[Congressional Record (Bound Edition), Volume 146 (2000), Part 9]
[Senate]
[Pages 11933-11956]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. KERRY (for himself and Ms. Collins):
  S. 2766. A bill to amend title XVIII of the Social Security Act with 
respect to payments made under the prospective payment system for home 
health services furnished under the Medicare program; to the Committee 
on Finance.


            THE EQUAL ACCESS TO HOME HEALTH CARE ACT OF 2000

 Mr. KERRY. Mr. President, I am pleased to join my colleague 
Senator Collins in introducing the Equal Access to Medicare Home Health 
Care Act. This legislation will protect patient access to home health 
care under Medicare, and ensure that providers are able to continue 
serving seniors who reside in medically underserved areas.
  Medicare was enacted in 1965, under the leadership of President 
Lyndon Johnson, as a promise to the American people that, in exchange 
for their years of hard work and service to our country, their health 
care would be protected in their golden years. Today, over 30 million 
seniors rely on the Medicare home health benefit to receive the care 
they need to maintain their independence and remain in their own homes, 
and to avoid the need for more costly hospital or nursing home care.
  Home health care is critical. It is a benefit to which all eligible 
Medicare beneficiaries, regardless of where they live, should be 
entitled. But, this benefit is being seriously undermined. Since 
enactment of the Balanced Budget Act, BBA, of 1997, federal funding for 
home health care has plummeted. According to the Congressional Budget

[[Page 11934]]

Office, CBO, Medicare spending on home health care dropped 45 percent 
in the last two fiscal years--from $17.5 billion in 1998 to $9.7 
billion in 1999--far beyond the original amount of savings sought by 
the BBA. Across the country, these cuts have forced over 2,500 home 
health agencies to close and over 500,000 patients to lose their 
services.
  In my own State of Massachusetts--a state that, because of economic 
efficiency, sustained a disproportionate share of the BBA cuts in 
Medicare home health funding--28 home health agencies have closed, 6 
more have turned in their Medicare provider numbers and chosen to opt 
out of the Medicare program, and 12 more have been forced to merge in 
order to consolidate their limited resources. The home health agencies 
that have continued to serve patients despite the deep cuts in Medicare 
funding reported net operating losses of $164 million in 1998. The loss 
of home health care providers in Massachusetts has cost 10,000 patients 
access to home health services. Consequently, many of the most 
vulnerable residents in my state are being forced to enter hospitals 
and nursing homes, or going without any help at all.
  To compound the problem, without Congressional action, Medicare 
payments for home health care will be automatically cut by an 
additional 15 percent next year. It is critical that we defend 
America's seniors against future cuts in home health services, and this 
bill will eliminate the additional 15 percent cut in Medicare home 
health payments mandated by the BBA. However, we must do more than 
attempt to stop future cuts. Indeed, it is equally as important that we 
begin to provide relief to home health providers who are already 
struggling to care for patients.
  During the first year of implementation of the Interim Payment 
System, IPS, thousands of home health care agencies incurred 
overpayments because they were not notified of their per beneficiary 
limits until long after the limits were imposed. The provisions of this 
bill would extend the repayment period for IPS overpayments without 
interest for three years, and thereafter at an interest rate lower than 
currently mandated.
  Under IPS, even agencies which did not incur overpayments were placed 
on precarious financial footing because of insufficient payments, 
particularly for high-cost and long-term patients. Accordingly, it is 
critical that we bolster the efforts of all home health care providers 
to transcend their current operating deficits, especially as they 
transition from the Interim Payment System to the Prospective Payment 
System, PPS.
  The BBA specified that, in aggregate, PPS payments to home health 
providers must equal IPS payments. This adjustment--the budget 
neutrality factor--is expected to reduce PPS payments for home health 
services by 22 percent below the average Medicare costs prior to 
enactment of the BBA. In order to provide relief to home health 
providers in this budget neutral context, the Equal Access to Medicare 
Home Health Care Act would establish a 10 percent add-on to the 
episodic base payment for patients in rural areas, to reflect the 
increasing costs of travel, and a ``reasonable cost'' add-on for 
security services utilized by providers in our urban areas. These add-
ons ensure that patients in our medically underserved communities 
continue to receive the home care they need and deserve.
  Finally, this legislation would encourage the incorporation of 
telehealth technology in home care plans by allowing cost reporting of 
the telemedicine services utilized by agencies. Telemedicine has 
demonstrated tremendous potential in bringing modern health care 
services to patients who reside in areas where providers and technology 
are scarce. Cost reporting will provide the data necessary to develop a 
fair and reasonable Medicare reimbursement policy for telehomecare and 
bring the benefits of modern science and technology to our nation's 
underserved.
  Unless we increase the federal commitment to the Medicare home health 
care benefit, we can only expect to continue to imperil the health of 
an entire generation. We must act to deliver on that promise that 
President Johnson made 25 years ago--our nation's seniors deserve no 
less.
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Mr. Levin, and Mr. Abraham):
  S. 2767. A bill to authorize the enforcement by State and local 
governments of certain Federal Communications Commission regulations 
regarding use of citizens band radio equipment; to the Committee on 
Commerce, Science, and Transportation.


                   cb radio interference legislation

 Mr. FEINGOLD. Mr. President, I am pleased to once again 
introduce a bill to deal with the all too common problem of 
interference with residential home electronic equipment caused by 
unlawful use of citizens band, or CB, radios. This is the third 
Congress in which I have offered this legislation. In 1998, it was 
nearly enacted as part of an anti-slamming bill. I hope that this year, 
we can finally put this common sense bill into law.
  The problem of CB radio interference can be extremely distressing for 
residents who cannot have a telephone conversation, watch television, 
or listen to the radio without being interrupted by a neighbor's 
illegal use of a CB radio. Unfortunately, under the current law, those 
residents have little recourse. The bill I am introducing today will 
provide those residents with a practical solution to this problem.
  Until recently, the FCC enforced its rules outlining what equipment 
may or may not be used for CB radio transmissions, how long 
transmissions may be broadcast, what channels may be used, as well as 
many other technical requirements. The FCC also used to investigate 
neighbor's complaints that a CB radio enthusiast's transmissions 
interfered with their use of home electronic and telephone equipment. 
The FCC receives thousands of such complaints annually.
  For the past five years, I have worked on behalf of constituents 
bothered by persistent interference of nearby CB radio transmissions, 
in some cases caused by unlawful use of radio equipment. In each case, 
the constituents have sought my help in securing an FCC investigation 
of the complaint. And in each case, the FCC indicated that due to a 
lack of resources, they no longer investigate radio frequency 
interference complaints. Instead of investigation and enforcement, the 
FCC only provides self-help information which the consumer may use to 
limit the interference on their own.
  This situation is understandable given the rising number of 
complaints for things like slamming. The resources of the FCC are 
limited, and there is only so much they can do to address complaints of 
radio interference.
  Nonetheless, this problem is extremely annoying and frustrating to 
those who experience radio interference. Many residents implement the 
self-help measures recommended by FCC such as installing filtering 
devices to prevent the unwanted interference, working with their 
telephone company, or attempting to work with the neighbor they believe 
is causing the interference. In many cases these self-help measures are 
effective.
  However, in some cases filters and other technical solutions fail to 
solve the problem because the interference is caused by the unlawful 
use of CB radio equipment such as unauthorized linear amplifiers.
  Municipal residents, after being denied an investigation or 
enforcement from the FCC, frequently contact their city or town 
government and ask them to police the interference. However, the 
Communications Act of 1934 provides exclusive authority to the Federal 
Government for the regulation of radio. This preempts municipal 
ordinances or State laws that regulate radio frequency interference 
caused by unlawful use of CB radio equipment. This situation creates an 
interesting dilemma for municipal governments. They can neither pass 
their own ordinances to control CB radio interference, nor can they 
rely on the agency with exclusive jurisdiction over interference to 
enforce the very Federal law which preempts them.
  Let me give an example of the kind of frustrations people have 
experienced

[[Page 11935]]

in attempting to deal with these problems. Shannon Ladwig, a resident 
of Beloit, WI is fighting to end CB interference with her home 
electronic equipment that has plagued her family for many years. 
Shannon worked within the existing system by asking for an FCC 
investigation, installing filtering equipment on her telephone, 
attempting to work with the neighbor causing the interference, and so 
on. Nothing has been effective.
  Here are some of the annoyances Shannon has experienced. Her 
answering machine picks up calls for which there is no audible ring, 
and at times records ghost messages. Often, she cannot get a dial tone 
when she or her family members wish to place an outgoing call. During 
telephone conversations, the content of the nearby CB transmission can 
frequently be heard and on occasion, her phone conversations are 
inexplicably cut off. Ms. Ladwig's TV transmits audio from the CB 
transmission rather than the television program her family is watching. 
Shannon never knows if the TV program she taped with her VCR will 
actually record the intended program or whether it will contain 
profanity from nearby CB radio conversation.
  Shannon did everything she could to solve the problem and years later 
she still feels like a prisoner in her home, unable to escape the 
broadcasting whims of a CB operator using illegal equipment with 
impunity. Shannon even went to her city council to demand action. The 
Beloit City Council responded by passing an ordinance allowing local 
law enforcement to enforce FCC regulations--an ordinance the council 
knows is preempted by Federal law. The bill I am introducing today 
would allow Beloit's ordinance to stand.
  The problems experienced by Beloit residents are by no means isolated 
incidents. I have received very similar complaints from at least 10 
other Wisconsin communities in the last several years in which whole 
neighborhoods are experiencing persistent radio frequency interference. 
Since I have begun working on this issue, my staff has also been 
contacted by a number of other congressional offices who are also 
looking for a solution to the problem of radio frequency interference 
in their States or districts caused by unlawful CB use. The city of 
Grand Rapids, Michigan, in particular, has contacted me about this 
legislation because they face a persistent interference problem very 
similar to that in Beloit. I am pleased that Senators Levin and Abraham 
join me today in cosponsoring this legislation.
  In all, the FCC receives more than 30,000 radio frequency 
interference complaints annually--most of which are caused by CB 
radios. Unfortunately, the FCC no longer has the staff, resources, or 
the field capability to investigate these complaints and localities are 
blocked from exercising any jurisdiction to provide relief to their 
residents.
  My bill resolves this Catch-22, by allowing states and localities to 
enforce statutes or ordinances prohibiting selected violations of the 
FCC regulations. This gives local law enforcement the ability to 
enforce existing FCC regulations regarding unauthorized CB equipment 
and frequencies while maintaining exclusive Federal jurisdiction over 
the regulation of radio services. It is a commonsense solution to a 
very frustrating and real problem which cannot be addressed under 
existing law. Residents should not be held hostage to a Federal law 
which purports to protect them but cannot be enforced.
  Now this amendment is by no means a panacea for the problem of radio 
frequency interference. It is intended only to help localities solve 
the most egregious and persistent problems of interference--those 
caused by unauthorized use of CB radio equipment and frequencies. In 
cases where interference is caused by the legal and licensed operation 
of any radio service, residents will need to resolve the interference 
using the FCC self-help measures that I mentioned earlier.
  In many cases, interference can result from inadequate home 
electronic equipment immunity from radio frequency interference. Those 
problems can only be resolved by installing filtering equipment and by 
improving the manufacturing standards of home telecommunications 
equipment.
  The electronic equipment manufacturing industry, represented by the 
Telecommunications Industry Association and the Electronics Industry 
Association, working with the Federal Communications Commission, has 
adopted voluntary standards to improve the immunity of telephones from 
interference. Those standards were adopted by the American National 
Standards Institute last year. Manufacturers of electronic equipment 
should be encouraged to adopt these new ANSI standards. Consumers have 
a right to expect that the telephones they purchase will operate as 
expected without excessive levels of interference from legal radio 
transmissions. Of course, Mr. President, these standards assume legal 
operation of radio equipment and cannot protect residents from 
interference from illegal operation of CB equipment.
  This bill also does not address interference caused by other radio 
services, such as commercial stations or amateur stations. I have 
worked with the American Radio Relay League (ARRL), an organization 
representing amateur radio operators, frequently referred to as ``ham'' 
operators, to address a number of concerns that they raised about the 
original versions of my bill. ARRL was concerned that while the bill 
was intended to cover only illegal use of CB equipment, FCC-licensed 
amateur radio operators might inadvertently be targeted and prosecuted 
by local government and law enforcement. ARRL also expressed concern 
that local law enforcement might not have the technical abilities to 
distinguish between ham stations and CB stations and might not be able 
to determine what CB equipment was FCC-authorized and what equipment is 
illegal.
  I have worked with the ARRL and amateur operators from Wisconsin to 
address these concerns. As a result of those discussions, this 
amendment incorporates a number of provisions suggested by the league. 
First, the amendment makes clear that the limited authority provided to 
localities in no way diminishes or affects the FCC's exclusive 
jurisdiction over the regulation of radio.
  Second, the amendment clarifies that possession of a FCC license to 
operate a radio service for the operation at issue, such as an amateur 
station, is a complete protection against any local government action 
authorized by this amendment. Unlike CB operators, amateur radio 
enthusiasts are not only individually licensed by the FCC but they also 
self-regulate. The ARRL is very involved in resolving interference 
concerns both among their own members and between ham operators and 
residents experiencing problems.
  Third, the bill also provides for a FCC appeal process by any radio 
operator who is adversely affected by a local government action under 
this amendment. The FCC will make determinations as to whether the 
locality acted properly within the limited jursidiction this 
legislation provides and the FCC will have the power to reverse the 
action if they acted improperly. And fourth, my legislation requires 
the FCC to provide States and localities with technical guidance on how 
to determine whether a CB operator is acting within the law.
  In addition, the bill has been modified to address concerns raised by 
truckers, who feared that local law enforcement would use reports of CB 
interference to indiscriminately stop and search trucks in the area. 
The bill now provides specifically that local governments may not seek 
to enforce the FCC regulations with respect to a CB radio on board a 
commercial motor vehicle unless there is probable cause to believe that 
someone in the vehicle is operating a CB radio in violation of the 
regulations. This provision should ensure that this new authority is 
not used as a pretext to harass truckers.
  Again, Mr. President, my bill is narrowly targeted to resolve 
persistent interference with home electronic equipment caused by 
illegal CB operation. Under my bill, localities cannot establish their 
own regulations on CB use outside of the already existing FCC

[[Page 11936]]

regulations. This bill will not resolve all interference problems and 
it is not intended to do so. Some interference problems require 
continued attentions from the FCC, the telecommunications manufacturing 
industry, and radio service operators. This bill merely provides 
localities with the tools they need to protect their residents while 
preserving the FCC's exclusive regulatory jurisdiction over the 
regulation of radio services.
  I ask that the full 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. 2767

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

     SECTION 1. ENFORCEMENT OF REGULATIONS REGARDING CITIZENS BAND 
                   RADIO EQUIPMENT.

       Section 302 of the Communications Act of 1934 (47 U.S.C. 
     302a) is amended by adding at the end the following:
       ``(f)(1) Except as provided in paragraph (2), a State or 
     local government may enact a statute or ordinance that 
     prohibits a violation of the following regulations of the 
     Commission under this section:
       ``(A) A regulation that prohibits a use of citizens band 
     radio equipment not authorized by the Commission.
       ``(B) A regulation that prohibits the unauthorized 
     operation of citizens band radio equipment on a frequency 
     between 24 MHz and 35 MHz.
       ``(2) A station that is licensed by the Commission pursuant 
     to section 301 in any radio service for the operation at 
     issue shall not be subject to action by a State or local 
     government under this subsection. A State or local government 
     statute or ordinance enacted for purposes of this subsection 
     shall identify the exemption available under this paragraph.
       ``(3) The Commission shall provide technical guidance to 
     State and local governments regarding the detection and 
     determination of violations of the regulations specified in 
     paragraph (1).
       ``(4)(A) In addition to any other remedy authorized by law, 
     a person affected by the decision of a State or local 
     government enforcing a statute or ordinance under paragraph 
     (1) may submit to the Commission an appeal of the decision on 
     the grounds that the State or local government, as the case 
     may be, enacted a statute or ordinance outside the authority 
     provided in this subsection.
       ``(B) A person shall submit an appeal on a decision of a 
     State or local government to the Commission under this 
     paragraph, if at all, not later than 30 days after the date 
     on which the decision by the State or local government 
     becomes final, but prior to seeking judicial review of such 
     decision.
       ``(C) The Commission shall make a determination on an 
     appeal submitted under subparagraph (B) not later than 180 
     days after its submittal.
       ``(D) If the Commission determines under subparagraph (C) 
     that a State or local government has acted outside its 
     authority in enforcing a statute or ordinance, the Commission 
     shall preempt the decision enforcing the statute or 
     ordinance.
       ``(5) The enforcement of statute or ordinance that 
     prohibits a violation of a regulation by a State or local 
     government under paragraph (1) in a particular case shall not 
     preclude the Commission from enforcing the regulation in that 
     case concurrently.
       ``(6) Nothing in this subsection shall be construed to 
     diminish or otherwise affect the jurisdiction of the 
     Commission under this section over devices capable of 
     interfering with radio communications.
       ``(7) The enforcement of a statute or ordinance by a State 
     or local government under paragraph (1) with regard to 
     citizens band radio equipment on board a `commercial motor 
     vehicle,' as defined in section 31101 of title 49, United 
     States Code, shall require probable cause to find that the 
     commercial motor vehicle or the individual operating the 
     vehicle is in violation of the regulations described in 
     paragraph (1). Probable cause shall be defined in accordance 
     with the technical guidance provided by the Commission under 
     paragraph (3).''.

 Mr. LEVIN. Mr. President, I am pleased to cosponsor 
legislation being introduced today by my friend from Wisconsin to 
address a problem that is unique to certain areas of Wisconsin and 
Michigan.
  In the Cities of Grand Rapids and Battle Creek, Michigan and in 
several Wisconsin communities, certain individual Citizens Band (CB) 
radio operators are using illegal equipment of a capacity which 
interferes with the home electronic equipment and telephone service of 
their neighbors.
  As a result, these neighbors are forced to buy filters in order to 
screen out the interference, and in some cases the interference is so 
extreme that the filters don't even work. There have also been 
complaints that some of these ``illegal'' CB broadcasters are using 
profanity which is disturbing to the neighbors and interfering with 
legitimate use of CB radios by truckers and others.
  The problem is exacerbated by a lack of Federal resources to stop the 
problem. In recent years, due to budget and staffing cuts, the FCC has 
decreased its enforcement efforts. The legislation being introduced 
today would authorize local jurisdictions to enforce the FCC 
regulations regarding use of citizens band radio equipment, while 
maintaining the FCC jurisdiction over the regulation of radio services.
  The bill provides for an FCC appeal process available to any person 
who believes they are adversely affected by local enforcement action. 
FCC does not object to this approach or to this legislation.
  Mr. President, this legislation offers a simple solution to the 
inability of the FCC, due to insufficient resources, to put a stop to 
illegal CB equipment use in parts of Michigan and Wisconsin. The 
legislation would allow local officials, who are more familiar with the 
specific problems and complaints in their areas of jurisdiction, to be 
authorized to enforce FCC regulations regarding the use of CB radio 
equipment. The legislation has the strong support of local government 
officials in the Michigan communities where CB interference occurs.
  An identical bill has been introduced in the House of 
Representatives. I hope this legislation will be enacted in an 
expedited manner so that local officials will have the ability to stop 
the use of illegal CB equipment that is interfering with legitimate CB 
use and disturbing citizens of the impacted communities.
                                 ______
                                 
      By Ms. COLLINS:
  S. 2768. A bill to amend title XVIII of the Social Security Act to 
improve the Medicare-dependent, small rural hospital program; to the 
Committee on Finance.


              small rural hospital program improvement act

  Ms. COLLINS. Mr. President, I rise today to introduce the Small Rural 
Hospital Program Improvement Act, which is intended to make critically 
important changes to Medicare payment policies for rural hospitals.
  Mr. President, most hospitals in rural America serve a large number 
of Medicare patients. Medicare payments to these hospitals, however, 
are not always adequate to cover the cost of the services they provide. 
The legislation I am introducing today will increase Medicare payments 
to small, rural hospitals in Maine and elsewhere by enabling more of 
them to qualify for enhanced reimbursements under the Medicare 
Dependent, Small Rural Hospital Program.
  Rural hospitals are the anchors of small towns and communities across 
America. Not only are they the mainstay of the local health care 
delivery system, but they are also often the major employers in their 
communities. Rural communities have unique characteristics and special 
needs, and their hospitals face tremendous challenges every day as they 
work to provide the highest quality health care to their patients in 
the face of sometimes discouraging odds.
  Rural communities tend to have higher concentrations of elderly 
persons and higher levels of poverty. Rural residents also tend to have 
higher rates of certain health problems than people living in urban 
areas. For example, deaths and disabilities resulting from injury are 
more common, and rural residents also tend to experience higher rates 
of chronic disease and disability. Rural providers also face unique 
challenges in the delivery of health care services, given the great 
distances and extreme weather conditions that often prevail, 
particularly in states like Maine. Shortages of physicians, nurses and 
other health professionals make it difficult to ensure that rural 
residents have access to all of the care that they need. And finally, 
Medicare reimbursement policies tend to favor urban areas and fail to 
take the special needs of rural providers into account.
  The Balanced Budget Act of 1997 has posed additional challenges for 
rural

