[Senate Report 105-186]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 335
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-186
_______________________________________________________________________


 
                    THE AMERICAN COMPETITIVENESS ACT

                                _______
                                

                  May 11, 1998.--Ordered to be printed

_______________________________________________________________________


Mr. Hatch, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 1723]

    The Committee on the Judiciary, to which was referred the 
bill (S. 1723) to amend the Immigration and Nationality Act to 
assist the United States to remain competitive by increasing 
the access of United States' firms and institutions of higher 
education to skilled personnel and by expanding educational and 
training opportunities for American students and workers and 
for other purposes, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose..........................................................7
 II. Legislative history..............................................8
III. Discussion.......................................................8
 IV. Vote of the Committee...........................................25
  V. Section-by-section analysis.....................................26
 VI. Cost estimate...................................................32
VII. Regulatory impact statement.....................................35
VIII.Additional views of Senators Leahy, Kennedy, Biden, Feingold, 
     Durbin, Torricelli, and Feinstein...............................36
 IX. Changes in existing law.........................................45

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; REFERENCES IN ACT.

  (a) Short Title.--This Act may be cited as the ``American 
Competitiveness Act''.
  (b) References in Act.--Except as otherwise specifically provided in 
this Act, whenever in this Act an amendment or repeal is expressed as 
an amendment to or a repeal of a provision, the reference shall be 
deemed to be made to the Immigration and Nationality Act (8 U.S.C. 1101 
et seq.).

SEC. 2. FINDINGS.

  Congress makes the following findings:
          (1) American companies today are engaged in fierce 
        competition in global markets.
          (2) Companies across America are faced with severe high skill 
        labor shortages that threaten their competitiveness.
          (3) The National Software Alliance, a consortium of concerned 
        government, industry, and academic leaders that includes the 
        United States Army, Navy, and Air Force, has concluded that 
        ``The supply of computer science graduates is far short of the 
        number needed by industry.''. The Alliance concludes that the 
        current severe understaffing could lead to inflation and lower 
        productivity.
          (4) The Department of Labor projects that the United States 
        economy will produce more than 130,000 information technology 
        jobs in each of the next 10 years, for a total of more than 
        1,300,000.
          (5) Between 1986 and 1995, the number of bachelor's degrees 
        awarded in computer science declined by 42 percent. Therefore, 
        any short-term increases in enrollment may only return the 
        United States to the 1986 level of graduates and take several 
        years to produce these additional graduates.
          (6) A study conducted by Virginia Tech for the Information 
        Technology Association of America estimates that there are more 
        than 340,000 unfilled positions for highly skilled information 
        technology workers in American companies.
          (7) The Hudson Institute estimates that the unaddressed 
        shortage of skilled workers throughout the United States 
        economy will result in a 5-percent drop in the growth rate of 
        GDP. That translates into approximately $200,000,000,000 in 
        lost output, nearly $1,000 for every American.
          (8) It is necessary to deal with the current situation with 
        both short-term and long-term measures.
          (9) In fiscal year 1997, United States companies and 
        universities reached the cap of 65,000 on H-1B temporary visas 
        a month before the end of the fiscal year. In fiscal year 1998 
        the cap is expected to be reached as early as May if Congress 
        takes no action. And it will be hit earlier each year until 
        backlogs develop of such a magnitude as to prevent United 
        States companies and researchers from having any timely access 
        to skilled foreign-born professionals.
          (10) It is vital that more American young people be 
        encouraged and equipped to enter technical fields, such as 
        mathematics, engineering, and computer science.
          (11) If American companies cannot find home-grown talent, and 
        if they cannot bring talent to this country, a large number are 
        likely to move key operations overseas, sending those and 
        related American jobs with them.
          (12) Inaction in these areas will carry significant 
        consequences for the future of American competitiveness around 
        the world and will seriously undermine efforts to create and 
        keep jobs in the United States.

SEC. 3. INCREASED ACCESS TO SKILLED PERSONNEL FOR UNITED STATES 
                    COMPANIES AND UNIVERSITIES.

  (a) Establishment of H1-C Nonimmigrant Category.--
          (1) In general.--Section 101(a)(15)(H)(i) (8 U.S.C. 
        1101(a)(15)(H)(i)) is amended--
                  (A) by inserting ``and other than services described 
                in clause (c)'' after ``subparagraph (O) or (P)''; and
                  (B) by inserting after ``section 212(n)(1)'' the 
                following: ``, or (c) who is coming temporarily to the 
                United States to perform labor as a health care worker, 
                other than a physician, in a specialty occupation 
                described in section 214(i)(1), who meets the 
                requirements of the occupation specified in section 
                214(i)(2), who qualifies for the exemption from the 
                grounds of inadmissibility described in section 
                212(a)(5)(C), and with respect to whom the Attorney 
                General certifies that the intending employer has filed 
                with the Attorney General an application under section 
                212(n)(1).''.
          (2) Conforming amendments.--
                  (A) Section 212(n)(1) is amended by inserting ``or 
                (c)'' after ``section 101(a)(15)(H)(i)(b)'' each place 
                it appears.
                  (B) Section 214(i) is amended by inserting ``or (c)'' 
                after ``section 101(a)(15)(H)(i)(b)'' each place it 
                appears.
          (3) Transition rule.--Any petition filed prior to the date of 
        enactment of this Act, for issuance of a visa under section 
        101(a)(15)(H)(i)(b) of the Immigration and Nationality Act on 
        behalf of an alien described in the amendment made by paragraph 
        (1)(B) shall, on and after that date, be treated as a petition 
        filed under section 101(a)(15)(H)(i)(c) of that Act, as added 
        by paragraph (1).
  (b) Annual Ceilings for H1-B and H1-C Workers.--
          (1) Amendment of the INA.--Section 214(g)(1) (8 U.S.C. 
        1184(g)(1)) is amended to read as follows:
  ``(g)(1) The total number of aliens who may be issued visas or 
otherwise provided nonimmigrant status during any fiscal year--
          ``(A) under section 101(a)(15)(H)(i)(b)--
                  ``(i) for each of fiscal years 1992 through 1997, may 
                not exceed 65,000,
                  ``(ii) for fiscal year 1998, may not exceed 95,000,
                  ``(iii) for fiscal year 1999, may not exceed the 
                number determined for fiscal year 1998 under such 
                section, minus 10,000, plus the number of unused visas 
                under subparagraph (B) for the fiscal year preceding 
                the applicable fiscal year, and
                  ``(iv) for fiscal year 2000, and each applicable 
                fiscal year thereafter through fiscal year 2002, may 
                not exceed the number determined for fiscal year 1998 
                under such section, minus 10,000, plus the number of 
                unused visas under subparagraph (B) for the fiscal year 
                preceding the applicable fiscal year, plus the number 
                of unused visas under subparagraph (C) for the fiscal 
                year preceding the applicable fiscal year;
          ``(B) under section 101(a)(15)(H)(ii)(b), beginning with 
        fiscal year 1992, may not exceed 66,000; or
          ``(C) under section 101(a)(15)(H)(i)(c), beginning with 
        fiscal year 1999, may not exceed 10,000.
For purposes of determining the ceiling under subparagraph (A) (iii) 
and (iv), not more than 20,000 of the unused visas under subparagraph 
(B) may be taken into account for any fiscal year.''.
          (2) Transition procedures.--Any visa issued or nonimmigrant 
        status otherwise accorded to any alien under clause (i)(b) or 
        (ii)(b) of section 101(a)(15)(H) of the Immigration and 
        Nationality Act pursuant to a petition filed during fiscal year 
        1998 but approved on or after October 1, 1998, shall be counted 
        against the applicable ceiling in section 214(g)(1) of that Act 
        for fiscal year 1998 (as amended by paragraph (1) of this 
        subsection), except that, in the case where counting the visa 
        or the other granting of status would cause the applicable 
        ceiling for fiscal year 1998 to be exceeded, the visa or grant 
        of status shall be counted against the applicable ceiling for 
        fiscal year 1999.

SEC. 4. EDUCATION AND TRAINING IN SCIENCE AND TECHNOLOGY.

  (a) Degrees in Mathematics, Computer Science, and Engineering.--
Subpart 4 of part A of title IV of the Higher Education Act of 1965 (20 
U.S.C. 1070c et seq.) is amended--
          (1) in section 415A(b)(1) (20 U.S.C. 1070c(b)(1))--
                  (A) by striking ``$105,000,000 for fiscal year 1993'' 
                and inserting ``$155,000,000 for fiscal year 1999''; 
                and
                  (B) by inserting ``, of which the amount in excess of 
                $25,000,000 for each fiscal year that does not exceed 
                $50,000,000 shall be available to carry out section 
                415F for the fiscal year'' before the period; and
          (2) by adding at the end the following:

``SEC. 415F. DEGREES IN MATHEMATICS, COMPUTER SCIENCE, AND ENGINEERING.

