[Congressional Record (Bound Edition), Volume 147 (2001), Part 4]
[Senate]
[Pages 5088-5109]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. HUTCHINSON:
  A bill to authorize the establishment of a suboffice of the 
Immigration and Naturalization Service in Fort Smith, Arkansas; to the 
Committee on the Judiciary.
  Mr. HUTCHINSON. Mr. President, I ask unanimous consent that a copy of 
the ``Fort Smith INS Suboffice Act'' be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 644

       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 ``Fort Smith INS Suboffice 
     Act''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) The Immigration and Naturalization Service office in 
     Fort Smith, Arkansas, is an office within the jurisdiction of 
     the district office in New Orleans, Louisiana.
       (2) During the past 10 years, the foreign national 
     population has grown substantially in the jurisdictional area 
     of the Fort Smith office.
       (3) According to the 2000 census, Arkansas' Hispanic 
     population grew by 337 percent over the Hispanic population 
     in the 1990 census. This rate of growth is believed to be the 
     fastest in the United States.
       (4) Hispanics now comprise 3.2 percent of Arkansas' 
     population and 5.7 percent of the Third Congressional 
     District of Arkansas' population.
       (5) This dramatic increase in immigration will continue as 
     the growing industries and excellent quality of life of 
     Northwest Arkansas are strong attractions.
       (6) Interstates 540 and 40 intersect in Fort Smith and air 
     transportation is readily available there.
       (7) In the Departments of Commerce, Justice, and State, the 
     Judiciary, and Related Agencies Appropriations Act, 2001, 
     Congress directed the Immigration and Naturalization Service 
     to review the staffing needs of the Fort Smith office.
       (8) A preliminary review shows that the Fort Smith office 
     is indeed understaffed. The office currently needs an 
     additional adjudication officer, an additional information 
     officer, a part-time ``jack-of-all-trades'' employee, 2 full-
     time clerks, and 1 additional enforcement officer.
       (9) A suboffice designation would enable the Fort Smith, 
     Arkansas, office to obtain additional staff as well as an 
     Officer-in-Charge who would have the authority to sign 
     documents and take actions related to cases which now must be 
     forwarded to the New Orleans District Office for approval.
       (10) The additional staff, authority, and autonomy that the 
     suboffice designation would provide the Fort Smith office 
     would result in a reduction in backlogs and waiting periods, 
     a significant improvement in customer service, and a 
     significant improvement in the enforcement of the immigration 
     laws of the United States.
       (11) The designation of the Fort Smith office as a 
     suboffice would show that the Immigration and Naturalization 
     Service is--
       (A) committed to facilitating the legal immigration process 
     for those persons acting in good faith; and
       (B) likewise committed to enforcing the immigration laws of 
     the United States.

     SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as may be 
     necessary for each fiscal year to establish and operate an 
     Immigration and Naturalization Service suboffice in Fort 
     Smith, Arkansas.
                                 ______
                                 
      By Mr. SPECTER (for himself, Mr. Leahy, Mr. Hatch, Mr. Kohl, Mr. 
        Biden, Mrs. Feinstein, Mr. Sessions, Mr. Grassley, and Mrs. 
        Clinton):
  S. 645. A bill to require individuals who lobby the President on 
pardon issues to register under the Lobbying Disclosure Act of 1995 and 
to require the President to report any gifts, pledges, or commitments 
of a gift to a trust fund established for purposes of establishing a 
Presidential library for that President after his or her term has 
expired; to the Committee on Governmental Affairs.
  Mr. SPECTER. Mr. President, this legislation follows consideration by 
the Judiciary Committee of the pardons issued by former President 
Clinton on January 20, the last day of his administration, and seeks to 
reform and correct a couple of major gaps which are present in existing 
procedures in two respects; stated succinctly, to require that 
lobbyists, such as Jack Quinn, be required to register and that 
contributions to Presidential libraries be subject to public 
disclosure.
  I offer this legislation on behalf of myself, Senators Leahy, Hatch, 
Kohl, Biden, Feinstein, Sessions, Grassley, and Clinton.
  The public record is filled with the details as to what happened with 
the notorious pardon of Marc Rich, who was a fugitive for some 17 
years, where a pardon was granted at the very last minute without the 
pardon attorney at the Department of Justice being informed of the 
situation until 1 a.m. on January 20.
  When the pardon attorney called the White House to try to get some 
information about Marc Rich and Pincus Green, he was told that they 
were ``traveling abroad.''
  When the pardon attorney testified at the Judiciary Committee hearing 
under my questioning, and testified that they were ``traveling 
abroad,'' he about broke up the hearing room, for that characterization 
to be made of someone who had been a fugitive for 17 years.
  In granting the pardon, former President Clinton notified Ms. Beth 
Dozoretz, who was very active in lobbying for the pardon, at 11 o'clock 
on January 19, some 2 hours in advance of telling the pardon attorney, 
and there had been extensive lobbying by Ms. Denise Rich, the former 
wife of Marc Rich.
  The legislation we are introducing will require that someone such as 
Jack Quinn be registered as a lobbyist.
  Without going into the details--and they are set forth in the 
Judiciary Committee hearing--there were major efforts made to keep this 
activity under the so-called radar screen so that nobody would know 
about it.
  This legislation would require someone in Jack Quinn's position to 
register and be known publicly, and then with the kind of public 
pressure which would be brought, I think it highly likely that a pardon 
such as that granted to Marc Rich would never have been granted.
  The second provision deals with contributions for pledges or 
commitments to raise money for Presidential libraries. This legislation 
provides that there should be public disclosure of those contributions, 
pledges, or commitments to raise money, where those pledges or 
commitments are made during the term of office.
  A pledge to contribute money to a Presidential library has a great 
many of the same characteristics as a campaign contribution. The 
question is raised about whether or not there is favoritism or 
influence sought from that kind of a monetary contribution. By having 
the public disclosure, then it would be within public view.

[[Page 5089]]

  That is the essence of the legislation.
  Mr. President, the Senate Judiciary Committee inquiry into the 
pardons and commutations issued by former President Clinton on January 
20, 2001, has disclosed major gaps which can be addressed through 
legislation. Today I am introducing a bill to address two of these 
subjects.
  My bill requires individuals who urge officials in the White House to 
grant clemency to register as lobbyists. There is currently no 
requirement for them to do so. This bill will also require the 
disclosure of donations or pledges of $5,000 or more, or commitments to 
raise $5,000 or more for presidential libraries while the President is 
still in office. Such donations, pledges or commitments are not 
currently subject to disclosure, creating a situation where individuals 
could make large contributions to the President's library foundation in 
the hope of influencing favorable action by the President.
  The Senate investigation of the pardons matter has been forward-
looking from the beginning. The objective of the inquiry was to get the 
facts out in the open. Once the facts were known, the question was 
whether legislative remedies were appropriate.
  This legislation does not deal with the President's power to grant 
executive clemency since any changes in that power would require a 
constitutional amendment.
  Former President Jimmy Carter called the pardon of fugitive 
commodities trader Marc Rich ``disgraceful,'' and Democratic 
Representative Henry Waxman said that ``the failures in the pardon 
process should embarrass every Democrat and every American.'' The 
outrage over former President Clinton's last minute pardons is bi-
partisan, and I expect there will be bi-partisan support for this 
legislation to fix the problems disclosed by the Senate Judiciary 
Committee inquiry.
  The pardons of Marc Rich and Pincus Green have sparked the most 
public outrage, and rightly so. The actions of Hugh Rodham, who took 
more than $400,000 for his limited work on the clemency requests for 
Almon Glenn Braswell and Carlos Vignali, Jr., and Roger Clinton, who is 
reportedly under investigation for trying to peddle access to the White 
House in relation to pardons, are similarly outrageous. There are 
undoubtedly others who made money from the pardons process, or at least 
tried to do so. But let us at least identify them as what they are--
lobbyists. When you get paid money, in some of these cases, lots of 
money, to argue for a pardon because you know the President of the 
United States, or someone like a relative who is close to the 
President, what you are doing is lobbying. Shining sunlight on the 
activities of these pardon lobbyists will further the cause of good 
government.
  In a February 18, 2001 op-ed in the New York Times, former President 
Clinton said that he had decided to grant Rich and Green clemency for a 
number of legal and foreign policy reasons, but it's hard to see how 
the facts of the case add up to a pardon. Rich fled to Switzerland in 
1983, shortly before he was indicted on 65 counts of racketeering, tax 
evasion, mail fraud, wire fraud, violation of Department of Energy 
regulations, and trading with the enemy. Then he tried to renounce his 
citizenship. Although he could afford the best lawyers in the business, 
Rich refused to return to the United States to plead his case in court. 
At the time of his pardon, he was still listed on the Justice 
Department's list of top international fugitives. Over the course of 
seventeen years and three administrations, Rich repeatedly tried to get 
the Justice Department to offer him a deal on favorable terms. When 
that failed, he orchestrated a plan last year to get a grant of 
executive clemency to wipe out the charges against him so he would 
never even have to stand trial. In the end, Mr. Rich got his pardon, 
but the way he got it shows the need for requiring pardon lobbyists to 
register.
  In late 2000, after failing to get the Southern District of New York 
to make a deal that didn't involve any jail time for Rich and Green, 
the Rich legal team began seriously pursuing a pardon strategy. There 
is some disagreement on the timing of the decision to seek a pardon, 
but the important point is that, once the decision was made to take the 
case to the White House, the Rich legal team wanted to keep their 
activities out of public view so the Southern District of New York, or 
someone else who would oppose the pardon, wouldn't weigh in and scotch 
the deal.
  There is some evidence that the Rich legal team was considering 
seeking a pardon as early as March, 1999. A log from the law firm of 
Arnold and Porter cites a March 12, 1999, memorandum from Carol Fischer 
to Robert Fink, one of Mr. Rich's lawyers. The document is titled 
``Legal Research re: Pardon Power.'' Clearly there was some 
consideration of seeking a pardon, or there wouldn't have been a need 
to do research on the pardon power.
  On February 10, 2000, Robert Fink wrote an e-mail to Avner Azulay, 
who works for Mr. Rich in Israel. Fink told Azulay that the latest 
efforts to make a deal with the Southern District of New York had 
failed because the Department of Justice would not negotiate unless Mr. 
Rich returned to the United States to face the charges. Azulay replied 
the same day, saying that ``The present impasse leaves us with only one 
other option: the unconventional approach which has not yet been tried 
and which I have been proposing all along.''
  There is also a March 20, 2000 e-mail from Azulay to Fink. In this e-
mail, Azulay tells Fink that ``We are reverting to the idea discussed 
with Abe which is to send DR [Denise Rich] on a ``personal'' mission to 
NO1. [undoubtedly President Clinton] with a well prepared script.''
  Mr. Quinn has testified that the idea of a pardon did not receive 
serious consideration until late in the year, but these e-mails raise 
questions about that assertion. Under ordinary circumstances, it would 
be of no interest when the Rich team made a decision to seek a pardon, 
but it is important in this case because there are other e-mails 
showing that they tried very hard to keep their efforts secret. For 
example, in a December 26, 2000 e-mail, Fink told Quinn that ``Frankly, 
I think we benefit from not having the existence of the petition known, 
and do not want to contact people who are unlikely to really make a 
difference but who could create press or other exposure.''
  Later, in a January 9, 2001, e-mail, Quinn told Fink, ``I think we've 
benefitted from being under the press radar. Podesta said as much.'' 
How did they benefit? They benefitted by not having the U.S. Attorney 
from the Southern District of New York weigh in with the White House, 
by not having the kind of scrutiny from the press that the case has had 
since January. Does anyone seriously believe that former President 
Clinton would have granted this pardon if the story had broken, with 
all the details out in the open, in early January instead of after the 
pardon was already a done deal? Of course not. Jack Quinn counted on 
being under the radar, and it worked.
  This legislation will make it harder for the Jack Quinn's of the 
future to stay under the radar. When pardon lobbyists are required to 
register, they won't be able to hide their actions until it is too late 
for anyone to act. If Jack Quinn had been required to register as a 
lobbyist when he started urging officials at the White House to grant 
clemency to Rich and Green, the chances are good that this story would 
have had a different ending.
  This legislation would also cover the activities of Hugh Rodham, who 
made more than $400,000 working to get clemency for Almon Glenn 
Braswell and Carlos Vignali, Jr. Mr. Braswell is the subject of an 
ongoing investigation related to allegations of tax evasion, and 
clearly should not have been granted a pardon. Mr. Vignali was one of 
the top members of a drug smuggling organization that shipped more than 
800 pounds of cocaine from the Los Angeles area to Minnesota. He was 
not a likely candidate to have his sentence commuted, and the Pardon 
Attorney reportedly recommended that the request be denied. Several of 
the members of the drug ring who had smaller roles that Vignali did are 
still sitting in jail.
  But Carlos Vignali got a pardon. Hugh Rodham's role should have been

[[Page 5090]]

subject to public disclosure since he had close family ties to the 
White House, reportedly lived at the White House for the last several 
weeks of the Clinton Administration and had documents shipped to 
himself there.
  Roger Clinton was also reportedly involved in several attempts to get 
paid for getting pardons for his friends. This matter, like several 
others, is reportedly being investigated by the U.S. Attorney for the 
Southern District of New York. It remains to be seen what she will 
find, but we don't have to wait for the end of her investigation to 
know that if an individual trades on his access to the White House to 
make money, that's lobbying, and he or she should be required to 
register as a lobbyist.
  The second part of this bill requires the public disclosure of 
donations or pledges of $5,000 or more, or commitments to raise $5,000 
or more for presidential libraries while the president is still in 
office. There are presently no requirements to make such donations 
public, and the Clinton library foundation has resisted efforts to 
review its donor list.
  Presidential libraries are a relatively new phenomenon, with only ten 
of them in existence. Under current law, presidential libraries are 
built with private funds, then turned over to the National Archivist 
for operation. Amendments to the Presidential Libraries Act have 
mandated the establishment of an endowment to cover some of the costs 
of operating the library. These goals are usually met through the 
establishment of a charitable organization, a 501(c)(3) corporation.
  Former Presidents Carter and Bush did not raise any money for their 
libraries while they were in office because they were concentrating on 
getting re-elected. Because both of these Presidents lost their re-
election bids, they never faced a situation of having to raise money 
for a library while they were still in office.
  Former Presidents Reagan and Clinton, as two-term Presidents, began 
raising money for their libraries during their second terms. Officials 
from the Reagan library have said that the library fund received 
several large contributions from corporate donors while former 
President Reagan was still in office, but the big corporate donations 
tailed off rapidly when the President left office.
  It is not necessary to suggest that there was any wrongdoing on the 
part of former President Reagan or of former President Clinton to 
realize that a donor could make a large donation to a presidential 
library in the hope of receiving a favorable action from the President 
in exchange for the donation. The fact that these donations can be made 
without public disclosure makes them a matter of even greater concern.
  The Rich case highlights the need for public disclosure of donations 
while the President is still in office. Denise Rich, Marc Rich's former 
wife, was deeply involved in trying to get a pardon for Rich. She also 
gave at least $450,000 to former President Clinton's library 
foundation. Beth Dozoretz, former finance chair of the Democratic 
National Committee who pledged to raise $1 million for the Clinton 
library, also worked on the Rich pardon.
  Ms. Dozoretz's involvement in the Rich case is remarkable in that the 
former President spent far more time talking to her about it than he 
did talking to the prosecutors in the Southern District of New York. 
Ms. Dozoretz had at least three conversations with former President 
Clinton about the Rich pardon, including one at 11 p.m. on January 19, 
2001, the night before the pardon was actually issued.
  Ms. Dozoretz had been scheduled to meet with my staff, but she 
changed attorneys and declined to be interviewed. But we found out that 
she had called the President on the night of January 19, at about 11 
p.m. to thank him for granting the pardon for Marc Rich. If Ms. 
Dozoretz knew of the Rich pardon in time to call the President at 11 
p.m. on the evening of January 19, she found out about the decision at 
least two hours before Pardon Attorney Roger Adams, the official who 
was charged with actually writing up the pardon warrant. Mr. Adams 
testified that he had not heard that Rich and Green were being 
considered for clemency until almost 1 a.m. on the morning of January 
20. Mr. Adams was told by the White House counsel's office that there 
probably wouldn't be much information available on Rich and Green 
because they had been ``living abroad'' for several years. That was a 
strange way of saying they were fugitives, but Mr. Adams was later able 
to figure that out himself. He had his staff research the Internet to 
see what he could learn about these two men, and he learned that they 
were on the Justice Department's list of most wanted international 
fugitives. When he relayed his concerns to the White House, he was told 
to prepare the pardon documents anyway.
  Ms. Dozoretz has refused to say from whom she learned that the 
President had decided to grant Rich's clemency request, but she 
apparently knew before the official who was charged with overseeing the 
pardon process. Ms. Dozoretz has asserted her privelege against self-
incrimination under the Fifth Amendment, so we have no way of knowing 
exactly how she learned that the decision had already been made on 
January 19.
  But we do have other relevant information. First, Beth Dozoretz 
pledged to raise $1 million for the Clinton library. Former President 
Clinton spoke to Ms. Dozoretz on January 10, 2001, when she was with 
Ms. Rich in Aspen. According to a January 10, 2001, e-mail from Robert 
Fink to Jack Quinn, Ms. Dozoretz received a phone call from POTUS, the 
President, on January 10. Mr. Fink went on to quote former President 
Clinton as saying ``that he wants to do it and is doing all possible to 
turn around the WH counsels.'' Ms. Dozoretz has denied saying that the 
President was trying to turn around the WH [White House] counsels, but 
she has not offered any explanation for what happened. It has been 
asserted that the message was garbled, but that explanation is 
inconsistent with the facts. All of former President Clinton's top 
advisers in the White House--including his Chief of Staff, John 
Podesta; his White House Counsel, Beth Nolan; and Bruce Lindsey, one of 
his closest political advisers who held the title of Assistant to the 
President--looked at the facts and recommended against a pardon. That 
is consistent with the former President having to turn around his White 
House counsels.
  Former President Clinton was unable to turn around his counsels, but 
in the end it didn't matter. He issued the pardons anyway, and created 
a firestorm. When a President ignores the advice of his closest 
advisors, there isn't much we can do since the power of executive 
clemency is in the hands of the President alone. But the Congress can 
and should ensure that bad judgment on the part of a President does not 
undermine the public's confidence in government. The two provisions in 
this legislation will help to restore public confidence in the pardon 
process.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 645

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

     SECTION 1. DISCLOSURE OF LOBBYING ACTIVITIES WITH RESPECT TO 
                   PRESIDENTIAL PARDONS.

       Section 3(8) of the Lobbying Disclosure Act of 1995 (2 
     U.S.C. 1602(8)) is amended--
       (1) in subparagraph (A)--
       (A) in clause (iii), by striking ``or'' after the 
     semicolon;
       (B) in clause (iv), by striking the period and inserting 
     ``; or''; and
       (C) by adding at the end the following:
       ``(v) the issuance of a grant of executive clemency in the 
     form of a pardon, commutation of sentence, reprieve, or 
     remission of fine.''; and
       (2) in subparagraph (B)(xii), by striking ``made to'' and 
     inserting ``except as provided in subparagraph (A)(v), made 
     to''.