[[Page 11937]]

areas. Deep Medicare payment reductions and mounting regulatory 
requirements have damaged our fragile rural health care delivery 
system, and, in particular, our rural hospitals and home health 
agencies. While the Balanced Budget Refinement Act of 1999 did provide 
some much-needed relief, we should take further steps to ensure that 
these rural providers receive more equitable Medicare payments.
  One relatively simple, but nevertheless important step we can take is 
to update the antiquated and arbitrary classification requirements that 
prevent otherwise-qualified hospitals from receiving assistance under 
the Medicare Dependent, Small Rural Hospital program. Under this 
program, small rural hospitals that treat relatively high proportions 
of Medicare patients qualify for enhanced Medicare reimbursements. To 
qualify as a Medicare Dependent Hospital, a hospital must be located in 
a rural area, not be a sole community hospital, have 100 or fewer beds, 
and have been dependent on Medicare for at least 60 percent of its 
inpatient days or discharges in 1987.
  The requirement that the hospital must have had at least 60 percent 
of its hospital discharges or patient days attributable to Medicare 
beneficiaries in 1987 is what creates the problem. Using 1987 as a base 
year erects an arbitrary barrier that prevents many small rural 
hospitals that otherwise meet the criteria from participating in this 
program. As an example, despite the fact that most of the small rural 
hospitals in Maine treat a disproportionate share of Medicare 
beneficiaries, none of them currently qualifies for this program. Not a 
single one.
  The legislation I am introducing today modifies and updates the 60 
percent requirement and bases eligibility for the Medicare Dependent, 
Small Rural Hospital program on Medicare discharges or patient days 
during any of the three most recently audited cost report periods 
rather than fiscal year 1987. In addition, the bill would make the 
program, which currently is only authorized through FY 2006, permanent. 
According to the Maine Hospital Association, if updated in this way, 
nine Maine hospitals will be eligible for the program, which would make 
them eligible for over $9 million additional Medicare dollars.
  Increasing Medicare payment rates is critically important to the 
hospitals in Maine. For the past several years, Maine has ranked 49th 
or 50th in the nation in terms of Medicare reimbursement-to-cost 
ratios. For example, while hospitals in some states received more from 
Medicare in 1996 than it cost them to provide care to older and 
disabled Medicare patients, Maine's hospitals were only reimbursed 80 
cents for every $1.00 they actually spent caring for Medicare 
beneficiaries.
  As a consequence, Maine's hospitals have experienced a serious 
Medicare shortfall in recent years. The Maine Hospital Association 
anticipates a $174 million Medicare shortfall in 2002, which will force 
Maine's hospitals to shift costs on to other payers in the form of 
higher hospital charges. This Medicare shortfall is one of the reasons 
that Maine has among the highest insurance premiums in the nation.
  Maine's poor Medicare margin is not due to high hospital costs. In 
fact, the current system tends to penalize Maine hospitals for their 
efficiency. For example, at $5,232, Maine's cost per discharge is 
slightly under the national average of $5,241, and is well below the 
Northeast average of $5,517.
  The legislation I am introducing today will not solve Maine's 
Medicare shortfall problem, but it will help to close the gap. It will 
also enable many more small rural hospitals across the country to 
benefit from this program, which will help to ensure continued access 
to high quality hospital care for all rural Americans.
                                 ______
                                 
      By LEAHY (for himself, Mr. Hatch, Mr. Robb, Mr. Durbin, Mr. Kohl, 
        Mr. Schumer, and Mr. Cleland):
  S. 2769. A bill to authorize funding for National Instant Criminal 
Background Check System improvement; to the Committee on the Judiciary.


                          nics partnership act

  Mr. LEAHY. Mr. President, I am pleased to introduce the legislation 
to improve the National Instant Criminal Background Check System, NICS. 
The NICS Partnership Act authorizes the Department of Justice to 
reimburse states for serving as points of contact under the NICS. Our 
legislation also requires the Attorney General to issue a report to 
Congress on the appropriate formula to reimburse states for their 
reasonable costs to serve as points of contact for access to the NICS. 
I am pleased that Senators Hatch, Robb, Durbin, Kohl, Schumer, and 
Cleland are original cosponsors of this bipartisan bill.
  The Brady Handgun Violence Prevention Act of 1994 established the 
NICS and required federal firearm licensees to conduct a background 
check on the purchaser of any firearm sale after November 30, 1998. In 
its first 18 months of operation, the NICS has been a highly effective 
system for keeping guns out of the hands of criminals and children. 
Having processed 10 million inquires during this time, the NICS has 
ensured the timely transfer of firearms to law-abiding citizens, while 
denying transfers to more than 179,000 felons, fugitives and other 
prohibited persons. That is a remarkable record in preventing crime and 
protecting public safety.
  This success, however, has come at an unfair cost to many states. The 
NICS is mandated by Federal law, the Brady Act, but many states are 
picking up the tab for conducting effective Brady background checks. 
Congress should remedy this inequity. Effective Brady background checks 
are the responsibility of the Federal government under Federal law. As 
a result, it is only fair for Congress to reimburse states for their 
reasonable costs needed to conduct effective Brady background checks.
  Because more comprehensive criminal history records are currently 
available at the state and local level in many states, instead of the 
Federal level, these states have elected to serve as points of contact 
(POCs) to access the NICS. A state POC is a state agency that agrees to 
conduct Brady background checks, including NICS checks, on prospective 
gun buyers. In states that have agreed to serve as POCs, federal 
firearm licensees contact the state POC for a Brady background check 
rather than contacting the Federal Bureau of Investigation (FBI). These 
POC background checks review more records of people in prohibited 
categories, such as people who have been involuntarily committed to a 
mental institution or are under a domestic violence restraining order.
  Indeed, in my home state of Vermont, for example, which serves as a 
POC, approximately 28 percent of all denials of prohibited persons 
seeking firearm purchases are based on state charges which would not 
have been available for review at the FBI's criminal record repository. 
These purchasers were denied because a relief from abuse order had been 
issued against them, they had been convicted of a misdemeanor crime of 
family violence, they were wanted in the State of Vermont, or they had 
been convicted of a felony in Vermont and not fingerprinted. These 
results demonstrate the value of having the states act as POCs for 
NICS.
  Currently, the following 15 states serve as a full POC for NICS: 
Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, 
Illinois, Nevada, New Jersey, Pennsylvania, Tennessee, Utah, Vermont 
and Virginia. Another 11 states serve as partial POCs for NICS by 
performing checks for handgun purchases while the FBI processes checks 
for long gun purchases: Iowa, Michigan, Nebraska, New York, North 
Carolina, Indiana, Maryland, New Hampshire, Oregon, Washington, and 
Wisconsin. Thus, more than half the states serve as full or partial 
POCs under the NICS.
  In fact, of the 8,621,000 background checks conducted last year, 
4,538,000 were handled by the FBI and 4,083,000--almost half--were 
handled by state POCs. So while some states relied on the FBI to 
conduct Brady background checks and paid nothing, the states that 
elected to conduct more effective background checks paid the full cost 
of them. That is unfair to states that are doing the right thing.

[[Page 11938]]

  The State of Vermont, for instance, pays about $110,000 a year for 
its POC system to run effective Brady background checks on all firearms 
purchased through federal firearms licensees. In other POC states, the 
burden is higher on state legislatures to come up with funding sources 
to pay for effective Brady background checks.
  Indeed, the Governor of Florida, Jeb Bush, wrote to me last year in 
strong support of Federal funding to pay for the costs of Brady 
background checks performed by POC states. Governor Bush empathized 
that Florida's POC background checks were more efficient and effective 
than background checks performed at the Federal level. Governor Bush 
concluded in his letter that: ``Without this funding, it is unlikely 
that state legislatures will continue the state programs--the 
inequities of charging for the service in some states but getting free 
service in others are too obvious.'' I agree. I ask unanimous consent 
that Governor Bush's letter be printed in the Record at the conclusion 
of my remarks.
  The FBI, in its first operations report on the NICS, recommend that 
states should be compensated for their costs necessary to serve as 
POCs. Specifically, the FBI's report found: ``Based on its first year 
of operation, it is clear that the ability of the NICS to stop 
prohibited persons from acquiring firearms would be improved by . . . a 
means to help states with the cost of performing as a POC state. . . 
.''
  A recent General Accounting Office report on the implementation of 
the NICS also praised the POC state background check system. The GAO 
report found: ``According to the FBI, the functioning of the NICS would 
be more effective and efficient if more states were full participants. 
For instance, FBI officials noted that state law enforcement agencies 
have access to more current criminal history records and more data 
sources, particularly regarding noncriminal disqualifiers, such as 
mental hospital commitments, from their own states than does the FBI, 
and have a better understanding of their own state laws and 
disqualifying factors.''
  Similar legislation to reimburse POC states under the NICS was part 
of the Senate-passed Juvenile Justice bill, which has been languishing 
in conference for many months. I prefer that we address this issue as 
part of the juvenile justice legislation by convening the juvenile 
justice conference and finishing the work we started last May when the 
Senate passed the Hatch-Leahy juvenile justice bill by a strong 
bipartisan vote. But since the congressional leadership appears 
unlikely to reconvene the juvenile justice conference, then we should 
consider these improvements to the NICS now to protect public safety.
  Indeed, the Department of Justice, in comments on the Senate-passed 
juvenile justice bill, stated: ``Reimbursing the point-of-contact 
states for doing NICS checks could be critical to retaining their 
participation, because they have a strong disincentive to preform 
checks that the FBI is providing to gun dealers and buyers free of 
charge. We believe it is very important to retain point-of-contact 
states and increase their number, because states have access to state 
records that are not available to the FBI and states have the expertise 
to interpret their own records and local laws.''
  Mr. President, states are doing the right thing by serving as points 
of contact under the NICS for more effective background checks, which 
are mandated by Federal law. These background checks prevent crime and 
promote the public safety. Congress should do the right thing by 
reimbursing these states for their reasonable costs for conducting 
these point of conduct background checks.
  I ask unanimous consent that the text of the bill be printed in the 
Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2769

       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 ``NICS Partnership Act of 
     2000''.

     SEC. 2. NATIONAL INSTANT CRIMINAL BACKGROUND CHECK SYSTEM 
                   IMPROVEMENTS.

       (a) Authorization for Reimbursement to States Serving as 
     Points of Contact.--There are authorized to be appropriated 
     $40,000,000 for fiscal year 2001, $50,000,000 for fiscal year 
     2002, and $60,000,000 for fiscal year 2003, to the Department 
     of Justice to directly reimburse States for the reasonable 
     costs necessary to serve as points of contact for access to 
     the National Instant Criminal Background Check System 
     established under Public Law 103-159.
       (b) Report on Reimbursement Formula for States Serving as 
     Points of Contact.--Not later than 90 days after the date of 
     enactment of this Act, the Attorney General shall submit to 
     the Committees on the Judiciary of the Senate and the House 
     of Representatives a report on the appropriate formula for 
     the direct reimbursement to States of the reasonable costs 
     necessary to serve as points of contact for access to the 
     National Instant Criminal Background Check System established 
     under Public Law 103-159.
                                 ______
                                 
      By Mr. CLELAND:
  S. 2771. A bill to provide for Federal recognition of the Lower 
Muscogee-Creek Indian Tribe of Georgia, and for other purposes; to the 
Committee on Indian Affairs.


    the lower muscogee-creek indian tribe of georgia recognition act

 Mr. CLELAND. Mr President, today I am introducing legislation 
which will provide for the Federal recognition of the Lower Muskogee-
Creek Indian Tribe of Georgia.
  I realize that Congress has traditionally deferred to the Secretary 
of the Interior on matters relating to tribal recognition. Further, 
while it is within our jurisdiction, I understand that there is a 
reluctance in Congress to federally recognize Indian tribes through 
legislation. I would certainly prefer to settle this particular 
recognition issue in accordance with the practices and procedures 
established by the Bureau of Indian Affairs. However, I am compelled to 
introduce this legislation because I believe there has been a 
fundamental flaw which, in this case, has prevented the Lower Muskogee 
tribe from obtaining a fair and equitable review of its recognition 
request. Mr. President, please allow me to elaborate on this statement.
  It is my understanding that once a petition has been denied, the 
rules prohibit a tribe from petitioning the Secretary of the Interior a 
second time. While the intent of the rule may be to eliminate redundant 
and frivolous petitions, I believe there are times when we must make an 
exception. Further, Mr. President, I would contend that this rule is 
especially unfair to those tribes who petitioned the Agency prior to 
the finalization of the rules in 1978. This is the case with respect to 
the Lower Muskogee tribe in my home State of Georgia.
  The Lower Muskogee tribe has tried for over two decades to obtain a 
favorable review of their status as a tribe. In 1977, members of the 
tribe petitioned the Secretary of the Interior for recognition. Without 
the assistance of legal counsel or technical support, the tribe 
submitted their petition. While the petition was pending, the 
Department of Interior (DOI) proposed and finalized rules relating to 
the procedures by which tribes may petition for federal recognition. In 
December 1981, the tribe's petition was denied due to technical 
omissions.
  I understand that there are serious concerns associated with the 
federal recognition of tribes by an Act of Congress--the most obvious 
being the perception that establishment of a gaming facility may soon 
follow. However, members of the Lower Muskogee tribe are not seeking to 
open casinos in Georgia. In fact, at the request of the tribe's 
Principal Chief, I have included language in the bill to prohibit such 
action. Under my bill, federal recognition of the Lower Muskogee tribe 
will not permit casinos or any other games of chance. It will simply 
recognize these well-deserving people as an Indian tribe, and allow 
their participation in programs which should be available to them as 
legitimate Native Americans.
  Mr. President, I ask unanimous consent that a copy of the bill be 
printed in the Record, and urge my colleagues to join me in enacting 
this legislation.

[[Page 11939]]

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

                                S. 2771

       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 ``Lower Muscogee-Creek Indian 
     Tribe of Georgia Recognition Act''.

     SEC. 2. FINDINGS.

       The Congress declares and finds the following:
       (1) The Lower Muscogee-Creek Indian Tribe of Georgia are 
     descendants of and political successors to those Indians 
     known as the original Creek Indian Nation at the time of 
     initial European contact with America.
       (2) The Lower Muscogee-Creek Indian Tribe of Georgia are 
     descendants and political successors to the signatories of 
     the 1832 Treaty of Washington which was a treaty made while 
     the Creeks were one nation, before removal. The Treaty 
     involved all Creeks, including the Upper, Middle, and Lower 
     Creeks, when the Creek Nation was whole and intact.
       (3) The Lower Muscogee-Creek Indian Tribe of Georgia 
     consists of over 2,500 eligible members, most of whom 
     continue to reside close to their ancestral homeland within 
     the State of Georgia. Pursuant to Article XII of the 1832 
     Treaty of Washington, the Lower Muscogee-Creek Indian Tribe 
     of Georgia declined to be removed and continued to operate as 
     a sovereign Indian tribe comprising those Lower Creeks 
     declining removal under the Treaty of 1832.
       (4) The Lower Muscogee-Creek Indian Tribe of Georgia 
     continues its political and social existence with a viable 
     tribal government carrying out many of its governmental 
     functions through its traditional form of collective 
     decisionmaking and social interaction.
       (5) In 1972, when the Lower Muscogee-Creek Indian Tribe of 
     Georgia (also known as the Muscogee-Creek Indian Tribe East 
     of the Mississippi River) petitioned the Bureau of Indian 
     Affairs for Federal recognition, the tribal leaders were not 
     well educated and the Tribe could not afford competent 
     counsel adequately versed in Federal Indian law. The Tribe 
     was unable to obtain technical assistance in its petition 
     which consequently lacked critical and pertinent historical 
     information necessary for recognition. Thus, due to technical 
     omissions, the petition was denied on December 21, 1981.
       (6) Despite the denial of the petition, the United States 
     Government, the government of the State of Georgia, and local 
     governments, have recognized the political leaders of the 
     Lower Muscogee-Creek Indian Tribe of Georgia as leaders of a 
     distinct political governmental entity.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Member.--The term ``member'' means an enrolled member 
     of the Tribe, as of the date of enactment of this Act, or an 
     individual who has been placed on the membership rolls of the 
     Tribe in accordance with this Act.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (3) Tribe.--The term ``Tribe'' means the Lower Muscogee-
     Creek Indian Tribe of Georgia.

     SEC. 4. FEDERAL RECOGNITION.

       (a) In General.--Federal recognition is hereby extended to 
     the Tribe. All laws and regulations of general application to 
     Indians or nations, tribes, or bands of Indians that are not 
     inconsistent with any specific provision of this Act shall be 
     applicable to the Tribe and its members.
       (b) Federal Benefits and Services.--The Tribe and its 
     members shall be eligible, on or after the date of enactment 
     of this Act, for all Federal benefits and services furnished 
     to federally recognized Indian tribes and their members 
     because of their status as Indians without regard to the 
     existence of a reservation for the Tribe or the residence of 
     any member on or near an Indian reservation.
       (c) Indian Reorganization Act Applicability.--The Act of 
     June 18, 1934 (25 U.S.C. 461 et seq.) shall be applicable to 
     the Tribe and its members.

     SEC. 5. RESERVATION.

       (a) Lands Taken Into Trust.--Notwithstanding any other 
     provision of law, if, not later than 2 years after the date 
     of enactment of this Act, the Tribe transfers interest in 
     land within the boundaries of Grady County, Carroll County, 
     and such other counties in the State of Georgia to the 
     Secretary, the Secretary shall take such interests in land 
     into trust for the benefit of the Tribe.
       (b) Reservation Established.--Land taken into trust 
     pursuant to subsection (a) shall be the initial reservation 
     land of the Tribe.
       (c) Limitation on Gaming.--Gaming as defined and regulated 
     by the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.) 
     is prohibited on the land taken into trust under subsection 
     (a).

     SEC. 6. BASE MEMBERSHIP ROLL.

       (a) In General.--Not later than 120 days after the date of 
     enactment of this Act, the Tribe shall submit to the 
     Secretary a membership roll consisting of all individuals who 
     are members of the Tribe. The qualifications for inclusion in 
     the membership roll of the Tribe shall be developed and based 
     upon the membership provisions as contained in the Tribe's 
     Constitution and Bill of Rights. Upon completion of the 
     membership roll, the Secretary shall publish notice of such 
     in the Federal Register. The Tribe shall ensure that such 
     roll is maintained and kept current.
       (b) Future Membership.--The Tribe shall have the right to 
     determine future membership in the Tribe, however, in no 
     event may an individual be enrolled as a member of the Tribe 
     unless the individual is a lineal descendant of a person on 
     the base membership roll, and has continued to maintain 
     political relations with the Tribe.

     SEC. 7. JURISDICTION.

       The reservation established pursuant to this Act shall be 
     Indian country under Federal and tribal jurisdiction.
                                 ______
                                 
      By Mr. GREGG (for himself, Mr. Kerrey, Mr. Breaux, Mr. Grassley, 
        Mr. Thompson, Mr. Robb, and Mr. Thomas):
  S. 2774. A bill to amend title II of the Social Security Act to 
provide for individual savings accounts funded by employee and employer 
Social Security payroll deductions, to extend the solvency of the old-
age, survivors, and disability insurance program, and for other 
purposes; to the Committee on Finance.


           the bipartisan social security reform act of 2000

  Mr. GRASSLEY. Mr. President, I rise today in support of legislation 
to make technical corrections to the Bipartisan Social Security Reform 
bill my colleagues and I introduced last summer. The purpose of this 
legislation is simple: to conform our previous legislative language to 
changes that have been made in the Social Security program--such as 
eliminating the earnings limit--since last July; to correct some 
inadvertent errors we discovered; and to update our assumptions to 
reflect the new reality of the Trust Funds as reported in the 2000 
Social Security and Medicare Trustees Report which came out earlier 
this year.
  Since July 16, 1999 when Senators Gregg, Kerrey, Breaux, Thompson, 
Thomas, and Robb and I introduced our legislation to save Social 
Security, the issue has taken on new life, due to Governor Bush's 
willingness to make Social Security reform a primary issue in his 
presidential campaign. He should be commended for his leadership and 
for grabbing the third rail of American politics fearlessly in order to 
create a truly secure Social Security system so that future generations 
will be able to rely on Social Security like their parents and 
grandparents.
  I want to urge my colleagues to take a serious look at our proposal 
to save Social Security. It was designed in a bipartisan, bicameral 
manner: four Republicans and three Democrats cosponsored the Bipartisan 
Social Security Reform Bill, and Congressmen Kolbe and Stenholm 
sponsored similar legislation in the House of Representatives.
  The bipartisan plan would maintain a basic floor of protection 
through a traditional Social Security benefit, but two percentage 
points of the 12.4 percent payroll tax would be redirected to 
individual accounts. Individuals could invest their personal accounts 
in any combination of the funds offered through the Social Security 
system. An individual who invested his or her personal account in a 
bond fund would receive a guaranteed interest rate. However, 
individuals who wish to pursue a higher rate of return through 
investment in a fund including equities could do so.
  Our proposal would eliminate the need for future payroll tax 
increases by advance funding a portion of future benefits through 
personal accounts. With individual accounts, we provide Americans with 
the tools necessary to build financial independence in retirement--
especially to those who previously had limited opportunities to create 
wealth. The legislation provides incentives for low and middle income 
working Americans to save additional funds for retirement by matching 
their voluntary contributions to their individual accounts. Under our 
plan, they will be able to save for retirement and benefit from 
economic growth.
  As all the cosponsors have said a hundred times, our proposal offers 
no ``free lunch''. In order to save Social Security for future 
generations it must

[[Page 11940]]

be modernized. We have crafted a responsible plan to save Social 
Security for generations to come. By making incremental, steady changes 
to the Social Security system, we will be able to ensure the long-term 
solvency of the program.
  With this technical corrections bill we have improved upon our 
original legislation and I urge my colleagues to support the bipartisan 
proposal to save Social Security.
  Mr. President, I ask that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2774

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

                  TITLE I--INDIVIDUAL SAVINGS ACCOUNTS

Sec. 101. Individual savings accounts.
Sec. 102. Social security KidSave Accounts.
Sec. 103. Adjustments to primary insurance amounts under part A of 
              title II of the Social Security Act.

