated 
     officers, employees, or agents of the Department, all books, 
     records, papers, and accounts relating to activities subject 
     to this Act of--
       ``(1) a warehouse operator operating a warehouse licensed 
     under this Act;
       ``(2) a person operating a system for the electronic 
     recording and transfer of receipts and other documents 
     authorized by the Secretary; or
       ``(3) any other person issuing receipts or electronic 
     documents authorized by the Secretary under this Act.
       ``(m) Cooperation With States.--The Secretary may--
       ``(1) cooperate with officers and employees of a State who 
     administer or enforce State laws relating to warehouses, 
     warehouse operators, weighers, graders, inspectors, samplers, 
     or classifiers; and
       ``(2) enter into cooperative agreements with States to 
     perform activities authorized under this Act.

     ``SEC. 4. IMPOSITION AND COLLECTION OF FEES.

       ``(a) In General.--The Secretary shall charge, assess, and 
     cause to be collected fees to cover the costs of 
     administering this Act.
       ``(b) Rates.--The fees under this section shall be set at a 
     rate determined by the Secretary.
       ``(c) Treatment of Fees.--All fees collected under this 
     section shall be credited to the account that incurs the 
     costs of administering this Act and shall be available to the 
     Secretary without further appropriation and without fiscal 
     year limitation.
       ``(d) Interest.--Funds collected under this section may be 
     deposited in an interest bearing account with a financial 
     institution, and any interest earned on the account shall be 
     credited under subsection (c).
       ``(e) Efficiencies and Cost Effectiveness.--
       ``(1) In general.--The Secretary shall seek to minimize the 
     fees established under this section by improving efficiencies 
     and reducing costs, including the efficient use of personnel 
     to the extent practicable and consistent with the effective 
     implementation of this Act.
       ``(2) Report.--The Secretary shall publish an annual report 
     on the actions taken by the Secretary to comply with 
     paragraph (1).

     ``SEC. 5. QUALITY AND VALUE STANDARDS.

       ``If standards for the evaluation or determination of the 
     quality or value of an agricultural product are not 
     established under another Federal law, the Secretary may 
     establish standards for the evaluation or determination of 
     the quality or value of the agricultural product under this 
     Act.

     ``SEC. 6. BONDING AND OTHER FINANCIAL ASSURANCE REQUIREMENTS.

       ``(a) In General.--As a condition of receiving a license or 
     approval under this Act (including regulations promulgated 
     under this Act), the person applying for the license or 
     approval shall execute and file with the Secretary a bond, or 
     provide such other financial assurance as the Secretary 
     determines appropriate, to secure the person's performance of 
     the activities so licensed or approved.
       ``(b) Service of Process.--To qualify as a suitable bond or 
     other financial assurance under subsection (a), the surety, 
     sureties, or financial institution shall be subject to 
     service of process in suits on the bond or other financial 
     assurance in the State, district, or territory in which the 
     warehouse is located.
       ``(c) Additional Assurances.--If the Secretary determines 
     that a previously approved bond or other financial assurance 
     is insufficient, the Secretary may suspend or revoke the 
     license or approval covered by the bond or other financial 
     assurance if the person that filed the bond or other 
     financial assurance does not provide such additional bond or 
     other financial assurance as the Secretary determines 
     appropriate.
       ``(d) Third Party Actions.--Any person injured by the 
     breach of any obligation arising under this Act for which a 
     bond or other financial assurance has been obtained as 
     required by this section may sue with respect to the bond or 
     other financial assurance in a district court of the United 
     States to recover the damages that the person sustained as a 
     result of the breach.

     ``SEC. 7. MAINTENANCE OF RECORDS.

       ``To facilitate the administration of this Act, the 
     following persons shall maintain such records and make such 
     reports, as the Secretary may by regulation require:
       ``(1) A warehouse operator that is licensed under this Act.
       ``(2) A person operating a system for the electronic 
     recording and transfer of receipts and other documents that 
     are authorized under this Act.
       ``(3) Any other person issuing receipts or electronic 
     documents that are authorized under this Act.

     ``SEC. 8. PRECLUSION OF LIABILITY.

       ``Nothing in this Act creates any liability with respect to 
     the Secretary or any officer, employee, or agent of the 
     Department in any case in which a warehouse operator or other 
     person authorized by the Secretary to carry out this Act 
     fails to perform a contractual obligation that is not subject 
     to this Act (including regulations promulgated under this 
     Act).

     ``SEC. 9. FAIR TREATMENT IN STORAGE OF AGRICULTURAL PRODUCTS.

       ``(a) In General.--Subject to the capacity of a warehouse, 
     a warehouse operator shall deal, in a fair and reasonable 
     manner, with persons storing, or seeking to store, an 
     agricultural product in the warehouse if the agricultural 
     product--
       ``(1) is of the kind, type, and quality customarily stored 
     or handled in the area in which the warehouse is located;
       ``(2) is tendered to the warehouse operator in a suitable 
     condition for warehousing; and
       ``(3) is tendered in a manner that is consistent with the 
     ordinary and usual course of business.
       ``(b) Allocation.--Nothing in this section prohibits a 
     warehouse operator from entering into an agreement with a 
     depositor of an agricultural product to allocate available 
     storage space.

     ``SEC. 10. COMMINGLING OF AGRICULTURAL PRODUCTS.

       ``(a) In General.--A warehouse operator may commingle 
     agricultural products in a manner approved by the Secretary.
       ``(b) Liability.--A warehouse operator shall be severally 
     liable to each depositor or holder for the care and 
     redelivery of the share of the depositor and holder of the 
     commingled agricultural product to the same extent and under 
     the same circumstances as if the agricultural products had 
     been stored separately.

     ``SEC. 11. TRANSFER OF STORED AGRICULTURAL PRODUCTS.

       ``(a) In General.--In accordance with regulations 
     promulgated under this Act, a warehouse operator may transfer 
     a stored agricultural product from 1 warehouse to another 
     warehouse for continued storage.
       ``(b) Continued Duty.--The warehouse operator from which 
     agricultural products have been transferred under subsection 
     (a) shall deliver to the rightful owner of such products, on 
     request at the original warehouse, such products in the 
     quantity and of the kind, quality, and grade called for by 
     the receipt or other evidence of storage of the owner.

     ``SEC. 12. ISSUANCE OF RECEIPTS AND OTHER DOCUMENTS.

       ``(a) In General.--Subject to subsections (b) and (c) and 
     except as otherwise provided in this Act, at the request of 
     the depositor of an agricultural product stored or handled in 
     a warehouse licensed under this Act, the warehouse operator 
     shall issue a receipt to the depositor as prescribed by the 
     Secretary.
       ``(b) Actual Storage Required.--A receipt may not be issued 
     under this section for an agricultural product unless the 
     agricultural product is actually stored in the warehouse at 
     the time of the issuance of the receipt.
       ``(c) Contents.--Each receipt issued for an agricultural 
     product stored or handled in a warehouse licensed under this 
     Act shall contain such information, for each agricultural 
     product covered by the receipt, as the Secretary may require 
     by regulation.

[[Page 10999]]

       ``(d) Prohibition on Additional Receipts or Other 
     Documents.--
       ``(1) Receipts.--While a receipt issued under this Act is 
     outstanding and uncanceled by the warehouse operator, no 
     other or further receipt may be issued for the same 
     agricultural product (or any portion of the same agricultural 
     product) represented by the outstanding receipt, except as 
     authorized by the Secretary.
       ``(2) Other documents.--If a written or electronic document 
     is recorded or transferred under this section, no other 
     similar document in any form shall be issued by any person 
     with respect to the same agricultural product represented by 
     the document, except as authorized by the Secretary.
       ``(e) Electronic Receipts and Electronic Documents.--Except 
     as provided in subsection (f) and notwithstanding any other 
     provision of Federal or State law:
       ``(1) In general.--The Secretary shall promulgate 
     regulations to authorize the issuance of electronic receipts, 
     and the recording and transfer of electronic receipts and 
     other documents, in accordance with this subsection.
       ``(2) Systems for electronic recording and transfer.--
     Electronic receipts and electronic documents issued with 
     respect to an agricultural product may be recorded in, and 
     transferred under, a system or systems maintained in 1 or 
     more locations.
       ``(3) Treatment of holder.--The person designated as a 
     holder of an electronic receipt or other electronic document 
     shall be considered, for the purposes of Federal and State 
     law, to be in possession of the receipt or document.
       ``(4) Security interests.--
       ``(A) Perfection of interest.--Any security interest 
     lawfully asserted by a person under any Federal or State law 
     with respect to an agricultural product that is the subject 
     of an electronic receipt, or an electronic document filed 
     under any system for electronic receipts or other electronic 
     documents issued or filed in accordance with this Act, may be 
     perfected only by recording the security interest in the 
     system in the manner specified by the regulations promulgated 
     under paragraph (1).
       ``(B) Effect of recordation.--The recordation by a person 
     of the person's security interest in any agricultural product 
     included in any system for electronic receipts or other 
     electronic documents issued or filed in accordance with this 
     Act shall, for the purposes of Federal and State law, 
     establish the security interest of the person.
       ``(C) Priority.--If more than 1 security interest exists in 
     an agricultural product covered by an electronic receipt, the 
     priority of the security interests shall be determined by the 
     applicable Federal or State law.
       ``(D) Encumbrances.--
       ``(i) Operators licensed under state law.--If a warehouse 
     operator licensed under State law elects to issue an 
     electronic receipt authorized under this subsection, a 
     security interest, lien, or other encumbrance may be recorded 
     on the electronic receipt under this subsection only if the 
     security interest, lien, or other encumbrance is--

       ``(I) authorized by State law to be included on a written 
     warehouse receipt; and
       ``(II) recorded in a manner prescribed by the Secretary.

       ``(ii) Other applications.--If a warehouse operator 
     licensed under this Act, or a warehouse operator not licensed 
     under State law, elects to issue an electronic receipt 
     authorized under this subsection, a security interest, lien, 
     or other encumbrance shall be recorded on the electronic 
     receipt in a manner prescribed by the Secretary.
       ``(5) Effect of purchase of receipt or document.--A person 
     purchasing an electronic receipt or electronic document shall 
     take possession of the agricultural product free and clear of 
     all liens, except those liens recorded in the system or 
     systems established under the regulations promulgated under 
     paragraph (1).
       ``(6) Acceptance.--
       ``(A) In general.--An electronic receipt issued, and an 
     electronic document transferred, in accordance with the 
     regulations promulgated under paragraph (1) shall be accepted 
     in any business, market, or financial transaction, whether 
     governed by Federal or State law.
       ``(B) No electronic receipt required.--A person shall not 
     be required to issue a receipt or document with respect to an 
     agricultural product in electronic format.
       ``(7) Legal effect.--Information created to comply with 
     this Act (including regulations promulgated under this Act) 
     shall not be denied legal effect, validity, or enforceability 
     on the ground that the information is generated, sent, 
     received, or stored by electronic or similar means.
       ``(8) Option for state licensed warehouse operators.--
     Notwithstanding any other provision of this Act, a State-
     licensed warehouse operator not licensed under this Act may, 
     at the option of the warehouse operator, issue electronic 
     receipts and electronic documents in accordance with this 
     subsection.
       ``(9) Application.--This subsection shall not apply to a 
     warehouse operator that is licensed under State law to store 
     agricultural commodities in a warehouse in the State if the 
     warehouse operator elects--
       ``(A) not to issue electronic receipts authorized under 
     this subsection; or
       ``(B) to issue electronic receipts authorized under State 
     law.
       ``(f) Electronic Receipts and Electronic Documents for 
     Cotton.--
       ``(1) Authority.--
       ``(A) Central filing.--Notwithstanding any other provision 
     of Federal or State law, the Secretary, or the designated 
     representative of the Secretary, may provide that, in lieu of 
     issuing a receipt for cotton stored in a warehouse licensed 
     under this Act or in any other warehouse, the information 
     required to be included in a receipt (i) under this Act in 
     the case of a warehouse licensed under this Act or (ii) under 
     any applicable State law in the case of a warehouse not 
     licensed under this Act, shall be recorded instead in 1 or 
     more central filing systems maintained in 1 or more locations 
     in accordance with regulations promulgated by the Secretary.
       ``(B) Delivery of cotton.--Any record under subparagraph 
     (A) shall include a statement that the cotton shall be 
     delivered to a specified person or to the order of the 
     person.
       ``(C) Electronic transmission facilities between warehouses 
     and system.--
       ``(i) Nonapplicability to warehouses without facilities.--
     This subsection and section 4 shall not apply to a warehouse 
     that does not have facilities to electronically transmit and 
     receive information to and from a central filing system under 
     this subsection.
       ``(ii) No requirement to obtain facilities.--Nothing in 
     this subsection requires a warehouse operator to obtain 
     facilities described in clause (i).
       ``(2) Recordation and enforcement of liens in central 
     filing system.--Notwithstanding any other provision of 
     Federal or State law:
       ``(A) Recordation.--The record of the possessory interests 
     of persons in cotton included in a central filing system 
     under this subsection--
       ``(i) shall be considered to be a receipt for the purposes 
     of this Act and State law; and
       ``(ii) shall establish the possessory interest of persons 
     in the cotton.
       ``(B) Enforcement.--
       ``(i) Possession of warehouse receipt.--Any person 
     designated as a holder of an electronic warehouse receipt 
     authorized under this subsection or section 4 shall, for the 
     purpose of perfecting the security interest of the person 
     under Federal or State law with respect to the cotton covered 
     by the warehouse receipt, be considered to be in possession 
     of the warehouse receipt.
       ``(ii) Priority of security interests.--If more than 1 
     security interest exists in the cotton represented by the 
     electronic warehouse receipt, the priority of the security 
     interests shall be determined by applicable Federal or State 
     law.
       ``(iii) Applicability.--This subsection is applicable to 
     electronic cotton warehouse receipts and any other security 
     interests covering cotton stored in a cotton warehouse, 
     regardless of whether the warehouse is licensed under this 
     Act.
       ``(3) Conditions for delivery on demand for cotton 
     stored.--A warehouse operator operating a warehouse covered 
     by this subsection, in the absence of a lawful excuse, shall, 
     without unnecessary delay, deliver the cotton stored in the 
     warehouse on demand made by the person named in the record in 
     the central filing system as the holder of the receipt 
     representing the cotton, if the demand is accompanied by--
       ``(A) an offer to satisfy the valid lien of a warehouse 
     operator, as determined by the Secretary; and
       ``(B) an offer to provide an acknowledgment in a central 
     filing system under this subsection, if requested by the 
     warehouse operator, that the cotton has been delivered.

     ``SEC. 13. CONDITIONS FOR DELIVERY OF AGRICULTURAL PRODUCTS.

       ``(a) Prompt Delivery.--In the absence of a lawful excuse, 
     a warehouse operator shall, without unnecessary delay, 
     deliver the agricultural product stored or handled in the 
     warehouse on a demand made by--
       ``(1) the holder of the receipt for the agricultural 
     product; or
       ``(2) the person that deposited the product, if no receipt 
     has been issued.
       ``(b) Payment To Accompany Demand if Requested.--
       ``(1) In general.--Demand for delivery shall be accompanied 
     by payment of the accrued charges associated with the storage 
     of the agricultural product if requested by the warehouse 
     operator.
       ``(2) Special rule for cotton.--In the case of cotton 
     stored in a warehouse, the warehouse operator shall provide a 
     written request for payment of the accrued charges associated 
     with the storage of the cotton to the holder of the receipt 
     at the time at which demand for the delivery of the cotton is 
     made.
       ``(c) Surrender of Receipt.--When the holder of a receipt 
     requests delivery of an agricultural product covered by the 
     receipt, the holder shall surrender the receipt to the 
     warehouse operator, in the manner prescribed by the 
     Secretary, to obtain the agricultural product.
       ``(d) Cancellation of Receipt.--A warehouse operator shall 
     cancel each receipt returned to the warehouse operator upon 
     the

[[Page 11000]]

     delivery of the agricultural product for which the receipt 
     was issued.

     ``SEC. 14. SUSPENSION OR REVOCATION OF LICENSES.

       ``(a) In General.--After providing notice and an 
     opportunity for a hearing in accordance with this section, 
     the Secretary may suspend or revoke any license issued, or 
     approval for an activity provided, under this Act--
       ``(1) for a material violation of, or failure to comply, 
     with any provision of this Act (including regulations 
     promulgated under this Act); or
       ``(2) on the ground that unreasonable or exorbitant charges 
     have been imposed for services rendered.
       ``(b) Temporary Suspension.--The Secretary may temporarily 
     suspend a license or approval for an activity under this Act 
     prior to an opportunity for a hearing for any violation of, 
     or failure to comply with, any provision of this Act 
     (including regulations promulgated under this Act).
       ``(c) Authority To Conduct Hearings.--The agency within the 
     Department that is responsible for administering regulations 
     promulgated under this Act shall have exclusive authority to 
     conduct any hearing required under this section.
       ``(d) Judicial Review.--
       ``(1) Jurisdiction.--A final administrative determination 
     issued subsequent to a hearing may be reviewable only in a 
     district court of the United States.
       ``(2) Procedure.--The review shall be conducted in 
     accordance with the standards set forth in section 706(2) of 
     title 5, United States Code.

     ``SEC. 15. PUBLIC INFORMATION.

       ``(a) In General.--The Secretary may release to the public 
     the results of any investigation made or hearing conducted 
     under this Act, including the names, addresses, and locations 
     of all persons--
       ``(1) that have been licensed under this Act or that have 
     been approved to engage in an activity under this Act; and
       ``(2) with respect to which a license or approval has been 
     suspended or revoked under section 14, including the reasons 
     for the suspension or revocation.
       ``(b) Confidentiality.--Except as otherwise provided by 
     law, an officer, employee, or agent of the Department shall 
     not divulge confidential business information obtained during 
     a warehouse examination or other function performed as part 
     of the duties of the officer, employee, or agent under this 
     Act.

     ``SEC. 16. PENALTIES FOR NONCOMPLIANCE.

       ``(a) Civil Penalties.--If a person fails to comply with 
     any requirement of this Act (including regulations 
     promulgated under this Act), the Secretary may assess, on the 
     record after an opportunity for a hearing, a civil penalty--
       ``(1) of not more than $25,000 per violation, if an 
     agricultural product is not involved in the violation; or
       ``(2) of not more than 100 percent of the value of the 
     agricultural product, if an agricultural product is involved 
     in the violation.
       ``(b) Federal Jurisdiction.--A district court of the United 
     States shall have exclusive jurisdiction over any action 
     brought under this Act without regard to the amount in 
     controversy or the citizenship of the parties.
       ``(c) Arbitration.--Nothing in this Act prevents the 
     enforceability of an agreement to arbitrate that would 
     otherwise be enforceable under chapter 1 of title 9, United 
     States Code.

     ``SEC. 17. REGULATIONS.

       ``The Secretary shall promulgate such regulations as the 
     Secretary considers necessary to carry out this Act.

     ``SEC. 18. AUTHORIZATION OF APPROPRIATION.