     SEC. 2. AMENDMENT TO THE ETHICS IN GOVERNMENT ACT OF 1978.

       Section 102(a) of the Ethics in Government Act of 1978 (5 
     U.S.C. App) is amended by adding at the end the following:
       ``(9) If the reporting individual is the President and is 
     currently serving as the President, the identity of the 
     source, a brief description, and the value of all gifts, 
     pledges,

[[Page 5091]]

     or commitments of a gift aggregating $5,000 or more for the 
     establishment of a Presidential library for that President 
     after his or her term has expired received from any source 
     other than a relative of the President during the preceding 
     calendar year. Information required to be reported under this 
     paragraph shall be made publicly available in accordance with 
     this Act.''.

  Mr. LEAHY. Mr. President, I rise today with the senior Senator from 
Pennsylvania to introduce legislation aimed at making our government 
more open and accountable to the American people. We are pleased to be 
joined by six other members of the Judiciary Committee, Senators Hatch, 
Kohl, Biden, Feinstein, Sessions, Grassley, and by the new junior 
Senator from New York, Senator Clinton.
  Our bill closes two loopholes in the laws governing what government 
officials and those who lobby them must disclose. First, it amends the 
Ethics in Government Act of 1978 to require the President to report any 
gifts or pledges of $5,000 or more to a presidential library during the 
President's term in office. Second, it adds to the list of individuals 
who must register under the Lobbying Disclosure Act of 1995 those who 
lobby on behalf of a client for a grant of executive clemency.
  This legislation builds on a hearing held by the Judiciary Committee 
on February 14, 2001, relating to the pardons granted by President 
Clinton in his last days in office. I said then that we needed to view 
these pardons as a whole and in their historical and constitutional 
context, not focus exclusively on one or two controversial cases. In 
this way, we could learn valuable lessons for the future.
  The legislation that we introduce today is a pragmatic and forward-
looking response to customs and practices that long predate the last 
Administration. As I have noted before, the controversies surrounding 
President Clinton's pardons are not unique.
  Other presidents raised substantial funds for their libraries while 
still in office. The Ronald Reagan Presidential Foundation opened its 
doors and began fundraising in February 1985, nearly four years before 
President Reagan left office. By November 1991, the Foundation had 
raised between $45 and $65 million. Much of that amount came in large 
lump sums from big corporations, a source of funding that reportedly 
dried up when President Reagan returned to private life.
  Fund raising for the Bush library also began while the president was 
still in the White House. The Arkansas Democrat-Gazette, in an article 
dated May 25, 1997, quoted former Bush aide Jim Cicconi as saying that 
fund raising for the library remained ``low key'' and ``very discreet'' 
until the president left office in 1993. Established in 1991, while the 
president was campaigning for reelection, the George Bush Presidential 
Library Foundation initially consisted of three people, including Mr. 
Cicconi and the president's son, George W. Bush.
  I should add that the donor lists for the Reagan and Bush libraries 
were not and have never been disclosed to the public, a failure of 
transparency for which President Clinton, but not his predecessors, has 
been roundly criticized.
  President Clinton was also not the first Chief Executive to grant 
clemency to friends or family members of major contributors. The very 
first pardon granted by the elder President Bush went to Armand Hammer, 
the late chairman of Occidental Petroleum Corporation, who pleaded 
guilty in 1975 to making illegal contributions to Richard Nixon's 
reelection campaign. Not long before he received his pardon, Hammer 
gave over $100,000 to the Republican party and another $100,000 to the 
Bush-Quayle Inaugural Committee. The team of lawyers that won Hammer 
his pardon included former Reagan Justice Department official, Theodore 
Olson. While Mr. Olson's name is well-known now, he was recently 
nominated to be Solicitor General, it was more important at the time 
that he was a close friend of C. Boyden Gray, the White House Counsel, 
and Richard Thornburgh, the Attorney General.
  Let me note one more example from the end of the first Bush 
Administration: In January 1993, two days before leaving the White 
House, President Bush pardoned Edwin Cox, Jr., the son of a wealthy 
Texas oilman. The Cox pardon was lobbied for by Bill Clements, the 
former governor of Texas, who contacted James Baker, then White House 
Chief of Staff. Not surprisingly, Mr. Baker mentioned the Cox family 
largesse in a note to the White House Counsel, referencing Edwin Cox 
Sr. as a ``longtime supporter of the president's.'' The Cox family had 
in fact contributed nearly $200,000 to the Bush family's political 
campaigns and to other Republican campaign committees. Shortly after 
the president pardoned his son, Cox Sr. made a generous contribution to 
the Bush Presidential Library. His name is now etched in gold on the 
exterior of the Library alongside the names of other ``benefactors,'' 
those contributing between $100,000 and $250,000.
  I mention these Bush-era pardons because they demonstrate that 
pardons which have become controversial and appear improper given the 
confluence of insider lobbying and financial contributions are not 
unique to the end of President Clinton's term in office. The bill we 
introduce today will bring a greater degree of transparency into the 
clemency process and so reduce the appearance of impropriety that may 
otherwise attach to a presidential pardon.
  I thank Senator Specter for the thoughtful and even-handed manner in 
which he conducted the Committee's hearing last month, and commend him 
for seeking constructive and bipartisan solutions.
                                 ______
                                 
      By Mr. FEINGOLD.
  S. 646. A bill to reform the Army Corps of Engineers; to the 
Committee on Environment and Public Works.
  Mr. FEINGOLD. Mr. President, I rise today to introduce the Corps of 
Engineers Reform Act of 2001. I am joined today in this effort by my 
colleague in the other body, Congressman Ron Kind.
  As I introduce this bill, I realize that it is a work in progress. 
Reforming the Corps of Engineers will be a difficult task for Congress. 
It involves restoring credibility and accountability to a federal 
agency rocked by recent scandals, and yet an agency that we in 
Wisconsin, and many states across the country, have come to rely upon. 
From the Great Lakes to the mighty Mississippi, the Corps is involved 
in providing aids to navigation, environmental remediation, water 
control and a variety of other services to my state. My office has 
strong working relationships with the Detroit, Rock Island, and St. 
Paul District Offices that service Wisconsin, and I want the cloud over 
the Corps to dissipate so that the Corps can continue to contribute to 
our environment and our economy.
  This legislation evolved from my experience in seeking to offer an 
amendment last year to the Water Resources Development Act of 2000 to 
create independent review of Army Corps of Engineers' projects. My 
interest in an independent review amendment was shared by the Minority 
Leader, Mr. Daschle, and the Senator from California, Mrs. Boxer, and a 
number of taxpayer and environmental organizations including: the 
League of Conservation Voters, American Rivers, Coast Alliance, 
Earthjustice Legal Defense Fund, Izaak Walton League of America, 
Natural Resources Defense Council, Sierra Club and Taxpayers for Common 
Sense.
  In response to my initiative, the bill's managers, Senator Smith and 
Senator Baucus, adopted an amendment as part of their Manager's Package 
which should help get the Authorizing Committee, the Environment and 
Public Works Committee, the additional information it needs to develop 
and refine legislation on this issue through a one year study by the 
National Academy of Sciences, NAS, on peer review. As part of the 
discussions with the Senator from New Hampshire, Mr. Smith, and the 
Senator from Montana, Mr. Baucus, over the amendment I intended to 
offer, they have agreed that as the NAS conducts its review, they will 
hold hearings on the issue of Corps reform and on this bill. It is my 
hope that through hearings the NAS study and my bill can dovetail 
nicely so that we have a fully vetted bill which can then be fine-tuned 
by the

[[Page 5092]]

NAS recommendations. I feel that this body should pass a serious reform 
bill this year.
  The bill I introduce today addresses more than the issue of 
independent review of Corps Projects. The bill is a comprehensive 
revision of the project review and authorization procedures at the U.S. 
Army Corps of Engineers. The aim is to increase transparency and 
accountability, to ensure fiscal responsibility, to balance economic 
and environmental interests, and to allow greater stakeholder 
involvement.
  The National Research Council recently completed a study of the 
Corps' analysis of a proposed extension of several locks on the Upper 
Mississippi River, Illinois Waterway after approximately $50 million 
was spent examining the feasibility of the proposed project. The 
National Research Council made several recommendations to revise the 
inland waterway and water resources system planning. And, as I 
mentioned, a second National Research Council study, required by the 
Water Resources Development Act of 2000, is now examining whether the 
Corps should establish a program of independent review of projects.
  This bill builds on the key recommendations of the National Research 
Council study:
  The Corps should have project review by an interdisciplinary group of 
experts outside the Corps of Engineers,
  The Corps should include a broader range of stakeholders in the 
planning process,
  The Corps should revise the water resources project planning 
framework in their internal planning documents (known as the Principles 
and Guidelines) so that ecological concerns are not considered 
secondary to economic benefits.
  The bill achieves this by creating both Stakeholder Advisory 
Committees and Independent Review Panels. Currently, the Corps goes 
through a multi-step process leading to project approval and 
construction. In the existing process, the public has limited 
involvement and environmental costs can be underestimated.
  Stakeholder Advisory Committees--comprised of a balance of local 
government, other federal agencies, interest groups reflecting social, 
economic, and environmental interests, and interested private 
citizens--are authorized to provide input in the planning process. The 
Corps is required to form a Committee under the bill upon receipt of a 
written request to the Corps by any person to do so. The Committee is 
comprised of volunteers, and is allowed to provide input to the Corps 
beginning in the early project stages, such as the drafting of a 
feasibility study for a project, and conclude at the release of a draft 
environmental impact statement when the broader public is brought into 
the project. The Corps is also restricted so that they can spend no 
more than on the staffing or operations of $250,000 a Committee. In 
addition, Committee meetings must meet the requirements of the Federal 
Advisory Committee Act, FACA. Any Committee expenses are to be 
considered as part of the total costs of the project.
  The bill also provides a comprehensive review of water resources 
projects by a panel with expertise in biology, engineering, and 
economics. The projects that will become subject to review include any 
projects, or significant modifications to existing projects:

       with an estimated cost of over $25 million (approximately 
     40 percent of the projects funded through the Water Resources 
     Development Act),
       for which the Governor of an affected State requests 
     independent review,
       that are determined to have significant adverse impacts on 
     fish and wildlife after implementation of proposed mitigation 
     plans by the US Fish and Wildlife Service,
       for which the head of another Federal Agency charged with 
     reviewing the project determines that the project has a 
     significant adverse impact on environmental, cultural, or 
     other resources under their jurisdiction, or
       determined by the Corps to be ``controversial'' in its 
     scope, impact, or cost-benefit analysis.

  To address concerns that the Independent Review Panel needs to be 
truly independent, the Office of Independent Review is established 
within the Office of the Assistant Secretary for Civil Works. This 
office, located in the Pentagon, provides the greatest amount of 
independence for the review process since the Office of the Assistant 
Secretary is separate from and above the Chief of Engineers who runs 
the Corps. Independent reviews are required to be completed in 180 days 
after they start. They are able to run concurrently with the 
Environmental Impact Statement Process under NEPA, and, ideally, will 
conform to that time frame.
  As with the Stakeholder Committees, the costs of these Panels are 
capped at no more than $500,000. Any panel expenses are to be 
considered as part of the total costs of the project and a Panel's 
product is required to be released to the public and to be submitted to 
Congress.
  It is my hope that this legislation will increase transparency of the 
Corps' decision-making process through greater accessibility by the 
public and interested stakeholder groups. While there are heartening 
signs of reform in the Corps Civil Works program, Congress should be 
working to create an independent process to help affirm when the Corps 
gets it right and help to provide a means for identifying problems 
before taxpayer funded construction investments are made. Today we 
begin that work in earnest.
  I feel that this bill is a practical first step down the road to a 
reformed Corps of Engineers. Independent review would catch mistakes by 
Corps planners, deter any potential bad behavior by Corps officials to 
justify questionable projects, and would provide planners desperately 
needed support against the never ending pressure of project boosters. 
Those boosters, Mr. President, include Congressional interests, which 
is why I believe that this body needs to champion reform--to end the 
perception that Corps projects are all pork and no substance.
  I wish it were the case, that I could argue that additional oversight 
were not needed, but unfortunately, I see that there is need for 
additional scrutiny. In the Upper Mississippi there is troubling 
evidence of abuse. There is troubling evidence from whistleblowers that 
senior Corps officials, under pressure from barge interests, ordered 
their subordinates to exaggerate demand for barges in order to justify 
new Mississippi River locks. This is a matter which is still under 
investigation, and I hope that no evidence of wrongdoing will 
ultimately be found. Adequate assessment of the environmental impacts 
of barges is also very important. I am also concerned that the Corps' 
assessment of the environmental impacts of additional barges does not 
adequately assess the impacts of barge movements on fish, backwaters 
and aquatic plants. We should not gamble with the environmental health 
of the river. If we allow more barges on the Mississippi, we must be 
sure the environmental impacts of those barges are fully mitigated.
  I am raising this issue principally because I believe that Congress 
should act to restore trust in the Corps if we are effectively going to 
address navigation and environmental needs. The first step in restoring 
that trust is restoring the credibility of the Corps' decision-making 
process.
  Unfortunately, Congress now finds itself having to reset the scales 
to make economic benefits and environmental restoration co-equal goals 
of project planning. Our rivers serve many masters, barge owners as 
well as bass fisherman, and the Corps' planning process should reflect 
the diverse demands we place on them. I want to make sure that future 
Corps projects no longer fail to produce predicted benefits, stop 
costing more than the Corps estimated, and do not have unanticipated 
environmental impacts. This bill will help us monitor the result of 
projects so that we can learn from our mistakes and, when possible, 
correct them. As a first step, I have committed myself to making Corps 
reform a priority in this Congress with this bill. I ask unanimous 
consent that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

[[Page 5093]]



                                 S. 646

       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 ``Corps of 
     Engineers Reform Act of 2001''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definition of Secretary.

                    TITLE I--PROJECT PLANNING REFORM

Sec. 101. Principles and guidelines.
Sec. 102. Stakeholder advisory committees.
Sec. 103. Independent review.
Sec. 104. Public access to information.
Sec. 105. Benefit-cost analysis.
Sec. 106. Project criteria.

                          TITLE II--MITIGATION

Sec. 201. Full mitigation.
Sec. 202. Concurrent mitigation.
Sec. 203. Mitigation tracking system.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the Corps of Engineers is the primary Federal agency 
     responsible for developing and managing the harbors, 
     waterways, shorelines, and water resources of the United 
     States;
       (2) the scarcity of Federal resources requires more 
     efficient use of Corps of Engineers funding and greater 
     oversight of Corps of Engineers analyses;
       (3) demand for recreation, clean water, and healthy 
     wildlife habitat must be reflected in the Corps of Engineers 
     project planning process;
       (4) the social and environmental impacts of dams, levees, 
     shoreline stabilization structures, and other projects must 
     be adequately considered and fully mitigated; and
       (5) affected interests must play a larger role in the 
     oversight of Corps of Engineers project development.
       (b) Purposes.--The purposes of this Act are--
       (1) to ensure that the water resources investments of the 
     United States are economically justified and enhance the 
     environment;
       (2) to provide independent review of Corps of Engineers 
     feasibility studies, general reevaluation studies, and 
     environmental impact statements;
       (3) to ensure that mitigation for Corps of Engineers 
     projects is successful and cost-effective;
       (4) to enhance the involvement of affected interests in 
     Corps of Engineers feasibility studies, general reevaluation 
     studies, and environmental impact statements;
       (5) to revise Corps of Engineers planning principles to 
     meet the economic and environmental needs of riverside and 
     coastal communities;
       (6) to ensure that environmental analyses are considered to 
     be co-equal to economic analyses in the assessment of Corps 
     of Engineers projects, recognizing the need for sound science 
     in the evaluation of the impacts on the health of aquatic 
     ecosystems; and
       (7) to ensure that the Corps of Engineers is making 
     appropriate, up-to-date calculations in conducting cost-
     benefit analyses of Corps of Engineers projects.

     SEC. 3. DEFINITION OF SECRETARY.

       In this Act, the term ``Secretary'' means the Secretary of 
     the Army.

                    TITLE I--PROJECT PLANNING REFORM

     SEC. 101. PRINCIPLES AND GUIDELINES.

       Section 209 of the Flood Control Act of 1970 (42 U.S.C. 
     1962-2) is amended to read as follows:

     ``SEC. 209. CONGRESSIONAL STATEMENT OF OBJECTIVES.

       ``(a) In General.--It is the intent of Congress that 
     economic development and environmental protection and 
     restoration be co-equal goals of water resources planning and 
     development.
       ``(b) Revision of Principles and Guidelines.--Not later 
     than 1 year after the date of enactment of the Corps of 
     Engineers Reform Act of 2001, the Secretary shall revise the 
     principles and guidelines of the Corps of Engineers for water 
     resources projects--
       ``(1) to provide for the consideration of ecological 
     restoration costs under Corps of Engineers economic models;
       ``(2) to incorporate new techniques in risk and uncertainty 
     analysis;
       ``(3) to eliminate biases and disincentives for 
     nonstructural flood damage reduction projects;
       ``(4) to incorporate new analytical techniques;
       ``(5) to encourage, to the maximum extent practicable, the 
     restoration of aquatic ecosystems; and
       ``(6) to ensure that water resources projects are justified 
     by benefits that accrue to the public at large and not only 
     to a limited number of private businesses.
       ``(c) Update of Guidance.--The Secretary shall update the 
     Guidance for Conducting Civil Works Planning Studies (ER 
     1105-2-100) to comply with this section.''.

     SEC. 102. STAKEHOLDER ADVISORY COMMITTEES.

       (a) In General.--Upon receipt of a written request by any 
     person or governmental entity, the Secretary shall establish, 
     for each water resources project that is authorized or 
     substantially modified after the date of enactment of this 
     Act, a stakeholder advisory committee to assist the Secretary 
     in the development of feasibility studies, general 
     reevaluation studies, and environmental impact statements for 
     the project.
       (b) Duration of Reviews.--A stakeholder advisory committee 
     established for a project under this section may provide 
     advice to the Secretary during planning and design of the 
     project, beginning with the initiation of the draft 
     feasibility study for the project and ending with the 
     issuance of the draft environmental impact statement for the 
     project.
       (c) Membership.--
       (1) In general.--A stakeholder advisory committee 
     established for a project under this section shall be 
     composed of--
       (A) representatives of--
       (i) State and local agencies;
       (ii) tribal organizations;
       (iii) public interest groups;
       (iv) industry, scientific, and academic organizations; and
       (v) Federal agencies; and
       (B) other interested citizens.
       (2) Balance.--The membership shall represent a balance of 
     the social, economic, and environmental interests in the 
     project.
       (d) Role.--A stakeholder advisory committee established for 
     a project under this section shall advise the Secretary but 
     shall not be required to make a formal recommendation.
       (e) Costs.--The costs of a stakeholder advisory committee 
     established for a project under this section--
       (1) shall be a Federal expense;
       (2) shall not exceed $250,000; and
       (3) shall be considered to be part of the total cost of the 
     project.
       (f) Applicability of Federal Advisory Committee Act.--The 
     Federal Advisory Committee Act (5 U.S.C. App.) shall apply to 
     a stakeholder advisory committee established under this 
     section.

     SEC. 103. INDEPENDENT REVIEW.

