[Congressional Record (Bound Edition), Volume 148 (2002), Part 9]
[Senate]
[Pages 12688-12695]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DOMENICI:
  S. 2719. A bill to authorize the Secretary of the Army to carry out 
critical restoration projects along the Middle Rio Grande; to the 
Committee on Environment and Public Works.
  Mr. DOMENICI. Madam President, great endeavors begin with a vision. 
Last fall, I joined the Middle Rio Grande Conservancy District and the 
Army Corps of Engineers in unveiling a vision that would rehabilitate 
and restore the Rio Grande Bosque in Albuquerque, NM.
  Today, I rise to introduce a bill that will make that vision a 
reality. Since last fall, the Army Corps of Engineers has undertaken 
the task of conducting a feasibility study so that we might gain a 
better understanding of how best to rehabilitate and restore this 
beautiful Albuquerque green belt.
  I remain grateful to each of the parties who have been involved with 
this idea since its inception. Each one contributes a very critical 
component. The Middle Rio Grande Conservancy District owns this vital 
part of the Bosque which runs from the National Hispanic Cultural 
Center north to the Paseo Del Norte bridge. The MRGCD has proven to be 
a valuable local partner in identifying areas for non-native species 
and other environmental restoration work. Additionally, MRGCD continues 
to work on the development and implementation of an educational 
campaign for local public schools on the importance of the Bosque. 
Finally, MRGCD has continually worked with all parties to provide 
options on how the Bosque can be preserved, protected and enjoyed by 
everyone.
  Last year I committed to requesting the Army Corps of Engineers to 
develop a preliminary restoration plan for the Bosque along the 
Albuquerque corridor. I have done that and the plan is well underway. 
This bill that I introduce today is the next step in following through 
on this project.
  Specifically, this bill authorizes $75 million dollars to complete 
projects, activities, substantial ecosystem restoration, preservation, 
protection and

[[Page 12689]]

recreation along the Middle Rio Grande.
  Having grown up in Albuquerque, the Bosque is something I treasure. I 
have been very involved in Bosque restoration since 1991 and I commend 
the Bosque Coalition for the work they have done, and will continue to 
do, all along the river.
  This new vision, specific to the Albuquerque Corridor, builds on that 
idea and is a logical complement to these previous efforts as well as 
towards Bosque revitalization, restoration and recovery along the 
entire Rio Grande river.
  This area was designated as a State park many years ago. As many of 
you know, this area has been overrun by non-native vegetation, peppered 
with graffiti, cluttered with trash and as we saw this past year, has 
become more susceptible to fire.
  I want to ensure that the Albuquerque corridor, which is a unique and 
irreplaceable part of the desert Southwest's ecosystem, is preserved 
for generations to come. A healthy ecosystem is key to such things as 
the protection of threatened species and overall river flow.
  We know that the river in this area is vital habitat for many 
species, including the endangered Rio Grande Silvery minnow. Efforts 
reducing non-native species, while protecting all from the possibility 
of devastating wildfire, will also improve the flow of the river and 
habitat for its many species.
  At the same time, the Bosque is a natural green belt through 
Albuquerque. This area should be made beautiful and more accessible to 
the public for enjoyment.
  I am grateful that all parties have come together and that I can be a 
part of making this vision a reality. 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. 2719

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

     SECTION 1. FINDINGS.

       Congress finds that--
       (1) the Middle Rio Grande bosque is--
       (A) a unique riparian forest located in Albuquerque, New 
     Mexico;
       (B) the largest continuous cottonwood forest in the 
     Southwest;
       (C) 1 of the oldest continuously inhabited areas in the 
     United States;
       (D) home to portions of 6 pueblos; and
       (E) a critical flyway and wintering ground for migratory 
     birds;
       (2) the portion of the Middle Rio Grande adjacent to the 
     Middle Rio Grande bosque provides water to many people in the 
     State of New Mexico;
       (3) the Middle Rio Grande bosque should be maintained in a 
     manner that protects endangered species and the flow of the 
     Middle Rio Grande while making the Middle Rio Grande bosque 
     more accessible to the public;
       (4) environmental restoration is an important part of the 
     mission of the Corps of Engineers; and
       (5) the Corps of Engineers should reestablish, where 
     feasible, the hydrologic connection between the Middle Rio 
     Grande and the Middle Rio Grande bosque to ensure the 
     permanent healthy growth of vegetation native to the Middle 
     Rio Grande bosque.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Critical restoration project.--The term ``critical 
     restoration project'' means a project carried out under this 
     Act that will produce, consistent with Federal programs, 
     projects, and activities, immediate and substantial ecosystem 
     restoration, preservation, recreation, and protection 
     benefits.
       (2) Middle rio grande.--The term ``Middle Rio Grande'' 
     means the portion of the Rio Grande from Cochiti Dam to the 
     headwaters of Elephant Butte Dam, in the State of New Mexico.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of the Army.

     SEC. 3. MIDDLE RIO GRANDE RESTORATION.

       (a) Critical Restoration Projects.--The Secretary shall 
     carry out critical restoration projects along the Middle Rio 
     Grande.
       (b) Project Selection.--
       (1) In general.--The Secretary may select critical 
     restoration projects in the Middle Rio Grande based on 
     feasibility studies.
       (2) Use of existing studies and plans.--In carrying out 
     subsection (a), the Secretary shall use, to the maximum 
     extent practicable, studies and plans in existence on the 
     date of enactment of this Act to identify the needs and 
     priorities for critical restoration projects.
       (c) Local Participation.--In carrying out this Act, the 
     Secretary shall consult with, and consider the priorities of, 
     public and private entities that are active in ecosystem 
     restoration in the Rio Grande watershed, including entities 
     that carry out activities under--
       (1) the Middle Rio Grande Endangered Species Act 
     Collaborative Program; and
       (2) the Bosque Improvement Group of the Middle Rio Grande 
     Bosque Initiative.
       (d) Cost Sharing.--
       (1) Cost-sharing agreement.--Before carrying out any 
     critical restoration project under this Act, the Secretary 
     shall enter into an agreement with the non-Federal interests 
     that shall require the non-Federal interests--
       (A) to pay 25 percent of the total costs of the critical 
     restoration project;
       (B) to provide land, easements, rights-of-way, relocations, 
     and dredged material disposal areas necessary to carry out 
     the critical restoration project;
       (C) to pay 100 percent of the operation, maintenance, 
     repair, replacement, and rehabilitation costs associated with 
     the critical restoration project that are incurred after the 
     date of enactment of this Act; and
       (D) to hold the United States harmless from any claim or 
     damage that may arise from carrying out the critical 
     restoration project (other than any claim or damage that may 
     arise from the negligence of the Federal Government or a 
     contractor of the Federal Government).
       (2) Recreational features.--
       (A) In general.--Any recreational features included as part 
     of a critical restoration project shall comprise not more 
     that 30 percent of the total project cost.
       (B) Non-federal funding.--The full cost of any recreational 
     features included as part of a critical restoration project 
     in excess of the amount described in subparagraph (A) shall 
     be paid by the non-Federal interests.
       (3) Credit.--The non-Federal interests shall receive credit 
     toward the non-Federal share for any design or construction 
     activities carried out by the non-Federal interests before 
     the date of execution of a cost-sharing agreement for a 
     critical restoration project if the Secretary determines in 
     the feasibility study for the critical restoration project 
     that the activities are part of the critical restoration 
     project.

     SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     Act--
       (1) $10,000,000 for fiscal year 2003; and
       (2) such sums as are necessary for each of fiscal years 
     2004 through 2012.
                                 ______
                                 
      By Mr. SARBANES (for himself, Mr. Reed, Mr. Schumer, Mr. Carper, 
        Ms. Stabenow, Mr. Corzine, and Mr. Akaka):
  S. 2721. A bill to improve the voucher rental assistance program 
under the United States Housing Act of 1937, and for other purposes; to 
the Committee on Banking, Housing, and Urban Affairs.
  Mr. SARBANES. Madam President, I come to the floor today to introduce 
the Housing Voucher Improvement Act of 2002. I am pleased that this 
legislation is being co-sponsored by a number of my colleagues on the 
Committee on Banking, Housing, and Urban Affairs: Senators Reed, 
Schumer, Carper, Stabenow, Corzine, and Akaka. This legislation will 
make important changes to the housing voucher program, a program that 
serves over 1.5 million low-income American families. These 1.5 million 
families are part of a growing number of people in this country who are 
unable to afford rising housing costs. As we learned in hearings before 
the Committee earlier this year, for too many people, the paycheck they 
bring home is too small to cover housing and other expenses. Low-income 
families are forced to live in crowded, unsafe conditions or forgo 
other necessities to make ends meet.
  In order to ensure that families have decent, safe and affordable 
housing, the government provides assistance in a variety of ways 
including public housing, section 8 vouchers, FHA mortgage insurance, 
and homeless assistance programs. While we have provided funding for 
these programs over the years, more must be done. It is estimated that 
over 14 million working families in this country pay more than they can 
afford for housing. In addition, 1.7 million families live in 
substandard housing--housing that is unsafe or overcrowded. 
Homelessness continues to be a major problem, with approximately 2 
million people experiencing homelessness at some point this year. These 
statistics show that millions of Americans are unable to afford the 
most basic of needs, housing.
  The solution to the affordable housing crisis is not found in any one 
program or in any one policy. We must

[[Page 12690]]