  ``(a) Allotments and Grants.--From amounts made available to carry 
out this section under section 415A(b)(1) for a fiscal year, the 
Secretary shall make allotments to States to enable the States to pay 
not more than 50 percent of the amount of grants awarded to low-income 
students in the States.
  ``(b) Use of Grants.--Grants awarded under this section shall be used 
by the students for attendance on a full-time basis at an institution 
of higher education in a program of study leading to an associate, 
baccalaureate or graduate degree in mathematics, computer science, or 
engineering.
  ``(c) Comparability.--The Secretary shall make allotments and grants 
shall be awarded under this section in the same manner, and under the 
same terms and conditions, as--
          ``(1) the Secretary makes allotments and grants are awarded 
        under this subpart (other than this section); and
          ``(2) are not inconsistent with this section.''.
  (b) Data Bank; Training.--
          (1) In general.--The Secretary of Labor shall--
                  (A) establish or improve a data bank on the Internet 
                that facilitates--
                          (i) job searches by individuals seeking 
                        employment in the field of technology; and
                          (ii) the matching of individuals possessing 
                        technology credentials with employment in the 
                        field of technology; and
                  (B) provide training in information technology to 
                unemployed individuals who are seeking employment.
          (2) Authorization of appropriations.--There are authorized to 
        be appropriated for fiscal year 1999 and each of the 4 
        succeeding fiscal years--
                  (A) $8,000,000 to carry out paragraph (1)(A); and
                  (B) $10,000,000 to carry out paragraph (1)(B).

SEC. 5. INCREASED ENFORCEMENT PENALTIES AND IMPROVED OPERATIONS.

  (a) Increased Penalties for Violations of H1-B or H1-C Program.--
Section 212(n)(2)(C) (8 U.S.C. 1182(n)(2)(C)) is amended--
          (1) by striking ``a failure to meet'' and all that follows 
        through ``an application--'' and inserting ``a willful failure 
        to meet a condition in paragraph (1) or a willful 
        misrepresentation of a material fact in an application--''; and
          (2) in clause (i), by striking ``$1,000'' and inserting 
        ``$5,000''.
  (b) Spot Inspections During Probationary Period.--Section 212(n)(2) 
(8 U.S.C. 1182(n)(2)) is amended--
          (1) by redesignating subparagraph (D) as subparagraph (E); 
        and
          (2) by inserting after subparagraph (C) the following:
  ``(D) The Secretary of Labor may, on a case-by-case basis, subject an 
employer to random inspections for a period of up to five years 
beginning on the date that such employer is found by the Secretary of 
Labor to have engaged in a willful failure to meet a condition of 
subparagraph (A), or a misrepresentation of material fact in an 
application.''.
  (c) Layoff Protection for United States Workers.--Section 212(n)(2) 
(8 U.S.C. 1182(n)(2)), as amended by subsection (b), is further amended 
by adding at the end the following:
                  ``(F)(i) If the Secretary finds, after notice and 
                opportunity for a hearing, a willful failure to meet a 
                condition in paragraph (1) or a willful 
                misrepresentation of a material fact in an application, 
                in the course of which the employer has replaced a 
                United States worker with a nonimmigrant described in 
                section 101(a)(15)(H)(i) (b) or (c) within the 6-month 
                period prior to, or within 90 days following, the 
                filing of the application--
                          ``(I) the Secretary shall notify the Attorney 
                        General of such finding, and may, in addition, 
                        impose such other administrative remedies 
                        (including civil monetary penalties in an 
                        amount not to exceed $25,000 per violation) as 
                        the Secretary determines to be appropriate; and
                          ``(II) the Attorney General shall not approve 
                        petitions filed with respect to the employer 
                        under section 204 or 214(c) during a period of 
                        at least 2 years for aliens to be employed by 
                        the employer.
                  ``(ii) For purposes of this subparagraph:
                          ``(I) The term `replace' means the employment 
                        of the nonimmigrant at the specific place of 
                        employment and in the specific employment 
                        opportunity from which a United States worker 
                        with substantially equivalent qualifications 
                        and experience in the specific employment 
                        opportunity has been laid off.
                          ``(II) The term `laid off', with respect to 
                        an individual, means the individual's loss of 
                        employment other than a discharge for 
                        inadequate performance, violation of workplace 
                        rules, cause, voluntary departure, voluntary 
                        retirement, or the expiration of a grant, 
                        contract, or other agreement. The term `laid 
                        off' does not include any situation in which 
                        the individual involved is offered, as an 
                        alternative to such loss of employment, a 
                        similar employment opportunity with the same 
                        employer at the equivalent or higher 
                        compensation and benefits as the position from 
                        which the employee was discharged, regardless 
                        of whether or not the employee accepts the 
                        offer.
                          ``(III) The term `United States worker' 
                        means--
                                  ``(aa) a citizen or national of the 
                                United States;
                                  ``(bb) an alien who is lawfully 
                                admitted for permanent residence; or
                                  ``(cc) an alien authorized to be 
                                employed by this Act or by the Attorney 
                                General.''.
  (d) Expedited Reviews and Decisions.--Section 214(c)(2)(C) (8 U.S.C. 
1184(c)(2)(C)) is amended by inserting ``or section 
101(a)(15)(H)(i)(b)'' after ``section 101(a)(15)(L)''.
  (e) Determinations on Labor Condition Applications To Be Made by 
Attorney General.--
          (1) In general.--Section 101(a)(15)(H)(i)(b) (8 U.S.C. 
        1101(a)(15)(H)(i)(b)) is amended by striking ``with respect to 
        whom'' and all that follows through ``with the Secretary'' and 
        inserting ``with respect to whom the Attorney General 
        determines that the intending employer has filed with the 
        Attorney General''.
          (2) Conforming amendments.--Section 212(n) (8 U.S.C. 
        1182(n)(1)) is amended--
                  (A) in paragraph (1)--
                          (i) in the first sentence, by striking 
                        ``Secretary of Labor'' and inserting ``Attorney 
                        General'';
                          (ii) in the sixth and eighth sentences, by 
                        inserting ``of Labor'' after ``Secretary'' each 
                        place it appears;
                          (iii) in the ninth sentence, by striking 
                        ``Secretary of Labor'' and inserting ``Attorney 
                        General'';
                          (iv) by amending the tenth sentence to read 
                        as follows: ``Unless the Attorney General finds 
                        that the application is incomplete or obviously 
                        inaccurate, the Attorney General shall provide 
                        the certification described in section 
                        101(a)(15)(H)(i)(b) and adjudicate the 
                        nonimmigrant visa petition.''; and
                          (v) by inserting in full measure margin after 
                        subparagraph (D) the following new sentence: 
                        ``Such application shall be filed with the 
                        employer's petition for a nonimmigrant visa for 
                        the alien, and the Attorney General shall 
                        transmit a copy of such application to the 
                        Secretary of Labor.''; and
                  (B) in the first sentence of paragraph (2)(A), by 
                striking ``Secretary'' and inserting ``Secretary of 
                Labor''.
  (f) Prevailing Wage Considerations.--Section 101 (8 U.S.C. 1101) is 
amended by adding at the end the following new subsection:
  ``(i)(1) In computing the prevailing wage level for an occupational 
classification in an area of employment for purposes of section 
212(n)(1)(A)(i)(II) and section 212(a)(5)(A) in the case of an employee 
of--
          ``(A) an institution of higher education (as defined in 
        section 1201(a) of the Higher Education Act of 1965), or a 
        related or affiliated nonprofit entity, or
          ``(B) a nonprofit or Federal research institute or agency,
the prevailing wage level shall only take into account employees at 
such institutions, entities, and agencies in the area of employment.
  ``(2) With respect to a professional athlete (as defined in section 
212(a)(5)(A)(iii)(II)) when the job opportunity is covered by 
professional sports league rules or regulations, the wage set forth in 
those rules or regulations shall be considered as not adversely 
affecting the wages of United States workers similarly employed and be 
considered the prevailing wage.
  ``(3) To determine the prevailing wage, employers may use either 
government or nongovernment published surveys, including industry, 
region, or statewide wage surveys, to determine the prevailing wage, 
which shall be considered correct and valid if the survey was conducted 
in accordance with generally accepted industry standards and the 
employer has maintained a copy of the survey information.''.
  (g) Posting Requirement.--Section 212(n)(1)(C)(ii) (8 U.S.C. 
1182(n)(1)(C)(ii)) is amended to read as follows:
                  ``(ii) if there is no such bargaining representative, 
                has provided notice of filing in the occupational 
                classification through such methods as physical posting 
                in a conspicuous location, or electronic posting 
                through an internal job bank, or electronic 
                notification available to employees in the occupational 
                classification.''.

SEC. 6. ANNUAL REPORTS ON H1-B VISAS.

  Section 212(n) (8 U.S.C. 1182(n)) is amended by adding at the end the 
following:
          ``(3) Using data from petitions for visas issued under 
        section 101(a)(15)(H)(i)(b), the Attorney General shall 
        annually submit the following reports to Congress:
                  ``(A) Quarterly reports on the numbers of aliens who 
                were provided nonimmigrant status under section 
                101(a)(15)(H)(i)(b) during the previous quarter and who 
                were subject to the numerical ceiling for the fiscal 
                year established under section 214(g)(1).
                  ``(B) Annual reports on the occupations and 
                compensation of aliens provided nonimmigrant status 
                under such section during the previous fiscal year.''.

SEC. 7. STUDY AND REPORT ON HIGH-TECHNOLOGY LABOR MARKET NEEDS.

