[Congressional Record (Bound Edition), Volume 155 (2009), Part 2]
[Senate]
[Pages 2042-2053]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. GRASSLEY (for himself and Mr. Levin):
  S. 344. A bill to require hedge funds to register with the Securities 
and Exchange Commission, and for other purposes; to the Committee on 
Banking, Housing, and Urban Affairs.
  Mr. GRASSLEY. Mr. President, 3 years ago, I started conducting 
oversight of the Securities and Exchange Commission. That oversight 
began in response to a whistleblower who came to my office complaining 
that SEC supervisors were impeding an investigation into a major hedge 
fund.
  Soon afterward, I came to the floor of the Senate to introduce an 
important piece of legislation based on what I learned from that 
oversight. The bill was aimed at closing a loophole in securities law 
that allows hedge funds to operate under the cloak of secrecy. 
Unfortunately, that bill, S. 1402, was never taken up by the Banking 
Committee in the last Congress.
  In light of the current instability in our financial system, I think 
it is very critical for the Senate to deal with this issue and do it in 
the near future. Therefore, I am pleased Senator Levin, who is on the 
floor, and I worked together to produce an even better version of the 
bill than I introduced previously, and we are now doing that in the 
111th Congress.
  I thank Senator Levin because he is on a very important oversight 
committee as well and does a lot of oversight, as I do. I appreciate 
everything he does in maybe a lot of different areas than I do, but I 
appreciate working together with him on this issue.
  This new bill, the Hedge Fund Transparency Act, does everything the 
previous version did, but it does more and does it better.
  As in the previous version, it clarifies current law to remove any 
doubt that the Securities and Exchange Commission has the authority to 
require hedge funds to register--simply to register--so the Government 
knows who they are and what they are doing. It removes the loophole 
previously used by hedge funds to escape the definition of an 
``investment company'' under the Investment Company Act of 1940.
  Under this legislation, hedge funds that want to avoid the stringent 
requirements of the Investment Company Act will only be exempt if, one, 
they file basic disclosure forms; and two, cooperate with requests for 
information from the Securities and Exchange Commission.
  I thank Senator Levin for not only cosponsoring this legislation but 
also contributing a key addition to this new version of the bill. In 
addition to requiring basic disclosure, this version also makes it 
clear that the hedge funds have the same obligations under our money 
laundering statutes as other financial institutions. They must report 
suspicious transactions and establish anti-money laundering programs.
  One major cause of the current crisis is a lack of transparency. 
Markets need a free flow of reliable information to function properly. 
Transparency was the focus of our system of securities regulations 
adopted way back in the 1930s. Unfortunately, over time, the wizards on 
Wall Street figured out a million clever ways to avoid transparency. 
The result is the confusion and uncertainty fueling the crisis today 
that we see.
  This bill is an important step toward renewing commitment to 
transparency on Wall Street and establishing credibility in our 
financial sector among the American populace. Unfortunately, there was 
not much of an appetite for this sort of commonsense legislation when I 
first introduced it before the financial crisis erupted. Hopefully, 
attitudes have changed, given all that has happened since the collapse 
of Bear Stearns last March. It is all very obvious to us, and 
particularly connected with the credit crunch and with the recession.
  Hedge funds are pooled investment companies that manage billions of 
dollars for groups of wealthy investors, and do it in total secrecy. 
Hedge funds affect regular investors. They affect the market as a 
whole. My oversight of the SEC convinces me that the Commission needs 
much more information about the activities of hedge funds in order to 
protect the markets. Any group of organizations that can wield hundreds 
of billions of dollars in market power every day should be transparent 
and disclose basic information about their operations to the agency 
that Americans rely on as the watchdogs of our Nation's financial 
markets.
  As I explained when I first introduced this bill, the Securities and 
Exchange Commission already attempted to oversee the hedge fund 
industry by regulation. Congress needs to act now because of a decision 
of a Federal appeals court. In 2006, the DC Circuit Court of Appeals 
overturned an SEC administrative rule requiring the registration of 
hedge funds. That decision effectively ended all registration of hedge 
funds with the Securities and Exchange Commission, unless and until we 
in Congress take action.
  The Hedge Fund Transparency Act would respond to that court decision 
by, one, including hedge funds in the definition of investment company; 
and

[[Page 2043]]

two, bringing much needed transparency to this supersecretive industry. 
The Hedge Fund Transparency Act is a first step in ensuring that the 
Securities and Exchange Commission has clear authority to do what it 
has already tried to do. Congress must act to ensure that our laws are 
kept up to date as new types of investments appear.
  Unfortunately, this legislation hasn't had many friends. These funds 
don't want people to know what they do or who participates in them. 
They have fought hard to keep it that way. Well, I think that is all 
the more reason to shed some light--particularly some sunlight--on them 
to see what they are doing.
  So I urge my colleagues to cosponsor and support this legislation, to 
support Senator Levin of Michigan and me in this effort as we work to 
protect all taxpayers, large and small.
  Once again I thank Senator Levin. And before I yield the floor, Mr. 
President, I ask unanimous consent to have printed in the Record a 
background paper on the Hedge Fund Transparency Act.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                      Hedge Fund Transparency Act

       Background: This bill is a revised version of S. 1402, 
     which Sen. Grassley introduced in the 110th Congress. While 
     the previous bill amended the Investment Advisers Act of 
     1940, this bill amends the Investment Company Act of 1940 
     (``ICA''). However, the purpose is the same: to make it clear 
     that the Securities and Exchange Commission has the authority 
     to require hedge fund registration. This version also adds a 
     provision authored by Sen. Levin to require hedge funds to 
     establish anti-money laundering programs and report 
     suspicious transactions.


                  hedge fund registration requirements

       Definition of an Investment Company: Hedge Funds typically 
     avoid regulatory requirements by claiming the exceptions to 
     the definition of an investment company contained in 
     Sec. 3(c)(1) or Sec. 3(c)(7) of the ICA. This bill would 
     remove those exceptions to the definition, transforming them 
     to exemptions by moving the provisions, without substantive 
     change, to new sections Sec. 6(a)(6) and Sec. 6(a)(7) of the 
     ICA.
       Requirements for Exemptions: An investment company that 
     satisfies either Sec. 6(a)(6) or Sec. 6(a)(7) will be 
     exempted from the normal registration and filing requirements 
     of the ICA. Instead, a company that meets the criteria in 
     Sec. 6(a)(6) or Sec. 6(a)(7) but has assets under management 
     of $50,000,000 or more, must meet several requirements in 
     order to maintain its exemption. These requirements include:
       1. Registering with the SEC.
       2. Maintaining books and records that the SEC may require.
       3. Cooperating with any request by the SEC for information 
     or examination.
       4. Filing an information form with the SEC electronically, 
     at least once a year. This form must be made freely available 
     to the public in an electronic, searchable format. The form 
     must include:
       a. The name and current address of each individual who is a 
     beneficial owner of the investment company.
       b. The name and current address of any company with an 
     ownership interest in the investment company.
       c. An explanation of the structure of ownership interests 
     in the investment company.
       d. Information on any affiliation with another financial 
     institution.
       e. The name and current address of the investment company's 
     primary accountant and primary broker.
       f. A statement of any minimum investment commitment 
     required of a limited partner, member, or investor.
       g. The total number of any limited partners, members, or 
     other investors.
       h. The current value of the assets of the company and the 
     assets under management by the company.
       Timeframe and Rulemaking Authority: The SEC must issue 
     forms and guidance to carry out this Act within 180 days 
     after its enactment. The SEC also has the authority to make a 
     rule to carry out this Act.
       Anti-Money Laundering Obligations: An investment company 
     exempt under Sec. 6(a)(6) or Sec. 6(a)(7) must establish an 
     anti-money laundering program and report suspicious 
     transactions under 31 U.S.C.A 5318(g) and (h). The Treasury 
     Secretary must establish a rule within 180 days of the 
     enactment of the Act setting forth minimum requirements for 
     the anti-money laundering programs. The rule must require 
     exempted investment companies to ``use risk-based due 
     diligence policies, procedures, and controls that are 
     reasonably designed to ascertain the identity of and evaluate 
     any foreign person that supplies funds or plans to supply 
     funds to be invested with the advice or assistance of such 
     investment company.'' The rule must also require exempted 
     investment companies to comply with the same requirements as 
     other financial institutions for producing records requested 
     by a federal regulator under 31 U.S.C. 5318(k)(2).

  Mr. LEVIN. Mr. President, history has proven time and time again that 
the markets are not self-policing. Today's financial crisis is due in 
part to the Government's failure to regulate key market participants, 
including hedge funds that have become unregulated financial 
heavyweights in the U.S. economy. So I am joining today with my 
colleague Senator Grassley of Iowa to introduce the Hedge Fund 
Transparency Act, and I thank Senator Grassley for his leadership on 
this and in so many other areas involving oversight of our financial 
institutions.
  Hedge funds sound complicated, but they are simply private investment 
funds in which investors have agreed to pool their money under the 
control of an investment manager. What distinguishes them from other 
investment funds is that hedge funds are typically open only to 
``qualified purchasers,'' an SEC term referring to institutional 
investors such as pension funds and wealthy individuals with assets 
over a specified minimum amount. In addition, most hedge funds have 100 
or fewer beneficial owners. By limiting the number of their beneficial 
owners and accepting funds only from investors of means, hedge funds 
have been able to qualify for the statutory exclusions provided in the 
Investment Company Act and avoid the obligation to comply with that 
law's statutory and regulatory requirements. In short, hedge funds have 
been able to operate outside of the reach of the Securities and 
Exchange Commission.
  The primary argument for allowing these funds to operate outside SEC 
regulation and oversight is that because their investors are generally 
more experienced than the general public, they need fewer government 
protections and their investment funds should be permitted to take 
greater risks than investment funds open to the investing public which 
need greater SEC protection. Indeed, the ability of hedge funds to take 
on more risk is the very reason that many individuals and institutions 
choose to invest in them. These investors accept more risk because that 
might lead to bigger rewards.
  The compensation system employed by most hedge funds encourages that 
risk taking. Typically, investors agree to pay hedge fund investment 
managers a management fee of 2 percent of the fund's total assets, plus 
20 percent of the fund's profits. The hedge fund managers profit 
enormously if a fund does well, but due to the guaranteed management 
fee, get a hefty payment even when the fund underperforms or fails. The 
analysis up to now has been that if wealthy people want to take big 
risks with their money, all else being equal, they should be allowed to 
do so without the safeguards normally required for the general public.
  So what is the problem with allowing their investment funds to 
operate outside of Federal regulation and oversight? The problem is 
that hedge funds have gotten so big and are so entrenched in U.S. 
financial markets that their actions can now significantly impact 
market prices, damage other market participants, and can even endanger 
the U.S. financial system and the economy as a whole.
  The systemic risks posed by hedge funds first became obvious 10 years 
ago. Back then, Long-Term Capital Management--or LTCM--was a hedge fund 
that, at its peak, had more than $125 billion in assets under 
management and, due to massive borrowing, a total market position of 
$1.3 trillion. When it began to falter, the Federal Reserve worried 
that it might unload its assets in a rush, drive down prices, and end 
up damaging not only other firms but U.S. markets as a whole. To 
prevent a financial meltdown, the Federal Reserve worked with the 
private sector to engineer a rescue package.
  That was just over a decade ago. Since then, according to a recent 
report issued by the Congressional Research Service, the hedge fund 
industry has expanded roughly tenfold. In 2006, the SEC testified that 
hedge funds represented 5 percent of all U.S. assets under management 
and 30 percent of all equity trading volume in the United States. By 
2007, an estimated 8,000