       ``There are authorized to be appropriated such sums as are 
     necessary to carry out this Act.''.
                                 ______
                                 
      By Mr. CONRAD (for himself, Mr. Grassley, Mr. Daschle, Mr. 
        Baucus, Mr. Kerrey, Mr. Jeffords, Mr. Rockefeller, Mr. Thomas, 
        Mr. Harkin, Mr. Roberts, Mr. Johnson, Mr. Cochran, and Mrs. 
        Lincoln):
  S. 2735. A bill to promote access to health care services in rural 
areas; to the Committee on Finance.


           health care access and rural equality act of 2000

  Mr. CONRAD. Mr. President, today, I rise to introduce the Health Care 
Access and Rural Equality Act of 2000 (H-CARE).
  This proposal is the result of a bipartisan and bicameral effort. I 
am proud to be joined by several cosponsors, including Senators 
Grassley, Daschle, Thomas, Harkin, Baucus, Kerrey, Jeffords, 
Rockefeller, Roberts, Johnson, Lincoln, and Cochran. I would also like 
to thank our House companions for joining me as supporters of this 
proposal. In particular, would like to recognize Representatives Foley, 
Pomeroy, Tanner, Nussle, McIntyre, Stenholm, Berry, and Lucas for their 
efforts. Working together, I believe we are taking important steps 
toward improving health care access in our rural communities.
  Also, I would like to thank the National Rural Health Association, 
the Federation of American Health Systems, and the College of American 
Pathologists for their support of this effort.
  Last year, we received information that 12 of my State's 35 rural 
hospitals were in jeopardy of closing. In North Dakota, many areas do 
not have hospitals within their county borders. This means that in some 
areas of my State, many communities depend on having access to one 
specific rural health care facility. If this facility were to close, 
this would leave residents in these areas without access to vital 
health care services.
  We know that in many rural communities, Medicare patients make up the 
majority of the typical rural hospitals' caseloads--in N.D., more than 
70 percent of most rural hospitals' patients are covered by Medicare. 
This means that Medicare funding and changes to the program greatly 
impact our small, rural providers.
  Unfortunately, while our rural facilities may serve a 
disproportionate number of Medicare patients, they are often forced to 
operate with merely half the reimbursement of their urban counterparts. 
For example, Mercy Hospital in Devils Lake receives on average about 
$4,200 for treating a patient with pneumonia. In New York City, we know 
that some hospitals receive more than $8,500 for treating the same 
illness. This disparity places our providers at a clear disadvantage.
  Against the backdrop of this funding disparity, we know that rural 
providers were particularly hard hit by reductions in the Balanced 
Budget Act of 1997. Last year, N.D. hospitals were losing at minimum 7 
percent on every Medicare patient they serve. In some of our smaller 
communities, hospital margins fell as low as negative 21 percent. How 
can our hospitals be expected to survive at a 20 percent loss?
  Recognizing the challenges that our communities were facing, I fought 
hard last year to offer relief to our rural providers. I am happy to 
say that the Balanced Budget Refinement Act of 1999 (BBRA) brought more 
than $100 million to our ND providers--but we must do more.
  Even though the BBRA improved the outlook for our hospitals, N.D. 
facilities are still in financial trouble--they are still projected to 
have negative 4.9 percent margins by 2002. Continued funding shortfalls 
have made it, and will continue to make it, impossible for our smallest 
rural hospitals to make needed building improvements; impossible for 
them to provide patients access to updated technologies; and difficult 
for them to competitively recruit and retain health care providers, 
particularly to the most isolated, frontier areas.
  For this reason, I rise to introduce H-CARE. This legislation offers 
targeted relief to our most vulnerable rural providers, including: our 
sole community, critical access, and Medicare dependent hospitals.
  In particular, H-CARE would offer a full inflation update to all 
rural hospitals. The BBA limited hospitals' inflation updates through 
2002. This has meant that our providers have not been allowed to 
receive payments that are in line with the costs they incur for serving 
Medicare patients. H-CARE would close the gap on this funding 
shortfall.
  Also, H-CARE permanently extends the important Medicare dependent 
hospital program, which is due to expire in 2006, and would offer these 
providers more up-to-date funding. Currently, they are reimbursed based 
on 1988 costs. As providers that serve at least a 60 percent Medicare 
caseload, it is important that they receive appropriate Medicare 
payments.
  In addition, H-CARE addresses several flaws in last year's Medicare 
add-back bill that have adversely impacted our rural providers. For 
example, many rural hospitals entered the Critical Access Hospital 
(CAH) program under the promise that they would receive adequate 
resources to keep their doors open. The BBRA inadvertently limited

[[Page 11001]]

these hospitals' ability to receive funding for providing lab services 
to their patients. H-CARE fixes this problem by ensuring CAHs once 
again receive the funding they need to provide lab services.
  For our sole community hospitals, H-CARE corrects an error in the 
BBRA which excluded some of these hospitals from receiving higher 
reimbursement rates based on more recent costs. H-CARE fixes this 
mistake by letting all sole community hospitals receive more up-to-date 
payments based on 1996 costs. This is particularly important for N.D. 
since 29 of my state's 36 rural facilities are sole community 
hospitals.
  Lastly, H-CARE would establish a loan fund that rural facilities 
could access to repair crumbling buildings or update their equipment--
eligible facilities could receive up to $5m to make repairs and an 
extra $50,000 to help develop a capital improvement plan. H-CARE also 
includes grants, in the amount of $50,000 per facility, that hospitals 
could use to purchase new technology and train staff on using this 
technology.
  In summary, this year, I will fight to enact these and other measures 
that are vital to improving our rural health care system. I urge my 
colleagues to support this important effort.
 Mr. JOHNSON. Mr. President, I am pleased to join my colleagues 
today to support introduction of the Health Care Access and Rural 
Equality Act of 2000, known as H-CARE.
  I especially want to commend Senators Conrad and Grassley, and 
Representative Foley for the tremendous amount of effort they put forth 
in drafting this key legislation. As well, I commend a number of my 
other colleagues who have contributed immensely to the crafting of this 
bill, including Senators Daschle, Harkin, Roberts, Thomas, Kerrey, 
Rockefeller, and Representatives Pomeroy, Tanner, Nussle, and McIntyre.
  The bipartisan and bicameral support for this legislation signifies 
the critical and often times desperate condition, that our rural 
hospitals are in due in large part to the unforeseen impact of the 
Balanced Budget Act (BBA) of 1997 and disparities in Medicare 
reimbursements for rural facilities.
  Impact estimates and preliminary data suggest that the BBA cuts have 
fallen squarely on the shoulders of our rural hospitals who do not have 
the operating margins to shoulder consecutive years of budgetary 
deficits. Unfortunately, rural hospitals do not have the luxury of 
trimming spending in one area to meet the needs in another. Recent cuts 
have forced hospitals to eliminate important programs such as home 
health care or therapy services in order to operate within these tight 
budget restraints.
  Rural hospitals are charged with the responsibility to provide high-
quality, compassionate care to individuals in times of need, especially 
our senior and disabled Medicare populations. However, it also seems 
evident to me that we have asked hospitals to do a day's work for an 
hour's pay.
  The H-CARE Act works to restore some of the funding disparities that 
exist for rural hospitals and provides resources to ensure their 
survival.
  Hospitals in my home state of South Dakota face a potential loss in 
Medicare revenues of nearly $171 million over five years if something 
is not done to help them.
  Provisions in H-CARE including inflation updates for rural hospitals, 
protection for Medicare Dependent Hospitals, support for the Critical 
Access Hospitals Programs, creation of a capital infrastructure loan 
program, assistance to update technology, and increased reimbursement 
for Sole Community Hospitals will allow rural facilities the necessary 
resources to keep their doors open.
  We are talking about rural facilities such as the Medical Center in 
Huron, SD, which was forced to eliminate 24 full time positions to 
compensate for Medicare cuts in their FY 2001 budget, or the hospital 
in Burke, SD, which had to cut $124,000 from their hospital this year 
to ensure their survival. These are just a few examples of the many 
stories that I've heard from hospitals administrators throughout my 
home state of South Dakota.
  Once again, I am please to join my colleagues today as an original 
cosponsor of the H-CARE Act and look forward to working with the full 
Senate to ensure quick and immediate action on this critically 
important legislation.
                                 ______
                                 
      By Mr. DOMENICI (for himself, and Mr. Bingaman):
  S. 2736. A bill to provide compensation for victims of the fire 
initiated by the National Park Service at Bandelier National Monument, 
New Mexico; to the Committee on Environment and Public Works.


                  the cerro grande fire assistance act

  Mr. DOMENICI. Mr. President, let me say from the very beginning of 
this discussion today, it has been a real pleasure to work with Senator 
Bingaman and his staff--and I hope that is mutual--on putting together 
a bill that we are going to introduce today. It is our best effort to 
put together a bill that permits the citizens of Los Alamos, the people 
who reside there, whose houses or personal property were damaged or 
destroyed, and businesses that existed, owned either by corporations or 
individuals--the damage they might have suffered. This is just a 
partial list. I will read the list before we leave the floor.
  This is an effort to compensate the Indian people for similar losses.
  Mr. President, since May 4, 2000, it is now known that the National 
Park Service started a forest fire, a so-called prescribed burn, at 
Bandelier National Monument in New Mexico. That was done during the 
height of the fire season and, regrettably, as everyone now knows, that 
fire, which was expected to be a controlled burn by the Park Service in 
Bandelier National Park, was not able to be controlled by those who 
were called in to control it. The fire went right down the 
mountainside, ended up burning down the forest and parts of the 
community of Los Alamos. The fire destroyed more than 425 residences.
  I am going to start from the beginning with just one photo. Senator 
Bingaman has others. He drove the streets while some of the fires were 
still cooling off. As I understand it, Senator Bingaman could see the 
remnants of steam and heat, and the residue of fires that had not yet 
totally burned out.
  This is just one picture of the old town site. That means there is a 
part of the area that was built up by the Federal Government years ago 
when Los Alamos was a closed off and secret community, at which the 
first atomic bomb was being built. All of the science was put in place 
up there, and it was totally a secret city. Years later, while I was a 
Senator--I have been here 28 years--we tore down the walls and sold 
those houses to individuals.
  This is the way the fire looked as a house burned adjoining the trees 
and forests that surround Los Alamos. It was actually much worse than 
that. But that is the best we can do in a photograph of this type.
  The fire started on May 4, and by May 5 it was a full-fledged 
wildfire devouring everything in its path. Ultimately, it devoured 
48,000 acres of forest land and significant parts of the community 
where houses and businesses were owned by individuals.
  During the time this fire burned out of control, our Nation was 
celebrating the 50th anniversary of Smokey the Bear; that is, the date 
of his rescue from a raging forest fire in the Lincoln National Forest 
in NM.
  For 50 years, Smokey the Bear had cautioned Americans to be careful. 
Apparently, no one told the Park Service.
  The decision was made to start a forest fire. The basis was a 
miscalculation of the danger. The result was, believe it or not, about 
25,000 people were evacuated; 405 families lost their residences or 
homes; two Indian pueblos lost land, livelihood, and sacred sites; and 
48,000 acres were transformed from a lush forest into a charcoal garden 
covered in some places by 12 inches of ash.
  The cost thus far to taxpayers just to fight the fire is perhaps $10 
million.
  We now have a couple of official reports. We have a 40-page report 
called ``Sierra Grande Prescribed Burn Investigative Report'' dated May 
18, 2000. It can be summarized.

[[Page 11002]]

  Too little planning; too few followed procedures; too little caution; 
too little experience; too much dry underbrush; too much wind; too much 
advice unheeded; and too late arrival of the ``hotshot'' experts; and, 
it was too bad.
  It is more than too bad. It calls into question the policy with 
reference to prescribed burns. But that is an issue for another day. 
But I am hopeful that serious discussions are taking place as to how we 
should handle controlled burns in the future.
  We have a catastrophe. It is a catastrophe that it started in the 
first place. There is no doubt about that.
  It is a tragedy that it destroyed homes. There is no doubt about 
that.
  It is a disaster that fire disrupted businesses. It cost State and 
local governments millions of dollars. There is no disagreement about 
that.
  Imagine the horror of seeing your home reduced to ashes and the 
freakishness of owning a concrete staircase to nowhere and calling it 
your home as you come back to visit. The house is burned to the ground, 
and only cement steps remain.
  Imagine seeing your neighborhood reduced to a row of brick chimneys 
and concrete foundations.
  Consider the irony of a home burned to the ground while the wooden 
tree house stands unoccupied in the yard.
  Imagine the task of sifting through the ashes for any unincinerated 
remnants of your life.
  Think about the gawkers and the TV trucks driving through your 
neighborhood waiting to see if the first rains produce mudslides and/or 
floods.
  Imagine your life if you were they.
  You want to go back to work, to get the kids back into a routine, but 
your life is a series of back-to-back-meetings, dealing with 
appraisers, contractors, insurance, FEMA, SBA, and flood insurance.
  Everyone involved wishes that the fire could be unset, the match 
unlit, the decision unmade, but there is no way to undo the 
catastrophe.
  The Federal Government can't undo the damage, but it can provide 
prompt compensation. That is the objective of the legislation that 
Senator Bingaman and I are introducing today. We have worked closely 
with the administration, and I am pleased that they support this 
legislation.
  I am pleased to introduce legislation that starts the process of 
rebuilding lives. It provides an expedited settlement process for the 
victims of the fire.
  The first estimate of the cost that we are covering is an approximate 
number of $300 million. We will use $300 million as our approximate 
cost as we take this bill into conference on the MILCON bill and 
attempt to get it adopted in an expedited matter as part of that 
conference, along with the moneys needed to compensate the victims for 
their claims under this legislation. And there are moneys for other 
components of the fire under other federal programs--$134 million for 
the laboratory damage itself, which is a separate appropriations item.
  To accomplish the goal of compensating fire victims in the most 
efficient and fair way possible, this legislation establishes a 
compensation process through a separate Office of Cerro Grande Fire 
Claims at FEMA.
  It provides for full compensation for property losses and personal 
injuries sustained by the victims, including all individuals, 
regardless of their immigration status, small businesses, local 
governments, schools, Indian tribes, and any other entities injured as 
a result of the fire.
  Such compensation will include the replacement cost of homes, cars, 
and any other property lost or damaged in the fire, as well as lost 
wages, business losses, insurance deductibles, emergency staffing 
expenses, debris removal and other clean-up costs, and any other losses 
deemed appropriate by the Director of FEMA.
  To make sure that this is an expedited procedure, within 45 days of 
enactment, FEMA must promulgate rules governing the claims process. 
After the rules are in place, FEMA must publish in newspapers and other 
places in New Mexico, an easy-to-understand description of the claims 
process in English and Spanish, so that everyone will know their rights 
and where and how to file a claim.
  Once those rules are in place, victims will have 2 years to file 
their claims, and FEMA must pay those claims within 6 months of filing.
  During the adjudication of each claim, FEMA is authorized to make 
interim payments to victims so that those with the greatest need will 
not be forced to wait a long time before receiving some form of 
compensation from the government.
  This bill also will reimburse insurance companies for the costs they 
paid to help rebuild Los Alamos and the surrounding communities. Under 
this bill, insurance companies will be able to make subrogation claims 
against the government on behalf of themselves or their policyholders 
in same manner as any other victim of the fire.
  I want the victims to know that this bill requires that they will 
compensated before insurance companies.
  The intent is to encourage insurance companies to settle with their 
policyholders and then come to the government for compensation. That 
way, victims can get on with their lives as soon as possible, and 
insurance companies can get reimbursed through the claims process 
without the need to proceed under the cumbersome Federal Tort Claims 
Act.
  For victims whose insurance will not cover the complete replacement 
cost of their property loss or their personal injury, insurance 
companies should cover all that is required under their policies, and 
the government will make up the difference.
  Mr. President, I think that in this bill, we have developed a process 
which is fair, comprehensive, and efficient. Yet there will be some who 
believe, for whatever reasons, that they are not receiving what they 
are entitled from the government.
  For those individuals, this bill preserves their right to sue under 
the Tort Claims Act or to protest the final claims decision of FEMA. I 
hope that there will be few, if any, such lawsuits, but I believe we 
must maintain the rights of individuals to proceed to court if they are 
unhappy with their claims award.
  I think we have taken an excellent first step in proposing this 
claims legislation. There is no way one bill can address every issue 
which might arise in every circumstance. Many of the details will be 
determined by the Fire Claims Office. I want my constituents to know 
that I will do all I can to monitor the process as it moves forward to 
ensure that New Mexicans are treated fairly and in accordance with the 
intent of this law.
  All our citizens owe a tremendous gratitude to the workers at Los 
Alamos. We won the cold war because of their contributions. Today we 
enjoy our freedoms because of their dedication. We need their continued 
dedication to assure that those freedoms survive for our future 
generations. And they need our help to rebuild their lives and return 
to their vital missions.
  I hope my colleagues will support the Cerro Grande Fire Assistance 
Act.
  Citizens can choose not to take this claims approach provided for in 
this legislation, and they can go to the Federal courts under the 
Federal Tort Claims Act. If they do, they will get no compensation 
under this bill. That is their option.
  If they choose the option provided under this bill and they go 
through it to get money for their damages--let's just take an item, 
such as a house which Senator Bingaman and I discussed. If there is a 
dispute as to the value of that house, and they are supposed to get the 
value for the replacement cost--if there is a dispute, this bill 
provides an opportunity to use arbitration.
  We have limited attorney's fees in this bill to 10 percent. We don't 
think this is going to be a heavily litigated process. I repeat, if 
citizens want to make their claim under the Federal Tort Claims Act, 
this legislation does not preclude that, other than they have no right 
to claim anything under this bill.
  We owe tremendous gratitude to the workers of Los Alamos. We won the 
cold war because of their efforts and