       (a) Projects Subject to Independent Review.--
       (1) In general.--The Secretary shall ensure that 
     feasibility studies, general reevaluation studies, and 
     environmental impact statements for each water resources 
     project described in paragraph (2) are subject to review by 
     an independent panel of experts established under this 
     section.
       (2) Projects subject to review.--A project shall be subject 
     to review under paragraph (1) if--
       (A) the project has an estimated total cost of more than 
     $25,000,000, including mitigation costs;
       (B) the Governor of an affected State described in 
     paragraph (4) requests the establishment of an independent 
     panel of experts for the project;
       (C) the Director of the United States Fish and Wildlife 
     Service determines that the project is likely to have a 
     significant adverse impact on fish or wildlife after 
     implementation of proposed mitigation plans;
       (D) the head of a Federal agency charged with reviewing the 
     project determines that the project is likely to have a 
     significant adverse impact on environmental, cultural, or 
     other resources under the jurisdiction of the agency after 
     implementation of proposed mitigation plans; or
       (E) the Secretary determines that the project is 
     controversial under paragraph (3).
       (3) Controversial projects.--
       (A) Determination by the secretary.--Upon receipt of a 
     written request by an interested party or on the initiative 
     of the Secretary, the Secretary shall determine whether a 
     project is controversial for the purposes of paragraph 
     (2)(E).
       (B) Criteria.--The Secretary shall determine that a project 
     is controversial if the Secretary finds that--
       (i) there is a significant public dispute as to the size, 
     nature, or effects of the project; or
       (ii) there is a significant public dispute as to the 
     economic or environmental costs or benefits of the project.
       (4) Affected state.--An affected State referred to in 
     paragraph (2)(B) means a State that--
       (A) is located at least partially within the drainage basin 
     in which the project is located; and
       (B) would be economically or environmentally affected as a 
     consequence of the project.
       (b) Office of Independent Review.--
       (1) Establishment.--There is established in the Office of 
     the Assistant Secretary of the Army for Civil Works an Office 
     of Independent Review (referred to in this section as the 
     ``Office'').
       (2) Director.--
       (A) Appointment.--The head of the Office shall be the 
     Director of the Office of Independent Review (referred to in 
     this section as the ``Director''), who shall be appointed by 
     the Secretary for a term of 3 years.
       (B) Selection.--
       (i) Qualifications.--The Secretary shall select the 
     Director from among individuals who are distinguished 
     scholars.
       (ii) Consideration of recommendations.--In making the 
     selection, the Secretary shall consider any recommendations 
     made by the Inspector General of the Army.
       (C) Limitation on appointments.--The Secretary shall not 
     appoint an individual to serve as the Director if the 
     individual has a

[[Page 5094]]

     financial or close professional association with any 
     organization or group with a strong financial or 
     organizational interest in an ongoing water resources 
     project.
       (D) Terms.--An individual may not serve for more than 1 
     term as the Director.
       (3) Duties.--The Director shall establish a panel of 
     experts to review each project subject to review under 
     subsection (a).
       (c) Establishment of Panels.--
       (1) In general.--As soon as practicable after the Secretary 
     selects a preferred alternative for a project subject to 
     review under subsection (a), the Director shall establish a 
     panel of experts to review the project.
       (2) Membership.--A panel of experts established by the 
     Director for a project shall be composed of not fewer than 5 
     nor more than 9 independent experts who represent a balance 
     of areas of expertise, including biology, engineering, and 
     economics.
       (3) Limitation on appointments.--The Director shall not 
     appoint an individual to serve on a panel of experts for a 
     project if the individual has a financial or close 
     professional association with any organization or group with 
     a strong financial or organizational interest in the project.
       (4) Consultation.--The Director shall consult with the 
     National Academy of Sciences in developing lists of 
     individuals to serve on panels of experts under this section.
       (5) Compensation.--An individual serving on a panel of 
     experts under this section shall be compensated at a rate of 
     pay to be determined by the Secretary.
       (6) Travel expenses.--An individual serving on a panel of 
     experts under this section shall receive travel expenses, 
     including per diem in lieu of subsistence, in accordance with 
     sections 5702 and 5703 of title 5, United States Code.
       (d) Duties of Panels.--A panel of experts established for a 
     project under this section shall--
       (1) review each feasibility study, general reevaluation 
     study, and environmental impact statement prepared for the 
     project;
       (2) assess the adequacy of the economic models used by the 
     Secretary in reviewing the project to ensure that--
       (A) multiple methods of economic analysis have been used; 
     and
       (B) any regional effects on navigation systems have been 
     examined;
       (3) assess the adequacy of the environmental models and 
     analyses used by the Secretary in reviewing the project;
       (4) receive from the public, and review, written and oral 
     comments of a technical nature concerning the project; and
       (5) submit to the Secretary a report containing the panel's 
     economic, engineering, and environmental analysis of the 
     project, including the panel's conclusions on the feasibility 
     studies, general reevaluation studies, and environmental 
     impact statements for the project, with particular emphasis 
     on matters of public controversy.
       (e) Duration of Project Reviews and Panel.--A panel of 
     experts shall--
       (1) complete review of a project under this section not 
     later than 180 days after the date of establishment of the 
     panel; and
       (2) terminate upon submission of a report to the Secretary 
     under subsection (d)(5).
       (f) Recommendations of Panel.--
       (1) Consideration by secretary.--After receiving a report 
     on a project from a panel of experts under this section and 
     before entering a final record of decision for the project, 
     the Secretary shall--
       (A) consider any recommendations contained in the report; 
     and
       (B) prepare a written explanation for any recommendations 
     that are not adopted.
       (2) Public review; submission to congress.--After receiving 
     a report on a project from a panel of experts under this 
     section, the Secretary shall--
       (A) make a copy of the report and any written explanation 
     of the Secretary on recommendations contained in the report 
     available for public review in accordance with section 104; 
     and
       (B) submit to Congress a copy of the report and any such 
     written explanation.
       (g) Costs.--
       (1) In general.--Subject to paragraph (2), the costs of a 
     panel of experts established for a project under this 
     section--
       (A) shall be a Federal expense;
       (B) shall not exceed $500,000; and
       (C) shall be considered to be part of the total cost of the 
     project.
       (2) Waiver.--The Secretary may waive the limitation 
     specified in paragraph (1)(B) in any case in which the 
     Secretary determines a waiver to be appropriate.
       (h) Applicability of Federal Advisory Committee Act.--The 
     Federal Advisory Committee Act (5 U.S.C. App.) shall apply to 
     a panel of experts established under this section.

     SEC. 104. PUBLIC ACCESS TO INFORMATION.

       (a) In General.--Except as provided in subsection (c), the 
     Secretary shall ensure that information relating to the 
     analysis of a water resources project by the Corps of 
     Engineers, including all supporting data, analytical 
     documents, and information that the Corps of Engineers has 
     considered in the analysis, is made available to any 
     individual upon request and to the public on the Internet.
       (b) Types of Information.--Information concerning a project 
     that shall be made available under subsection (a) shall 
     include--
       (1) any information that has been made available to the 
     non-Federal interests with respect to the project; and
       (2) all data used by the Corps of Engineers in the 
     justification and analysis of the project.
       (c) Exception for Trade Secrets.--
       (1) In general.--The Secretary shall not make information 
     available under subsection (a) that the Secretary determines 
     to be a trade secret of the person that provided the 
     information to the Corps of Engineers.
       (2) Criteria for trade secrets.--The Secretary shall 
     consider information to be a trade secret only if--
       (A) the person that provided the information to the Corps 
     of Engineers--
       (i) has not disclosed the information to any person other 
     than--

       (I) an officer or employee of the United States or a State 
     or local government;
       (II) an employee of the person that provided the 
     information to the Corps of Engineers; or
       (III) a person that is bound by a confidentiality 
     agreement; and

       (ii) has taken reasonable measures to protect the 
     confidentiality of the information and intends to continue to 
     take such measures;
       (B) the information is not required to be disclosed, or 
     otherwise made available, to the public under any other 
     Federal or State law; and
       (C) disclosure of the information is likely to cause 
     substantial harm to the competitive position of the person 
     that provided the information to the Corps of Engineers.

     SEC. 105. BENEFIT-COST ANALYSIS.

       Section 308(a) of the Water Resources Development Act of 
     1990 (33 U.S.C. 2318(a)) is amended--
       (1) in paragraph (1)(B), by striking ``and'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(3) any projected benefit attributable to any increase in 
     the value of privately owned property, increase in the 
     quantity of privately owned property, or increase in the 
     value of privately owned services, that arises from the 
     draining, reduction, or elimination of wetland.''.

     SEC. 106. PROJECT CRITERIA.

       After the date of enactment of this Act, the Secretary 
     shall not submit to Congress any proposal to authorize or 
     substantially modify a water resources project unless the 
     proposal contains a certification by the Secretary that the 
     project minimizes to the maximum extent practicable adverse 
     impacts on--
       (1) the natural hydrologic patterns of aquatic ecosystems; 
     and
       (2) the value or native diversity of aquatic ecosystems.

                          TITLE II--MITIGATION

     SEC. 201. FULL MITIGATION.

       Section 906(d) of the Water Resources Development Act of 
     1986 (33 U.S.C. 2283(d)) is amended--
       (1) in paragraph (1)(A), by inserting ``fully'' before 
     ``mitigate''; and
       (2) by adding at the end the following:
       ``(3) Standards for mitigation.--
       ``(A) In general.--To mitigate losses to fish and wildlife 
     resulting from a water resources project, the Secretary, at a 
     minimum, shall acquire and restore 1 acre of habitat to 
     replace each acre of habitat negatively affected by the 
     project.
       ``(B) Monitoring plan.--The mitigation plan for a water 
     resources project under paragraph (1) shall include a 
     detailed and specific plan to monitor mitigation 
     implementation and success.
       ``(4) Design of mitigation projects.--The Secretary shall--
       ``(A) design each mitigation project to reflect 
     contemporary understanding of the importance of spatial 
     distribution of habitat and the natural hydrology of aquatic 
     ecosystems; and
       ``(B) fully mitigate the adverse hydrologic impacts of 
     water resources projects.
       ``(5) Recommendation of projects.--The Secretary shall not 
     recommend a water resources project alternative or choose a 
     project alternative in any final record of decision, 
     environmental impact statement, or environmental assessment 
     completed after the date of enactment of this paragraph 
     unless the Secretary determines that the mitigation plan for 
     the alternative has the greatest probability of cost-
     effectively and successfully mitigating the adverse impacts 
     of the project on aquatic resources and fish and wildlife.
       ``(6) Completion of mitigation before construction of new 
     projects.--The Secretary shall complete all planned 
     mitigation in a particular watershed before constructing any 
     new water resources project in that watershed.''.

     SEC. 202. CONCURRENT MITIGATION.

       Section 906(a)(1) of the Water Resources Development Act of 
     1986 (33 U.S.C. 2283(a)(1)) is amended by adding at the end 
     the following: ``To ensure concurrent mitigation, the 
     Secretary shall complete 50 percent of

[[Page 5095]]

     required mitigation before beginning project construction and 
     shall complete the remainder of required mitigation as 
     expeditiously as practicable, but not later than the last day 
     of project construction.''.

     SEC. 203. MITIGATION TRACKING SYSTEM.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary shall establish a 
     recordkeeping system to track--
       (1) the quantity and type of wetland and other habitat 
     types affected by the operation and maintenance of each water 
     resources project carried out by the Secretary;
       (2) the quantity and type of mitigation required for 
     operation and maintenance of each water resources project 
     carried out by the Secretary;
       (3) the quantity and type of mitigation that has been 
     completed for the operation and maintenance of each water 
     resources project carried out by the Secretary; and
       (4) wetland losses permitted under section 404 of the 
     Federal Water Pollution Control Act (33 U.S.C. 1344) and 
     required mitigation for such losses.
       (b) Required Information and Organization.--The 
     recordkeeping system shall--
       (1) include information on impacts and mitigation described 
     in subsection (a) that occur after December 31, 1969; and
       (2) be organized by watershed, project, permit application, 
     and zip code.
       (c) Availability of Information.--The Secretary shall make 
     information contained in the recordkeeping system available 
     to the public on the Internet.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mr. Dorgan):
  S. 649. A bill to modify provisions relating to the Gun-Free Schools 
Act; to the Committee on Health, Education, Labor, and Pensions.
  Mrs. FEINSTEIN. Mr. President, today Senator Dorgan and I are 
introducing a bill to make four important changes to the current Gun-
Free Schools Act, GFSA.
  I am a proud sponsor of the Gun-Free Schools Act, which was enacted 
as part of the Elementary-Secondary Education Act in 1994. The law 
requires states receiving federal elementary-secondary education funds 
to have a state law requiring local school districts to expel from 
school for a period of not less than one year students who bring 
weapons to school.
  A March report (ED-OIG/S03-A0018) prepared by the Inspector General, 
IG, of the U.S. Department of Education, highlights several 
improvements needed to clarify the law. This bill makes those important 
clarifications.
  The IG's report, called a ``perspective paper,'' resulted from an 
audit that Senator Dorgan and I requested to examine the enforcement of 
the GFSA in seven States.
  We live in a society today that is much different than when I grew 
up. Our nation is awash in guns and our children live in a culture of 
violence, bombarded by horrific images in movies, television, and video 
games. Combine these factors with a lack of parental supervision and 
this combustible mix has exploded again and again on too many school 
campuses.
  In just the last few weeks alone, we've seen this mix erupt within 
just a few miles of each other in the San Diego area.
  On March 5, a troubled young man named Charles ``Andy'' Williams 
brought a .22-caliber revolver to school, fired at random, killing two 
students and wounding 13 others at Santana High School, in Santee, 
California. And on March 22, an eighteen year-old shot five students at 
Granite Hill High School in El Cajon, California. Fortunately, in this 
case, no one was killed.
  The Los Angeles Times summed up this epidemic aptly on March 6 and 
called on public officials to act, saying ``Nothing of course, assures 
that tragedy can be prevented, but leaders from the classroom to the 
White House can clearly take more steps to promote school safety.''
  Now I know that gun laws are not the only answer to solving this 
problem, but they do represent part of the answer. But the fact is that 
even the most simple, rational, and targeted measures to deter guns 
from falling into the hands of our young people have been cast aside.
  The fact is that there are some simple steps we can take to limit the 
number of guns from reaching our children. We can close the loophole on 
the importation of high capacity ammunition clips. We can include 
trigger locks on every gun purchased.
  And we need to continue with measures that are working. The Gun Free 
Schools Act is a targeted fix that is working. And the bill we are 
introducing today refines this law slightly to make it work even 
better.
  This legislation will close several loopholes in current law under 
which allows some students to escape punishment who bring guns to 
school.
  Because the law effectively imposes a one-year expulsion for students 
who have ``brought'' a weapon to school, students who ``have'' or 
``possess'' a weapon in school can go ``scot-free.''
  Under current law, for example, a student could use a firearm that 
was technically ``brought'' to school by another student. The student 
could then possess it in his or her backpack or locker and thus 
potentially make it available to others and go unpunished because he or 
she did not technically ``bring'' it to school.
  Another loophole that the bill addresses is the definition of school. 
The current prohibition on guns in schools applies to ``a school.'' 
This could be interpreted to mean literally the school building.
  Our bill clarifies that school means ``any setting that is under the 
control and supervision of the local education agency'', i.e., the 
school district. Without this change, a student could wield a firearm 
on the football field, on the school bus or in the parking lot and 
possibly evade punishment under this law.
  Here are the four changes made by this bill: Under the current law, 
states are required to have a law requiring a one-year expulsion of 
students who have ``brought a weapon to a school'' in order to receive 
federal education funds.
  The change our bill proposes is to add to current law, ``or to have 
possessed a firearm.'' We are proposing this change because punishing 
only people who ``bring'' a weapon to school leaves a glaring loophole 
in the law.
  Without this change, students who ask friends to bring a weapon to 
school or who obtain a weapon from someone who has ``brought'' it to 
school, but carry it around or use the weapon, would not be covered 
since current law uses the term ``brought.'' Current law could be 
interpreted to mean that students can have a gun at school as long as 
they do not actually ``bring'' it into the school. I believe this 
change is an important clarification.
  The IG's report says that without this change, states and school 
districts may ``incorrectly implement the Act, resulting in non-
compliance or the submission of erroneous information on disciplinary 
actions under the Act.'' This is because current law does not ``specify 
expulsion as the consequence for students found in possession of a 
firearm.''
  Under current law, school districts and states are required to report 
expulsions. They are, however, required to report incidents. An example 
of this would be when students bring a weapon to or possess weapons in 
schools, for which no disciplinary action is taken.
  Without reporting all incidents in which students have or possess 
weapons in schools, it is impossible to determine if school officials 
are in fact enforcing the law, if they are actually expelling students.
  The IG's audit cites an example at one Maryland school in which a 
student who brought a firearm to school was not expelled. Instead, the 
school's administrators allowed the student to withdraw from school and 
the school did not inform the school district of the incident. Police 
arrested the student. So action was taken, but the incident itself did 
not appear in the annual report because technically the student was not 
expelled.
  Similarly, the IG found that in one California district, school 
officials did not expel a student ``involved in a firearm incident'' 
because the student was arrested and did not return to school.
  In these cases, the students did face legal consequences for their 
action, but the weapons incidents were not reflected in the school's 
report because the law requires reporting only expulsions, not 
incidents.
  The bill would add several new reporting requirements. School 
districts and states would have to report, 1. all

[[Page 5096]]

firearms incidents; 2. each modification of an expulsion, e.g., when an 
administrator shortens an expulsion, which is allowed under current 
law; and 3. the level of education in which the incident occurs, 
elementary, middle, high school.
  Only by thorough reporting can public officials, the Department of 
Education, and the Congress know how well the law is working and how 
effectively it is being enforced.
  These proposed changes should remedy that deficiency.
  There are two additional changes we are proposing based on the IG's 
work. The Department of Education has incorporated these two changes in 
their guidance to states and school districts, but I believe these 
changes should be codified in the law so they cannot be changed 
administratively.
  The prohibition on weapons in ``school'' applies ``to a school,'' 
which implies that this means the building only. For many years, the 
U.S. Department of Education interpreted this to mean the school 
buildings only.
  Under that approach, therefore, a student could bring a weapon to 
school and leave it in an unlocked car, where it would still be readily 
available to students throughout the school day.
  Interpreted strictly to mean ``school buildings,'' that policy also 
allowed guns on athletic fields, in equipment sheds, and in school 
yards. As one Virginia legislator put it, ``you could legally come to a 
PTA meeting packing a weapon.''
  Fortunately, the Department has corrected its guidance to school 
districts to clarify that the prohibition on bringing guns to schools 
applies to the entire school campus. The guidance states, ``The one-
year expulsion requirement applies to students who bring weapons to any 
setting that is under the control and supervision of the local 
education agency.''
  Under our bill, weapons would be allowed to be kept in cars and 
trucks on school property only if the weapons are ``lawfully stored 
inside a locked vehicle on school property.'' This provision is an 
effort to recognize that in some communities students may go hunting 
directly after school.
  Under current law, the chief school administrator in a school 
district can modify an expulsion on a case-by-case basis.
  Our bill would require that all modifications be put in writing. The 
IG found inconsistent reporting of modifications. This change should 
establish one consistent, clear policy and should provide a record of 
expulsions that are modified.
  Guns have no place in schools. Congress made this clear in 1994 when 
we adopted the Gun-Free Schools Act.
  This is a good law that should remain in place. The bill we introduce 
today makes some important clarifications in that law and strengthens 
it.
  The latest Annual Report on School Safety reports that 3,930 students 
were expelled for bringing a firearm to school. One student is one too 
many, in my view.
  The latest incidents in California are but another disturbing 
reminder of the ``culture of violence'' that so pervades our society. 
All of us must ask why students resort to guns to deal with their 
grievances or vent their frustrations. Clearly, we must take strong 
steps to address the underlying societal issues and to get guns out of 
the hands of youngsters.
  This bill is one small, yet important, step to ensure that no more 
schoolchildren die from weapons violence. I urge my colleagues to enact 
this bill promptly.
  I ask unanimous consent that a summary of the bill be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

              The Gun-Free Schools Refinement Act--Summary

       Amendments to the current Gun-Free Schools Act of 1994. 
     These changes are based on the March 2001 report of the U.S. 
     Department of Education's Inspector General (ED-OIG/S03-
     A0018).