[[Page 2044]]

hedge funds were managing assets totaling roughly $1.5 trillion. The 
most current estimate is that 10,000 hedge funds are managing 
approximately $1.8 trillion in assets, after suffering losses over the 
last year of over $1 trillion.
  In addition, over the last 10 years, billions of dollars being 
managed by hedge funds have been provided by pension plans. A 2007 
report by the U.S. Government Accountability Office found that the 
amount of money that defined benefit pension plans have invested in 
hedge funds has risen from about $3.2 billion in 2000 to more than $50 
billion in the year 2006. That total is probably much higher now. And 
while most individual pension funds invest only a small slice of their 
money in hedge funds, a few go farther. For example, according to the 
GAO report, as of September 2006, the Missouri State Employees 
Retirement System had invested over 30 percent of its assets in hedge 
funds. Universities and charities have also directed significant assets 
to hedge funds. The result is that hedge fund losses threaten every 
economic sector in America, from the wealthy to the working class 
relying on pensions, to our institutions of higher learning, to our 
nonprofit charities.
  A third key developed is that over the last 10 years, some of the 
largest U.S. banks and security firms have set up their own hedge funds 
and used them to invest not only client funds but also their own cash. 
In some cases, these hedge funds have commingled client and 
institutional funds and linked the fate of both to high-risk investment 
strategies. These hedge fund affiliates are typically owned by the same 
holding companies that own federally insured banks or federally 
regulated broker-dealers. Because of their ownership, their size and 
reach, their clientele, and the high-risk nature of their investments, 
the failure of hedge funds today can imperil not only their direct 
investors, but also the financial institutions that own them, that lent 
them money, or did business with them. From there, the effects can 
ripple through the markets and impact the entire economy.
  It is time for Congress to step into the breach and establish clear 
authority for Federal regulation and oversight of hedge funds. That is 
the backdrop for the introduction of the Grassley-Levin Hedge Fund 
Transparency Act.
  The purpose of this bill is to institute a reasonable and practical 
regulatory regime for hedge funds. The bill contains four basic 
requirements to make hedge funds subject to SEC regulation and 
oversight.
  It requires them to register with the SEC, to file an annual 
disclosure form with basic information that will be made publicly 
available, to maintain books and records required by the SEC, and to 
cooperate with any SEC information request or examination.
  In addition, the bill directs Treasury to issue a final rule 
requiring hedge funds to establish anti-money laundering programs and, 
in particular, to guard against allowing suspect offshore funds into 
the U.S. financial system. The Bush Administration issued a proposed 
anti-money laundering rule for hedge funds seven years ago, in 2002, 
but never finalized it. A 2006 investigation by the Permanent 
Subcommittee on Investigations, which I chair, showed how two hedge 
funds brought millions of dollars in suspect funds into the United 
States, without any U.S. controls or reporting obligations, and called 
on a bipartisan basis for the proposed hedge fund anti-money laundering 
regulations to be finalized, but no action was taken. Hedge funds are 
the last major U.S. financial players without anti-money laundering 
obligations, and it is time for this unacceptable regulatory gap to be 
eliminated.
  Our bill imposes a set of basic disclosure obligations on hedge funds 
and makes it clear they are subject to full SEC oversight while, at the 
same time, exempting them from many of the obligations that the 
Investment Company Act imposes on other types of investment companies, 
such as mutual funds that are open for investment by all members of the 
public. The bill imposes a more limited set of obligations on hedge 
funds in recognition of the fact that hedge funds do not open their 
doors to all members of the public, but limit themselves to investors 
of means. The bill also, however, gives the SEC the authority it needs 
to impose additional regulatory obligations and exercise the level of 
oversight it sees fit over hedge funds to protect investors, other 
financial institutions, and the U.S. financial system as a whole.
  The bill imposes these requirements on all entities that rely on 
Sections 80a-3(c)(1) or (7) to avoid compliance with the full set of 
the Investment Company Act requirements. A wide variety of entities 
invoke those sections to avoid those requirements and SEC oversight, 
and they refer to themselves by a wide variety of terms--hedge funds, 
private equity funds, venture capitalists, small investment banks, and 
so forth. Rather than attempt a futile exercise of trying to define the 
specific set of companies covered by the bill and thereby invite future 
claims by parties that they are outside the definitions and thus 
outside the SEC's authority, the bill applies to any investment company 
that has at least $50 million in assets or assets under its management 
and relies on Sections 80a-3(1) or (7) to avoid compliance with the 
full set of Investment Company Act requirements. Instead, those 
companies under the bill have to comply with a reduced set of 
obligations, which include filing an annual public disclosure form, 
maintaining books and records specified by the SEC, and cooperating 
with any SEC information request or examination.
  Finally, our bill makes an important technical change. It moves 
paragraphs (c)(1) and (7)--the two paragraphs that hedge companies use 
to avoid complying with the full set of Investment Act Company 
requirements--from Section 80a-3 to Section 80a-6 of the Investment 
Company Act. While our bill preserves both paragraphs and makes no 
substantive changes to them, it moves them from the part of the bill 
that defines ``investment company'' to the part of the bill that 
exempts certain investment companies from the Investment Company Act's 
full set of requirements.
  The bill makes this technical change to make it clear that hedge 
funds really are investment companies, and they are not excluded from 
the coverage of the Investment Company Act. Instead, they are being 
given an exemption from many of that law's requirements, because they 
are investment companies which voluntarily limited themselves to one 
hundred or fewer beneficial owner accepting funds only from investors 
of means. Under current law, the two paragraphs allow hedge funds to 
claim they are excluded from the Investment Company Act--they are not 
investment companies at all and are outside the SEC's reach. Under our 
bill, the hedge funds would qualify as investment companies--which they 
plainly are--but would qualify for exemptions from many of the Act's 
requirements by meeting certain criteria.
  It is time to bring hedge funds under the federal regulatory 
umbrella. With their massive investments, entanglements with U.S. 
banks, securities firms, pension funds, and other large investors, and 
their potential impact on market equilibrium, we cannot afford to allow 
these financial heavyweights to continue to operate free of government 
regulation and oversight.
  When asked at a recent hearing of the Senate Homeland Security and 
Government Affairs Committee whether hedge funds should be regulated, 
two expert witnesses gave the exact same one-word answer: ``Yes.'' One 
law professor, after noting that disclosure requirements don't apply to 
hedge funds, told the Committee: ``If you asked a regulator what . . . 
role did hedge funds play in the current financial crisis, I think they 
would look at you like a deer in the headlights, because we just don't 
know.'' It is essential that federal financial regulators know what 
hedge funds are doing and that they have the authority to prevent 
missteps and misconduct.
  The Hedge Fund Transparency Act will protect investors, and it will 
help protect our financial system. I hope

[[Page 2045]]

our colleagues will join us in support of this bill and its inclusion 
in the regulatory reform efforts that Congress will be undertaking 
later this year.
                                 ______
                                 