              TITLE II--SOCIAL SECURITY SYSTEM ADJUSTMENTS

Sec. 201. Adjustments to bend points in determining primary insurance 
              amounts.
Sec. 202. Adjustment of widows' and widowers' insurance benefits.
Sec. 203. Elimination of earnings test for individuals who have 
              attained early retirement age.
Sec. 204. Gradual increase in number of benefit computation years; use 
              of all years in computation.
Sec. 205. Maintenance of benefit and contribution base.
Sec. 206. Reduction in the amount of certain transfers to Medicare 
              Trust Fund.
Sec. 207. Actuarial adjustment for retirement.
Sec. 208. Improvements in process for cost-of-living adjustments.
Sec. 209. Modification of PIA factors to reflect changes in life 
              expectancy.
Sec. 210. Mechanism for remedying unforeseen deterioration in social 
              security solvency.

                  TITLE I--INDIVIDUAL SAVINGS ACCOUNTS

     SEC. 101. INDIVIDUAL SAVINGS ACCOUNTS.

       (a) Establishment and Maintenance of Individual Savings 
     Accounts.--Title II of the Social Security Act (42 U.S.C. 401 
     et seq.) is amended--
       (1) by inserting before section 201 the following:

                    ``Part A--Insurance Benefits'';

     and
       (2) by adding at the end the following:

                 ``Part B--Individual Savings Accounts


                     ``individual savings accounts

       ``Sec. 251. (a) Establishment.--
       ``(1) In general.--
       ``(A) Establishment in absence of kidsave account.--Except 
     as provided in subparagraph (B), the Commissioner of Social 
     Security, within 30 days of the receipt of the first 
     contribution received pursuant to subsection (b) with respect 
     to an eligible individual, shall establish in the name of 
     such individual an individual savings account. The individual 
     savings account shall be identified to the account holder by 
     means of the account holder's Social Security account number.
       ``(B) Use of kidsave account.--If a KidSave Account has 
     been established in the name of an eligible individual under 
     section 262(a) before the date of the first contribution 
     received by the Commissioner pursuant to subsection (b) with 
     respect to such individual, the Commissioner shall 
     redesignate the KidSave Account as an individual savings 
     account for such individual.
       ``(2) Definition of eligible individual.--In this part, the 
     term `eligible individual' means any individual born after 
     December 31, 1937.
       ``(b) Contributions.--
       ``(1) Amounts transferred from the trust fund.--The 
     Secretary of the Treasury shall transfer from the Federal 
     Old-Age and Survivors Insurance Trust Fund, for crediting by 
     the Commissioner of Social Security to an individual savings 
     account of an eligible individual, an amount equal to the sum 
     of any amount received by such Secretary on behalf of such 
     individual under section 3101(a)(2) or 1401(a)(2) of the 
     Internal Revenue Code of 1986.
       ``(2) Other contributions.--For provisions relating to 
     additional contributions credited to individual savings 
     accounts, see sections 531(c)(2) and 6402(l) of the Internal 
     Revenue Code of 1986.
       ``(c) Designation of Investment Type of Individual Savings 
     Account.--
       ``(1) Designation.--Each eligible individual who is 
     employed or self-employed shall designate the investment type 
     of individual savings account to which the contributions 
     described in subsection (b) on behalf of such individual are 
     to be credited.
       ``(2) Form of designation.--The designation described in 
     paragraph (1) shall be made in such manner and at such 
     intervals as the Commissioner of Social Security may 
     prescribe in order to ensure ease of administration and 
     reductions in burdens on employers.
       ``(3) Special rule for 2001.--Not later than January 1, 
     2001, any eligible individual that is employed or self-
     employed as of such date shall execute the designation 
     required under paragraph (1).
       ``(4) Designation in absence of designation by eligible 
     individual.--In any case in which no designation of the 
     individual savings account is made, the Commissioner of 
     Social Security shall make the designation of the individual 
     savings account in accordance with regulations that take into 
     account the competing objectives of maximizing returns on 
     investments and minimizing the risk involved with such 
     investments.
       ``(d) Treatment of Incompetent Individuals.--Any 
     designation under subsection (c)(1) to be made by an 
     individual mentally incompetent or under other legal 
     disability may be made by the person who is constituted 
     guardian or other fiduciary by the law of the State of 
     residence of the individual or is otherwise legally vested 
     with the care of the individual or his estate. Payment under 
     this part due an individual mentally incompetent or under 
     other legal disability may be made to the person who is 
     constituted guardian or other fiduciary by the law of the 
     State of residence of the claimant or is otherwise legally 
     vested with the care of the claimant or his estate. In any 
     case in which a guardian or other fiduciary of the individual 
     under legal disability has not been appointed under the law 
     of the State of residence of the individual, if any other 
     person, in the judgment of the Commissioner, is responsible 
     for the care of such individual, any designation under 
     subsection (c)(1) which may otherwise be made by such 
     individual may be made by such person, any payment under this 
     part which is otherwise payable to such individual may be 
     made to such person, and the payment of an annuity payment 
     under this part to such person bars recovery by any other 
     person.


   ``definition of individual savings account; treatment of accounts

       ``Sec. 252. (a) Individual Savings Account.--In this part, 
     the term `individual savings account' means any individual 
     savings account in the Individual Savings Fund (established 
     under section 254) which is administered by the Individual 
     Savings Fund Board.
       ``(b) Treatment of Account.--Except as otherwise provided 
     in this part and in section 531 of the Internal Revenue Code 
     of 1986, any individual savings account described in 
     subsection (a) shall be treated in the same manner as an 
     individual account in the Thrift Savings Fund under 
     subchapter III of chapter 84 of title 5, United States Code.


               ``individual savings account distributions

       ``Sec. 253. (a) Date of Initial Distribution.--Except as 
     provided in subsection (c), distributions may only be made 
     from an individual savings account of an eligible individual 
     on and after the earliest of--
       ``(1) the date the eligible individual attains normal 
     retirement age, as determined under section 216 (or early 
     retirement age (as so determined) if elected by such 
     individual), or
       ``(2) the date on which funds in the eligible individual's 
     individual savings account are sufficient to provide a 
     monthly payment over the life expectancy of the eligible 
     individual (determined under reasonable actuarial 
     assumptions) which, when added to the eligible individual's 
     monthly benefit under part A (if any), is at least equal to 
     an amount equal to \1/12\ of the poverty line (as defined in 
     section 673(2) of the Community Services Block Grant Act (42 
     U.S.C. 9902(2) and determined on such date for an individual) 
     and adjusted annually thereafter by the adjustment determined 
     under section 215(i).
       ``(b) Forms of Distribution.--
       ``(1) Required monthly payments.--Except as provided in 
     paragraph (2), beginning with the date determined under 
     subsection (a), the balance in an individual savings account 
     available to provide monthly payments not in excess of the 
     amount described in subsection (a)(2) shall be paid, as 
     elected by the account holder (in such form and manner as 
     shall be prescribed in regulations of the Individual Savings 
     Fund Board), by means of the purchase of annuities or equal 
     monthly payments over the life expectancy of the eligible 
     individual (determined under reasonable actuarial 
     assumptions) in accordance with requirements (which shall be 
     provided in regulations of the Board) similar to the 
     requirements applicable to payments of benefits under 
     subchapter III of chapter 84 of title 5, United States Code, 
     and providing for indexing for inflation.
       ``(2) Payment of excess funds.--To the extent funds remain 
     in an eligible individual's individual savings account after 
     the application of paragraph (1), such funds shall be payable 
     to the eligible individual in such

[[Page 11941]]

     manner and in such amounts as determined by the eligible 
     individual, subject to the provisions of subchapter III of 
     chapter 84 of title 5, United States Code.
       ``(c) Distribution in the Event of Death Before the Date of 
     Initial Distribution.--If the eligible individual dies before 
     the date determined under subsection (a), the balance in such 
     individual's individual savings account shall be distributed 
     in a lump sum, under rules established by the Individual 
     Savings Fund Board, to the individual's heirs.


                       ``individual savings fund

       ``Sec. 254. (a) Establishment.--There is established and 
     maintained in the Treasury of the United States an Individual 
     Savings Fund in the same manner as the Thrift Savings Fund 
     under sections 8437, 8438, and 8439 (but not section 8440) of 
     title 5, United States Code.
       ``(b) Individual Savings Fund Board.--
       ``(1) In general.--There is established and operated in the 
     Social Security Administration an Individual Savings Fund 
     Board in the same manner as the Federal Retirement Thrift 
     Investment Board under subchapter VII of chapter 84 of title 
     5, United States Code.
       ``(2) Specific investment and reporting duties.--
       ``(A) In general.--The Individual Savings Fund Board shall 
     manage and report on the activities of the Individual Savings 
     Fund and the individual savings accounts of such Fund in the 
     same manner as the Federal Retirement Thrift Investment Board 
     manages and reports on the Thrift Savings Fund and the 
     individual accounts of such Fund under subchapter VII of 
     chapter 84 of title 5, United States Code.
       ``(B) Study and report on increased investment options.--
       ``(i) Study.--The Individual Savings Fund Board shall 
     conduct a study regarding ways to increase an eligible 
     individual's investment options with respect to such 
     individual's individual savings account and with respect to 
     rollovers or distributions from such account.
       ``(ii) Report.--Not later than 2 years after the date of 
     enactment of the Bipartisan Social Security Reform Act of 
     2000, the Individual Savings Fund Board shall submit a report 
     to the President and Congress that contains a detailed 
     statement of the results of the study conducted pursuant to 
     clause (i), together with the Board's recommendations for 
     such legislative actions as the Board considers appropriate.


     ``budgetary treatment of individual savings fund and accounts

       ``Sec. 255. The receipts and disbursements of the 
     Individual Savings Fund and any accounts within such fund 
     shall not be included in the totals of the budget of the 
     United States Government as submitted by the President or of 
     the congressional budget and shall be exempt from any general 
     budget limitation imposed by statute on expenditures and net 
     lending (budget outlays) of the United States Government.''.
       (b) Modification of FICA Rates.--
       (1) Employees.--Section 3101(a) of the Internal Revenue 
     Code of 1986 (relating to tax on employees) is amended to 
     read as follows:
       ``(a) Old-Age, Survivors, and Disability Insurance.--
       ``(1) In general.--
       ``(A) Individuals covered under part a of title ii of the 
     social security act.--In addition to other taxes, there is 
     hereby imposed on the income of every individual who is not a 
     part B eligible individual a tax equal to 6.2 percent of the 
     wages (as defined in section 3121(a)) received by him with 
     respect to employment (as defined in section 3121(b)).
       ``(B) Individuals covered under part b of title ii of the 
     social security act.--In addition to other taxes, there is 
     hereby imposed on the income of every part B eligible 
     individual a tax equal to 4.2 percent of the wages (as 
     defined in section 3121(a)) received by such individual with 
     respect to employment (as defined in section 3121(b)).
       ``(2) Contribution of oasdi tax reduction to individual 
     savings accounts.--
       ``(A) In general.--In addition to other taxes, there is 
     hereby imposed on the income of every part B eligible 
     individual an individual savings account contribution equal 
     to the sum of--
       ``(i) 2 percent of the wages (as so defined) received by 
     such individual with respect to employment (as so defined), 
     plus
       ``(ii) so much of such wages (not to exceed $2,000) as 
     designated by the individual in the same manner as described 
     in section 251(c) of the Social Security Act.
       ``(B) Inflation adjustment.--
       ``(i) In general.--In the case of any calendar year 
     beginning after 2001, the dollar amount in subparagraph 
     (A)(ii) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year, determined by 
     substituting `calendar year 2000' for `calendar year 1992' in 
     subparagraph (B) thereof.

       ``(ii) Rounding.--If any dollar amount after being 
     increased under clause (i) is not a multiple of $10, such 
     dollar amount shall be rounded to the nearest multiple of 
     $10.''.
       (2) Self-employed.--Section 1401(a) of the Internal Revenue 
     Code of 1986 (relating to tax on self-employment income) is 
     amended to read as follows:
       ``(a) Old-Age, Survivors, and Disability Insurance.--
       ``(1) In general.--
       ``(A) Individuals covered under part a of the social 
     security act.--In addition to other taxes, there shall be 
     imposed for each taxable year, on the self-employment income 
     of every individual who is not a part B eligible individual 
     for the calendar year ending with or during such taxable 
     year, a tax equal to 12.40 percent of the amount of the self-
     employment income for such taxable year.
       ``(B) Individuals covered under part b of title ii of the 
     social security act.--In addition to other taxes, there is 
     hereby imposed for each taxable year, on the self-employment 
     income of every part B eligible individual, a tax equal to 
     10.4 percent of the amount of the self-employment income for 
     such taxable year.
       ``(2) Contribution of oasdi tax reduction to individual 
     savings accounts.--
       ``(A) In general.--In addition to other taxes, there is 
     hereby imposed for each taxable year, on the self-employment 
     income of every individual, an individual savings account 
     contribution equal to the sum of--
       ``(i) 2 percent of the amount of the self-employment income 
     for each individual for such taxable year, and
       ``(ii) so much of such self-employment income (not to 
     exceed $2,000) as designated by the individual in the same 
     manner as described in section 251(c) of the Social Security 
     Act.
       ``(B) Inflation adjustment.--
       ``(i) In general.--In the case of any taxable year 
     beginning after 2001, the dollar amount in subparagraph 
     (A)(ii) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2000' 
     for `calendar year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any dollar amount after being 
     increased under clause (i) is not a multiple of $10, such 
     dollar amount shall be rounded to the nearest multiple of 
     $10.''.
       (3) Part b eligible individual.--
       (A) Taxes on employees.--Section 3121 of such Code 
     (relating to definitions) is amended by inserting after 
     subsection (s) the following:
       ``(t) Part B Eligible Individual.--For purposes of this 
     chapter, the term `part B eligible individual' means, for any 
     calendar year, an individual who is an eligible individual 
     (as defined in section 251(a)(2) of the Social Security Act) 
     for such calendar year.''.
       (B) Self-employment tax.--Section 1402 of such Code 
     (relating to definitions) is amended by adding at the end the 
     following:
       ``(k) Part B Eligible Individual.--The term `part B 
     eligible individual' means, for any calendar year, an 
     individual who is an eligible individual (as defined in 
     section 251(a)(2) of the Social Security Act) for such 
     calendar year.''.
       (4) Effective dates.--
       (A) Employees.--The amendments made by paragraphs (1) and 
     (3)(A) apply to remuneration paid after December 31, 2000.
       (B) Self-employed individuals.--The amendments made by 
     paragraphs (2) and (3)(B) apply to taxable years beginning 
     after December 31, 2000.
       (c) Matching Contributions.--
       (1) In general.--Part IV of subchapter A of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to credits 
     against tax) is amended by adding at the end the following:

            ``Subpart H--Individual Savings Account Credits

``Sec. 54. Individual savings account credit.''.

     ``SEC. 54. INDIVIDUAL SAVINGS ACCOUNT CREDIT.

       ``(a) Allowance of Credit.--Each part B eligible individual 
     is entitled to a credit for the taxable year in an amount 
     equal to the sum of--
       ``(1) $100, plus
       ``(2) 100 percent of the designated wages of such 
     individual for the taxable year, plus
       ``(3) 100 percent of the designated self-employment income 
     of such individual for the taxable year.
       ``(b) Limitations.--
       ``(1) Amount.--The amount determined under subsection (a) 
     with respect to such individual for any taxable year may not 
     exceed the excess (if any) of--
       ``(A) an amount equal to 1 percent of the contribution and 
     benefit base for such taxable year (as determined under 
     section 230 of the Social Security Act), over
       ``(B) the sum of the amounts received by the Secretary on 
     behalf of such individual under sections 3101(a)(2)(A)(i) and 
     1401(a)(2)(A)(i) for such taxable year.
       ``(2) Failure to make voluntary contributions.--In the case 
     of a part B eligible individual with respect to whom the 
     amount of wages designated under section 3101(a)(2)(A)(ii) 
     plus the amount self-employment income designated under 
     section 1401(a)(2)(A)(ii) for the taxable year is less that 
     $1, the credit to which such individual is entitled under 
     this section shall be equal to zero.
       ``(c) Definitions.--For purposes of this section--

[[Page 11942]]

       ``(1) Part b eligible individual.--The term `part B 
     eligible individual' means, for any calendar year, an 
     individual who--
       ``(A) is an eligible individual (as defined in section 
     251(a)(2) of the Social Security Act) for such calendar year, 
     and
       ``(B) is not an individual with respect to whom another 
     taxpayer is entitled to a deduction under section 151(c).
       ``(2) Designated wages.--The term `designated wages' means 
     with respect to any taxable year the amount designated under 
     section 3101(a)(2)(A)(ii).
       ``(3) Designated self-employment income.--The term 
     `designated self-employment income' means with respect to any 
     taxable year the amount designated under section 
     1401(a)(2)(A)(ii) for such taxable year.
       ``(d) Credit Used Only for Individual Savings Account.--For 
     purposes of this title, the credit allowed under this section 
     with respect to any part B eligible individual--
       ``(1) shall not be treated as a credit allowed under this 
     part, but
       ``(2) shall be treated as an overpayment of tax under 
     section 6401(b)(3) which may, in accordance with section 
     6402(l), only be transferred to an individual savings account 
     established under part B of title II of the Social Security 
     Act with respect to such individual.''.
       (2) Contribution of credited amounts to individual savings 
     account.--
       (A) Credited amounts treated as overpayment of tax.--
     Subsection (b) of section 6401 of such Code (relating to 
     excessive credits) is amended by adding at the end the 
     following:
       ``(3) Special rule for credit under section 54.--Subject to 
     the provisions of section 6402(l), the amount of any credit 
     allowed under section 54 for any taxable year shall be 
     considered an overpayment.''.
       (B) Transfer of credit amount to individual savings 
     account.--Section 6402 of such Code (relating to authority to 
     make credits or refunds) is amended by adding at the end the 
     following:
       ``(l) Overpayments Attributable to Individual Savings 
     Account Credit.--In the case of any overpayment described in 
     section 6401(b)(3) with respect to any individual, the 
     Secretary shall transfer for crediting by the Commissioner of 
     Social Security to the individual savings account of such 
     individual, an amount equal to the amount of such 
     overpayment.''.
       (3) Conforming amendments.--
       (A) Section 1324(b)(2) of title 31, United States Code, is 
     amended by inserting before the period at the end ``, or 
     enacted by the Bipartisan Social Security Reform Act of 
     2000''.
       (B) The table of subparts for part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following:

``Subpart H. Individual Savings Account Credits.''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to refunds payable after December 31, 2000.
       (d) Tax Treatment of Individual Savings Accounts.--
       (1) In general.--Subchapter F of chapter 1 of the Internal 
     Revenue Code of 1986 (relating to exempt organizations) is 
     amended by adding at the end the following:

            ``PART IX--INDIVIDUAL SAVINGS FUND AND ACCOUNTS

``Sec. 531. Individual Savings Fund and Accounts.

     ``SEC. 531. INDIVIDUAL SAVINGS FUND AND ACCOUNTS.

       ``(a) General Rule.--The Individual Savings Fund and 
     individual savings accounts shall be exempt from taxation 
     under this subtitle.
       ``(b) Individual Savings Fund and Accounts Defined.--For 
     purposes of this section, the terms `Individual Savings Fund' 
     and `individual savings account' means the fund and account 
     established under sections 254 and 251, respectively, of part 
     B of title II of the Social Security Act.
       ``(c) Contributions.--
       ``(1) In general.--No deduction shall be allowed for 
     contributions credited to an individual savings account under 
     section 251 of the Social Security Act or section 6402(l).
       ``(2) Rollover of inheritance.--Any portion of a 
     distribution to an heir from an individual savings account 
     made by reason of the death of the beneficiary of such 
     account may be rolled over to the individual savings account 
     of the heir after such death.
       ``(d) Distributions.--
       ``(1) In general.--Any distribution from an individual 
     savings account under section 253 of the Social Security Act 
     shall be included in gross income under section 72.
       ``(2) Period in which distributions must be made from 
     account of decedent.--In the case of amounts remaining in an 
     individual savings account from which distributions began 
     before the death of the beneficiary, rules similar to the 
     rules of section 401(a)(9)(B) shall apply to distributions of 
     such remaining amounts.
       ``(3) Rollovers.--Paragraph (1) shall not apply to amounts 
     rolled over under subsection (c)(2) in a direct transfer by 
     the Commissioner of Social Security, under regulations which 
     the Commissioner shall prescribe.''.
       (2) Clerical amendment.--The table of parts for subchapter 
     F of chapter 1 of such Code is amended by adding after the 
     item relating to part VIII the following:

``Part IX. Individual savings fund and accounts.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 102. SOCIAL SECURITY KIDSAVE ACCOUNTS.