work on a variety of fronts to combat this crisis. We must preserve the 
affordable housing that already exists; we must build new affordable 
housing; and, we must ensure that the housing programs we have in place 
work effectively to house families in need. The Housing Voucher 
Improvement Act is not intended to address all of these needs, but it 
is an important step forward in making sure that the voucher program 
works to provide the greatest range of housing opportunities to the 
lowest income Americans.
  The bill I am introducing today is intended to work towards three 
objectives: ensuring that the voucher program works effectively and 
that all families receiving vouchers are able to find adequate housing; 
providing families with vouchers the widest range of possibilities as 
to where to live; and assisting families receiving housing assistance 
in attaining self-sufficiency.
  The voucher program has provided millions of Americans with the 
opportunity to live in safe and decent homes. However, as housing 
markets tighten, families are finding it more difficult to use housing 
vouchers. This difficulty may result from a lack of rental housing, 
available housing being too expensive, or too few landlords who accept 
tenants with housing vouchers. The Housing Voucher Improvement Act will 
give local public housing authorities a number of tools to assist 
voucher holders in finding housing and to make the voucher program 
attractive to private market landlords.
  To help people find decent and safe housing, this bill will give 
public housing agencies the flexibility to use a limited amount of 
their funds to provide search assistance to voucher holders. For many 
people who receive vouchers, additional assistance, such as housing 
counseling, transportation services, or security deposit funds may make 
the difference in finding a place to live. This bill will also increase 
housing opportunities for voucher holders by allowing public housing 
agencies to increase the amount that the voucher is worth where a 
significant number of families given vouchers are unable to find 
adequate housing. Provisions are also included in the bill to make it 
easier to use vouchers in housing developed with HOME funds or Low 
Income Housing Tax Credits. Ensuring that vouchers can be used in these 
developments will greatly expand housing opportunities for extremely 
low-income families.
  In order to operate a successful program, enough apartments must be 
available for people with vouchers. Therefore, vouchers must be an 
attractive option for landlords. Towards that end, the Housing Voucher 
Improvement Act allows public housing agencies to use their funds to 
reach out to local property owners to increase landlord participation 
in the vouchers program. It also scales penalties for inspection 
violations to the magnitude of the violation and helps guarantee timely 
payments to apartment owners by creating an incentive for housing 
authorities to use automatic payment systems for interested owners. 
This bill will also allow public housing authorities to streamline 
inspections while still ensuring that housing is decent, safe and 
sanitary. All of these provisions will make vouchers easier to use for 
private-market apartment owners.
  This bill also creates a new use for vouchers, allowing housing 
authorities to couple a limited number of vouchers with housing being 
constructed with HOME dollars, tax credits, or other funds. These 
``thrifty vouchers'' will cost less than regular vouchers, allowing 
more families to be served.
  While most of this bill will help to expand housing opportunities for 
people searching for housing, one critical component of housing policy 
is self-sufficiency. Housing assistance is key in moving people from 
welfare to work. A stable home is needed for job stability. While this 
seems intuitive, I do not rely on intuition alone in making this 
assertion. Recent studies, including one done by the Manpower 
Demonstration Research Corporation, show that people receiving housing 
assistance are more successful in moving from welfare to work. They had 
higher wages and retained employment for longer periods of time. This 
bill strengthens the role that housing plays in self-sufficiency by 
providing greater opportunities for voucher holders to become involved 
in educational and employment programs. We also authorize welfare to 
work vouchers, which will strengthen relations between housing and 
welfare agencies. Given the role that housing assistance can play in 
promoting self-sufficiency, greater coordination between housing and 
welfare agencies makes good common sense.
  I introduce this bill today with the hope that it will strengthen one 
of the most important federal housing programs. People given vouchers 
should be able to find adequate housing, and should have greater 
choices in where to live. And those families already receiving housing 
assistance should be able to access programs that will assist them in 
meeting their educational and employment goals. There is widespread 
consensus that the changes made in this bill will assist in these 
efforts. This bill is supported by a wide range of organizations 
including public housing agencies, industry groups, and advocacy 
organizations. The bill is strongly supported by the National 
Association of Housing and Redevelopment Officials, the Center on 
Budget and Policy Priorities, the Local Initiatives Support 
Corporation, the Enterprise Foundation, the National Low Income Housing 
Coalition, the National Apartment Association, the National Affordable 
Housing Management Association and others.
  I want to take a moment to thank my staff for their hard work on this 
bill, and I want to specifically thank Mary Grace Folwell, a fellow 
from the American Planning Association, who has been crucial in working 
on this legislation.
  I urge my colleagues to support this critical legislation and to 
recognize the important role that housing assistance plays in the lives 
of millions of Americans.
  Madam President, I ask unanimous that letters of support and a 
section-by-section analysis be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                                    July 11, 2002.
     Senator Paul S. Sarbanes,
     Chairman, Senate Banking Housing and Urban Affairs, 
         Washington, DC.
       Dear Senator Sarbanes: We, the organizations signed below, 
     are writing in support of the Housing Voucher Improvement Act 
     of 2002. The Section 8 housing voucher program provides many 
     low-income families with the means to find affordable 
     housing. However, in many cities, suburbs, and rural housing 
     markets around the country, vouchers are very difficult to 
     use. In some markets, there is just not a lot of rental 
     housing available, the available housing is too expensive, or 
     there are too few landlords who accept tenants with Section 8 
     vouchers. This legislation is narrowly tailored to make 
     vouchers more effective by giving PHAs various tools to 
     assist voucher holders in finding housing and by making 
     vouchers easier for private properly owners to use.
       To make vouchers easier to use for private-market apartment 
     owners, the Housing Voucher Improvement Act changes the unit 
     inspection requirement to make it more time-efficient; scales 
     penalties for inspection violations to the magnitude of the 
     violation; and, to guarantee timely payments by the PHA, 
     creates an incentive for PHAs to use automatic payment 
     systems for interested owners.
       To help PHAs deal with high-cost rental markets, the bill 
     increases local flexibility in setting maximum rents. The 
     legislation grants PHAs limited authority to increase their 
     Fair Market Rents to a maximum of 120% of the area's fair 
     market rent. Current law allows PHAs to use this maximum only 
     after the waiver is granted by HUD. The bill also adds 
     provisions to facilitate the use of vouchers in units in 
     lower-poverty neighborhoods that are developed with HOME 
     funds or Low Income Housing Tax Credits.
       To help voucher-holders find housing, the bill authorizes 
     PHAs to use existing funding to provide landlord outreach and 
     education and apartment-search assistance to voucher-holders 
     as well as assistance with security deposits, application 
     fees and credit checks.
       The bill gives local public housing authorities the option 
     of turning a limited portion of its available vouchers into 
     lower cost ``thrifty vouchers,'' which can be attached to a 
     new housing development or to a development this 
     rehabilitated or preserved. Because the vouchers cost less 
     than regular vouchers, a larger number of families can be 
     served by the same level of funding. The bill also makes it 
     easier to administer the

[[Page 12691]]

     project-based component on the vouchers program and to attach 
     vouchers to buildings in a range of neighborhoods.
       Appropriately in this year of welfare reauthorization, the 
     bill contains several provisions to promote employment among 
     tenants of HUD's major rental assistance programs, including 
     a 5-year authorization of Welfare-to-Work vouchers.
       We thank you for your leadership on this issue and for your 
     continued support of affordable housing programs.
       Consortium for Citizens with Disabilities Housing Task 
     Force, Center on Budget and Policy Priorities, Local 
     Initiatives Support Corporation (LISC), National Apartment 
     Association, National Association of Housing and 
     Redevelopment Officials (NAHRO), National Coalition for the 
     Homeless, National Housing Conference, National Housing Law 
     Project, National Low Income Housing Coalition, National 
     Multi Housing Council, The Enterprise Foundation, and 
     Volunteers of America.
                                  ____

                                       National Affordable Housing


                                       Management Association,

                                    Alexandria, VA, July 11, 2002.
     Hon. Paul S. Sarbanes,
     Chairman, Senate Committee on Banking, Housing, and Urban 
         Affairs, Washington, DC.
       Dear Chairman Sarbanes, The National Affordable Housing 
     Management Association (NAHMA) is pleased to support 
     provisions in the Housing Voucher Improvement Act which make 
     the Section 8 voucher program more user-friendly for both 
     tenants and landlords, improve administration, and address 
     many problems which inhibit voucher utilization.
       In recent years, the difficulty of satisfying the Section 8 
     regulatory burdens has created a strong disincentive for 
     private landlords to accept the vouchers. The Housing Voucher 
     Improvement Act makes several constructive reforms to the 
     voucher program which address this reality. First, it makes 
     the unit inspection requirement more time efficient. 
     Likewise, it makes penalties for inspection violations 
     commensurate with the severity of the violation. Furthermore, 
     it will improve the timeliness of payments to landlords by 
     creating an incentive for public housing authorities (PHAs) 
     to use automatic payment systems.
       This bill also addresses voucher utilization problems in 
     high-cost areas by offering PHAs flexibility to establish 
     maximum rents in high cost areas. By allowing PHAs to set the 
     voucher payment standard at 120 percent of fair market rent 
     (FMR), housing authorities will be able to automatically 
     increase their payment standard to address market changes.
       In short, NAHMA is pleased that you have offered 
     legislation to improve Section 8 voucher utilization and 
     increase housing opportunities for extremely low income 
     families.
           Sincerely,
                                                    George Caruso,
     Executive Director.
                                  ____