      By Mr. LUGAR (for himself, Mr. Kerry, Mr. Brownback, Mr. Leahy, 
        and Mr. Kaufman):
  S. 345 A bill to reauthorize the Tropical Forest Conservation Act of 
1998 through fiscal year 2012, to rename the Tropical Forest 
Conservation Act of 1998 as the ``Tropical Forest and Coral 
Conservation Act of 2009'', and for other purposes; to the Committee on 
Foreign Relations.
  Mr. LUGAR. Mr. President, I rise to introduce the Tropical Forest and 
Coral Conservation Act of 2009, a bill to protect outstanding tropical 
forests and coral reefs in developing countries through Debt for Nature 
Swaps that then-Senator Biden and myself first passed more than ten 
years ago.
  This bill reauthorizes a proven program which enjoys the ardent 
support of the Treasury Department and State Department for the third 
time since 1998. It will help developing countries reduce foreign debt 
and provide comprehensive environmental preservation programs to 
protect tropical forests and endangered marine habitats around the 
world. This bill will also serve as an important diplomatic tool to 
provide for our national security.
  As one of the most successful U.S. conservation assistance programs, 
the agreements concluded under the Tropical Forest Conservation Act so 
far will together generate over $188 million to help conserve over 50 
million acres of tropical forests in Asia, the Caribbean, Central and 
South America. In addition, private donors, including the Nature 
Conservancy, the World Wildlife Fund, the Wildlife Conservation 
Society, and Conservation International, have contributed more than $12 
million to TFCA swaps, leveraging U.S. Government funds. This is an 
effective use of scarce Federal conservation dollars. But the rate of 
deforestation continues to accelerate across the globe.
  This bill is an example of how we can use economic incentives and 
opportunities to change behavior and to influence personal and societal 
choices. Clearly, there are economic opportunities in clean energy 
sources, solar, wind and biofuels, and carbon sequestration and storage 
technologies. But improvements in farming and forestry practices may be 
among the lowest hanging fruit in the quest to deal with climate 
change.
  During the global climate change discussions in the late 1990s in 
Kyoto, the concept of carbon sinks provided by forestry and agriculture 
was taken off the table. Last year during the Bali discussions, the 
topic of carbon sequestration through forestry and agricultural 
practices was revived. This is an important development, and it should 
be embraced by the United States.
  Also alarming is the rapid rate of coral reef and coastal 
exploitation. The burden of foreign debt falls especially hard on 
nations with few natural resources that often resort to harvesting or 
otherwise exploiting coral reefs and other marine habitats to earn hard 
currency to service foreign debt. According to the National Oceanic and 
Atmospheric Administration, NOAA, 61 percent of the world's coral reefs 
may be destroyed by the year 2050 if the present rate of destruction 
continues.
  The Tropical Forest and Coral Conservation Act expands the current 
tropical forest conservation programs to include the protection and 
conservation of these vital coral ecosystems. This legislation will 
make available resources for environmental stewardship that would 
otherwise be of the lowest priority in a developing country. It will 
reduce debt by investing locally in programs that will strengthen 
indigenous economies by creating long-term management policies that 
will preserve the natural resources upon which local commerce is based.
  Both Indonesia and Brazil have been declared eligible for Tropical 
Forest Conservation Act funds. Brazil is the second most populous 
nation in our hemisphere. It wields enormous influence over neighboring 
states in South America and has expressed interest in a leading global 
role. It would be a diplomatic mistake to hinder our outreach to a 
nation on an issue--conservation--where we have mutual goals. 
Similarly, we should not encumber conservation cooperation with one the 
largest democracies in the world, Indonesia. The United States cannot 
afford to squander diplomatic opportunities that allow us to establish 
working relationships with key agencies in such strategically important 
nations.
  This legislation has enormous consequences for the existence of 
critical ecosystems, the health of our planet, the livelihoods of 
millions of people across the globe, and even the security of Americans 
here at home.
  I would like to provide additional information about activities under 
this act.
  Fourteen TFCA agreements have been concluded to date in Bangladesh, 
El Salvador, Belize, Peru, the Philippines, Panama, Guatemala, 
Colombia, Paraguay, Botswana, Costa Rica, and Jamaica. With the 
reauthorization of TFCA, the U.S. Government will be able to pursue 
agreements to conserve threatened coral reefs along with tropical 
forests.
  The Tropical Forest and Coral Reef Conservation Act of 2009 
authorizes appropriations for debt reduction for eligible countries at 
$25,000,000 in fiscal year 2009; $30,000,000 in fiscal year 2010; 
$30,000,000 in fiscal year 2011; and $30,000,000 in fiscal year 2012 
subject to appropriations.
  First, the bill authorizes a Debt Swap option under which a third 
party may purchase the debt of a TFCA-eligible country in exchange for 
the creation of a fund to support tropical forest or coral reef 
conservation. The terms of the agreement are negotiated with the 
country, the third party and the U.S. Government.
  Under this option, there may be no cost to the United States 
Government because the financial assistance involved would come from 
nongovernmental or private entities. Third-party funding may be 
leveraged, in part, with U.S. Government appropriated funds.
  Second, the bill authorizes a debt reduction option in which 
principal and interest payments due to the U.S. Government may be 
wholly or partially reduced. In return, the country accepts a new 
obligation to make payments to a conservation fund to be administered 
by a tropical forest or coral reef board within that country.
  The bill authorizes appropriations to compensate the United States 
Treasury for the reduction in the revenues caused by TFCA debt 
treatment. However, these funds would be effectively leveraged because 
the amounts placed by an eligible country in its conservation fund 
would exceed the cost of debt reduction to the United States Treasury.
  Third, under the Buy Back option, an eligible country is able to buy 
back its debt at its asset value in exchange for its willingness to 
place an additional amount based on the purchase price in local 
currency in a tropical forest fund.
  Under this third option, there would be no cost to the United States 
Government since the debt is being bought back at its value as 
determined under the Federal Credit Reform Act of 1990.
  The Tropical Forest Conservation and Coral Act applies to 
concessional loans made under the Foreign Assistance Act of 1961 and 
credits granted under the Agricultural Trade and Assistance Act of 
1954. It is consistent with established Treasury Department debt 
reduction practices as well as with the Federal Credit Reform Act of 
1990.
  Within each developing country, the conservation fund would be 
administered by a commission representing a majority of local 
nongovernmental, community development and scientific and academic 
organizations, representatives of the host government and a 
representative of the United States Government.
  The conservation fund could be used to provide grants for the 
following purposes: to preserve, maintain or restore the tropical 
forest or coral reef of the beneficiary country through establishing 
parks and reserves; to develop and implement scientifically sound 
systems of natural resource management; to provide training programs to 
strengthen the scientific, technical and managerial capacities of 
individuals

[[Page 2046]]

and organizations involved in conservation; to provide for restoration, 
protection and sustainable use of diverse animal and plant species; to 
provide research and identification of medicinal uses of tropical 
forest plant life to treat human diseases, illnesses, and health-
related concerns; to develop and support individuals living in or near 
a tropical forest or coral reef, including the cultures of such 
individuals.
  Oversight of this program would continue through multiple mechanisms 
including the following: funds for this program are subject to periodic 
formal evaluations and annual fund evaluations recently required as 
part of OMB's Program Assessment Rating Tool, PART. TFCA Evaluation 
Scorecard is completed each year on each TFCA Fund. The Evaluation 
Scorecard was developed to provide for consistent, on-going evaluation 
and reporting across local TFCA programs.
  Local TFCA funds are subject to regular audits. In addition, the 
local board or oversight committee monitors performance under each 
grant agreement to make sure that time schedules and other performance 
goals are being achieved. Grant agreements include budgets, timelines, 
and provisions requiring periodic progress reports from the grantee to 
the board.
  In addition, the U.S. Government uses the annual management budget 
provided by Congress to fund evaluations of local TFCA programs. 
Evaluations undertaken with these funds include local site visits to 
determine that activities are being carried out consistent with the 
terms of the TFCA agreement.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 345

       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 ``Tropical Forest and Coral 
     Conservation Reauthorization Act of 2009''.

     SEC. 2. AMENDMENT TO SHORT TITLE OF ACT TO ENCOMPASS EXPANDED 
                   SCOPE.

       (a) In General.--Section 801 of the Tropical Forest 
     Conservation Act of 1998 (Public Law 87-195; 22 U.S.C. 2151 
     note) is amended by striking ``Tropical Forest Conservation 
     Act of 1998'' and inserting ``Tropical Forest and Coral 
     Conservation Act of 2009''.
       (b) References.--Any reference in any other provision of 
     law, regulation, document, paper, or other record of the 
     United States to the ``Tropical Forest Conservation Act of 
     1998'' shall be deemed to be a reference to the ``Tropical 
     Forest and Coral Conservation Act of 2009''.

     SEC. 3. EXPANSION OF SCOPE OF ACT TO PROTECT FORESTS AND 
                   CORAL REEFS.

       (a) In General.--Section 802 of the Tropical Forest and 
     Coral Conservation Act of 2009 (22 U.S.C. 2431), as renamed 
     by section 2(a), is amended--
       (1) in subsections (a)(1), (a)(6), (a)(7), (b)(1), (b)(3), 
     and (b)(4), by striking ``tropical forests'' each place it 
     appears and inserting ``tropical forests and coral reefs and 
     associated coastal marine ecosystems'';
       (2) in subsection (a)(2)--
       (A) in subparagraph (A), by striking ``resources, which are 
     the basis for developing pharmaceutical products and 
     revitalizing agricultural crops'' and inserting 
     ``resources''; and
       (B) in subparagraph (C), by striking ``far-flung''; and
       (3) in subsection (b)(2)--
       (A) by striking ``tropical forests'' the first place it 
     appears and inserting ``tropical forests and coral reefs and 
     associated coastal marine ecosystems'';
       (B) by striking ``tropical forests'' the second place it 
     appears and inserting ``areas'';
       (C) by striking ``tropical forests'' the third place it 
     appears and inserting ``tropical forests and coral reefs and 
     their associated coastal marine ecosystems''; and
       (D) by striking ``that have led to deforestation'' and 
     inserting ``on such countries''.
       (b) Amendments Related to Definitions.--Section 803 of such 
     Act (22 U.S.C. 2431a) is amended--
       (1) in paragraph (5)--
       (A) in the heading, by striking ``tropical forest'' and 
     inserting ``tropical forest or coral reef'';
       (B) in the matter preceding subparagraph (A), by striking 
     ``tropical forest'' and inserting ``tropical forest or coral 
     reef''; and
       (C) in subparagraph (B)--
       (i) by striking ``tropical forest'' and inserting 
     ``tropical forest or coral reef''; and
       (ii) by striking ``tropical forests'' and inserting 
     ``tropical forests or coral reefs''
       (2) by adding at the end the following new paragraphs:
       ``(10) Coral.--The term `coral' means species of the phylum 
     Cnidaria, including--
       ``(A) all species of the orders Antipatharia (black 
     corals), Scleractinia (stony corals), Alcyonacea (soft 
     corals), Gorgonacea (horny corals), Stolonifera (organpipe 
     corals and others), and Coenothecalia (blue coral), of the 
     class Anthoza; and
       ``(B) all species of the order Hydrocorallina (fire corals 
     and hydrocorals) of the class Hydrozoa.
       ``(11) Coral reef.--The term `coral reef' means any reef or 
     shoal composed primarily of coral.
       ``(12) Associated coastal marine ecosystem.--The term 
     `associated coastal marine ecosystem' means any coastal 
     marine ecosystem surrounding, or directly related to, a coral 
     reef and important to maintaining the ecological integrity of 
     that coral reef, such as seagrasses, mangroves, sandy seabed 
     communities, and immediately adjacent coastal areas.''.

     SEC. 4. CHANGE TO NAME OF FACILITY.

       (a) In General.--Section 804 of the Tropical Forest and 
     Coral Conservation Act of 2009 (22 U.S.C. 2431b), as renamed 
     by section 2(a), is amended by striking ``Tropical Forest 
     Facility'' and inserting ``Conservation Facility''.
       (b) Conforming Amendments to Definitions.--Section 803(8) 
     of such Act (22 U.S.C. 2431a(8)) is amended--
       (1) in the heading, by striking ``Tropical forest 
     facility'' and inserting ``Conservation facility''; and
       (2) by striking ``Tropical Forest Facility'' both places it 
     appears and inserting ``Conservation Facility''.
       (c) References.--Any reference in any other provision of 
     law, regulation, document, paper, or other record of the 
     United States to the ``Tropical Forest Facility'' shall be 
     deemed to be a reference to the ``Conservation Facility''.