                        1. ``Brought a Weapon''

       Current law: Requires states to have a law requiring a one-
     year expulsion of students who have ``brought a weapon to a 
     school.''
       Proposed Change: Adds ``or possessed a weapon.''


                        2. Entire School Campus

       Current law: The prohibition on bringing a weapon to school 
     applies ``to a school.''
       Proposed Change: Clarifies that the prohibition on bringing 
     guns to schools applies to entire school, specifically ``any 
     setting that is under the control and supervision of the 
     local education agency,'' unless a gun is lawfully locked in 
     a vehicle.


                   3. Report Incidents, Modifications

       Current Law: Requires only reporting of expulsions.
       Proposed Changes: Requires the reporting of--
       1. All weapons incidents;
       2. Each modification of an expulsion (e.g., when an 
     administrator shortens an expulsion); and
       3. The level of education in which the incident occurs 
     (elementary, middle, high school).


                      4. Modifications in Writing

       Current Law: Allows states' laws to allow the chief 
     administering officer of a school district to modify one-year 
     expulsions on a case-by-case basis.
       Proposed Change: Requires that all modifications of 
     expulsions be put in writing.

  Mr. DORGAN. Mr. President, I am pleased to join Senator Feinstein in 
introducing the Gun-Free Schools Refinement Act. As my colleagues may 
remember, Senator Feinstein and I were the principal authors of the 
Gun-Free Schools Act of 1994, and as a result of this law, more than 
13,000 students have been expelled from school between 1996 and 1999 
for bringing a gun to school. That is more than 13,000 potential 
tragedies that have been avoided because we as a nation adopted a 
``zero tolerance'' policy toward bringing a weapon into our school 
classrooms and hallways.
  Despite the Gun-Free Schools Act, however, school shootings still 
occasionally occur, and even one of these incidents is too many. That's 
why, nearly two years ago, Senator Feinstein and I asked the Department 
of Education Inspector General to conduct a review of the Gun-Free 
Schools Act to ensure that states and local school districts are 
vigorously enforcing this important law.
  The Inspector General completed this review and issued her final 
report in February, 2001. Fortunately, the IG found no evidence that 
states or school districts were intentionally ignoring instances where 
students brought weapons to schools. However, while we were glad to 
learn that schools are generally trying to comply with the spirit of 
the law, the IG did find some instances where schools and states have 
not complied with the letter of the law. This may result in uneven 
enforcement of the Gun-Free Schools Act. Therefore, the IG recommended 
in March that Congress consider making a number of technical changes to 
the Gun-Free Schools Act to clarify areas of the statute where schools 
were confused about what was required in the enforcement of their 
``zero tolerance'' policies.
  The Gun-Free Schools Refinement Act would make four changes to the 
1994 law: First, this legislation clarifies that the law applies to 
students who ``possess'' a gun in school, not just those who 
``brought'' a weapon to school, as the law currently reads. A common-
sense interpretation of the law would compel schools to expel students 
who possess firearms in school, even if they were not the ones who 
physically brought the guns there. This change merely codifies a 
common-sense reading of the law so that it applies to students who 
either bring or possess a weapon at school.
  Second, this bill clarifies that the Gun-Free Schools Act applies not 
just to the school buildings but to the grounds and any other setting 
under the jurisdiction of the school. What is meant by a ``school'' is 
not currently defined by the statute, but the Department of Education 
has already determined in its implementation guidance that a ``school'' 
means any area under the supervision of the school, such as buses or 
off-campus athletic events or field trips. This change codifies the 
Department's reasonable definition. I do want to mention, however, that 
this change would still allow schools the flexibility to permit rifle 
clubs, hunter safety education, or other sanctioned school activities, 
as long as these limited purposes provide reasonable safeguards to 
ensure student safety and are

[[Page 5097]]

otherwise consistent with the intent of the Gun-Free Schools Act.
  This bill also requires that schools report all incidents of students 
bringing a gun to school, even if a student's expulsion is ultimately 
shortened using the case-by-case exception provided for in the Gun-Free 
Schools Act. Technically the law requires schools to report only 
expulsions, and the IG found that this has led to considerable 
confusion among schools about whether they also need to report 
shortened expulsions. The Department of Education has already taken a 
step in the right direction toward addressing this issue by revising 
the reporting form that schools use when reporting firearm incidents. 
This will further clarify for states and schools the data they need to 
report.
  Finally, this legislation requires that modifications to one-year 
expulsions, which are made on a case-by-case basis by the chief school 
officer, be made in writing. This will simply ensure that school 
officials, parents or other appropriate individuals will have access to 
a written record explaining why the expulsion was shortened.
  In summary, I think these are simple, straightforward, and sensible 
changes to the Gun-Free Schools Act. I urge my colleagues to join me 
and Senator Feinstein in making these technical changes when the Senate 
debates upcoming legislation reauthorizing the Elementary and Secondary 
Education Act.
                                 ______
                                 
      By Mrs. BOXER (for herself and Mr. Wyden):
  S. 650. A bill to amend the Mineral Leasing Act to prohibit the 
exportation of Alaska North Slope crude oil; to the Committee on 
Banking, Housing, and Urban Affairs.
  Mrs. BOXER. Mr. President, this year the spotlight on energy policy 
has increased. One issue that is key for this country is our oil 
supply. Americans are very dependent on gasoline, and it is imperative 
that we address this problem.
  First on the demand side of the equation, we should increase the 
Corporate Average Fuel Economy standard for SUVs and light trucks so 
that it equals the standard for cars. That would save 1 million barrels 
of oil per day. By becoming more energy efficient, the amount of our 
dependence on oil will decrease.
  Second, we also need to focus on the supply side of the picture. For 
example, we should protect the American supply by banning the 
exportation of crude oil from Alaska's North Slope. And, today, I am 
introducing, along with Senator Wyden, legislation to do just that.
  For 22 years, from 1973 to 1995, the export of Alaska North Slope oil 
was banned. We banned it to reduce our dependence on imported oil and 
to keep gasoline prices down.
  Unfortunately, at the behest of oil producers, the ban was lifted in 
1995. The General Accounting Office has stated that lifting the export 
ban resulted in an increase in the price of crude oil by about $1 per 
barrel. In fact, some oil companies used their ability to export this 
oil to artificially increase the price of gasoline on the West Coast.
  With the spotlight on energy policy, President Bush and others have 
called for drilling in the Arctic National Wildlife Refuge, (ANWR). It 
makes no sense to destroy a beautiful, pristine sanctuary, one of the 
most remarkable wildlife habitats in the world, for oil that will only 
last six months. And this call to destroy ANWR comes even in the face 
of the possible export of American oil that is being drilled in areas 
already open to drilling.
  For a little under a year now, no North Slope oil has been exported. 
But this has been done voluntarily--and in one case mainly to ensure 
that a proposed merger was approved by the FTC. Although there are no 
exports now, the threat exists and given our current situation, this 
ban is necessary to preclude any chance of exporting this oil.
  This is oil that is on public lands, and that is transported along a 
federal right-of-way. Taxpayers own this product. We need to ensure 
that American consumers and industry will remain first. I encourage my 
colleagues to support the Oil Supply Improvement Act.
                                 ______
                                 
      By Mr. REED (for himself, Mr. Jeffords, Ms. Mikulski, Ms. 
        Collins, Mr. Wellstone, and Mrs. Clinton):
  S. 651. A bill to provide for the establishment of an assistance 
program for health insurance consumers; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. REED. Mr. President, I rise today to join with my distinguished 
colleagues, Senators Jeffords, Collins, Mikulski, Wellstone and 
Clinton, in introducing bipartisan legislation that we believe can make 
a real difference in the lives of health care consumers in this nation. 
The Health Care Consumer Assistance Act provides grants to States to 
create, or expand upon, health care consumer assistance, or health 
ombudsman programs.
  In 1997, the President's Advisory Commission on Consumer Protection 
and Quality in the Health Care Industry noted that consumers have the 
right to accurate information and assistance in making decisions about 
health plans. One model program, the Administration on Aging's Long 
Term Care Ombudsman Program, has been highly successful for twenty five 
years in promoting quality living and health care for nursing home 
residents nationwide.
  Now more than ever, people need this kind of assistance to navigate 
the health care system. The Health Care Consumer Assistance Act would 
create a grant program for states to establish private, non-profit, 
independent entities to operate statewide ombudsman programs. Each 
state ombudsman program would be a ``one-stop'' source for information, 
counseling and referral services for health care consumers.
  Last summer, the Henry J. Kaiser Family Foundation and Consumer 
Reports magazine released the results of a survey on consumer 
satisfaction with health plans. This survey is part of a larger project 
examining ways to improve how consumers resolve problems with their 
health insurance plans. The survey found that while most people who 
experienced a problem with their plan were able to resolve them, the 
majority of those surveyed were confused about where to go for 
information and help.
  Over the past few years, a growing number of states have taken steps 
to give patients new rights in dealing with their health insurance 
plans. For example, more than 30 states now have an external review 
process for residents to appeal adverse decisions by their health 
plans. While the majority of those surveyed thought the ability to 
appeal a decision to an independent medical expert would be helpful, 
only one percent had actually used the process available in many 
states. In fact, most consumers were unaware this option even existed, 
much less how to use it.
  The legislation we introduce today seeks to remedy this information 
gap by providing grants to states that wish to establish health care 
consumer assistance programs. These programs are designed to help make 
health care consumers more educated and effective as they seek to 
understand and exercise their health care choices, rights, and 
responsibilities.
  I believe that the Health Care Consumer Assistance Act would 
compliment a Patient's Bill of Rights that includes a strong appeals 
process and access to legal remedies. It may, in fact, actually serve 
to ease the ongoing debate about litigation. By empowering health care 
consumers with information and effective strategies for making sure 
they get the care they have paid for when they need it most, the 
chances that a health-related dispute will end up in court are 
drastically minimized. When a person is sick and in need of medical 
care, the last thing they want is to have a protracted legal battle, 
they simply want the care that will make them better.
  Under this bill, the Secretary of Health and Human Services will 
provide funds to eligible states to create or contract with an 
independent, nonprofit agency, to provide a variety of information and 
support services for health care consumers, including the following: 
educational materials about

[[Page 5098]]

strategies for health care consumers to resolve problems and 
grievances; operate a 1-800 telephone hotline for consumer inquiries; 
coordinate and make referrals to other private and public health care 
entities when appropriate; and conduct education and outreach in the 
community.
  The concept of a health care consumer assistance program has gained 
considerable support over the past several years as states have 
contemplated the patient protection issue and several states have taken 
steps to create these programs. Governors and state legislatures in 
many states including, Florida, Georgia, Massachusetts, Maryland, 
Nebraska, Nevada, Rhode Island, Texas, Vermont, Virginia and Wisconsin 
have introduced or enacted health care ombudsman legislation. However, 
a Families USA survey of existing programs has found that while some 
states have successfully launched their programs, other state 
initiatives have faltered due to a lack of sufficient funding.
  I believe that Americans deserve access to the information and 
assistance they need to be empowered and informed health care 
consumers. As the health insurance system becomes more confusing and 
complex, it becomes critically important that consumers have a place 
where they can go for counseling and assistance. As health plan options 
become more complicated, people need a reliable, accessible source of 
information. State health care consumer assistance programs have proven 
their ability to meet this challenge. I look forward to working with my 
colleagues in advancing this important and timely legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 651

       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 ``Health Care Consumers 
     Assistance Fund Act''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) All consumers need information and assistance to 
     understand their health insurance choices and to facilitate 
     effective and efficient access to needed health services. 
     Many do not understand their health care coverage despite the 
     current efforts of both the public and private sectors.
       (2) Federally initiated health care consumer assistance and 
     information programs targeted to consumers of long-term care 
     and to medicare beneficiaries under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.) are effective, as are a 
     number of State and local consumer assistance initiatives.
       (3) The principles, policies, and practices of health plans 
     for providing safe, effective, and accessible health care can 
     be enriched by State-based collaborative, independent 
     education, problem resolution, and feedback programs. Health 
     care consumer assistance programs have proven their ability 
     to meet this challenge.
       (4) Many states have created health care consumer 
     assistance programs. The Federal Government can assist the 
     States in developing and maintaining effective health care 
     consumer assistance programs.

     SEC. 3. GRANTS.

       (a) In General.--The Secretary of Health and Human Services 
     (referred to in this Act as the ``Secretary'') shall 
     establish a fund, to be known as the ``Health Care Consumer 
     Assistance Fund'', to be used to award grants to eligible 
     States to enable such States to carry out consumer assistance 
     activities (including programs established by States prior to 
     the enactment of this Act) designed to provide information, 
     assistance, and referrals to consumers of health insurance 
     products.
       (b) State Eligibility.--To be eligible to receive a grant 
     under this section a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including a State plan that describes--
       (1) the manner in which the State will ensure that the 
     health care consumer assistance office (established under 
     subsection (d)) will assist health care consumers in 
     accessing needed care by educating and assisting health 
     insurance enrollees to be responsible and informed consumers;
       (2) the manner in which the State will coordinate and 
     distinguish the services provided by the health care consumer 
     assistance office with the services provided by the long-term 
     care ombudsman authorized by the Older Americans Act of 1965 
     (42 U.S.C. 3001 et seq.), the State health insurance 
     information program authorized under section 4360 of the 
     Omnibus Budget Reconciliation Act of 1990 (42 U.S.C. 1395b-
     4), the protection and advocacy program authorized under the 
     Protection and Advocacy for Mentally Ill Individuals Act of 
     1986 (42 U.S.C. 10801 et seq.), and any other programs that 
     provide information and assistance to health care consumers;
       (3) the manner in which the State will coordinate and 
     distinguish the health care consumer assistance office and 
     its services from enrollment services provided under the 
     medicaid and State children's health insurance programs under 
     titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 
     et seq. and 1397aa et seq.), and medicare and medicaid health 
     care fraud and abuse activities including those authorized by 
     Federal law under title 11 of the Social Security Act (42 
     U.S.C. 1301 et seq.), and State health insurance departments 
     and health plan programs that perform similar functions;
       (4) the manner in which the State will provide services to 
     underserved and minority populations and populations residing 
     in rural areas;
       (5) the manner in which the State will establish and 
     implement procedures and protocols, consistent with 
     applicable Federal and State confidentiality laws, to ensure 
     the confidentiality of all information shared by consumers 
     and their health care providers, health plans, or insurers 
     with the office established under subsection (d)(1) and to 
     ensure that no such information is used, released or referred 
     without the express prior permission of the consumer in 
     accordance with section 4(b), except to the extent that the 
     office collects or uses aggregate information;
       (6) the manner in which the State will oversee the health 
     care consumer assistance office, its activities and product 
     materials, and evaluate program effectiveness;
       (7) the manner in which the State will provide for the 
     collection of non-Federal contributions for the operations of 
     the office in an amount that is not less than 25 percent of 
     the amount of Federal funds provided under this Act; and
       (8) the manner in which the State will ensure that funds 
     made available under this Act will be used to supplement, and 
     not supplant, any other Federal, State, or local funds 
     expended to provide services for programs described under 
     this Act and those described in paragraphs (3) and (4).
       (c) Amount of Grant.--
       (1) In general.--From amounts appropriated under section 4 
     for a fiscal year, the Secretary shall award a grant to a 
     State in an amount that bears the same ratio to such amounts 
     as the number of individuals within the State covered under a 
     health insurance plan (as determined by the Secretary) bears 
     to the total number of individuals covered under a health 
     insurance plan in all States (as determined by the 
     Secretary). Any amounts provided to a State under this 
     section that are not used by the State shall be remitted to 
     the Secretary and reallocated in accordance with this 
     paragraph.
       (2) Minimum amount.--In no case shall the amount provided 
     to a State under a grant under this section for a fiscal year 
     be less than an amount equal to .5 percent of the amount 
     appropriated for such fiscal year under section 5.
       (d) Provision of Funds for Establishment of Office.--
       (1) In general.--From amounts provided under a grant under 
     this section, a State shall, directly or through a contract 
     with an independent, nonprofit entity with demonstrated 
     experience in serving the needs of health care consumers, 
     provide for the establishment and operation of a State health 
     care consumer assistance office.
       (2) Eligibility of entity.--To be eligible to enter into a 
     contract under paragraph (1), an entity shall demonstrate 
     that the entity has the technical, organizational, and 
     professional capacity to deliver the services described in 
     section 4 throughout the State to all public and private 
     health insurance consumers.

     SEC. 4. USE OF FUNDS.