[[Page 11003]]

their predecessors in the various activities and scientific niches at 
this laboratory which has been run admirably by the University of 
California.
  Today, we enjoy some of our basic freedoms because in that cold war 
with the Soviet Union we had great people in this community and a 
couple of other communities, always staying ahead so people could be 
assured nuclear weapons would never be used against our people.
  That laboratory is having some trouble besides the fire. When it all 
finishes, we will still stand in awe at the fantastic brain trust that 
is assembled in the mountains of northern New Mexico. We have a sister 
institution in California, obviously, and an engineering institution in 
Albuquerque called Sandia National Laboratories. They are three labs 
that are tied together by scientific prowess and a commitment to serve 
America in her needs.
  The PRESIDING OFFICER. The junior Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, I thank my colleague, Senator Domenici. 
I also want to state how much I have enjoyed working with him on this 
terrible subject. I think the ability of our offices to work together 
has been admirable. We have come up with a plan that moves the process 
forward and closer to some real relief for the people who were damaged 
by this incident.
  Mr. President, this was a disaster. This was a catastrophe. Let me 
show three photos that make the case. This is a photo from space, from 
a very high altitude, that shows the fire while it was burning, with 
the smoke plume coming through northeastern New Mexico into Colorado, 
into Oklahoma, and into west Texas. The photo shows the magnitude of 
what was involved. This was clearly the largest forest fire we have 
ever had in our State of New Mexico since they have been keeping 
records. It is very unfortunate that it was started by a controlled 
burn to which the Park Service agreed. That clearly makes this the 
responsibility of the Federal Government. As a country, we need to step 
up and compensate people for their losses.
  Let me show two other photos that make the case as to what was done. 
This is a photo of one of the houses in Los Alamos with a car out 
front. These people in Los Alamos were advised they needed to leave 
their homes, get in cars or on buses, and go down to Santa Fe to escape 
the danger. They did. This is what they came back to a couple of weeks 
later. Clearly, this is not the kind of a circumstance of which anyone 
can be proud.
  Mr. DOMENICI. Will the Senator yield?
  Mr. BINGAMAN. I yield.
  Mr. DOMENICI. The Senator views this scene while driving down the 
streets?
  Mr. BINGAMAN. I toured the community and the neighborhoods with James 
Lee Witt, the head of FEMA, and with our Governor, Governor Johnson. We 
saw the devastation.
  Mr. DOMENICI. This is a chimney?
  Mr. BINGAMAN. That is a chimney.
  The people did not have time to even arrange to drive their cars out 
of town. Of course, all their personal belongings were in the houses. 
The damage was total. The loss was total for the families who were 
burned out.
  Another photo makes the case, a photo of the rubble that was left at 
one of the sites. Here is a bicycle. I might add, the water lines in 
these houses were still running. As we drove up and down the street, we 
saw water spurting out of the water lines, but there would be no house. 
Clearly, the devastation was enormous.
  The people of Los Alamos and Senator Domenici made this point, and it 
has been made many times: The people of Los Alamos were heroic in their 
response to this tragedy. They pulled together as a community. They 
helped each other. They worked together to get their community back up 
and running. The people of the entire State came together and rallied 
to help the people who were injured. This was a period, and we are 
still in it to some extent, a period where we have lots of fires going 
on in New Mexico. It was not just the people who were injured in the 
Cerro Grande fire who were requiring assistance. We had other fires in 
our State, including the Scott Able fire in southern New Mexico which 
was very devastating, the fire at Ruidoso, the Viveash fire near Pecos.
  Our job now, and what Senator Domenici and I are trying to do in this 
legislation, is to put in place a mechanism so people can get as full a 
relief as possible. We recognize you are not ever in a position to 
compensate someone for all of this loss, but we want to compensate 
people as fully as the Government can. We also, of course, want to do 
so as quickly as possible.
  The reason this legislation is important, I believe--and I think this 
was something which the administration officials, and Jack Lew with the 
Office of Management and Budget agreed with entirely--is that the time 
it takes to go through the Tort Claims Act is extensive. History has 
shown that in many cases it is not satisfactory, that process has not 
been satisfactory. It was our conclusion, and the conclusion supported 
by the administration, that we should do a separate bill which would 
set up a different procedure that, hopefully, would give better 
compensation to people, and do it much more quickly than is otherwise 
possible.
  Senator Domenici pointed out we have gone to great lengths to not 
interfere with the right of people to pursue their remedies under 
current law, if they choose to do that. We have not changed the rules 
for that. We have not in any way impeded that. But people have to make 
a judgment after they consult with everyone involved--their attorneys 
if they have attorneys, or anyone else with whom they want to consult--
make a judgment as to whether to use the remedy, the process we are 
setting up in this legislation, once this becomes law, or to use the 
process that is available to them under current law under the Tort 
Claims Act.
  My own hope is that we have come up with a better alternative. That 
is my belief. That has certainly been our purpose. We hope people will 
see it that way and that this legislation will result in more full 
compensation, much more rapidly than would otherwise be possible, and 
that people will be able to get on with their lives because of that.
  The legislation has many aspects to it, which I discussed in detail. 
Senator Domenici went into some of that. Let me just say, the main 
thrust of it is to compensate people for injuries they receive, for 
loss of property, compensate businesses for losses they incurred, 
compensate businesses and individuals, both, for financial losses that 
are directly traceable and attributable to this fire.
  Clearly, we want this to be a fair process for those involved. At the 
same time, we are anxious that it be done in a responsible way, so once 
it is over with, we can have an accounting for what compensation was 
provided and the justification for it. I think the American people will 
want that and should be entitled to that. I believe this will 
substantially improve the chances of folks getting fully compensated, 
as fully compensated as possible, as early as possible.
  For that reason, I am pleased to join Senator Domenici in 
cosponsoring this legislation. I do think we have several steps, 
several hoops to jump through between now and when this becomes law. 
There will be opportunities for us to fine-tune this as we go forward. 
I hope we can do that, but I hope we can go forward very quickly. He 
indicated our desire to have it included in some appropriations 
legislation--the military construction appropriations bill--which is 
pending now. I hope very much that can happen, and I hope that bill can 
get to the President very quickly with this included and can become 
law.
  Mr. President, on May 4, 2000, a decision by the National Park 
Service to conduct a prescribed burn in the Bandelier National Park 
changed the lives of Los Alamos residents forever. What started as a 
prescribed burn of approximately 1,000 acres, turned into a fire that 
roared for 18 days and in the end charred over 47,000 acres. Soon after 
the fire raged out of control, the National Park Service assumed 
responsibility for the damage caused by the fire.
  While we need to take another look at the Park Service's policy 
concerning

[[Page 11004]]

prescribed burns, we first need to take care of those that were injured 
by the Park Service's actions. There will be time for hearings and 
investigations. But first, there are people that must be clothed, homes 
that must be rebuilt, and businesses that must pay their bills. We need 
to make sure our children are settled again before the 2001 school year 
begins in 2 months. We need to clean up the debris and hazardous waste 
so families can think about rebuilding.
  The Cerro Grande Fire Assistance Act that I am introducing with 
Senator Domenici today is what we believe represents the Government's 
responsibility to the citizens of Los Alamos and the surrounding 
pueblos.
  The Cerro Grande fire didn't just burn 47,000 acres of national 
forest. This fire was so intense that it traveled several miles from 
the point of origin to the town of Los Alamos, New Mexico. When the 
fire roared up the canyons in Los Alamos, it completely destroyed 385 
dwellings and seriously damaged another 17 dwellings. Over 60 homes 
were burned on 46th, 48th and Yucca Streets alone. Keep in mind that 
Los Alamos is not a large community and these numbers reflect a large 
majority of the residents in those areas. This chart shows what used to 
be single family homes on Arizona Avenue. It was one of the 50 homes 
destroyed along Arizona Avenue.
  This second picture shows the damage done along Alabama Avenue. The 
fourplexes across the street were spared but many of the fourplexes 
along Alabama are no longer standing. Most of these fourplexes were 
built between 1949 and 1954 by the federal government for the first 
workers of the national laboratory. In the late 1960's the federal 
government sold these homes to the residents of Los Alamos. On May 4th, 
many of these homes were occupied by the original residents--
individuals who are now retired from the lab and enjoying their golden 
years. Ten percent of the households destroyed belonged to senior 
citizens. One such couple showed up to a town meeting to show me all 
they had left of their former home--the wife had the burned door handle 
and the husband had the key in his pocket.
  Other fourplexes that were destroyed were occupied by young families 
and the most recent generation of lab employees. 35% of the housing 
units destroyed were being rented and 92 of those tenants were without 
any form of insurance. Many of these people are now without a home for 
their young families. One of the couples I spoke with after the fire 
was a young couple expecting a child who lost their home and their 
adjoining rental unit. And I was recently informed that over 200 school 
children were burned out of their homes.
  Driving through these neighborhoods that are now filled with 
blackened trees, melted swing sets and burned bicycles is a difficult 
thing to witness. This fire grew out of control so quickly, mostly 
because of the 60 mph winds that swirled through the controlled burn 
area, that most families had less than an hour to gather their 
belongings and evacuate the mesa. Many others didn't have even that 
much time. As you can see by the numerous burned cars, many families 
were unable to get both of their cars down the hill before the fire 
hit. In the end, 5% of the housing units in Los Alamos was destroyed by 
this fire.
  Despite the personal tragedy many of them suffered, the residents of 
Los Alamos came together and helped one another and supported the 
efforts of the hundreds of firefighters who fought long and hard to 
control this monstrous blaze. Several Los Alamos restaurant owners 
returned to Los Alamos during the height of the fire and donated their 
inventory and services to cook up meals at the local Elks Lodge for the 
firefighters, police and National Guardsmen who were sent to this 
remote community. In addition, the outpouring of support from the 
nearby communities in setting up shelters and offering food and 
clothing was something I was proud to witness firsthand. This support 
also included the shelters and individuals who volunteered to take in 
the hundreds of animals that belonged to the over 20,000 residents 
evacuated from Los Alamos and White Rock.
  The citizens of Los Alamos were heroic throughout this fire. 
Residents, like engineer Tony Tomei, were single-handedly trying to 
help save their neighborhoods from spreading wildlife. Tomei used his 
garden hose to douse small spot fires and used a rake and shovel to 
extinguish burning debris. His all night efforts saved his own house 
and the house of one neighbor, much to the neighbor's surprise.
  After returning from Los Alamos and viewing the extent of damage, I 
began work with Senator Domenici on legislation that would compensate 
the people of Los Alamos, the surrounding pueblos, and the national 
laboratory for the damages sustained. We have been working for over 3 
weeks now with the Office of Budget and Management, the White House, 
and the citizens of New Mexico to come up with legislation that will 
provide those who suffered personal and/or financial injury the most 
expedient and thorough compensation possible. We have received input 
from a number of individuals who lost their homes, from business owners 
who were shut down for up to a week, from the Los Alamos County Council 
and the governors of the San Ildefonso and Santa Clara Pueblos. While 
no one can truly be made whole after such a devastating experience, the 
role of the federal government in this situation is to ensure that 
people are adequately compensated for the losses resulting from the 
fire. Senator Domenici and I worked to come up with legislation that 
would compensate New Mexicans as fully as possible, while still being 
something acceptable to the entire Congress.
  Based on the numerous meetings we held with the people mentioned 
above, we have come up with categories of damages that are compensable, 
including: property losses, business losses and financial losses. The 
goal is to compensate individuals for losses that were not otherwise 
covered by insurance or any other third party contribution.
  For example, compensable property losses will include such things as 
uninsured property losses. This should address the problem many 
individuals are facing after realizing that they were under insured for 
their homes or their personal property. The goal is this legislation is 
to provide individuals with the funds needed to repair or replace their 
real and personal property using ``replacement value'' as a determining 
factor. This means that individuals should receive the dollar amount 
needed to rebuild their homes using current construction methods and 
materials, in line with current zoning requirements, and without a 
deduction for depreciation. It also means that individuals should be 
provided with the funds necessary to allow them to replace their 
damaged personal property with property that provides them equal 
utility. Moreover, we realize that homeowners will need funds to cover 
the cost of stabilizing and restoring their land to a condition 
suitable for building after the debris is removed.
  The legislation will also compensate public entities for the damage 
to the physical infrastructure in the community. The county and other 
governmental entities will be able to seek compensation for the cost of 
rebuilding community infrastructure damaged by the fire, such as power 
lines, roads and public parks.
  Compensable business losses will include such things as damage to 
tangible business assets, lost profits, costs incurred as a result of 
suspending business for one week, wages paid to employees for days 
missed during the fire, and other business losses deemed appropriate by 
the Claims Office. This provision is intended to help business owners 
who were forced to evacuate Los Alamos for up to 5 days. For people 
like the local nursery owner, closing shop during Mothers' Day weekend 
and the short planting season in northern NM was devastating. While the 
residents of Los Alamos disappeared from the community, the fixed 
overhead costs of the small business owners did not disappear.
  Compensable financial losses will include economic losses for 
expenses

[[Page 11005]]

such as insurance deductibles, temporary living expenses, relocation 
expenses, debris removal costs, and emergency staffing expenses for our 
governmental entities. The intent is to assist victims in rebuilding 
and recovering incidental expenses that they would otherwise not have 
incurred, had it not been for the Cerro Grande Fire. This includes 
costs incurred by the claimant in proving his losses, including the 
cost of appraisals where necessary.
  In addition, the pueblos will be eligible to seek compensation for 
the damage to the forest lands on the pueblo and the impact of the fire 
on their subsistence hunting, fishing, firewood, timbering, grazing and 
agricultural activities. Individual tribal members and wholly-owned 
tribal entities will be eligible to seek reimbursement through this 
claims process for quantifiable losses. This means that the BIA will 
not serve as a conduit for any settlement to an individual tribal 
member or a tribe.
  This legislation also intends to provide resources for the 
remediation that will be necessary to prevent future disasters because 
of flooding and mudslides. While we have experienced an unusually dry 
summer in the Southwest, forecasters predict an earlier than usual 
monsoon season and efforts must be made to shore up the burned 
hillsides and 70 foot canyon walls. The remediation effort will have to 
be undertaken by several federal agencies, including the Department of 
interior, the Agriculture Department and other entities with experience 
in this regard.
  In order to expedite an individual's recovery, we have designed an 
administrative claims process that will allow injured parties to seek 
compensation for the expenses that were incurred, and were not 
otherwise covered by a third party, as a result of the Cerro Grande 
fire. This legislation authorizes that claims process and establishes 
an Office of Cerro Grande Fire Claims which will be under the authority 
of the Director of FEMA. FEMA is directed to compensate the victims of 
the Cerro Grande fire for injuries resulting from the fire and to 
settle those claims in an expeditious manner. FEMA will be given 
authority to hire an independent claims manager or other experts in 
claims processing to oversee this large project. We feel that FEMA is 
the best federal agency to handle this responsibility as they are 
capable of the task and are familiar with the damages that are common 
in a disaster. I trust that the FEMA Director will assemble a team that 
the community of Los Alamos can have confidence in and that will strive 
to settle claims to the benefit of those injured.
  The Director of FEMA has 45 days to design this claims process and 
promulgate regulations for the claims office to follow. The regulations 
should not be overly burdensome for the claimants and should provide an 
understandable and straight forward path to settlement. In the event 
that issues arise concerning a settlement amount, the claimant will be 
able to enter into binding arbitration to settle any disputes with the 
claims office. If a claimant would rather have the Director's decision 
reviewed by a judge, the claimant will be able to seek judicial review 
of the Director's decision in federal court. Claimants who believe they 
need legal assistance as they proceed through this process should know 
that attorneys' fees are provided for in this legislation, with a cap 
of 10%. And while we believe this administrative claims process is the 
most efficient and reliable route for those seeking compensation, we 
are leaving the option of a federal tort action open to this 
legislation.
  Mr. President, there is nothing Senator Domenici or I can do to 
replace the personal items and sentimental possessions that were 
consumed by the Cerro Grande Fire. This federal compensation will do 
nothing to replace a coin collection collected over a lifetime or an 
heirloom inherited from a great-grandmother. However, the federal 
government has the responsibility to try and restore the lives of the 
people impacted by this horrible tragedy. The federal government 
started this mess and it is time the federal government started 
cleaning up this mess and fixing what was damaged.
  Congress can start the recovery process by passing this legislation. 
I ask that my colleagues act quickly on this legislation as the season 
for rebuilding this community is a short season for this city that sits 
high above the valley. I thank my colleagues for their support and for 
their willingness to do the right thing in this very unique situation.
  I yield the floor.
  The PRESIDING OFFICER. The senior Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I once again thank Senator Bingaman.
  Part of the time these discussions were taking place in New Mexico, I 
was not available to be there. As most people in New Mexico know, I 
have been there twice, but I missed one occasion when Senator Bingaman 
got to talk with the people. I thank him for that because he brought 
back a number of ideas. One of my staffers was present with him. Those 
ideas are incorporated in this legislation.
  In particular, let me repeat that the bill covers ``loss of 
property,'' and it says what that means; ``business losses,'' and it 
says what that means; ``financial losses,'' and it says what that 
means. Then a ``summary of the claims process'' and a summary of the 
remedies and a summary of appeal rights.
  The lead agency is going to be the Office of Cerro Grande Fire Claims 
within FEMA. James Lee Witt or his successor will oversee that office 
but has the discretionary authority to designate an independent claims 
manager to run the office, if he so desires.
  We are not creating anything new, it will be FEMA. But if he wants an 
independent claims manager, he has the latitude and authority to do 
that. There will be a separate account for the victims of the Cerro 
Grande fire that will be separate from the disaster assistance fund. 
Also, all of the money appropriated will be designated as an emergency.
  I want to thank the staff who worked on this legislation. In my 
office: Steve Bell, Denise Greenlaw Ramonas, Brian Benczkowski, James 
Fuller and Veronica Rodriguez. From Senator Bingaman's office, Trudy 
Vincent, Christine Landavazo, Sam Fowler and Bob Simon. I also want to 
thank Ann Bushmiller from the White House Counsel's office and 
Elizabeth Gore from the Office of Management and Budget. I ask 
unanimous consent that a letter from Jack Lew expressing the 
Administration's support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2736

       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 ``Cerro Grande Fire Assistance 
     Act''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) on May 4, 2000, the National Park Service initiated a 
     prescribed burn on Federal land at Bandelier National 
     Monument in New Mexico during the peak of the fire season in 
     the Southwest;
       (2) on May 5, 2000, the prescribed burn, which became known 
     as the ``Cerro Grande Prescribed Fire'', exceeded the 
     containment capabilities of the National Park Service, was 
     reclassified as a wildland burn, and spread to other Federal 
     and non-Federal land, quickly becoming characterized as a 
     wildfire;
       (3) by May 7, 2000, the fire had grown in size and caused 
     evacuations in and around Los Alamos, New Mexico, including 
     the Los Alamos National Laboratory, 1 of the leading national 
     research laboratories in the United States and the birthplace 
     of the atomic bomb;
       (4) on May 13, 2000, the President issued a major disaster 
     declaration for the counties of Bernalillo, Cibola, Los 
     Alamos, McKinley, Mora, Rio Arriba, Sandoval, San Juan, San 
     Miguel, Santa Fe, Taos, and Torrance, New Mexico;
       (5) the fire resulted in the loss of Federal, State, local, 
     tribal, and private property;
       (6) the Secretary of the Interior and the National Park 
     Service have assumed responsibility for the fire and 
     subsequent losses of property; and
       (7) the United States should compensate the victims of the 
     Cerro Grande fire.
       (b) Purposes.--The purposes of this Act are--
       (1) to compensate victims of the fire at Cerro Grande, New 
     Mexico, for injuries resulting from the fire; and

[[Page 11006]]

       (2) to provide for the expeditious consideration and 
     settlement of claims for those injuries.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Cerro grande fire.--The term ``Cerro Grande fire'' 
     means the fire resulting from the initiation by the National 
     Park Service of a prescribed burn at Bandelier National 
     Monument, New Mexico, on May 4, 2000.
       (2) Director.--The term ``Director'' means--
       (A) the Director of the Federal Emergency Management 
     Agency; or
       (B) if a Manager is appointed under section 4(a)(3), the 
     Manager.
       (3) Injured person.--The term ``injured person'' means--
       (A) an individual, regardless of the citizenship or alien 
     status of the individual; or
       (B) an Indian tribe, corporation, tribal corporation, 
     partnership, company, association, county, township, city, 
     State, school district, or other non-Federal entity 
     (including a legal representative);

     that suffered injury resulting from the Cerro Grande fire.
       (4) Injury.--The term ``injury'' has the same meaning as 
     the term ``injury or loss of property, or personal injury or 
     death'' as used in section 1346(b)(1) of title 28, United 
     States Code.
       (5) Manager.--The term ``Manager'' means an Independent 
     Claims Manager appointed under section 4(a)(3).
       (6) Office.--The term ``Office'' means the Office of Cerro 
     Grande Fire Claims established by section 4(a)(2).