     SEC. 5. ELIGIBILITY FOR BENEFITS.

       Section 805(a) of the Tropical Forest and Coral 
     Conservation Act of 2009 (22 U.S.C. 2431c(a)), as renamed by 
     section 2(a), is amended by striking ``tropical forest'' and 
     inserting ``tropical forest or coral reef''.

     SEC. 6. UNITED STATES GOVERNMENT REPRESENTATION ON OVERSIGHT 
                   BODIES FOR GRANTS FROM DEBT-FOR-NATURE SWAPS 
                   AND DEBT-BUYBACKS.

       Section 808(a)(5) of the Tropical Forest and Coral 
     Conservation Act of 2009 (22 U.S.C. 2431f(a)(5)), as renamed 
     by section 2(a), is amended by adding at the end the 
     following new subparagraph:
       ``(C) United states government representation on the 
     administering body.-- One or more individuals appointed by 
     the United States Government may serve in an official 
     capacity on the administering body that oversees the 
     implementation of grants arising from a debt-for-nature swap 
     or debt buy-back regardless of whether the United States is a 
     party to any agreement between the eligible purchaser and the 
     government of the beneficiary country.''.

     SEC. 7. CONSERVATION AGREEMENTS.

       (a) Renaming of Agreements.--Section 809 of the Tropical 
     Forest and Coral Conservation Act of 2009 (22 U.S.C. 2431g), 
     as renamed by section 2(a), is amended--
       (1) in the section heading, by striking ``TROPICAL FOREST 
     AGREEMENT'' and inserting ``CONSERVATION AGREEMENT''; and
       (2) in subsection (a)--
       (A) by striking ``Authority'' and all that follows through 
     ``(1) In general.--The Secretary'' and inserting 
     ``Authority.--The Secretary''; and
       (B) by striking ``Tropical Forest Agreement'' and inserting 
     ``Conservation Agreement''.
       (b) Elimination of Requirement To Consult With the 
     Enterprise for the Americas Board.--Such subsection is 
     further amended by striking paragraph (2).
       (c) Role of Beneficiary Countries.--Such section is further 
     amended--
       (1) in subsection (e)(1)(C), by striking ``in exceptional 
     circumstances, the government of the beneficiary country'' 
     and inserting ``in limited circumstances, the government of 
     the beneficiary country when needed to improve governance and 
     enhance management of tropical forests or coral reefs or 
     associated coastal marine ecosystems, without replacing 
     existing levels of financial efforts by the government of the 
     beneficiary country and with priority given to projects that 
     complement grants made under subparagraphs (A) and (B)''; and
       (2) by amending subsection (f) to read as follows:
       ``(f) Review of Larger Grants.--Any grant of more than 
     $250,000 from a Fund must be approved by the Government of 
     the United States and the government of the beneficiary 
     country.''.
       (d) Technical and Conforming Amendments.--Such section is 
     further amended--
       (1) in subsection (c)(2)(A)(i), by inserting ``to serve in 
     an official capacity'' after ``Government'';
       (2) in subsection (d)--
       (A) in the matter preceding paragraph (1), by striking 
     ``tropical forests'' and inserting ``tropical forests and 
     coral reefs and associated coastal marine ecosystems related 
     to such coral reefs'';

[[Page 2047]]

       (B) in paragraph (5), by striking ``tropical forest''; and
       (C) in paragraph (6), by striking ``living in or near a 
     tropical forest in a manner consistent with protecting such 
     tropical forest'' and inserting ``dependent on a tropical 
     forest or coral reef or an associated coastal marine 
     ecosystem related to such coral reef and related resources in 
     a manner consistent with conserving such resources''.
       (e) Conforming Amendments to Definitions.--Section 803(7) 
     of such Act (22 U.S.C. 2431a(7)) is amended--
       (1) in the heading, by striking ``Tropical forest 
     agreement'' and inserting ``Conservation agreement''; and
       (2) by striking ``Tropical Forest Agreement'' both places 
     it appears and inserting ``Conservation Agreement''.

     SEC. 8. CONSERVATION FUND.

       (a) In General.--Section 810 of the Tropical Forest and 
     Coral Conservation Act of 2009 (22 U.S.C. 2431h), as renamed 
     by section 2(a), is amended--
       (1) in the section heading, by striking ``TROPICAL FOREST 
     FUND'' and inserting ``CONSERVATION FUND''; and
       (2) in subsection (a)--
       (A) by striking ``Tropical Forest Agreement'' and inserting 
     ``Conservation Agreement''; and
       (B) by striking ``Tropical Forest Fund'' and inserting 
     ``Conservation Fund''.
       (b) Conforming Amendments to Definitions.--Such Act is 
     further amended--
       (1) in section 803(9) (22 U.S.C. 2431a(9))--
       (A) in the heading, by striking ``Tropical forest fund'' 
     and inserting ``Conservation fund''; and
       (B) by striking ``Tropical Forest Fund'' both places it 
     appears and inserting ``Conservation Fund'';
       (2) in section 806(c)(2) (22 U.S.C. 2431d(c)(2)), by 
     striking ``Tropical Forest Fund'' and inserting 
     ``Conservation Fund''; and
       (3) in section 807(c)(2) (22 U.S.C. 2431e(c)(2)), by 
     striking ``Tropical Forest Fund'' and inserting 
     ``Conservation Fund''.

     SEC. 9. REPEAL OF AUTHORITY OF THE ENTERPRISE FOR THE 
                   AMERICAS BOARD TO CARRY OUT ACTIVITIES UNDER 
                   THE TROPICAL FOREST AND CORAL CONSERVATION ACT 
                   OF 2009.

       (a) In General.--Section 811 of the Tropical Forest and 
     Coral Conservation Act of 2009 (22 U.S.C. 2431i), as renamed 
     by section 2(a), is repealed.
       (b) Conforming Amendments.--Section 803 of such Act (22 
     U.S.C. 2431a), as renamed by section 2(a), is amended--
       (1) by striking paragraph (4); and
       (2) by redesignating paragraphs (5), (6), (7), (8), and (9) 
     as paragraphs (4), (5), (6), (7), and (8), respectively.

     SEC. 10. CHANGES TO DUE DATES OF ANNUAL REPORTS TO CONGRESS.

       Section 813 of the Tropical Forest and Coral Conservation 
     Act of 2009 (22 U.S.C. 2431k), as renamed by section 2(a), is 
     amended--
       (1) in subsection (a)--
       (A) by striking ``(a) In General.--Not later than December 
     31'' and inserting ``Not later than April 15'';
       (B) by striking ``Facility'' both places it appears and 
     inserting ``Conservation Facility''; and
       (C) by striking ``fiscal year'' both places it appears and 
     inserting ``calendar year''; and
       (2) by striking subsection (b).

     SEC. 11. CHANGES TO INTERNATIONAL MONETARY FUND CRITERION FOR 
                   COUNTRY ELIGIBILITY.

       Section 703(a)(5) of the Foreign Assistance Act of 1961 (22 
     U.S.C. 2430b(a)(5)) is amended--
       (1) by striking ``or, as appropriate in exceptional 
     circumstances,'' and inserting ``or'';
       (2) in subparagraph (A)--
       (A) by striking ``or in exceptional circumstances, a Fund 
     monitored program or its equivalent,'' and inserting ``or a 
     Fund monitored program, or is implementing sound 
     macroeconomic policies,''; and
       (B) by striking ``(after consultation with the Enterprise 
     for the Americas Board)''; and
       (3) in subparagraph (B), by striking ``(after consultation 
     with the Enterprise for Americas Board)''.

     SEC. 12. NEW AUTHORIZATION OF APPROPRIATIONS FOR THE 
                   REDUCTION OF DEBT AND AUTHORIZATION FOR AUDIT, 
                   EVALUATION, MONITORING, AND ADMINISTRATION 
                   EXPENSES.

       Section 806 of the Tropical Forest and Coral Conservation 
     Act of 2009 (22 U.S.C. 2431d), as renamed by section 2(a), is 
     amended--
       (1) in subsection (d), by adding at the end the following 
     new paragraphs:
       ``(7) $25,000,000 for fiscal year 2009.
       ``(8) $30,000,000 for fiscal year 2010.
       ``(9) $30,000,000 for fiscal year 2011.
       ``(10) $30,000,000 for fiscal year 2012.''; and
       (2) by amending subsection (e) to read as follows:
       ``(e) Use of Funds To Conduct Program Audits, Evaluations, 
     Monitoring, and Administration.--Of the amounts made 
     available to carry out this part for a fiscal year, $300,000 
     is authorized to be made available to carry out audits, 
     evaluations, monitoring, and administration of programs under 
     this part, including personnel costs associated with such 
     audits, evaluations, monitoring and administration.''.
                                 ______
                                 
      By Mr. ROCKEFELLER (for himself and Ms. Snowe):
  S. 348. A bill to amend section 254 of the Communications Act of 1934 
to provide that funds received as universal service contributions and 
the universal service support programs established pursuant to that 
section are not subject to certain provisions of title 31, United 
States Code, commonly known as the Antideficiency Act; to the Committee 
on Commerce, Science, and Transportation.
  Mr. ROCKEFELLER. Mr. President, I am proud to reintroduce, with my 
colleague Senator Olympia Snowe of Maine, a bipartisan effort to ensure 
that all universal service programs can continue to operate smoothly 
and effectively. While Congress has annually taken action to deal with 
this issue, our hope is to enact a permanent solution.
  For many years, we have fought hard for universal service, including 
the E-Rate. It is essential for all of the universal service programs 
to operate in a timely manner.
  The Universal Service Fund is accomplishing its mission, and every 
member who has worked with us should be proud of the progress of this 
program. Our country has a strong telecommunications network, and rural 
customers are getting service at affordable rates. Lifeline and Linkup 
programs help the poorest of customers keep basic telephone access 
which is essential in our modern world. Rural health care is helping 
connect our rural clinics to modern medicine and specialists.
  In 1996, when the Telecommunications Act passed, only 14 percent of 
all classrooms were connected, while just 5 percent of the poorest 
classrooms were connected. The latest data is encouraging with 93 
percent of all classrooms connected and 89 percent of the poorest 
classrooms connected. Since 1998, West Virginia schools and libraries 
have received over $101 million in E-Rate discounts. While this is an 
extraordinary success, the need for E-Rate discounts remains because 
schools and libraries face monthly telecommunication costs and Internet 
access fees. Additionally, every school and library will periodically 
need to upgrade its internal connections as the demand of technology 
grows and institutions need greater bandwidth to handle ever increasing 
demand. At the beginning of the debates in 1996, schools were talking 
about dial-up access, now every school wants--and needs--broadband.
  This legislation gives the Universal Service Fund a permanent 
exemption from the Antideficiency Act which will provide sustainability 
and consistency for the program. Over the last few years, we have done 
one-year exemptions. Other Federal programs have permanent exemptions 
for the Antideficiency Act, and it is common sense to grant an 
exemption for the Universal Service Fund.
                                 ______
                                 