                      Council of Large Public Housing Authorities,


                              1250 Eye Street NW, Suite 901 A,

                                    Washington, DC, June 27, 2002.
     Hon. Paul Sarbanes,
     Chair, Committee on Banking, Housing and Urban Affairs, 
         Washington, DC.
       Dear Chairman Sarbanes: We write in support of your efforts 
     to make Section 8 vouchers easier to use through the 
     ``Housing Voucher Improvement Act of 2002.'' In light of the 
     great need for more affordable housing opportunities and the 
     difficulty many low-income families have encountered in 
     utilizing the program due largely to rising costs in many 
     markets, we agree that legislative changes are needed so that 
     the program can be more effective in providing housing 
     subsidy to low-income families. We very much appreciate the 
     attention this legislation will bring to this important 
     issue.
       As a November 2001, HUD study shows, tight market 
     conditions brought about by extremely low vacancy rates in 
     many communities is biggest impediment to voucher holders 
     succeeding in utilizing their subsidy. We support several 
     provisions in the bill that would help address this problem, 
     particularly the proposal to enable PHAs to increase payments 
     to 120% of the payment standard without prior HUD approval, 
     In addition, the sections which authorize a $50 million 
     Voucher Improvement Fund and provide some flexibility for 
     PHAs to use voucher resources to pay for housing counseling, 
     search assistance, and incentives to landlords will help 
     voucher holders become more competitive in the market place. 
     The proposed revisions to the current project-based Section 8 
     program will also assist PHAs that can better serve low-
     income families by increasing the supply of assisted units, 
     instead of relying on exclusively on private market.
       While we understand that this bill is designed to make only 
     modest changes to the Section 8 program, it highlights the 
     need for a more dramatic reform. Legislative changes over the 
     years have addressed particular issues to help Section 8 keep 
     pace with changing market conditions, however, some of these 
     piecemeal modifications have added significantly to the 
     program's complexity. Ultimately, we believe that local 
     authorities need even more flexibility to make the most 
     efficient use of Federal funding for housing in an ever-
     changing market place. Your bill is a step in that direction.
       Again, we very much appreciate your staunch support of 
     affordable housing programs and your efforts to increase 
     Federal investment in this area. We look forward to our 
     continued work with you and your dedicated staff to continue 
     to make the Section 8 program work better for needy families.
           Sincerely,
                                                   Sunia Zaterman,
     Executive Director.
                                  ____


         Summary of the Housing Voucher Improvement Act of 2002

       Section 1. Short Title.
       Section 2. Purposes--(1) to ensure that the Section 8 
     program works effectively and all families receiving vouchers 
     are able to find adequate housing; (2) to provide families 
     with vouchers the widest range of possibilities as to where 
     to live; and (3) to assist families receiving housing 
     assistance in attaining self sufficiency through encouraging 
     partnerships between housing authorities and welfare 
     agencies.
       Section 3. Authorize ``Thrifty Vouchers'' designed to make 
     additional housing affordable to extremely low-income 
     families.
       Thrifty Vouchers (TVs) are intended to encourage the 
     production or preservation of housing affordable to extremely 
     low-income families. PHAs would be authorized to issue TVs 
     out of their existing allocation of vouchers. In addition, 
     Congress could appropriate additional incremental assistance 
     for use as TVs.
       TVs would cost less than regular vouchers because there 
     would be no debt service included in the rent calculation for 
     a TV unit. Rents would be based on the operating costs of a 
     development and would be capped at 75% of the FMR (unlike 
     regular vouchers which are set between 90 and 110% of the 
     FMR). Data indicate that 75% of FMR should be adequate in 
     most places to cover the costs of operation of multifamily 
     housing. The bill provides an exception to the 75% cap for 
     PHAs that can demonstrate both that this cap could not 
     support a reasonable operating cost of rental housing and a 
     need for the production or preservation of affordable housing 
     in the PHA's service area. Since these vouchers cost less 
     than regular vouchers, PHAs could serve more families with 
     the same amount of funding.
       At the beginning of the development of a project, 
     developers receiving tax credits, HOME funds, or other 
     capital subsidies could link TVs to not more than 25% of the 
     units in a development. The 25% cap is intended to prevent 
     concentration of poverty. While tax credits and HOME are 
     producing new rental housing, such housing is not affordable 
     to extremely low income families without additional operating 
     subsidies. A recent study done by HUD found that extremely 
     low-income families living in HOME units who do not also 
     receive vouchers, pay 69% of their income for rent. In some 
     cases, residents use tenant-based vouchers to afford such 
     units. However, linking TVs to a project would ensure that 
     some of the units in a given project would be affordable to 
     those most in need of housing.
       This section makes TVs a subparagraph of the project-based 
     voucher statute. This is in response to a concern expressed 
     by HUD that they do not want to administer two separate 
     programs. Thus, TVs would be counted against a PHA's 20% cap 
     on project-based vouchers; however, new incremental 
     assistance appropriated by Congress for use as TVs would not 
     be counted against the 20% cap.
       Several changes were made to the project-based voucher 
     statute to make it easier for PHAs and private owners to 
     administer these vouchers. The most significant include the 
     expansion of the purpose of project-based vouchers to include 
     the revitalization of low-income communities and the 
     prevention of the displacement of extremely low-income 
     families, and changes to the waiting list provisions to allow 
     for separate project-based lists and to permit PHAs to allow 
     owners to maintain their own waiting lists, subject to 
     certain requirements.
       Section 4. Providing assistance to voucher holders in their 
     search for decent, safe and affordable housing.
       1. Allow PHAs with unutilized Section 8 funds to use those 
     funds on activities designed to assist families in finding 
     housing. PHAs that have low utilization rates (they do not 
     use all of their Section 8 funds to house families) will have 
     unused Section 8 funds that could be made available to assist 
     families in finding housing. This legislative change would 
     allow PHAs to use 2% of the funds they receive under the 
     voucher program to provide additional services to families 
     searching for housing if they have a low voucher success rate 
     and/or problems with concentration of voucher holders in 
     high-poverty neighborhoods. PHAs could use funds for 
     counseling, security deposits, application and credit check 
     fees, and search assistance such as transportation services.
       2. Allow PHAs that use all of their Section 8 funds to use 
     up to one week of reserves on activities designed to assist 
     families in finding housing. For PHAs that use all of their 
     funds and whose families still face difficulties in funding 
     adequate housing (a success