       Title II of the Social Security Act (42 U.S.C. 401 et 
     seq.), as amended by section 101(a), is amended by adding at 
     the end the following:

                       ``Part C--KidSave Accounts


                           ``kidsave accounts

       ``Sec. 261. (a) Establishment.--The Commissioner of Social 
     Security shall establish in the name of each individual born 
     on or after January 1, 1995, a KidSave Account upon the later 
     of--
       ``(1) the date of enactment of this part, or
       ``(2) the date of the issuance of a Social Security account 
     number under section 205(c)(2) to such individual.
     The KidSave Account shall be identified to the account holder 
     by means of the account holder's Social Security account 
     number.
       ``(b) Contributions.--
       ``(1) In general.--There are authorized to be appropriated 
     and are appropriated such sums as are necessary in order for 
     the Secretary of the Treasury to transfer from the general 
     fund of the Treasury for crediting by the Commissioner to 
     each account holder's KidSave Account under subsection (a), 
     an amount equal to the sum of--
       ``(A) in the case of any individual born on or after 
     January 1, 2001, $1,000, on the date of the establishment of 
     such individual's KidSave Account, and
       ``(B) in the case of any individual born on or after 
     January 1, 1995, $500, on the 1st, 2nd, 3rd, 4th, and 5th 
     birthdays of such individual occurring on or after January 1, 
     2001.
       ``(2) Adjustment for inflation.--For any calendar year 
     after 2001, each of the dollar amounts under paragraph (1) 
     shall be increased by the cost-of-living adjustment using the 
     wage increase percentage determined under section 215(i) for 
     the calendar year.
       ``(c) Designations Regarding KidSave Accounts.--
       ``(1) Initial designations of investment vehicle.--A person 
     described in subsection (d) shall, on behalf of the 
     individual described in subsection (a), designate the 
     investment vehicle for the KidSave Account to which 
     contributions on behalf of such individual are to be 
     deposited. Such designation shall be made on the application 
     for such individual's Social Security account number.
       ``(2) Changes in investment vehicles.--The Commissioner 
     shall by regulation provide the time and manner by which an 
     individual or a person described in subsection (d) on behalf 
     of such individual may change 1 or more investment vehicles 
     for a KidSave Account.
       ``(d) Treatment of Minors and Incompetent Individuals.--Any 
     designation under subsection (c) to be made by a minor, or an 
     individual mentally incompetent or under other legal 
     disability, may be made by the person who is constituted 
     guardian or other fiduciary by the law of the State of 
     residence of the individual or is otherwise legally vested 
     with the care of the individual or his estate. Payment under 
     this part due a minor, or an individual mentally incompetent 
     or under other legal disability, may be made to the person 
     who is constituted guardian or other fiduciary by the law of 
     the State of residence of the claimant or is otherwise 
     legally vested with the care of the claimant or his estate. 
     In any case in which a guardian or other fiduciary of the 
     individual under legal disability has not been appointed 
     under the law of the State of residence of the individual, if 
     any other person, in the judgment of the Commissioner, is 
     responsible for the care of such individual, any designation 
     under subsection (c) which may otherwise be made by such 
     individual may be made by such person, any payment under this 
     part which is otherwise payable to such individual may be 
     made to such person, and the payment of an annuity payment 
     under this part to such person bars recovery by any other 
     person.


                    ``definitions and special rules

       ``Sec. 262. (a) Kidsave Accounts.--In this part, the term 
     `KidSave Account' means any KidSave Account in the Individual 
     Savings Fund (established under section 254) which is 
     administered by the Individual Savings Fund Board.
       ``(b) Treatment of Accounts.--
       ``(1) In general.--Except as provided in paragraph (2), any 
     KidSave Account described in subsection (a) shall be treated 
     in the same manner as an individual savings account under 
     part B.
       ``(2) Distributions.--Notwithstanding any other provision 
     of law, distributions may only be made from a KidSave Account 
     of an individual on or after the earlier of--
       ``(A) the date on which the individual begins receiving 
     benefits under this title, or
       ``(B) the date of the individual's death.''.

[[Page 11943]]



     SEC. 103. ADJUSTMENTS TO PRIMARY INSURANCE AMOUNTS UNDER PART 
                   A OF TITLE II OF THE SOCIAL SECURITY ACT.

       (a) In General.--Section 215 of the Social Security Act (42 
     U.S.C. 415) is amended by adding at the end the following:

 ``Adjustment of Primary Insurance Amount in Relation to Deposits Made 
          to Individual Savings Accounts and KidSave Accounts

       ``(j)(1) Except as provided in paragraph (2), an 
     individual's primary insurance amount as determined in 
     accordance with this section (before adjustments made under 
     subsection (i)) shall be equal to--
       ``(A) the amount which would be so determined without the 
     application of this subsection, multiplied by
       ``(B) 1 minus the ratio of--
       ``(i) the sum of--
       ``(I) the total of all amounts which have been credited 
     pursuant to sections 3101(a)(2)(A)(i) and 1401(a)(2)(A)(i) of 
     the Internal Revenue Code of 1986 to the individual savings 
     account held by such individual, plus
       ``(II) 50 percent of the accumulated value of the KidSave 
     Account (established on behalf of such individual under 
     section 261(a)) determined on the date such KidSave Account 
     is redesignated as an individual savings account held by such 
     individual under section 251(a)(1)(B), plus
       ``(III) accrued interest on such amounts compounded 
     annually up to the date of initial benefit entitlement based 
     on the individual's earnings, assuming an interest rate equal 
     to the projected interest rate of the Federal Old-Age and 
     Survivors Trust Fund, to
       ``(ii) the expected present value of all future benefits 
     paid based on the individual's earnings, as of the date of 
     initial benefit entitlement based on such earnings, assuming 
     future mortality and interest rates for the Federal Old-Age 
     and Survivors Trust Fund used in the intermediate projections 
     of the most recent Board of Trustees report under section 
     201.
       ``(2) In the case of an individual who becomes entitled to 
     disability insurance benefits under section 223, such 
     individual's primary insurance amount shall be determined 
     without regard to paragraph (1).''.
       (b) Conforming Amendment to Railroad Retirement Act of 
     1974.--Section 1 of the Railroad Retirement Act of 1974 (45 
     U.S.C. 231) is amended by adding at the end the following:
       ``(s) In applying applicable provisions of the Social 
     Security Act for purposes of determining the amount of the 
     annuity to which an individual is entitled under this Act, 
     section 215(j) of the Social Security Act and part B of title 
     II of such Act shall be disregarded.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to computations and recomputations 
     of primary insurance amounts occurring after December 31, 
     2000.

              TITLE II--SOCIAL SECURITY SYSTEM ADJUSTMENTS

     SEC. 201. ADJUSTMENTS TO BEND POINTS IN DETERMINING PRIMARY 
                   INSURANCE AMOUNTS.

       (a) Additional Bend Point.--Section 215(a)(1)(A) of the 
     Social Security Act (42 U.S.C. 415(a)(1)(A)) is amended--
       (1) in clause (ii), by striking ``and'' at the end;
       (2) in clause (iii)--
       (A) by striking ``15 percent'' and inserting ``32 
     percent'';
       (B) by striking ``clause (ii),'' and inserting the 
     following: ``clause (ii) but do not exceed the amount 
     established for purposes of this clause by subparagraph (B), 
     and''; and
       (3) by inserting after clause (iii) the following:
       ``(iv) 15 percent of the individual's average indexed 
     monthly earnings to the extent that such earnings exceed the 
     amount established for purposes of clause (iii),''.
       (b) Initial Level of Additional Bend Point.--Section 
     215(a)(1)(B)(i) of such Act (42 U.S.C. 415(a)(1)(B)(i)) is 
     amended--
       (1) by striking ``clause (i) and (ii)'' and inserting 
     ``clauses (i) and (iii)''; and
       (2) by adding at the end the following: ``For individuals 
     who initially become eligible for old-age or disability 
     insurance benefits, or who die (before becoming eligible for 
     such benefit), in the calendar year 2001, the amount 
     established for purposes of clause (ii) of subparagraph (A) 
     shall be equal to 197.5 percent of the amount established for 
     purposes of clause (i).''.
       (c) Adjustments to PIA Formula Factors.--Section 
     215(a)(1)(B) of such Act (42 U.S.C. 415(a)(1)(B)) is amended 
     further--
       (1) by redesignating clause (iii) as clause (iv);
       (2) by inserting after clause (ii) the following:
       ``(iii) For individuals who initially become eligible for 
     old-age or disability insurance benefits, or who die (before 
     becoming eligible for such benefits), in any calendar year 
     after 2005, effective for such calendar year--
       ``(I) the percentage in effect under clause (ii) of 
     subparagraph (A) shall be equal to the percentage in effect 
     under such clause for calendar year 2005 increased the 
     applicable number of times by 3.8 percentage points,
       ``(II) the percentage in effect under clause (iii) of 
     subparagraph (A) shall be equal to the percentage in effect 
     under such clause for calendar year 2005 decreased the 
     applicable number of times by 1.2 percentage points, and
       ``(III) the percentage in effect under clause (iv) of 
     subparagraph (A) shall be equal to the percentage in effect 
     under such clause for calendar year 2005 decreased the 
     applicable number of times by 0.5 percentage points.
     For purposes of the preceding sentence, the term `applicable 
     number of times' means a number equal to the lesser of 10 or 
     the number of years beginning with 2006 and ending with the 
     year of initial eligibility or death.''; and
       (3) in clause (iv) (as redesignated), by striking 
     ``amount'' and inserting ``dollar amount''.
       (d) Effective Date.--The amendments made by this section 
     shall apply with respect to primary insurance amounts of 
     individuals attaining early retirement age (as defined in 
     section 216(l) of the Social Security Act), or dying, after 
     December 31, 2000.

     SEC. 202. ADJUSTMENT OF WIDOWS' AND WIDOWERS' INSURANCE 
                   BENEFITS.

       (a) Widow's Benefit.--Section 202(e)(2)(A) of the Social 
     Security Act (42 U.S.C. 402(e)(2)(A)) is amended by striking 
     ``equal to'' and all that follows and inserting ``equal to 
     the greater of--
       ``(i) the primary insurance amount (as determined for 
     purposes of this subsection after application of 
     subparagraphs (B) and (C)) of such deceased individual, or
       ``(ii) the lesser of--
       ``(I) the applicable percentage of the joint benefit which 
     would have been received by the widow or surviving divorced 
     wife and the deceased individual for such month if such 
     individual had not died, or
       ``(II) the benefit which would have been received by the 
     widow or surviving divorced wife if such individual's 
     contributions were based on the maximum contribution and 
     benefit base amount (determined under section 230) for each 
     contribution base year (as determined under section 
     215(b)(2)(B)(ii)) of such individual.
     For purposes of clause (ii)(I), the applicable percentage is 
     equal to 50 percent in 2001, increased (but not above 75 
     percent) by 1 percentage point in every second year 
     thereafter.''.
       (b) Widower's Benefit.--Section 202(f)(3)(A) of the Social 
     Security Act (42 U.S.C. 402(b)(3)(A)) is amended by striking 
     ``equal to'' and all that follows and inserting ``equal to 
     the greater of--
       ``(i) the primary insurance amount (as determined for 
     purposes of this subsection after application of 
     subparagraphs (B) and (C)) of such deceased individual, or
       ``(ii) the lesser of--
       ``(I) the applicable percentage of the joint benefit which 
     would have been received by the widow or surviving divorced 
     wife and the deceased individual for such month if such 
     individual had not died, or
       ``(II) the benefit which would have been received by the 
     widower or surviving divorced husband if such individual's 
     contributions were based on the maximum contribution and 
     benefit base amount (determined under section 230) for each 
     contribution base year (as determined under section 
     215(b)(2)(B)(ii)) of such individual.
     For purposes of clause (ii)(II), the applicable percentage is 
     equal to 50 percent in 2001, increased (but not above 75 
     percent) by 1 percentage point in every second year 
     thereafter.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply individuals entitled to benefits after the date 
     of enactment of this Act.

     SEC. 203. ELIMINATION OF EARNINGS TEST FOR INDIVIDUALS WHO 
                   HAVE ATTAINED EARLY RETIREMENT AGE.

       (a) In General.--Section 203 of the Social Security Act (42 
     U.S.C. 403) is amended--
       (1) in subsection (c)(1), by striking ``retirement age'' 
     and inserting ``early retirement age'';
       (2) in paragraphs (1)(A) and (2) of subsection (d), by 
     striking ``retirement age'' each place it appears and 
     inserting ``early retirement age'';
       (3) in subsection (f)(1)(B), by striking ``retirement age'' 
     and inserting ``early retirement age'';
       (4) in subsection (f)(3)--
       (A) by striking ``33\1/3\ percent'' and all that follows 
     through ``any other individual,'' and inserting ``50 percent 
     of such individual's earnings for such year in excess of the 
     product of the exempt amount as determined under paragraph 
     (8),''; and
       (B) by striking ``retirement age'' and inserting ``early 
     retirement age'';
       (5) in subsection (f)(5)(D)(i), by striking ``retirement 
     age'' and inserting ``early retirement age'';
       (6) in subsection (f)(9)--
       (A) by striking ``, (5)(D)(i), and (8)(D)'' and inserting 
     ``and (5)(D)(i)''; and
       (B) by striking ``retirement age'' both places it appears 
     and inserting ``early retirement age'';
       (7) in subsection (h)(1)(A), by striking ``retirement age 
     (as defined in section 216(l))'' each place it appears and 
     inserting ``early retirement age (as defined in section 
     216(l))''; and
       (8) in subsection (j)--
       (A) in the heading, by striking ``Retirement Age'' and 
     inserting ``Early Retirement Age''; and

[[Page 11944]]

       (B) by striking ``having attained retirement age (as 
     defined in section 216(l))'' and inserting ``having attained 
     early retirement age (as defined in section 216(l))''.
       (b) Conforming Amendments Eliminating the Special Exempt 
     Amount for Individuals Who Have Attained Age 62.--
       (1) Uniform exempt amount.--Section 203(f)(8)(A) of the 
     Social Security Act (42 U.S.C. 403(f)(8)(A)) is amended by 
     striking ``the new exempt amounts (separately stated for 
     individuals described in subparagraph (D) and for other 
     individuals) which are to be applicable'' and inserting ``a 
     new exempt amount which shall be applicable''.
       (2) Conforming amendments.--Section 203(f)(8)(B) of the 
     Social Security Act (42 U.S.C. 403(f)(8)(B)) is amended--
       (A) in the matter preceding clause (i), by striking 
     ``Except'' and all that follows through ``whichever'' and 
     inserting ``The exempt amount which is applicable for each 
     month of a particular taxable year shall be whichever'';
       (B) in clauses (i) and (ii), by striking ``corresponding'' 
     each place it appears; and
       (C) in the last sentence, by striking ``an exempt amount'' 
     and inserting ``the exempt amount''.
       (3) Repeal of basis for computation of special exempt 
     amount.--Subparagraphs (D) and (E) of section 203(f)(8) of 
     the Social Security Act (42 U.S.C. 403(f)(8)) are repealed.
       (c) Additional Conforming Amendments.--
       (1) Elimination of redundant references to retirement 
     age.--Section 203 of the Social Security Act (42 U.S.C. 403) 
     is amended--
       (A) in subsection (c), in the last sentence, by striking 
     ``nor shall any deduction'' and all that follows and 
     inserting ``nor shall any deduction be made under this 
     subsection from any widow's or widower's insurance benefit if 
     the widow, surviving divorced wife, widower, or surviving 
     divorced husband involved became entitled to such benefit 
     prior to attaining age 60.''; and
       (B) in subsection (f)(1), by striking clause (D) and 
     inserting the following: ``(D) for which such individual is 
     entitled to widow's or widower's insurance benefits if such 
     individual became so entitled prior to attaining age 60,''.
       (2) Provisions relating to earnings taken into account in 
     determining substantial gainful activity of blind 
     individuals.--The second sentence of section 223(d)(4) of 
     such Act (42 U.S.C. 423(d)(4)) is amended by striking ``if 
     section 102 of the Senior Citizens' Right to Work Act of 1996 
     had not been enacted'' and inserting the following: ``if the 
     amendments to section 203 made by section 102 of the Senior 
     Citizens' Right to Work Act of 1996 and by the Bipartisan 
     Social Security Reform Act of 2000 had not been enacted''.
       (d) Study of the Effect of Taking Earnings Into Account in 
     Determining Substantial Gainful Activity of Disabled 
     Individuals.--
       (1) In general.--Not later than February 15, 2001, the 
     Commissioner of Social Security shall conduct a study on the 
     effect that taking earnings into account in determining 
     substantial gainful activity of individuals receiving 
     disability insurance benefits has on the incentive for such 
     individuals to work and submit to Congress a report on the 
     study.
       (2) Contents of study.--The study conducted under paragraph 
     (1) shall include the evaluation of--
       (A) the effect of the current limit on earnings on the 
     incentive for individuals receiving disability insurance 
     benefits to work;
       (B) the effect of increasing the earnings limit or changing 
     the manner in which disability insurance benefits are reduced 
     or terminated as a result of substantial gainful activity 
     (including reducing the benefits gradually when the earnings 
     limit is exceeded) on--
       (i) the incentive to work; and
       (ii) the financial status of the Federal Disability 
     Insurance Trust Fund;
       (C) the effect of extending eligibility for the Medicare 
     program to individuals during the period in which disability 
     insurance benefits of the individual are gradually reduced as 
     a result of substantial gainful activity and extending such 
     eligibility for a fixed period of time after the benefits are 
     terminated on--
       (i) the incentive to work; and
       (ii) the financial status of the Federal Hospital Insurance 
     Trust Fund and the Federal Supplementary Medical Insurance 
     Trust Fund; and
       (D) the relationship between the effect of substantial 
     gainful activity limits on blind individuals receiving 
     disability insurance benefits and other individuals receiving 
     disability insurance benefits.
       (3) Consultation.--The analysis under paragraph (2)(C) 
     shall be done in consultation with the Administrator of the 
     Health Care Financing Administration.
       (e) Effective Date.--The amendments and repeals made by 
     subsections (a), (b), and (c) shall apply with respect to 
     taxable years ending after December 31, 2002.

     SEC. 204. GRADUAL INCREASE IN NUMBER OF BENEFIT COMPUTATION 
                   YEARS; USE OF ALL YEARS IN COMPUTATION.

       (a) In General.--Section 215(b)(2)(A) of the Social 
     Security Act (42 U.S.C. 415(b)(2)(A)) is amended--
       (1) in clause (i), by striking ``5 years'' and inserting 
     ``the applicable number of years for purposes of this 
     clause''; and
       (2) by striking ``Clause (ii),'' in the matter following 
     clause (ii) and inserting the following:
     ``For purposes of clause (i), the applicable number of years 
     is the number of years specified in connection with the year 
     in which such individual reaches early retirement age (as 
     defined in section 216(l)(2)), or, if earlier, the calendar 
     year in which such individual dies, as set forth in the 
     following table:

The applicable number of years is:
  2002...............................................................4.
  2003...............................................................4.
  2004...............................................................3.
  2005...............................................................3.
  2006...............................................................2.
  2007...............................................................2.
  2008...............................................................1.
  2009...............................................................1.
  After 2009.........................................................0.
     Notwithstanding the preceding sentence, the applicable number 
     of years is 5, in the case of any individual who is entitled 
     to old-age insurance benefits, and has a spouse who is also 
     so entitled (or who died without having become so entitled) 
     who has greater total wages and self-employment income 
     credited to benefit computation years than the individual. 
     Clause (ii),''.
       (b) Use of All Years in Computation.--
       (1) In general.--Section 215(b)(2)(B) of the Social 
     Security Act (42 U.S.C. 415(b)(2)(B)) is amended by striking 
     clauses (i) and (ii) and inserting the following:
       ``(i)(I) for calendar years after 2001 and before 2010, the 
     term `benefit computation years' means those computation base 
     years equal in number to the number determined under 
     subparagraph (A) plus the applicable number of years 
     determined under subclause (III), for which the total of such 
     individual's wages and self-employment income, after 
     adjustment under paragraph (3), is the largest;
       ``(II) for calendar years after 2009, the term `benefit 
     computation years' means all of the computation base years; 
     and
       ``(III) for purposes of subclause (I), the applicable 
     number of years is the number of years specified in 
     connection with the year in which such individual reaches 
     early retirement age (as defined in section 216(l)(2)), or, 
     if earlier, the calendar year in which such individual dies, 
     as set forth in the following table:

The applicable number of years is:
  Before 2002........................................................0.
  2002...............................................................1.
  2003...............................................................1.
  2004...............................................................2.
  2005...............................................................2.
  2006...............................................................3.
  2007...............................................................3.
  2008...............................................................4.
  2009...............................................................4;
       ``(ii) the term `computation base years' means the calendar 
     years after 1950, except that such term excludes any calendar 
     year entirely included in a period of disability; and''.
       (2) Conforming amendment.--Section 215(b)(1)(B) of the 
     Social Security Act (42 U.S.C. 415(b)(1)(B)) is amended by 
     striking ``in those years'' and inserting ``in an 
     individual's computation base years determined under 
     paragraph (2)(A)''.
       (c) Effective Date.--
       (1) Subsection (a).--The amendments made by subsection (a) 
     shall apply with respect to individuals attaining early 
     retirement age (as defined in section 216(l)(2) of the Social 
     Security Act) after December 31, 2001.
       (2) Subsection (b).--The amendment made by subsection (b) 
     shall apply to benefit computation years beginning after 
     December 31, 2000.

     SEC. 205. MAINTENANCE OF BENEFIT AND CONTRIBUTION BASE.