      By Mr. CASEY (for himself and Mr. Specter):
  S. 349. A bill to establish the Susquehanna Gateway National Heritage 
Area in the State of Pennsylvania, and for other purposes; to the 
Committee on Energy and Natural Resources.
  Mr. CASEY. Mr. President, I rise today to introduce legislation that 
would establish the Susquehanna Gateway National Heritage Area in York 
and Lancaster Counties, Pennsylvania. Since 1984, Congressionally-
designated National Heritage Areas have fostered partnerships between 
the public and private sectors for undertaking preservation, 
educational, and recreational initiatives in diverse regions throughout 
the country. Through these efforts, National Heritage Areas have helped 
to protect our nation's natural and cultural resources while promoting 
local economic development. Today, I am proud once again to join my 
colleague from Pennsylvania Senator Arlen Specter to propose a bill 
that would grant national recognition to the Susquehanna Gateway 
region, an area that has played a key role in the development of our 
nation's cultural, political, and economic identity.
  As the Senate continues its work in the 111th Congress, I look 
forward to working with my colleagues to pass the Susquehanna Gateway 
National Heritage Area Act soon so that the region

[[Page 2048]]

can begin to play a national role in sharing America's story.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 349

       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 ``Susquehanna Gateway National 
     Heritage Area Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) numerous sites of significance to the heritage of the 
     United States are located within the boundaries of the 
     proposed Susquehanna Gateway National Heritage Area, which 
     includes the Lower Susquehanna River corridor and all of 
     Lancaster and York Counties in the State of Pennsylvania;
       (2) included among the more than 200 historically 
     significant sites, structures, districts, and tours in the 
     area are--
       (A) the home of a former United States President;
       (B) the community where the Continental Congress adopted 
     the Articles of Confederation;
       (C) the homes of many prominent figures in the history of 
     the United States;
       (D) the preserved agricultural landscape of the Plain 
     communities of Lancaster County, Pennsylvania;
       (E) the exceptional beauty and rich cultural resources of 
     the Susquehanna River Gorge;
       (F) numerous National Historic Landmarks, National Historic 
     Districts, and Main Street communities; and
       (G) many thriving examples of the nationally significant 
     industrial and agricultural heritage of the region, which are 
     collectively and individually of significance to the history 
     of the United States;
       (3) in 1999, a regional, collaborative public-private 
     partnership of organizations and agencies began an initiative 
     to assess historic sites in Lancaster and York Counties, 
     Pennsylvania, for consideration as a Pennsylvania Heritage 
     Area;
       (4) the initiative--
       (A) issued a feasibility study of significant stories, 
     sites, and structures associated with Native American, 
     African-American, European-American, Colonial American, 
     Revolutionary, and Civil War history; and
       (B) concluded that the sites and area--
       (i) possess historical, cultural, and architectural values 
     of significance to the United States; and
       (ii) retain a high degree of historical integrity;
       (5) in 2001, the feasibility study was followed by 
     development of a management action plan and designation of 
     the area by the State of Pennsylvania as an official 
     Pennsylvania Heritage Area;
       (6) in 2008, a feasibility study report for the Heritage 
     Area--
       (A) was prepared and submitted to the National Park 
     Service--
       (i) to document the significance of the area to the United 
     States; and
       (ii) to demonstrate compliance with the interim criteria of 
     the National Park Service for National Heritage Area 
     designation; and
       (B) found that throughout the history of the United States, 
     Lancaster and York Counties and the Susquehanna Gateway 
     region have played a key role in the development of the 
     political, cultural, and economic identity of the United 
     States;
       (7) the people of the region in which the Heritage Area is 
     located have--
       (A) advanced the cause of freedom; and
       (B) shared their agricultural bounty and industrial 
     ingenuity with the world;
       (8) the town and country landscapes and natural wonders of 
     the area are visited and treasured by people from across the 
     globe;
       (9) for centuries, the Susquehanna River has been an 
     important corridor of culture and commerce for the United 
     States, playing key roles as a major fishery, transportation 
     artery, power generator, and place for outdoor recreation;
       (10) the river and the region were a gateway to the early 
     settlement of the ever-moving frontier;
       (11) the area played a critical role as host to the 
     Colonial government during a turning point in the 
     Revolutionary War;
       (12) the rural landscape created by the Amish and other 
     Plain people of the region is of a scale and scope that is 
     rare, if not entirely unknown in any other region, in the 
     United States;
       (13) for many people in the United States, the Plain people 
     of the region personify the virtues of faith, honesty, 
     community, and stewardship at the heart of the identity of 
     the United States;
       (14) the regional stories of people, land, and waterways in 
     the area are essential parts of the story of the United 
     States and exemplify the qualities inherent in a National 
     Heritage Area;
       (15) in 2008, the National Park Service found, based on a 
     comprehensive review of the Susquehanna Gateway National 
     Heritage Area Feasibility Study Report, that the area meets 
     the 10 interim criteria of the National Park Service for 
     designation of a National Heritage Area;
       (16) the preservation and interpretation of the sites 
     within the Heritage Area will make a vital contribution to 
     the understanding of the development and heritage of the 
     United States for the education and benefit of present and 
     future generations;
       (17) the Secretary of the Interior is responsible for 
     protecting the historic and cultural resources of the United 
     States;
       (18) there are significant examples of historic and 
     cultural resources within the Heritage Area that merit the 
     involvement of the Federal Government, in cooperation with 
     the management entity and State and local governmental 
     bodies, to develop programs and projects to adequately 
     conserve, support, protect, and interpret the heritage of the 
     area;
       (19) partnerships between the Federal Government, State and 
     local governments, regional entities, the private sector, and 
     citizens of the area offer the most effective opportunities 
     for the enhancement and management of the historic sites 
     throughout the Heritage Area to promote the cultural and 
     historic attractions of the Heritage Area for visitors and 
     the local economy; and
       (20) the Lancaster-York Heritage Region, a 501(c)(3) 
     nonprofit corporation and State-designated management entity 
     of the Pennsylvania Heritage Area, would be an appropriate 
     management entity for the Heritage Area.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Heritage area.--The term ``Heritage Area'' means the 
     Susquehanna Gateway National Heritage Area established by 
     section 4(a).
       (2) Management entity.--The term ``management entity'' 
     means the management entity for the Heritage Area designated 
     by section 5(a).
       (3) Management plan.--The term ``management plan'' means 
     the plan developed by the management entity under section 
     6(a).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (5) State.--The term ``State'' means the State of 
     Pennsylvania.

     SEC. 4. ESTABLISHMENT OF SUSQUEHANNA GATEWAY NATIONAL 
                   HERITAGE AREA.

       (a) In General.--There is established in the State the 
     Susquehanna Gateway National Heritage Area.
       (b) Boundaries.--The Heritage Area shall include a core 
     area located in south-central Pennsylvania consisting of an 
     1869-square-mile region east and west of the Susquehanna 
     River and encompassing Lancaster and York Counties.
       (c) Map.--A map of the Heritage Area shall be--
       (1) included in the management plan; and
       (2) on file in the appropriate offices of the National Park 
     Service.

     SEC. 5. DESIGNATION OF MANAGEMENT ENTITY.

       (a) Management Entity.--The Lancaster-York Heritage Region 
     shall be the management entity for the Heritage Area.
       (b) Authorities of Management Entity.--The management 
     entity may, for purposes of preparing and implementing the 
     management plan, use Federal funds made available under this 
     Act--
       (1) to prepare reports, studies, interpretive exhibits and 
     programs, historic preservation projects, and other 
     activities recommended in the management plan for the 
     Heritage Area;
       (2) to pay for operational expenses of the management 
     entity;
       (3) to make grants to the State, political subdivisions of 
     the State, nonprofit organizations, and other persons;
       (4) to enter into cooperative agreements with the State, 
     political subdivisions of the State, nonprofit organizations, 
     and other organizations;
       (5) to hire and compensate staff;
       (6) to obtain funds or services from any source, including 
     funds and services provided under any other Federal program 
     or law; and
       (7) to contract for goods and services.
       (c) Duties of Management Entity.--To further the purposes 
     of the Heritage Area, the management entity shall--
       (1) prepare a management plan for the Heritage Area in 
     accordance with section 6;
       (2) give priority to the implementation of actions, goals, 
     and strategies set forth in the management plan, including 
     assisting units of government and other persons in--
       (A) carrying out programs and projects that recognize and 
     protect important resource values in the Heritage Area;
       (B) encouraging economic viability in the Heritage Area in 
     accordance with the goals of the management plan;
       (C) establishing and maintaining interpretive exhibits in 
     the Heritage Area;
       (D) developing heritage-based recreational and educational 
     opportunities for residents and visitors in the Heritage 
     Area;
       (E) increasing public awareness of and appreciation for the 
     natural, historic, and cultural resources of the Heritage 
     Area;
       (F) restoring historic buildings that are--
       (i) located in the Heritage Area; and
       (ii) related to the themes of the Heritage Area; and

[[Page 2049]]

       (G) installing throughout the Heritage Area clear, 
     consistent, and appropriate signs identifying public access 
     points and sites of interest;
       (3) consider the interests of diverse units of government, 
     businesses, tourism officials, private property owners, and 
     nonprofit groups within the Heritage Area in developing and 
     implementing the management plan;
       (4) conduct public meetings at least semiannually regarding 
     the development and implementation of the management plan; 
     and
       (5) for any fiscal year for which Federal funds are 
     received under this Act--
       (A) submit to the Secretary an annual report that 
     describes--
       (i) the accomplishments of the management entity;
       (ii) the expenses and income of the management entity; and
       (iii) the entities to which the management entity made any 
     grants;
       (B) make available for audit all records relating to the 
     expenditure of the Federal funds and any matching funds; and
       (C) require, with respect to all agreements authorizing the 
     expenditure of Federal funds by other organizations, that the 
     receiving organizations make available for audit all records 
     relating to the expenditure of the Federal funds.
       (d) Prohibition on Acquisition of Real Property.--
       (1) In general.--The management entity shall not use 
     Federal funds received under this Act to acquire real 
     property or any interest in real property.
       (2) Other sources.--Nothing in this Act precludes the 
     management entity from using Federal funds from other sources 
     for authorized purposes, including the acquisition of real 
     property or any interest in real property.