       (a) By State.--A State shall use amounts provided under a 
     grant awarded under this Act to carry out consumer assistance 
     activities directly or by contract with an independent, non-
     profit organization. The State shall ensure the adequate 
     training of personnel carrying out such activities. Such 
     activities shall include--
       (1) the operation of a toll-free telephone hotline to 
     respond to consumer requests for assistance;
       (2) the dissemination of appropriate educational materials 
     on how best to access health care and the rights and 
     responsibilities of health care consumers;
       (3) the provision of education to health care consumers on 
     effective methods to promptly and efficiently resolve their 
     questions, problems, and grievances;
       (4) referrals to appropriate private and public entities to 
     resolve questions, problems and grievances;
       (5) the coordination of educational and outreach efforts 
     with consumers, health plans, health care providers, payers, 
     and governmental agencies; and
       (6) the provision of information and assistance to 
     consumers regarding internal, external, or administrative 
     grievances or appeals

[[Page 5099]]

     procedures in nonlitigative settings to appeal the denial, 
     termination, or reduction of health care services, or the 
     refusal to pay for such services, under a health insurance 
     plan.
       (b) Confidentiality and Access to Information.--The health 
     care consumer assistance office of a State shall establish 
     and implement procedures and protocols, consistent with 
     applicable Federal and State confidentiality laws, to ensure 
     the confidentiality of all information shared by consumers 
     and their health care providers, health plans, or insurers 
     with the office and to ensure that no such information is 
     used, released, or referred to State agencies or outside 
     entities without the expressed prior permission of the 
     consumer, except to the extent that the office collects or 
     uses aggregate information that is not individually 
     identifiable. Such procedures and protocols shall ensure that 
     the health care consumer is provided with a description of 
     the policies and procedures of the office with respect to the 
     manner in which health information may be used to carry out 
     consumer assistance activities.
       (c) Availability of Services.--The health care consumer 
     assistance office of a State shall not discriminate in the 
     provision of information and referrals regardless of the 
     source of the individual's health insurance coverage or 
     prospective coverage, including individuals covered under 
     employer-provided insurance, self-funded plans, the medicare 
     or medicaid programs under title XVII or XIX of the Social 
     Security Act (42 U.S.C. 1395 and 1396 et seq.), or under any 
     other Federal or State health care program.
       (d) Designation of Responsibilities.--
       (1) Within existing state entity.--If the health care 
     consumer assistance office of a State is located within an 
     existing State regulatory agency or office of an elected 
     State official, the State shall ensure that--
       (A) there is a separate delineation of the funding, 
     activities, and responsibilities of the office as compared to 
     the other funding, activities, and responsibilities of the 
     agency; and
       (B) the office establishes and implements procedures and 
     protocols to ensure the confidentiality of all information 
     shared by consumers and their health care providers, health 
     plans, or insurers with the office and to ensure that no 
     information is transferred or released to the State agency or 
     office without the expressed prior permission of the consumer 
     in accordance with subsection (b).
       (2) Contract entity.--In the case of an entity that enters 
     into a contract with a State under section 3(d), the entity 
     shall provide assurances that the entity has no real or 
     perceived conflict of interest in providing advice and 
     assistance to consumers regarding health insurance and that 
     the entity is independent of health insurance plans, 
     companies, providers, payers, and regulators of care.
       (e) Subcontracts.--The health care consumer assistance 
     office of a State may carry out activities and provide 
     services through contracts entered into with 1 or more 
     nonprofit entities so long as the office can demonstrate that 
     all of the requirements of this Act are complied with by the 
     office.
       (f) Term.--A contract entered into under this section shall 
     be for a term of 3 years.

     SEC. 5. FUNDING.

       There are authorized to be appropriated $100,000,000 to 
     carry out this Act.

     SEC. 6. REPORT OF THE SECRETARY.

       Not later than 1 year after the Secretary first awards 
     grants under this Act, and annually thereafter, the Secretary 
     shall prepare and submit to the appropriate committees of 
     Congress a report concerning the activities funded under 
     section 4 and the effectiveness of such activities in 
     resolving health care-related problems and grievances.
                                 ______
                                 
      By Mr. EDWARDS (for himself, Mr. Jeffords, Mr. Leahy, and Mr. 
        Wellstone):
  S. 652. A bill to promote the development of affordable, quality 
rental housing in rural areas for low-income households; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. EDWARDS. Mr. President, I rise to reintroduce legislation I 
offered last year to promote the development of affordable, quality 
rental housing for low-income households in rural areas. I am pleased, 
along with Senator Jeffords, Senator Leahy, and Senator Wellstone, to 
introduce the ``Rural Rental Housing Act of 2001.''
  There is a pressing and worsening need for quality rental housing for 
rural families and senior citizens. As a group, residents of rural 
communities are the worst housed of all our citizens. Rural areas 
contain approximately 20 percent of the nation's population as compared 
to suburbs with 50 percent. Yet, twice as many rural American families 
live in bad housing than in the suburbs. An estimated 2,600,000 rural 
households live in substandard housing with severe structural damage or 
without indoor plumbing, heat, or electricity.
  Substandard housing is a particularly grave problem in the rural 
areas of my home state of North Carolina. Ten percent or more of the 
population in five of North Carolina's rural counties live in 
substandard housing. Rural housing units, in fact, comprise 60 percent 
of all substandard units in the state.
  Even as millions of rural Americans live in wretched rental housing, 
millions more are paying an extraordinarily high price for their 
housing. One out of every three renters in rural America pays more than 
30 percent of his or her income for housing; 20 percent of rural 
renters pay more than 50 percent of their income for housing.
  Most distressing is when people living in housing that does not have 
heat or indoor plumbing pay an extraordinary amount of their income in 
rent. More than 90 percent of people living in housing in the worst 
conditions pay more than 50 percent of their income for housing costs.
  Unfortunately, our rural communities are not in a position to address 
these problems alone. They are disproportionately poor and have fewer 
resources to bring to bear on the issue. Poverty is a crushing, 
persistent problem in rural America. One-third of the non-metropolitan 
counties in North Carolina have 20 percent or more of their population 
living below the poverty line. In contrast, not a single metropolitan 
county in North Carolina has 20 percent or more of its population 
living below the poverty line. Not surprisingly, the economies of rural 
areas are generally less diverse, limiting jobs and economic 
opportunity. Rural areas have limited access to many forces driving the 
economy, such as technology, lending, and investment, because they are 
remote and have low population density. Banks and other investors, 
looking for larger projects with lower risk, seek metropolitan areas 
for loans and investment. Credit in rural areas is often more expensive 
and available at less favorable terms than in metropolitan areas.
  Given the magnitude of this problem, it is startling to find that the 
federal government is turning its back on the situation. In the face of 
this challenge, the federal government's investment in rural rental 
housing is at its lowest level in more than 25 years. Federal spending 
for rural rental housing has been cut by 73 percent since 1994. Rural 
rental housing unit production financed by the federal government has 
been reduced by 88 percent since 1990. Moreover, poor rural renters do 
not fair as well as poor urban renters in accessing existing programs. 
Only 17 percent of very low-income rural renters receive housing 
subsidies, compared with 28 percent of urban poor. Rural counties fared 
worse with Federal Housing Authority assistance on a per capita basis, 
as well, getting only $25 per capita versus $264 in metro areas. Our 
veterans in rural areas are no better off: Veterans Affairs housing 
dollars are spent disproportionately in metropolitan areas.
  To address the scarcity of rural rental housing, I believe that the 
federal government must come up with new solutions. We cannot simply 
throw money at the problem and expect the situation to improve. 
Instead, we must work in partnership with State and local governments, 
private financial institutions, private philanthropic institutions, and 
the private and nonprofit sectors to make headway. We must leverage our 
resources wisely to increase the supply and quality of rural rental 
housing for low-income households and the elderly.
  Senator Jeffords, Senator Leahy, Senator Wellstone, and I are 
proposing a new solution. Today, we introduce the Rural Rental Housing 
Act of 2001 to create a flexible source of financing to allow project 
sponsors to build, acquire or rehabilitate rental housing based on 
local needs. We demand that the federal dollars to be stretched by 
requiring State matching funds and by requiring the sponsor to find 
additional sources of funding for the project. We are pleased that more 
than 70 housing groups from 26 states have already indicated their 
support for this legislation.
  Let me briefly describe what the measure would do. We propose a $250

[[Page 5100]]

million fund to be administered by the United States Department of 
Agriculture, USDA. The funds will be allotted to states based on their 
share of rural substandard units and of the rural population living in 
poverty, with smaller states guaranteed a minimum of $2 million. We 
will leverage federal funding by requiring states or other non-profit 
intermediaries to provide a dollar-for-dollar match of project funds. 
The funds will be used for the acquisition, rehabilitation, and 
construction of low-income rural rental housing.
  The USDA will make rental housing available for low-income 
populations in rural communities. The population served must earn less 
than 80 percent area median income. Housing must be in rural areas with 
populations not exceeding 25,000. Priority for assistance will be given 
to very low income households, those earning less than 50 percent of 
area median income, and in very low-income communities or in 
communities with a severe lack of affordable housing. To ensure that 
housing continues to serve low-income populations, the legislation 
specifies that housing financed under the legislation must have a low-
income use restriction of not less than 30 years.
  The Act promotes public-private partnerships to foster flexible, 
local solutions. The USDA will make assistance available to public 
bodies, Native American tribes, for-profit corporations, and private 
nonprofit corporations with a record of accomplishment in housing or 
community development. Again, it stretches federal assistance by 
limiting most projects from financing more than 50 percent of a project 
cost with this funding. The assistance may be made available in the 
form of capital grants, direct, subsidized loans, guarantees, and other 
forms of financing for rental housing and related facilities.
  Finally, the Act will be administered at the state level by 
organizations familiar with the unique needs of each state rather than 
creating a new federal bureaucracy. The USDA will be encouraged to 
identify intermediary organizations based in the state to administer 
the funding provided that it complies with the provisions of the Act. 
These intermediary organizations can be states or state agencies, 
private nonprofit community development corporations, nonprofit housing 
corporations, community development loan funds, or community 
development credit unions.
  This Act is not meant to replace, but to supplement the Section 515 
Rural Rental Housing program, which has been the primary source of 
federal funding for affordable rental housing in rural America from its 
inception in 1963. Section 515, which is administered by the USDA's 
Rural Housing Service, makes direct loans to non-profit and for-profit 
developers to build rural rental housing for very low income tenants. 
Our support for 515 has decreased in recent years--there has been a 73 
percent reduction since 1994--which has had two effects. It is 
practically impossible to build new rental housing, and our ability to 
preserve and maintain the current stock of Section 515 units is 
hobbled. Fully three-quarters of the Section 515 portfolio is more than 
20 years old.
  The time has come for us to take a new look at a critical problem 
facing rural America. How can we best work to promote the development 
of quality rental housing for low-income people in rural America? My 
colleagues and I believe that to answer this question, we must comply 
with certain basic principles. We do not want to create yet another 
program with a large federal bureaucracy. We want a program that is 
flexible, that fosters public-private partnerships, that leverages 
federal funding, and that is locally controlled. We believe that the 
Rural Rental Housing Act of 2001 satisfies these principles and will 
help move us in the direction of ensuring that everyone in America, 
including those in rural areas, have access to affordable, quality 
housing options.
  I request that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 652

       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 ``Rural Rental Housing Act of 
     2001''.

     SEC. 2. FINDINGS.

        Congress makes the following findings:
       (1) There is a pressing and increasing need for rental 
     housing for rural families and senior citizens, as evidenced 
     by the fact that--
       (A) two-thirds of extremely low-income and very low-income 
     rural households do not have access to affordable rental 
     housing units;
       (B) more than 900,000 rural rental households (10.4 
     percent) live in either severely or moderately inadequate 
     housing; and
       (C) substandard housing is a problem for 547,000 rural 
     renters, and approximately 165,000 rural rental units are 
     overcrowded.
       (2) Many rural United States households live with serious 
     housing problems, including a lack of basic water and 
     wastewater services, structural insufficiencies, and 
     overcrowding, as shown by the fact that--
       (A) 28 percent, or 10,400,000, rural households in the 
     United States live with some kind of serious housing problem;
       (B) approximately 1,000,000 rural renters have multiple 
     housing problems; and
       (C) an estimated 2,600,000 rural households live in 
     substandard housing with severe structural damage or without 
     indoor plumbing, heat, or electricity.
       (3) In rural America--
       (A) one-third of all renters pay more than 30 percent of 
     their income for housing;
       (B) 20 percent of rural renters pay more than 50 percent of 
     their income for housing; and
       (C) 92 percent of all rural renters with significant 
     housing problems pay more than 50 percent of their income for 
     housing costs, and 60 percent pay more than 70 percent of 
     their income for housing.
       (4) Rural economies are often less diverse, and therefore, 
     jobs and economic opportunity are limited because--
       (A) factors that exist in rural environments, such as 
     remoteness and low population density, lead to limited access 
     to many forces driving the economy, such as technology, 
     lending, and investment; and
       (B) local expertise is often limited in rural areas where 
     the economies are focused on farming or natural resource-
     based industries.
       (5) Rural areas have less access to credit than 
     metropolitan areas since--
       (A) banks and other investors that look for larger projects 
     with lower risk seek metropolitan areas for loans and 
     investment;
       (B) credit that is available is often insufficient, leading 
     to the need for interim or bridge financing; and
       (C) credit in rural areas is often more expensive and 
     available at less favorable terms than in metropolitan areas.
       (6) The Federal Government investment in rural rental 
     housing has dropped during the last 10 years, as evidenced by 
     the fact that--
       (A) Federal spending for rural rental housing has been cut 
     by 73 percent since 1994; and
       (B) rural rental housing unit production financed by the 
     Federal Government has been reduced by 88 percent since 1990.
       (7) To address the scarcity of rural rental housing, the 
     Federal Government must work in partnership with State and 
     local governments, private financial institutions, private 
     philanthropic institutions, and the private sector, including 
     nonprofit organizations.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Eligible project.--The term ``eligible project'' means 
     a project for the acquisition, rehabilitation, or 
     construction of rental housing and related facilities in an 
     eligible rural area for occupancy by low-income families.
       (2) Eligible rural area.--The term ``eligible rural area'' 
     means a rural area with a population of not more than 25,000, 
     as determined by the most recent decennial census of the 
     United States, and that is located outside an urbanized area.
       (3) Eligible sponsor.--The term ``eligible sponsor'' means 
     a public agency, an Indian tribe, a for-profit corporation, 
     or a private nonprofit corporation--
       (A) a purpose of which is planning, developing, or managing 
     housing or community development projects in rural areas; and
       (B) that has a record of accomplishment in housing or 
     community development and meets other criteria established by 
     the Secretary by regulation.
       (4) Low-income families.--The term ``low-income families'' 
     has the meaning given the term in section 3(b) of the United 
     States Housing Act of 1937 (42 U.S.C. 1437a(b)).
       (5) Qualified intermediary.--The term ``qualified 
     intermediary'' means a State, a State agency designated by 
     the Governor of the State, a public instrumentality of the 
     State, a private nonprofit community development corporation, 
     a nonprofit housing corporation, a community development loan 
     fund, or a community development credit union, that--
       (A) has a record of providing technical and financial 
     assistance for housing and community development activities 
     in rural areas; and

[[Page 5101]]

       (B) has a demonstrated technical and financial capacity to 
     administer assistance made available under this Act.
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.
       (8) State.--The term ``State'' means each of the several 
     States of the United States, the Commonwealth of Puerto Rico, 
     the District of Columbia, the Commonwealth of the Northern 
     Mariana Islands, Guam, the Virgin Islands, American Samoa, 
     the Trust Territories of the Pacific, and any other 
     possession of the United States.

     SEC. 4. RURAL RENTAL HOUSING ASSISTANCE.

       (a) In General.--The Secretary may, directly or through 1 
     or more qualified intermediaries in accordance with section 
     5, make assistance available to eligible sponsors in the form 
     of loans, grants, interest subsidies, annuities, and other 
     forms of financing assistance, to finance the eligible 
     projects.
       (b) Applications.--
       (1) In general.--To be eligible to receive assistance under 
     this section, an eligible sponsor shall submit to the 
     Secretary, or a qualified intermediary, an application in 
     such form and containing such information as the Secretary 
     shall require by regulation.
       (2) Affordability restriction.--Each application under this 
     subsection shall include a certification by the applicant 
     that the housing to be acquired, rehabilitated, or 
     constructed with assistance under this section will remain 
     affordable for low-income families for not less than 30 
     years.
       (c) Priority for Assistance.--In selecting among applicants 
     for assistance under this section, the Secretary, or a 
     qualified intermediary, shall give priority to providing 
     assistance to eligible projects--
       (1) for very low-income families (as defined in section 
     3(b) of the United States Housing Act of 1937 (42 U.S.C. 
     1437a(b)); and
       (2) in low-income communities or in communities with a 
     severe lack of affordable rental housing, in eligible rural 
     areas, as determined by the Secretary; or
       (3) if the applications are submitted by public agencies, 
     Indian tribes, private nonprofit corporations or limited 
     dividend corporations in which the general partner is a non-
     profit entity whose principal purposes include planning, 
     developing and managing low-income housing and community 
     development projects.
       (d) Allocation of Assistance.--
       (1) In general.--In carrying out this section, the 
     Secretary shall allocate assistance among the States, taking 
     into account the incidence of rural substandard housing and 
     rural poverty in each State and the share of that State of 
     the national total of such incidence.
       (2) Small state minimum.--In making an allocation under 
     paragraph (1), the Secretary shall provide each state an 
     amount not less than $2,000,000.
       (e) Limitations on Amount of Assistance.--
       (1) In general.--Except as provided in paragraph (2), 
     assistance made available under this Act may not exceed 50 
     percent of the total cost of the eligible project.
       (2) Exception.--Assistance authorized under this Act shall 
     not exceed 75 percent of the total cost of the eligible 
     project, if the project is for the acquisition, 
     rehabilitation, or construction of not more than 20 rental 
     housing units for use by very low-income families.

     SEC. 5. DELEGATION OF AUTHORITY.

       (a) In General.--The Secretary may delegate authority for 
     distribution of assistance--
       (1) to one or more qualified intermediaries in the State; 
     and
       (2) for a period of not more than 3 years, at which time 
     that delegation of authority shall be subject to renewal, in 
     the discretion of the Secretary, for 1 or more additional 
     periods of not more than 3 years.
       (b) Solicitation.--
       (1) In general.--The Secretary may, in the discretion of 
     the Secretary, solicit applications from qualified 
     intermediaries for a delegation of authority under this 
     section.
       (2) Contents of application.--Each application under this 
     subsection shall include--
       (A) a certification that the applicant will--
       (i) provide matching funds from sources other than this Act 
     in an amount that is not less than the amount of assistance 
     provided to the applicant under this section; and
       (ii) distribute assistance to eligible sponsors in the 
     State in accordance with section 4; and
       (B) a description of--
       (i) the State or the area within a State to be served;
       (ii) the incidence of poverty and substandard housing in 
     the State or area to be served;
       (iii) the technical and financial qualifications of the 
     applicant; and
       (iv) the assistance sought and a proposed plan for the 
     distribution of such assistance in accordance with section 4.
       (3) Multistate applications.--The Secretary may, in the 
     discretion of the Secretary, seek application by qualified 
     intermediaries for more than 1 State.

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated to carry out this 
     Act $250,000,000 for each of fiscal years 2002 through 2006.