     SEC. 4. COMPENSATION FOR VICTIMS OF CERRO GRANDE FIRE.

       (a) In General.--
       (1) Compensation.--Each injured person shall be entitled to 
     receive from the United States compensation for injury 
     suffered by the injured person as a result of the Cerro 
     Grande fire.
       (2) Office of cerro grande fire claims.--
       (A) In general.--There is established within the Federal 
     Emergency Management Agency an Office of Cerro Grande Fire 
     Claims.
       (B) Purpose.--The Office shall receive, process, and pay 
     claims in accordance with this title.
       (C) Funding.--The Office--
       (i) shall be funded from funds made available to the 
     Director under this title; and
       (ii) may reimburse other Federal agencies for claims 
     processing support and assistance.
       (3) Option to appoint independent claims manager.--The 
     Director may appoint an Independent Claims Manager to--
       (A) head the Office; and
       (B) assume the duties of the Director under this Act.
       (b) Submission of Claims.--Not later than 2 years after the 
     date on which regulations are first promulgated under 
     subsection (f), an injured person may submit to the Director 
     a written claim for 1 or more injuries suffered by the 
     injured person in accordance with such requirements as the 
     Director determines to be appropriate.
       (c) Investigation of Claims.--
       (1) In general.--The Director shall, on behalf of the 
     United States, investigate, consider, ascertain, adjust, 
     determine, grant, deny, or settle any claim for money damages 
     asserted under subsection (b).
       (2) Applicability of state law.--Except as otherwise 
     provided in this Act, the laws of the State of New Mexico 
     shall apply to the calculation of damages under subsection 
     (d)(4).
       (3) Extent of damages.--Any payment under this Act--
       (A) shall be limited to actual compensatory damages 
     measured by injuries suffered; and
       (B) shall not include--
       (i) interest before settlement or payment of a claim; or
       (ii) punitive damages.
       (d) Payment of Claims.--
       (1) Determination and payment of amount.--
       (A) In general.--
       (i) Payment.--Not later than 180 days after the date on 
     which a claim is submitted under this Act, the Director shall 
     determine and fix the amount, if any, to be paid for the 
     claim.
       (ii) Priority.--The Director, to the maximum extent 
     practicable, shall pay subrogation claims submitted under 
     this Act only after paying claims submitted by injured 
     parties that are not insurance companies seeking payment as 
     subrogees.
       (B) Parameters of determination.--In determining and 
     settling a claim under this Act, the Director shall determine 
     only--
       (i) whether the claimant is an injured person;
       (ii) whether the injury that is the subject of the claim 
     resulted from the fire;
       (iii) the amount, if any, to be allowed and paid under this 
     Act; and
       (iv) the person or persons entitled to receive the amount.
       (C) Insurance and other benefits.--
       (i) In general.--In determining the amount of, and paying, 
     a claim under this Act, to prevent recovery by a claimant in 
     excess of actual compensatory damages, the Director shall 
     reduce the amount to be paid for the claim by an amount that 
     is equal to the total of insurance benefits (excluding life 
     insurance benefits) or other payments or settlements of any 
     nature that were paid, or will be paid, with respect to the 
     claim.
       (ii) Government loans.--This subparagraph shall not apply 
     to the receipt by a claimant of any government loan that is 
     required to be repaid by the claimant.
       (2) Partial payment.--
       (A) In general.--At the request of a claimant, the Director 
     may make 1 or more advance or partial payments before the 
     final settlement of a claim, including final settlement on 
     any portion or aspect of a claim that is determined to be 
     severable.
       (B) Judicial decision.--If a claimant receives a partial 
     payment on a claim under this Act, but further payment on the 
     claim is subsequently denied by the Director, the claimant 
     may--
       (i) seek judicial review under subsection (i); and
       (ii) keep any partial payment that the claimant received, 
     unless the Director determines that the claimant--

       (I) was not eligible to receive the compensation; or
       (II) fraudulently procured the compensation.

       (3) Rights of insurer or other third party.--If an insurer 
     or other third party pays any amount to a claimant to 
     compensate for an injury described in subsection (a), the 
     insurer or other third party shall be subrogated to any right 
     that the claimant has to receive any payment under this Act 
     or any other law.
       (4) Allowable damages.--
       (A) Loss of property.--A claim that is paid for loss of 
     property under this Act may include otherwise uncompensated 
     damages resulting from the Cerro Grande fire for--
       (i) an uninsured or underinsured property loss;
       (ii) a decrease in the value of real property;
       (iii) damage to physical infrastructure;
       (iv) a cost resulting from lost tribal subsistence from 
     hunting, fishing, firewood gathering, timbering, grazing, or 
     agricultural activities conducted on land damaged by the 
     Cerro Grande fire;
       (v) a cost of reforestation or revegetation on tribal or 
     non-Federal land, to the extent that the cost of 
     reforestation or revegetation is not covered by any other 
     Federal program; and
       (vi) any other loss that the Director determines to be 
     appropriate for inclusion as loss of property.
       (B) Business loss.--A claim that is paid for injury under 
     this Act may include damages resulting from the Cerro Grande 
     fire for the following types of otherwise uncompensated 
     business loss:
       (i) Damage to tangible assets or inventory.
       (ii) Business interruption losses.
       (iii) Overhead costs.
       (iv) Employee wages for work not performed.
       (v) Any other loss that the Director determines to be 
     appropriate for inclusion as business loss.
       (C) Financial loss.--A claim that is paid for injury under 
     this Act may include damages resulting from the Cerro Grande 
     fire for the following types of otherwise uncompensated 
     financial loss:
       (i) Increased mortgage interest costs.
       (ii) An insurance deductible.
       (iii) A temporary living or relocation expense.
       (iv) Lost wages or personal income.
       (v) Emergency staffing expenses.
       (vi) Debris removal and other cleanup costs.
       (vii) Costs of reasonable efforts, as determined by the 
     Director, to reduce the risk of wildfire, flood, or other 
     natural disaster in the counties specified in section 
     2(a)(4), to risk levels prevailing in those counties before 
     the Cerro Grande fire, that are incurred not later than the 
     date that is 3 years after the date on which the regulations 
     under subsection (f) are first promulgated.
       (viii) A premium for flood insurance that is required to be 
     paid on or before May 12, 2002, if, as a result of the Cerro 
     Grande fire, a person that was not required to purchase flood 
     insurance before the Cerro Grande fire is required to 
     purchase flood insurance.
       (ix) Any other loss that the Director determines to be 
     appropriate for inclusion as financial loss.
       (e) Acceptance of Award.--The acceptance by a claimant of 
     any payment under this Act, except an advance or partial 
     payment made under subsection (d)(2), shall--
       (1) be final and conclusive on the claimant, with respect 
     to all claims arising out of or relating to the same subject 
     matter; and
       (2) constitute a complete release of all claims against the 
     United States (including any agency or employee of the United 
     States) under chapter 171 of title 28, United States Code 
     (commonly known as the ``Federal Tort Claims Act''), or any 
     other Federal or State law, arising out of or relating to the 
     same subject matter.
       (f) Regulations and Public Information.--
       (1) Regulations.--Notwithstanding any other provision of 
     law, not later than 45 days after the date of enactment of 
     this Act, the Director shall promulgate and publish in the 
     Federal Register interim final regulations for the processing 
     and payment of claims under this Act.

[[Page 11007]]

       (2) Public information.--
       (A) In general.--At the time at which the Director 
     promulgates regulations under paragraph (1), the Director 
     shall publish, in newspapers of general circulation in the 
     State of New Mexico, a clear, concise, and easily 
     understandable explanation, in English and Spanish, of--
       (i) the rights conferred under this Act; and
       (ii) the procedural and other requirements of the 
     regulations promulgated under paragraph (1).
       (B) Dissemination through other media.--The Director shall 
     disseminate the explanation published under subparagraph (A) 
     through brochures, pamphlets, radio, television, and other 
     media that the Director determines are likely to reach 
     prospective claimants.
       (g) Consultation.--In administering this Act, the Director 
     shall consult with the Secretary of the Interior, the 
     Secretary of Energy, the Secretary of Agriculture, the 
     Administrator of the Small Business Administration, other 
     Federal agencies, and State, local, and tribal authorities, 
     as determined to be necessary by the Director to--
       (1) ensure the efficient administration of the claims 
     process; and
       (2) provide for local concerns.
       (h) Election of Remedy.--
       (1) In general.--An injured person may elect to seek 
     compensation from the United States for 1 or more injuries 
     resulting from the Cerro Grande fire by--
       (A) submitting a claim under this Act;
       (B) filing a claim or bringing a civil action under chapter 
     171 of title 28, United States Code; or
       (C) bringing an authorized civil action under any other 
     provision of law.
       (2) Effect of election.--An election by an injured person 
     to seek compensation in any manner described in paragraph (1) 
     shall be final and conclusive on the claimant with respect to 
     all injuries resulting from the Cerro Grande fire that are 
     suffered by the claimant.
       (3) Arbitration.--
       (A) In general.--Not later than 45 days after the date of 
     enactment of this Act, the Director shall establish by 
     regulation procedures under which a dispute regarding a claim 
     submitted under this Act may be settled by arbitration.
       (B) Arbitration as remedy.--On establishment of arbitration 
     procedures under subparagraph (A), an injured person that 
     submits a disputed claim under this Act may elect to settle 
     the claim through arbitration.
       (C) Binding effect.--An election by an injured person to 
     settle a claim through arbitration under this paragraph 
     shall--
       (i) be binding; and
       (ii) preclude any exercise by the injured person of the 
     right to judicial review of a claim described in subsection 
     (i).
       (4) No effect on entitlements.--Nothing in this Act affects 
     any right of a claimant to file a claim for benefits under 
     any Federal entitlement program.
       (i) Judicial Review.--
       (1) In general.--Any claimant aggrieved by a final decision 
     of the Director under this Act may, not later than 60 days 
     after the date on which the decision is issued, bring a civil 
     action in the United States District Court for the District 
     of New Mexico, to modify or set aside the decision, in whole 
     or in part.
       (2) Record.--The court shall hear a civil action under 
     paragraph (1) on the record made before the Director.
       (3) Standard.--The decision of the Director incorporating 
     the findings of the Director shall be upheld if the decision 
     is supported by substantial evidence on the record considered 
     as a whole.
       (j) Attorney's and Agent's Fees.--
       (1) In general.--No attorney or agent, acting alone or in 
     combination with any other attorney or agent, shall charge, 
     demand, receive, or collect, for services rendered in 
     connection with a claim submitted under this Act, fees in 
     excess of 10 percent of the amount of any payment on the 
     claim.
       (2) Violation.--An attorney or agent who violates paragraph 
     (1) shall be fined not more than $10,000.
       (k) Waiver of Requirement for Matching Funds.--
       (1) In general.--Notwithstanding any other provision of 
     law, a State or local project that is determined by the 
     Director to be carried out in response to the Cerro Grande 
     fire under any Federal program that applies to an area 
     affected by the Cerro Grande fire shall not be subject to any 
     requirement for State or local matching funds to pay the cost 
     of the project under the Federal program.
       (2) Federal share.--The Federal share of the costs of a 
     project described in paragraph (1) shall be 100 percent.
       (l) Applicability of Debt Collection Requirements.--Section 
     3716 of title 31, United States Code, shall not apply to any 
     payment under this Act.
       (m) Indian Compensation.--Notwithstanding any other 
     provision of law, in the case of an Indian tribe, a tribal 
     entity, or a member of an Indian tribe that submits a claim 
     under this Act--
       (1) the Bureau of Indian Affairs shall have no authority 
     over, or any trust obligation regarding, any aspect of the 
     submission of, or any payment received for, the claim;
       (2) the Indian tribe, tribal entity, or member of an Indian 
     tribe shall be entitled to proceed under this Act in the same 
     manner and to the same extent as any other injured person; 
     and
       (3) except with respect to land damaged by the Cerro Grande 
     fire that is the subject of the claim, the Bureau of Indian 
     Affairs shall have no responsibility to restore land damaged 
     by the Cerro Grande fire.
       (n) Report.--Not later than 1 year after the date of 
     promulgation of regulations under subsection (f)(1), and 
     annually thereafter, the Director shall submit to Congress a 
     report that describes the claims submitted under this Act 
     during the year preceding the date of submission of the 
     report, including, for each claim--
       (1) the amount claimed;
       (2) a brief description of the nature of the claim; and
       (3) the status or disposition of the claim, including the 
     amount of any payment under this Act.
       (o) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this Act.
                                  ____


          Summary of Cerro Grande Fire Assistance Act of 2000

       Administrator: FEMA as lead agency, with authority to 
     designate an independent claims manager.
       Entities eligible for compensation: all individuals, Indian 
     tribes, corporations, tribal corporations, partnerships, 
     companies, associations, counties, townships, cities, State, 
     school districts and any other non-federal entity that 
     suffered injury resulting from the Cero Grande fire.
       Types of compensable injuries: tracks the Federal Tort 
     Claims Act: Injury, loss of property and personal injuries 
     are compensable.
       Damages for ``loss of property'' will include: uninsured or 
     under-insured property loss, decrease in the value of real 
     property, damage to physical infrastructure, loss of 
     subsistence hunting, fishing, firewood, timbering, grazing 
     and agricultural activities, and any other loss deemed 
     appropriate as a ``loss of property.''
       Damages for ``injury'' will include ``business losses'', 
     such as: damage to tangible assets or inventory, business 
     interruption losses, overhead costs, employee wages paid for 
     work not performed as a result of the fire, and any other 
     injury deemed appropriate for compensation as a ``business 
     loss.''
       Damages for ``injury will include ``financial losses'' such 
     as: increased mortgage interest costs, insurance deductibles, 
     the cost of flood insurance, temporary living or relocation 
     expenses, emergency staffing expenses, debris removal and 
     other clean-up costs, hazard mitigation and any other injury 
     deemed appropriate for compensation as a ``financial loss.''
       Process: FEMA Director required to promulgate interim final 
     regulations within 45 days of enactment of the Act. Claims 
     must be filed within two years of promulgation of the 
     regulations, and adjudicated by FEMA within 180 days of 
     filing. Once regulations are promulgated, Director must 
     publish easy-to-understand explanation of the rights 
     conferred by the law and a description of the claims process 
     in English and Spanish in New Mexico newspapers and other 
     media outlets.
       Election of remedies: Party must at the outset elect either 
     to proceed under Federal Tort Claims Act (FTCA) or 
     legislative claims process. The election is binding on the 
     claimant for all damages resulting from the Cerro Grande 
     fire. Must release U.S. Government from lawsuit under FTCA as 
     a condition of receiving a claims process award.
       Appeal: If victim is dissatisfied with claims decision, may 
     appeal to Federal District Court for the District of New 
     Mexico or pursue binding arbitration. If elect binding 
     arbitration, decision of the arbitor is final. If elect 
     Federal Court, standard of review is that the decision of the 
     Director stands if supported by substantial evidence on the 
     record.
       Insurance: Insurance companies allowed to proceed in same 
     manner under the Act as all other claimants, but to the 
     maximum extent practicable, insurance company subrogation 
     claims must be paid after those of other injured persons. 
     Awards received through claims process will be reduced by 
     amounts of insurance payments already received.
       Consultation: Director required to consult with Secretary 
     of Energy, Secretary of Interior, Secretary of Agriculture, 
     SBA, FEMA, other federal agencies, State, local and tribal 
     officials to ensure the efficient administration of the 
     process and provide an outlet for local concerns.
       Attorney's fees: Limited to 10 percent of claims award. 
     Attorneys who violate the rule fined $10,000.
       Matching requirements: Waives State and local matching 
     requirement for all Federal programs utilized in response to 
     the fire.
       Flood insurance: Government will reimburse homeowners for 
     the cost of three years of Federal flood insurance premiums 
     if their property was not in the flood plain prior to the 
     fire and subsequently was included in the flood plain as a 
     result of the fire.

[[Page 11008]]

     
                                  ____
                              Office of Management and Budget,

                                    Washington, DC, June 15, 2000.
     Hon. Pete V. Domenici,
     U.S. Senate,
     Washington, DC.
       Dear Senator Domenici: As you know from our work together 
     in recent weeks, the Administration shares with you the 
     commitment to ensuring that all those affected by the fire 
     that began at Bandelier National Monument are fully 
     compensated for their losses. We are pleased that our work 
     together in a constructive dialogue has resulted in 
     legislation that will achieve this goal.
       We are fully supportive of the Cerro Grande Fire Assistance 
     Act, which will help fully, fairly, and quickly compensate 
     those who have suffered losses as a result of this fire. We 
     urge Congress to move promptly to pass this essential 
     legislation.
           Sincerely,
                                                     Jacob J. Lew,
                                                         Director.
                                 ______
                                 
      By Mr. LUGAR (for himself and Mr. Harkin)
  S. 2737. A bill to amend the United States Grain Standards Act to 
extend the authority of the Secretary of Agriculture to collect fees, 
extend the authorization of appropriations, and improve the 
administration of that Act, and for other purposes; to the Committee on 
Agriculture, Nutrition, and Forestry.


              the grain standards improvement act of 2000

 Mr. LUGAR. Mr. President, today I rise to introduce the Grain 
Standards Improvement Act of 2000. I am pleased that the ranking 
minority member of the Senate Agriculture Committee, Senator Harkin, 
has joined me as a cosponsor.
  The United States Grain Standards Act was enacted in 1916 as a means 
of eliminating confusion resulting from the use of many different sets 
of grain standards applied by different grain inspection organizations 
operating without national coordination and supervision. Created by 
this Act and operating within the United States Department of 
Agriculture (USDA), the Federal Grain Inspection Service (FGIS) sets 
and administers official grain standards and conducts grain inspection 
services.
  The Act authorizes FGIS to establish standards of ``kind, class, 
quality and condition for corn, wheat, rye, oats, barley, flax seed, 
sorghum, soybeans, mixed grain and such other grains as in the 
administrator's judgment the usages of the trade may warrant and 
permit.'' The FGIS administrator is authorized to develop standards or 
procedures for accurate weighing and weight certification and controls 
for grain shipped in interstate or foreign commerce. The Act also 
established certain performance requirements for grain inspection and 
weighing equipment. The certainty of these standards and the 
credibility and integrity of the inspection system has allowed our 
domestic and international markets to flourish as a result.
  But improvements are necessary to keep up with the changing markets. 
The legislation that I am introducing today is based on legislation 
proposed by the Administration earlier this year. The Gain Standards 
Improvement Act of 2000 will reauthorize the collection of fees, the 
FGIS Advisory Committee, and funding for FGIS until September 30, 2005.
  In order to keep up with advances in technology, FGIS needs 
flexibility in the way that commodity samples can be obtained. Grain 
marketing patterns, quality attributes, and quality testing methods are 
changing rapidly. New quality traits developed through biotechnology 
have increased the speed of change. This Act will provide flexibility 
needed by FGIS to continue to maintain an efficient sampling system.
  In general, under current law, only one official federal inspection 
agency can operate within geographic boundaries. The 1993 amendments to 
the Grain Standards Act provided for a pilot program that allowed for 
more than one official inspection agency within a single geographic 
area at interior locations. These programs were successful in 
facilitating the marketing of grain without jeopardizing the integrity 
of the system. This bill will permanently authorize this policy.
  This legislation is supported by the National Association of State 
Departments of Agriculture, the Association of American Warehouse 
Control Officials, the National Grain and Feed Association, the 
American Farm Bureau Federation, the National Farmers Union and other 
agricultural commodity organizations.
  The credibility and integrity of the United States grain inspection 
must be maintained to allow U.S. producers to continue to feed the 
world through our marketing system. The Grain Standards Improvement Act 
of 2000 will help FGIS to continue these high standards and increase 
the economic efficiency of the U.S. grain marketing system.
  Mr. President, I ask unanimous consent that the bill and a section-
by-section summary be printed in the Record following my statement.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2737

       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 ``Grain Standards Improvement 
     Act of 2000''.