[[Page 12692]]

     rate less than 80%), the bill allows PHAs to use up to one 
     week of reserves to provide additional service to families 
     searching for houring.
       3. Create a Voucher Success Fund of $50 million for PHAs 
     that do not have unused funds, but still need additional 
     resources to assist families in finding housing. These PHAs 
     use almost all of their Section 8 funds, but families that 
     receive vouchers still face difficulties in finding adequate 
     housing. PHAs that use almost all of their Section 8 funds 
     but have a success rate lower than 80% would apply to HUD for 
     funds to help families find housing through counseling, 
     security deposits, application and credit check fees, and 
     search assistance such as transportation services.
       Section 5. Expanding housing opportunities for voucher 
     holders
       1. All PHAs to set their voucher payment standard at 120% 
     of FMR if they have had their payment standard set at 110% or 
     above for the previous 6 months AND continue to have problems 
     with utilization, success rates, or concentration of Section 
     8 units. Currently, PHAs may set their payment standard 
     (which determines the amount the voucher is worth) between 
     90% and 110% of the Fair Market Rent. HUD can approve higher 
     payment standards on a case by case basis. This change will 
     allow housing authorities to automatically increase their 
     payment standard to address market changes. Raising the 
     payment standard will help ensure that more vouchers could be 
     used in high cost Areas.
       2. Allow PHAs to pay 120% of FMR as the payment standard in 
     individual cases for people with disabilities. People with 
     disabilities may be limited in their housing opportunities, 
     and their choices may be restricted based on special needs. 
     This provision will allow housing authorities to pay up to 
     120% of the FMR as a reasonable accommodation for voucher 
     holders with disabilities without prior HUD approval, and 
     would authorize HUD approval for payment standards above 
     120%.
       3. Allow PHAs to set higher payment standard for voucher 
     used in Low Income Housing Tax Credit (LIHTC) developments. 
     The LIHTC program provides substantial funding for low-income 
     housing development. Though tax credit housing serves low-
     income people, these properties are not usually affordable to 
     extremely low-income households (with incomes below 30% of 
     the Area Median Income). One way to serve the poorest 
     families in tax credit developments is to house families with 
     vouchers. The recent increase in tax credits presents an 
     opportunity to expand housing choice for even the lowest 
     income families. In some areas, the tax credit units will 
     have higher rents than are normally covered by a voucher. In 
     2000, Congress changed the project-based statute to allow 
     project-based assistance to cover these higher rents so long 
     as the LIHTC building was not in a high poverty census tract. 
     This provision would make a similar change for vouchers.
       4. Allow PHAs to pay up to their full payment standard for 
     units in HOME developments. Currently, HOME units may only be 
     rented up to the Fair Market Rent to voucher holders. This 
     provision will allow a PHA to pay a rent at their regular 
     payment standard, where above the FMR, in order to provide an 
     incentive to HOME developments to seek out voucher holders as 
     renters, only where the units are located outside of high-
     poverty areas.
       5. Addressing Housing in the Consolidated Plan. Cities, 
     counties and states that receive Community Development Block 
     Grant (CDBG) funds (known as ``participating jurisdictions'') 
     are required to complete Consolidated Plans detailing the 
     housing and community development needs in their 
     jurisdictions. This provision of the bill makes the following 
     changes to the Consolidated Plan requirements:
       a. Include a requirement that the jurisdiction identify 
     barriers to voucher utilization and potential solutions. This 
     would ensure that entities other than the PHA (such as cities 
     and counties) are aware of issues with voucher recipients and 
     their ability to find housing. While no direct action would 
     be required from the city or participating jurisdiction, they 
     would be acknowledging the difficulties in using vouchers, 
     and identifying the causes. This would hopefully lead to the 
     jurisdiction deciding to take actions to alleviate the 
     barriers where possible.
       b. Include a requirement that the jurisdiction consider 
     employment opportunities in determining the location of 
     housing development. Housing opportunities close to 
     employment opportunities and/or transportation are important 
     to ensuring the success of low-income people in finding and 
     retaining employment. This provision would ensure that 
     jurisdictions are looking at location in determining where 
     housing resources should be allocated.
       c. Include a requirement that a participating jurisdiction 
     must consult with social service agencies in certain aspects 
     of planning for housing opportunities. When determining how 
     to address affordable housing problems, housing planners and 
     welfare administrators should be working together to help 
     plan for people moving from welfare to work, and to help link 
     people receiving housing assistance with welfare agencies and 
     resources (and vice versa).
       Section 6. Access to HOME and LIHTC developments
       Require that HUD ensure that PHAs have a list of LIHTC and 
     HOME developments to give to voucher holders. While LIHTC 
     developments could provide housing opportunities to very poor 
     families, and while LIHTC developments may not discriminate 
     against voucher holders, there is almost no communication or 
     coordination between PHAs and state HFAs, which operate the 
     LIHTC program. This provision will require HUD to compile 
     information on where tax credit and HOME developments are 
     located and ensure that this information is readily available 
     to PHAs. PHAs will be responsible to access such information 
     and provide it to families searching for housing assistance 
     with vouchers.
       Section 7. Reallocation of vouchers. Currently, HUD allows 
     PHAs to return unused vouchers to HUD. HUD published a notice 
     (which has not yet been fully implemented) which requires 
     that unused budget authority be recaptured from PHAs with low 
     utilization rates (under 95% utilization). While HUD's notice 
     describes how they will reallocate these vouchers, the 
     reallocation is not structured in a way that ensures that 
     communities do not lose needed vouchers. This provision will 
     require that vouchers to be reallocated be distributed to one 
     or more administrators in the region. HUD would, through a 
     competition, designate such an administrator with Section 8 
     experience, which could be a PHA, a state or local agency, a 
     non-profit, or a private entity. The administrator would 
     receive all vouchers available for reallocation in its region 
     and would be able to operate the vouchers on a regional 
     basis, allowing and encouraging families to live anywhere in 
     the metropolitan area while still serving people on the 
     original PHA's waiting list. The new administrator would have 
     to reach certain levels of performance--in both success rates 
     and utilization in order to retain the vouchers.
       Section 8. Promoting Self-Sufficiency
       1. Allow people who live in a project-based Section 8 
     housing to be eligible for Family Self Sufficiency 
     activities. The Family Self Sufficiency (FSS) program 
     provides services to assist families in public housing or 
     those who receive vouchers in attaining educational and 
     employment goals. This provision would also make residents of 
     project-based Section 8 housing eligible for the FSS program. 
     Under this provision, owners of project-based section 8 
     housing would be able to choose to operate their own FSS 
     program, and if they opted not to provide such services, the 
     PHA, at its discretion, could choose to serve such families 
     in its FSS program. While this change will have some cost, it 
     will be small, given that only a small percentage of families 
     currently participate in FSS programs.
       2. Allow Resident Opportunities and Self-Sufficiency (ROSS) 
     funds to be used to serve Section 8 families. ROSS grants are 
     given to PHAs and resident organizations to fund self-
     sufficiency activities. Currently, PHAs can only serve public 
     housing residents with these funds, though the predecessor to 
     ROSS allowed PHAs to serve Section 8 residents as well. This 
     provision would permit PHAs to serve Section 8 tenants with 
     ROSS funds, though it would leave the decision to each PHA to 
     determine where funds are best used.
       3. Incentives to Families to Increase Earnings. State and 
     local welfare agencies have an enormous amount of flexibility 
     in using their funds to help low-income families. In some 
     cases, welfare agencies and housing authorities have worked 
     together to use some of these funds to assist people 
     receiving federal housing assistance. This section would 
     ensure that payments made by welfare agencies (or other 
     agencies) to help families with rental payments that have 
     increased because of increased earnings, are deducted from 
     the family's income when the PHA determines that family's 
     share of rent. These provisions will create incentives for 
     families to increase earnings and retain employment by 
     allowing them to retain more of their income.
       4. Authorize Welfare to Work Vouchers. In FY 1999, Congress 
     authorized 50,000 Welfare to Work vouchers in an 
     appropriations bill. The program has never been authorized 
     and new vouchers have not been allocated beyond the initial 
     50,000. However, given that welfare will be reauthorized this 
     year, the timing seems perfect to authorize this program, 
     giving housing authorities additional incentives to 
     collaborate with welfare agencies. In authorizing this 
     program, we strengthen the requirements that PHAs work with 
     welfare agencies in administering these vouchers. Recent 
     studies show that housing assistance is critical in allowing 
     people to retain employment, and these vouchers will help in 
     this effort.
       Section 9. Inspection of Units under Section 8. Currently, 
     when a voucher holder wants to rent a unit, prior to the 
     voucher holder moving in, and payments being made to an 
     owner, the PHA must inspect that individual unit and any 
     deficiencies must be repaired. Owners and PHAs agree that 
     this is disincentive to owners participating in the program 
     because of the amount of time it takes to lease-up the unit 
     and receive payment. This provision will allow a PHA to begin 
     payments to an owner prior to inspection of that particular 
     unit so long as: (1) a

