[House Report 105-584]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-584
_______________________________________________________________________


 
                    DRUG-FREE WORKPLACE ACT OF 1998

_______________________________________________________________________


 June 18, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Talent, from the Committee on Small Business, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 3853]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Small Business, to whom was referred the 
bill (H.R. 3853) to promote drug-free workplace programs, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Drug-Free Workplace Act of 1998''.

SEC. 2. FINDINGS; PURPOSES.

  (a) Findings.--Congress finds that--
          (1) 74 percent of adults who use illegal drugs are employed;
          (2) small business concerns employ over 50 percent of the 
        Nation's workforce;
          (3) in over 88 percent of families with children under the 
        age of 18, at least 1 parent is employed; and
          (4) employees who use and abuse addictive substances increase 
        costs for businesses and risk the health and safety of all 
        employees because--
                          (A) absenteeism is 66 percent higher among 
                        drug users than nondrug users;
                          (B) health benefit utilization is 300 percent 
                        higher among drug users than nondrug users;
                          (C) 47 percent of workplace accidents are 
                        drug-related;
                          (D) disciplinary actions are 90 percent 
                        higher among drug users than nondrug users; and
                          (E) employee turnover is significantly higher 
                        among drug users than nondrug users.
  (b) Purposes.--The purposes of this Act are to--
          (1) educate small business concerns about the advantages of a 
        drug-free workplace;
          (2) provide financial incentives and technical assistance to 
        enable small business concerns to create a drug-free workplace; 
        and
          (3) assist working parents in keeping their children drug-
        free.

SEC. 3. SENSE OF CONGRESS.

  It is the sense of Congress that--
          (1) businesses should adopt drug-free workplace programs; and
          (2) States should consider incentives to encourage businesses 
        to adopt drug-free workplace programs. Financial incentives may 
        include--
                  (A) a reduction in workers' compensation premiums;
                  (B) a reduction in unemployment insurance premiums;
                  (C) tax deductions in an amount equal to the amount 
                of expenditures for employee assistance programs, 
                treatment, or drug testing.
        Other incentives may include adoption of liability limitation 
        as recommended by the President's Commission on Model State 
        Drug Laws.

SEC. 4. DRUG-FREE WORKPLACE DEMONSTRATION PROGRAM.

  The Small Business Act (15 U.S.C. 636 et seq.) is amended by--
          (1) redesignating sections 31 and 32 as sections 32 and 33, 
        respectively; and
          (2) inserting the following new section:

``SEC. 31. DRUG-FREE WORKPLACE DEMONSTRATION PROGRAM.

  ``(a) Establishment.--There is established a drug-free workplace 
demonstration program, under which the Administration may make grants, 
cooperative agreements, or contracts to eligible intermediaries for the 
purpose of providing financial and technical assistance to small 
business concerns seeking to start a drug-free workplace program.
  ``(b) Eligibility for Participation.--An intermediary shall be 
eligible to receive a grant, cooperative agreement, or contract under 
subsection (a) if it meets the following criteria:
          ``(1) It is an organization described in section 501(c)(3) or 
        501(c)(6) of the Internal Revenue Code of 1986 that is exempt 
        from tax under section 5(a) of such Act, a program of such 
        organization, or provides services to such organization.
          ``(2) Its purpose is to develop comprehensive drug-free 
        workplace programs or to supply drug-free workplace services, 
        or provide other forms of assistance and services to small 
        businesses.
          ``(3) It has at least 2 years of experience in drug-free 
        workplace programs or in providing assistance and services to 
        small business concerns.
          ``(4) It has a drug-free workplace policy in effect.
  ``(c) Requirements for Program.--Any drug-free workplace program 
developed as a result of this section shall include--
          ``(1) a written policy, including a clear statement of 
        expectations for workplace behavior, prohibitions against 
        substances in the workplace, and the consequences of violating 
        such expectations and prohibitions;
          ``(2) training for at least 2 hours for employees;
          ``(3) additional training for employees who are parents;
          ``(4) employee drug testing by a drug testing laboratory 
        certified by the Substance Abuse and Mental Health Services 
        Administration, or approved by the Department of Health and 
        Human Services under the Clinical Laboratories Improvements Act 
        of 1967 (42 U.S.C. 263a), or the College of American 
        Pathologists, and each positive result shall be reviewed by a 
        Licensed Medical Review Officer;
          ``(5) employee access to an employee assistance program, 
        including assessment, referral, and short-term problem 
        resolution; and
          ``(6) continuing alcohol and drug abuse prevention program.
  ``(d) Evaluation and Coordination.--The Small Business Administrator, 
in coordination with the Secretary of Labor, the Secretary of Health 
and Human Services, and the Director of the Office of National Drug 
Control Policy, shall evaluate drug-free workplace programs established 
as a result of this section and shall submit a report of findings to 
the Congress not later than 1 year after the date of the enactment of 
this section.
  ``(e) Eligible Intermediary.--Any eligible intermediary shall be 
located in a state, the District of Columbia, or the territories.
  ``(f) Definition of Employee.--For purposes of this section, the term 
`employee' includes--
          ``(1) supervisors;
          ``(2) managers;
          ``(3) officers active in management of the business; and
          ``(4) owners active in management of the business.
  ``(g) Construction.--Nothing in this section shall be construed to 
require an employer who attends a program offered by an intermediary to 
contract for any services offered as part of a drug-free workplace 
program.
  ``(h) Authorization.--There are authorized to be appropriated to 
carry out the provisions of this section, $10,000,000 for fiscal year 
1999 and such sums may remain available until expended.''.