  (a) Study.--The National Science Foundation shall oversee the 
National Academy of Sciences in establishing a government-industry 
panel, including representatives from academia, government, and 
business, to conduct a study, using sound analytical methods, to assess 
the labor market needs for workers with high technology skills during 
the 10-year period beginning on the date of enactment of this Act. The 
study shall focus on the following issues:
          (1) The future training and education needs of the high-
        technology sector over that 10-year period, including projected 
        job growth for high-technology issues.
          (2) Future training and education needs of United States 
        students to ensure that their skills, at various levels, are 
        matched to the needs of the high technology and information 
        technology sector over that 10-year period.
          (3) An analysis of progress made by educators, employers, and 
        government entities to improve the teaching and educational 
        level of American students in the fields of math, science, 
        computer, and engineering since 1998.
          (4) An analysis of the number of United States workers 
        currently or projected to work overseas in professional, 
        technical, and managerial capacities.
          (5) The following additional issues:
                  (A) The need by the high-technology sector for 
                foreign workers with specific skills.
                  (B) The potential benefits gained by the 
                universities, employers, and economy of the United 
                States from the entry of skilled professionals in the 
                fields of science and engineering.
                  (C) The extent to which globalization has increased 
                since 1998.
                  (D) The needs of the high-technology sector to 
                localize United States products and services for export 
                purposes in light of the increasing globalization of 
                the United States and world economy.
                  (E) An examination of the amount and trend of high 
                technology work that is out-sourced from the United 
                States to foreign countries.
  (b) Report.--Not later than October 1, 2000, the National Science 
Foundation shall submit a report containing the results of the study 
described in subsection (a) to the Committees on the Judiciary of the 
House of Representatives and the Senate.
  (c) Availability of Funds.--Funds available to the National Science 
Foundation shall be made available to carry out this section.

SEC. 8. LIMITATION ON PER COUNTRY CEILING WITH RESPECT TO EMPLOYMENT-
                    BASED IMMIGRANTS.

  (a) Special Rules.--Section 202(a) (8 U.S.C. 1152(a)) is amended by 
adding at the end the following new paragraph:
          ``(5) Rules for employment-based immigrants.--
                  ``(A) Employment-based immigrants not subject to per 
                country limitation if additional visas available.--If 
                the total number of visas available under paragraph 
                (1), (2), (3), (4), or (5) of section 203(b) for a 
                calendar quarter exceeds the number of qualified 
                immigrants who may otherwise be issued such visas, the 
                visas made available under that paragraph shall be 
                issued without regard to the numerical limitation under 
                paragraph (2) of this subsection during the remainder 
                of the calendar quarter.
                  ``(B) Limiting fall across for certain countries 
                subject to subsection (e).--In the case of a foreign 
                state or dependent area to which subsection (e) 
                applies, if the total number of visas issued under 
                section 203(b) exceeds the maximum number of visas that 
                may be made available to immigrants of the state or 
                area under section 203(b) consistent with subsection 
                (e) (determined without regard to this paragraph), in 
                applying subsection (e) all visas shall be deemed to 
                have been required for the classes of aliens specified 
                in section 203(b).''.
  (b) Conforming Amendments.--
          (1) Section 202(a)(2) (8 U.S.C. 1152(a)(2)) is amended by 
        striking ``paragraphs (3) and (4)'' and inserting ``paragraphs 
        (3), (4), and (5)''.
          (2) Section 202(e)(3) (8 U.S.C. 1152(e)(3)) is amended by 
        striking ``the proportion of the visa numbers'' and inserting 
        ``except as provided in subsection (a)(5), the proportion of 
        the visa numbers''.
  (c) One-Time Protection Under Per Country Ceiling.--Notwithstanding 
section 214(g)(4) of the Immigration and Nationality Act, any alien 
who--
          (1) as of the date of enactment of this Act is a nonimmigrant 
        described in section 101(a)(15)(H)(i) of that Act;
          (2) is the beneficiary of a petition filed under section 
        204(a) for a preference status under paragraph (1), (2), or (3) 
        of section 203(b); and
          (3) would be subject to the per country limitations 
        applicable to immigrants under those paragraphs but for this 
        subsection,
may apply for and the Attorney General may grant an extension of such 
nonimmigrant status until the alien's application for adjustment of 
status has been processed and a decision made thereon.

SEC. 9. ACADEMIC HONORARIA.

  Section 212 (8 U.S.C. 1182) is amended by adding at the end the 
following new subsection:
  ``(p) Any alien admitted under section 101(a)(15)(B) may accept an 
honorarium payment and associated incidental expenses for a usual 
academic activity or activities, as defined by the Attorney General in 
consultation with the Secretary of Education, if such payment is 
offered by an institution of higher education (as defined in section 
1201(a) of the Higher Education Act of 1965) or other nonprofit entity 
and is made for services conducted for the benefit of that institution 
or entity.''.

                               I. PURPOSE

    In the Information Age, when skilled workers are at a 
premium, America faces a serious dilemma when employers find 
that they cannot grow, innovate, and compete in global markets 
without increased access to skilled personnel. The current 
shortage of such skilled personnel presents both a short-term 
and a long-term problem. The country needs to increase its 
access to skilled personnel immediately in order to prevent 
current needs from going unfilled. However, to meet these needs 
over the long term, the American education system must produce 
more young people in key fields, and we must increase our other 
training efforts, so that more Americans can be prepared to 
keep this country at the cutting edge and competitive in global 
markets.
    S. 1723 addresses both aspects of this problem. In order to 
meet immediate needs, the bill raises the current ceiling on 
the temporary hiring of skilled foreign nationals in specialty 
occupations. Under the Immigration and Nationality Act, 
employers are authorized to hire no more than 65,000 of these 
workers, a limit set in 1990. This ceiling is now proving 
inadequate in large measure due to the increase in the 
globalization of the U.S. economy and the growth of the U.S. 
economy generally and in certain industries in particular. For 
the first time, the ceiling was reached 1 month before the end 
of fiscal year 1997 and is projected to be reached more than 4 
months before the end of fiscal year 1998. Without legislation, 
U.S. employers will not be able lawfully to hire skilled 
foreign nationals in the United States on H-1B's for the 
remainder of fiscal year 1998. Moreover, the extensive backlogs 
that will develop without legislative action will worsen the 
problem in each succeeding fiscal year.
    S. 1723 also addresses the long-term problem that too few 
U.S. students are entering and excelling in mathematics, 
computer science, engineering and related fields in sufficient 
numbers. It contains measures to encourage more young people to 
study mathematics, engineering and computer science, to 
disseminate information about the availability of jobs in these 
fields, and to train unemployed persons in these areas.

                        II. LEGISLATIVE HISTORY

    This legislation was introduced by Senator Abraham and is 
cosponsored by Senators Hatch, McCain, DeWine, Specter, Grams, 
Brownback, Santorum, Thurmond, Ashcroft, Smith (OR), Hagel, 
Bennett, Mack, and Coverdell.
    A hearing was held on February 25, 1998, in the Committee 
on the Judiciary prior to the introduction of the legislation. 
The bill was not referred to subcommittee but was considered 
directly by the Committee on the Judiciary. It was marked up on 
April 2, 1998, and reported out of Committee with a favorable 
recommendation by a 12-to-6 vote.

                            III. DISCUSSION

                        A. The Current Situation

                             1. current law

    Under current law, the United States may issue up to 65,000 
H-1B visas annually. These visas are valid for 3 years, after 
which they can be renewed for an additional 3 years, thus 
allowing a maximum stay of 6 years. Persons admitted under 
these visas cannot stay permanently unless they are sponsored 
by an employer for a separate permanent employment-based 
immigrant visa, for which there is a generally lengthy separate 
approval process.
    In order to qualify for an H-1B visa, an individual must be 
in a ``specialty occupation.'' According to the law:

          The term ``specialty occupation'' means an occupation 
        that requires--(A) theoretical and practical 
        application of a body of highly specialized knowledge, 
        and (B) attainment of a bachelor's or higher degree in 
        the specific specialty (or its equivalent) as a minimum 
        for entry into the occupation in the United States.

    To qualify for an H-1B visa a nonimmigrant must have ``full 
state licensure to practice in the occupation, if such 
licensure is required to practice in the occupation'' or must 
possess ``experience in the specialty equivalent to the 
completion of [a bachelor's or higher degree], and recognition 
of expertise in the specialty through progressively responsible 
positions relating to the specialty.''
    As this language suggests, Congress has never limited use 
of H-1B visas to the ``best and brightest.'' In fact, the 
phrase ``best and brightest'' does not appear in the law. There 
are at least four reasons why an employer may choose to hire a 
foreign national on an H-1B visa: (1) the individual possesses 
unique knowledge or skills; (2) the person is an individual who 
can localize service or products based on their native 
knowledge of the language or culture of the market in which the 
service or product will be sold; (3) the company is building a 
global workforce (for example it is planned that the person 
will work in the United States to gain experience for a period 
ofyears before being sent to work overseas for the employer); 
and (4) an employer finds an inadequate number of highly qualified U.S. 
workers available for positions that need to be filled. These four 
reasons encompass a wide variety of situations where hiring an H-1B 
worker can increase the productivity of an employer in almost any 
industry, and caution against new specific mandates or requirements 
likely to inadvertently harm many employers. It is worth noting that 
three of these four reasons have nothing to do with whether or not 
there is a shortage in a particular field.