     SEC. 2. SAMPLING FOR EXPORT GRAIN.

       Section 5(a)(1) of the United States Grain Standards Act (7 
     U.S.C. 77(a)(1)) is amended by striking ``(on the basis'' and 
     all that follows through ``from the United States)''.

     SEC. 3. GEOGRAPHIC BOUNDARIES FOR OFFICIAL AGENCIES.

       (a) Inspection Authority.--Section 7(f)(2) of the United 
     States Grain Standards Act (7 U.S.C. 79(f)(2)) is amended by 
     striking ``conduct pilot programs to''.
       (b) Weighing Authority.--Section 7A(i) of the United States 
     Grain Standards Act (7 U.S.C. 79a(i)) is amended in the last 
     sentence by striking ``conduct pilot programs to''.

     SEC. 4. AUTHORIZATION TO COLLECT FEES.

       (a) Inspection and Supervisory Fees.--Section 7(j)(4) of 
     the United States Grain Standards Act (7 U.S.C. 79(j)(4)) is 
     amended in the first sentence by striking ``2000'' and 
     inserting ``2005''.
       (b) Weighing and Supervisory Fees.--Section 7A(l)(3) of the 
     United States Grain Standards Act (7 U.S.C. 79a(l)(3)) is 
     amended in the first sentence by striking ``2000'' and 
     inserting ``2005''.

     SEC. 5. TESTING OF EQUIPMENT.

       Section 7B(a) of the United States Grain Standards Act (7 
     U.S.C. 79b(a)) is amended in the first sentence by striking 
     ``but at least annually and''.

     SEC. 6. LIMITATION ON ADMINISTRATIVE AND SUPERVISORY COSTS.

       Section 7D of the United States Grain Standards Act (7 
     U.S.C. 79d) is amended--
       (1) by striking ``2000'' and inserting ``2005''; and
       (2) by striking ``40 per centum'' and inserting ``30 
     percent''.

     SEC. 7. LICENSES AND AUTHORIZATIONS.

       Section 8(a)(3) of the United States Grain Standards Act (7 
     U.S.C. 84(a)(3)) is amended by inserting ``inspection, 
     weighing,'' after ``laboratory testing,''.

     SEC. 8. GRAIN ADDITIVES.

       Section 13(e)(1) of the United States Grain Standards Act 
     (7 U.S.C. 87b(e)(1)) is amended by inserting ``, or prohibit 
     disguising the quality of grain,'' after ``sound and pure 
     grain''.

     SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

       Section 19 of the United States Grain Standards Act (7 
     U.S.C. 87h) is amended by striking ``2000'' and inserting 
     ``2005''.

     SEC. 10. ADVISORY COMMITTEE.

       Section 21(e) of the United States Grain Standards Act (7 
     U.S.C. 87j(e)) is amended by striking ``2000'' and inserting 
     ``2005''.
                                  ____


  Grain Standards Improvement Act of 2000--Section-by-Section Summary

     Section 1. Short title
       This Act may be cited as the Grain Standards Improvement 
     Act of 2000.
     Section 2. Sampling for export grain
       This section would provide FGIS with more flexibility in 
     obtaining samples of export grain. Currently, samples of 
     export grain can only be obtained after final elevation of 
     the grain. Historically, this has been a requirement due to 
     the breakage that can occur as the grain goes through an 
     export elevator. In many cases, this sampling procedure is 
     still appropriate. However, for value enhanced traits (e.g. 
     protein) that are not affected by handling, sampling and 
     testing prior to final elevation may be more appropriate. 
     Often it is not a simple process to perform these tests in a 
     field environment. Grain marketing patterns, quality 
     attributes, and quality testing methods are changing rapidly. 
     These changes are being expedited by quality traits developed 
     through biotechnology and new testing methods. In response to 
     these breakthroughs, new grain marketing programs are 
     evolving that require measurement of additional, more complex 
     quality attributes. Also, in order to maintain an efficient 
     and effective marketing system in the United States, grain 
     merchants are relying more on identity preserved programs to 
     assure acceptable quality with limited testing. These

[[Page 11009]]

     merchants may need quality results on identity preserved 
     grain prior to final elevation. Flexibility in obtaining 
     samples would not jeopardize the representatives of the 
     samples obtained for inspection.
     Section 3. Geographic boundaries for official agencies
       This section would allow, under certain conditions, more 
     than one official agency to perform inspection and weighing 
     services within a single geographic area at interior 
     locations. The 1993 amendments provided for pilot programs to 
     test such a change. These programs were successful in that 
     they facilitated the marketing of grain without jeopardizing 
     integrity of the system. This section will give the Secretary 
     the authority to develop criteria similar to the current 
     pilot programs.
     Section 4. Authorization to collect fees
       This section would extend, through fiscal year 2005, the 
     authority of the Secretary to charge user fees assessed for 
     the supervision of official agencies and to invest sums 
     collected.
     Section 5. Testing of equipment
       This section would eliminate the requirement for mandatory 
     annual testing for all equipment used in sampling, grading, 
     inspection, and weighing. Annual testing is not necessary or 
     appropriate for such equipment.
     Section 6. Limitation on administration and supervisory costs
       This section would provide that the administration and 
     supervisory costs for services, performed through fiscal year 
     2005, would be subject to the ceiling of 30 percent of total 
     costs for such services (excluding the costs of 
     standardization, compliance, and foreign monitoring 
     activities).
     Section 7. Licenses and authorizations
       This section would allow the Secretary to contract for 
     inspection and weighing services in addition to specified 
     sampling and technical functions. This allows the Secretary 
     greater flexibility in performing the duties required by the 
     Act.
     Section 8. Grain additives
       This section would prohibit disguising the quality of the 
     grain as a result of the introduction of nongrain substances 
     and other identified grains. The prohibition would include 
     the introduction of nongrain substances such as cinnamon, 
     vanilla, and bleach, and could apply to all grain whether 
     officially inspected or not. This prohibition will enhance 
     the integrity of the national grain marketing system.
     Section 9. Authorization of appropriations
       The section would extend, through fiscal year 2005, the 
     authorization for appropriations to cover standardization, 
     compliance, foreign monitoring activities and any other 
     expenses necessary to carry out the provisions of the Act 
     which are not obtained from fees and sales of samples.
     Section 10. Advisory committee
       This section would maintain an advisory committee through 
     fiscal year 2005. This committee represents the industry and 
     advises the Secretary in administering the Act.
                                 ______
                                 
      By Mr. JEFFORDS (for himself, Mr. Frist, and Mr. Enzi):
  S. 2738. A bill to amend the Public Health Service Act to reduce 
medical mistakes and medication-related errors; to the Committee on 
Health, Education, Labor, and Pensions.


              the patient safety and errors reduction act

  Mr. JEFFORDS. Mr. President, I am pleased to join today with my good 
friend Senator Frist to announce the introduction of the Patient Safety 
and Errors Reduction Act, a bill which will work toward increasing 
patient safety for all Americans.
  Late last year, the Institute of Medicine (IOM) released a report 
citing medical errors as the eighth leading cause of death in the 
United States, with as many as 98,000 people dying as a result each 
year. More people die of medical mistakes than from motor vehicle 
accidents, AIDS, or breast cancer. The IOM report took a serious look 
at the problem of medical errors and provided some thoughtful 
recommendations for change.
  Last year I worked closely with Senator Frist to ensure that Congress 
pass Senate Bill 580, the Healthcare Research and Quality Act of 1999. 
This newly passed legislation reauthorized by the Agency for Health 
Care Policy and Research, renamed it the Agency for Healthcare Research 
and Quality (AHRQ), and refocused its mission to support healthcare 
research on safety and quality improvement. I am pleased that AHRQ has 
decided to dedicate more than $20 million for research on medical error 
reduction. This shows a real commitment by Dr. John Eisenberg and his 
agency to address the problem of medical errors.
  Our bill will attack this problem in several ways. First, it will 
provide a framework of support for the numerous efforts that are 
already underway in the public and the private sectors. Second, it will 
establish a Center for Quality Improvement and Patient Safety within 
the Agency for Healthcare Research and Quality. And finally, it will 
provide needed confidentiality protections for medical error reporting 
systems.
  I believe we can save thousands of lives by substantially reducing 
medical mistakes over the next few years. We have a great opportunity 
to apply the safety lessons that we have already learned--both within 
health care and in other fields.
  How can we prevent these mistakes? One lesson we have learned that 
was repeated time and again in our hearings is that mandatory reporting 
of all errors and subsequent punishment of healthcare professionals 
doesn't work very well.
  Even good doctors and nurses make mistakes during the most routine of 
tasks. Clearly, the root cause of medical errors is more systemic. 
Medicine has some of the most advanced technology for treating patients 
and some of the most rudimentary systems for ensuring quality. Taking a 
look at the systems that ensure patient safety will go farther in 
addressing the problem of medical errors rather than reprimanding any 
one individual or group.
  Over the past few decades we have seen one industry after another 
adopt the principles of continuous quality improvement. The government 
itself has instituted these principles, notably in its regulation of 
aviation. Focusing on punishment will only deter improvement.
  Having said that, we are not interested in sweeping problems under 
the rug, but bringing them out into the open. And if an individual is 
harmed, this bill in no way limits the legal recourse that patients 
have now. The confidentiality protections are just for information that 
is submitted under quality improvement and medical error reporting 
systems. Patients and their lawyers will still have access to the 
entire medical record just like they do now.
  Our bill also creates a new center for patient safety through AHRQ as 
the IOM report recommended. This Center will collect information on 
medical errors and serve as a center to develop strategies to reduce 
them. It is likely that additional funding beyond the $20 million 
recommended by the President will be needed for AHRQ's new role 
overseeing this center for patient safety.
  We also need to allow for confidentiality--through peer review 
protections--for information that is voluntarily submitted regarding 
medical errors. This legislation provides for these protections.
  Once the information is collected and analyzed, either through AHRQ 
or another deemed institution, such as the Vermont Program for Quality 
in Health Care, recommendations on ways to prevent errors need to be 
developed and disseminated throughout the health care industry.
  It is my hope that these recommendations will continue to be 
incorporated into survey instruments by organizations such as the Joint 
Commission on Accreditation of Healthcare Organizations, the 
accrediting body responsible for hospitals and other inpatient 
healthcare settings. In this way, the health care industry can engage 
in the kind of continuous quality improvement that is vital to curbing 
errors and saving lives. But a medical errors program will only succeed 
if hospitals, doctors and other health professionals support it and 
participate in it willingly.
  Neither the IOM nor Congress discovered this problem. Health care 
professionals have been at work for some time in trying to address 
medical errors. I hope that by becoming a partner in this process, the 
federal government can accelerate the pace of reform and provide the 
most effective structure possible.
  I am pleased that our legislation has the support of many, including 
the

[[Page 11010]]

United States Pharmacopeia, the American Hospital Association, the 
American Health Quality Association, the American College of 
Physicians/American Society of Internal Medicine, the American 
Psychological Association, and the Institute for Safe Medication 
Practices.
  Mr. President, we cannot afford to wait on this issue. This 
legislation will raise the quality of health care delivered by 
decreasing medical errors and increasing patient safety and I will work 
to ensure its enactment this year.
                                 ______
                                 
      By Mr. LAUTENBERG (for himself, Mr. Helms, Mr. Moynihan, Mr. 
        Roth, Mr. Thurmond, and Mr. Warner):
  S. 2739. A bill to amend title 39, United States Code, to provide for 
the issuance of a semipostal stamp in order to afford the public a 
convenient way to contribute to funding for the establishment of the 
World War II Memorial; to the Committee on Governmental Affairs.


  semipostal stamp for the establishment of the world war ii memorial

  Mr. LAUTENBERG. Mr. President, I rise today to introduce S. 2749, the 
World War II Memorial Postage Stamp Act. The purpose of this bill is to 
raise funds for the construction of the National World War II Memorial 
by issuing a special World War II Memorial ``semipostal'' stamp.
  Mr. President, many events have shaped world history, but none so 
dramatically or so deeply as the Second World War. The war permanently 
altered lives, communities, and nations, at the same time speeding 
America's rise as a superpower.
  The National World War II Memorial will honor the 16 million 
Americans who served in uniform during the war, the more than 400,000 
who gave their lives, and the millions more who supported the war 
effort at home. A symbol of the defining event of 20th-century America, 
the Memorial will honor the spirit, sacrifice, and commitment of the 
American people as well as the cause of freedoom from tyranny 
throughout the world.
  To date, the World War II Memorial Fund, chaired by Bob Dole, has 
raised approximately $92 million. Issuing a World War II Memorial Stamp 
could raise millions more, helping the World War Memorial Fund reach 
its goal of $100 million needed to construct and maintain the Memorial. 
Furthermore, a new stamp would give every American the chance to play a 
part in building this monument to those who served our Nation.
  Mr. President, I served this great country as a member of the Armed 
Forces during World War II, and I know firsthand the sacrifices made by 
our Nation's veterans. It is my sincere hope that, thanks to this bill, 
the National World War II Memorial will be a lasting symbol of American 
unity--and a timeless reminder of the moral strength that joins the 
citizens of this country.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the legislation was ordered to be printed 
in the Record, as follows:

                                S. 2739

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

     SECTION 1. SEMIPOSTAL STAMP FOR THE ESTABLISHMENT OF THE 
                   WORLD WAR II MEMORIAL.

       (a) In General.--Chapter 4 of title 39, United States Code, 
     is amended by inserting after section 414 the following:

     ``Sec. 414a. Special postage stamp for the establishment of 
       the World War II Memorial

       ``(a) In order to afford the public a convenient way to 
     contribute to funding for the establishment of the World War 
     II Memorial, the Postal Service shall establish a special 
     rate of postage for first-class mail under this section.
       ``(b) The rate of postage established under this section--
       ``(1) shall be equal to the regular first-class rate of 
     postage, plus a differential of not to exceed 25 percent;
       ``(2) shall be set by the Governors in accordance with such 
     procedures as the Governors shall by regulation prescribe (in 
     lieu of the procedures under chapter 36); and
       ``(3) shall be offered as an alternative to the regular 
     first-class rate of postage.

     The use of the special rate of postage established under this 
     section shall be voluntary on the part of postal patrons.
       ``(c)(1) Amounts becoming available for the establishment 
     of the World War II Memorial under this section shall be paid 
     to the American Battle Monuments Commission. Payments under 
     this section shall be made under such arrangements as the 
     Postal Service shall by mutual agreement with the American 
     Battle Monuments Commission establish in order to carry out 
     the purposes of this section, except that, under those 
     arrangements, payments to such Commission shall be made at 
     least twice a year.
       ``(2) For purposes of this section, the term `amounts 
     becoming available for the establishment of the World War II 
     Memorial under this section' means--
       ``(A) the total amounts received by the Postal Service that 
     it would not have received but for the enactment of this 
     section, reduced by
       ``(B) an amount sufficient to cover reasonable costs 
     incurred by the Postal Service in carrying out this section, 
     including those attributable to the printing, sale, and 
     distribution of stamps under this section,

     as determined by the Postal Service under regulations that it 
     shall prescribe.
       ``(d) It is the sense of the Congress that nothing in this 
     section should--
       ``(1) directly or indirectly cause a net decrease in total 
     Federal funding received by the American Battle Monuments 
     Commission below the level that would otherwise have been 
     received but for the enactment of this section; or
       ``(2) affect regular first-class rates of postage or any 
     other regular rates of postage.
       ``(e) Special postage stamps under this section shall be 
     made available to the public beginning on such date as the 
     Postal Service shall by regulation prescribe, but in no event 
     later than 90 days after the date of the enactment of this 
     section or, if earlier, November 11, 2000 (Veterans Day).
       ``(f) The Postmaster General shall include in each report 
     rendered under section 2402 with respect to any period during 
     any portion of which this section is in effect information 
     concerning the operation of this section, except that, at a 
     minimum, each shall include--
       ``(1) the total amount described in subsection (c)(2)(A) 
     which was received by the Postal Service during the period 
     covered by such report; and
       ``(2) of the amount under paragraph (1), how much (in the 
     aggregate and by category) was required for the purposes 
     described in subsection (c)(2)(B).
       ``(g) This section shall cease to be effective upon the 
     determination of the Postmaster General (in consultation with 
     the American Battle Monuments Commission) that the Commission 
     has or will have the funds necessary to pay all expenses of 
     the establishment of the World War II Memorial. Any excess 
     funds shall be deposited in the fund within the Treasury of 
     the United States created by section 2113 of title 36 and may 
     be used for any of the purposes allowable under such section.
       ``(h) As used in this section, the term `World War II 
     Memorial' refers to the memorial the construction of which is 
     authorized by Public Law 103-32.''.
       (b) Conforming Amendments.--(1) The analysis for chapter 4 
     of title 39, United States Code, is amended by striking the 
     item relating to section 414 and inserting the following:

``414. Special postage stamps to benefit breast cancer research.
``414a. Special postage stamps for the establishment of the World War 
              II Memorial.''.

       (2) The heading for section 414 of title 39, United States 
     Code, is amended to read as follows:

     ``Sec. 414. Special postage stamps to benefit breast cancer 
       research''.