SEC. 5. SMALL BUSINESS DEVELOPMENT CENTERS.

  Section 21(c)(3) of the Small Business Act (15 U.S.C. 648(c)(3)) is 
amended--
          (1) in subparagraph (R) by striking ``and'';
          (2) in subparagraph (S) by striking the period and inserting 
        ``; and''; and
          (3) by inserting after subparagraph (S) the following new 
        subparagraph:
          ``(T) providing information and assistance to small business 
        concerns with respect to developing drug-free workplace 
        programs.''.

SEC. 6. CONTRACT AUTHORITY.

  The Small Business Administrator may contract with and compensate 
government and private agencies or persons for services related to 
carrying out the provisions of this Act.

SEC. 7. COLLECTION OF DATA AND STUDY.

  (a) Collection and Study.--The Small Business Administrator shall 
collect data and conduct a study on--
          (1) drug use in the workplace among employees of small 
        business concerns;
          (2) costs to small business concerns associated with illegal 
        drug use by employees; and
          (3) a need for assistance in the small business community to 
        develop drug prevention programs.
  (b) Report.--Not later than 6 months after the date of the enactment 
of this Act, the Small Business Administrator shall submit a report 
containing findings and conclusions of the study to the chairmen and 
ranking members of the Small Business Committees of the House and 
Senate.

                                Purpose

    H.R. 3853 will initiate a demonstration program designed to 
aid small businesses in the establishment of drug-free 
workplace programs. Under H.R. 3853, non-profit intermediaries 
will be awarded grants to establish drug-free workplace 
programs for use by small businesses. These programs will 
encourage employers to offer and use a variety of strategies of 
employee assistance, training and intervention to reduce 
substance abuse problems.

                          Need for Legislation

    The abuse of drugs and alcohol in the workplace is a 
significant hazard to working Americans, and a serious drain on 
the economy in terms of lost productivity, increased health 
costs and wasted potential. Small businesses employ the vast 
majority of American workers. Yet the Institute for a Drug-Free 
Workplace estimates that a majority of illicit drug users work 
for organizations with less than 25 people--small businesses. 
Furthermore, the 1996 Conference Board Survey estimated the 
cost to the economy from absenteeism, injuries and diminished 
productivity to be $200 billion.
    These statistics point to a problem in our society that 
goes beyond the economic costs. Workplace injuries and lost 
productivity are often easily quantified. The costs to families 
and children due to the problem of substance abuse are harder 
to add up. H.R. 3853 will address both the obvious and hidden 
damage this problem causes through the encouragement of 
workplace-based programs of employee assistance and 
intervention.