                            2. the 1990 act

    Prior to 1990, there was no cap on H-1B visas, which 
previously were called H-1 visas. As part of a comprehensive 
package of immigration law reforms, the Immigration Act of 1990 
added the 65,000 cap, a number that was essentially chosen 
arbitrarily in order to provide reassurance to critics of these 
visas that an unlimited supply of them would not be available, 
and despite contemporaneous expressions of concern that this 
limit would eventually have an adverse impact on American 
companies' and universities' access to skilled personnel and 
hence on their potential growth. ``The [65,000] number was set 
without public hearings, is arbitrary, and was in no way 
arrived at by analyzing demand, labor shortages, business 
conditions, or skilled labor needed by firms to remain globally 
competitive,'' according to Pro. Charles B. Keely of Georgetown 
University.
    In addition, to respond to concerns about wages, the 1990 
Act added a Labor Condition Attestation (LCA) to the program 
that required companies to attest they were paying individuals 
on H-1B's the higher of the prevailing wage or actual wage paid 
to similarly employed Americans. Under that provision, in order 
to obtain approval for bringing somebody in on an H-1B visa, 
under the law an employer must file an application with the 
Secretary of Labor stating:

          The employer--is offering and will offer during the 
        period of authorized employment to aliens admitted or 
        provided status as a nonimmigrant described in section 
        101(a)(15)(H)(I)(b) wages that are at least--(I) the 
        actual wage level paid by the employer to all other 
        individuals with similar experience qualifications for 
        the specific employment in question, or (II) the 
        prevailing wage level for the occupational 
        classification in the area of employment, whichever is 
        greater, based on the best information available at the 
        time of filing the application, and (ii) will provide 
        working conditions for such a nonimmigrant that will 
        not adversely affect the working conditions of workers 
        similarly employed.

    In order to secure enforcement of these requirements, the 
1990 act required the employer to provide notice of the fact 
that it is hiring a worker on an H-1B visa and the salary at 
which it is hiring the worker either to the collective 
bargaining representative of employees in the relevant 
occupational classification and area or, if there is none, to 
the employees themselves by posting this information at 
conspicuous locations at the place of employment. It also 
established a complaint mechanism for anyone who knew that 
these requirements were not being complied with to use, and 
authorized the Department of Labor to investigate these 
complaints and, if it found them meritorious, take appropriate 
action against violators, ranging from fines to debarment from 
use of H-1B visas.

                         3. the current crisis

    The 65,000 cap on H-1B visas set in 1990 proved sufficient 
for a number of years. In 1997, however, for the first time 
companies bumped up against it a month before the end of the 
fiscal year. The situation this year is much worse: As of May 
1998 and for the remainder of fiscal year 1998, no foreign-born 
professional can be hired in America on a new H-1B petition, 
according to the Immigration and Naturalization Service, unless 
Congress acts to raise the cap. That is because there already 
are sufficient visas approved or pending applications for H-1B 
status to exceed the 65,000 cap on H-1B visas set in the 
Immigration Act of 1990. In turn, the backlog that will develop 
for fiscal year 1999 may mean the 65,000 allotment will be 
reached by January 1999, thereby preventing companies, 
universities, and other nonprofits from using H-1B visas to 
gain access to skilled foreign-born professionals.
    There has been some debate, principally among authors of 
various academic studies, about whether there is a high-tech 
worker shortage and if so what is the proper way of measuring 
it. In the real world, however, there does not seem to be 
serious disagreement on this point. Virtually no employers the 
Committee has contacted have related anything but a serious 
difficulty in finding skilled individuals to fill key 
positions. The employers have found that these unfilled 
positions are limiting their companies growth potential and 
ability to create more jobs, products, and services for 
Americans. This is not surprising since, for example, the 
unemployment rate among electrical engineers nationally is 
below 1 percent (0.4 percent).
    We see other indicators of the tightness of the labor 
market. ComputerWorld reports that for many IT jobs annual 
salary increases were 10 to 20 percent annually in 1997. 
Salaries for certain IT occupations have risen more than 15 
percent annually in recent years, according to William M. 
Mercer. ``Starting salaries for Berkeley BSCS degree-holders 
averaged $47,000 last spring, 17.5 percent higher than in 1995. 
The campus placement center is booked solid. I have witnessed 
industry recruiters outside our building wearing signs that 
read `will trade pizza for a resume,' '' according to Randy H. 
Katz, chair, Department of Electrical Engineering and Computer 
Sciences, UC Berkeley. The Federal Reserve's survey of economic 
conditions made public on March 19 stated ``shortages of both 
skilled-and entry-level workers worsened.'' Companies appear so 
desperate for workers they are even hiring teenagers part-time 
at $50,000 a year, as The Washington Post reported in a March 1 
front-page article. In 1996, spending for recruitment ads in 
newspapers totaled nearly $5.8 billion, more than triple the 
$1.9 billion spent in 1991, according to the Newspaper 
Association of America.
    Andrew Grove, Chairman of Intel Corp., has stated that the 
issue is not so much a shortage of people, but restrictions in 
U.S. immigration law that prevent talented and highly qualified 
people from being hired off of U.S. university campuses and 
elsewhere. It is worth noting that in discussing the Midwest, 
Federal Reserve economist Richard E. Kraglic stated, ``The 
region is not just running out of workers; it is running out of 
potential workers.'' This is having a negative impact on 
economic growth, says economist Diane Swonk at First Chicago 
NBD. ``We're slowing because we've run out of people to 
employ.'' The Hudson Institute estimates that the unaddressed 
shortage of skilled workers throughout the U.S. economy will 
result in a 5-percent drop in the growth rate of GDP. That 
translates into approximately $200 billion in lost output, 
nearly $1,000 for every American.
    Those asserting that there is no shortage have relied 
heavily on a March 24 letter by the General Accounting Office 
(GAO) to two Members of Congress. In this letter, however, GAO 
made it very clear that it was not asserting that there is no 
shortage and indeed that it did notperform an independent 
analysis of whether or not a shortage of high-tech workers exists. 
Rather, the thrust of the letter was to raise questions about the 
methodology used by other studies in measuring whether there was a 
shortage and if so what its magnitude is. The U.S. Department of 
Commerce responded to the GAO letter by charging it contained ``several 
inaccuracies.'' The Commerce Department states that it did, for 
example, discuss that graduates with degrees outside of the computer 
and information sciences can and do enter the IT field. The Virginia 
Tech researchers for ITAA responded that their survey's methodology was 
sound. The researchers said GAO made a mistake in evaluating the 
study's response rate, pointing out the actual response rate was 60 
percent, not 36 percent as GAO reported, and that, moreover, there was 
little nonresponse bias in the survey. Phil Peters, a senior fellow of 
the Alexis de Tocqueville Institution, analyzed both sides and 
seriously questions the conclusions of the General Accounting Office.
    Even taken on its own terms, the limitations of GAO's 
report counsel caution against investing in GAO the 
responsibility of advising policymakers about the existence of 
a shortage--a project GAO itself did not claim to have 
undertaken, and that, particularly in specialized fields, it is 
very unlikely it possesses the tools to undertake because of 
the difficulty of the research involved, the creativity 
necessary, and the shortcomings of available government data, 
such as BLS wage data, in narrow fields and which GAO generally 
relies upon. This is particularly true when making an 
evaluation of how many highly skilled specialty workers should 
be admitted who will make up such a small percentage of the 
overall U.S. labor force annually.
    At the end of the day, it seems almost impossible to 
continue to debate whether we need to raise the H-1B cap to 
address the current shortage of highly skilled workers in the 
face of the current facts concerning H-1B visa usage itself. 
The recent enormous increase in the use of H-1B visas--without 
any change in U.S. law--is itself very powerful evidence that 
employers need access to the individuals they are recruiting in 
this fashion in order to grow, prosper, and compete 
internationally. Between 1997 and 1998, the use of the visas 
increased by approximately 45 percent. Projecting this demand 
to continue at this pace through the end of fiscal year 1998, 
95,000 of these visas will be needed, or 30,000 more than 
current law allows. Unless Congress acts, the use of H-1B visas 
to hire foreign nationals, often foreign students recruited off 
U.S. college campuses, will become prohibited for months and 
even potentially a year or more at a time because of the 
backlogs that will develop.

             B. The Likely Consequences of a Failure To Act

                     1. The Impact on American Jobs

    Artificially limiting companies' ability to hire skilled 
foreign professionals will stymie our country's economic growth 
and thereby partially atrophy its creation of American jobs. 
Thus, contrary to the claims of some critics of the H-1B 
program, American workers' interests are advanced, rather than 
retarded, by raising the H-1B cap.
    A letter signed by the CEO's of fourteen of America's 
leading companies, including Microsoft's Bill Gates, Netscape's 
James Barksdale, and Texas Instruments' Thomas Engibous, put 
this point well:

          Failure to increase the H-1B cap and the limits that 
        will place on the ability of American companies to grow 
        and innovate will also limit the growth of jobs 
        available to American workers. * * * Failure to raise 
        the H-1B cap will aid our foreign competitors by 
        limiting the growth and innovation potential of U.S. 
        companies while pushing talented people away from our 
        shores. * * * [this] could mean a loss of America's 
        high technology leadership in the world.