  Mr. LEAHY. Mr. President, I am proud, once again, to rise and offer 
my support for the Rural Rental Housing Act. This important legislation 
will help reaffirm the federal government's commitment to provide 
quality affordable housing in rural areas. I joined Senator Edwards in 
introducing this bill last year, and look forward to the opportunity to 
debate this issue in the 107th Congress.
  The need for a new federal program to encourage production, 
rehabilitation and acquisition of rural rental housing has never been 
more evident than it is today. Families in small towns across the 
country find themselves with fewer and fewer options for a safe and 
affordable place to live. In my home state of Vermont, like many other 
states across the country, housing costs have soared out of reach of 
most low-income families and rental vacancy rates have fallen to 
alarmingly low levels. For those people fortunate enough to find an 
available apartment it is increasingly difficult to afford the rent the 
market demands.
  Despite this trend, the federal government has continued to scale 
back their commitment to rural housing programs over the last decade. 
Money for production has dropped nearly 88 percent since 1990, and 
funding for subsidized housing has fallen by 73 percent since 1994. 
This decline has made it incredibly difficult to maintain the existing 
housing stock, little less produce the number of units need to meet 
demand. In Vermont four thousand rental units were built with federal 
assistance between 1976 and 1985, but during the next ten years this 
number fell to under two thousand--nearly half of what was produced the 
decade before, despite the rising need. Nationwide it is estimated that 
nearly 2.6 million households live in substandard conditions, often 
without proper plumbing, heat or electricity.
  The Rural Rental Housing Act will provide $250 million dollars for a 
new matching federal grant program to address this situation. These 
funds will complement existing programs run by the Rural Housing 
Service at Department of Agriculture and will be used in a variety of 
ways to increase the supply, the affordability, and the quality of 
housing for the most needy residents, the lowest income families and 
our elderly citizens. Most importantly, this program is designed to be 
administered at the state and local level and to encourage public-
private partnerships to best address the unique needs of each state.
  I think it is time for the Senate to take action to address the needs 
of our country's most rural populations. I am proud to be a cosponsor 
of this bill and I encourage my colleagues to add their support.
  Mr. WELLSTONE. Mr. President, today I offer my support for the Rural 
Rental Housing Act of 2001. Communities in every state in this country 
are suffering from a critical lack of affordable housing. Many rural 
areas have been particularly hard hit. This bill takes an important 
step toward re-establishing the production and preservation of 
affordable housing as a National priority. It assures that the needs of 
rural communities are not forgotten. I am pleased to be a co-sponsor of 
this bill, and urge all of my colleagues similarly to support this 
legislation.
  The time has come for the federal government to get back in the 
business of producing affordable housing. Until we do, we will not get 
at the issue underlying the current affordable housing crisis: the 
rapid erosion of affordable housing stock. Every year, in fact, every 
day, we see the demolition of old affordable housing units without 
seeing the creation of an equivalent number of new affordable housing 
units. And while there can be no question that some of our existing 
affordable housing units should be demolished, we have yet to meet our 
responsibility to replace the old units that are lost with new, better, 
affordable units. Our current policy simply results in too many 
displaced families, families who are forced to sometimes double-up or 
even become homeless in worst-case scenarios, overburdening otherwise 
already fragile communities.
  The housing needs of rural communities are particularly pronounced.

[[Page 5102]]

Rural households pay more of their income for housing than do urban 
households. They are less likely to receive government-assisted 
mortgages; they tend to be poorer than urban households. They have 
limited access to mortgage credit, and they are often targeted by 
predatory lenders. Rural communities have a disproportionate share of 
the nation's substandard housing. They often have an inadequate supply 
of affordable housing. Development costs are higher in rural 
communities than in urban areas, and rural communities have a limited 
secondary mortgage market. Many low-income rural families have only 
limited experience with credit and lending institutions, and they often 
lack an understanding of what it takes to get a home loan. Compounding 
this problem is a lack of pre- and post-purchase counseling for rural 
homeowners.
  Despite the critical housing needs of rural communities, direct 
lending for new or improved rural rental housing is currently at its 
lowest funding level in more than 25 years. The Department of 
Agriculture, USDA, has oversight of most of the federal rural housing 
assistance programs. The primary sources of funding for rural housing 
assistance, the Section 515 Rural Rental Housing Loan Program, which 
makes direct loans to developers and cooperatives to build rural rental 
housing and the Section 521 Rental Assistance Program (which provides 
rent subsidies to low-income rural renters), have seen their funding 
levels steadily eroded since the mid-eighties. As a consequence, right 
now the rate of housing assistance to non-metro areas is only about 
half that to metro areas.
  Unfortunately, while funding levels for rural housing assistance 
programs have been decreasing, the need for affordable rural housing 
has been increasing. According to an analysis of 1995 American Housing 
Survey, AHS, data, 10.4 million rural households, 28 percent, have 
housing problems. When considering only rural renters, the problem 
becomes even more pronounced. Thirty-three percent of all rural renters 
are ``cost burdened,'' paying more than 30 percent of their income for 
housing costs. Almost one million rural renter households suffer from 
multiple housing problems. Of these households, 90 percent are severely 
cost burdened, paying more than 50 percent of their income for rent. 
Sixty percent pay more than 70 percent of their income for housing. 
Nearly 60 percent of tenants in Section 515 housing are elderly, 
disabled or handicapped. The average tenant income is less than $8,000 
a year, and the average income of tenants who receive Section 521 
housing assistance is $7,300 per year. Ninety-eight percent of them are 
either low-income, 88 percent, or very-low income, 10 percent, and 75 
percent are single female or female-headed households.
  The ``Rural Rental Housing Act of 2001'' is intended to promote the 
development of affordable, quality rental housing in rural areas for 
low income households. The bill would authorize the Secretary of 
Agriculture, directly or through specified intermediaries, to provide 
rural rental housing assistance in the form of loans, grants, interest 
subsidies, annuities, and other forms of assistance to finance eligible 
projects. It would require that no state receives less that $2 million. 
It would limit the amount of assistance to 50 percent of the total cost 
of eligible projects, unless the project is smaller than 20 units and 
is targeted to very-low income tenants, then assistance can total up to 
75 percent of the total cost. It would require that properties 
acquired, rehabbed, or constructed with these funds remain affordable 
for low-income families for at least 30 years, and it would give 
priority to low-income families, low-income communities, or communities 
lacking affordable rental housing. Finally, it would authorize 
$250,000,000 in appropriations for each fiscal year 2002 through 2006.
  I am pleased to be a co-sponsor of this important legislation, and 
look forward to working with Senators Edwards, Jeffords, and Leahy to 
ensure its passage.
                                 ______
                                 
      By Mr. BAYH (for himself, Mr. Domenici, Mrs. Lincoln, Mr. Lugar, 
        Mr. Graham, Mr. Voinovich, Mr. Carper, Mr. Lieberman, Mr. 
        Johnson, Mr. Miller, Ms. Landrieu, Mr. Breaux, and Mr. Kohl):
  S. 653. A bill to amend part D of title IV of the Social Security Act 
to provide grants to States to encourage media campaigns to promote 
responsible fatherhood skills, and for other purposes; to the Committee 
on Finance.
  Mr. BAYH. Mr. President, I rise today to introduce The Responsible 
Fatherhood Act of 2001 with Senator Pete Domenici. Our bill aims to 
encourage fathers to take both emotional and financial responsibility 
for their children.
  Many of America's mothers, including single moms, are heroic in their 
efforts to make ends meet while raising good, responsible children. 
Many dads are too. But an increasing number of men are not doing their 
part, or are absent entirely. The decline in the involvement of fathers 
in the lives of their children over the last forty years is a troubling 
trend that affects us all. Fathers can help teach their children about 
respect, honor, duty and so many of the values that make our 
communities strong.
  The number of children living in households without fathers has 
tripled over the last forty years, from just over 5 million in 1960 to 
more than 17 million today. Today, the United States leads the world in 
fatherless families, and too many children spend their lives without 
any contact with their fathers. The consequences are severe, A study by 
the Journal of Research in Crime and Delinquency found that the best 
predictor of violent crime and burglary in a community is not the rate 
of poverty, but the rate of fatherless homes.
  When fathers are absent from their lives, children are: 5 times more 
likely to live in poverty; twice as likely to commit crimes; more 
likely to bring weapons and drugs into the classroom; twice as likely 
to drop out of school; twice as likely to be abused; more likely to 
commit suicide; over twice as likely to abuse alcohol or drugs; and 
more likely to become pregnant as teenagers.
  I have had the opportunity to work with and visit local fatherhood 
programs in Indiana. I have talked to fathers as they work to re-engage 
with their children, learn how to be better parents, and gradually 
build the trust that allows them to be involved emotionally, as well as 
financially, with their children. I visited the Father Resource 
Program, run by Dr. Wallace McLaughlin in Indianapolis. This program is 
a wonderful example of a local, private/public partnership that 
delivers results. It has served more than 500 fathers, primarily young 
men between the ages of 15 and 25, by providing father peer support 
meetings, pre-marital counseling, family development forums and family 
support services, as well as co-parenting, employment, job training, 
education, and life skills classes.
  The fathers there were eager to tell me about the profound impact 
these programs have made in their lives, and the lives of their 
children. One said to me, ``After the six week fatherhood training 
program, the support doesn't stop . . . I was wild before. The program 
taught me self-discipline, parenting skills, and responsibility.'' 
Another said, ``As fathers, we would like to interact with our kids. 
When they grow into something, we want to feel proud and say that we 
were a part of that.'' And yet another, ``The program showed me how to 
have a better relationship with my child's mother, and a better 
relationship with my child. Before those relationships were just 
financial.'' While the program's emotional benefits to families are 
difficult to measure, we do know it is helping fathers enter the 
workforce. Over eighty percent of the men who have graduated from the 
program are currently employed.
  This type of investment is a fiscally responsible one, it helps get 
to the root cause of many of the social problems that cost our society 
and our government a great deal of money: The cost to society of drug 
and alcohol abuse is more than $110 billion per year. The social and 
economic costs of teenage

[[Page 5103]]

pregnancy, abortion and STDs has been estimated at over $21 billion per 
year. The federal government spends $8 billion a year on dropout 
prevention programs. Last year, the federal government spent more than 
$105 billion on poverty relief programs for families and children.
  All this adds up to a staggering price. My legislation, The 
Responsible Fatherhood Act of 2001, does three primary things to help 
combat fatherlessness in America. First, it creates a grant program for 
state media campaigns to encourage fathers to act responsibly. Second, 
it funds community efforts that provide fathers with the tools 
necessary to be responsible fathers. Finally, the bill creates a 
National Clearinghouse to assist states with their media campaigns and 
with the dissemination of materials to promote responsible fatherhood.
  Senators Voinovich, Lincoln, Lugar, Johnson, Miller, Landrieu, 
Breaux, Graham, Lieberman, Kohl, and Carper also join me in the 
introduction of The Responsible Fatherhood Act of 2001. This 
legislation has been introduced in the House of Representatives by 
Congresswoman Julia Carson, and has the endorsement of the 
Congressional Black Caucus.
  President Bush has included funding for responsible fatherhood in his 
budget blueprint and I encourage him to continue to make this 
initiative a priority. Collectively, I hope we are able to pass 
responsible fatherhood legislation prior to Father's Day this year.
  I know that government cannot be the lone answer to this problem. We 
cannot legislate parental responsibility. But government can encourage 
fathers to behave responsibly, inform the public about the consequences 
of father absence, and remove barriers to responsible fatherhood.
  I urge my colleagues to support this important initiative.
                                 ______
                                 
      By Mr. LUGAR (for himself and Mr. Harkin):
  S. 657. A bill to authorize funding for the National 4-H Program 
Centennial Initiative; to the Committee on Agriculture, Nutrition, and 
Forestry.
  Mr. LUGAR. Mr. President, I rise to introduce legislation authorizing 
funding for the National 4-H Program Centennial Initiative.
  In 2002 we will celebrate the centennial of the founding of the 4-H 
program. This important youth development program operates in each of 
the 50 states and more than 3,000 counties. The program is carried out 
through the cooperative efforts of: youth; volunteer leaders; land 
grant universities; federal, state and local governments; and the U.S. 
Department of Agriculture.
  Last year over 6.8 million youth ages 5 to 19 participated in the 4-H 
program. Over 600,000 volunteer leaders work directly or indirectly 
with youth through the 4-H program.
  The legislation I am introducing today recognizes the important role 
of 4-H in youth development. I am pleased that Senator Harkin has 
joined with me as a cosponsor.
  In celebration of its centennial, the National 4-H Council has 
proposed a public-private partnership to develop new strategies for 
youth development for the next century. The funding authorized in this 
bill will allow the National 4-H Council to convene meetings and hold 
discussions at the national, state, and local levels to form strategies 
for youth development. From input provided through these sessions, a 
final report will be prepared that summarizes the discussions, makes 
specific recommendations of strategies for youth development, and 
proposes a plan of action for carrying out those strategies.
  Because 4-H is an important program for youth in each of our states, 
I am hopeful that there will be strong support for this initiative from 
my colleagues. I urge my colleagues to cosponsor this legislation.
  I ask unanimous consent that the text of the bill to be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 657

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

     SECTION 1. NATIONAL 4-H PROGRAM CENTENNIAL INITIATIVE.

       (a) Findings.--Congress finds that--
       (1) the 4-H Program is 1 of the largest youth development 
     organizations operating in each of the 50 States and over 
     3,000 counties;
       (2) the 4-H Program is promoted by the Secretary of 
     Agriculture through the Cooperative State Research, 
     Education, and Extension Service and land-grant colleges and 
     universities;
       (3) the 4-H Program is supported by public and private 
     resources, including the National 4-H Council; and
       (4) in celebration of the centennial of the 4-H Program in 
     2002, the National 4-H Council has proposed a public-private 
     partnership to develop new strategies for youth development 
     for the next century in light of an increasingly global and 
     technology-oriented economy and ever-changing demands and 
     challenges facing youth in widely diverse communities.
       (c) Grant.--
       (1) In general.--Subject to the availability of 
     appropriations, the Secretary of Agriculture shall make a 
     grant to the National 4-H Council to be used to pay the 
     Federal share of the cost of--
       (A) conducting a program of discussions through meetings, 
     seminars, and listening sessions on the National, State, and 
     local levels regarding strategies for youth development; and
       (B) preparing a report that--
       (i) summarizes and analyzes the discussions;
       (ii) makes specific recommendations of strategies for youth 
     development; and
       (iii) proposes a plan of action for carrying out those 
     strategies.
       (2) Cost sharing.--
       (A) In general.--The Federal share of the cost of the 
     program under paragraph (1) shall be 50 percent.
       (B) Form of non-federal share.--The non-Federal share of 
     the cost of the program under paragraph (1) may be paid in 
     the form of cash or the provision of services, material, or 
     other in-kind contributions.
       (d) Report.--The National 4-H Council shall submit the 
     report prepared under subsection (c) to the President, the 
     Secretary of Agriculture, the Committee on Agriculture of the 
     House of Representatives, and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000 for 
     fiscal year 2002.

  Mr. HARKIN. Mr. President, I am pleased to join Senator Lugar, the 
chairman of the Committee on Agriculture, Nutrition and Forestry, to 
introduce this legislation to authorize a national effort to strengthen 
4-H's youth development program. With the 4-H program set to observe 
its centennial year in 2002, this legislation is a fitting tribute to 
the tremendous contributions 4-H has made over the years to youth 
development in both rural and urban communities.
  The 4-H program is uniquely positioned to continue and expand upon 
its record of service to our youth all across America and across our 
many diverse communities, from farms to inner cities. 4-H is federally 
authorized, carried out through state land-grant universities and 
supported with public and private resources, including from the 
National 4-H Council. However, the key to 4-H's success is the 
multitude of volunteers who make the 4-H program work at the local 
community level.
  This legislation will authorize a new initiative for developing and 
carrying out strategies for strengthening 4-H youth development in its 
second century. Working through public-private partnerships, the 
National 4-H Council will start at the grassroots level with a program 
of discussions around the country involving meetings, seminars and 
listening sessions to address the future of 4-H youth development. 
Based on the information and ideas gathered, a report will be prepared 
that summarizes and analyzes the discussions, makes specific 
recommendations of strategies for youth development and proposes a plan 
of action for carrying out those strategies.
  The objective, of course, is to build on the tradition and success of 
4-H to develop new approaches for youth development that are 
appropriate and effective in the 21st Century. Youth today face ever-
growing pressures, demands and challenges far different from those of 
the past. 4-H has a great deal to offer them, but to be fully 
successful 4-H must adapt to the realities of an increasingly complex 
and rapidly changing world. 4-H must also be responsive to the widening 
diversity of

[[Page 5104]]

the local communities where its contributions really make a difference.
  In short, 4-H can expand its fine record of service and accomplish 
even more in its second century by developing new strategies for youth 
development. That is exactly what this legislation is designed to help 
achieve. I urge my colleagues to support it.
                                 ______
                                 
      By Mr. LEAHY (for himself and Mr. Jeffords):
  S. 658. A bill to amend title 32, United States Code, to authorize 
units of the National Guard to conduct small arms competitions and 
athletic competitions, and for other purposes; to the Committee on 
Armed Services.
  Mr. LEAHY. Mr. President, I am pleased to rise today with Senator 
Jeffords to introduce legislation that will allow the National Guard to 
participate fully in international sports competitions. Currently, 
members of the National Guard are involved in a myriad of athletic and 
small arms competitions, but their authority for such activities is 
unclear. This legislation will make it easier for the Guard to support 
the competitions and allow them to use their funds and facilities for 
such events. This is basic but necessary legislation.
  The National Guard is already participating in these events. The 
Vermont National Guard hosted the 2001 Conseil International du Sport 
Militaire, CISM, World Military Ski Championships at the Stowe ski area 
this month. This military ski event united military personnel from more 
than 30 countries, promoting friendship and mutual understanding 
through sports. More than 350 international athletes competed in such 
events as the biathlon, giant slalom, cross country, and military 
patrol race. They tested their skill and mettle in the beautiful Green 
Mountains, where the recent nor'easter added to the already bountiful 
snow cover there.
  But it takes a lot more than a 3-foot base of powder to carry off 
these competitions. It takes clear authorities, regulations, and 
resources. This legislation will allows these important events to 
continue with full participation of the National Guard. I urge the 
Senate to join Senator Jeffords and me in sponsoring this legislation 
and moving it quickly through the legislative process.
  I ask unanimous consent that additional material be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 658

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

     SECTION 1. CONDUCT OF SMALL ARMS COMPETITIONS AND ATHLETIC 
                   COMPETITIONS BY THE NATIONAL GUARD.

       (a) Preparation and Participation Generally.--Section 504 
     of title 32, United States Code, is amended--
       (1) in subsection (a)--
       (A) by striking ``or'' at the end of paragraph (2);
       (B) by striking paragraph (3) and inserting:
       ``(3) prepare for and participate in small arms 
     competition; or''; and
       (C) by adding at the end the following new paragraph:
       ``(4) prepare for and participate in qualifying athletic 
     competitions.''; and
       (2) by adding at the end the following new subsections:
       ``(c)(1) Units of the National Guard may conduct a small 
     arms competition or qualifying athletic competition in 
     conjunction with training required under this chapter if such 
     activity (treating the activity as of it were a provision of 
     services) meets the requirements set forth in paragraphs (1), 
     (3), and (4) of section 508(a) of this title.
       ``(2) Facilities and equipment of the National Guard, 
     including military property and vehicles described in section 
     508(c) of this title, may be used in connection with 
     activities carried out under paragraph (1).
       ``(3) Except as otherwise provided in an applicable 
     provision of an appropriations Act, amounts appropriated for 
     the National Guard may be used to pay the costs of activities 
     carried out under this subsection and expenses incurred by 
     members of the National Guard in engaging in activities under 
     paragraph (3) or (4) of subsection (a), including 
     participation fees, costs of attendance, costs of travel, per 
     diem, costs of clothing, costs of equipment, and related 
     expenses.
       ``(d) In this section, the term `qualifying athletic 
     competition' means a competition in an athletic event that 
     necessarily involves demonstrations by the competitors of--
       ``(1) skills relevant to the performance of military 
     duties; or
       ``(2) physical fitness consistent with the standards that 
     are applicable to members of the National Guard in 
     evaluations of the physical readiness of members for military 
     duty in the members' armed force.''.
       (b) Clerical Amendments.--(1) The heading of such section 
     is amended to read as follows:

     ``Sec. 504. National Guard schools; small arms competitions; 
       athletic competitions''.