[[Page 12693]]

     building inspection has been conducted by the PHA in the last 
     6 months; (2) a unit inspection is completed within 30 days; 
     and (3) the PHA and the owner have an agreement that any 
     repairs on the unit must be made within 30 days of the unit 
     inspection. This section will also allow PHAs to annually 
     inspect units within 3 months of the anniversary date of that 
     unit entering the Section 8 program if they are conducting 
     inspections on a geographical basis.
       Current regulation allows PHAs to withhold their entire 
     portion of a rent payment for an inspection violation, 
     regardless of the magnitude of the violation. This provision 
     would scale penalties for inspection violations to the 
     severity of the violation--if a garbage disposal needs to be 
     fixed the PHA payment will only be withheld to the extent 
     that the garbage disposal would merit.
       These changes will help to bring owners into the program 
     while still ensuring that units meet HUD standards for being 
     safe and decent.
       Section 10. Automatic Payment Systems. Currently, some, but 
     not all, PHAs use electronic fund transfers to pay Section 8 
     dwelling unit owners. This section would allow PHAs to use 
     technical assistance funds and other means to establish 
     electronic fund transfer systems for rental payments. 
     Landlord participation is optional. Automatic payment systems 
     would assist PHAs in making timely rent payments and thereby 
     encourage owner participation in the Section 8 program.
       Section 11. Enhanced Workers. To protect tenants from 
     displacement, in 1999 Congress passed legislation creating 
     ``enhanced vouchers'' for all tenants facing conversion of a 
     project from project-based Section 8 to market-rate housing. 
     In several respects, the law as passed and interpreted by HUD 
     fails to clearly protect tenants as Congress intended. Some 
     PHAs require existing tenants to go through an application 
     process for enhanced vouchers, which occasionally results in 
     a tenant being denied voucher benefits. To protect tenants, 
     this section amends the existing statute to clarify that 
     tenants cannot be required to go through the application 
     process again to receive an enhanced voucher.
       ``Empty nesters,'' elderly tenants whose household members 
     have either moved or died, sometimes reside in units that are 
     too large for their current family size under normal program 
     and occupancy requirements. Likewise, growing families may 
     reside in units that are too small under normal program and 
     occupancy requirements. In both situations, these tenants 
     could be displaced due to family/unit size mismatches. This 
     section clarifies the current enhanced voucher statute to 
     allow tenants with family size/unit mismatches to remain in 
     the unit until an appropriately sized unit becomes available 
     in the property.
                                 ______
                                 