    At a February 25 hearing, the Committee heard testimony 
that strongly indicates individuals on H-1B visas create many 
jobs in America. T.J. Rodgers, president and CEO of Cypress 
Semiconductor, testified that for every foreign-born engineer 
he can hire, he employs five other American employees in 
marketing, manufacturing, or related endeavors. Anant Agrawal, 
born in India, entered the country on an H-1B visa. When he 
started working at Sun Microsystems the company employed fewer 
than 300 people. Combining his talents with another engineer, 
he developed SPARC, a powerful microprocessor that proved to be 
a dramatic innovation in chip design, according to Sun 
Microsystems. Today, Sun employs more than 23,000 people, the 
majority of whom do work related to Agrawal's innovation.
    Moreover, failure to raise the cap on H-1B visas will 
almost certainly have the effect of causing some U.S. companies 
to push some of their operations offshore. The Committee 
believes it is essential to avoid this danger by removing the 
artificial limits on companies' access to skilled personnel 
created if too few H-1B visas available and resisting the call 
to impose regulations on their use that are so excessive that 
the effect is the same.
    This danger is not fanciful speculation. According to ITAA, 
in 1997, more than 100,000 U.S. jobs in the information 
technology field were outsourced to India. Moreover, IT 
companies operating in both countries have told the Committee 
that an employee earning $60,000 a year in the U.S. would only 
be paid $6,000 a year in India. IT companies have also told the 
Committee that despite this salary differential, right now, on 
balance, most American companies would prefer to have their 
work done on-site, where for example, they can better monitor 
the quality of what is being done, but that if they cannot get 
the people they need on-site, they will have the work done 
elsewhere.
    Many of the concerns about H-1B visas revolve around the 
fear that individuals entering on H-1B visas ``take'' a job 
from an American worker. This fear, however, arises from the 
premise that there is a fixed number of jobs and competition 
for which is a zero-sum game. But this premise is plainly 
flawed. Just since passage of the 1990 act, the number of U.S. 
jobs has increased by more than 12 million and the Internet, 
which was used by a few thousand specialists back in 1990, now 
is used by tens of millions and is a major source of jobs and 
innovation in America. Since 1960, the number of U.S. jobs has 
more than doubled from 65 million to over 130 million today. 
These figures are simply the application of the general 
principle that labor markets have demonstrated time and time 
again: additional people entering the labor force, whether 
native-born students out of school, immigrants, or 
nonimmigrants, expand job opportunities and create other jobs 
through innovation, entrepreneurship, and money spent on 
consumer items like food, clothing, and housing, as pointed out 
in the 1986 Economic Report of the President.
    Moreover, looking at the particular case of individuals on 
H-1B visas, there is no evidence that they are harming the job 
prospects of native-born Americans. According to National 
Science Foundation data, there is no correlation between the 
percentage of foreign-born in a field and the unemployment rate 
in that field. The data show that fields with a high percentage 
of the foreign-born, such as computer science and engineering, 
have lower unemployment rates than fields with relatively few 
foreign-born, such as the geosciences andsocial sciences. And 
there is abundant evidence that the U.S. economy, its industries, and 
its universities, which are recognized as the best in the world, have 
all prospered from skilled foreign nationals and immigrants working 
side by side with native-born Americans.
    Finally, it seems worth noting that in 1991, the annual 
ceiling of H-1B's represented 0.055 percent of the U.S. 
civilian employment. In 1998, it is a smaller 0.05 percent 
given the growth of the labor force. The passage of the 
American Competitiveness Act will increase the annual flow of 
H-1B's as a proportion of the U.S. civilian labor force in 1998 
by approximately 0.023 percentage points. Even in particular 
industries, the expansion of the labor force will be tiny in 
percentage terms. It seems very unlikely that so minuscule a 
change in the composition of this country's workforce could 
have an appreciable negative impact on American employees.

                     2. impact on american salaries

    It has also been suggested that raising the cap on H-1B 
visas will have a negative impact on salaries for Americans in 
the same occupations, and that in fact one reason employers may 
want to bring in H-1B workers is to economize on costs. But 
there are no data to support these concerns. For instance, 
there are additional legal costs to hiring an individual on an 
H-1B. Moreover, National Science Foundation data show that the 
typical foreign-born scientist and engineer earns more, not 
less, than his or her native-born counterpart, according to the 
Wall Street Journal. The 1996 worldwide salary survey conducted 
by EE Times, a publication that covers the electrical 
engineering field, provides further evidence of this. Among the 
findings of the survey:

          American-born engineers earned a mean salary of 
        $66,000, fully $1,400 below the total mean. Immigrants 
        from India ($74,400) and Hong Kong ($76,800) pulled up 
        the averages for foreign-born engineers. Newcomers from 
        China at $65,800 [only $200 below the mean] lagged 
        behind them. This illustrates a point made in earlier 
        surveys * * * no evidence exists of immigrants dragging 
        down overall salaries.

The EE Times survey stated that it found no evidence of 
exploitation. ``Not a single one of the 137 non-U.S.-born 
engineers or managers earned under $35,000. By contrast 28 
American readers did.''

    Thus, what evidence we have suggests that American wages 
are not being undercut by H-1B workers, particularly in light 
of market forces and the role innovation plays in propelling 
the fields in question forward. There is also no evidence that 
companies maintain two wage scales for native-born and H-1B 
employees working side by side one another in the same 
occupations. Provisions in current law governing the hiring of 
H-1B workers, which require employers to pay H-1B workers the 
higher of prevailing or actual wages and to provide them 
working conditions that do not adversely affect the working 
conditions of others similarly situated, in fact forbid any 
such a practice. Moreover it would not work: especially given 
the fierce competition for skilled workers, an H-1B employee 
who is not being treated fairly can easily be petitioned by 
another employer and switch to work for that employer.
    Indeed, the Committee understands that such job changes are 
fairly common among H-1B workers, since the occurrence of such 
job changes and the INS's difficulty in accounting for them 
artificially inflated the count of the number of H-1B visas in 
use last fiscal year and for a period of time prompted concerns 
that the cap had been reached well before it had in fact been 
hit. Finally, many H-1B's are foreign students recruited off 
U.S. college campuses in the same process through which 
companies hire native-born students, so it would be unexpected 
if employers are creating different wage scales for the two 
groups. Indeed, at the Committee's hearing, Steven Levin of 
Texas Instruments testified that the situation is so 
competitive today that there are more companies recruiting at 
M.I.T. than there are graduates in high tech fields annually.
    In his testimony, Levin also provided data on starting 
salaries for various field that cast real doubt on the 
proposition that salaries in these areas are suffering from any 
kind of deflationary pressure. Although he noted that 
``starting salary * * * is heavily dependent on the education 
and work experience of each person offered employment'' and 
that ``the schools attended and the grade point average of a 
person also influences the starting salary,'' Levin testified 
that the average starting salary for engineers with a 
bachelor's degree and summer work experience at Texas 
Instruments is $46,800. For a person with a master's degree and 
summer work experience it is $54,000. For a Ph.D. with summer 
work experience it is $76,200.
    The Committee also heard similar testimony from Kenneth M. 
Alvares, vice president, Human Resources, at Sun Microsystems. 
He said the starting salaries it offers for recent college 
graduates is $45,000 to $55,000, though those with more 
experience could start at more than $55,000. Microsoft 
testified to similar numbers. Alvares also testified that ``of 
all the H-1B workers that Sun has hired, only a very small 
handful are actually recruited outside the United States and 
then brought into the country. The vast majority of H-1B's that 
Sun hires are already in the United States having graduated 
from United States schools--frequently at the top of their 
class.''
    In light of this lack of evidence that H-1B salaries are 
depressing the wages of Americans, the Committee rejects the 
idea of a new salary ``floor'' for individuals on H-1B's. Such 
a ``floor'' chosen by Congress would be completely arbitrary 
and as such would have negative and unintended consequences. 
The prevailing wage provisions in current law already require 
the individual on an H-1B to be paid at least the average paid 
to other similarly employed Americans.

                  3. the impact on training americans

    There is widespread agreement among Committee Members that 
more should be done about educating American young people for 
the jobs of tomorrow. Indeed, separate provisions of this 
legislation address that in a number of ways: Through a 
scholarship program included in the bill to help students major 
in engineering, mathematics, and computer science, and through 
provisions for training the unemployed in information 
technology at authorized levels higher than those announced in 
a small IT initiative put forward by the Clinton Administration 
earlier this year.
    It has been suggested, however, that raising the cap on H-
1B visas will have a negative effect on training programs, 
because it will undermine employers' commitment to providing 
American workers the necessary training. This claim, however, 
is belied by the evidence that industries that use H-1B's are 
already making very significant efforts to train Americans and 
indeed devote more of their own resources to worker training 
than those that do not use a significant number of H-1B visas. 
High tech firms spend $911 per employee on training vs. $300 
per employee for nonhigh-tech firms, according to the American 
Society for Training and Development. Michael Murray of 
Microsoft testified that his company alone spends over $568 
million annually on training and education. Sun Microsystems 
spends over $50 million a year, not including the 20,000 
volunteer hours Sun employees are contributing to link U.S. 
schools to the Internet in economically disadvantaged areas. 
Despite these expenditures, Microsoft and Sun today have 2,522 
and 2,000 unfilled technical positions respectively. Similarly, 
TexasInstruments spends over $100 million a year on training 
employees and has over 500 openings for skilled positions despite, like 
many companies, engaging in significant efforts to recruit on college 
campuses across the Nation.
    In addition, Silicon Valley entrepreneurs are themselves 
making $200 million in charitable contributions to fund 
fellowships in science and engineering at Stanford University. 
And Silicon Valley executives this year helped pass a 
significant education reform package through the California 
state legislature. High tech executives in Virginia and in 
other states have similarly led efforts for educational reform.