       (2) The item relating to such section in the table of 
     sections at the beginning of chapter 5 of title 32, United 
     States Code, is amended to read as follows:

``504. National Guard schools; small arms competitions; athletic 
              competitions.''.
                                  ____


                           Sectional Analysis

       Section XXX amends 32 U.S.C. Sec. 504 to allow the National 
     Guard to use appropriated funds to support certain costs of 
     members of the National Guard involved with small arms and 
     other athletic training and competitions to promote morale 
     and military readiness. Although the Department of Defense 
     (DOD), Air Force (USAF), and Army (DA) regulations allow use 
     of appropriated funds to support sports programs, there are 
     some things under general fiscal law principles for which 
     appropriated funds can not be used, unless specifically 
     authorized by law. The Active Components cover these costs 
     with non-appropriated funds. Unlike the Air Force and the 
     Army, the National Guard receives no non-appropriated funds 
     for Morale, Welfare, Recreation (MWR) sports activities and, 
     therefore, can not cover costs associated with sports 
     programs with such funds. Section XXX addresses this 
     inconsistency and provides authority for NGB to spend 
     appropriated funds on items the Active Components generally 
     cover with non-appropriated funds.
       Departmental, national, and international sports 
     competition programs are run by the Army and the Air Force. 
     AR 215-1 and AFI 34-107 outline the requirements for soldier/
     airmen athletes to apply to compete at this higher level as 
     individuals or as part of departmental teams. 10 U.S.C. 
     Sec. 717 provides specific statutory authority to use 
     appropriated funds to purchase personal furnishings for 
     soldier/airmen competitors at this level. This authority, 
     however, can not be used to support the NG sports program 
     because implementing regulations require control and approval 
     at the departmental level. DODD 1330.4, AR 215-1, chap. 8, 
     AFI 34-107. The NG competitive sports program, as with other 
     MACOM level and below sports programs within the Active 
     Components, maintains intramural level sports programs to 
     support athletes who will train to compete for positions on 
     the departmental teams authorized by 10 U.S.C. Sec. 717. 
     Section XXX authorizes the NG to use appropriated funds to 
     support a MACOM level sports program on par with Active 
     Component MACOMs.
       Section XXX places two limits on NGB sports activities to 
     ensure any training, participation, or holding of sports 
     events enhances military readiness. First, the amendment 
     allows preparation for and participation in sports events 
     that ``require skills relevant to military duties or involve 
     aspects of physical fitness that are evaluated by the armed 
     forces in determining whether a member of the National Guard 
     is fit for military duty.'' Second, the amendment requires 
     the National Guard hold only sports events that ``meet the 
     requirements set forth in paragraphs (1), (3), and (4) of 
     section 508(a)'' of title 32, United States Code. This 
     limitation allows the National Guard Bureau to hold sporting 
     events only if: (1) such event ``does not adversely affect 
     the quality of training or otherwise interfere with the 
     ability of a member or unit of the National Guard to perform 
     the military functions of the member or unit; (2) ``National 
     Guard personnel will enhance their military skills as a 
     result of'' participation in the sports event; and (3) the 
     event ``will not result in a significant increase in the cost 
     of the training.'' 32 U.S.C. 508(a)(1), (3), (4). These 
     limitations safeguard one of the purposes of competitive 
     sporting events within DOD, namely to enhance military 
     readiness.

  Mr. JEFFORDS. Mr. President, It is with great pleasure that Senator 
Leahy and I today to introduce the National Guard Competitive Sports 
Equity Act.
  Passage of this bill will allow the National Guard to utilize 
appropriated funds in support of National Guard Sports Programs, 
National Guard Bureau sanctioned competitive events and associated 
training programs.
  The National Guard Competitive Events and Sports program adds value 
to the National Guard by enhancing the National Guard's competitive

[[Page 5105]]

training programs through participation in military, national and 
international sports competitions. The National Guard Competitive 
Sports Program trains, coordinates and participates in events such as 
the Pan Am Games, World Championships and Olympic Games, Competition 
International Sports Militaire, CISM, and manages the World Class 
Athlete Program.
  The National Guard Sports Office manages four core programs that 
include marksmanship, biathlon, parachute competition and marathon 
programs.
  This legislation is important because it will allow these programs to 
continue to flourish and provide the National Guard training resource 
equity on par with similar programs available to active duty soldiers.
  Under current law, active component services are able to utilize 
Morale, Welfare and Recreation, MWR funds for training, allowances, 
entry fees, personal clothing and specialized equipment in support of 
training and competitive events. The Guard does not receive or have 
access to similar funding sources. The Guard is forced to use training 
funds potentially earmarked for other events or not participate.
  This important legislation will allow this program to continue and 
provide the National Guard with the funding flexibility it requires to 
maintain this highly successful program.
                                 ______
                                 
      By Mr. CRAPO (for himself, Mr. Craig, Mr. Hagel, Mr. Cochran, 
        Mrs. Lincoln, Mr. Roberts, Mr. Helms, Mr. Dayton, and Mr. 
        Hutchinson):
  S. 659. A bill to amend title XVIII of the Social Security Act to 
adjust the labor costs relating to items and services furnished in a 
geographically reclassified hospital for which reimbursement under the 
medicare program is provided on a prospective basis; to the Committee 
on Finance.
  Mr. CRAPO. Mr. President, I rise today to introduce the Medicare 
Geographic Adjustment Fairness Act of 2001. I am pleased to have the 
support of several of my colleagues including Senators Craig, Hagel, 
Cochran, Lincoln, Roberts, Helms, Dayton, and Hutchinson. These members 
recognize the need for adequate reimbursements for rural health 
facilities. I am also grateful to Representative Bart Stupak who will 
be introducing this legislation in the House.
  The Medicare Geographic Adjustment Fairness Act will amend the Social 
Security Act to redirect additional Medicare reimbursements to rural 
hospitals. Currently, hospitals throughout the country are losing 
Medicare reimbursements, which results in severe implications for 
surrounding communities.
  As you know, in an attempt to keep Medicare from consuming its 
limited reserves, Congress enacted the Balanced Budget Act of 1997, 
BBA, which made sweeping changes in the manner that health care 
providers are reimbursed for services rendered to Medicare 
beneficiaries. These were the most significant modifications in the 
history of the program.
  All of the problems with the BBA, whether hospitals, nursing 
facilities, home health agencies, or skilled nursing facilities, are 
especially acute in rural states, where Medicare payments are a bigger 
percentage of hospital revenues and profit margins are generally much 
lower. These facilities were already managed at a highly efficient 
level and had ``cut the fat out of the system.'' Therefore, the cuts 
implemented in the BBA hit the rural communities in Idaho and 
throughout the United States in a very significant and serious way.
  In the 106th Congress, the Senate did a tremendous job of bringing 
forth legislation that adjusted Medicare payments to health care 
providers hurt by cuts ordered in the BBA. While this was a meaningful 
step, the Senate must continue to address the inequities in the system.
  My bill would expand wage-index reclassification by requiring the 
Secretary of Health and Human Services to deem a hospital that has been 
reclassified for purposes of its inpatient wage-index to also 
reclassify for purposes of other services which are provider-based and 
for which payments are adjusted using a wage-index. In other words, 
this legislation would require the Secretary to use a hospital's 
reclassification wage-index to adjust payments for hospital outpatient, 
skilled nursing facility, home health, and other services, providing 
those entities are provider-based. This change should have been made in 
BBA when Congress required that prospective payment systems be 
established for these and other services. As such, this change would 
address an issue that has been left unaddressed for several years.
  It makes sense that, if a hospital has been granted reclassification 
by the Medicare Geographic Classification Review Board for certain 
inpatient services, it also be granted wage-index reclassification for 
outpatient and other services. It is estimated that this provision 
would help approximately 400 hospitals, 90 percent which are rural. 
Furthermore, this provision would be budget neutral.
  I know my colleagues in the Senate share my commitment of promoting 
access to health care services in rural areas. Expanding wage-index 
geographic reclassification will allow hospitals to recoup lost funds 
and use those funds to address patients' needs in an appropriate, 
effective, and meaningful way. I encourage my colleagues to cosponsor 
the Medicare Geographic Adjustment Fairness Act.
                                 ______
                                 
      By Mr. THOMPSON (for himself, Mr. Breaux, Mr. Murkowski, Mr. 
        Jeffords, Mr. Gramm, Mr. Nickles, and Mrs. Lincoln):
  S. 661. A bill to amend the Internal Revenue Code of 1986 to repeal 
the 4.3-cent motor fuel excise taxes on railroads and inland waterway 
transportation which remain in the general fund of the Treasury; to the 
Committee on Finance.
  Mr. THOMPSON. Mr. President, today I am introducing legislation to 
repeal the 4.3-cent federal excise tax on railroad and inland waterway 
transportation fuels. This tax was signed into law by President Clinton 
in 1993 in order to help reduce the federal budget deficit. Now that 
the budget is in surplus, however, the tax is no longer needed. 
Railroad and barges should not continue to be the only forms of 
transportation that must pay this tax for purposes of deficit 
reduction, particularly during this time of high fuel prices. I am 
pleased to be joined in my efforts by the Senator from Louisiana, Mr. 
Breaux, the Senator from Alaska, Mr. Murkowski, the Senator from 
Vermont, Mr. Jeffords, the Senator from Oklahoma, Mr. Nickles, the 
Senator from Texas, Mr. Gramm, and the Senator from Arkansas, Mrs. 
Lincoln.
  The Omnibus Budget Reconciliation Act of 1993 imposed a Federal 
excise tax of 4.3 cents per gallon on all transportation fuels. The 
revenue raised from the tax was dedicated to deficit reduction, so tax 
revenue was deposited in the general fund instead of into any of the 
transportation trust funds. Prior to the 1993 act, the gasoline, 
aviation and diesel fuel excise taxes had been considered to be ``user 
fees.'' The revenue raised from these taxes was deposited into the 
transportation trust funds and was dedicated to improving highways, 
airports and waterways. There is no railroad trust fund. Therefore, the 
1993 act was a significant departure from previous treatment of 
transportation fuel taxes.
  In 1997, Congress redirected the 4.3-cent gasoline excise tax back 
into the highway trust fund and the 4.3-cent aviation fuel excise tax 
back into the airport and airway trust fund as a part of the surface 
transportation reauthorization bill, TEA-21. The 1997 law restored the 
gasoline and aviation taxes to their previous status as true user fees. 
The revenue collected from these taxes are once again used for the 
benefit of our highways and airports. However, the final version of 
TEA-21 did not touch the tax on inland waterway barge fuel or railroad 
fuel, so that tax revenue is still being deposited in the general fund.
  Last Congress, the Senator from Rhode Island, John Chafee, led the 
effort to repeal the 4.3-cent excise tax on railroad and barge fuel. 
The 106th Congress actually voted to repeal the tax

[[Page 5106]]

as part of the Taxpayer Refund and Relief Act of 1999. Unfortunately, 
the bill was vetoed by President Clinton.
  I am pleased to carry on the work of our former colleague by 
introducing this bill to repeal the 4.3-cent tax on railroad and barge 
fuel effective this year. I believe the time has come to repeal the 
4.3-cent tax, since it provides no benefit to the railroad and barge 
systems, and it only imposes a burden on these two industries that are 
important to my home state of Tennessee. I look forward to working with 
my colleagues to repeal this outdated tax.
                                 ______
                                 
      By Mr. DODD (for himself, Mr. Byrd, Mr. Santorum, Mr. Conrad, Mr. 
        Feingold, Mr. Kennedy, Mr. Kohl, Mr. Leahy, Mr. Dorgan, and Mr. 
        Voinovich):
  S. 662. A bill to amend title 38, United States Code, to authorize 
the Secretary of Veterans Affairs to furnish headstones or markers for 
marked graves of, or to otherwise commemorate, certain individuals; to 
the Committee on Veterans' Affairs.
  Mr. DODD. Mr. President, according to the Department of Veterans 
Affairs, today some 1,500 American World War II-era veterans, members 
of the so-called Greatest Generation, will pass away. Tomorrow about 
the same number will pass away. That daily number will gradually rise 
in the weeks, months, and years to come. Most of them were not career 
soldiers, but they answered the call to serve our country. Many bravely 
confronted our enemies in distant lands, in battles that we regard as 
history, but that they remember as their personal stories. Midway 
Island, Omaha Beach, and Iwo Jima are just a few of the places hallowed 
by their deeds. Through their strength and dedication these veterans 
have earned the respect and gratitude of all Americans to follow.
  As these veterans pass away, their families are rightfully seeking to 
preserve the record of their loved ones' service to our nation. One way 
in which they are seeking to record that service is to secure official 
burial recognition. But, because of a provision of current law, the 
Department of Veterans Affairs is prohibited from providing an official 
headstone or grave marker to as many as 20,000 of these families each 
year.
  The law I am referring to dates back to the Civil War era, when our 
nation wanted to ensure that our fallen soldiers were not buried in 
unmarked graves. Thus, the law instructs the VA to provide a grave 
marker for veterans who would otherwise lie in unmarked graves. Of 
course, in this day and age, a grave rarely goes unmarked. Today, 
virtually every deceased veteran is buried in a marked grave, or in 
some other way duly memorialized by surviving family members. Until 
1990, the surviving family members of a deceased veterans could receive 
from the VA, after a burial or cremation, a partial reimbursement for 
the cost of a private headstone, a VA headstone, or a VA marker. The 
choice was solely up to the vet's surviving family members. However, 
budgetary belt tightening measures enacted in 1990 eliminated the 
reimbursement component and precluded the VA from providing a headstone 
or a marker where the family had already done so privately. That 
measure has left the VA without any recourse when dealing with veterans 
families who have made private burial arrangements, other than denying 
their request for official headstones or grave markers.
  The inequity created by the current law is not difficult to 
understand. A family who is aware of this peculiarity in the law can 
simply request the official headstone, or in most cases grave marker, 
prior to making private arrangements for a headstone or marker. The VA 
will examine the request, find that the veterans grave has not been 
marked, and provide the marker, bestowing the appropriate recognition 
for service to the Nation. The family is then able to incorporate the 
VA marker into its private arrangements as the family deems fit.
  However, many, if not most, families do not know about the 
peculiarities of the law in this area. Most families are unaware of the 
current law and act as any family would in a time of loss and grief: 
they make private and appropriate arrangements to commemorate the 
deceased. For most, the idea of checking with the VA at this most 
difficult time is the farthest thing from their minds, but the effect 
of not doing so is absolute and final. When families purchase a private 
headstone, as nearly every family does these days, they unknowingly 
forfeit the opportunity to receive a government headstone or marker.
  The Guzzo family of West Hartford, CT is one of the countless 
families who have found out about this law the hard way. Thomas Guzzo 
first brought this matter to my attention several years ago. His late 
father, Agostino Guzzo, served in the Phillippines and was honorably 
discharged from the Army in 1947. Today, Agostino Guzzo is interred in 
a mausoleum at the Cedar Hill Cemetery in Hartford, CT, but the 
mausoleum bears no reference to his service because of the current law. 
Like so many families, the Guzzo family provided its own marker and 
subsequently found that it was not eligible for an official VA marker.
  When I was first contacted by the Guzzo family, I attempted to 
straighten out what I thought to be a bureaucratic mixup. I was 
surprised to realize that Thomas Guzzo's difficulties resulted not from 
some glitch in the system, but rather from the law itself. In the end, 
I wrote to the former Secretary of Veterans Affairs regarding Thomas 
Guzzo's very reasonable request. The Secretary responded that his hands 
were tied as a result of the obscure law. Furthermore, the Secretary's 
response indicated that, even if a grave marker could be provided for 
Agostino Guzzo, that marker could not be placed on a cemetery bench or 
tree dedicated in his name. The law prevented the Department from 
providing a marker for placement anywhere but the grave site and thus 
prevents families from recognizing their veteran's service as they 
wish.
  I rise today to introduce a bill that will appropriately address 
these issues and ensure our deceased veterans are treated equitably. 
The bill will allow the families of deceased veterans to receive an 
official headstone or grave marker in recognition of their veteran's 
contribution to our nation, regardless of whether their grave is 
privately marked.
  What I propose today is a modest means of solving a massive problem. 
The VA has described this issue as one of its greatest public affairs 
challenges, but the cost of fixing it is relatively small. Last 
Congress, the idea was scored by the Congressional Budget Office at 
less than $3 million dollars per year, over the first 5 years. This 
bill will put at ease countless families who are disillusioned by the 
current system. Moreover, it gives those families the appropriate 
flexibility, with respect to common cemetery restrictions, to 
commemorate deceased veterans by dedicating a tree or bench or other 
suitable site in the veteran's honor.
  America is different today than it was when we changed the burial 
benefits in 1990. Our fiscal house is in order; disciplined spending 
has produced budget surpluses for the first time in many years. We know 
that the VA is forced to reject as many as 20,000 headstone and grave 
marker requests each year under the current law. These are meritorious 
requests by deserving applicants whose families unknowingly forfeit 
their right to this modest memorial in a time of stress and loss. The 
cost of fixing this inequity is minor. It is appropriate, I feel, to 
make sure that all our veterans receive the recognition they have 
earned.
  The policy is simple. We should provide these markers or headstones 
to the families when they request them, and we should allow these 
families to recognize their deceased veterans in a manner deemed 
fitting by each family.
  Time is of the essence. One thousand five hundred veterans pass away 
each day, and each day there are 1,500 new families who may be denied a 
modest recognition of the service their loved one gave to our Nation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.

[[Page 5107]]

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

                                 S. 662

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

     SECTION 1. AUTHORITY TO PROVIDE HEADSTONES OR MARKERS FOR 
                   MARKED GRAVES OR OTHERWISE COMMEMORATE CERTAIN 
                   INDIVIDUALS.