                            Committee Action

    On May 14, 1998, the Subcommittee on Empowerment of the 
Committee on Small Business held a hearing to discuss H.R. 
3853, the Drug-Free Workplace Act of 1998, and to discuss the 
problem of substance abuse in the workplace generally. The 
first panel of witnesses consisted of: the Honorable Rob 
Portman, Representative from the Second Congressional District 
of Ohio; Mr. Thomas J. Donohue, President of the U.S. Chamber 
of Commerce; and Ms. Barbara Thomas, President of Warner-
Lambert Consumer Health Care.
    Representative Portman explained the components of H.R. 
3853. He also expressed his hope that the bill would attract 
bipartisan support based on the bipartisan concerns over the 
problem of substance abuse in the workplace. Representative 
Portman discussed the fact that only three percent of small 
businesses have drug-free workplace policies despite the fact 
that they employ most of the workforce. Finally, Representative 
Portman stressed that the costs to society of substance abuse 
in the workplace amount to tens of billions of dollars and that 
small businesses are willing to work to reduce those costs and 
are willing to work with the intermediaries supported by H.R. 
3853 to help eliminate substance abuse problems.
    Mr. Thomas J. Donohue then testified that ``[H]uman 
capital--is any ongoing organization's most valuable asset,'' 
and that absenteeism and diminished productivity accounted for 
nearly 50% of the $200 billion that drug and alcohol dependency 
costs employers every year. He stated, ``[a]nnual productivity 
losses from substance abuse amount to $640 for every American 
worker, regardless of whether they are substance abusers.'' Mr. 
Donohue then cited surveys that showed that workers in 
businesses with 25 or fewer employees admitted current illegal 
drug use at over twice the rate reported by employees in large 
firms. He concluded by stating, ``the Drug-Free Workplace Act 
embodies precisely the type of guidance and leadership the 
business community can use effectively to do its part. It is 
good for employees, good for employers, good for their 
communities, and good for the country. It is the smart thing to 
do and the right thing to do.''
    Ms. Barbara Thomas was the final witness for the first 
panel and discussed ``Stop the Silence'' (Warner-Lambert's 
program to help parents talk to their children about the 
dangers of drugs) and how it has led to an increase from 9 to 
146 calls to their employee assistance program related to 
substance abuse. The ``Stop the Silence'' kit cost 
approximately $5 per kit, and has helped numerous families deal 
better with substance abuse problems. Ms. Thomas stated, 
``[o]ur program relies heavily upon drug testing and 
rehabilitation programs. The goal of each is to help people 
stop destructive habits and ensure a safe workplace.'' Warner-
Lambert managers are included in the random drug-testing as 
part of the ``highly-sensitive'' category of employees. Warner-
Lambert also requires contractors who do business on their 
property to drug test their employees.
    The second panel of witnesses consisted of Mr. Richard 
Manfredi, President of Manfredi Motor Company, representing the 
American Trucking Association; Mr. Ray Soldivan, Vice President 
of Phoenix House, representing the American Council on Drug 
Education; Ms. Beth Lindamood of the Great American Insurance 
Company; and Mr. Scott Sutton of the William Jordan Company, 
representing the Associated General Contractors.
    Mr. Manfredi testified concerning the great success the 
trucking industry has enjoyed with its program of drug-free 
workplace initiatives. He testified in strong support of 
testing and cited Federal Highway Administration studies that 
showed that only 0.2 percent of truckers that were randomly 
tested tested positive. The FHWA has also found the trucking 
industry's drug use violation rate to be 2.2 percent, one-third 
of the rate for the general population.
    Mr. Ray Soldivan then testified for the American Council on 
Drug Education, stating, ``[a]t ACDE, we recognize the 
workplace as a key prevention site, a primary line of defense, 
where we can not only confront substance abuse in the 
workforce, but where we can prevent substance abuse throughout 
society. It is a venue as critical as home and school * * * We 
believe employers have much to gain by helping empower workers 
to deal thoughtfully and knowledgeably with drug use--and with 
the possibility of drug use--by their children, their friends 
and neighbors, and their co-workers. In this way, the workforce 
can become a positive force for demand reduction throughout the 
community.''
    Then Beth Lindamood, an analyst for the Great American 
Insurance Company, testified on the need for drug-testing as 
part of a drug-free workplace program. ``[I]n order to offer 
assistance for a problem you must first detect the problem,'' 
Ms. Lindamood stated.
    The last witness on the panel was Mr. Scott Sutton, 
representing the Associated General Contractors of America. Mr. 
Sutton cited a report in the Journal of Management estimating 
the overall cost to organizations. The report found the cost 
from applicant and employee drug testing to range from $160 per 
employee in the first year of employment to $800 per employee 
over an average tenure of 10 years. He also cited a report in 
The National Law Journal that only 10 percent of workers 
consider testing to be an invasion of privacy.
    Mr. Sutton testified that small businesses, a major 
component of the Associated General Contractors, are at high 
risk and cited a report from The Institute for a Drug-Free 
Workplace estimating that a majority of illicit drug users work 
for organizations with less than 25 employees. Mr. Sutton then 
testified concerning a test used by a Newport News, Virginia 
company. The test costs only $3.50 per substance tested for and 
takes just 6 or 7 minutes. Finally, Mr. Sutton praised the use 
of Small Business Development Centers in H.R. 3853 because, 
``[t]he Small Business Development Centers are known and 