                    4. The Abraham-Hatch Substitute

    The Abraham-Hatch Substitute to S. 1723 addresses the 
various aspects of the current crisis. First, it makes the 
necessary temporary increases in the 65,000 cap on H-1B visas. 
It raises that cap by 30,000 to 95,000 for fiscal year 1998. In 
1999, 2000, 2001, and 2002, 10,000 visas would be subtracted 
from the 95,000, and those 10,000 would be allocated to a new 
H-1C category that would place a ceiling on physical therapists 
and other health care professionals. This new category is not 
an increase in physical therapists or other health care 
professionals but rather a ceiling. The creation of a new 
category, rather than a limitation within the H-1B category, 
was recommended by both the INS and State Department to ease 
and clarify administrative requirements for the agencies and 
other affected parties. To avoid disruptions in 1999 through 
2002, the bill also allows up to 20,000 H-2B visas to be made 
available to the H-1B category if the H-2B visas are unused in 
the previous fiscal year. If visas are unused in the H-1C 
category in a prior year, those visas will likewise be made 
available for use, if necessary, in the H-1B category. Unlike 
the bill as originally introduced, the Substitute makes the 
increases in the cap temporary, in order to provide an 
opportunity for Congress to reexamine this subject in 5 years. 
In addition, at the suggestion of Senator Kyl, the Substitute 
added a provision requiring a study and report on high tech, 
United States, and global issues for the next 10 years overseen 
by the National Science Foundation and done by a panel 
established by the National Academy of Sciences to be 
transmitted to the Judiciary Committees of both Houses by 
October 1, 2000, to assist the Congress in performing that 
reexamination. The Substitute also includes provisions greatly 
toughening penalties for willful violators, including a 
provision not contained in the legislation as originally 
introduced but developed with the assistance of Senator 
Grassley imposing an unprecedented $25,000 fine and 2 year 
debarment for willful violations in the course of which an 
American worker is laid off. Second, the Substitute also 
authorizes $50 million for the State Student Incentive Grant 
(SSIG) program to create approximately 20,000 scholarships for 
up to $5000 a year for low-income students pursuing an 
associate, undergraduate, or graduate level degree in 
mathematics, engineering or computer science. The program 
provides dollar-for-dollar Federal matching funds that will 
grow to $100 million with State matching. The bill also 
authorizes $10 million a year to train unemployed American 
workers in new skills for the information technology industry 
and $8 million per year for an improved job database to match 
job skills and job openings in information technology.

   5. Other Possible Restrictions on H-1B Visas and the Committee's 
                  Reasons for Declining to Adopt Them

    America has a very diverse economy. To attempt to 
micromanage the human resources policies of companies through 
prohibitions, undue restrictions or requirements on H-1B visas 
is likely to have unintended and harmful consequences on U.S. 
businesses, universities, and nonprofit entities, as well as on 
the U.S. economy and the jobs for Americans that economy 
generates. In the absence of compelling, demonstrated 
offsetting benefits, adoption of such regulations would be 
unwise.
    For these reasons, the Judiciary Committee declined to 
adopt a number of possible additional restrictions on H-1B 
visas proposed in a number of different quarters.

                   A. The Kennedy-Feinstein Amendment

    Senators Kennedy and Feinstein proposed an amendment that 
contained a number of additional preconditions for hiring H-1B 
workers. The Committee's judgment was that for the most part, 
these preconditions were really solutions in search of a 
problem, but that their effect would have been to inject the 
U.S. government so far into the minutiae of the human resources 
policies of employers across America and render H-1B visas so 
cumbersome to use that most employers would simply refrain from 
hiring H-1B workers.

                   1. Government-Approved Recruitment

    One provision of the Kennedy-Feinstein amendment was a 
requirement that before they could hire an H-1B worker, 
employers would have to attest that they had previously taken 
timely and effective steps to hire a qualified American. The 
full text of this provision reads:

          The employer, prior to filing the application, has 
        taken timely, significant, and effective steps to 
        recruit and retain sufficient United States workers in 
        the specialty occupation in which the nonimmigrant 
        whose services are being sought will be employed. Such 
        steps include good faith recruitment in the United 
        States, using procedures that meet industry-wide 
        standards, offering compensation as required by 
        subparagraph (A) [at least the prevailing wage], and 
        offering employment to any qualified United States 
        worker who applies or evidence that such good faith 
        recruitment was unsuccessful.

    There is a minor exception that might apply to some 
individuals who are ``aliens with extraordinary ability, aliens 
who are outstanding professors and researchers, and certain 
multinational executives and managers.'' No such definition is 
now used for H-1B employment, and individuals who would qualify 
on it would likely be eligible for other visas. Individuals 
with great promise or potential, but perhaps lesser years of 
experience, would be unlikely to qualify for that narrow 
exception.
    This provision ``requires businesses to engage in a 
government approved process before they can hire any 
international workers,'' according to American Business for 
Legal Immigration (ABLI), a coalition of American businesses 
and associations. Such a requirement has enormous implications 
not simply for foreign nationals, but for how a U.S. employer 
recruits American employees. What it amounts to is a grant of 
power to the Department of Labor to pass in advance on the 
adequacy of the process through which any company that wishes 
to hire an H-1B worker engages in its ordinary recruitment of 
workers, most of whom are Americans. Any company that did not 
get such a pre-approval of its recruitment practices before 
hiring someone on an H-1B visa would face a serious risk of 
Federal penalties.
    The problems with this sweeping grant of power are 
compounded by the fact that even with respect to some of the 
more modest obligations it currently is charged with enforcing, 
theDOL has shown little ability to give employers uniform and 
predictable interpretations and guidelines under which to function. 
Moreover, the system the DOL has devised before it will issue the 
``labor certification'' that employers must have in order to obtain a 
visa for a permanent worker now generally takes 2 years. DOL has 
suggested that the procedure for meeting this new mandate would not be 
nearly so cumbersome, but it has not described what it would be.
    To remain competitive in global markets, the Committee 
believes hiring decisions must remain the realm of U.S. 
companies and universities, rather than Federal bureaucrats. It 
is worth noting that in the context of permanent labor 
certifications, DOL has generally interpreted any ``qualified'' 
U.S. worker to be any worker who meets ``minimum'' criteria for 
the job as determined by the Department of Labor. The problem 
with this becomes more apparent if one uses a sports analogy. 
There are many people ``qualified'' to be a major league 
shortstop or second basemen. But to be most competitive teams 
try to hire the most qualified individual available for the 
job. Note that Congress has never barred major league baseball 
teams from hiring foreign-born shortstops simply because 
native-born individuals exists who might have some 
qualifications as well. Surely a researcher who contributes to 
a cure for cancer or Alzheimer's or a computer engineer who 
prepares products for export markets or provides IT services to 
hospitals is no less important to America than a 20-year-old 
with a quick glove and a strong right arm.
     Raymond J. Uhalde, acting assistant secretary for 
employment and training, U.S. Department of Labor, testified 
before the Judiciary Committee on February 25 that the prior 
recruitment attestation simply amounted to ``checking a box.'' 
With all respect, the Committee believes this does not 
accurately characterize the mandate this attestation would 
impose on U.S. businesses and universities. Any U.S. employer 
that ``checks a box'' on an attestation risks severe financial 
penalties, debarment from the use of H-1B visas and potential 
public embarrassment if that attestation is proven false or is 
inadequately documented. In order to be certain of compliance 
with such an attestation, an employer would have to follow DOL 
regulations--regulations that may not be forthcoming for a very 
long period of time if past experience is a guide--that spell 
out specifically which type of recruitment practices are 
acceptable to the Department of Labor for all professional 
employees in the company, particularly those employed in 
positions remotely similar to those in which an individual on 
an H-1B might be hired. This amounts to micromanaging the human 
resources policies of U.S. companies and universities 
throughout America.
    Universities have also pointed out the problems created by 
the prior recruitment attestation. According to the Association 
of American Universities, the College and University Personnel 
Association, NAFSA: Association of International Educators, and 
the National Association of State Universities and Land Grant 
Colleges, as applied to university hiring, this provision 
requires a policy of autarky, or native self-sufficiency, at 
odds with their mission of opening up their students to global 
perspectives. Moreover, they are concerned that this 
legislative language does not allow for consideration of the 
relative ability of different individuals. They write, 
``American higher education and academic-based research are 
world-renowned for their quality. That quality is a direct 
result of a commitment to recruit the most talented researchers 
and professors in the world. One of the country's greatest 
advantages is the ability of its higher education institutions 
to attract exceptional talent without regard to national 
borders.''