       (a) In General.--Section 2306 of title 38, United States 
     Code, is amended--
       (1) in subsections (a) and (e)(1), by striking ``the 
     unmarked graves of''; and
       (2) by adding at the end the following:
       ``(f) A headstone or marker furnished under subsection (a) 
     shall be furnished, upon request, for the marked grave or 
     unmarked grave of the individual or at another area 
     appropriate for the purpose of commemorating the 
     individual.''.
       (b) Applicability.--The amendment to subsection (a) of 
     section 2306 of title 38, United States Code, made by 
     subsection (a) of this section, and subsection (f) of such 
     section 2306, as added by subsection (a) of this section, 
     shall apply with respect to burials occurring on or after 
     November 1, 1990.
                                 ______
                                 
      By Mr. WELLSTONE (for himself and Mr. Dayton):
  S. 663. A bill to authorize the President to present a gold medal on 
behalf of Congress to Eugene McCarthy in recognition of his service to 
the Nation; to the Committee on Banking, Housing, and Urban Affairs.
  Mr. WELLSTONE. Mr. President, in recognition of his distinguished 
record of service to the United States, I am introducing a bill today 
to award a Congressional Gold Medal to Eugene McCarthy.
  The Congressional Gold Medal is considered to the most distinguished 
recognition that Congress bestows. I believe, and I hope my colleagues 
will agree, that the Congressional Gold Medal is a fitting tribute to 
the dedicated service Eugene McCarthy has given to our Nation.
  Eugene McCarthy graduated from St. Johns University in Minnesota in 
1935, and from the University of Minnesota in 1939. He taught economics 
and sociology at public and Catholic high schools and colleges in 
Minnesota and North Dakota, including at St. Thomas College in St. 
Paul, and at his own alma mater, St. Johns University. McCarthy served 
in the military intelligence division of the U.S. War Department in 
1944. In 1948, he was elected to Congress to represent the State of 
Minnesota. For Eugene McCarthy, this was merely a first step, revealing 
that his long-time interest in politics would be even more a calling 
than it would be a career. He has pursued his political vocation and 
mission for more than 40 years. This span covers Eugene McCarthy's 
service in the House of Representatives and in the Senate during the 
years 1948 to 1971, his anti-war presidential campaign of 1968, his 
Independent candidacy of 1976, and the many books, essays and speeches 
that always spoke out for reform of the political process and the 
limitation of executive power.
  Eugene McCarthy exemplified the highest standards of public service 
and dedication to Constitutional principles as a member of the House of 
Representatives for five terms, from 1948 to 1958, and as a Member of 
this body, the Senate, for two terms, from 1959 to 1971. Through his 
shaping of legislation on civil rights, tax policy, Social Security and 
Medicare, the minimum wage, unemployment compensation, government 
reform, foreign policy and Congressional oversight of the Central 
Intelligence Agency, McCarthy upheld the finest principles of politics 
and policy. As Chairman of the Senate Special Committee on Unemployment 
Problems in 1959-60, McCarthy held hearings which led to the 
Committee's outlining of many of the economic development and social 
welfare programs later enacted during the Kennedy and Johnson 
administration. On the Ways and Means and Finance Committees of the 
House and Senate, respectively, McCarthy pushed for additional benefits 
and minimum wage coverage for migrant workers. In the early 1960s, he 
led the fight to give Medicare coverage to the mentally ill. He was a 
leader throughout the 1960s in efforts to extend unemployment 
compensation. Beginning in 1954, and subsequently for more than 15 
years in both the House and the Senate, McCarthy called for 
Congressional oversight of the CIA.


  Eugene McCarthy's principled campaign for the Democratic Presidential 
nomination in 1968 and his courageous stand regarding U.S. withdrawal 
from the Vietnam War inspired countless young people to believe they 
could make a difference in public life. He always emphasized the role 
of Congress in foreign policy, and his actions helped hasten the end of 
the most controversial war in American history. Eugene McCarthy 
deplored cynicism and any tendency to look upon all politicians as 
corrupt. He said:

       Truth will prove the best antidote to cynicism which is an 
     especially dangerous attitude when it prevails among young 
     people . . . Not only does it destroy confidence and hope, 
     some of the most precious assets of youth, but it also eats 
     away the will to attack difficult political problems, as it 
     does problems in other fields.

  As a distinguished author, poet and lecturer, Eugene McCarthy has 
elevated the language of public dialogue in a way that epitomizes the 
deepest and most cherished values of American political life. ``What 
the country needs,'' McCarthy said in 1968, ``is a freeing of our moral 
energy, a freeing of our resolution, a freeing of our strength.'' He 
added that, ``in a free country the potential for leadership must exist 
in every man and ever woman.'' McCarthy has authored numerous books on 
American politics and institutions, including ``A Liberal Answer to the 
Conservative Challenge,'' 1964; ``America Revisited: 150 Years After 
Tocqueville,'' 1976; ``the Ultimate Tyranny: The Majority over the 
Majority,'' 1980; and ``Up Till Now: A Memoir,'' 1988.
  Eugene McCarthy has dedicated much of his life to our Nation. His 
leadership and service have extended far beyond his tenure in the 
United States Congress. It is an honor for me to ask that we award the 
Congressional Gold Medal to this deserving scholar and gentleman. This 
bill offers us here in the Senate finally to recognize Eugene 
McCarthy's extraordinary contributions to the United States and to say: 
Eugene McCarthy, we thank you.
                                 ______
                                 
      By Mr. GREGG (for himself and Mr. Kohl):
  S. 664. A bill to provide jurisdictional standards for the imposition 
of State and local tax obligations on interstate commerce, and for 
other puroses; to the Committee on Finance.
  Mr. GREGG. Mr. President, today I introduce with Senator Kohl the New 
Economy Tax Fairness Act, or NET FAIR. As we all know, the Internet and 
electronic commerce have reshaped our society over the last decade. 
Much of the success that our Nation's economy has enjoyed has been a 
result of innovative companies making use of Internet technology to 
conduct commerce online. E-commerce has created new jobs, increased 
productivity, lowered business costs, generated a higher level of 
convenience for consumers, and sparked overall growth in the U.S. 
economy.
  With this in mind, there remain those that would like to tax 
interstate commerce over the Internet even while this budding 
technology has yet to meet its full potential. The NET FAIR Act 
addresses the issue of taxing remote sellers that conduct interstate 
commerce electronically.
  In 1992, the Supreme Court ruled in Quill Corp. v. North Dakota that 
States cannot force out-of-State retail firms to collect sales taxes. 
The Court held that Congress alone has the authority to impose such 
requirements under the interstate commerce clause of the Constitution. 
NET FAIR builds upon the Quill decision by extending the same approach 
that currently governs catalogue sales to the Internet. This 
legislation would allow States to require a company to collect sales 
and use tax, or to pay business activity taxes, only if their goods or 
services are sold to individuals living in states where the company has 
a substantial physical presence, or ``nexus.''
  Today, there are over 7,600 taxing jurisdictions nationwide. NET FAIR 
provides clear rules of the road for all parties involved, establishing 
sound nexus standards for the 21st Century. This legislation allows the 
Internet to continue as an engine of economic growth

[[Page 5108]]

while respecting the sovereign right of States to determine their own 
tax policy for commerce conducted within their borders. A failure to 
address this issue will subject small and large businesses alike to 
thousands of different tax standards and rules, making it difficult to 
ensure compliance. In fact, it will be the small and medium sized 
businesses--using the Internet to remain competitive in the new 
economy--that will be hit the hardest, as they lack the resources to 
comply with the thousands of jurisdictional tax standards that exist 
across the country.
  At my urging, the bipartisan Advisory Commission on Electronic 
Commerce was established in 1998. The Commission was established to 
examine all aspects of the Internet taxation issue. In April 2000, the 
Commission issued its report to Congress. With majority support, the 
ACEC recommended that the Internet tax moratorium be extended, which I 
support, and that Congress clarify nexus rules for e-commerce and 
establish clear guidelines for when state and local governments could 
levy taxes on vendors of interstate commerce. Our legislation goes to 
the very heart of this issue, and establishes clear nexus rules for e-
commerce. Since the ACEC issued its report, it has become apparent that 
reform in this area is necessary; however, Congress should not allow a 
``tax first, reform later'' approach to prevail. Rather, Congress 
should address the nexus issue head on.
  NET FAIR provides legal certainty for companies and consumers that 
engage in interstate commerce via the Internet, telephone, or mail 
order. This bill adheres to our Founding Fathers' tenet of ``no 
taxation without representation'' by codifying fair taxation 
principles. We cannot stand idly by and allow this new economic avenue 
to be hampered with new taxes. This legislation does not preempt a 
State's right to tax commerce; however, it does protect businesses and 
consumers from unfair taxation on interstate commerce and from what 
could be a crippling effect on the growth of the new 21st Century 
economy.
  Senator Kohl and I firmly believe that the New Economy Tax Fairness 
Act accomplishes this task. It is vital that Congress address Internet 
taxation and clarify nexus standards so that interstate commerce, 
especially online, electronic commerce, can continue to thrive and 
positively impact our Nation's overall economic success. I would ask 
that our Senate colleagues join us in this effort.
  I ask that the text of this legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 664

       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 ``New Economy Tax Fairness Act 
     or NET FAIR Act''.

     SEC. 2. JURISDICTIONAL STANDARDS FOR THE IMPOSITION OF STATE 
                   AND LOCAL BUSINESS ACTIVITY, SALES, AND USE TAX 
                   OBLIGATIONS ON INTERSTATE COMMERCE.

       Title I of the Act entitled ``An Act relating to the power 
     of the States to impose net income taxes on income derived 
     from interstate commerce, and authorizing studies by 
     congressional committees of matters pertaining thereto'', 
     approved on September 14, 1959 (15 U.S.C. 381 et seq.), is 
     amended to read as follows:

                  ``TITLE I--JURISDICTIONAL STANDARDS

     ``SEC. 101. IMPOSITION OF STATE AND LOCAL BUSINESS ACTIVITY, 
                   SALES, AND USE TAX OBLIGATIONS ON INTERSTATE 
                   COMMERCE.

       ``(a) In General.--No State shall have power to impose, for 
     any taxable year ending after the date of enactment of this 
     title, a business activity tax or a duty to collect and remit 
     a sales or use tax on the income derived within such State by 
     any person from interstate commerce, unless such person has a 
     substantial physical presence in such State. A substantial 
     physical presence is not established if the only business 
     activities within such State by or on behalf of such person 
     during such taxable year are any or all of the following:
       ``(1) The solicitation of orders or contracts by such 
     person or such person's representative in such State for 
     sales of tangible or intangible personal property or 
     services, which orders or contracts are approved or rejected 
     outside the State, and, if approved, are fulfilled by 
     shipment or delivery of such property from a point outside 
     the State or the performance of such services outside the 
     State.
       ``(2) The solicitation of orders or contracts by such 
     person or such person's representative in such State in the 
     name of or for the benefit of a prospective customer of such 
     person, if orders or contracts by such customer to such 
     person to enable such customer to fill orders or contracts 
     resulting from such solicitation are orders or contracts 
     described in paragraph (1).
       ``(3) The presence or use of intangible personal property 
     in such State, including patents, copyrights, trademarks, 
     logos, securities, contracts, money, deposits, loans, 
     electronic or digital signals, and web pages, whether or not 
     subject to licenses, franchises, or other agreements.
       ``(4) The use of the Internet to create or maintain a World 
     Wide Web site accessible by persons in such State.
       ``(5) The use of an Internet service provider, on-line 
     service provider, internetwork communication service 
     provider, or other Internet access service provider, or World 
     Wide Web hosting services to maintain or take and process 
     orders via a web page or site on a computer that is 
     physically located in such State.
       ``(6) The use of any service provider for transmission of 
     communications, whether by cable, satellite, radio, 
     telecommunications, or other similar system.
       ``(7) The affiliation with a person located in the State, 
     unless--
       ``(A) the person located in the State is the person's agent 
     under the terms and conditions of subsection (d); and
       ``(B) the activity of the agent in the State constitutes 
     substantial physical presence under this subsection.
       ``(8) The use of an unaffiliated representative or 
     independent contractor in such State for the purpose of 
     performing warranty or repair services with respect to 
     tangible or intangible personal property sold by a person 
     located outside the State.
       ``(b) Domestic Corporations; Persons Domiciled in or 
     Residents of a State.--The provisions of subsection (a) shall 
     not apply to the imposition of a business activity tax or a 
     duty to collect and remit a sales or use tax by any State 
     with respect to--
       ``(1) any corporation which is incorporated under the laws 
     of such State; or
       ``(2) any individual who, under the laws of such State, is 
     domiciled in, or a resident of, such State.
       ``(c) Sales or Solicitation of Orders or Contracts for 
     Sales by Independent Contractors.--For purposes of subsection 
     (a), a person shall not be considered to have engaged in 
     business activities within a State during any taxable year 
     merely by reason of sales of tangible or intangible personal 
     property or services in such State, or the solicitation of 
     orders or contracts for such sales in such State, on behalf 
     of such person by one or more independent contractors, or by 
     reason of the maintenance of an office in such State by one 
     or more independent contractors whose activities on behalf of 
     such person in such State consist solely of making such 
     sales, or soliciting orders or contracts for such sales.
       ``(d) Attribution of Activities and Presence.--For purposes 
     of this section, the substantial physical presence of any 
     person shall not be attributed to any other person absent the 
     establishment of an agency relationship between such persons 
     that--
       ``(1) results from the consent by both persons that one 
     person act on behalf and subject to the control of the other; 
     and
       ``(2) relates to the activities of the person within the 
     State.
       ``(e) Definitions.--For purposes of this title--
       ``(1) Business activity tax.--The term `business activity 
     tax' means a tax imposed on, or measured by, net income, a 
     business license tax, a business and occupation tax, a 
     franchise tax, a single business tax or a capital stock tax, 
     or any similar tax or fee imposed by a State.
       ``(2) Independent contractor.--The term `independent 
     contractor' means a commission agent, broker, or other 
     independent contractor who is engaged in selling, or 
     soliciting orders or contracts for the sale of, tangible or 
     intangible personal property or services for more than one 
     principal and who holds himself or herself out as such in the 
     regular course of his or her business activities.
       ``(3) Internet.--The term `Internet' means collectively the 
     myriad of computer and telecommunications facilities, 
     including equipment and operating software, which comprise 
     the interconnected world-wide network of networks that employ 
     the Transmission Control Protocol/Internet Protocol, or any 
     predecessor or successor protocols to such Protocol.
       ``(4) Internet access.--The term `Internet access' means a 
     service that enables users to access content, information, 
     electronic mail, or other services offered over the Internet, 
     and may also include access to proprietary content, 
     information, and other services as a part of a package of 
     services offered to users.

[[Page 5109]]

       ``(5) Representative.--The term `representative' does not 
     include an independent contractor.
       ``(6) Sales tax.--The term `sales tax' means a tax that 
     is--
       ``(A) imposed on or incident to the sale of tangible or 
     intangible personal property or services as may be defined or 
     specified under the laws imposing such tax; and
       ``(B) measured by the amount of the sales price, cost, 
     charge, or other value of or for such property or services.
       ``(7) Solicitation of orders or contracts.--The term 
     `solicitation of orders or contracts' includes activities 
     normally ancillary to such solicitation.
       ``(8) State.--The term `State' means any of the several 
     States, the District of Columbia, or any territory or 
     possession of the United States, or any political subdivision 
     thereof.
       ``(9) Use tax.--The term `use tax' means a tax that is--
       ``(A) imposed on the purchase, storage, consumption, 
     distribution, or other use of tangible or intangible personal 
     property or services as may be defined or specified under the 
     laws imposing such tax; and
       ``(B) measured by the purchase price of such property or 
     services.
       ``(10) World wide web.--The term `World Wide Web' means a 
     computer server-based file archive accessible, over the 
     Internet, using a hypertext transfer protocol, file transfer 
     protocol, or other similar protocols.
       ``(f) Application of Section.--This section shall not be 
     construed to limit, in any way, constitutional restrictions 
     otherwise existing on State taxing authority.

     ``SEC. 102. ASSESSMENT OF BUSINESS ACTIVITY TAXES.

       ``(a) Limitations.--No State shall have power to assess 
     after the date of enactment of this title any business 
     activity tax which was imposed by such State or political 
     subdivision for any taxable year ending on or before such 
     date, on the income derived for activities within such State 
     that affect interstate commerce, if the imposition of such 
     tax for a taxable year ending after such date is prohibited 
     by section 101.
       ``(b) Collections.--The provisions of subsection (a) shall 
     not be construed--
       ``(1) to invalidate the collection on or before the date of 
     enactment of this title of any business activity tax imposed 
     for a taxable year ending on or before such date; or
       ``(2) to prohibit the collection after such date of any 
     business activity tax which was assessed on or before such 
     date for a taxable year ending on or before such date.

     ``SEC. 103. TERMINATION OF SUBSTANTIAL PHYSICAL PRESENCE.

       ``If a State has imposed a business activity tax or a duty 
     to collect and remit a sales or use tax on a person as 
     described in section 101, and the person so obligated no 
     longer has a substantial physical presence in that State, the 
     obligation to pay a business activity tax or to collect and 
     remit a sales or use tax on behalf of that State applies only 
     for the period in which the person has a substantial physical 
     presence.

     ``SEC. 104. SEPARABILITY.

       ``If any provision of this title or the application of such 
     provision to any person or circumstance is held invalid, the 
     remainder of this title or the application of such provision 
     to persons or circumstances other than those to which it is 
     held invalid, shall not be affected thereby.''.

  Mr. KOHL. Mr. President, today I introduce with my good friend from 
New Hampshire NET FAIR, the New Economy Fairness Act. This bill is 
identical to a bill we introduced last Congress. It would clarify the 
tax situation of companies that sell and ship products out of the state 
in which they are located.
  NET FAIR codifies current legal decisions defining when a business 
can be subject to state and local business taxes and be required to 
collect State and local sales taxes. Currently, a business falls into a 
state or local taxing jurisdiction when it has a ``substantial physical 
presence'' or ``nexus'' there.
  And that makes sense. If a business is located in a State--uses the 
roads there, impacts the environment there, employs local workers there 
it should pay taxes and business fees there, and it should collect 
sales taxes on products sold there.
  But if a business is located out of State, and simply ships products 
to consumers there, it is not part of the local economy. It does not 
use local services or infrastructure. And it should not be subject to 
the taxes and tax collection burdens that support a community not its 
own.
  That seems simple. But as with anything that happens in tax law, it 
is not. Cases have been brought in courts across the country trying to 
clarify exactly what is a ``substantial physical presence.'' Is it 
maintaining a Web site? Sending employees to training conferences? 
Taking orders over the Internet? Our bill codifies the decisions 
already established by the courts and restates the principle on which 
they are all based: State and local taxing authorities do not have 
jurisdiction over businesses that are not physically located in their 
borders.
  Because this area of the law is as arcane as it is important, it is 
important to describe what our bill does not do.
  It does not exempt e-businesses or any other mail order businesses 
from taxation. The businesses our bill cover pay plenty of taxes--
Federal taxes and State and local taxes and fees in every state in 
which they maintain a physical presence.
  Our bill does not offer special breaks for e-businesses. Though the 
struggling e-economy will certainly benefit from having its tax 
situation clarified, nothing we state in this bill goes beyond current 
established case law.
  Our bill does not take away any revenue States and localities are 
currently collecting. Only Congress has the right to regulate the flow 
of commerce between the States. State and local tax collectors have 
never been able to reach into other States and collect revenues from 
businesses outside their borders.
  Our bill does not threaten ``main street businesses.'' In fact, it is 
just the opposite. The small stores of Main Street are threatened by 
malls and mega-stores--not by the Internet or catalogue companies. In 
fact, many Main Street speciality stores are staying alive by offering 
their products over the Internet.
  In Wisconsin, for example, we have many cheese makers who have run 
small family businesses for years. A quick search on the World Wide Web 
yields 20 Wisconsin cheese makers selling over the Internet. They are 
from Wisconsin towns like Plain, Durand, Fennimore, Tribe Lake, Thorp, 
and Prairie Ridge. Could these small towns support speciality cheese 
makers with walk-in traffic only? Would these small businesses continue 
to sell over the Internet if they had to figure and remit sales taxes 
and business fees to the over 7000 taxing jurisdictions into which they 
might ship? Of course not.
  What our bill does do is protect businesses, big and small, and 
consumers from facing a plethora of new taxes and tax compliance 
burdens. What it does do is keep the life-line of Internet sales 
available for countless small businesses and entrepreneurs. What it 
does do is clarify the tax law and eliminate the need for State-by-
State litigation--that governs the developing world of e-commerce. What 
it does do is provide predictability to the mail order business sector 
an industry that employs 300,000 in the State of Wisconsin.
  I urge my colleagues to support NETFAIR and protect thousands of 
businesses and millions of consumers from new and onerous tax burdens.

                          ____________________