trusted advisors for emerging businesses. They have been 
partners in small business development for years.''
    The third and final panel consisted of Mr. Rudy Guzman of 
L&R Guzman Corporation; Mr. Larry Bennett of the Coalition for 
a Drug-Free Greater Cincinnati; Mr. Tuck Krehbiel of the C.J. 
Krehbiel Company; and Ms. Solange Bitol of the American Civil 
Liberties Union.
    Mr. Guzman testified that, after starting a new truss-
building business to supply an already successful business, he 
found the business failing. He discovered stolen inventory and 
low productivity were the result of employee drug abuse and he 
implemented a drug-free workplace policy. The policy did not 
just lead to success, it led to growth of the company to three 
times its planned size.
    Mr. Larry Bennett of the Coalition for a Drug-Free Greater 
Cincinnati testified that after one year of a drug-free 
workplace program, OSHA recordable accidents were reduced by 
50%. He testified that parent training approaches work. Mr. 
Bennett said, ``[s]mall business owners appreciate this 
training approach. It not only helps employees improve their 
parenting skills, it also helps the owner dispel the ``big 
brother'' aspect of drug-free workplace programs.''
    Mr. Tuck Krehbiel testified that at their company owners 
test themselves in the same program to build confidence and set 
the example. With a workplace program that follows up with EAP, 
employees understand that management is not judging people, but 
that it supports recovery.
    The final witness was Ms. Solange Bitol of the American 
Civil Liberties Union. Ms. Bitol testified concerning her 
organization's concerns over the privacy rights of employees. 
She testified that the ACLU believes that indiscriminate drug 
testing is unfair; however, she also testified that Federal 
courts are upholding random drug testing programs in 
occupations involving safety.
    Questioning by Members of the subcommittee focused on 
several key areas. Mr. Jackson expressed concern that employers 
must be encouraged to use intervention and assistance as often 
as possible rather than resorting to firing. Mr. Jackson also 
expressed concern over drug testing as a confidentiality issue. 
Several of the employer witnesses testified that they do not 
and would not test beyond drugs and alcohol. Such testing is 
expensive and unnecessary. Ms. Millender-McDonald questioned 
the panel regarding training and stressed the view that 
training and education are of paramount importance. Lastly, 
Chairman Souder questioned Ms. Bitol regarding the 
constitutionality of testing and discussed the balance that 
must be struck between privacy and safety.
    On Thursday June 11, 1998, the Committee on Small Business 
met to consider H.R. 3853. By unanimous consent, an amendment 
in the nature of a substitute was offered by Chairman Talent 
and accepted as original text for the purpose of amendment. The 
substitute was then opened for amendment by section. No 
amendments were offered to section one.
    Mr. Hinojosa offered an amendment to section two that would 
have required funding for the demonstration program to come 
from any tobacco settlement bill passed by Congress. A point of 
order was raised against the amendment based on germaneness. 
The Chairman heard arguments regarding the point of order and 
sustained the point of order. The amendment was ruled out of 
order, and Ms. Velazquez appealed the ruling of the Chair. A 
recorded vote was requested and the ruling of the Chair was 
sustained by a vote of 13-6. There were no further amendments 
offered to section two, and no amendments were offered to 
section three.
    In section four, the first amendment was offered by Mr. 
Pascrell. The amendment expanded the eligibility of 
intermediaries to include 501(c)(6) non-profit organizations 
such as Chambers of Commerce or trade associations. Mr. Souder 
questioned whether the amendment would apply to political 
organizations and Mr. Pascrell assured him it would not. The 
amendment was agreed to by unanimous voice vote.
    Ms. Christian-Green offered an amendment requiring all 
intermediaries to be State-certified as drug education 
providers. The Chairman asked Ms. Christian-Green if all States 
required such certification and Ms. Christian-Green replied 
that she was uncertain. The Chairman then suggested that the 
amendment be withdrawn in favor of report language directing 
the Administration to draft regulations requiring certification 
where applicable. Ms. Christian-Green agreed and the amendment 
was withdrawn.
    Mrs. McCarthy offered an amendment that would require 
training for employees to be expanded to four hours. Mrs. 
McCarthy explained that she believed more training time was 
necessary to ensure effective drug abuse prevention. Mr. Souder 
expressed concern that four hours would be more burdensome than 
necessary and pointed out that the trucking industry, a model 
for the demonstration program, only requires two hours of 
training. Mr. Bartlett and Mrs. Kelly also expressed concern 
over the four hour requirement. Mrs. McCarthy asked unanimous 
consent to change her amendment from four hours to two hours; 
consent was granted and the amendment, as modified, was passed 
by unanimous voice vote.
    Ms. Velazquez offered an amendment changing the nature of 
any drug-testing program offered to ``for cause.'' Mr. Jackson 
expressed a question regarding the voluntary nature of small 
business participation in the testing aspect of the bill. Mr. 
Bartlett expressed concern that ``for cause'' testing, as 
opposed to random testing, might open small businesses to more 
claims of discrimination. Ms. Millender-McDonald expressed 
concern over the definition of ``for cause,'' and Ms. Velazquez 
expressed belief that such definition was best left to the 
intermediaries and the Administration. Mrs. Kelly then 
questioned whether the amendment would preclude random testing. 
The Chairman explained that the bill would only establish a 
base of requirements and would not preclude any intermediary 
from offering assistance with random testing as well as ``for 