                                 ______
                                 
      By Ms. LANDRIEU:
  S. 2740. A bill to provide for the establishment of Individual 
Development Accounts (IDAs) that will allow individuals and families 
with limited means an opportunity to accumulate assets, to access 
education, to own their own homes and businesses, and ultimately to 
achieve economic self-sufficiency, and to increase the limit on 
deductible IRA contributions, and for other purposes; to the Committee 
on Finance.


       the savings accounts are valuable for everyone act of 2000

  Ms. LANDRIEU. Mr. President, I want to speak for a few moments this 
morning and introduce a bill that I am calling the Savings Are Valuable 
for Everyone Act, the SAVE Act of 2000.
  Mr. President, as of February 1, 2000, the United States officially 
entered into the longest period of economic expansion in our history. 
This means we have had nine years of continuous growth--a hard-earned 
achievement. During this time, we have had the first back-to-back 
federal budget surpluses

[[Page 11011]]

in 43 years, the smallest welfare rolls in 30 years, and 20 million new 
jobs for people across America.
  Clearly we are doing something right. However, that does not mean our 
work is done. In order for this economic prosperity to reach its full 
potential, we must continue to provide more opportunities (not 
guarantees) to widen the ``winners' circle'' and allow all Americans to 
participate in our economic expansion.
  According to the U.S. Department of Labor, the latest unemployment 
figures show that most Americans do have jobs. The unemployment average 
is 4.1 percent and many states have even lower rates, such as Iowa with 
2.5 percent, New Hampshire with 2.7 percent, and Virginia with 2.8 
percent. In some places across the country, there are some even higher 
spots, such as Howard County, Maryland, where the unemployment rate is 
a remarkable 1.4 percent. However, because of the high cost of living, 
many working families still struggle to make ends meet and are being 
forced to live from paycheck to paycheck, without any hope of saving 
for the future or building the tangible assets which are so important 
to upward mobility.
  I recently finished reading the book, ``The Millionaire Next Door,'' 
and discovered that when the authors of this book began interviewing 
millionaires as part of their research, they were surprised to find 
most of the wealthy people they spoke with didn't drive fancy sports 
cars, or have $5,000 gold watches or even live in fabulous mansions. 
They were first-generation business people who, through aggressive 
saving, sensible investing and frugal spending, had managed to 
accumulate a significant amount of assets.
  While not everyone's goal in life is to become a millionaire, this 
book does carefully outline the road to fiscal security and clearly 
documents the importance of saving.
  I know that you will be as shocked as I was to learn that, while the 
net worth of the typical American family has increased dramatically 
recently, the net worth of families under $25,000 has actually been 
decreasing. The Federal Reserve Board recently released a study which 
showed that families earning under $10,000 a year had a medium net 
worth of $1,900 in 1989. This figure rose to $4,800 in 1995 but slipped 
to $3,600 by 1998. The net worth of families who earn less than $25,000 
annually was $31,000 in 1995 but then dropped to $24,800 in 1998.
  During this same time period, while the number of families who owned 
a home or business rose overall, this figure among lower income 
families has actually decreased. In 1995, 36.1 percent of families who 
earned less than $10,000 a year owned a home, however by 1998 this 
number had decreased to 34.5 percent. In 1995, 54.9 percent of families 
who earn less than $25,000 annually owned their home but in 1998 this 
percentage was reduced to 51.7 percent.
  Mr. President, I rise today to address this problem by introducing 
the Savings Are Valuable for Everyone Act of 2000, or SAVE, which will 
help all families save for the future. The goal of SAVE is simple: help 
the working poor build assets for themselves and to expand the IRA 
limit to ensure retirement savings. The goal is not income 
redistribution, but instead it is to find ways that allow opportunities 
for everyone, regardless of income, to build the productive assets that 
lead to economic security.
  In order to help the working poor break the discouraging cycle of 
living from paycheck to paycheck and to help the lower-middle class 
move up the income ladder and save for the future, this measure 
provides incentives for the accumulation of assets through the use of 
Individual Development Accounts, or IDAs, while, at the same time, 
making it easier for the rest of America to save for retirement.
  IDAs are matched savings accounts which are restricted to three uses: 
(1) post-secondary education/training; (2) small business start-up 
costs; and (3) purchasing a first home. Private as well as state and 
local public sector funds can also be contributed to the account with a 
special tax credit of up to $500 a year attached to the private 
contribution. Usually it takes two to four years for the account holder 
to accumulate enough funds to purchase the asset they were saving for 
and, before the money is released, they must complete an approved 
financial education course which is provided by the qualified financial 
institution or non-profit which holds the account.
  All IDAs must be held at a ``qualified financial institutions,'' 
meaning, any financial institution qualified to hold an IRA. IDAs are 
available to all citizens or legal residents of the United States who 
are at least 18 years old and whose household income does not exceed 80 
percent of the area median income, or AMI. At least 33 percent of the 
IDAs will be targeted to households which are at 50 percent or below 
the AMI. Contributions made by a participant into an IDA are limited to 
$2,000 per year. While the individuals who open these accounts are 
encouraged to use the money for their own benefit, they may withdraw it 
to help a spouse or dependent open a business, buy a house, or further 
their education.
  For example, one such program was started in March of 1999, by 
Hibernia Bank Louisiana. They began pilot IDA programs in New Orleans, 
with another one operating in Shreveport, to help low-income families 
save for a house. So far, 11 families are participating in the New 
Orleans program, with seven already placed in homes of their own and 
four shopping for one.
  The program administrator said these 11 families ``absolutely would 
not be in a position to buy a home at this time'' without this program. 
Hibernia matches the account holders funds two-to-one up to a set 
amount. The funds then can be used for home-buying costs, such as a 
down payment or closing costs--lump sums that often can be prohibitive 
to working families on a tight budget.
  In order to encourage the establishment of IDAs, two tax credits are 
offered. The first is available to participating financial 
institutions. For every dollar saved in an IDA, the qualified financial 
institution will provide a one to one match, limited to $500 per person 
per year. The financial institution would then be eligible for a 90 
percent federal tax credit for matching funds provided.
  The second tax credit is known as the IDA Investment Tax Credit. In 
order to leverage private sector investments and encourage broader 
community involvement in this program, a 50 percent tax credit will be 
available for investments in qualified non-profits, 501(c)(3)s or 
credit unions, which can administer qualified IDA programs. However, in 
order qualify for this tax credit, at least 70 percent of the funds 
received must be used for financial education, program monitoring, and/
or program administration. Any taxpayer can participate can participate 
as a donor.
  It is important to remember that each IDA consists of two parallel 
accounts--one that the participants make his deposits into and one that 
the donor makes their deposits of matching funds into. The interest on 
the money in the participant's account would be taxed while all funds 
in the matching account (including interest) would be tax free. One 
could say that the participant's account is treated in a similar 
fashion to the way that the IRS treats IRAs and 401(k)s.
  Already an estimated 3,000 people nationwide are taking advantage of 
available pilot programs, which are run in partnership with more than 
100 nonprofit organizations and authorized financial institutions. This 
fact shows the strength of this plan: it serves as a catalyst for the 
rapid creation of public-private partnerships--between accountholders, 
banks, foundations, policymakers and providers of financial education--
that are the hallmark of successful IDA programs.
  As you can see, IDAs are not only good for individuals and their 
families, they also are good for the future of our country. Russell 
Long once said, ``The problem with Capitalism is that there are not 
enough Capitalists.'' IDAs provide a tool with which our country can 
address this age-old problem and help create more Capitalists. When 
capitalism is combined with the proper social safety nets and 
incentives for asset

[[Page 11012]]

development for those at all income levels, we create incentives for 
saving at all levels while you create a capitalist system that works 
for everybody. These accounts are a sure-fire mechanism that will build 
assets and create wealth among the families and communities who need 
help the most.
  Economic analyses of the impact of a national IDA investment show 
that for every dollar invested, a $5 return to the national economy 
would result in the form of new businesses, new jobs, increased 
earnings, higher tax receipts and reduced welfare expenditures. 
However, it is important to realize that the Savings Accounts Are 
Valuable for Everyone Act does not simply focus on the working poor. It 
also provides savings incentives for the middle class by expanding the 
current Individual Retirement Account limits from $2,000 a year to 
$3,500.
  Currently, our tax code allows individuals to save up to $2,000 a 
year in IRAs with income earned on the deposits either being tax 
deferred until withdrawal, which can begin at age 59\1/2\, or, through 
the use of the Roth IRA, the taxes can be paid up front on the money 
deposited into the accounts. SAVE will make these accounts an even 
better tool for retirement saving by expanding the annual contribution 
limits.
  I firmly believe that we must find ways to shift our nation's policy 
from one of consumption to one of savings and wealth accumulation for 
all American households. To understand why, one need only consider 
these facts which were calculated by the Corporation for Enterprise 
Development in Washington, D.C.:
  One-half of all American households have less than $1,000 in net 
financial assets;
  One-third of all American households and 60 percent of African-
American households have zero or negative net financial assets;
  Forty percent of all white children and 73 percent of all black 
children grow up in households with zero or negative financial assets;
  By some estimates, 13-20 percent of all American households do not 
even have a checking or savings account; and
  Ten percent of all American households control two-thirds of the 
wealth.
  We already have a tax code that provides over $300 billion in federal 
tax expenditures which are dedicated to asset building for middle- and 
upper-income wage earners and businesses, but tax-based incentives are 
still out of reach for most lower- and middle-income families. In this 
time of wealth and prosperity, why can't we offer tools that will 
assist in asset building for the families who need them the most--the 
working poor and moderate-income families who make up the backbone of 
our economic system.
  Benjamin Franklin once said, ``The wealth of an individual is 
measured not by what a person earns but by what he saves.''
  Take the example of Oseola McCarty of Mississippi. Oseola toiled in 
obscurity for most of her life, taking in other people's laundry for $2 
a bundle and amassing a small fortune by socking away every extra cent 
in a savings account. At the age of 87, she donated $150,000 of her 
life savings to the University of Southern Mississippi, establishing a 
scholarship fund to give African-American youths a chance for the 
education she never received.
  What Oseola accomplished is a great example of the power of savings. 
Savings, investing and assets--not necessarily income--determine 
wealth. Just think what Oseola could have accomplished, not only for 
herself but for others, with the benefit of a program like IDAs to add 
matching funds and additional interest to her hard-earned savings.
  IDAs are partnerships between the government, the community and the 
individual to build stronger families and a stronger economy. For not 
only do Americans improve their economic security through the building 
of assets, this also stimulates the development of capital for the 
entire nation. As our nation continues to build on our recent economic 
successes, we in Congress must continue to look for innovative ways to 
give working families the tools they need to plan for the future. 
Passage of the Savings Accounts are Valuable for Everyone Act is one 
way we can do this.
  Mr. President, to summarize my comments, I will share a story about 
what this act, if passed and adopted, will do. There is a family in 
Washington, the Darden family. Selena and Dwayne Darden thought they 
were doing the best they could do. They were both working, earning 
about 150 percent of the poverty rate. They had four children and were 
doing a very good job of raising their children, but basically living 
paycheck to paycheck. They never thought they could save for the future 
or, for that matter, own a home. There just wasn't anything extra.
  Then just about 2 years ago, according to this article, Selena, who 
is a beautician, heard about something called Individual Development 
Accounts, a program that was offered here in Washington with the 
Capital Area Asset Building Corporation. They inquired and were told 
basically that this was a pilot program that Congress had established a 
few years earlier that would allow her and her husband to put up some 
savings, which would be matched by the Federal Government through an 
appropriate financial institution and a community agency that would 
provide some education and support for the effort. If she was a 
consistent and good saver, she and her husband could save enough for a 
downpayment. The end of the story is that they did; they saved enough. 
They are now proud homeowners right here in Marshall Heights.
  I share that story because that is exactly what this bill does. In my 
State, in the last few years, I have come to learn about these pilot 
programs that we initiated through the work of Senator Coats, and 
Senator Santorum has been on this issue for some time, and Senator 
Lieberman has been advocating this proposal. I want to add my voice by 
introducing this bill to say how much I support this effort, and to 
take these pilot programs that have been successful and expand them 
nationwide.
  In Louisiana, I have come across many families from New Orleans to 
Shreveport, and elsewhere, who are coming into partnership with the 
Hibernia Bank and community action organizations, such as the 
Providence House in Louisiana, that help families get back on their 
feet when they go through a crisis. The idea is to help create these 
accounts. People can begin saving money.
  The bill allows for them to either use the funds for home ownership, 
because we know how important that is, or building a person's 
confidence and self-esteem--how important it is for children to live in 
a home that actually belongs to them, as opposed to renting and perhaps 
having to move, and to be able to put down roots. We know how important 
that is.
  This bill will allow people to save to start up a business. We spend 
a lot of time in Washington talking about business. Sometimes I think 
we focus on businesses that are actually quite large, which is 
wonderful; but we need to focus on the great strength of America, which 
is small business--that entrepreneur out there who takes a risk to 
start a business. He employs himself and one, two, or three other 
people. That is the backbone of the American economy and the great 
system we have enjoyed. We are really the envy of the world. This bill 
will allow for people to save a few thousand dollars to start a 
successful business and employ members of their family, or friends, or 
other workers in their area.
  I am hoping we can potentially consider, as this bill moves through 
the process, that it may allow savings for a transportation vehicle. If 
you can get a good job, sometimes the jobs are not necessarily where 
people live. Mass transit is not as dependable as it should be. Perhaps 
we should consider this matched savings plan to give people the ability 
to get a vehicle and to be able to drive to work. Some of these pilots 
allow that.
  This bill will allow for these savings accounts. It is limited to 
households of 80 percent of the median income, based

[[Page 11013]]

on regions, and 150 percent of the national poverty rate. While that 
might work for Louisiana, it doesn't work very well for poor families 
in Connecticut or California, where the standard of living is high.
  We have designed this bill to reach to the low-income working poor. 
But we are sensitive to the different regions in this Nation. We 
believe if we can help people accumulate assets and encourage them to 
save, that not only is it good for individual families but it is good 
for our Nation to encourage savings rates.
  Let me share a few statistics about this which are of very great 
concern to me and of which I would like my colleagues to be more aware.
  According to a recent report by the Corporation for Enterprise 
Development in Washington, DC, one-half of all American households have 
less than $1,000 in financial assets; one-third of all American 
households and 60 percent of African American households have zero, or 
negative financial assets; 40 percent of all white children and 73 
percent of all African American children grow up in households with 
zero or negative financial assets; by some estimates, 13 to 20 percent 
of all American households do not have a checking or a savings account; 
and 10 percent of all American households control currently two-thirds 
of the wealth.
  If we want to address an income gap, if we want to try to increase 
prosperity, if we want to try to eliminate poverty, I suggest that our 
efforts have to be more than just income, more than just about full 
employment or a job. It is about income, frugal spending, and 
aggressive savings. And we should be partnering with the American 
people to do just that, to encourage wealth and assets creation and 
development.
  Not everyone wants to be a millionaire. Some people are better at 
that than others. But I don't know of a family that doesn't want to 
have financial security--not one. Whether they work at a relatively 
modest job from 9 to 5, or whether they work two jobs, or three, or 
whether they are quite aggressive and well educated enough to make 
large sums of money, in every case I think it is about security. It is 
about choices. But I don't know any family that doesn't want to be 
secure. We can be better partners in this Government by encouraging 
policies such as this that enable people to be part of that American 
dream, to widen the winners circle, because we have the greatest 
economic expansion underway and there is a cost-effective way to do it.
  Let me just make a couple of other points as I close.
  According to some documents that are supporting this policy, let me 
read for the Record a couple of things:
  No. 1, assets matter and have largely been ignored in poverty policy 
debates.
  No. 2, individual development accounts address the wealth gap and 
bring people into the financial mainstream.
  No. 3, public policy plays a large role in determining levels of 
household wealth.
  People say, We can't afford to do this. They ask, Why would we want 
to do this for a certain group of people, low- and moderate-income 
people? One reason is we already do it to the tune of $300 billion for 
middle-income and wealthy individuals and businesses. It is called tax 
incentives. All throughout our Tax Code and public policy, we are 
already putting up $300 billion to help create and maintain assets for 
the wealthy and for businesses. Let's do the same for the working poor 
and lower and middle class so they can be more able to join this 
extraordinary economic expansion. We do that through IRAs and 401(k)s 
and IDAs, which are good national investments and they improve the 
national savings rate.
  In conclusion, let me say that this SAVE Act will expand IDA. It also 
raises the income limits for IRAs for all families in America to 
encourage them to save. By expanding the opportunities for IRAs, which 
many of us have supported in a bipartisan way, and by implementing IDAs 
from pilots to a national model, I believe we could go a long way in 
eliminating poverty, expanding the middle class, and expanding and 
widening the winners circle in this great economic expansion.
  I share this with my colleagues. I thank again Senator Lieberman for 
his great work. Senator Santorum has also been leading this effort. 
Senator Dan Coats, who is no longer serving with us, I understand was 
one of the original sponsors of this pilot program. It is now time. We 
know it works to take it national. That is what we do with this bill.
  I yield whatever time I may have.
  Mr. President, I ask unanimous consent to insert additional material 
into the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                          IDAs: Federal Policy

       The benefits and rationale for enacting federal IDA policy 
     can be summarized in five parts:
       1. Assets matter, and have been largely ignored in poverty 
     policy. Assets provide an economic cushion and enable people 
     to make investments in their futures in a way that income 
     alone cannot provide. IDAs address a big piece of the poverty 
     puzzle--the savings and asset base of the poor--that has 
     never been addressed before.
       2. IDAs address the wealth gap and bring people into the 
     financial mainstream. Despite the growing trend of average 
     Americans investing in stocks and mutual funds, many are 
     being left behind. One-third of all American households have 
     zero or negative net financial assets, and up to 20 percent 
     of all households do not even have a checking or savings 
     account.
       3. Public policy plays a large role in determining levels 
     of household wealth.--Nearly $300 billion in federal tax 
     expenditures are dedicated to asset building for middle- and 
     upper-income people (for home ownership, retirement, and 
     investing). But public policies often penalize low-income 
     people or put tax-based asset incentives out of their reach.
       4. Individual asset accounts (like IDAs) are the future of 
     asset building. Increasingly, asset accounts such as IRA's, 
     401(k)s, medical savings accounts, individual training 
     accounts and other individual savings incentives are the 
     emerging tools for wealth-building policy in the new global, 
     flexible economy. IDAs are an inclusive extension of this 
     policy trend.
       5. IDAs are a good national investment and improve the 
     national savings rate. Economic analyses of the impact of a 
     national IDA investment show that for every dollar invested, 
     a five dollar return to the national economy would result in 
     the form of new businesses, new jobs, increased earnings, 
     higher tax receipts, and reduced welfare expenditures. At the 
     same time, IDAs will increase core deposits at a time when 
     many Americans are moving to other investment vehicles. And, 
     importantly, IDAs help address the growing problem of the 
     declining national personal savings rate.
                                 ______
                                 
      By Mr. JOHNSON (for himself, Mr. Conrad, Mr. Harkin, Mr. Dorgan, 
        Mr. Roberts, Mr. Levin, Mr. Kerrey, Mr. Grassley, and Mr. 
        Craig):
  S. 2741. A bill to amend the Agricultural Credit Act of 1987 to 
extend the authority of the Secretary of Agriculture to provide grants 
for State mediation programs dealing with agricultural issues, and for 
other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.