     SEC. 6. MANAGEMENT PLAN.

       (a) In General.--Not later than 3 years after the date on 
     which funds are first made available to carry out this Act, 
     the management entity shall prepare and submit to the 
     Secretary a management plan for the Heritage Area.
       (b) Contents.--The management plan for the Heritage Area 
     shall--
       (1) include comprehensive policies, strategies, and 
     recommendations for the conservation, funding, management, 
     and development of the Heritage Area;
       (2) take into consideration existing State, county, and 
     local plans;
       (3) specify the existing and potential sources of funding 
     to protect, manage, and develop the Heritage Area;
       (4) include an inventory of the natural, historic, 
     cultural, educational, scenic, and recreational resources of 
     the Heritage Area relating to the themes of the Heritage Area 
     that should be preserved, restored, managed, developed, or 
     maintained; and
       (5) include an analysis of, and recommendations for, ways 
     in which Federal, State, and local programs, may best be 
     coordinated to further the purposes of this Act, including 
     recommendations for the role of the National Park Service in 
     the Heritage Area.
       (c) Disqualification From Funding.--If a proposed 
     management plan is not submitted to the Secretary by the date 
     that is 3 years after the date on which funds are first made 
     available to carry out this Act, the management entity may 
     not receive additional funding under this Act until the date 
     on which the Secretary receives the proposed management plan.
       (d) Approval and Disapproval of Management Plan.--
       (1) In general.--Not later than 180 days after the date on 
     which the management entity submits the management plan to 
     the Secretary, the Secretary shall approve or disapprove the 
     proposed management plan.
       (2) Considerations.--In determining whether to approve or 
     disapprove the management plan, the Secretary shall consider 
     whether--
       (A) the management entity is representative of the diverse 
     interests of the Heritage Area, including governments, 
     natural and historic resource protection organizations, 
     educational institutions, businesses, and recreational 
     organizations;
       (B) the management entity has provided adequate 
     opportunities (including public meetings) for public and 
     governmental involvement in the preparation of the management 
     plan;
       (C) the resource protection and interpretation strategies 
     contained in the management plan, if implemented, would 
     adequately protect the natural, historic, and cultural 
     resources of the Heritage Area; and
       (D) the management plan is supported by the appropriate 
     State and local officials, the cooperation of which is needed 
     to ensure the effective implementation of the State and local 
     aspects of the management plan.
       (3) Disapproval and revisions.--
       (A) In general.--If the Secretary disapproves a proposed 
     management plan, the Secretary shall--
       (i) advise the management entity, in writing, of the 
     reasons for the disapproval; and
       (ii) make recommendations for revision of the proposed 
     management plan.
       (B) Approval or disapproval.--The Secretary shall approve 
     or disapprove a revised management plan not later than 180 
     days after the date on which the revised management plan is 
     submitted.
       (e) Approval of Amendments.--
       (1) In general.--The Secretary shall review and approve or 
     disapprove substantial amendments to the management plan in 
     accordance with subsection (d).
       (2) Funding.--Funds appropriated under this Act may not be 
     expended to implement any changes made by an amendment to the 
     management plan until the Secretary approves the amendment.

     SEC. 7. RELATIONSHIP TO OTHER FEDERAL AGENCIES.

       (a) In General.--Nothing in this Act affects the authority 
     of a Federal agency to provide technical or financial 
     assistance under any other law.
       (b) Consultation and Coordination.--The head of any Federal 
     agency planning to conduct activities that may have an impact 
     on the Heritage Area is encouraged to consult and coordinate 
     the activities with the Secretary and the management entity 
     to the extent practicable.
       (c) Other Federal Agencies.--Nothing in this Act--
       (1) modifies, alters, or amends any law or regulation 
     authorizing a Federal agency to manage Federal land under the 
     jurisdiction of the Federal agency;
       (2) limits the discretion of a Federal land manager to 
     implement an approved land use plan within the boundaries of 
     the Heritage Area; or
       (3) modifies, alters, or amends any authorized use of 
     Federal land under the jurisdiction of a Federal agency.

     SEC. 8. PRIVATE PROPERTY AND REGULATORY PROTECTIONS.

       Nothing in this Act--
       (1) abridges the rights of any property owner (whether 
     public or private), including the right to refrain from 
     participating in any plan, project, program, or activity 
     conducted within the Heritage Area;
       (2) requires any property owner to permit public access 
     (including access by Federal, State, or local agencies) to 
     the property of the property owner, or to modify public 
     access or use of property of the property owner under any 
     other Federal, State, or local law;
       (3) alters any duly adopted land use regulation, approved 
     land use plan, or other regulatory authority of any Federal, 
     State, or local agency, or conveys any land use or other 
     regulatory authority to the management entity;
       (4) authorizes or implies the reservation or appropriation 
     of water or water rights;
       (5) diminishes the authority of the State to manage fish 
     and wildlife, including the regulation of fishing and hunting 
     within the Heritage Area; or
       (6) creates any liability, or affects any liability under 
     any other law, of any private property owner with respect to 
     any person injured on the private property.

     SEC. 9. EVALUATION; REPORT.

       (a) In General.--Not later than 3 years before the date on 
     which authority for Federal funding terminates for the 
     Heritage Area, the Secretary shall--
       (1) conduct an evaluation of the accomplishments of the 
     Heritage Area; and
       (2) prepare a report in accordance with subsection (c).
       (b) Evaluation.--An evaluation conducted under subsection 
     (a)(1) shall--
       (1) assess the progress of the management entity with 
     respect to--
       (A) accomplishing the purposes of this Act for the Heritage 
     Area; and
       (B) achieving the goals and objectives of the approved 
     management plan for the Heritage Area;
       (2) analyze the Federal, State, local, and private 
     investments in the Heritage Area to determine the leverage 
     and impact of the investments; and
       (3) review the management structure, partnership 
     relationships, and funding of the Heritage Area for purposes 
     of identifying the critical components for sustainability of 
     the Heritage Area.
       (c) Report.--
       (1) In general.--Based on the evaluation conducted under 
     subsection (a)(1), the Secretary shall prepare a report that 
     includes recommendations for the future role of the National 
     Park Service, if any, with respect to the Heritage Area.
       (2) Required analysis.--If the report prepared under 
     paragraph (1) recommends that Federal funding for the 
     Heritage Area be reauthorized, the report shall include an 
     analysis of--
       (A) ways in which Federal funding for the Heritage Area may 
     be reduced or eliminated; and
       (B) the appropriate time period necessary to achieve the 
     recommended reduction or elimination.
       (3) Submission to congress.--On completion of the report, 
     the Secretary shall submit the report to--
       (A) the Committee on Energy and Natural Resources of the 
     Senate; and
       (B) the Committee on Natural Resources of the House of 
     Representatives.

     SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There is authorized to be appropriated to 
     carry out this Act $10,000,000, of which not more than 
     $1,000,000 may be authorized to be appropriated for any 
     fiscal year.

[[Page 2050]]

       (b) Cost-Sharing Requirement.--The Federal share of the 
     cost of any activity carried out using funds made available 
     under this Act shall be not more than 50 percent.

     SEC. 11. TERMINATION OF AUTHORITY.

       The authority of the Secretary to provide financial 
     assistance under this Act terminates on the date that is 15 
     years after the date of enactment of this Act.
                                 ______
                                 
      By Mr. DURBIN (for himself, Mr. Whitehouse, Mrs. Murray, Mr. 
        Cardin, and Mr. Dodd):
  S. 355. A bill to enhance the capacity of the United States to 
undertake global development activities, and for other purposes; to the 
Committee on Foreign Relations.
  Mr. DURBIN. Mr. President, today, along with Senators Whitehouse, 
Murray, Cardin and Dodd, I am introducing a bill to triple the number 
of Foreign Service officers working with USAID.
  As we take stock of America's image in the world, it's clear that we 
need to do more to help countries stabilize their society and their 
economy.
  Our own security depends on the stability of far-flung places beyond 
our borders.
  America's generosity and ability to help other countries is becoming 
more important to the effectiveness of our foreign policy.
  In the U.S., the responsibility for development falls largely to the 
U.S. Agency for International Development, or USAID.
  USAID was founded by the Kennedy administration in 1961. It became 
the first U.S. foreign assistance organization with the primary goal of 
long term economic and social development efforts overseas.
  During its first decade, it had more than 5,000 Foreign Service 
Officers serving all over the world, often in the most difficult of 
conditions.
  Today--at a time when the U.S. needs to show its leadership overseas 
more than ever--USAID operates with just 1,000 Foreign Service 
Officers.
  With so few people to deploy, our hands are tied and we're missing 
opportunities to build bridges and foster diplomacy.
  For example, more than seven years after U.S. took military action in 
Afghanistan, the Taliban and al Qaeda continue to undermine progress 
toward a more stable state.
  Our military has done a heroic job in Afghanistan. But success in 
Afghanistan also depends on improving the lives of the Afghan people--
jobs, agriculture, stability, and a functional government.
  We have not done enough to win the hearts and minds of the Afghan 
people. And the military cannot bear this burden alone.
  The last time I went to Afghanistan there were only six American 
agricultural experts for the entire country--I think today there are 
only slightly more.
  For a nation with an agricultural economy and record poppy harvest, 
we have been able to lend just a handful of agricultural development 
experts.
  Secretary of Defense Robert Gates understands this critical need to 
partner our military efforts with civilian development expertise. Last 
month he said:

       The problem is that the civil side of our government--the 
     Foreign Service and foreign-policy side, including our aid 
     for international development--[has] been systematically 
     starved of resources for a quarter of a century or more . . . 
     We have not provided the resources necessary, first of all, 
     for our diplomacy around the world; and second, for 
     communicating to the rest of the world what we are about and 
     who we are as a people.