cause'' testing. Further debate was heard concerning the merits 
of the amendment, and Ms. Velazquez withdrew the amendment by 
unanimous consent.
    Mr. Jackson offered an amendment to include supervisors, 
owners and officers under the drug testing provision. The 
Chairman asked to clarify that the amendment apply to those in 
active control of their businesses, Mr. Jackson asked unanimous 
consent to change the amendment to reflect that clarification. 
The amendment was agreed to by unanimous voice vote.
    Mr. Jackson then offered another amendment prohibiting the 
use of any grant funds authorized under H.R. 3853 to conduct 
religious services, build or maintain facilities used primarily 
for religious purposes, or offer religious instruction as part 
of a program. Mr. Souder expressed concern that the amendment 
could have a chilling effect on the participation of faith-
based organizations. Such organizations have an excellent 
record in rehabilitation but might be deterred from 
participation if regulations required intrusive inspection and 
reporting requirements. The Chairman expressed a desire to work 
with Mr. Jackson to craft a less detailed amendment that would 
nevertheless prohibit use of funds in a manner that would 
violate the ``Establishment Clause.'' Mr. Jackson then withdrew 
his amendment by unanimous consent, subject to his right to 
offer it later in an amended form.
    Ms. Velazquez offered an amendment requiring that drug 
testing programs recommended under the legislation be 
administered by certified laboratories and reviewed by medical 
review officers. Mr. Souder offered clarifying language to 
specify the certification required. The clarification was 
agreed to by unanimous consent. The amendment was then approved 
by unanimous voice vote.
    Ms. Christian-Green offered an amendment to require that 
any training offered be ``culturally sensitive''. Mr. Souder 
expressed concerns over what the phrase ``culturally 
sensitive'' meant. Ms. Christian-Green expressed her concern 
that persons not be targeted due to their backgrounds and that 
all employees be fully informed of the reasons for a drug-free 
workplace program. Ms. Velazquez expressed her support for the 
amendment as did Ms. Millender-McDonald. Mr. Bartlett expressed 
his belief that the need for appropriate training was essential 
but was concerned that the word ``culturally'' could lead to 
confusion. The amendment was defeated by a voice vote and a 
recorded vote was requested. By unanimous consent the recorded 
vote was delayed to the end of the mark-up. Ms. Millender-
McDonald offered an amendment requiring that any drug testing 
program be recommended by an ``employee assistance 
professional'' and voluntary. The Chairman expressed his 
concern that the amendment would remove the permissive nature 
of programs and options offered by intermediaries. Mr. Souder 
also expressed concern about the amendment. The amendment was 
defeated by voice vote.
    Ms. Millender-McDonald then offered another amendment to 
add the offering of ``continuing alcohol and drug abuse 
prevention programs'' to the drug-free workplace programs. The 
amendment was adopted by a unanimous voice vote. This amendment 
made clear that the programs established by this legislation 
must focus on both drug and alcohol abuse problems.
    Mr. Manzullo offered an amendment to clarify that the small 
businesses would not be mandated to be financially responsible 
for implementing any portion of the drug-free workplace 
programs established by this bill. Mr. Manzullo was concerned 
that small businesses would be obliged to provide all services 
offered if they were to participate with an intermediary on a 
drug-free workplace plan. Mr. Souder expressed concern that the 
amendment would, in fact, confuse issues. His reading of the 
bill was that small businesses were not obligated to use any 
programs offered, and that programs offered were voluntary. Mr. 
Manzullo stated that he believed the language of the bill was 
not clear and that such ambiguity created the possibility for 
litigation. Mrs. Smith and Mr. Bartlett expressed the opinion 
that the bill was unclear and supported Mr. Manzullo's 
amendment to make the situation explicit. At the request of the 
Chairman, and by unanimous consent, Mr. Manzullo withdrew his 
amendment temporarily.
    Ms. Velazquez offered an amendment to require the Small 
Business Administration to perform a study on the costs of 
substance abuse in the workplace and the needs of small 
business to combat substance abuse. The amendment was approved 
by a unanimous voice vote.
    Ms. Christian-Green then offered an amendment to clarify 
that organizations in the States, the District of Columbia, and 
the territories are eligible for grants under the demonstration 
program. The amendment was approved by a unanimous voice vote.
    The Committee then returned to the amendment by Mr. 
Manzullo. Debate continued centering on the issue of whether 
small businesses would be obligated to provide all services 
offered by an intermediary. Mr. Pascrell expressed his concern 
that the amendment would deter employers from offering a full 
range of services to their employees. Mr. Manzullo reiterated 
his concern that small businesses have the choice of what 
services they could afford to offer employees. The Chairman 
suggested compromise language that no small business involved 
in a program offered by an intermediary be obligated to 
contract for any services offered as a part of a drug-free 
workplace program. The proposal was accepted by unanimous 
consent and the amendment was accepted by unnaimous voice vote.
    The Committee then returned to the pending amendment by Ms. 
Christian-Green and the roll was called. The amendment was 
defeated by a vote of 10 against and 5 in favor.
    The Chairman then moved for final passage of H.R. 3853, as 
amended, and that the Committee report the bill with technical 
and conforming amendments. The motion was approved and the 
Committee, with a quorum present, reported the bill by 
unanimous voice vote.