               mediation program legislation introduction

  Mr. JOHNSON. Mr President, I rise on the floor of the Senate today to 
introduce bipartisan legislation to extend a popular program which 
provides mediation services between agricultural producers and the 
various credit and United States Department of Agriculture agencies who 
family farmers and ranchers work with to maintain their operations.
  During the 1980's farm crisis, Congress authorized federal 
participation in a state farm mediation program. Originally authorized 
in the Agriculture Credit Act of 1987, mediation programs help 
agricultural producers and their creditors to resolve credit disputes 
(and other types of disputes) in a confidential and non-adversarial 
setting which is outside the traditional process of litigation, 
appeals, bankruptcy, and foreclosure.
  The mediators are neutral facilitators and they do not make decisions 
for the disputing parties.
  Federal legislation has encouraged state involvement by providing 
matching grant funds to the states that participate in the mediation 
program. Currently, 24 states participate, including Alabama, Arkansas, 
Arizona, Florida, Idaho, Illinois, Indiana, Iowa, Kansas, Michigan, 
Minnesota, Nebraska,

[[Page 11014]]

Nevada, New Mexico, New York, North Dakota, Oklahoma, Oregon, South 
Dakota, Texas, Utah, Washington, Wisconsin, and Wyoming.
  Beyond the scope of agricultural credit-related mediation, the 
program aims to resolve disputes such as wetland determinations, 
grazing issues, and USDA program compliance, and other issues the 
Secretary of Agriculture deems appropriate.
  Each year, Congress seeks to provide funding for the mediation 
program through the Agriculture Appropriations process. This year $3 
million has been appropriated for this program in both the House and 
Senate Agriculture Appropriation bills. This legislation will not 
change the fact that Congress must go through the Appropriations 
process each year to secure funding for this program.
  The legislation my colleagues and I are introducing today 
reauthorizes the mediation program by eliminating the sunset clause 
(set to expire in FY 2000), clarifies that funds appropriated by 
Congress to the mediation program must be used for farm credit cases 
(including USDA direct and guaranteed loans and loans from commercial 
entities) and may be used for other USDA program disputes, and 
clarifies that mediation services can include counseling services to 
prepare parties to a dispute prior to mediation.
  In a time when family farmers and ranchers continue to deal with low 
prices and suffer under more and more vertical integration, I believe 
we must begin to reflect on what we can do to maintain the independent 
family farms and ranches that our country depends on for our food 
supply. We live in a day and age where nearly every farm and ranch 
operation must secure credit in order to pay production expenditures 
necessary to stay in business. This mediation program is supported by 
both sides of the aisle and allows farmers and ranchers to settle their 
credit and farm program disputes in a fair way without digging 
themselves into legal debt.
  I have worked with the lone Congressman from my home state of South 
Dakota in drafting this legislation and the same bill will be 
introduced in the House of Representatives today as well.
  I urge my colleagues of the Senate to join me in supporting this bi-
partisan legislation with the goal of moving it through the legislative 
process quickly in order to continue to provide these services to our 
American farmers and ranchers.
                                 ______
                                 
      By Mr. SMITH of Oregon (for himself, Mr Abraham, Mr. Ashcroft, 
        Mr. Burns, Mr. Santorum, Mr. Gorton, Mrs. Hutchison, Mr. 
        Allard, Mr. Bennett, Mr. Coverdell, Mr. Gregg, Mr. Helms, Mr. 
        Thomas, Mr. Inhofe, Mr. Mack, Mr. Warner, Mr. Bunning, Mr. 
        Lott, Mr. McConnell, Mr. Crapo, and Mr. Roberts):
  S. 2742. A bill to amend the Internal Revenue Code of 1986 to 
increase disclosure for certain political organizations exempt from tax 
under section 527 and section 501(c), and for other purposes; read the 
first time.


            tax-exempt political disclosure act introduction

  Mr. SMITH of Oregon. Mr. President, I rise today to introduce 
legislation, co-sponsored by 20 of my Senate colleagues, to bring 
sunshine to our campaign finance laws, to provide for full disclosure 
of contributions and expenditures of groups which have heretofore not 
been held accountable, yet have been subsidized by the American people 
through their tax-exempt status.
  Joining me in this effort are Senators Abraham, Ashcroft, Burns, 
Santorum, Gorton, Hutchison, Allard, Bennett, Coverdell, Gregg, Helms, 
Thomas, Inhofe, Mack, Warner, Bunning, Lott, McConnell, Crapo, and 
Roberts.
  I have long been a proponent of full disclosure, to the extent it is 
consistent with the First Amendment, of campaign contributions and 
expenditures.
  If we are to rekindle the trust of the American people, not only must 
the political parties be held accountable, so, too, must those tax-
exempt groups which engage in political activities, yet heretofore have 
operated outside the realm of disclosure. The public has the right to 
know the identity of those trying to influence our elections, and 
Congress must do whatever it can to make sure that organizations do not 
wrongly benefit from the public subsidy of tax exemption.
  The bill we are introducing today, the Tax-Exempt Political 
Disclosure Act, expands upon the McCain-Lieberman amendment of last 
week which targeted a narrow list of tax-exempt organizations 
established under section 527 of the tax code. The so-called 527 groups 
covered in this bill do not make contributions to candidates or engage 
in express advocacy, and thus are not required to publicly disclose 
contributors or expenditures. Our bill contains in its entirety the 
provisions of the McCain-Lieberman amendment, but goes beyond the 527 
groups to require tax-exempt labor and business organizations, as well, 
to disclose their contributors and expenditures.
  Specifically, in Title I of our bill, which is identical to the 
McCain-Lieberman amendment, we require the subset of 527 organizations 
that are not already subject to the Federal Election Campaign Act to:
  1. Disclose their existence to the IRS;
  2. File publicly available tax returns;
  3. Publicly report expenditures of over $500; and
  4. Identify those who contribute more than $200 annually to the 
organization.
  Title II of our bill applies to business or labor organizations that 
are tax-exempt under sections 501(c)(5) or 501(c)(6) of the Internal 
Revenue Code and that spend $25,000 or more on the very same kinds of 
political activities engaged in by section 527 organizations covered by 
Title I of our bill. As we do with the 527 organizations, we require 
tax-exempt business and labor organizations to report expenditures for 
political activity of $500 or more and identify those who contribute 
more than $200 annually.
  Importantly, this legislation will not result in disclosure of any 
labor or business organization's membership lists because annual dues 
to these tax-exempt groups are excluded from the definition of 
``contribution.'' The bill requires disclosure only of those members 
who choose to contribute more than $200 annually for political 
purposes.
  If the Senate is for disclosure of the few tax-exempt 527 
organizations that may spend a couple of million dollars on issue ads, 
then surely we should advocate disclosure of the tax-exempt labor and 
business organizations that will spend twenty or forty times that 
amount of money on issue ads and other political activity. Our 
legislation will require these organizations receiving tax exempt 
status to emerge from the shadows and make some minimal disclosure 
about themselves and the source of their money.
  Tax exemption is not an entitlement, and any organization wanting to 
avoid the ramifications of claiming such status simply may choose not 
to seek that status. Our bill merely says that if a group engaging in 
political activity wants tax exempt status, the public has a right to 
expect certain things in return.
  Let me make clear that we are sincere in this effort, and we welcome 
and invite Senators McCain and Feingold to work with us. We are open to 
discussions with business and labor groups, as well, on the mechanics 
of the bill. We want to be flexible and will consider changes where 
appropriate.
  The bottom line, however, is that in the end there must be meaningful 
disclosure if we are to have the confidence of the American people and 
bring integrity to the process.
                                 ______
                                 
      By Mr. KENNEDY (for himself, Mr. Dodd, and Mrs. Murray):
  S. 2743. A bill to amend the Public Health Service Act to develop an 
infrastructure for creating a national voluntary reporting system to 
continually reduce medical errors and improve patient safety to ensure 
that individuals receive high quality health care; to the Committee on 
Health, Education, Labor, and Pensions.


  THE VOLUNTARY ERROR REDUCTION AND IMPROVEMENT IN PATIENT SAFETY ACT

 Mr. KENNEDY. Mr. President, between 44,000 and 98,000 patients 
die each

[[Page 11015]]

year from medical errors, making it the eighth leading cause of death 
in the United States. Each day, more than 250 people die because of 
medical errors--the equivalent of a major airplane crash every day. 
Estimates of the annual financial cost of preventable errors run as 
high as $29 billion a year. We can do better for our citizens. We must 
do better.
  The Voluntary Error Reduction and Improvement in Patient Safety Act 
of 2000, which Senator Dodd and I are introducing today, will provide 
the federal investment and framework necessary to take the first steps 
to effectively treat this continuing epidemic of medical errors. Today, 
there errors are a stealth plague hidden deep within the world's best 
health care system. This legislation will support needed research in 
this area, and identify and reduce common mistakes.
  Reducing medical errors can save lives and health care dollars, and 
avoid countless family tragedies. The field of anesthesia had the 
foresight to undertake such an effort almost 20 years ago, and today, 
the number of fatalities from errors in administering anesthesia has 
dropped by 98 percent. Our goal should be to achieve equal or even 
greater success in reducing other types of medical mistakes. This 
legislation lays the foundation to achieve this goal.
  The 1999 Institute of Medicine report, To Err is Human, documented 
the compelling need for aggressive national action on the issue. The 
IOM report recommended the creation of two reporting systems, each with 
different goals. The first is a voluntary confidential reporting system 
to learn about medical errors and help researchers develop solutions 
for future error prevention and reduction. The second is a mandatory 
public reporting system for certain serious errors and deaths in order 
to inform the public and hold health care facilities responsible for 
their mistakes.
  Our legislation today deals with the first issue, but the second 
issue is also critical. I believe that the public has a right-to-know 
about certain serious events, and public disclosure is an important 
tool to assure that institutions put safety on the front burner, not 
the back burner.
  I commend the Administration for recognizing the value of mandatory 
reporting by recently establishing such programs in the Department of 
Veterans Affairs and Department of Defense health care systems. The 
Agency for Healthcare Research and Quality is also in the process of 
evaluating existing mandatory reporting systems, and the Health Care 
Financing Administration is planning to sponsor a mandatory reporting 
demonstration project for selected private hospitals. I believe our 
next step should be to move ahead with mandatory reporting, and the 
results of these studies will shed needed light on the effectiveness of 
different options.
  The bill we introduce today would take a significant first step 
toward implementing and providing support for the recommendations in 
the IOM report.
  The overwhelming majority of errors are caused by flaws in the health 
care system, not the outright negligence of individual doctors and 
nurses. Our hospitals, doctors, nurses, and other health care providers 
want to do the right thing. Our proposal gives the health care 
community the tools to identify the causes of medical errors, the 
resources to develop strategies to prevent them, and the encouragement 
to implement those solutions.
  First, the Act creates a new patient safety center in the Agency for 
Healthcare Research and Quality. The Center for Quality Improvement and 
Patient Safety will improve and promote patient safety by conducting 
and supporting research on medical errors, administering the national 
medical error reporting systems created under this bill, and 
disseminating evidence-based practices and other error reduction and 
prevention strategies to health care providers, purchasers and the 
public.
  Second, the legislation would establish national voluntary reporting 
and surveillance systems under AHRQ to identify, track, prevent and 
reduce medical errors. The National Patient Safety Reporting System 
will allow health care professionals, health care facilities, and 
patients to voluntarily report adverse events and close calls. The 
National Patient Safety Surveillance System would establish a 
surveillance system, which is modeled on a successful CDC initiative 
that tracks hospital-acquired infections, for health care facilities 
that choose to participate. Participating facilities will include a 
representative sample of various institutions, which will monitor, 
analyze, and report selected adverse events and close calls. 
Researchers will provide feedback to the participating facilities.
  Reports submitted to both programs will be analyzed to identify 
systemic faults that led to the errors, and recommend solutions to 
prevent similar errors in the future.
  In order to encourage participation, reports and analyses from both 
programs will be protected from discovery, and health care workers who 
submit reports to the programs will be protected against workplace 
retaliation based on their participation in the reporting systems.
  In exchange for establishing this reporting system, health care 
facilities and professionals would be expected to voluntarily implement 
appropriate patient safety solutions as they are developed. In 
addition, in recognition of the significant federal investments in 
error reduction strategies and the provision of health services, the 
Secretary of Health and Human Services will be required to develop a 
process for determining which evidence-based practices should be 
applied to programs under the Secretary's authority. The Secretary will 
take appropriate, reasonable steps to assure implementation of these 
practices.
  Our proposal also requires the Director of the Office of Personnel 
Management to develop a similar process for determining which evidence-
based practices should be used as purchasing standards for the Federal 
Employees Health Benefits Program. Plans will also be rated on how well 
they met these standards, and compliance ratings will be provided to 
federal employees and retirees during the annual enrollment period.
  The bill authorizes $50,000,000 for the Agency for Healthcare 
Research and Quality for FY 2001, increasing to $200,000,000 in FY 
2005, to fund error-related research and the reporting systems.
  Systemic errors in the health care system put every patient at risk 
of injury. The measure we propose today is designed to reduce that risk 
as much as possible. Americans deserve the highest quality health care. 
This bill will raise patient safety to a high national priority, and 
ensure that patient safety becomes part of every citizen's expectation 
of high quality health care. This is essential legislation, and I look 
forward to working with my colleagues to expedite its passage and to 
develop companion legislation that establishes a mandatory reporting 
system.
  I ask unanimous consent that the following summary, fact sheet, and 
letters of support be inserted into the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  Voluntary Error Reduction and Improvement in Patient Safety Act of 
                             2000: Summary

       According to the November 1999 Institute of Medicine 
     report, ``To Err is Human: Building a Safer Health System,'' 
     between 44,000 and 98,000 patients die each year as a result 
     of mistakes. Estimates of total annual national costs for 
     preventable errors range from $17 to $29 billion. This 
     legislation amends the Public Health Service Act to establish 
     a national non-punitive system to prevent and reduce medical 
     errors. Provisions are designed to: (1) identify and 
     investigate certain medical errors; (2) develop and 
     disseminate best practices to prevent and reduce medical 
     errors; and (3) assure implementation of evidence-based error 
     reduction strategies.


                       CENTER FOR PATIENT SAFETY

       Authorizes the Agency for Healthcare Research and Quality 
     (AHRQ) to: (1) create a Center for Quality Improvement and 
     Patient Safety to promote patient safety; (2) serve as a 
     central publicly accessible clearinghouse for information 
     concerning patient safety;

[[Page 11016]]

     (3) administer the reporting systems created under this 
     legislation; (4) conduct and fund research on the causes of 
     and best practices to reduce medical errors; and (5) 
     disseminate evidence-based information to guide in the 
     development and continuous improvement of best practices.


                           REPORTING SYSTEMS

       Creates two national voluntary, and confidential reporting 
     systems under AHRQ: (1) a reporting system of adverse events 
     and close calls that uses uniform reporting standards and 
     forms; and (2) a surveillance system in which participating 
     health care facilities agree to monitor, analyze, and report 
     specified adverse events and close calls that occur in their 
     institutions. Reports submitted to both programs will be 
     protected from discovery, and analyzed to identify errors 
     that result from faults in the health care system. Neither 
     program will preempt existing nor preclude the later 
     development of new reporting systems.
       Health care professionals who submit reports to the 
     reporting systems, their employer, or an appropriate 
     regulatory agency or private accrediting body may not be 
     discriminated against in their employment for reporting.


                          AUTHORIZATION LEVELS

       Authorizes $50,000,000 for AHRQ for fiscal year 2001, with 
     gradual increases to $200,000,000 for fiscal year 2005, to 
     fund error-related research and the reporting systems.


                    APPLICATION TO FEDERAL PROGRAMS

       Requires the Secretary of the Department of Health and 
     Human Services to: (1) develop a process for determining 
     which evidence-based best practices disseminated by AHRQ 
     should be applied to programs under the Secretary's 
     authority; and (2) take reasonable steps as may be 
     appropriate to bring about the implementation of such 
     practices. Requires the Director of the Office of Personnel 
     Management to develop a process for determining which 
     evidence-based best practices disseminated by AHRQ should be 
     used as purchasing standards for the Federal Employees Health 
     Benefits Program.
                                  ____


Fact Sheet: The Need for the Voluntary Error Reduction and Improvement 
                    of Patient Safety Act (VERIPSA)

       In December, 1999, the Institute of Medicine issued a 
     report, To Err is Human: Building a Safer Health Care System, 
     that documents the compelling need for national action to 
     reduce errors and improve patient safety:
       Between 44,000 and 98,000 patients die each year as a 
     result of medical errors, making medical errors the eighth 
     leading cause of death.
       Errors in the health care system result in more deaths each 
     year than highway accidents, breast cancer or AIDS. Errors 
     that seriously injure or otherwise harm patients are even 
     more prevalent.
       In 1993, medication errors alone are estimated to have 
     accounted for 7,000 deaths. Two percent of patients admitted 
     to hospitals experience an adverse event caused by medication 
     errors, resulting in $2 billion in national spending for 
     additional hospital costs related to preventable medication 
     errors for inpatients.
       Total annual national costs (e.g., health care, lost wages/
     productivity, disability) resulting from medical errors are 
     estimated to be between $38 and $50 billion, including $17-29 
     billion for preventable events.


          VERIPSA Can Save Lives and Reduce Health Care Costs

       The report found that most medical errors are the result of 
     flaws in the health care system, rather than carelessness by 
     health professionals, including, for example, errors that 
     arise from misreading a physician's handwritten prescription. 
     Many of these problems can be minimized through better 
     systems and computerization.
       Over the last two decades, a systematic effort to reduce 
     deaths from errors in administering anesthesia has resulted 
     in a decline from two deaths per 10,000 patients in the early 
     1980s to one death per 300,000 patients today.
       One study found that 60 percent of preventable adverse drug 
     events could be avoided by physician computer-entry order 
     systems.
       The experience on other industries has shown the 
     effectiveness of concerted efforts to reduce errors. Since 
     1976, the death rate from airline accidents has declined 
     400%. Since the creation of the Occupational Safey and Health 
     Administration in 1970, the workplace death rate has been cut 
     in half.
       The Institute of Medicine report concludes that a reduction 
     in medical errors of 50% over the next five years is 
     achievable and should be a minimum target for national 
     action.
                                  ____

                                                   American Health


                                          Quality Association,

                                    Washington, DC, June 15, 2000.