  Many people on both sides of the aisle agree that USAID is no longer 
equipped to do its job effectively. We simply are not meeting the 
international development goals of the United States.
  USAID has been shortchanged--and America's efforts abroad have 
suffered as a result.
  Now we have a lot of needs here at home, to be sure. But one 
important lesson of the last few years is that America must be engaged 
if we are to remain a leader in world affairs.
  The Increasing America's Global Development Capacity Act of 2009 
would take the first step toward putting the Agency for International 
Development on firmer footing. As Secretary Clinton said in her remarks 
to USAID employees last week, it is ironic that that our very best 
young military leaders are given unfettered resources to spend as they 
see fit to build a school, to open a health clinic, to pave a road, and 
our diplomats and development experts have to go through miles of 
paperwork to spend ten cents. Secretary Clinton said, and I agree, that 
this is not a sensible approach.
  The bill would authorize USAID to hire an additional 700 Foreign 
Service Officers this year. This would basically double the current 
number of development officers available to work in targeted countries.
  This is fundamental to rebuilding the agency's capacity.
  Senator Leahy, Chair of the Foreign Operations Appropriations 
Subcommittee, shares a commitment to rebuilding USAID. I am heartened 
by the Subcommittee's recommended increase in funding for USAID's 
operating expenses for fiscal year 2009. This was a priority for me in 
the bill, and Chairman Leahy has been very supportive.
  My bill also would establish a goal of hiring an additional 1,300 
Foreign Service Officers by 2012.
  After three years, USAID would have more than 3,000 talented, 
committed Americans serving in the world's most difficult locations 
helping to improve the lives of others. It won't be the 5,000 experts 
of the 1960s, but it will be a big improvement from today.
  With a stronger development work force, we can send talented public 
servants to help improve child and maternal health, treat people with 
AIDS, TB and malaria, provide clean water and sanitation, help farmers 
and women start or improve their business, and assist reformers and 
civic leaders to build stronger democratic institutions.
  We all recall the renewed interest in public service that emerged 
after 9/11--many of those people have answered the call, and I bet 
there are as many more who would welcome an opportunity to serve.
  Foreign development assistance is as important a foreign policy tool 
as diplomacy and defense.
  Secretary of Defense Robert Gates is perhaps the most persuasive 
advocate for rebuilding our civilian development capacity. He argues 
that we need to engage in non-military ways to pursue global 
development goals.
  The civilian instruments of national security--diplomacy, development 
assistance, sharing expertise on civil society--are becoming more and 
more important.
  Secretary Gates argues that these tools are good for the world's 
poor, our national security, and our country.
  I agree.
  Let us take one concrete step to rebuild that important civilian 
capacity, which would help improve our ability to help the world's 
poorest countries and people.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 355

       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 ``Increasing America's Global 
     Development Capacity Act of 2009''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) foreign development assistance is an important foreign 
     policy tool in addition to diplomacy and defense;
       (2) development assistance is part of any comprehensive 
     United States response to regional conflicts, terrorist 
     threats, weapons proliferation, disease pandemics, and 
     persistent widespread poverty;
       (3) in 2002 and 2006, the United States National Security 
     Strategy included global development, along with defense and 
     diplomacy, as the 3 pillars of national security;
       (4) in its early years, the United States Agency for 
     International Development (referred to in this Act as 
     ``USAID'') had more than 5,000 full-time Foreign Service 
     Officers;
       (5) in 2008, USAID had slightly more than 1,000 full-time 
     Foreign Service Officers;
       (6) the budget at USAID, calculated in real dollars, has 
     dropped 27 percent since 1985;
       (7) this decline in personnel and operating budgets has 
     diminished the capacity of USAID to provide development 
     assistance and implement foreign assistance programs; and

[[Page 2051]]



     SEC. 3. HIRING OF ADDITIONAL FOREIGN SERVICE OFFICERS AS 
                   USAID EMPLOYEES.

       (a) Initial Hirings.--Except as provided under subsection 
     (c), not later than 1 year after the date of the enactment of 
     this Act, the Administrator of USAID (referred to in this 
     section as the ``Administrator'') shall increase by not less 
     than 700 the total number of full-time Foreign Service 
     Officers employed by USAID compared to the number of such 
     officers employed by USAID on September 30, 2008. These 
     officers shall be used to enhance the ability of USAID to--
       (1) carry out development activities around the world by 
     providing USAID with additional human resources and expertise 
     needed to meet important development and humanitarian needs 
     around the world;
       (2) strengthen the institutional capacity of USAID as the 
     lead development agency of the United States; and
       (3) more effectively help developing nations to become more 
     stable, healthy, democratic, prosperous, and self-sufficient.
       (b) Subsequent Hirings.--
       (1) In general.--Except as provided under subsection (c), 
     during the 2-year period beginning 1 year after the date of 
     the enactment of this Act, the Administrator shall increase 
     by not less than 1,300 the total number of full-time Foreign 
     Service Officers over the number of such officers at the 
     beginning of such 2-year period to carry out the activities 
     described in subsection (a), contingent upon sufficient 
     appropriations.
       (2) Strategy.--Not later than 180 days after the date of 
     the enactment of this Act, the Administrator shall submit a 
     strategy to Congress that includes--
       (A) a plan to create a professional training program that 
     will provide new and current USAID employees with technical, 
     management, leadership, and language skills;
       (B) a staffing plan for the subsequent 5 years; and
       (C) a description of further resources and statutory 
     changes necessary to implement the proposed training and 
     staffing plans.
       (c) Exception.--If the Administrator determines that USAID 
     has competing needs that are more urgent than the hirings 
     described in subsection (a) or (b), or finds a shortage of 
     qualified individuals for such hirings, the Administrator may 
     reduce the number of such hirings and use the available funds 
     for competing needs if the Administrator submits a report 
     describing such competing needs and, if applicable, the 
     nature of the shortage, to--
       (1) the Committee on Appropriations of the Senate;
       (2) the Committee on Foreign Relations of the Senate;
       (3) the Committee on Appropriations of the House of 
     Representatives; and
       (4) the Committee on Foreign Affairs of the House of 
     Representatives.
                                 ______
                                 
      By Mrs. BOXER (for herself and Mr. Burr):
  S. 356. A bill to amend the Bank Holding Company Act of 1956 and the 
Revised Statutes of the United States to prohibit financial holding 
companies and national banks from engaging, directly or indirectly, in 
real estate brokerage or real estate management activities, and for 
other purposes; to the Committee on Banking, Housing, and Urban 
Affairs.
  Mrs. BOXER. Mr. President, I rise today to introduce the Community 
Choice In Real Estate Act of 2009. I am pleased to have Senator Burr 
join me in introducing this bill. In previous Congresses, this bill was 
introduced by former Senators Allard and Clinton, and I am happy to 
continue their efforts.
  The Community Choice in Real Estate Act of 2003 would clarify 
Congressional intent that real estate brokerage and management are not 
financial activities and would therefore retain the separation of 
commerce and banking that was intended during consideration of the 
Gramm-Leach-Bliley Act.
  The Gramm-Leach-Bliley Act got many things wrong when it repealed the 
firewall between the activities of banks and those of the stock market, 
bonds and insurance and allowed these institutions to engage in riskier 
activities. But one thing that it did get right was maintaining the 
firewalls separating the financial and commercial sectors.
  We already have seen the damage to our economy and real estate market 
caused when banks began to engage in certain previously prohibited 
activities. If the firewall separating banking and commerce also were 
to be torn down, it would further undermine banks' ability to be 
neutral arbiters of capital and lend based on financial principles and 
without bias. The S&L crisis of the 1980's has already shown us what 
can happen when federal rules keeping financial services separate from 
commercial activities are weakened.
  Real estate brokerage and management have always been considered by 
Congress to be commercial transactions, and not financial matters. This 
was further reflected when Congress specifically chose not to include 
real estate activities as one of the powers given to national banks and 
financial holding companies as part of Gramm-Leach-Bliley.
  However, following the passage of that Act, the Federal Reserve and 
the Treasury Department proposed rules in response to a petition by 
some financial services entities that would have allowed them to own 
and operate local real estate brokerage and property management 
companies.
  Since fiscal year 2003, Congress has included language in the annual 
appropriations bill for the Treasury Department to prevent the use of 
funds to implement these regulations. These have only been temporary 
fixes, however, and we ought to resolve this issue once and for all in 
the 111th Congress.
  I urge my colleagues to support this legislation.
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Mr. Begich, and Mr. McCain):
  S.J. Res. 7. A joint resolution proposing an amendment to the 
Constitution of the United States relative to the election of Senators; 
to the Committee on the Judiciary.
  Mr. FEINGOLD. Mr. President, our founding fathers did a remarkable 
job in drafting the United States Constitution and the Bill of Rights. 
Their work was so superb that in the 217 years since the ratification 
of the Bill of Rights, the Constitution has only been amended 17 times. 
But every so often, a situation arises that so clearly exposes a flaw 
in our constitutional structure that it requires a constitutional 
remedy.
  Over the past several months, our country has witnessed multiple 
controversies surrounding appointments to vacant Senate seats by 
governors. The vacancies in Illinois and New York have made for 
riveting political theater, but lost in the seemingly endless string of 
press conferences and surprise revelations is the basic fact that the 
citizens of these states have had no say in who should represent them 
in the Senate. The same is true of the recent selections in Delaware 
and Colorado. That is why I will introduce today a constitutional 
amendment to end gubernatorial appointments to the U.S. Senate and 
require special elections to fill these vacancies, as is currently 
required for House vacancies. I am pleased that the recently elected 
Senator from Alaska, Senator Begich, and the distinguished senior 
Senator from Arizona, Senator McCain, have agreed to be original 
cosponsors of the amendment.
  I do not make this proposal lightly. In fact, I have opposed dozens 
of constitutional amendments during my time in the Senate, particularly 
those that would have interfered with the Bill of Rights. The 
Constitution should not be treated like a rough draft. Constitutional 
amendments should be considered only when a statutory remedy to a 
problem is not available, and when the impact of the issue at hand on 
the structure of our government, the safety, welfare, or freedoms of 
our citizens, or the survival of our democratic republic is so 
significant that an amendment is warranted. I believe this is such a 
case.
  In 1913, the citizens of this country, acting through their elected 
state legislatures, ratified the 17th Amendment to the Constitution. 
Our esteemed colleague Senator Byrd, in Chapter 21 of his remarkable 
history of the United States Senate, lays out in fascinating detail the 
lengthy struggle to obtain for the citizens of this country the right 
to elect their Senators. The original Constitution, as we all know, 
gave state legislatures the right to choose the Senators for their 
states. While the first proposal to amend the Constitution to require 
the direct election of Senators was introduced in the House in 1826, 
the effort only really picked up steam after the Civil War.
  As Senator Byrd recounts: ``In the post-Civil War period, state 
legislatures became increasingly subject to