                      Section-by-Section Analysis

Section 1. Short title

    Designates the bill as ``the Drug-Free Workplace Act of 
1998''.

Section 2. Findings, purposes

    This section details Congressional findings regarding the 
serious costs in health, safety and productivity that the abuse 
of alcohol and drugs heaps on the economy and particularly, 
small business. This section also lays out the fundamental 
purpose of this bill--to aid working families and the small 
businesses that employ them in combating the threat of 
substance abuse.

Section 3. Sense of Congress

    This section expresses the sense of Congress that 
businesses should adopt drug-free workplace policies and that 
the States should encourage them in their efforts through tax 
and insurance incentives.

Section 4. Drug-free workplace demonstration program

    This section establishes the demonstration program 
permitting the Small Business Administration to offer grants to 
intermediary organizations who would provide assistance to 
small businesses in setting up drug-free workplace programs. 
The intermediaries must be 501(c)(3) or (6) non-profit 
organizations with a background in assisting small businesses 
and a specific history of at least two years experience in 
establishing drug-free workplace programs.
    This section, under paragraph (c), also establishes de 
minimis components for any drug-free workplace program. These 
components are (1) a clear written policy, (2) a minimum of two 
hours of training for all employees, (3) additional training 
for working parents, (4) drug testing by a certified 
institution, (5) access to an employee assistance program, and 
(6) a continuing drug and alcohol abuse prevention program.
    Paragraph (d) requires the Small Business Administration, 
in conjunction with the Departments of Labor and Health and 
Human Services and the ``Drug Czar,'' to evaluate programs any 
drug-free workplace programs establish. Paragraphs (e) and (f), 
respectively, define eligible intermediaries to include 
organizations in the District of Columbia and the territories, 
and define ``employees'' as including supervisors, managers and 
certain owners and officers.
    Finally, paragraph (g) makes clear that participation in 
drug-free workplace training sessions or other program does not 
require any employer to contract for any services offered as 
part of a drug-free workplace program, and paragraph (h) 
authorizes the program for fiscal 1999 at $10,000,000.
    While the Committee did not accept an amendment offered by 
Ms. Christian-Green regarding the certification of intermediary 
organizations it does wish to encourage the Administration, 
when drafting regulations for this program, to use certified 
intermediaries whenever possible. The Committee recognizes that 
certification may not be required in all jurisdictions, and 
does not wish to make it a statutory requirement. However, when 
required in a jurisdiction, it should also be required for this 
program. In jurisdictions where certification is not required, 
the Administration should draft regulations that require 
intermediaries to have some demonstrated skills and experience. 
The certification or experience should not necessarily be 
intrinsic to the intermediary itself, it may be acquired 
through subcontracting or referral.

Section 5. Small business development centers

    Section 5 adds providing drug-free workplace assistance and 
information to the various duties and responsibilities of small 
business development centers.

Section 6. Contract authority

    Authorizes the Small Business Administration to contract 
with other government agencies or organizations or private 
organizations for the provision of services under this Act. 
This provision will allow the Small Business Administration to 
draw on the resources of other organizations in areas outside 
their technical competencies.

Section 7. Collection of data and study

    Directs the Small Business Administration to collect data 
and perform a study on the abuse of drugs in the workplace and 
its costs to small business.

               Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 17, 1998.
Hon. James M. Talent,
Chairman, Committee on Small Business,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3853, the Drug-
Free Workplace Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mark Hadley 
(for federal costs) and Marc Nicole (for the state and local 
impact).
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 3853--Drug-Free Workplace Act of 1998

    Summary: H.R. 3853 would establish a drug-free workplace 
demonstration program, require that Small Business Development 
Centers (SBDCs) provide small businesses with information 
regarding drug-free workplace programs, and direct the Small 
Business Administration (SBA) to study the effects of drug use 
in the workplace. The bill would authorize the appropriation of 
$10 million to SBA for grants or contracts with not-for-profit 
organizations to provide small businesses with drug-free 
workplace programs. In addition, CBO estimates that 
implementing the other provisions of the bill would require 
expenditures of about $2 million over the 1999-2003 period. 
Assuming appropriation of the authorized and estimated amounts, 
CBO estimates that implementing the bill would cost $12 million 
over the 1999-2003 period.
    H.R. 3853 would not affect direct spending or receipts; 
therefore, pay-as-you-go procedures would not apply. H.R. 3853 
contains no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act (UMRA) and would 
impose no costs on state, local, or tribal governments except 
as conditions of federal assistance.
    Estimated cost to the Federal Government: For the purposes 
of this estimate, CBO assumes H.R. 3853 will be enacted by the 
end of fiscal year 1998, and that the authorized and estimated 
amounts will be appropriated by the start of each fiscal year. 
The estimated budgetary impact of H.R. 3853 is shown in the 
following table. The costs of this legislation fall within 
budget function 370 (commerce and housing credit).

                                     [By fiscal year in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                                       1999     2000     2001     2002     2003 
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
Estimated authorization level......................................       11      \1\      \1\      \1\      \1\
Estimated outlays..................................................        3        6        2      \1\      \1\
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.                                                                                         

    Basis of estimate: Based on information from SBA, CBO 
estimates that implementing H.R. 3853 would result in total 
costs to the government of about $12 million over the 1999-2003 
period. Of that amount, $10 million is specifically authorized 
in the bill for the drug-free workplace demonstration program. 
In addition, we estimate that SBA would spend about $1 million 
in 1999 to conduct the required study of drug use and less than 
$500,000 a year (through SBDCs) to provide information and 
assistance to help small businesses develop drug-free workplace 
programs.
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: H.R. 3853 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments except as conditions of federal assistance. 
The bill would expand the services that Small Business 
Development Centers are required to provide. SBDCs are operated 
solely or jointly by state and local government and 
institutions of higher education. SBDCs are funded by the 
federal government, and requirements imposed on them are 
conditions of receiving federal assistance.
    Estimate prepared by: Federal Costs: Mark Hadley; Impact on 
State, Local, and Tribal Governments; Marc Nicole.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                 Statement of Constitutional Authority

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, Section 8, clause 18 of the 
Constitution of the United States.