      By Mr. ROCKEFELLER:
  S. 2722. A bill to amend the Internal Revenue Code of 1986 to ensure 
the proper tax treatment of executives compensation, and or other 
purposes; to the Committee on Finance.
  Mr. ROCKEFELLER. Madam President, the corporate accounting scandals 
that have unfolded over the previous few months have caused 
incalculable damage to the American economy. Millions of people have 
been harmed, among them some of our most vulnerable citizens, including 
retirees on fixed incomes and families who have saved for years to 
educate their children or finally buy a home. Loss of confidence 
threatens our economy and diminishes hope for the millions who have 
lost their jobs in the last 18 months. And the cost of equity is 
rising, making it more difficult for the vast majority of honest and 
energetic entrepreneurs to turn their ideas into economic growth.
  This is not a bubble bursting; it is, in great measure, the result of 
a considerable diminution of regulation at the behest of powerful 
lobbies, over the objections of many people.
  Today, the Senate is debating the most effective way to restore 
balance between entrepreneurship and oversight, to ensure that 
corporate excesses do not again steal the savings of millions of 
people. The underlying Senate bill is based on accounting reforms and 
tougher enforcement. The Finance Committee is about to mark up its own 
bill dealing with diversification requirements, executive compensation, 
and notification and disclosure regarding 401(k) plans.
  I fully support Senator Sarbanes' bill and will support the Finance 
Committee proposal as well. And today I propose legislation that will 
complement my colleagues' efforts and help us move toward our goal of 
restoring confidence in American business and American businesspeople. 
Where legislation already under consideration focuses largely on 
oversight and punishment--two critical sides of the triangle--my bill 
attacks the incentives to cut corners or commit crimes in the arena of 
executive compensation.
  This legislation will protect workers and shareholders as Congress 
carefully sorts through the appropriate measures.
  Currently, Federal regulations permit a number of frankly sleazy 
accounting practices which allow corporations and their executives to 
take millions of dollars away from shareholders, creditors, and the 
Treasury, without any penalty at all. Some of the most obvious abuses 
aren't even crimes. My proposal will help to stop white collar crime 
before it is committed, by taking the common sense step of putting the 
lid on the cookie jar.
  This bill will do four things: 1. Right now, corporations may 
transfer funds to an executive's deferred compensation account, giving 
that executive certain access to the money but potentially also 
removing it from the reach of shareholders and creditors. But since it 
is termed ``deferred,'' the executive pays no taxes. Currently, Section 
132 of the Revenue Code prevents regulators from cracking down on this 
practice. My legislation gives Treasury the authority to examine the 
constructive receipt doctrine and close loopholes that allow 
inappropriate deferral of taxation. It also gives Treasury the 
authority to act on situations where executive assets are supposedly 
subject to the claims of an employer's creditors, but in reality, are 
protected from legitimate claims. Either the individual must pay income 
tax, or the funds must be corporate assets subject to claims. They 
can't have it both ways.
  2. Currently, corporations can give their senior executives massive 
loans, with no real expectation of repayment. These loans are 
effectively theft from the employees and shareholders, since they 
represent revenue given in compensation which will never be repaid, 
reinvested, or distributed as dividends. And they are theft from the 
Treasury as well; since they are accounted as loans, the recipient 
doesn't pay taxes on them. It's a tax-free performance bonus, often 
given--as we saw in the Adelphi and WorldCom cases--when the executive 
deserves more to be fired than to be paid. My legislation will make 
sure a loan is a loan: if a loan doesn't require security or have any 
enforceable repayment schedule, it's income and it will be taxed, just 
like the salaries of rank-and-file workers are taxed.
  3. Right now, company employees may be unable to sell their stock 
while executives are dumping theirs and creating--as analysts take note 
and supply overwhelms demand--the kind of stock-price death spiral that 
took the life savings of thousands of Enron employees.
  Back in the early 1980's, Congress responded to the trend of 
corporations providing their executives with ``gold parachutes'' with a 
20 percent excise tax on those payments. I believe that the excise tax 
on golden parachutes should also be applied to the sales of corporate 
stock by corporate executives during periods when regular employees of 
the company are not able to freely sell their stock in their company 
retirement plans. This would be a temporary, six-month provision, to 
deter corporate executives from taking advantage of the existing 
uncertainty as Congress considers other possible reforms to encourage 
more equitable treatment of rank-and-file employees and corporate 
executives. And it will be a bridge from the current structure to one 
in which employees have the same ability to sell their stock as 
insiders have.
  4. Additionally, my bill will prevent corporate executives from 
getting a free ride when their corporation moves offshore for tax 
avoidance purposes. Under current law, if an American corporation 
dissolves and is then reincorporated in a foreign country, shareholders 
of the corporation are required to pay capital gains on the 
``exchange'' of their stock in the ``old corporation'' for stock in the 
``new corporation,'' even though they never actually sell their stock. 
Meanwhile, corporate executives, who have engineered the

[[Page 12694]]

move offshore, are under no such obligation regarding stock options 
they receive as compensation. My bill would require executives to pay 
capital gains taxes on the ``exchange'' of their stock options when 
they move offshore to avoid taxation. I believe this provision will 
provide a much-needed disincentive to corporate executives seeking to 
avoid the reach of the IRS through corporate expatriation.
  I agree with all those who would increase oversight and penalties, 
but I say, let's also look at first causes--the executive compensation 
funds. That's where some of the greatest opportunities for 
inappropriate, unfair, and unethical practices are--practices that 
disadvantage average workers and investors and are undermining 
confidence in America's capital markets. And it's time for that to 
change.
  Finally, I am appalled at the problem of executives benefitting from 
what can only be considered excessive compensation arrangements in the 
waning days before bankruptcy of a failing corporation. I am looking 
for a way to prevent those arrangements in the final months before a 
corporation closes, and I hope to have a proposal ready for 
introduction soon.
                                 ______
                                 