Statement on the ``Voluntary Error Reduction and Improvement in Patient 
                              Safety Act''

       The American Health Quality Association (AHQA) represents 
     the national network of Quality Improvement Organizations 
     (QIOs), which are known as the Peer Review Organizations 
     (PROs), for their Medicare quality improvement work. The QIOs 
     have vast clinical and analytic expertise, work daily with 
     providers across the country, and know how to affect systemic 
     change and bring about measurable improvement in care. They 
     are experts at translating the literature and research 
     regarding best practices from ``bookshelf to bedside'' and 
     teaching providers how to perform ongoing measurement of 
     their progress.
       Senator Kennedy and Senator Dodd have done a commendable 
     job of addressing all of the various aspects of what is 
     necessary for a national system for improving patient safety. 
     In their ``Voluntary Error Reduction and Improvement in 
     Patient Safety Act,'' they direct AHRQ to establish a Center 
     for Quality Improvement and Patient Safety to conduct 
     research of medical errors and disseminate information on the 
     best practices for reducing them. The bill also proposes two 
     reporting systems that are voluntary, non-punitive, and 
     confidential. One system asks providers to report adverse 
     events and close calls to AHRQ using uniformed standards and 
     forms. The other asks providers to agree to monitor specific 
     types of adverse events as directed by AHRQ.
       AHQA is pleased that AHRQ is given the authority to 
     contract with experts in the field to work with health care 
     providers and practitioners to identify adverse events and 
     determine what systemic changes are necessary to prevent them 
     for recurring. AHQA's goal in the patient safety debate is to 
     make sure that true quality improvement is achieved. We do 
     not support error reporting for the sake of reporting. 
     Organizations, such as the QIOs, should be encouraged to work 
     side by side with providers and practitioners to improve 
     their health care delivery systems.
       ``The Voluntary Error Reduction and Improvement in Patient 
     Safety Act'' then goes beyond reporting and research by 
     directing the Secretary of HHS to take the best practices 
     disseminated by AHRQ and apply them, as may be appropriate, 
     to programs under the Secretary's authority. The bill 
     specifically directs the Secretary to enter into agreements 
     with the QIOs (through their PRO work) to provide, upon 
     request, technical assistance regarding best practices and 
     root-cause analysis to health care providers participating in 
     HHS funded health programs.
       AHQA believes it is the appropriate next step to regime HHS 
     to apply the most up-to-date methods for assuring patient 
     safety to its health care programs. The QIOs stand ready to 
     assist the Director of AHRQ and the Secretary of HHS in their 
     efforts to help the medical community find the root cause of 
     adverse events that are occurring and help develop strategies 
     for preventing them in the future.
                                  ____



                           Massachusetts Hospital Association,

                                    Burlington, MA, June 15, 2000.
     Hon. Edward M. Kennedy,
     U.S. Senate,
     Washington, DC.
       Dear Senator Kennedy: On behalf of the hospitals in 
     Massachusetts, I am writing to applaud the introduction of 
     your legislation ``The Error Reduction and Improvement in 
     Patient Safety Act.'' This bill will no doubt serve as a 
     major step toward making patient safety a national priority.
       We hope that many aspects of this legislation will become 
     law. In particular, we support your suggested process to 
     ensure that proven practices to reduce medical errors are 
     implemented. In addition, we also believe that your efforts 
     to improve confidentiality protections for reporting will go 
     a long way towards creating a safe environment that supports 
     open dialogue about errors, their causes, and solutions.
       Thanks to you and your staff, Massachusetts continues to be 
     on the forefront of the national debate about how best to 
     address this important issue.
           Sincerely,
                                                   Andrew Dreyfus,
     Executive Vice President.
                                  ____

         Federation of Behavioral, Psychological and Cognitive 
           Sciences,
                                    Washington, DC, June 15, 2000.
     Hon. Edward Kennedy,
     Health, Education, Labor and Pensions Committee, U.S. Senate, 
         Washington, DC.
       Dear Senator Kennedy: I am writing on behalf of the 
     Federation of Behavioral, Psychological and Cognitive 
     Sciences, a coalition of 19 scientific associations. Among 
     its scientists are human factors researchers whose work is 
     devoted to understanding and reducing the adverse effects of 
     medical errors. I write to endorse the ``Voluntary Error 
     Reduction and Improvement in Patient Safety Act.''
       This bill recognizes that human error in healthcare 
     settings has reached epidemic proportions and will provide an 
     infrastructure for centralized error reporting systems. 
     Important provisions of the bill will allow healthcare 
     providers to learn from such reporting systems by creating 
     interdisciplinary partnerships to conduct root cause analyses 
     across a wide range of health care settings.
       Such analyses will help detect error trends and inform new 
     lines of directed inquiry and

[[Page 11017]]

     hypothesis-driven research to reduce errors. The bill 
     highlights the pivotal role of human factors research in 
     understanding human error in any context and would draw upon 
     the success of human factors as it has been applied in many 
     other industries such as aviation, maritime shipping, and 
     nuclear power to improve safety.
       As in these other industries, particularly as evidenced in 
     aviation, the real value of error reporting lies in the 
     development of useful applications of the reported data to 
     improve safety. The ``Voluntary Error Reduction and 
     Improvement in Patient Safety Act'' clearly lays out the 
     infrastructure to promote the development of evidence-based 
     interventions to improve safety. Further, unique features of 
     this learning system include basic behavioral principles of 
     positive reinforcement to stimulate voluntary reporting. Such 
     a positive feedback loop will surely strengthen the quality 
     of the database this bill will structure. The database will 
     form the foundation for a bold new way of thinking about 
     patient safety. The data and the research, in turn, will make 
     attainable the goal we all strive for, the dramatic reduction 
     of adverse events in health care settings.
       We believe the Kennedy-Dodd bill is a very strong plan for 
     reducing adverse events due to medical error. We also find 
     much to praise in the Jeffords bill. So we take the unusual 
     step of endorsing both and encourage work to meld the unique 
     features of these two extraordinary bills into a coherent 
     whole that will then surely receive the overwhelming support 
     of the Congress.
           Sincerely,
                                                    David Johnson,
                                       Executive Director.

 Mr. FRIST. Mr. President, I am pleased to join with my 
colleague, the distinguished chairman of the Health, Education, Labor, 
and Pensions Committee (HELP), Senator Jeffords, in introducing today a 
critical piece of legislation that will take needed steps to improve 
the quality of health care delivered in this country. The goal of our 
legislation today is to improve patient safety by reducing medical 
errors throughout the health care system.
  The Institute of Medicine Report (IOM), released last November, 
sparked a national debate about how safe our hospitals and health care 
settings actually are for patients. The scope of the problem identified 
in the findings were shocking. The IOM found that each year an 
estimated 44,000 to 98,000 hospital deaths occur as a result of 
preventable adverse events. This makes medical errors the 8th leading 
cause of death, with more deaths than vehicle accidents, breast cancer 
or AIDS. These errors cost our Nation $37.6 billion to $50 billion per 
year, representing 4 percent of national health expenditures.
  Despite the recent IOM findings, this is not a new debate. Many 
experts have told us that the health care industry is a decade or more 
behind in utilizing new technologies to reduce medical errors. Just 
last year, the HELP Committee took initial steps last year to reduce 
medical errors through the reauthorization of the Agency for Healthcare 
Research and Quality (AHRQ), revitalizing this agency as the federal 
agency focused on improving the quality of health care in this country. 
Part of the core mission of AHRQ is to further our understanding of the 
causes of medical errors and the best strategies we can employ to 
reduce these errors. The legislation authorized the Director of AHRQ to 
conduct and support research; to build private-public partnerships to 
identify the causes of preventable health care errors and patient 
injury in health care delivery; to develop, demonstrate, and evaluate 
strategies for reducing errors and improving patient safety; and to 
disseminate such effective strategies throughout the health care 
industry.
  The legislation we introduce today builds upon the further 
recommendations of the IOM report and reflects the culmination of 
testimony received throughout the past several months in a series of 
hearings held by the HELP Committee.
  The central goal of this legislation is quality improvement 
throughout the health care system. We heard over and over throughout 
our hearings that we need to develop our knowledge base about the best 
mechanisms to reduce medical errors. This can only be achieved if we 
build a system where errors can be reported and understood to improve 
care, not to punish individuals. We need to create a ``culture of 
safety'' in which errors can be reported, and analyzed, and then change 
can be implemented.
  I will not go into the details of this legislation, which Senator 
Jeffords has already outlined, I would simply outline the three main 
goals of this legislation, the creation of a national center for 
quality improvement and patient safety at the AHRQ, the creation of a 
voluntary reporting system to collect and analyze medical errors, and 
the establishment of strong confidentiality provisions for the 
information submitted under quality improvement and medical error 
reporting systems.
  I am very supportive of the goals of this legislation and will 
continue to examine the best ways to reduce medical errors in our 
health care system. It is essential that we pass medical errors 
legislation this year. We will continue to seek input from patients and 
provider groups as we work to pass this legislation.
  Mr. DODD. Mr. President, I am pleased to join Senator Kennedy in 
sponsoring the ``Error Reduction and Improvement in Patient Safety 
Act,'' legislation which will establish a national system to identify, 
track and prevent medical errors.
  Last November, the Institute of Medicine reported that between 44,000 
and 98,000 deaths per year are attributable to medical errors, ranging 
from illegible prescriptions to amputations of the wrong limb. In other 
words, patients are being harmed not because of a failure of science or 
medical knowledge, but because of the inability of our health care 
system to mitigate common human mistakes.
  Most Americans feel confident that the health care they receive will 
make them better--or at the very least, not make them feel worse. And 
in the vast majority of circumstances, that confidence is deserved. The 
dedication, knowledge and training of our doctors, nurses, surgeons and 
pharmacists in this country are unparalleled. But, as the IOM report 
starkly notes, the quality of our health care system is showing some 
cracks. If we are to maintain public confidence, we must respond 
quickly and thoroughly to this crisis.
  One thing is certain: the paradigm of individual blame that we've 
been operating under discourages providers from reporting mistakes--and 
thwarts efforts to learn from those mistakes. We have to move beyond 
finger-pointing and encourage the reporting and analysis of medical 
errors if we want to make real progress towards improving patient 
safety.
  This legislation will do just that. It authorizes the creation of a 
national Center for Quality Improvement and Patient Safety to set and 
track national patient safety goals and conduct and fund safety 
research. The bill also sets up national non-punitive, voluntary, and 
confidential reporting systems for medical errors. By analyzing and 
learning from mistakes, we will be better able to determine what 
systems and procedures are most effective in preventing errors in the 
future.
  Identification and analysis of errors is critical to improving the 
quality of health care. But we must also develop measures of 
accountability that ensure that the information that is generated by a 
national error reporting system is actually used to improve patient 
safety. Our bill takes those practices shown to be most effective in 
preventing errors and creates a mechanism for integrating those 
practices into federally-funded health care programs. These evidence-
based ``best practices'' will also be used as standards for health care 
organizations seeking to participate in the Federal Employees Health 
Benefits Program.
  Mr. President, the ``Error Reduction and Improvement in Patient 
Safety Act'' addresses the complex problem of medical errors in the 
most comprehensive manner possible--from the identification of errors, 
to the analysis of the errors, to the application of best practices to 
prevent those errors from ever occurring again. Simply put, this 
legislation will save lives. I look forward to working with my 
colleagues to enact this legislation expeditiously, because frankly, 
one medical error is one too many.
                                 ______
                                 
      By Mr. ASHCROFT:

[[Page 11018]]

  S. 2744. A bill to ensure fair play for family farms; to the 
Committee on the Judiciary.


               the fair play for family farms act of 2000

  S. 2745. A bill to provide for grants to assist value-added 
agricultural businesses; to the Committee on Agriculture, Nutrition, 
and Forestry.


        the value-added development act for american agriculture

  S. 2746. A bill to amend the Internal Revenue Code of 1986 to allow a 
credit against income tax for investment by farmers in value-added 
agricultural property; to the Committee on Finance.


    the farmers' value-added agricultural investment tax credit act

  Mr. ASHCROFT. Mr. President, I rise today to discuss the concerns of 
Missouri farmers and ranchers about concentration in the agriculture 
sector and about individual farmers' ability to compete and to get fair 
prices for their commodities.
  Missouri is a ``farm state'', so ensuring fair competition in markets 
is an important issue to me. The state of Missouri is ranked second in 
the list of states with the most number of farms--only Texas has more. 
Missouri's varying topography and climate makes for a very 
agriculturally diverse state. Farmers and ranchers produce over 40 
commodities, 22 of which are ranked in the top ten among the states. 
Missouri is a leader in such crops as beef, soybeans, hay, and rice, as 
well as watermelon and concord grapes. Having diversity and the ability 
to change has allowed Missouri farmers to maintain their livelihood for 
generations. More than 88 percent of the farms in Missouri are family 
or individually owned, and 8 percent are partnerships. It is easy to 
see that Missouri is a state that values small and family farms--which 
are the bedrock of Missouri's rural communities.
  As I have traveled around Missouri--visiting every county in the 
state--Missouri farmers and ranchers have repeatedly told me that 
increasing concentration of the processing and packing industry has 
resulted--and will continue to result--in a less competitive market 
environment and lower prices for producers.
  I have been responding to these concerns, and I am taking further 
action today. Last year, I asked the Department of Justice to create a 
high-level post within the Antitrust Division to specialize in 
agriculture-related mergers and transactions. The Administration 
responded by appointing a representative for agriculture in the 
Department of Justice. This appointment is a step in the right 
direction, but producers still have multiple concerns that need to be 
addressed.
  Today, I am introducing three bills to address Missouri and American 
farmers' concerns about agriculture concentration and market 
competition. In addition to listening to Missouri farmers on this 
issue, I have reviewed a resolution that was considered in the Missouri 
State Legislature about competition in the agricultural economy.
  The Ninetieth General Assembly of Missouri called upon the 106th 
Congress to take an initiative on federal law governing agriculture 
concentration. Missouri State Concurrent Resolution 27 (S. Con. Res. 
27) is a bipartisan resolution outlining what the Missouri legislature 
recommends the federal government should do to address the issue of 
concentration. The resolution passed the Missouri State Senate and was 
reported out of the House Agriculture Committee to the full House. In 
drafting the package of bills I am introducing today, I studied the 
recommendations and objectives in State Senator Maxwell's Missouri 
resolution as well as including important provisions of my own.
  Mr. President, the bill I'm introducing today--the Fair Play of 
Family Farms Act--does the following things:
  First, this legislation adds ``sunshine'' to the merger process. It 
will give the Department of Agriculture more authority when it comes to 
mergers and acquisitions. This will heighten USDA's role in review of 
all proposed agriculture mergers so that the impact on farmers will be 
given more consideration, and will make these reviews public. The 
public will be given an opportunity to comment on the proposed merger, 
and the USDA will be required to do an impact analysis on producers on 
a regional basis. I want to ensure that if two agri-businesses merge, 
the impact on farmers are completely evaluated.
  Second, my bill creates a permanent position for an Assistant 
Attorney General for Agricultural Competition. This position will not 
simply be appointed by the President or by the Attorney General, but 
the position will require Senate review and confirmation. Also, my bill 
provides additional staffing for this new position.
  In addition, this bill provides additional funds and requires the 
Grain Inspection, Packers and Stockyard Administration (GIPSA) to hire 
more litigation attorneys, economists, and investigators to enforce the 
Packers and Stockyard Act. An important element of this provision is 
that it requires GIPSA to put more investigators out ``in the field'' 
for oversight and investigations. I want to make sure that there are 
not just more attorneys and economists in Washington, D.C., but that 
there are more people out doing investigations and oversight.
  Because there has been some concerns that the Packers and Stockyards 
Act does not cover the entire poultry industry, this legislation also 
requires an analysis of why the poultry industry is not covered, and 
requires GAO to offer suggestions for how the disparity between poultry 
and livestock can be remedied.
  This bill addresses another problem I was informed about when I was 
out visiting Missouri farmers--and that is the issue of confidentiality 
clauses in contracts signed by farmers. Several farmers were concerned 
about confidentiality clauses in the contracts with agri-business that 
they were told make it illegal for farmers to share the contract with 
others, even their lawyers and bankers. I want to ensure that farmers 
are able to get the legal and financial advice they need, so this bill 
ensures that such confidentiality clauses do not apply to farmers' 
contacts with their lawyers or bankers.
  The bill also creates a statutory trust for the protection of 
ranchers who sell on a cash basis to livestock dealers. Right now, if 
ranchers deliver their cattle to a dealer and then the dealer goes 
bankrupt, the rancher is not protected. My bill would set up a trust 
for the rancher, so that if the dealer goes bankrupt, the rancher would 
be at the front of the line to get paid. There are similar trusts 
already set up for when a rancher sells livestock to a packer, and this 
legislation extends the same protections to ranchers when they sell 
their livestock to dealers.
  One of the recommendations from the Missouri legislature that I 
included in the bill allows GIPSA to seek reparations for producers 
when a packer is found to be engaged in predatory or unfair practices. 
This section specifies that when money is collected from those that are 
damaging producers, the money should go to the farmers, not to the 
federal government.
  This bill will lead to a more fair playing field for Missouri farmers 
and ranchers. It address concerns of Missourians that I have visited 
with and incorporates the outline of the Missouri State Resolution.
  Finally, I am pleased to be the Senate sponsor of two bills that have 
already been introduced in the other Chamber by the distinguished 
Representative from Missouri, Congressman Jim Talent. I would like to 
commend Congressman Talent for the work he has done to help the 
Missouri agriculture community. Representative Talent's bills on value 
added agriculture are a positive step for Missouri and U.S. producers. 
Therefore, I would like to introduce these two bills in the Senate to 
``help put farmers back in the driver's seat.''
  The Value-Added Development Act for American Agriculture provides 
technical assistance for producers to start value-added ventures. This 
bill helps family farmers compete by giving farmers the opportunity to 
take a greater share of the profit from the processing industry. The 
legislation will provide technical assistance to

[[Page 11019]]

producers for value-added ventures, including engineering, legal 
services, applied research, scale production, business planning, 
marketing, and market development.
  The funds would be provided to farmers through grants requests, which 
will be evaluated on the State level. It has long been my opinion that 
farmers know how best to farm their land, meet market demands, and make 
a profit. If the ideas of farmers are cultivated on a local and state 
level, farmers will likely have more flexibility to make wise decisions 
for markets in their home states and regions.
  States would have the opportunity to apply for $10 million grants to 
start up an Agriculture Innovation Center. The state boards will 
consist of the State Department of Agriculture, the largest two general 
farm organizations, and the four highest grossing commodity groups. The 
Agriculture Innovation Center will then use the funds to help farmers 
finance the start-up of value added ventures.
  Once it is determined that the farmers' ideas for a value added 
venture could be beneficial, the State Agriculture Innovation Center 
can give the farmers assistance with plans, engineering, and design. 
When the farmer is actually ready to begin implementation of the value 
added project, the third bill I am introducing will help out.
  The Farmers' Value-Added Agricultural Investment Tax Credit Act would 
create a tax credit for farmers who invest in producer owned value-
added endeavors--even ventures that are not farmer-owned co-ops. This 
would provide a 50% tax credit for the producers of up to $30,000 per 
year, for six years.
  The three bills I am introducing today are important to the 
continuation of the American farmer over the next century. I know that 
these bills will benefit the producers of Missouri, and in turn benefit 
all of America.

                          ____________________