                           Oversight Findings

    In accordance with clause 2(l)(3)(D) of rule XI of the 
Rules of the House of Representatives, the Committee states 
that no oversight findings or recommendations have been made by 
the Committee on Government Reform and Oversight with respect 
to the subject matter contained in H.R. 3853.
    In accordance with clause (2)(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the oversight findings 
and recommendations of the Committee on Small Business with 
respect to the subject matter contained in H.R. 3853 are 
incorporated into the descriptive portions of this report.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

SMALL BUSINESS ACT

           *       *       *       *       *       *       *


  Sec. 21. (a) * * *

           *       *       *       *       *       *       *

  (c)(1) * * *

           *       *       *       *       *       *       *

  (3) Services provided by a small business development center 
shall include, but shall not be limited to--
          (A) * * *

           *       *       *       *       *       *       *

          (R) developing informational publications, 
        establishing resource centers of reference materials, 
        and distributing compliance guides published under 
        section 312(a) of the Small Business Regulatory 
        Enforcement Fairness Act of 1996; [and]
          (S) providing small business owners with access to a 
        wide variety of export-related information by 
        establishing on-line computer linkages between small 
        business development centers and an international trade 
        data information network with ties to the Export 
        Assistance Center program[.]; and
          (T) providing information and assistance to small 
        business concerns with respect to developing drug-free 
        workplace programs.

           *       *       *       *       *       *       *


SEC. 31. DRUG-FREE WORKPLACE DEMONSTRATION PROGRAM.

  (a) Establishment.--There is established a drug-free 
workplace demonstration program, under which the Administration 
may make grants, cooperative agreements, or contracts to 
eligible intermediaries for the purpose of providing financial 
and technical assistance to small business concerns seeking to 
start a drug-free workplace program.
  (b) Eligibility for Participation.--An intermediary shall be 
eligible to receive a grant, cooperative agreement, or contract 
under subsection (a) if it meets the following criteria:
          (1) It is an organization described in section 
        501(c)(3) or 501(c)(6) of the Internal Revenue Code of 
        1986 that is exempt from tax under section 5(a) of such 
        Act, a program of such organization, or provides 
        services to such organization.
          (2) Its purpose is to develop comprehensive drug-free 
        workplace programs or to supply drug-free workplace 
        services, or provide other forms of assistance and 
        services to small businesses.
          (3) It has at least 2 years of experience in drug-
        free workplace programs or in providing assistance and 
        services to small business concerns.
          (4) It has a drug-free workplace policy in effect.
  (c) Requirements for Program.--Any drug-free workplace 
program developed as a result of this section shall include--
          (1) a written policy, including a clear statement of 
        expectations for workplace behavior, prohibitions 
        against substances in the workplace, and the 
        consequences of violating such expectations and 
        prohibitions;
          (2) training for at least 2 hours for employees;
          (3) additional training for employees who are 
        parents;
          (4) employee drug testing by a drug testing 
        laboratory certified by the Substance Abuse and Mental 
        Health Services Administration, or approved by the 
        Department of Health and Human Services under the 
        Clinical Laboratories Improvements Act of 1967 (42 
        U.S.C. 263a), or the College of American Pathologists, 
        and each positive result shall be reviewed by a 
        Licensed Medical Review Officer;
          (5) employee access to an employee assistance 
        program, including assessment, referral, and short-term 
        problem resolution; and
          (6) continuing alcohol and drug abuse prevention 
        program.
  (d) Evaluation and Coordination.--The Small Business 
Administrator, in coordination with the Secretary of Labor, the 
Secretary of Health and Human Services, and the Director of the 
Office of National Drug Control Policy, shall evaluate drug-
free workplace programs established as a result of this section 
and shall submit a report of findings to the Congress not later 
than 1 year after the date of the enactment of this section.
  (e) Eligible Intermediary.--Any eligible intermediary shall 
be located in a state, the District of Columbia, or the 
territories.
  (f) Definition of Employee.--For purposes of this section, 
the term ``employee'' includes--
          (1) supervisors;
          (2) managers;
          (3) officers active in management of the business; 
        and
          (4) owners active in management of the business.
  (g) Construction.--Nothing in this section shall be construed 
to require an employer who attends a program offered by an 
intermediary to contract for any services offered as part of a 
drug-free workplace program.
  (h) Authorization.--There are authorized to be appropriated 
to carry out the provisions of this section, $10,000,000 for 
fiscal year 1999 and such sums may remain available until 
expended.

SEC. [31.] 32. HUBZONE PROGRAM.