      By Mr. LEAHY:
  S. 2723. A bill to provide transitional housing assistance for 
victims of domestic violence; to the Committee on Banking, Housing, and 
Urban Affairs.
  Mr. LEAHY. Madam President, I am pleased to introduce the 
Transitional Housing Assistance for Victims of Domestic Violence Act of 
2002 to provide grants for transitional housing and related services to 
people fleeing domestic violence situations.
  I witnessed the devastating effects of domestic violence early in my 
career as the Vermont State's Attorney for Chittenden County. Today, a 
growing number of homeless individuals are women and children fleeing 
domestic violence. More than half the cities surveyed by the U.S. 
Conference of Mayors in 2000 cited domestic violence as a primary cause 
of homelessness. Shelters offer short-term assistance, but are 
overcrowded and unable to provide the support needed. Transitional 
housing allows women to bridge the gap between leaving a domestic 
violence situation and becoming fully self-sufficient.
  A transitional housing grant program was last authorized for only one 
year as part of the reauthorization of the Violence Against Women Act 
in 2000. This program would have been administered through the 
Department of Health and Human Services and provided $25 million in 
FY2001. Unfortunately, funds were never appropriated for the program, 
and the authorization has now expired.
  The grant program established in the bill I am introducing today 
would be administered through the Department of Justice, in 
consultation with the Departments of Health and Human Services and 
Housing and Urban Development. This program would have the benefit of a 
wide range of expertise in the three departments, and has enormous 
potential to improve people's lives.
  This new grant program will make a big impact, in many areas of the 
country, availability of affordable housing is at an all-time low. 
There are many dedicated people working to provide victims of domestic 
violence with resources, such as Rose Pulliam of the Vermont Network 
Against Domestic Violence and Sexual Assault, but they can not work 
alone. We should all be concerned with providing victims of domestic 
violence a safe place to gain the skills and stability needed to make 
the transition to independence. This is an important component of 
reducing and preventing crimes that take place in domestic situations, 
ranging from assault and child abuse to homicide, and helping the 
victims of these crimes. I urge the Senate to take prompt action on 
this legislation.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Mr. Fitzgerald, Mr. Harkin, Mr. 
        Lugar, Ms. Cantwell, Mr. Wyden, Mr. Corzine, Mr. Leahy, Mrs. 
        Boxer, Mr. Durbin, and Mr. Nelson of Nebraska):
  S. 2724. A bill to provide regulatory oversight over energy trading 
markets and metals trading markets, and for other purposes; to the 
Committee on Agriculture, Nutrition, and Forestry.
  Mrs. FEINSTEIN. Madam President, I am very pleased to introduce this 
bill today along the Senator Harkin and Senator Lugar, chairman and 
ranking member of the Senate Agriculture Committee. Our bill is already 
co-sponsored by Senators Fitzgerald, Cantwell, Wyden, Corzine, Leahy, 
Durbin, and Boxer.
  The Senate Agriculture Committee held a hearing on this bill 
yesterday and I understand it is the intentions of the chairman and 
ranking member to try and have a bill that can be marked up before the 
recess.
  The bill closes the loophole that was created when Congress passed 
the Commodity Futures Modernization Act in 2000 which exempted on-line 
energy and metals trading from regulatory oversight.
  The bill is supported by: The New York Mercantile Exchange, The 
Pacific Exchange, Aquila Energy Corporation, Cambridge Energy Research 
Associates, Mid-America Energy Holding Company, Pacific Gas and 
Electric, Southern California Edison, Calpine, The Apache Corporation, 
The American Public Gas Association, The American Public Power 
Association, The Texas Independent Producers and Royalty Association, 
The California Municipal Utilities Association, The Consumers Union, 
The Consumer Federation of America, The Derivatives Study Center, The 
National Rural Electric Cooperative Association U.S. PIRG, The 
Transmission Access Policy Study Group, The Sierra Club, and all four 
FERC Commissioners.
  This bill could not be more timely in light of what we have learned 
about the energy sector in the past couple of months and the operations 
of these energy companies: 1. CMS Energy admitted that 80 percent of 
its trades were round trip or wash trades and were made simply to 
increase volume; 2. Reliant admitted to $6.4 billion in wash trades 
from 1999-2001 which the company characterized as energy swaps; 3. Duke 
confessed to $2 billion in wash trades and stated that $650 million of 
these trades were executed on the Inter-Continental Exchange, ICE, and 
electronic trading facility exempt from CFTC oversight because of the 
Commodity Futures Modernization Act.
  But electronic exchanges like ICE have no responsibility for trades 
or wash trades executed on its exchange and does not even have any 
responsibility for checking that a transaction has been executed. Thus, 
a company that wanted to manipulate prices or game the market would not 
have to even execute a single trade.
  In the past year, 12 of the largest energy companies in the U.S. have 
lost about $188 billion of capital, accounting for 71 percent of the 
market value. The credit ratings of several of those energy companies 
have been severely downgraded; some are at junk bond or near-junk bond 
status.
  In May, 2000, a severe energy crisis began in California. Electricity 
that had typically sold for about $30 a Megawatt hour all of a sudden 
started selling for 10 times that. This led to the bankruptcy of 
California's largest utility and the near-bankruptcy of California's 
second largest utility. It also resulted in overcharges of billions of 
dollars to California ratepayers and taxpayers.
  In November, California encountered a natural gas crisis. Natural gas 
is the main cost component of electricity. At one point gas was selling 
for $12 per decatherm in San Juan New Mexico and $59 in Southern 
California when the cost to transport it was less than one dollar.
  Just about the time Congress passed the Commodity Futures 
Modernization Act exempting electronic energy trading exchanges from 
oversight, the crisis began spreading to the other western states. For 
more than six months Oregon, Washington, and the other Western States 
experienced the same price spikes as California.
  The entire crisis lasted for more than a year while energy companies 
like Reliant, Enron, Duke, Williams, and AES

[[Page 12695]]

enjoyed record revenues and profits. Obviously we are all a bit wiser 
today about energy markets and about wash trades in particular.
  Wash trades or round trip trades involve two or more companies 
plotting together to execute offsetting trades. These trades would be 
illegal if they were done on NYMEX, the Chicago Merc, or the Pacific 
Exchange and those exchanges would have the responsibility to report 
it.
  However, there is no such reporting or enforcement requirement on 
electronic exchanges because as I said before, the CFMA created a big 
loophole. This legislation would ensure that wash trades are subject to 
full CFTC oversight no matter where they are done.
  And of course there is Enron which controlled a large share of the 
energy market while they engaged in activities that were downright 
illegal. Many of these activities could have been prevented or at least 
stopped if regulators simply had the proper authority and the will.
  Let me recap what happened with the Commodity Futures Modernization 
Act. In November, 1999, the SEC, the Federal Reserve, the CFTC and the 
Department of Treasury produced a study titled Over the Counter 
Derivative Markets and the Commodity Exchange Act, A Report of the 
President's Working Group on Financial Markets.
  It was signed by Federal Reserve Chairman Alan Greenspan, Secretary 
of Treasury Larry Summers, SEC Chairman Arthur Levitt and CFTC Chairman 
Bill Rainer.
  The report said that the case had not been made that energy or other 
tangible commodities should be exempted from CFTC oversight. The report 
found that because of the immaturity of the energy market, the lack of 
liquidity in the market and finite supplies, in energy markets, energy 
markets were more susceptible to manipulation than the deep and liquid 
financial markets.
  Recent history has certainly borne that to be correct; these 
commodities are more subject to manipulation!
  On June 21, 2000 shortly after the President's Working Group issued 
its report, the Banking Committee and Agriculture Committee held a 
hearing on the Report and the Commodity Futures Modernization Act.
  Let me read from that committee report:

       The Commission has reservations about the bill's exclusions 
     of Over the Counter (OTC) derivatives from the Commodities 
     Exchange Act. On this point the bill diverges from the 
     recommendations of the President's Working Group, which 
     limited the proposed exclusions to financial derivatives. The 
     Commission believes the distinction drawn by the Working 
     Group between financial (non-tangible) and non-financial 
     transactions was a sound one and respectfully urges the 
     Committees to give weight to that distinction.

  And the Senate Agriculture Committee marked up the Commodity Futures 
Modernization Act consistent with what was in the President's Working 
Group Report.
  That version of the bill however, was not reflected in the final 
provision that passed Congress as part of a much bigger bill at the end 
of the 106th Congress.
  I urge my colleagues in Congress to pass this legislation and fix 
this problem as soon as possible.

                          ____________________