                    2. the ``no layoff'' attestation

    The Kennedy-Feinstein Amendment also included a provision 
requiring employers to make a second new attestation as a 
condition of hiring an H-1B worker, this one concerning 
layoffs. This provision would have required an employer to 
state that it

          (i) has not, within the 6-month period prior to the 
        filing of the application, laid off or otherwise 
        displaced any United States worker (as defined in 
        subparagraph (B), including a worker obtained by 
        contract, employee leasing, temporary help agreement, 
        or other similar basis, who has substantially 
        equivalent qualifications and experience in the 
        occupation classification for the position in which the 
        nonimmigrant is intended to be (or is) employed; and
          (ii) will not lay off or otherwise knowingly 
        displace, during the 90-day period following the filing 
        of the application, or during the 90-day period 
        immediately preceding the filing of any visa petition 
        supported by the application, any United States worker, 
        including any obtained by contract, who has 
        substantially equivalent qualifications and experience 
        in the occupation classification for the position for 
        which the nonimmigrant is to be (or is) employed.

    This provision is designed to forbid an employer from 
laying off an American worker in order to hire an H-1B worker 
with the same skills at a lower salary. Current law, however, 
already contains a prohibition designed to have the same 
effect. It forbids hiring H-1B workers at a salary below the 
higher of the prevailing or actual wage for people in that 
occupation. Moreover, there is no evidence that H-1B visas are 
in fact being used in this way. In response to a question from 
Senator Abraham at the February 25 hearing, DOL's Raymond 
Uhalde could cite in the past 7 years only one specific example 
known to DOL of a U.S. company laying off Americans and 
replacing them with individuals on H-1B visas, though it was 
not indicated whether the degree of evidence that this example 
involved a purposeful one-for-one replacement by the original 
employer. Mr. Uhalde also alluded to press reports of other 
cases but provided the Committee with no details. To date, the 
Department of Labor has also failed to respond to written 
follow-up questions on this and other points that were 
submitted by the Committee in March, despite repeated requests 
for its answers.
    In order to address any possible instances in which this 
might occur, however, S. 1723 as amended includes severe 
penalties of any employer who commits a willful violation of 
the prerequisites for hiring H-1B workers during the course of 
which it lays off a U.S. worker. The bill makes these employers 
subject to a fine of $25,000 per violation and a 2-year 
debarment from utilizing H-1B and all other employment-based 
immigrant visas. This narrowly targeted provision will penalize 
any employer who is truly guilty of the conduct giving rise to 
the concern.
    By contrast, the provision contained in the Kennedy-
Feinstein amendment was much broader. It very likely would have 
required a company to adopt a policy that prohibits layoffs of 
almost any employee currently working for it if the employer 
wanted even to ensure the option that it could later hire an 
individual on an H-1B visa. This is because if the employer had 
in the previous 6 months laid off anyone in the same 
``occupational classification'' as the H-1B worker it sought to 
hire, even at a job siteon the other side of the country, or if 
it did so within 90 days of hiring the H-1B worker, it would be in 
violation of this provision even if these other decisions had nothing 
to do with the hiring of the H-1B worker. This problem is further 
compounded by the fact that ``occupational classifications'' are very 
broad. Companies may have hundreds or even thousands of individuals 
employed in the same classification. If, for example, a computer 
engineer is laid off anywhere in the country by XYZ company, that 
company would be prohibited from hiring any other computer engineer on 
an H-1B visa, anywhere else, regardless of the differences in job 
duties the individuals perform or how many new jobs or innovations this 
new person might create.
    The Association of American Universities, the College and 
University Personnel Association, NAFSA: Association of 
International Educators, and the National Association of State 
Universities and Land Grant Colleges state: ``There is no 
evidence that American researchers are being laid off in order 
for universities to hire foreign H-1B researchers.'' They also 
find ``very problematic'' the broad occupational 
classifications to which the prohibition on layoffs would 
apply, pointing out many people fall into these categories who 
perform completely different functions. Additionally, they are 
concerned that the expiration of a grant could be considered a 
layoff and prevent the hiring of a whole range of people in the 
same classification, no matter how beneficial these individuals 
might be to the campus. Finally, university officials have told 
the committee that the legislative language contained in the 
Kennedy-Feinstein amendment means that any university that 
changes its course offerings or replaces a department and in 
the process changes its workforce composition will essentially 
be prohibited from hiring any foreign national. Such 
universities essentially will be shut out from the use of H-1B 
visas, which will undermine the caliber of the Nation's 
institutions of higher learning.
    For similar reasons, this provision would likely have a 
severe negative effect on other industries, such as 
entertainment and biomedical research. The Motion Picture 
Association of America endorsed the American Competitiveness 
Act, writing that ``to remain competitive in our global 
marketplace it is essential that our industry have timely 
access to foreign professionals when the need arises. From 
digital animators to computer programmers to software 
engineers, highly skilled technical employees play a critical 
role in the production of motion pictures.'' Yet given the 
relatively short project duration of motion picture production, 
many people may be working for periods of limited duration, 
after which they may be considered ``laid off.'' Thus this 
provision could effectively prohibit the American entertainment 
industry from employing individuals on H-1B's who could help in 
the production of animated and other films.
    Representatives of the biomedical research community, both 
for profit and nonprofit, have also told the Committee that the 
prior recruitment and no-layoff attestations contained in the 
Kennedy-Feinstein language will prevent them from hiring 
talented researchers and limit their flexibility in choosing 
and ending research projects, concluding that if these 
provisions were to become law they could have a serious and 
negative impact on the development of potentially life-saving 
drugs in the United States.
    Prohibiting or attempting to restrict layoffs in France and 
other countries has seriously harmed the functioning of those 
countries' economies. The Committee believes the real effect of 
a restriction of this sort will be either to limit American 
companies' access to foreign-born talent, which will help the 
companies' foreign competitors and thereby cost American jobs 
in the long run, or to drive U.S. companies to seek that talent 
by moving their facilities offshore, thereby eliminating 
American jobs in both the short and long term and helping 
foreign governments interested in attracting more investment, 
research and other facilities to their nations.

                 3. other kennedy-feinstein provisions

a. Limit on visa's term

    The Kennedy-Feinstein Amendment also contained a provision 
that would have limited the period of maximum stay for an 
individual on an H-1B to 3 years from the current 6 years. The 
Committee believes this would be unwise. Forcing individuals on 
H-1B visas to leave the country after 3 years would effectively 
give the benefit of any training they have received to the 
foreign competitors of U.S. companies.

b. Grant of unfettered investigative authority to the Department of 
        Labor

    The Kennedy-Feinstein Amendment also contained another 
provision that would have granted the Department of Labor 
unfettered authority to investigate any employer of an H-1B 
employee without a complaint having been filed. The Committee 
believes the case has not been made for granting this authority 
to DOL. In fiscal year 1997, DOL found only three cases of 
willful failure to pay the required wage rates in the H-1B visa 
program, involving three visa holders. Since 1990, it has found 
only eight such violations, according to DOL.
    Proponents of broader DOL authority have argued that this 
lack of identified willful violations is not significant, 
because it is explained not by the fact that these violations 
are not occurring but by the fact that individuals on H-1B's 
are reluctant to file complaints for fear that their employer 
will retaliate against them. They also argue that a DOL 
Inspector General's report shows wider abuse of H-1B's.
    The claim that individuals on H-1B's are afraid of filing 
complaints is belied several different ways. First, Harris 
Miller, president of the Information Technology Association of 
America, pointed out at the Committee's hearing that H-1B visa 
holders are not the only sources of complaints. The entire 
purpose of the requirement that employers post the fact that 
they are hiring an H-1B worker at a particular salary is to 
provide an opportunity for third parties to file complaints. 
Any interested party, including U.S. workers, may file a 
complaint which DOL must investigate. Competitors can also be a 
prime source of complaints, Miller noted, because no one would 
like to see their competition receive a competitive advantage 
by employing people at below market wages.
    Second, despite the availability of these other possible 
complainants, the DOL told a researcher in 1995 that H-1B 
nonimmigrants themselves were the number one source of 
complaints filed, according to Empower America. Nor is this 
fact surprising, for the premise that underlies DOL's 
contention, that H-1B workers are akin to ``indentured 
servants'' and will therefore refrain from complaining, is 
incorrect. There isconsiderable mobility among H-1B visa 
holders, who are sophisticated and knowledgeable employees. If an 
individual finds a better offer at another employer, he or she may 
simply be petitioned for by that new employer, a process that (at least 
right now) takes only approximately 1 month. This is quite common 
according to attorneys and human resources professionals in the field; 
the Department of Labor has provided no information disproving this and 
has left the misleading impression in public testimony that a 
nonimmigrant cannot change employers. In fact, as noted above, INS 
counting of H-1B's in 1997 was complicated by the fact that it was not 
counting ``extensions'' correctly--those H-1B visa holders who were 
employed by one U.S. employer and then hired by another U.S. employer.
    Finally, numerous proimmigration and immigrant rights 
organizations have endorsed S. 1723. These groups would be 
unlikely to have done so if they believed widespread 
mistreatment of individuals on H-1B's was occurring in the 
United States.
    The other argument offered in support of increased 
enforcement powers for DOL is a 1996 DOL Inspector General's 
audit report. Yet NAFSA: Association of International Educators 
published a thorough review of the audit report in a February 
1998 report by legal scholar Steven Bell. NAFSA: Association of 
International Educators concluded:

          The audit report is filled with a series of 
        fundamental errors, including factually inaccurate 
        statements of congressional intent, lack of knowledge 
        of the Immigration and Nationality Act, seriously 
        flawed statistical methodology, and incorrect 
        measurements of both the permanent and H-1B temporary 
        visa process sufficient to render the report completely 
        invalid as a tool for policy makers.