       (a) In General.--Section 230 of the Social Security Act (42 
     U.S.C. 430) is amended to read as follows:


            maintenance of the contribution and benefit base

       ``Sec. 230. (a) The Commissioner of Social Security shall 
     determine and publish in the Federal Register on or before 
     November 1 of each calendar year the contribution and benefit 
     base determined under subsection (b) which shall be effective 
     with respect to remuneration paid after such calendar year 
     and taxable years beginning after such year.
       ``(b) For purposes of this section, for purposes of 
     determining wages and self-employment income under sections 
     209, 211, 213, and 215 of this Act and sections 54, 1402, 
     3121, 3122, 3125, 6413, and 6654 of the Internal Revenue Code 
     of 1986, and for purposes of section 4022(b)(3)(B) of Public 
     Law 93-406, the contribution and benefit base with respect to 
     remuneration paid in (and taxable years beginning in) any 
     calendar year is an amount equal to 84.5 percent of the total 
     wages and self-employment income for the preceding calendar 
     year (within the meaning of section 209).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to remuneration paid in (and taxable years 
     beginning in) any calendar year after 2000.

     SEC. 206. REDUCTION IN THE AMOUNT OF CERTAIN TRANSFERS TO 
                   MEDICARE TRUST FUND.

       Subparagraph (A) of section 121(e)(1) of the Social 
     Security Amendments of 1983 (42

[[Page 11945]]

     U.S.C. 401 note), as amended by section 13215(c)(1) of the 
     Omnibus Budget Reconciliation Act of 1993, is amended--
       (1) in clause (ii), by striking ``the amounts'' and 
     inserting ``the applicable percentage of the amounts''; and
       (2) by adding at the end the following: ``For purposes of 
     clause (ii), the applicable percentage for a year is equal to 
     100 percent, reduced (but not below zero) by 10 percentage 
     points for each year after 2004.''.

     SEC. 207. ACTUARIAL ADJUSTMENT FOR RETIREMENT.

       (a) Early Retirement.--
       (1) In general.--Section 202(q) of the Social Security Act 
     (42 U.S.C. 402(q)) is amended--
       (A) in paragraph (1)(A), by striking ``\5/9\'' and 
     inserting ``the applicable fraction (determined under 
     paragraph (12))''; and
       (B) by adding at the end the following:
       ``(12) For purposes of paragraph (1)(A), the `applicable 
     fraction' for an individual who attains the age of 62 in--
       ``(A) any year before 2001, is \5/9\;
       ``(B) 2001, is \7/12\;
       ``(C) 2002, is \11/18\;
       ``(D) 2003, is \23/36\;
       ``(E) 2004, is \2/3\; and
       ``(F) 2005 or any succeeding year, is \25/36\.''.
       (2) Months beyond first 36 months.--Section 202(q) of such 
     Act (42 U.S.C. 402(q)(9)) (as amended by paragraph (1)) is 
     amended--
       (A) in paragraph (9)(A), by striking ``five-twelfths'' and 
     inserting ``the applicable fraction (determined under 
     paragraph (13))''; and
       (B) by adding at the end the following:
       ``(13) For purposes of paragraph (9)(A), the `applicable 
     fraction' for an individual who attains the age of 62 in--
       ``(A) any year before 2001, is \5/12\;
       ``(B) 2001, is \16/36\;
       ``(C) 2002, is \16/36\;
       ``(D) 2003, is \17/36\;
       ``(E) 2004, is \17/36\; and
       ``(F) 2005 or any succeeding year, is \1/2\.''.
       (3) Effective date.--The amendments made by paragraphs (1) 
     and (2) shall apply to individuals who attain the age of 62 
     in years after 2000.
       (b) Delayed Retirement.--Section 202(w)(6) of the Social 
     Security Act (42 U.S.C. 402(w)(6)) is amended--
       (1) in subparagraph (C), by striking ``and'' at the end;
       (2) in subparagraph (D), by striking ``2004.'' and 
     inserting ``2004 and before 2007;''; and
       (3) by adding at the end the following:
       ``(E) \17/24\ of 1 percent in the case of an individual who 
     attains the age of 62 in a calendar year after 2006 and 
     before 2009;
       ``(F) \3/4\ of 1 percent in the case of an individual who 
     attains the age of 62 in a calendar year after 2008 and 
     before 2011;
       ``(G) \19/24\ of 1 percent in the case of an individual who 
     attains the age of 62 in a calendar year after 2010 and 
     before 2013; and
       ``(H) \5/6\ of 1 percent in the case of an individual who 
     attains the age of 62 in a calendar year after 2012.''.

     SEC. 208. IMPROVEMENTS IN PROCESS FOR COST-OF-LIVING 
                   ADJUSTMENTS.

       (a) Annual Declarations of Persisting Upper Level 
     Substitution Bias, Quality-Change Bias, and New-Product 
     Bias.--Not later than December 1, 2000, and annually 
     thereafter, the Commissioner of the Bureau of Labor 
     Statistics shall publish in the Federal Register an estimate 
     of the upper level substitution bias, quality-change bias, 
     and new-product bias retained in the Consumer Price Index, 
     expressed in terms of a percentage point effect on the annual 
     rate of change in the Consumer Price Index determined through 
     the use of a superlative index that accounts for changes that 
     consumers make in the quantities of goods and services 
     consumed.
       (b) Modification of Cost-of-Living Adjustment.--
       (1) In general.--Notwithstanding any other provision of 
     law, for each calendar year after 2000 any cost-of-living 
     adjustment described in subsection (f) shall be further 
     adjusted by the greater of--
       (A) the applicable percentage point, or
       (B) the correction for the upper level substitution bias, 
     quality-change bias, and new-product bias (as last published 
     by the Commissioner of the Bureau of Labor Statistics 
     pursuant to subsection (a)).
       (2) Applicable percentage point.--For purposes of paragraph 
     (1)(A), the applicable percentage point shall be determined 
     in accordance with the following table:

                                                             Applicable
Calendar year:                                        Percentage Point:
  2001.........................................................0.1 ....

  2002.........................................................0.2 ....

  2003.........................................................0.3 ....

  2004 and thereafter.........................................0.33.....

       (c) Funding for CPI Improvements.--
       (1) In general.--There is hereby appropriated to the Bureau 
     of Labor Statistics in the Department of Labor, for each of 
     fiscal years 2001, 2002, and 2003, $60,000,000 for use by the 
     Bureau for the following purposes:
       (A) Research, evaluation, and implementation of a 
     superlative index to estimate upper level substitution bias, 
     quality-change bias, and new-product bias in the Consumer 
     Price Index.
       (B) Expansion of the Consumer Expenditure Survey and the 
     Point of Purchase Survey.
       (2) Reports.--The Commissioner of the Bureau of Labor 
     Statistics shall submit reports regarding the use of 
     appropriations made under paragraph (1) to the Committee on 
     Appropriations of the House of Representative and the 
     Committee on Appropriations of the Senate upon the request of 
     each Committee.
       (d) Information Sharing.--The Commissioner of the Bureau of 
     Labor Statistics may secure directly from the Secretary of 
     Commerce information necessary for purposes of calculating 
     the Consumer Price Index. Upon request of the Commissioner of 
     the Bureau of Labor Statistics, the Secretary of Commerce 
     shall furnish that information to the Commissioner.
       (e) Administrative Advisory Committee.--The Bureau of Labor 
     Statistics shall, in consultation with the National Bureau of 
     Economic Research, the American Economic Association, and the 
     National Academy of Statisticians, establish an 
     administrative advisory committee. The advisory committee 
     shall periodically advise the Bureau of Labor Statistics 
     regarding revisions of the Consumer Price Index and conduct 
     research and experimentation with alternative data collection 
     and estimating approaches.
       (f) Cost-of-Living Adjustment Described.--A cost-of-living 
     adjustment described in this subsection is any cost-of-living 
     adjustment for a calendar year after 2000 determined by 
     reference to a percentage change in a consumer price index or 
     any component thereof (as published by the Bureau of Labor 
     Statistics of the Department of Labor and determined without 
     regard to this section) and used in any of the following:
       (1) The Internal Revenue Code of 1986.
       (2) The provisions of this Act (other than programs under 
     title XVI and any adjustment in the case of an individual who 
     attains early retirement age before January 1, 2001).
       (3) Any other Federal program.
       (g) Recapture of CPI Reform Revenues Deposited Into the 
     Federal Old-Age and Survivors Insurance Trust Fund.--Section 
     201 of the Social Security Act (42 U.S.C. 401) is amended by 
     adding at the end the following:
       ``(n) On July 1 of each calendar year specified in the 
     following table, the Secretary of the Treasury shall 
     transfer, from the general fund of the Treasury to the 
     Federal Old-Age and Survivors Insurance Trust Fund, an amount 
     equal to the applicable percentage for such year, specified 
     in such table, of the total wages paid in and self-employment 
     income credited to such year.

The applicable percentage for the year is--
    0.4 percent.efore 2020.............................................
    0.53 percent.fore 2040.............................................
    0.67 percent.fore 2060.............................................
    0.8 percent.''.....................................................

     SEC. 209. MODIFICATION OF PIA FACTORS TO REFLECT CHANGES IN 
                   LIFE EXPECTANCY.

       (a) Modification of PIA Factors.--Section 215(a)(1) of the 
     Social Security Act (42 U.S.C. 415(a)(1)(B)) is amended by 
     redesignating subparagraph (D) as subparagraph (F) and by 
     inserting after subparagraph (C) the following:
       ``(D)(i) For individuals who initially become eligible for 
     old-age insurance benefits in any calendar year after 2005, 
     each of the percentages under clauses (i), (ii), (iii), and 
     (iv) of subparagraph (A) shall be multiplied the applicable 
     number of times by the applicable factor.
       ``(ii) For purposes of clause (i)--
       ``(I) the term `applicable number of times' means a number 
     equal to the sum of--
       ``(aa) the number of years beginning with 2006 and ending 
     with the earlier of 2016 or the year of initial eligibility; 
     plus
       ``(bb) if the year of initial eligibility has not occurred, 
     the number of years beginning with 2023 and ending with the 
     earlier of 2053 or the year of initial eligibility; and
       ``(II) the term `applicable factor' means .988 with respect 
     to the first 6 applicable number of times and .997 with 
     respect to the applicable number of times in excess of 6.
       ``(E) For any individual who initially becomes eligible for 
     disability insurance benefits in any calendar year after 
     2005, the primary insurance amount for such individual shall 
     be equal to the greater of--
       ``(i) such amount as determined under this paragraph, or
       ``(ii) such amount as determined under this paragraph 
     without regard to subparagraph (D) thereof.''.
       (b) Study of the Effect of Increases in Life Expectancy.--
       (1) Study plan.--Not later than February 15, 2001, the 
     Commissioner of Social Security shall submit to Congress a 
     detailed study plan for evaluating the effects of increases 
     in life expectancy on the expected level of retirement income 
     from social security, pensions, and other sources. The study 
     plan shall include a description of the methodology, data, 
     and funding that will be required in order to provide to 
     Congress not later than February 15, 2006--
       (A) an evaluation of trends in mortality and their 
     relationship to trends in health status, among individuals 
     approaching eligibility for social security retirement 
     benefits;
       (B) an evaluation of trends in labor force participation 
     among individuals approaching

[[Page 11946]]

     eligibility for social security retirement benefits and among 
     individuals receiving retirement benefits, and of the factors 
     that influence the choice between retirement and 
     participation in the labor force;
       (C) an evaluation of changes, if any, in the social 
     security disability program that would reduce the impact of 
     changes in the retirement income of workers in poor health or 
     physically demanding occupations;
       (D) an evaluation of the methodology used to develop 
     projections for trends in mortality, health status, and labor 
     force participation among individuals approaching eligibility 
     for social security retirement benefits and among individuals 
     receiving retirement benefits; and
       (E) an evaluation of such other matters as the Commissioner 
     deems appropriate for evaluating the effects of increases in 
     life expectancy.
       (2) Report on results of study.--Not later than February 
     15, 2006, the Commissioner of Social Security shall provide 
     to Congress an evaluation of the implications of the trends 
     studied under paragraph (1), along with recommendations, if 
     any, of the extent to which the conclusions of such 
     evaluations indicate that projected increases in life 
     expectancy require modification in the social security 
     disability program and other income support programs.

     SEC. 210. MECHANISM FOR REMEDYING UNFORESEEN DETERIORATION IN 
                   SOCIAL SECURITY SOLVENCY.

       (a) In General.--Section 709 of the Social Security Act (42 
     U.S.C. 910) is amended--
       (1) by redesignating subsection (b) as subsection (c); and
       (2) by striking ``Sec. 709. (a) If the Board of Trustees'' 
     and all that follows through ``any such Trust Fund'' and 
     inserting the following:
       ``Sec. 709. (a)(1)(A) If the Board of Trustees of the 
     Federal Old-Age and Survivors Insurance Trust Fund and the 
     Federal Disability Insurance Trust Fund determines at any 
     time, using intermediate actuarial assumptions, that the 
     balance ratio of either such Trust Fund during any calendar 
     year within the succeeding period of 75 calendar years will 
     attain zero, the Board shall promptly submit to each House of 
     the Congress and to the President a report setting forth its 
     recommendations for statutory adjustments affecting the 
     receipts and disbursements of such Trust Fund necessary to 
     maintain the balance ratio of such Trust Fund at not less 
     than 20 percent, with due regard to the economic conditions 
     which created such inadequacy in the balance ratio and the 
     amount of time necessary to alleviate such inadequacy in a 
     prudent manner. The report shall set forth specifically the 
     extent to which benefits would have to be reduced, taxes 
     under section 1401, 3101, or 3111 of the Internal Revenue 
     Code of 1986 would have to be increased, or a combination 
     thereof, in order to obtain the objectives referred to in the 
     preceding sentence.
       ``(B) In addition to any reports under subparagraph (A), 
     the Board shall, not later than May 30, 2001, prepare and 
     submit to Congress and the President recommendations for 
     statutory adjustments to the disability insurance program 
     under title II of this Act to modify the changes in 
     disability benefits under the Bipartisan Social Security 
     Reform Act of 2000 without reducing the balance ratio of the 
     Federal Disability Insurance Trust Fund. The Board shall 
     develop such recommendations in consultation with the 
     National Council on Disability, taking into consideration the 
     adequacy of benefits under the program, the relationship of 
     such program with old age benefits under such title, and 
     changes in the process for determining initial eligibility 
     and reviewing continued eligibility for benefits under such 
     program.
       ``(2)(A) The President shall, no later than 30 days after 
     the submission of the report to the President, transmit to 
     the Board and to the Congress a report containing the 
     President's approval or disapproval of the Board's 
     recommendations.
       ``(B) If the President approves all the recommendations of 
     the Board, the President shall transmit a copy of such 
     recommendations to the Congress as the President's 
     recommendations, together with a certification of the 
     President's adoption of such recommendations.
       ``(C) If the President disapproves the recommendations of 
     the Board, in whole or in part, the President shall transmit 
     to the Board and the Congress the reasons for that 
     disapproval. The Board shall then transmit to the Congress 
     and the President, no later than 60 days after the date of 
     the submission of the original report to the President, a 
     revised list of recommendations.
       ``(D) If the President approves all of the revised 
     recommendations of the Board transmitted to the President 
     under subparagraph (C), the President shall transmit a copy 
     of such revised recommendations to the Congress as the 
     President's recommendations, together with a certification of 
     the President's adoption of such recommendations.
       ``(E) If the President disapproves the revised 
     recommendations of the Board, in whole or in part, the 
     President shall transmit to the Board and the Congress the 
     reasons for that disapproval, together with such revisions to 
     such recommendations as the President determines are 
     necessary to bring such recommendations within the 
     President's approval. The President shall transmit a copy of 
     such recommendations, as so revised, to the Board and the 
     Congress as the President's recommendations, together with a 
     certification of the President's adoption of such 
     recommendations.
       ``(3)(A) This paragraph is enacted by Congress--
       ``(i) as an exercise of the rulemaking power of the Senate 
     and the House of Representatives, respectively, and as such 
     it is deemed a part of the rules of each House, respectively, 
     but applicable only with respect to the procedure to be 
     followed in that House in the case of a joint resolution 
     described in subparagraph (B), and it supersedes other rules 
     only to the extent that it is inconsistent with such rules; 
     and
       ``(ii) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at any time, in the same manner, and 
     to the same extent as in the case of any other rule of that 
     House.
       ``(B) For purposes of this paragraph, the term `joint 
     resolution' means only a joint resolution which is introduced 
     within the 10-day period beginning on the date on which the 
     President transmits the President's recommendations, together 
     with the President's certification, to the Congress under 
     subparagraph (B), (D), or (E) of paragraph (2), and--
       ``(i) which does not have a preamble;
       ``(ii) the matter after the resolving clause of which is as 
     follows: `That the Congress approves the recommendations of 
     the President as transmitted on __ pursuant to section 709(a) 
     of the Social Security Act, as follows: ____', the first 
     blank space being filled in with the appropriate date and the 
     second blank space being filled in with the statutory 
     adjustments contained in the recommendations; and
       ``(iii) the title of which is as follows: `Joint resolution 
     approving the recommendations of the President regarding 
     social security.'.
       ``(C) A joint resolution described in subparagraph (B) that 
     is introduced in the House of Representatives shall be 
     referred to the Committee on Ways and Means of the House of 
     Representatives. A joint resolution described in subparagraph 
     (B) introduced in the Senate shall be referred to the 
     Committee on Finance of the Senate.
       ``(D) If the committee to which a joint resolution 
     described in subparagraph (B) is referred has not reported 
     such joint resolution (or an identical joint resolution) by 
     the end of the 20-day period beginning on the date on which 
     the President transmits the recommendation to the Congress 
     under paragraph (2), such committee shall be, at the end of 
     such period, discharged from further consideration of such 
     joint resolution, and such joint resolution shall be placed 
     on the appropriate calendar of the House involved.
       ``(E)(i) On or after the third day after the date on which 
     the committee to which such a joint resolution is referred 
     has reported, or has been discharged (under subparagraph (D)) 
     from further consideration of, such a joint resolution, it is 
     in order (even though a previous motion to the same effect 
     has been disagreed to) for any Member of the respective House 
     to move to proceed to the consideration of the joint 
     resolution. A Member may make the motion only on the day 
     after the calendar day on which the Member announces to the 
     House concerned the Member's intention to make the motion, 
     except that, in the case of the House of Representatives, the 
     motion may be made without such prior announcement if the 
     motion is made by direction of the committee to which the 
     joint resolution was referred. All points of order against 
     the joint resolution (and against consideration of the joint 
     resolution) are waived. The motion is highly privileged in 
     the House of Representatives and is privileged in the Senate 
     and is not debatable. The motion is not subject to amendment, 
     or to a motion to postpone, or to a motion to proceed to the 
     consideration of other business. A motion to reconsider the 
     vote by which the motion is agreed to or disagreed to shall 
     not be in order. If a motion to proceed to the consideration 
     of the joint resolution is agreed to, the respective House 
     shall immediately proceed to consideration of the joint 
     resolution without intervening motion, order, or other 
     business, and the joint resolution shall remain the 
     unfinished business of the respective House until disposed 
     of.
       ``(ii) Debate on the joint resolution, and on all debatable 
     motions and appeals in connection therewith, shall be limited 
     to not more than 2 hours, which shall be divided equally 
     between those favoring and those opposing the joint 
     resolution. An amendment to the joint resolution is not in 
     order. A motion further to limit debate is in order and not 
     debatable. A motion to postpone, or a motion to proceed to 
     the consideration of other business, or a motion to recommit 
     the joint resolution is not in order. A motion to reconsider 
     the vote by which the joint resolution is agreed to or 
     disagreed to is not in order.
       ``(iii) Immediately following the conclusion of the debate 
     on a joint resolution described in subparagraph (B) and a 
     single quorum call at the conclusion of the debate if 
     requested in accordance with the rules of the appropriate 
     House, the vote on final passage of the joint resolution 
     shall occur.

[[Page 11947]]

       ``(iv) Appeals from the decisions of the Chair relating to 
     the application of the rules of the Senate or the House of 
     Representatives, as the case may be, to the procedure 
     relating to a joint resolution described in subparagraph (B) 
     shall be decided without debate.
       ``(F)(i) If, before the passage by one House of a joint 
     resolution of that House described in subparagraph (B), that 
     House receives from the other House a joint resolution 
     described in subparagraph (B), then the following procedures 
     shall apply:
       ``(I) The joint resolution of the other House shall not be 
     referred to a committee and may not be considered in the 
     House receiving it except in the case of final passage as 
     provided in subclause (II).
       ``(II) With respect to a joint resolution described in 
     subparagraph (B) of the House receiving the joint resolution, 
     the procedure in that House shall be the same as if no joint 
     resolution had been received from the other House, but the 
     vote on final passage shall be on the joint resolution of the 
     other House.
       ``(ii) Upon disposition of the joint resolution received 
     from the other House, it shall no longer be in order to 
     consider the joint resolution that originated in the 
     receiving House.
       ``(b) If the Board of Trustees of the Federal Hospital 
     Insurance Trust Fund or the Federal Supplementary Medical 
     Insurance Trust Fund determines as any time that the balance 
     ratio of either such Trust Fund.''.
       (b) Conforming Amendments.--
       (1) Section 709(b) of the Social Security Act (42 U.S.C. 
     910(b)) (as amended by subsection (a) of this section) is 
     amended by striking ``any such'' and inserting ``either 
     such''.
       (2) Section 709(c) of such Act (42 U.S.C. 910(c)) (as 
     redesignated by subsection (a) of this section) is amended by 
     inserting ``or (b)'' after ``subsection (a)''.
                                 ______
                                 
      By Mr. DORGAN (for himself, Mr. Enzi, Mr. Voinovich, Mr. Breaux, 
        Mr. Graham, Mr. Hutchinson, Mrs. Lincoln, Mr. Bennett, Mr. 
        Bryan, Mr. Cleland, and Mr. Thomas):
  S. 2775. To foster innovation and technological advancement in the 
development of the Internet and electronic commerce, and to assist the 
States in simplifying their sales and use taxes; to the Committee on 
Finance.