  (a) In General.--There is established within the 
Administration a program to be carried out by the Administrator 
to provide for Federal contracting assistance to qualified 
HUBZone small business concerns in accordance with this 
section.

           *       *       *       *       *       *       *

  Sec. [32.] 33. All laws and parts of laws inconsistent with 
this Act are hereby repealed to the extent of such 
inconsistency.

                             MINORITY VIEWS

    Committee Democrats support the goal of a drug free work 
place. Unfortunately, H.R. 3853 falls short of this objective. 
Although the legislation reported out of Committee is an 
improvement over the original bill, H.R. 3853 still remains 
deficient in a number of ways.
    Thanks to amendments offered by Committee Members, such 
critical issues as participation by local business groups, 
supervisor training and accurate testing by labs were 
addressed. These were important first steps to ensuring that 
H.R. 3853 adequately addresses the issue of a drug free work 
place.
    One of the biggest concerns many Democrats on the Committee 
had was over the Small Business Administration's level of 
expertise in this area. The adoption of H.R. 3853 represents a 
venture into a new arena of social policy for the Small 
Business Administration. In an attempt to address the lack of 
expertise, the managers' amendment included language directing 
the SBA to study the effectiveness of this new program. 
Democrats were successful in expanding the study to include 
examining the extent of the problem of drug use in small 
business and the need for assistance from the Small Business 
Administration. Nonetheless, further work still needs to be 
done to make sure that the Small Business Administration is 
prepared to effectively administer this program.
    Another major concern was the lack of participation by 
local chambers of commerce and trade associations. This issue 
was corrected by Mr. Pascrell, who successfully offered an 
amendment to include 501(c)6 and other organizations that 
provide services to small business. It made no sense for every 
other federal program that focuses on drugs in the work place 
to include these organizations and for H.R. 3853 to bar them 
from participating.
    The need for sufficient training was also problematic to 
Democrats on the Committee. The Committee mark allowed for only 
60 minutes of training. This was clearly an insufficient amount 
of time to seriously provide employees and supervisors 
instruction on such a sensitive and critical issue as substance 
abuse in the work place. The issue was improved when the 
Committee adopted Ms. McCarthy's modified amendment to increase 
the training requirements under the bill to 2 hours. Committee 
Democrats still remain concerned that more instruction is 
needed and would have preferred Ms. McCarthy's original 
amendment that required 4 hours of training.
    Mr. Davis' concern that drug testing be conducted by an 
accredited lab is important in order to insure that tests are 
done in a manner that is both quick and accurate. This issue 
was addressed by ensuring that all tests be performed at 
accredited labs. Democrats on the Committee also want to 
encourage the Department of Health and Human Services to 
implement an out-reach program to make sure that more minority 
owned labs are included.
    An important milestone in abuse prevention was the approval 
of Ms. Millender-McDonald's amendment that would include 
alcohol in any continuing drug abuse prevention program. If the 
goal of this legislation is to eliminate drugs that impair 
faculties and cause danger in the work place, then it makes 
sense to include alcohol as part of this program.
    While many problem areas were addressed, the one size fits 
all approach that H.R. 3853 takes severely limits the ability 
of small businesses to tailor a program that meets their needs. 
This approach leaves many unresolved questions which must be 
addressed before the legislation guarantees that our work 
places are truly drug free environments.
    Democrats still remain concerned over the cost of the 
program. With the Small Business Administration already under 
fire, we are concerned that funds for this new program will be 
siphoned from already established and critical programs, such 
as the 7(j) management and technical assistance program, the 
SBIC program and the Women Business Centers program.
    Furthermore, the legislation still sorely lacks employee 
protections. While Mr. Jackson was able to make the legislation 
fairer by extending testing to supervisors and owners, this is 
clearly not sufficient. In order for a drug free work place to 
be successful, it is important that a commitment be made to 
employees that they will be treated fairly. Under H.R. 3853 
employees have little or no recourse. The bill reported out of 
Committee contains no clear guidelines of what happens to 
employees who tests positive or voluntarily come forward. This 
issue must be resolved if we are to have a successful drug free 
work place program.
    An attempt by Ms. Christian-Green to ensure that all 
training conducted take into account language and cultural 
barriers was defeated by the Majority. It is critical that low-
skilled workers with a limited-English-proficiency clearly 
understand the drug free workplace policy and its 
ramifications.
    The testing provisions of the legislation still remain 
extremely vague, as well. For example, as currently drafted, 
the legislation would allow for such controversial methods of 
testing as hair samples, which has been questioned as 
ethnically biased. These types of inconsistencies will not 
foster a drug free work place, but create an environment filled 
with tension and uncertainty between employees and supervisors.
    As stated earlier, Democrats join in supporting efforts to 
create a drug free work place. H.R. 3853, although improved 
from the version considered by the Committee, still requires 
substantial work in the areas of cost, drug testing, and 
employee protections before it will truly create a work 
environment that is drug free. Democrats look forward to the 
continued process of refining this legislation during 
consideration by the full House.

                                                Nydia M. Velazquez.

                                
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