[[Page 2052]]

intimidation and bribery in the selection of Senators.'' Nine cases of 
bribery came before the Senate between 1866 and 1906. And between 1891 
and 1905, the state legislatures from 20 different states deadlocked 45 
times when trying to pick a Senator. At one point, a Senate seat from 
Delaware remained vacant for 4 years because of deadlocks.
  The political theater occasioned by these Senate appointment fights 
dwarfs even the extraordinary events we have witnessed in recent 
months. Senator Byrd quotes from an account by the historian George 
Haynes about efforts to select a Senator in Missouri in 1905:

       Lest the hour of adjournment should come before an election 
     was secured, an attempt was made to stop the clock upon the 
     wall of the assembly chamber. Democrats tried to prevent its 
     being tempered with; and when certain Republicans brought 
     forward a ladder, it was seized and thrown out of the window. 
     A fist-fight followed, in which many were involved. Desks 
     were torn from the floor and a fusillade of books began. The 
     glass of the clock-front was broken, but the pendulum still 
     persisted in swinging until, in the midst of a yelling mob, 
     one member began throwing ink bottles at the clock, and 
     finally succeeded in breaking the pendulum. On a motion to 
     adjourn, arose the wildest disorder. The presiding officers 
     of both houses mounted the speaker's desk, and, by shouting 
     and waving their arms, tried to quiet the mob. Finally, they 
     succeeded in securing some semblance of order.

  Popular sentiment for direct election of Senators slowly grew in 
response to events like these. Some states held popular referenda on 
who should be Senator and attempted to require their legislatures to 
select the winners of those votes. More and more Senators were chosen 
in such processes, leading to more support in the Senate for a 
constitutional amendment. Congress finally acted in 1911 and 1912. 
There was high drama in the Senate as Vice President James Schoolcraft 
Sherman broke a tie on a crucial substitute amendment offered by 
Senator Joseph Bristow of Kansas during Senate consideration of the 
joint resolution. A few days of parliamentary wrangling ensued over 
whether the Vice President's tie breaking role in the Senate extends to 
such situations, and that precedent still stands today. In May 1912, an 
impasse of almost a year was broken and the House receded to the Senate 
version of the amendment, allowing it to be sent to the States for 
ratification. Less than a year later, on April 8, 1913, Connecticut 
became the 36th State to ratify the amendment, and it became the 17th 
Amendment to the Constitution.
  I recount this summary of the history of the 17th Amendment, and 
again, I commend to my colleagues Senator Byrd's chapter on the 
subject, first to make the point that even though it seems obvious to 
us that the Senate should be elected by the people, the struggle for 
that right was not easy or fast. But the cause was just and in the end 
the call for direct elections was too strong to be ignored. I believe 
the same result will occur here. It may take time, but in the end, I am 
confident that the principle that people must elect their 
representatives will prevail.
  Second, this history shows that the public's disgust with the 
corruption, bribery, and political chicanery that resulted from having 
Senators chosen by state legislatures was a big motivation for passing 
the amendment. Gubernatorial appointments pose the same dangers, and 
demand the same solution--direct elections.
  Finally, the history indicates that the proviso in the 17th amendment 
permitting gubernatorial appointments to fill temporary vacancies was 
not the subject of extensive debate in the Congress. The proviso 
originated in the substitute amendment offered by Senator Bristow. The 
Bristow substitute was designed, its sponsor explained, to ``make[] the 
least possible change in the Constitution to accomplish the purposes 
desired; that is the election of Senators by popular vote.'' Most 
significantly, it deleted a provision in the resolution as originally 
introduced that year that would have amended Article I, section 4 of 
the Constitution to remove Congress's supervisory authority to make or 
alter regulations concerning the time and manner of Senate elections.
  The proviso, explained Senator Bristow, ``is practically the same 
provision which now exists in the case of such a vacancy. The governor 
of the State may appoint a Senator until the legislature elects.'' 
Although significant debate over other provisions in the Bristow 
amendment is found in the Record before the climactic tie vote, which 
was broken by the Vice President, there seems to have been no further 
discussion of the proviso.
  Thus, it appears that the proviso was simply derived from the 
original constitutional provision in Article I, Section 3, which gave 
the power to choose Senators to the state legislatures, but allowed 
governors to appoint temporary replacements when the legislatures were 
not in session. It was unremarkable at the time of the 17th Amendment 
to allow governors to have the same temporary replacement power once 
direct elections were required. That would explain the apparent lack of 
debate on the question. The long and contentious debate over the 
amendment was dominated by much more basic issues, such as whether the 
people should elect their Senators at all, and whether Congress should 
also amend the ``time, place, or manner clause'' of Article I, section 
4.
  Nearly 100 years later, that proviso has allowed a total of 184 
Senators to be appointed by governors, and we have a situation in 
today's Senate where the people of four states, comprising over 12 
percent of the entire population of the country, will be represented 
for the next two years by someone they did not elect. It is very hard 
to imagine that the Congress that passed the 17th Amendment and the 
states that ratified it would have been comfortable with such an 
outcome. Indeed, some argue that the intent of the 17th Amendment was 
that temporary appointments to fill early vacancies should last only 
until a special election can be scheduled, rather than for an entire 
two-year Congress until the next general election. A number of states 
have adopted that approach, but many have not.
  That is not to say that the people appointed to Senate seats are not 
capable of serving, or will not do so honorably. I have no reason to 
question the fitness for office of any of the most recent appointees, 
and I look forward to working with them. But those who want to be a 
U.S. Senator should have to make their case to the people whom they 
want to represent, not just the occupant of the governor's mansion. And 
the voters should choose them in the time-honored way that they choose 
the rest of the Congress of the United States.
  I want to make it clear that this proposal is not simply a response 
to these latest cases that have been in the news over the past few 
months. These cases have simply confirmed my longstanding view that 
Senate appointments by state governors are an unfortunate relic of the 
pre-17th Amendment era, when state legislatures elected U.S. Senators. 
Direct election of Senators was championed by the great progressive Bob 
La Follette, who served as Wisconsin's Governor and a U.S. Senator. 
Indeed, my State of Wisconsin is now one of only 4 States, Oregon, 
Massachusetts, and Alaska are the others, that clearly require a 
special election to fill a Senate vacancy in all circumstances.
  The vast majority of states still rely on the appointment system, 
while retaining the right to require direct elections, as the 
Massachusetts legislature and the voters of Alaska have done in recent 
years. But changing this system state by state would be a long and 
difficult process, even more difficult than the ratification of a 
constitutional amendment, particularly since Governors have the power 
to veto state statutes that would take this power away from them. 
Furthermore, the burden should not be on Americans to pass legislation 
in their states protecting their fundamental voting rights--the right 
to elect one's representatives is a bedrock principle and should be 
reaffirmed in the nation's ruling charter.
  We need to finish the job started by La Follette and other reformers 
nearly a century ago. Nobody can represent

[[Page 2053]]

the people in the House of Representatives without the approval of the 
voters. The same should be true for the Senate.
  In the several days since I announced my intention to introduce this 
amendment, I have heard a number of arguments raised against it. I 
would like to briefly address them. First of all, some suggest this 
amendment is an overreaction to the headlines of the day. But there are 
several precedents for amending the provisions of the Constitution that 
relate to the structure of government based on specific events. The 
22nd Amendment, limiting the presidency to two terms, passed in 1951 in 
response to President Franklin D. Roosevelt's four-term presidency. The 
25th Amendment, revising presidential succession, was passed in 1967 in 
response to confusion that occurred after the assassination of 
President Kennedy. If events demonstrate that there is a problem with 
our government structure, sooner or later we must take steps to address 
those problems. There is no better time to do that than when the 
effects of the structural flaw are most evident and most prominently 
part of the public debate.
  Another objection I have heard to this proposal is the potential 
financial burden on the states that must pay for special elections. As 
someone with a reputation for fiscal discipline, I always consider a 
proposal's impact on the taxpayer. But the cost to our democracy of 
continuing the anachronism of gubernatorial Senate appointments is far 
greater than the cost of infrequent special elections. And weighing the 
costs associated with the most basic tenet of our democracy--the 
election of the government by the governed--sets us on a dangerous 
path. Besides, the Constitution already requires special elections when 
a House seat becomes vacant, a far more frequent occurrence since there 
are so many more Representatives than Senators. I find the cost 
argument wholly unconvincing.
  Another argument I have heard is that special elections garner very 
low turnouts, or favor wealthy or well known candidates. They are not 
particularly democratic, the argument goes. And that may very well be 
true. But they are a whole lot more democratic than the election held 
inside the mind of one decisionmaker--the governor. Special elections 
may not be ideal, but they are elections, and every voter has the 
opportunity to participate. As Winston Churchill said, ``It has been 
said that democracy is the worst form of government except all the 
others that have been tried.''
  I have also heard the argument that the candidates for the special 
election will be selected by party bosses because there won't be time 
for a primary. That is simply not true. Under this amendment, each 
state can decide how to set up its special elections. My home State of 
Wisconsin provides for a special election within about 10 weeks of the 
vacancy, with a primary one month earlier. It's a compressed schedule 
to be sure, because the state doesn't want to be without representation 
for too long. But it can be done. I would hope that most states would 
want to hold primaries, but the point of this amendment is to make 
clear that only Senators who have been elected by the people can serve, 
not to micromanage how the states want to implement that requirement.
  I believe the core issue here is whether we are going to have a 
government that is as representative of and responsive to the people as 
possible. The time to require special elections to fill Senate 
vacancies has come. Congress should act quickly on this proposal, and 
send it to the states for ratification.

                          ____________________