                 Internet Tax Moratorium and Equity Act

 Mr. DORGAN. Mr. President, if the Internet and E-commerce are 
to continue to grow and flourish then Congress must address the 
difficult tax issues that these have posed. To that end, Senator 
Voinovich and I, along with Senators Graham, Enzi, Breaux and six of 
our distinguished colleagues are introducing the Internet Tax 
Moratorium and Equity Act.
  First and foremost, this legislation extends for four additional 
years the existing moratorium on punitive and discriminatory Internet 
taxes, and on access taxes. Internet technology is becoming a real 
growth engine for our economy. Governments should not be allowed to 
impose new taxes on access, or to enact discriminatory tax plans that 
would apply to the Internet and E-commerce but not to other kinds of 
transactions. I believe that such policies could foolishly hurt the 
future growth of the Internet industry, and this legislation prevents 
that from happening anytime soon.
  At the same time, however, this legislation moves toward a solution 
to the growing web of tax compliance problems that faces virtually 
everyone who would do business across state lines --sellers and 
customers alike. Our approach also would help to create a climate in 
which Web-based firms and Main Street businesses can co-exist and 
compete on fair and even terms.
  Any new form of commerce presents a challenge to the rules and 
structures that have grown up around the old. The Internet is no 
exception. The Internet has raised vexing questions regarding both 
privacy and the protection of property rights in writing and music. It 
has raised similar questions regarding the revenue systems of the 
states and localities of this nation. Not surprisingly, the Internet 
simply does not fit neatly into these systems as they have evolved over 
the last two hundred years.
  This disconnect has created tensions on all sides. On one side are 
the vital new businesses--Internet service providers, Web-based 
businesses and the rest--worried that they will be singled out as cash 
cows and subjected to new and unfair taxes. On the other side are state 
and local governments worried about the erosion of their tax bases and 
their ability to pay for the schools, police, garbage collection and 
more that their taxpayers need and expect. In between are Main Street 
merchants who collect sales taxes from their customers and worry about 
unfair competition from Web-based business that avoid collecting these 
taxes. Let us not forget the citizens and taxpayers, who appreciate the 
convenience and opportunities of the Web but who also care about their 
Main Street merchants, and about their schools and other local 
services.
  All of these concerns are valid. There are no bad guys in the drama. 
Rather, it is the kind of conflict that a new technology inevitably 
poses. The automobile required the reform of traffic-control rules 
designed for the horse-and-buggy era. So today the rise of E-commerce 
requires an update of tax compliance rules designed primarily for local 
commerce. Our job in Congress is not to point fingers but rather to try 
to address the problem in a fair and constructive way.
  The solution must begin by putting the worries of Web-based 
entrepreneurs to rest. They should not be concerned about new and 
discriminatory tax burdens, and they should not be singled out as cash 
cows. Congress should make this clear. We have enacted a moratorium to 
prohibit state and local governments from enacting tax plans that 
discriminate against the E-commerce or impose a levy on Internet 
access. This existing moratorium is set to expire next year. We should 
extend that moratorium to December 2005. That will help clear the air 
and also make possible the development of a real solution for the sales 
and use tax compliance problems now facing many businesses and and 
their customers.
  The solution begins with a recognition of the problem. Collecting a 
sales tax in a face-to-face transaction on Main Street or at the mall 
is a relatively simple process. The seller collects the tax and remits 
it to the state or local government. But with remote sales--such as 
catalog and Internet sales--it's more difficult. States can not require 
a seller to collect a sales tax unless the business has an actual 
location or sales people in the state. So most states, and many 
localities, have laws that require the local buyer to send an 
equivalent ``use tax'' to the state or local government when he or she 
did not pay taxes at the time of purchase.
  The reality, of course, is that customers almost never do that. It 
would be a major inconvenience, and people are not accustomed to paying 
sales taxes in that way. So, despite the requirement in the law, most 
simply don't do it. This tax, which is already owed, is not paid. For 
years, state and local governments could accept this loss because 
catalog sales were a relatively minor portion of overall commerce. The 
Internet, however, will change that.
  Internet and catalog sellers argue that collecting sales taxes would 
be a significant burden for them. They contend that they would have to 
comply with tax laws from thousands of different jurisdictions--46 
states and thousands of local governments have sales taxes. They would 
have to deal with many different tax rates and all of the 
idiosyncracies regarding what is taxable and what is non-taxable. They 
have a point.
  However, there are some remote sellers who know they enjoy an 
advantage over Main Street businesses and simply do not want to lose 
it. They can sell a product without collecting the tax, whereas Main 
Street businesses must collect the local sales tax. Main Street 
businesses claim that is unfair, and they have a point, too.
  As I said, all sides in this debate have valid points, and that is 
the premise of the bill we introduce today. There are three basic 
principles underlying the Internet Tax Moratorium and Equity Act. 
First, we believe that this new Internet technology is becoming a real 
growth engine for our economy. Governments should not impose access or 
discriminatory taxes that might jeopardize its growth. That's why the 
legislation we are introducing extends the current moratorium on 
Internet access

[[Page 11948]]

and multiple and discriminatory taxes on electronic commerce for over 
four additional years.
  Second, state and local governments should be encouraged to simplify 
their sales tax systems as they apply to remote sellers. And third, 
once States have done this, then it is only fair that remote sellers do 
their part and collect any use tax that is owed, just as local 
merchants collect sales taxes. This simple step would free the consumer 
from the burden of having to report such taxes individually. It would 
level the playing field for local retailers and others that already 
collect and remit such taxes, and it would protect the ability of state 
and local governments to provide necessary services for their residents 
in the future.
  Specifically, the Internet Tax Moratorium and Equity Act would do the 
following:
  Extend the existing moratorium on Internet access, multiple and 
discriminatory taxes through December 31, 2005.
  Put Congress on record as urging States and localities to develop a 
streamlined sales and use tax system with the advice of the National 
Conference of Commissioners on Uniform State Laws. Among other things, 
such a system would include a single, blended tax rate with which all 
remote sellers could comply. It should also include within each state a 
uniform tax base on which remote sellers apply the tax, as well as a 
uniform list of exempt items.
  Authorize States to enter into an Interstate Sales and Use Tax 
Compact through which member States would adopt the streamlined sales 
and use tax system. Congressional authority and consent to enter into 
such a Compact would expire if it has not occurred by January 1, 2006.
  Authorize adopting States to require remote sellers with more than $5 
million in annual gross sales to collect and remit sales and use taxes 
on remote sales, once twenty States have adopted such Compact, unless 
Congress has acted to disapprove the Compact by law within a period of 
120 days after the Congress receives it.
  Prohibit states that have not adopted the simplified sales and use 
tax system from gaining benefit from the authority extended in the bill 
to require sellers to collect and remit sales and use taxes on remote 
sales.
  In my view, it would be a mistake for Congress to adopt a lengthy 
extension of the current Internet tax moratorium without addressing the 
underlying problem. If we don't, then the growth of the Internet, which 
should be a benefit to Americans, will instead mean a major erosion of 
funds available to build and maintain schools and roads, finance police 
departments and garbage collection, and all the other services that 
citizens in this country want and need. One study suggests that states 
and local governments soon could be losing more than $20 billion 
annually if the Internet industry continues its rapid growth, and if 
sales and use tax collection rules are left unchanged.
  The competitive crisis facing local retailers is also growing more 
urgent. Testimony at a recent congressional hearing makes that clear: A 
representative of Wal-Mart testified recently that that company is 
incorporating a separate business to put Wal-Mart on the Internet. It 
will do so in a manner that will enable them to avoid sales and use 
taxes. The reason? Even though Wal-Mart has locations in every state 
and therefore would be required to collect such taxes on Internet 
sales, it recognizes that other large competitors will be making those 
sales tax-free. The company regards such avoidance as a matter of 
necessity to remain competitive.
  This scenario will play out over and over again. The large retailers 
like Wal-Mart will survive; the small Main Street businesses will 
struggle. And, there will be a massive loss of revenues to fund schools 
and other basic services.
  Mr. President, this is an important issue that Congress must address 
now. We believe that this legislation strikes a balance between the 
interests of the Internet industry, state and local governments, local 
retailers and remote sellers. It is workable and fair.
  I urge my colleagues to cosponsor this much-needed bipartisan 
legislation.
  Mr. ENZI. Mr. President, I rise in strong support of the Internet Tax 
Moratorium and Equity Act of 2000 introduced today by Senator Dorgan. I 
am an original cosponsor and I encourage each of my colleagues to join 
me as a cosponsor of this bill. We had to take a look at the Internet 
sales tax issue for people who might be using legislative vehicles to 
develop huge loopholes in our current system. We are federally 
mandating states into a sales tax exemption. We need to preserve the 
system for those cities, towns, counties, and states that rely on the 
ability to collect the sales tax they are currently getting.
  There are some critical issues here that have to be solved to keep 
the stability of state and local government--just the stability of it--
not to increase sales tax, just protect what is there right now. I 
believe the Internet Tax Moratorium and Equity Act of 2000 is a 
monumental step forward in protecting, yet enhancing, the current 
system.
  Certainly, no Senator wants to take steps that will unreasonably 
burden the development and growth of the Internet. At the same time, we 
must also be sensitive to issues of basic competitive fairness and the 
negative effect our action or inaction can have on brick-and-mortar 
retailers, a critical economic sector and employment force in all 
American society, especially in rural states like Wyoming. In addition, 
we must consider the legitimate need of state and local governments to 
have the flexibility they need to generate resources to adequately fund 
their programs and operations.
  If the loophole exists, I can share a method for local retailers to 
avoid sales tax collection too--but creating this loophole will lead to 
others--pay attention here. Sales tax collection and federal and state 
income tax could be in the same boat, if sole tax collection is no 
longer necessary on Internet sales purely by virtue of the sale over 
the Internet. Why shouldn't an employee whose check is written on the 
Internet and transmitted directly to his bank account not owe any 
income tax? Both would be Internet tax loopholes--tax collection 
exemptions forced by an all-knowing Federal Government.
  As the only accountant in the Senate, I have a unique perspective on 
the dozens of tax proposals that are introduced in Congress each year. 
In addition, my service on the State and local level and my experiences 
as a small business owner enable me to consider these bills from more 
than one viewpoint.
  I understand the importance of protecting and promoting the growth of 
Internet commerce because of its potential economic benefits. It is a 
valuable resource because it provides access on demand. In addition, it 
is estimated that the growth of online businesses will create millions 
of new jobs nationwide in the coming years. Therefore, I do not support 
a tax on the use of Internet itself.
  I do, however, have concerns about using the Internet as a sales tax 
loophole. Sales taxes go directly to state and local governments and I 
am very leery of any federal legislation that bypasses their 
traditional ability to raise revenue to perform needed services such as 
school funding, road repair and law enforcement. I will not force 
states into a huge new exemption. While those who advocate a permanent 
loophole on the collection of a sales tax over the Internet claim to 
represent the principles of tax reduction, they are actually advocating 
a tax increase. Simply put, if Congress continues to allow sales over 
the Internet to go untaxed and electronic commerce continues to grow as 
predicted, revenues to state and local governments will fall and 
property taxes will have to be increased to offset lost revenue or 
States who do not have or believe in State income taxes will be forced 
to start one.
  After months of hard work, negotiations, and compromise, the Internet 
Tax Moratorium and Equity Act of 2000 has been introduced. I would like 
to commend Senator Dorgan on his commitment to finding a solution and

[[Page 11949]]

working all parties to find that solution. The bill extends the 
existing moratorium on Internet access, multiple, and discriminatory 
taxes for an additional four years through December 31, 2005.
  Throughout the past several years, we have heard that catalog and 
Internet companies say they are willing to allow and collect sales tax 
on interstate sales (regardless of traditional or Internet sales) if 
States will simplify collections to one rate per State sent to one 
location in that State. I think that is a reasonable request. I have 
heard the argument that computers make it possible to handle several 
thousand tax entities, but from an auditing standpoint as well as 
simplicity for small business, I support one rate per State. I think 
the States should have some responsibility for redistribution not a 
business forced to do work for government. Therefore, the bill would 
put Congress on record as urging States and localities to develop a 
streamlined sales and use tax system, which would include a single, 
blended tax rate with which all remote sellers can comply. You need to 
be aware that States are prohibited from gaining benefit from the 
authority extended in the bill to require sellers to collect and remit 
sales and use taxes on remote sales if the States have not adopted the 
simplified sales and use tax system.
  Further, the bill would authorize States to enter into an Interstate 
Sales and Use Tax Compact through which members would adopt the 
streamlined sales and use tax system. Congressional authority and 
consent to enter into such a compact would expire if it has not 
occurred by January 1, 2006. The bill also authorizes States to require 
all other sellers to collect and remit sales and use taxes on remote 
sales unless Congress has acted to disapprove the compact by law within 
a period of 120 days after the Congress receives it.
  We introduce this bill because we do not think there is adequate 
protection now. It is very important we do not build electronic 
loopholes on the Internet, an ever-changing Internet, one that is 
growing by leaps and bounds, one that is finding new technology 
virtually every day. What we know as the Internet today is not what we 
will be using by the time the moratorium is finalized. More and more 
people are using the Internet everyday.
  Mr. President, I recognize this body has a constitutional 
responsibility to regulate interstate commerce. Furthermore, I 
understand the desire of several Senators to protect and promote the 
growth of Internet commerce. Internet commerce is an exciting field. It 
has a lot of growth potential. The new business will continue to create 
millions of new jobs in the coming years.
  The exciting thing about that for Wyomingites is that our merchants 
do not have to go where the people are. For people in my State, that 
means their products are no longer confined to a local market. They do 
not have to rely on expensive catalogs to sell merchandise to the big 
city folks. They do not have to travel all the way to Asia to display 
their goods. The customer can come to us on the Internet. It is a 
remarkable development, and it will push more growth for small 
manufacturers in rural America, especially in my State. We have seen 
some of the economic potential in the Internet and will continue this 
progress. It is a valuable resource because it provides access on 
demand. It brings information to your fingertips when you want it and 
how you want it.
  I was the mayor of a small town, Gillette, WY, for 8 years. I later 
served in the State house for 5 years and the State senate for 5 years. 
Throughout my public life I have always worked to reduce taxes, to 
return more of people's hard-earned wages to them.
  I am not here to argue in favor of taxes. There were times in 
Gillette when we had to make tough decisions. I was mayor during the 
boom time when the size of our town doubled in just a few years. We had 
to be very creative to be sure that our revenue sources would cover the 
necessary public services--important services like sewer, water, curb 
and gutter, filling in potholes, shoveling snow, collecting garbage, 
and mostly water. It is a tough job because the impact of your decision 
is felt by all of your neighbors. Hardly any of these problems is 
solved without money. When you are the mayor of a small town, you are 
on call 24 hours a day. You are in the phone book. People can call you 
at night and tell you that the city sewer is backing up into their 
house. I was fascinated how they were always sure that it was the 
city's sewer that was doing it. Therefore, it is important that we do 
not cut towns out of a historic source of revenue. They provides 
services you really depend on. Remember you cannot flush your toilet 
over the Internet.
  The point is that the government that is closest to the people is 
also on the shortest time line to get results. I think it is the 
hardest work. I am very concerned with any piece of legislation that 
mandates or restricts local government's ability to meet the needs of 
its citizens. This has the potential to provide electronic loopholes 
that will take away all of their revenue. The Internet Tax Moratorium 
and Equity Act of 2000 would designate a level playing field for all 
involved--business, government, and the consumer.
  If the loophole exists, I can share a method for local retailers to 
avoid sales tax collection too--but creating this loophole will lead to 
others--pay attention here. Sales tax collection and federal and state 
income tax could be in the same boat, if sole tax collection is no 
longer necessary on Internet sales purely by virtue of the sale over 
the Internet. Why shouldn't an employee whose check is written on the 
Internet and transmitted directly to his bank account not owe any 
income tax? Both would be Internet tax loopholes--tax collection 
exemptions forced by an all-knowingly federal government.
  I do strongly support this bill. The current system of collecting 
revenues for those towns and states should be preserved--preserved on a 
level playing field for all involved. I do not think we have all the 
answers, or we would not be asking for this bill. So whatever we do, we 
have to have a bill that will preserve the way that small business and 
small towns function at the present at the present time. Our bill is 
critical for towns, small businesses, and you and me. I urge my 
colleagues to support it.
  I yield the floor.
  Mr. GRAHAM. Mr. President, earlier this year, the Senate began 
consideration of the Elementary and Secondary Education Act 
reauthorization. As its name suggests, that legislation governs how 
Federal dollars that go to the States for education will be spent. It 
is a very important bill, and I regret that the Senate was unable to 
complete consideration of it.
  As important as the ESEA reauthorization bill is, however, it is not 
the most significant education bill that Congress will deal with in the 
next two years. In fact, the most important education bill Congress 
will consider won't mention schools or students. It won't reference 
classroom size or teacher salaries.
  In 1998, Congress passed the Internet Tax Freedom Act. That bill 
imposed a three year moratorium on specific state taxes applicable to 
the Internet. The legislation didn't affect the states' ability to 
impose sales tax on Internet purchases, nor did it fix the unfair 
advantage ``e-tailers'' currently have over their main street 
competitors with respect to their responsibility to collect sales and 
use taxes.
  As a result of two Supreme Court rulings, a state is prohibited from 
requiring out-of-state retailers from collecting sales tax on purchases 
made by its residents if the business has no presence in the state. The 
sales tax still applies, it just has to be collected directly from the 
purchaser. For a variety of reasons, very little of this tax is ever 
collected.
  The Internet Tax Freedom Act created the Advisory Commission on 
Electronic Commerce which was supposed to come up with a solution to 
this problem. Instead the Commission was hijacked by a small group who 
opted to demagogue this issue to further their ``anti-tax'' agenda. The 
result was a year-long study of an issue with little in the form of 
useful recommendations.
  The House has passed a five year extension of the moratorium put in 
place

[[Page 11950]]

by the Internet Tax Freedom Act. The Senate also may soon consider a 
proposal to extend the temporary ban imposed in 1998. The game plan of 
the forces supporting this extended moratorium is clear: delay, delay, 
delay. Keep extending the moratorium until there is a sufficiently 
large political constituency to permanently block the collection of 
sales taxes on purchases made over the Internet.
  This is not a hidden agenda. Governor Gilmore, Chairman of the 
Advisory Commission on Electronic Commerce stated it clearly when he 
said that ``I believe America should ban sales and use taxes on the 
Internet permanently, for all time. If we secure tax freedom on the 
Internet through 2006, tax freedom on the Internet will become an 
entitlement for the American people and a political inevitability. No 
tax collector will be welcome on the Internet after 2006.''
  Let me be clear: this is not about whether purchases made over the 
Internet are subject to sales tax. They already are. The question is 
whether Internet sellers should have the same responsibility to collect 
the sales tax as their Main Street competitors.
  If we answer this question with a ``no,'' funding for education will 
suffer. Why? Because states have the fundamental responsibility for 
financing public education in our country For most states, sales tax 
revenue is the primary means by which states fulfill this 
responsibility. Because many states rely on sales taxes for their 
general revenue, the equation is simple--no collection of sales tax on 
the Internet means less money for new schools, teacher salaries, or 
textbooks. Six states--Florida, Nevada, South Dakota, Tennessee, Texas 
and Washington rely on sales taxes for more than half of their total 
tax revenue.
  Over the next four years, Internet sales are expected to grow by 
nearly $500 billion. If state and local governments are prohibited from 
collecting sales taxes on those new sales, they stand to lose close to 
$17.5 billion in revenue. Florida's share of that lost revenue could be 
$1 billion. When asked why he robbed banks, Willie Sutton replied, 
``that's where the money is.'' Today, the money is increasingly on the 
Internet.
  There is another reason to fix this issue: fairness. No one would 
seriously consider a proposal that barred state and local governments 
from collecting sales and use taxes from retailers who operate from 
green buildings. That would be unfair to those businesses that aren't 
located in green buildings. Proposals to arbitrarily benefit the 
Internet, however, somehow receive a great deal of attention and 
support.
  Our position should be clear: no more delays. No more moratoriums 
until Congress agrees to a process whereby states can simplify their 
sales tax systems and receive the authority they need to require remote 
sellers to collect their sales taxes.
  The legislation we are introducing today takes the first positive 
step in this direction. The bill extends the current moratorium on 
Internet access taxes and multiple or discriminatory taxes on the 
Internet, a prohibition that virtually all agree should be imposed.
  More importantly, however, it establishes a process whereby states 
can cooperatively create a model sales and use tax system. Sales tax 
laws must be made significantly more uniform across the states, and the 
administration of the tax must be substantially overhauled and 
simplified. The goal of this legislation is to develop a simple, 
uniform, and fair system of sales tax collection. It will reduce the 
burden on remote sellers and protect state and local sovereignty.
  Once states have adopted this simplified system, they would then have 
the authority to require remote sellers to collect and remit sales and 
use taxes to the state.
  Previous attempts to require remote sellers to collect sales and use 
taxes have been criticized on the grounds that it was unreasonable to 
require businesses to keep track of the nearly 7,500 state and local 
governments levying sales and use taxes. That is a suspect criticism, 
particularly for those. Nevertheless, this bill dramatically simplifies 
the system for businesses by establishing uniform definitions and fewer 
rates.
  The streamlined sales and use tax system envisioned by this 
legislation follows the guidance offered by the Advisory Commission on 
Electronic Commerce. The attributes of this streamlined system include:
  A centralized, one-stop, multi-state registration system for sellers;
  Uniform definitions for goods or services that would be included in 
the tax base;
  Uniform and simple rules for attributing transactions to particular 
taxing jurisdictions;
  Uniform rules for the designation and identification of purchasers 
exempt from tax;
  Uniform certification procedures for software that sellers may rely 
on to determine state and local taxes;
  Uniform bad debt rules;
  Uniform returns and remittance forms;
  Consistent electronic filing and remittance methods;
  State administration of State and local sales taxes;
  Uniform audit procedures;
  Reasonable compensation for tax collection by remote sellers;
  Exemption for remote sellers with less than $5 million in annual 
sales for the previous year;
  Appropriate protections for consumer privacy; and
  Such other features that member states deem warranted to promote 
simplicity.
  Critics of this legislation will argue that it is anti-technology, 
and that the Internet must be protected from this threat. That is not 
true. The sponsors of this bill yield to no one in their support and 
enthusiasm for a vibrant information technology era. But that support 
does not necessitate special breaks for companies doing business over 
the Internet.
  A more appropriate characterization for this legislation is that it 
will both assure fairness to all sellers and protect states' abilities 
to collect the resources necessary to make the education investments 
that will pave the way for the next technological breakthrough--the 
next Internet. I hope my colleagues will join us and support this 
approach.
                                 ______
                                 
      By Mr. COVERDELL (for himself and Mr. Torricelli):
  S. 2776. A bill to amend the Internal Revenue Code of 1986 to 
encourage charitable contributions to public charities for the use in 
medical research; to the Committee on Finance.


              the medical research investment act of 2000

  Mr. COVERDELL. Mr. President, today I rise to introduce bipartisan 
legislation, the Medical Research Investment Act, or MRI Act, and 
privileged to be joined today by Senator Torricelli. The American 
people are unique in the world in their spirit of volunterism and 
charitable efforts. Unfortunately, the Federal Tax Code quite often 
gets in the way.
  Congress has made impressive strides to increase resources for 
medical research. Last year we passed and enacted an increase of $2.7 
billion in funding for the National Institutes of Health. This fourteen 
percent increase means this Congress is well on its way to doubling the 
Federal support for medical research, as we promised. At the same time, 
however, we should not diminish the critical role of private donations. 
This is why the MRI Act is so necessary.
  While researchers have indeed made impressive breakthroughs in 
finding cures. The fight is far from over. For instance, 16 million 
Americans live with diabetes mellitus. In fact, I met today a 
courageous child, Caity Rigg, who suffers from Juvenile diabetes and 
requires four shots of insulin a day just to survive. Diabetes is the 
leading cause of kidney failure, blindness, and amputations, and is a 
major factor for heart disease, stroke, and birth defects. It shortens 
average life expectancy by 15 years and costs the nation in excess of 
$100 billion annually.
  Cardiovascular diseases, heart attacks and strokes, claimed nearly 1 
million lives in the United States in

[[Page 11951]]

1997. A third of these deaths were premature. In 1996, a third of all 
hospitalization expenditures were made to Medicare beneficiaries for 
hospital expenses due to cardiovascular problems.
  This year approximately half a million Americans will die of cancer--
more than 1,500 people per day. It is the second leading cause of death 
in the United States, and since 1990, approximately 13 million new 
cases have been diagnosed. In 2000, over 1 million new patients will be 
stricken.
  The MRI Act makes very simple, but very significant changes. First, 
it encourages charitable gifts of cash or property for medical research 
by increasing the limitations on deductibility from the current 50 
percent cap to 80 percent of adjusted gross income. Individuals could 
give 30 percent for medical research and 50 percent of income for other 
purposes. Or they could give as much as 80 percent of income for 
medical research alone. Not only would this benefit medical research, 
but it presents the opportunity for other charities to similarly 
receive greater support. Further, those who can give more than 80 
percent in a year may extent the carry-forward for excess charitable 
gifts for medical research from five years to ten years.
  Second, the MRI Act allows medical research to benefit from incentive 
stock option, or ISO's, giving by ending disincentives for taxpayers 
who contribute stock from ISO's to medical research. Current law taxes 
such transactions at a rate of almost forty percent if stocks are not 
held for more than a year. Because of the tax on their gifts, many 
taxpayers find they must sell $140 in stock for every $100 they wish to 
donate because of the taxes on their gifts. In addition to this change, 
no ordinary income, capital gains or alternative minimum tax would be 
imposed on medical research gifts.
  Accordingly to an estimate by Price Waterhouse Coopers, the MRI Act 
would release more than 1 billion in new donations to medical research 
over the next 5 years. For many research efforts, it could mean the 
difference between finding cures or not. Our proposal enjoys broad 
support from the medical research community.
  Alliance for Aging Research, American Association for Cancer 
Research, ALS Association (Lou Gehrigs's Disease), American Society of 
Cell Biologists, Cancer Treatment Research Foundation, Coalition of 
National Cancer Cooperative Groups, Cure for Lymphoma, Friends of 
Cancer Research, International Foundation for Anticancer Drug 
Discovery, Juvenile Diabetes Foundation for Parkinson's Research, 
Oncology Nursing Society, Prevent Blindness America, Research to 
Prevent Blindness, and Society for Women's Health Research.
  In closing, I encourage my colleagues to join us in supporting the 
MRI Act and look forward to its consideration. I ask unanimous consent 
that a copy of my proposed legislation appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2776

       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 ``Medical Research Investment 
     Act of 2000''.

     SEC. 2. INCREASE IN LIMITATION ON CHARITABLE DEDUCTION FOR 
                   CONTRIBUTIONS FOR MEDICAL RESEARCH.

       (a) In General.--Paragraph (1) of section 170(b) of the 
     Internal Revenue Code of 1986 (relating to percentage 
     limitations) is amended by adding at the end the following 
     new subparagraph:
       ``(G) Special limitation with respect to certain 
     contributions for medical research.--
       ``(i) In general.--Any medical research contribution shall 
     be allowed to the extent that the aggregate of such 
     contributions does not exceed the lesser of--

       ``(I) 80 percent of the taxpayer's contribution base for 
     any taxable year, or
       ``(II) the excess of 80 percent of the taxpayer's 
     contribution base for the taxable year over the amount of 
     charitable contributions allowable under subparagraphs (A) 
     and (B) (determined without regard to subparagraph (C)).

       ``(ii) Carryover.--If the aggregate amount of contributions 
     described in clause (i) exceeds the limitation of such 
     clause, such excess shall be treated (in a manner consistent 
     with the rules of subsection (d)(1)) as a medical research 
     contribution in each of the 10 succeeding taxable years in 
     order of time.
       ``(iii) Treatment of capital gain property.--In the case of 
     any medical research contribution of capital gain property 
     (as defined in subparagraph (C)(iv)), subsection (e)(1) shall 
     apply to such contribution.
       ``(iv) Medical research contribution.--For purposes of this 
     subparagraph, the term `medical research contribution' means 
     a charitable contribution--

       ``(I) to an organization described in clauses (ii), (iii), 
     (v), or (vi) of subparagraph (A), and
       ``(II) which is designated for the use of conducting 
     medical research.

       ``(v) Medical research.--For purposes of this subparagraph, 
     the term `medical research' has the meaning given such term 
     under the regulations promulgated under subparagraph (A)(ii), 
     as in effect on the date of the enactment of this 
     subparagraph.''.
       (b) Conforming Amendments.--
       (1) Section 170(b)(1)(A) of the Internal Revenue Code of 
     1986 is amended in the matter preceding clause (i) by 
     inserting ``(other than a medical research contribution)'' 
     after ``contribution''.
       (2) Section 170(b)(1)(B) of such Code is amended by 
     inserting ``or a medical research contribution'' after 
     ``applies''.
       (3) Section 170(b)(1)(C)(i) of such Code is amended by 
     striking ``subparagraph (D)'' and inserting ``subparagraph 
     (D) or (G)''.
       (4) Section 170(b)(1)(D)(i) of such Code is amended--
       (A) in the matter preceding subclause (I), by inserting 
     ``or a medical research contribution'' after ``applies'', and
       (B) in the second sentence, by inserting ``(other than 
     medical research contributions)'' before the period.
       (c) Effective Date.--The amendments made by this section 
     shall apply--
       (1) to contributions made in taxable years beginning after 
     December 31, 2000, and
       (2) to contributions made on or before December 31, 2000, 
     but only to the extent that a deduction would be allowed 
     under section 170 of the Internal Revenue Code of 1986 for 
     the taxable years beginning after December 31, 1999, had 
     section 170(b)(1)(G) of such Code (as added by this section) 
     applied to such contributions when made.

     SEC. 3. TREATMENT OF CERTAIN INCENTIVE STOCK OPTIONS.

       (a) Amt Adjustments.--Section 56(b)(3) of the Internal 
     Revenue Code of 1986 (relating to treatment of incentive 
     stock options) is amended--
       (1) by striking ``Section 421'' and inserting the 
     following:
       ``(A) In general.--Except as provided in subparagraph (B), 
     section 421'', and
       (2) by adding at the end the following new subparagraph:
       ``(B) Exception for certain medical research stock.--

       ``(i) In general.--This paragraph shall not apply in the 
     case of a medical research stock transfer.
       ``(ii) Medical research stock transfer.--For purposes of 
     clause (i), the term `medical research stock transfer' means 
     a transfer--

       ``(I) of stock which is traded on an established securities 
     market,
       (II) of stock which is acquired pursuant to the exercise of 
     an incentive stock option within the same taxable year as 
     such transfer occurs, and
       ``(III) which is a medical research contribution (as 
     defined in section 170(b)(1)(G)(iv)).''.
       (b) Nonrecognition of Certain Incentive Stock Options.--
     Section 422(c) of the Internal Revenue Code of 1986 (relating 
     to special rules) is amended by adding at the end the 
     following new paragraph:
       ``(8) Medical research contributions.--For purposes of this 
     section and section 421, the transfer of a share of stock 
     which is a medical research stock transfer (as defined in 
     section 56(b)(3)(B)) shall be treated as meeting the 
     requirements of subsection (a)(1).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to transfers of stock made after the date of the 
     enactment of this Act.
                                 ______
                                 
      By Mr. SARBANES (for himself, Mr. Warner, Mr. Robb, and Ms. 
        Mikulski):
  S. 2777. A bill to amend the National Oceanic and Atmospheric 
Administration Authorization Act of 1992 to revise and enhance 
authorities, and to authorize appropriations, for the Chesapeake Bay 
Office, and for other purposes; to the Committee on Commerce, Science, 
and Transportation.


       THE NOOA CHESAPEAKE BAY OFFICE REAUTHORIZATION ACT OF 2000

  Mr. SARBANES. Mr. President, today I am introducing legislation, 
together with my colleagues, Senators Warner, Robb and Mikulski, to 
reauthorize and enhance the NOAA Chesapeake Bay Program office. This 
office, which was first established in 1992 pursuant to Public Law 102-
567, serves as the focal point for all of NOAA's activities within the 
Chesapeake Bay watershed and is a vital part of the effort to

[[Page 11952]]

achieve the long-term goal of the Bay Program--restoring the Bay's 
living resources to healthy and balanced levels.
  As the lead Federal agency responsible for marine science, NOAA has 
played a critical role in the restoration of the Chesapeake Bay and its 
living marine resources. Since 1984, when the Agency first signed a 
Memorandum of Understanding with EPA to participate in the Chesapeake 
Bay Program as a full Federal partner, NOAA has supported scientific 
investigations and conducted other important activities ranging from 
fisheries stock assessments to monitoring of algal blooms and tracking 
changes in tidal wetlands. This research has been essential to 
improving our understanding of the impacts of climate, harvest and 
pollution on the decline of anadromous fish, oysters and other marines 
species in the Bay and helping to develop management strategies for 
restoring living resources.
  In order to better integrate NOAA's diverse efforts in the Bay region 
and provide a clear focal point within NOAA for Chesapeake Bay 
initiatives, in 1991 I introduced legislation to create a NOAA 
Chesapeake Bay Office or NCBO. The legislation authorized $2.5 million 
a year for the program and prescribed the office's principal functions 
as coordination, strategy development, technical and financial 
assistance and research dissemination. That legislation was 
incorporated in an overall NOAA authorization bill and became Public 
Law 102-567. To implement the initiative, NOAA established an office in 
Annapolis under the administration of the National Marine Fisheries 
Service and has been funding peer-reviewed research directed at the 
Bay's living resource problems, providing scientific expertise and 
technical assistance to Bay Program partners, working to involve other 
relevant NOAA elements in the Bay restoration and participating in a 
wide variety of Bay Program projects and activities. During the past 
eight years, the NCBO has made great strides in realizing the 
objectives of the NOAA Authorization Act of 1992 and the overall Bay 
Program living resource goals. Working with other Bay Program Partners, 
important progress has been made in surveying and assessing fishery 
resources in the Bay, developing fishery management plans for selected 
species, undertaking habitat restoration projects, removing barriers to 
fish passage, and undertaking important remote sensing and data 
analysis activities.
  NOAA's responsibilities to the Bay restoration effort are far from 
complete, however. Some populations of major species of fish and 
shellfish in Chesapeake Bay such as shad and oysters, remain severely 
depressed, while others, such as blue crab are at risk. Bay-wide, some 
16 of 25 ecologically important species are in decline or severe 
decline, due to disease, habitat loss, over-fishing and other factors. 
The underwater grasses that once sustained these fisheries are only at 
a fraction of their historic levels. Research and monitoring must be 
continued and enhanced to track living resource trends, evaluate the 
responses of the estuary's biota to changes in their environment and 
establish clear management goals and progress indicators for restoring 
the productivity, diversity and abundance of these species. Chesapeake 
2000, the soon-to-be-signed new Bay Agreement, has identified several 
living resource goals which will require strong NOAA involvement to 
achieve.
  The legislation which I am introducing would provide NOAA with 
additional resources and authority necessary to ensure its continued 
full participation in the Bay's restoration and in meeting with goals 
and objectives of Chesapeake 2000. First, this measure would move 
administration and oversight of the NOAA Bay Office from the National 
Marine Fisheries Service (NMFS) to the Office of the Undersecretary to 
help facilitate the pooling of all of NOAA's talents and take better 
advantage of NOAA's multiple capabilities. In addition to NMFS there 
are four other line offices within NOAA with programs and 
responsibilities critical to the Bay restoration effort--the Office of 
Oceanic and Atmospheric Research, National Ocean Service, National 
Weather Service, and National Environmental Satellite, Data and 
Information Service. Getting these different line offices to pool their 
resources and coordinate their activities is a serious challenge when 
they do not have a direct stake or clear line of responsibility to the 
Chesapeake Bay Program. Placing the NOAA Bay office within the Under 
Secretary's Office will help assure the coordination of activities 
across all line organizations of NOAA.
  Second, the legislation authorizes and directs NOAA to undertake a 
special five-year study, in cooperation with the scientific community 
of the Chesapeake Bay and appropriate other federal agencies, to 
develop the knowledge base required for understanding multi-species 
interactions and developing multi-species management plans. To date, 
fisheries management in Chesapeake Bay and other waters, has been 
largely based upon single-species plans that often ignore the critical 
relationships between water and habitat quality, ecosystem health and 
the food webs that support the Bay's living resources. There is a 
growing consensus between scientific leaders and managers alike that we 
must move beyond the one-species-at-a-time approach toward a wider, 
multi-species and ecosystem perspective. Chesapeake 2000 calls for 
developing multi-species management plans for targeted species by the 
year 2005 and implementing the plans by 2007. In order to achieve these 
goals, NOAA must take a leadership role and support a sustained 
research and monitoring program.
  Third, the legislation authorizes NOAA to carry out a small-scale 
fishery and habitat restoration grant and technical assistance program 
to help citizens organizations and local governments in the Chesapeake 
Bay watershed undertake habitat, fish and shellfish restoration 
projects. Experience has shown that, with the proper tools and 
training, citizens' groups and local communities can play a tremendous 
role in fisheries and habitat protection and restoration efforts. The 
Chesapeake Bay Foundation's oyster gardening program, for example, has 
proven to be highly successful in training citizens to grow oysters at 
their docks to help restore oysters' populations in the Bay. The new 
Bay Agreement has identified a critical need to not only to expand and 
promote community-based programs but to restore historic levels of 
oyster production, restore living resource habitat and submerged 
aquatic vegetation. The NOAA small-grants program, which this bill 
would authorize, would complement EPA's Chesapeake Bay small watershed 
program, and make ``seed'' grants available on a competitive, cost-
sharing basis to local governments and nonprofit organizations to 
implement hands-on projects such as improvement of fish passageways, 
creating artificial or natural reefs, restoring wetlands and sea-grass 
beds, and producing oysters for restoration projects.
  Fourth, the legislation would establish an internet-based Coastal 
Predictions Center for the Chesapeake Bay. Resource managers and 
scientists alike agree that we must make better use of the various 
modeling and monitoring systems and new technologies to improve 
prediction capabilities and response to physical and chemical events 
within the Bay and tributary rivers. There are substantial amounts of 
data collected and compiled by Federal, state and local government 
agencies and academic institutions including information on weather, 
tides, currents, circulation, climate, land use, coastal environmental 
quality, aquatic living resources and habitat conditions. 
Unfortunately, little of this data is coordinated and organized in a 
manner that is useful to the wide range of potential users. The Coastal 
Predictions Center would serve as a knowledge bank for assembling 
monitoring and modeling data from relevant government agencies and 
academic institutions, interpreting that data, and organizing it into 
products that are useful to resource managers, scientists and the 
public.
  Finally, the legislation would increase the authorization for the 
NOAA Bay Program from the current level of

[[Page 11953]]

$2.5 million to $6 million per year to enhance current activities and 
to carry out these new initiatives. For more than a decade, funding for 
NOAA's Bay Program has remained static at an annual average of $1.9 
million. If we are to achieve the ultimate, long-term goal of the Bay 
Program--protecting, restoring and maintaining the health of the living 
resources of the Bay--additional financial resources must be provided.
  Mr. President, this legislation will provide an important boost to 
our efforts to restore the Bay's living resources. It is strongly 
supported by the Chesapeake Bay Commission, the Chesapeake Bay 
Foundation and members of the scientific community. I ask unanimous 
consent that the full text of the measure and supporting letters be 
printed in the Record immediately following my statement.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2777

       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 ``NOAA Chesapeake Bay Office 
     Reauthorization Act of 2000''.

     SEC. 2. CHESAPEAKE BAY OFFICE.

       (a) Establishment.--Section 307(a) of the National Oceanic 
     and Atmospheric Administration Authorization Act of 1992 (15 
     U.S.C. 1511d(a)) is amended--
       (1) in paragraph (1), by striking ``Estuarine Resources''; 
     and
       (2) by striking paragraph (2) and inserting the following:
       ``(2) Administration.--
       ``(A) In general.--Beginning not later than 60 days after 
     the date of enactment of this subparagraph, the Office shall 
     be administered by the Office of the Under Secretary of 
     Commerce for Oceans and Atmosphere.
       ``(B) Director.--The Secretary of Commerce shall appoint as 
     Director of the Office an individual who has knowledge of and 
     experience in research or resource management efforts in the 
     Chesapeake Bay.''.
       (b) Functions.--Section 307(b) of the National Oceanic and 
     Atmospheric Administration Authorization Act of 1992 (15 
     U.S.C. 1511d(b)) is amended--
       (1) by striking paragraph (3) and inserting the following:
       ``(3) coordinate the programs and activities of the various 
     organizations within the National Oceanic and Atmospheric 
     Administration and the Chesapeake Bay Regional Sea Grant 
     Programs, including--
       ``(A) programs and activities in--
       ``(i) coastal and estuarine research, monitoring, and 
     assessment;
       ``(ii) fisheries research and stock assessments;
       ``(iii) data management;
       ``(iv) remote sensing;
       ``(v) coastal management;
       ``(vi) habitat conservation and restoration; and
       ``(vii) atmospheric deposition; and
       ``(B) programs and activities of the Cooperative Oxford 
     Laboratory of the National Ocean Service with respect to--
       ``(i) nonindigenous species;
       ``(ii) marine species pathology;
       ``(iii) human pathogens in marine environments; and
       ``(iv) ecosystems health;''; and
       (2) in paragraph (7), by striking the period at the end and 
     inserting the following: ``, which report shall include an 
     action plan consisting of--
       ``(A) a list of recommended research, monitoring, and data 
     collection activities necessary to continue implementation of 
     the strategy described in paragraph (2); and
       ``(B) proposals for--
       ``(i) continuing and new National Oceanic and Atmospheric 
     Administration activities in the Chesapeake Bay; and
       ``(ii) the integration of those activities with the 
     activities of the partners in the Chesapeake Bay Program to 
     meet the commitments of the Chesapeake 2000 agreement and 
     subsequent agreements.''.
       (c) Conforming Amendment.--Section 307 of the National 
     Oceanic and Atmospheric Administration Authorization Act of 
     1992 (15 U.S.C. 1511d) is amended by striking the section 
     heading and inserting the following:

     ``SEC. 307. CHESAPEAKE BAY OFFICE.''.

     SEC. 3. MULTIPLE SPECIES MANAGEMENT STRATEGY; CHESAPEAKE BAY 
                   FISHERY AND HABITAT RESTORATION SMALL GRANTS 
                   PROGRAM; COASTAL PREDICTION CENTER.

       The National Oceanic and Atmospheric Administration 
     Authorization Act of 1992 is amended by inserting after 
     section 307 (15 U.S.C. 1511d) the following:

     ``SEC. 307A. MULTIPLE SPECIES MANAGEMENT STRATEGY.

       ``(a) In General.--Not later than 180 days after the date 
     of enactment of this section, the Director of the Chesapeake 
     Bay Office of the National Oceanic and Atmospheric 
     Administration shall commence a 5-year study, in cooperation 
     with the scientific community of the Chesapeake Bay and 
     appropriate Federal agencies--
       ``(1) to determine and expand the understanding of the role 
     and response of living resources in the Chesapeake Bay 
     ecosystem; and
       ``(2) to develop a multiple species management strategy for 
     the Chesapeake Bay.
       ``(b) Required Elements of Study.--In order to improve the 
     understanding necessary for the development of the strategy 
     under subsection (a), the study shall--
       ``(1) determine the current status and trends of fish and 
     shellfish that live in the Chesapeake Bay estuaries and are 
     selected for study;
       ``(2) evaluate and assess interactions among the fish and 
     shellfish described in paragraph (1) and other living 
     resources, with particular attention to the impact of changes 
     within and among trophic levels; and
       ``(3) recommend management actions to optimize the return 
     of a healthy and balanced ecosystem for the Chesapeake Bay.

     ``SEC. 307B. CHESAPEAKE BAY FISHERY AND HABITAT RESTORATION 
                   SMALL GRANTS PROGRAM.

       ``(a) In General.--The Director of the Chesapeake Bay 
     Office of the National Oceanic and Atmospheric Administration 
     (referred to in this section as the `Director'), in 
     cooperation with the Chesapeake Executive Council (as defined 
     in section 307(e)), shall carry out a community-based fishery 
     and habitat restoration small grants and technical assistance 
     program in the Chesapeake Bay watershed.
       ``(b) Projects.--
       ``(1) Support.--The Director shall make grants under the 
     program under subsection (a) to pay the Federal share of the 
     cost of projects that are carried out by eligible entities 
     described in subsection (c) for the restoration of fisheries 
     and habitats in the Chesapeake Bay.
       ``(2) Federal share.--The Federal share under paragraph (1) 
     shall not exceed 75 percent.
       ``(3) Types of projects.--Projects for which grants may be 
     made under the program include--
       ``(A) the improvement of fish passageways;
       ``(B) the creation of natural or artificial reefs or 
     substrata for habitats;
       ``(C) the restoration of wetland or sea grass;
       ``(D) the production of oysters for restoration projects; 
     and
       ``(E) the restoration of contaminated habitats in the 
     Chesapeake Bay watershed.
       ``(c) Eligible Entities.--The following entities are 
     eligible to receive grants under the program under this 
     section:
       ``(1) The government of a political subdivision of a State 
     in the Chesapeake Bay watershed and the government of the 
     District of Columbia.
       ``(2) An organization in the Chesapeake Bay watershed (such 
     as an educational institution or a community organization) 
     that is described in section 501(c) of the Internal Revenue 
     Code of 1986 and is exempt from taxation under section 501(a) 
     of that Code.
       ``(d) Additional Requirements.--The Director may prescribe 
     any additional requirements, including procedures, that the 
     Director considers necessary to carry out the program under 
     this section.

     ``SEC. 307C. COASTAL PREDICTION CENTER.

       ``(a) Establishment.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of this section, the Director of the Chesapeake Bay 
     Office of the National Oceanic and Atmospheric Administration 
     (referred to in this section as the `Director'), in 
     collaboration with regional scientific institutions, shall 
     establish a coastal prediction center for the Chesapeake Bay 
     (referred to in this section as the `center').
       ``(2) Purpose of center.--The center shall serve as a 
     knowledge bank for--
       ``(A) assembling, integrating, and modeling coastal 
     information and data from appropriate government agencies and 
     scientific institutions;
       ``(B) interpreting the data; and
       ``(C) organizing the data into predictive products that are 
     useful to policy makers, resource managers, scientists, and 
     the public.
       ``(b) Activities.--
       ``(1) Information and prediction system.--The center shall 
     develop an Internet-based information system for integrating, 
     interpreting, and disseminating coastal information and 
     predictions concerning--
       ``(A) climate;
       ``(B) land use;
       ``(C) coastal pollution;
       ``(D) coastal environmental quality;
       ``(E) ecosystem health and performance;
       ``(F) aquatic living resources and habitat conditions; and
       ``(G) weather, tides, currents, and circulation that affect 
     the distribution of sediments, nutrients, and organisms, 
     coastline erosion, and related physical and chemical events 
     within the Chesapeake Bay and the tributaries of the 
     Chesapeake Bay.
       ``(2) Agreements to provide data, information, and 
     support.--The Director may enter into agreements with other 
     entities of the National Oceanic and Atmospheric 
     Administration, other appropriate Federal,

[[Page 11954]]

     State, and local government agencies, and academic 
     institutions, to provide and interpret data and information, 
     and provide appropriate support, relating to the activities 
     of the center.
       ``(3) Agreements relating to information products.--The 
     Director may enter into grants, contracts, and interagency 
     agreements with eligible entities for the collection, 
     processing, analysis, interpretation, and electronic 
     publication of information products for the center.''.

     SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--Section 307 of the National Oceanic and 
     Atmospheric Administration Authorization Act of 1992 (15 
     U.S.C. 1511d) is amended by striking subsection (d) and 
     inserting the following:
       ``(d) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     to the Department of Commerce for the Chesapeake Bay Office 
     $6,000,000 for each of fiscal years 2001 through 2004.
       ``(2) Amounts for new programs.--Of the amount authorized 
     to be appropriated for each fiscal year under paragraph (1)--
       ``(A) not more than $2,500,000 shall be available to carry 
     out section 307A;
       ``(B) not more than $1,000,000 shall be available to carry 
     out section 307B; and
       ``(C) not more than $500,000 shall be available to carry 
     out section 307C.''.
       (b) Conforming Amendment.--Section 2 of the National 
     Oceanic and Atmospheric Administration Marine Fisheries 
     Program Authorization Act (Public Law 98-210; 97 Stat. 1409) 
     is amended by striking subsection (e) (106 Stat. 4285).

     SEC. 5. TECHNICAL CORRECTION.

       Section 307(b) of the National Oceanic and Atmospheric 
     Administration Authorization Act of 1992 (15 U.S.C. 1511d(b)) 
     is amended by striking ``Chesapeake Bay Executive Council'' 
     and inserting ``Chesapeake Executive Council''.


                                    Chesapeake Bay Commission,

                                                    June 12, 2000.
     Hon. Paul S. Sarbanes,
     U.S. Senate, Hart Senate Office Building, Washington, DC
       Dear Senator Sarbanes: We understand that you will soon be 
     introducing legislation to reauthorize NOAA's Chesapeake Bay 
     Program. This broadened, $6 million reauthorization would 
     allow NOAA to better address multi-species management issues, 
     to establish a complementary grants program in support of 
     local community projects throughtout the Bay, and to make 
     additional contributions that enhance the restoration of 
     oysters in the estuary.
       This legislation provides another enhanced mechanism for 
     meeting the ambitious restoration and protection goals 
     contained in the Chesapeake 2000 agreement that we and our 
     Bay partners are signing on June 28. The members of the 
     Chesapeake Bay Commission look forward to the enactment on 
     this NOAA reauthorization and offer our full support and 
     assistance as it moves through the Congress.
           Sincerely,
     Bill Bolling,
       Chairman.
     Brian E. Frosh,
       Vice-Chairman.
     Arthur D. Hershey,
       Vice-Chairman.
                                  ____



                                     Chesapeke Bay Foundation,

                                                    June 20, 2000.
     Hon. Paul S. Sarbanes,
     Hart Building,
     Washington, DC.
       Dear Senator Sarbanes: The Chesapeake Bay Foundation fully 
     supports your new bill that would reauthorize and enhance the 
     NOAA Chesapeake Bay Program. We greatly appreciate your 
     leadership on this legislation and your persistent pursuit of 
     a restored Bay.
       The NOAA Bay Program originally was authorized in 1992 and 
     has been a major contributor in protecting and restoring the 
     Bay. The NOAA Bay office has provided a clear focal point 
     within NOAA for Chesapeake Bay initiatives, involving all 
     relevant NOAA entities in Bay restoration efforts, managing 
     peer-reviewed research, and strengthening NOAA's interactions 
     with Chesapeake Bay partners.
       One of the NOAA Bay Program's yearly achievements is its 
     fishery stock assessment. This work is crucial to gauging and 
     managing the health of the Bay's fisheries. In addition, the 
     NOAA Bay Program contributes to ecosystem management, 
     community-based restoration activities, data analysis, and 
     information management. NOAA Bay Program employees 
     participate on Chesapeake Bay Program committees and they 
     chair the Chesapeake Bay Environmental Effects Committee and 
     the Chesapeake Bay Stock Assessment Committee.
       Recently, the NOAA Bay Program made a major commitment to 
     restoring the Bay's oyster population, which provides vital 
     filtering of polluted water and unique habitat for marine 
     life. CBF views restoring the oyster population as one of the 
     most important steps we can take to restore the health of the 
     Bay.
       This new bill would consolidate authority for the Program's 
     base funding with other line item programs, such as oyster 
     recovery and multi-species initiatives. Moreover, the bill 
     requires the NOAA Bay Program to help the Bay states meet the 
     goals of the Chesapeake 2000 Agreement. The small watershed 
     grants section, which is a new initiative, would be used for 
     projects like Susquehanna River fish passages, oyster reef 
     reconstruction, and other citizen-led, hands-on projects.
       Lastly, the bill increases authorization to $6 million each 
     year to carry out these activities. The Chesapeake Bay is the 
     most productive estuary in the world and its vast fisheries 
     and marine resources deserve that level of commitment from 
     the federal government.
       This bill represents a tremendous boost for CBF's and 
     NOAA's efforts to Save the Bay. We look forward to working 
     with you to secure passage of this exciting new legislation.
           Very Truly Yours,
                                      Michael F. Hirshfield, PhD.,
                              Vice-President, Resource Protection.
                                 ______
                                 
      By Mr. KOHL (for himself, Mr. DeWine, Mr. Specter, Mr. Leahy, Mr. 
        Grassley, and Mr. Feingold):
  S. 2778. A bill to amend the Sherman Act to make oil-producing and 
exporting cartels illegal; to the Committee on the Judiciary.


     the no oil producing and exporting cartels (nopec) act of 2000

  Mr. KOHL. Mr. President, we have all watched in the last few weeks as 
gas prices have skyrocketed across the country, reaching an average 
price for regular gas of $ 1.68 per gallon. The situation is even worse 
in Wisconsin and other Midwestern states. The Milwaukee Journal 
Sentinel reported on June 21 that the average price in Milwaukee for 
regular gas has reached $2.05 per gallon, and reports of consumers 
paying as much as $2.30 or more are not uncommon. We need to take 
action, and take action now, to combat this unjustified rise in gas 
prices that takes hard-earned dollars away from average citizens every 
time they visit the gas pump. It is for this reason that I rise today, 
with my colleagues Senators DeWine, Specter, Leahy, and Grassley, to 
introduce the ``No Oil Producing and Exporting Cartels Act of 2000'', 
``NOPEC''.
  We have all heard many explanations offered for this rise in gas 
prices. Some say that the oil companies are gouging consumers. Some 
blame disruptions in supply. Others point to the EPA requirement 
mandating use of a new and more expensive type of ``reformulated'' gas 
in the Midwest. Some even claim that refiners and distributors are 
illegally fixing prices, and I am glad to see that the Federal Trade 
Commission, at the request of the Wisconsin delegation and Senator 
DeWine, has now launched an investigation to figure out if these 
allegations are true. And these are just a few of the reasons that have 
been offered.
  But one cause of these escalating prices is indisputable. This is the 
price fixing conspiracy of the OPEC nations, a conspiracy that for 
years has unfairly driven up the cost of imported crude oil to satisfy 
the greed of the oil exporters. We have long decried OPEC but, sadly, 
until now no one has tried to take any action to put it out of 
business. NOPEC will, for the first time, establish, clearly and 
plainly, that when a group of competing oil producers like OPEC agrees 
to act together to restrict supply or set prices they are violating 
U.S. law, and it will authorize the Attorney General or FTC to file 
suit under the antitrust laws for redress. Our bill will also make 
plain that the nations of OPEC cannot hide behind the doctrines of 
``Sovereign Immunity'' or ``Act of State'' to escape the reach of 
American justice.
  Even under current law, there is no doubt that the actions of the 
international oil cartel would be in gross violation of our most basic 
principles of antitrust law as nothing more than an illegal price 
fixing scheme if this cartel was a group of international private 
companies rather than foreign governments. But OPEC members have used 
the shield of ``sovereign immunity'' to escape accountability for their 
price-fixing. The Federal Sovereign Immunities Act, though, already 
recognizes that the ``commercial'' activity of nations is not protected 
by sovereign immunity. And it is hard to imagine an

[[Page 11955]]

activity that is more obviously commercial than selling oil for profit, 
as the OPEC nations do. Our legislation will correct one erroneous 
twenty-year-old lower federal court holding and establish that 
sovereign immunity doctrine will not divest a U.S. court from 
jurisdiction to hear a lawsuit alleging that members of the oil cartel 
are violating antitrust law.
  Mr. President, in recent years a consensus has developed in 
international law that certain basic standards are universal, and that 
the international community can, and should, take action when a nation 
violates these fundamental standards. The response of the international 
community to ethnic cleansing in the former Yugoslavia and action by 
the courts of Britain to recognize that Mr. Pinochet could be held 
accountable in Britain for allegations of human rights abuses and 
torture that occurred when he was President of Chile are two prominent 
examples. The rogue actions of the international oil cartel should be 
treated no differently. The most fundamental principle of a free market 
is that competitors cannot be permitted to conspire to limit supply or 
fix price. This principle is the foundation upon which the entire body 
of competition law rests. In this era of increasing globalization, when 
we truly need to open international markets to ensure the prosperity of 
all, we should not permit any nation to flout this fundamental 
principle.
  Our NOPEC legislation will, for the first time, enable our 
authorities to take legal action to combat the illegitimate price-
fixing conspiracy of the oil cartel and will, at a minimum, have a real 
deterrent effect on nations that seek to join forces to fix oil prices 
to the detriment of consumers. For these reasons, I urge that my 
colleagues support this bill so that our nation will finally have an 
effective means to combat this selfish conspiracy of oil-rich nations.
  Mr. DeWINE. Mr. President, today Senators Kohl, Specter, Leahy, 
Grassley, Feingold, and I have introduced the ``No Oil Producing and 
Exporting Cartels Act of 2000'', NOPEC. We do so to address the long-
standing problem of foreign governments acting in the commercial arena 
to fix, allocate, and establish production and price levels of 
petroleum products.
  More than two months ago, Senators Specter, Kohl, Thurmond, Schumer, 
Biden, and I sent a letter to the President asking him to seriously 
consider legal action to put an end to the cartel behavior of OPEC 
nations. The White House has failed to take any action, and it appears 
that there are some within the Administration who believe there may be 
legal stumbling blocks to such a lawsuit. During the time in which the 
Administration has failed to take action, we have witnessed gas prices 
begin to rise again. Most notable are the unexplainable, sharp price 
increases in several Midwestern states. These price increases have 
harmed many in Ohio and across the Midwest. There is no relief in 
sight. Many are speculating about the cause of the price-spikes. One 
cause is indisputable--the unacceptably high price of imported crude 
oil set by the OPEC cartel.
  Nation after nation has adopted antitrust enforcement principles that 
recognize the illegality of price fixing and other restraints of trade. 
Yet OPEC is undeterred, and continues to flout broadly accepted legal 
principles and artificially restrains the production of oil. It is time 
for internationally recognized principles of competition to operate in 
the oil and petroleum industry--just as they do in other markets.
  The purpose of NOPEC is simple and straightforward. It makes clear 
that the U.S. enforcement agencies may bring antitrust enforcement 
actions against foreign states which violate antitrust laws in the 
production and sale of oil and other petroleum products, and it 
establishes that the district courts have jurisdiction and authority to 
consider such cases.
  NOPEC does this by amending the Sherman Antitrust Act and the Foreign 
Sovereign Immunities Act, ``FSIA''. Under FSIA, the governmental 
activities of foreign governments are immune from the jurisdiction of 
the federal courts. A lower federal court has ruled--we believe 
erroneously--that the conduct of OPEC nations in relation to oil 
production and exportation are governmental, not commercial activities, 
and thus immune. NOPEC corrects this ruling, and clarifies the law, 
specifically removing immunity from foreign governments when they are 
engaged in the limitation of the production or distribution of oil and 
other petroleum products. NOPEC also makes clear that the federal 
courts should not decline to make a determination on the merits of an 
action brought under NOPEC based on the ``act of state'' doctrine.
  This legislation will send a strong signal to OPEC nations that their 
agreements restrain trade and harm American consumers. This will no 
longer be accepted. Our legislation will allow the U.S. enforcement 
agencies to do their jobs and enforce the antitrust laws.
                                 ______
                                 
      By Mr. SANTORUM (for himself, Mr. Lieberman, Mr. Abraham, Mr. 
        Kohl, Mr. Hutchinson, Mr. Torricelli, and Mr. Kerry):
  S. 2779. A bill to provide for the designation of renewal communities 
and to provide tax incentives relating to such communities, to provide 
a tax credit to taxpayers investing in entities seeking to provide 
capital to create new markets in low-income communities, and to provide 
for the establishment of Individual Development Accounts (IDAs), and 
for other purposes; to the Committee on Finance.


     the american community renewal and new markets empowerment act

  Mr. KERRY. Mr. President, today I am joining colleagues on both sides 
of the aisle to introduce the American Community Renewal and New 
Markets Empowerment Act. Demonstrating that Congress can constructively 
work together and find common ground, we--Senators Lieberman, 
Torricelli, Kohl, Santorum, Abraham, and Hutchinson--unveiled a plan 
that creates economic incentives to help close America's wealth gap. 
Among many important initiatives, our plan includes my new markets 
legislation that I introduced last September, S. 1594, the Community 
Development and Venture Capital Act, and full funding for Round II of 
Empowerment Zones.
  This plan builds on the President's and Speaker's agreement by 
securing full, mandatory funding for Massachusett's Empowerment Zone. 
So far, the money has dribbled in--only $6.6 million of the $100 
million authorized over ten years--and made it impossible for the city 
to implement a plan for economic self-sufficiency. Some 80 public and 
private entities, from universities to technology companies to banks to 
local government, showed incredible community spirit and committed to 
matching the EZ money, eight to one. Let me say it another way--these 
groups agreed to match the $100 million in Federal Empowerment Zone 
money with $800 million. Yet, regrettably, in spite of this incredible 
alliance, the city of Boston has not been able to tap into that 
leveraged money and implement the strategic plan because Congress 
hasn't held its part of the bargain. I am extremely pleased that we 
were able to work together and find a way to provide full, steady 
funding to these zones. That money means education, daycare, 
transportation and basic health care in areas--in Massachusetts that 
includes 57,000 residents who live in Roxbury, Dorchester and 
Mattipan--where almost 50 percent of the children are living in poverty 
and nearly half the residents over 25 don't even have a high school 
diploma.
  Mr. President, this bill also includes an initiative that I 
introduced last year called the Community Development and Venture 
Capital Act. Its purpose is to stimulate economic development through 
public-private partnerships that invest venture capital in smaller 
businesses that are located in impoverished rural and urban areas, 
known as new markets, or that employ low-income people. We call these 
areas new markets because of the overlooked business opportunities. 
According to Michael Porter, a respected professor at Harvard and 
business analyst who has written extensively on competitiveness, ``. . 
. inner cities are the largest underserved market in America,

[[Page 11956]]

with many tens of billions of dollars of unmet consumer and business 
demand.''
  Both innovative and fiscally sound, my new markets initiative is 
financially structured similar to Small Business Administration 
(SBA's), successful Small Business Investment Company (SBIC), program, 
and incorporates a technical assistance component similar to that 
successfully used in SBA's microloan program. However, unlike the SBIC 
program which focuses solely on small businesses with high-growth 
potential and claims successes such as Staples and Calaway Golf, the 
New Markets Venture Capital program will focus on smaller businesses 
that show promise of financial and social returns, such as jobs--what 
we call a ``double bottomline.''
  To get at the complex and deep-rooted economic problems in new market 
areas, my initiative has three parts: a venture capital program to 
funnel investment money into our poorest communities, a program to 
expand the number of venture capital firms that are devoted to 
investing in such communities, and a mentoring program to link 
established, successful businesses with businesses and entrepreneurs in 
stagnant or deteriorating communities in order to facilitate the 
learning curve.
  What I'm trying to do as Ranking Member of the Small Business 
Committee, and have been working with the SBA to achieve, is expand 
investment in our neediest communities by building on the economic 
activity created by loans. I think one of the most effective ways to do 
that is to spur venture capital investment in our neediest communities.
  But, Mr. President, this bill even goes further than funding 
empowerment zones and establishing incentives to attract venture 
capital into distressed communities. It enhances education 
opportunities, creates individual development accounts to help low-
income families save and invest in their future, increases affordable 
housing, improves access to technology in our classrooms and creates 
incentives to help communities remediate brownfields.
  Before closing, I want to thank my colleauges for working so hard on 
this compromise and for their admirable willingness to put aside our 
differences for a larger purpose.

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