[Emphasis added.] Bell found that the 28-page DOL report 
contained more than 24 errors of a factual or legal nature--
nearly one a page.
    An analysis by the American Immigration Law Foundation also 
called the DOL audit report ``highly questionable.'' That 
analysis concluded: ``The audit report performed by the Office 
of the Inspector General so lacks context and basic references 
to immigration law that its value as a useful guide to future 
legislation should be severely questioned.''
    A third analysis published in Interpreter Releases also 
found the DOL Inspector General's report to be fundamentally 
flawed as a vehicle for evaluating employment visa issues.
    To give just one example: the DOL Inspector's General's 
report considers it an abuse of the H-1B program for an 
employer to obtain such a visa on behalf of an employee whom 
the employer may seek to hire permanently. In fact, however, 
Congress decided specifically in the 1990 Immigration Act to 
allow ``dual intent'' for H-1B's, meaning that a nonimmigrant 
could enter on an H-1B petition without being prohibited by a 
consular officer even if it was concluded the nonimmigrant 
later intended to stay permanently in the United States by 
being sponsored for permanent residence by his or her employer.
    Finally, it is worth noting that S. 1723 does grant the 
Department of Labor new authority to conduct investigations. 
The bill allows DOL to conduct spot inspections, without a 
complaint being filed, of employers who commit willful 
violations of the H-1B program. The probationary period in 
which such inspections can occur can last for up to 5 years at 
the discretion of the Secretary of Labor. This targets 
enforcement at known abusers rather than subjecting all 
employers to time-consuming and intrusive investigations. 
Georgetown University Professor Charles B. Keely writes, 
``Proposals to curtail use of temporary visas, especially the 
H-1B, are misdirected. More restrictive nonimmigrant visa 
policy, if unilaterally adopted by the United States, would 
ultimately be changed because such a policy will not alter 
competitive demands for international personnel movement.''

                   B. Feinstein Three Year Amendment

    The Committee defeated an amendment by Senator Feinstein to 
raise the cap on H-1B visas only for 3 years, rather than the 5 
years included in the Abraham-Hatch substitute. It seemed 
unlikely that the need for these additional visas would have 
vanished in 3 years, (or 2\1/2\ years, considering that we are 
now more than halfway through the current fiscal year). Should 
that projection prove incorrect, however, the numbers available 
for H-1B visas in S. 1723 are ceilings, not mandatory 
admissions. If employers use fewer of these visas, they will 
simply go unused, as happened from 1990 through Fiscal Year 
1996. Insufficient numbers, on the other hand, hold great 
potential for disruption.

                      C. Occupational Limitations

    Although no amendment to this effect was offered, some have 
suggested that any increase in the H-1B visas available should 
be limited to high-tech workers. The Committee, however, was 
persuaded by the arguments of the ABLI coalition, which 
includes many high-tech employers. ABLI wrote to the Committee 
and stated,

          We oppose * * * separating ``high-tech'' workers from 
        other H-1B recipients. Without appropriate knowledge of 
        what constitutes a ``high-tech'' worker, imposing these 
        distinctions will only serve to diminish the positive 
        impact of the program. With the skills needed to 
        compete in a global marketplace changing on an almost 
        daily basis, today's high technology can quickly become 
        yesterday's news. Creating a definition of ``high-
        tech'' worker is likely to put unreasonable constraints 
        on the ability of American businesses to create jobs 
        and generate economic growth.

    In this connection, it seems worth noting that although it 
has variously been reported that according to the Department of 
Labor, in the past few years between 25 and 50 percent of those 
receiving H-1B's were perhaps physical therapists, in fact the 
DOL's Office of Employment and Training Administration (ETA) 
has told the Committee that DOL does not know how many 
individuals are admitted on H-1B's in which occupations in a 
given year. This is because this information would be kept not 
by DOL, but by INS, which issues the visas that confer 
admission. In fact, however, INS does not keep track of the 
occupations.
    The information that DOL has, and that is the apparent 
source for the incorrect claims about physical therapists cited 
above, is salary information from the H-1B approved 
certifications. However, in a given year, there are as many as 
6 times as many positions certified by DOL, nearly 400,000, as 
there are H-1B admissions, 65,000.
    ETA has told the Committee that an occupation like physical 
therapy could readilybe disproportionately represented in the 
number of approved certifications without these certifications bearing 
any relationship to actual admissions. This is because the 
certifications may be geographically limited but the firm recruiting 
the physical therapist may have a national scope. If the recruiting 
firm does not know where the H-1B individual will work, it may file and 
receive a dozen or more certifications for different geographic 
locations for that therapist, even though they will all eventually 
result in only one admission. In contrast, a university would likely 
only have one certified position for a researcher or professor.
    Nevertheless, in order to address the issue of the use of 
H-1B visas by physical therapists, S. 1723 creates a separate 
temporary visa category for the use of physical therapists and 
other health care professionals, capped at 10,000 a year, 
starting in 1999. S. 1723 also requires the INS to collect and 
report data on the salaries and occupations of those admitted 
on H-1B visas.

                      D. H-1B Dependent Employers

    A proposal adopted by the Committee last Congress granted 
the DOL expanded powers and imposed some new attestations on 
employers of whose workforce H-1B workers constituted more than 
20 percent. This was an effort to target increased enforcement 
resources on this kind of employer because the rare examples of 
abuses were believed to be concentrated among these employers. 
Further examination has revealed no available evidence of a 
correlation between the percentage of H-1B's in an employer's 
workforce and its propensity to willfully violate the law on H-
1B's. In fact, it is possible that those employer's that rely 
on H-1B's the most would have the greatest incentive to obey 
the law, since disbarment from the program would hit such 
employers severely. The Committee has since become aware that 
these provisions would disproportionately affect small 
businesses. Moreover, on further reflection, the Committee has 
concluded that rather than targeting enforcement resources on 
certain kinds of employers, these resources should be targeted 
on employers with a record of violating the law. That is the 
approach S. 1723 currently takes.

                               conclusion

    There are reasons to be concerned about the impact on 
America if the H-1B cap is not addressed. Thomas Friedman of 
the New York Times wrote recently, ``If U.S. companies are told 
to put up `No Vacancy' signs, they are inevitably going to move 
more knowledge operations overseas, and that will spur more 
innovation, wealth creation, and jobs over there.'' He points 
out many of those hired on H-1B visas are actually educated at 
American universities, noting ``the idea that we would educate 
all these foreign computer engineers in U.S. universities and 
then send them home to compete with us is nuts.''
    Since 1990, the American economy has prospered and American 
companies have become world leaders in numerous fields. 
Foreign-born talent has played an important role in that 
success. The Committee believes that the American system of 
openness works and that imposing regulatory burdens that will, 
in effect, bar talented individuals from working in the United 
States simply because those individuals were not born in this 
country is not in keeping with the American tradition of 
welcoming to our shores people who can make a contribution to 
our economy and society.

                       IV. VOTE OF THE COMMITTEE

    On April 2, 1998, with a quorum present, the Committee on 
the Judiciary considered S. 1723, the American Competitiveness 
Act. Senators Kennedy and Feinstein offered an amendment in the 
nature of a substitute, which was defeated by a 10-to-8 vote. A 
Feinstein amendment to lower the period of time the additional 
H-1B visas would be made available in the bill from 5 years to 
3 years was defeated by a 10-to-8 vote. The Committee then 
approved an Abraham-Hatch substitute by unanimous consent and 
voted 12-to-6 on final passage to report the bill favorably to 
the Senate floor.

                             Recorded Votes

             vote on kennedy-feinstein substitute amendment

        YEAS (8)                      NAYS (10)
Leahy                               Hatch
Kennedy                             Thurmond
Biden                               Grassley
Kohl                                Specter (by proxy)
Feinstein                           Thompson
Feingold (by proxy)                 Kyl
Durbin                              DeWine
Torricelli                          Ashcroft (by proxy)
                                    Abraham
                                    Sessions (by proxy)

  vote on feinstein amendment to end the increase in additional h-1b 
                          visas after 3 years

        YEAS (8)                      NAYS (10)
Leahy                               Hatch
Kennedy                             Thurmond
Biden                               Grassley (by proxy)
Kohl                                Specter (by proxy)
Feinstein                           Thompson
Feingold (by proxy)                 Kyl
Durbin                              DeWine
Torricelli                          Ashcroft (by proxy)
                                    Abraham
                                    Sessions (by proxy)

                    Vote on final passage of S. 1723

        YEAS (12)                     NAYS (6)
Hatch                               Leahy
Thurmond                            Kennedy
Grassley (by proxy)                 Biden
Specter (by proxy)                  Feingold (by proxy)
Thompson                            Durbin
Kyl                                 Torricelli
DeWine
Ashcroft (by proxy)
Abraham
Sessions (by proxy)
Kohl
Feinstein

                     V. SECTION-BY-SECTION ANALYSIS

The Abraham-Hatch Substitute Amendment for the American Competitiveness 
                              Act S. 1723

Section 1

    The Act may be cited as the ``American Competitiveness 
Act.''

Section 2. Findings

    The Act makes the following findings:
           The National Software Alliance, a consortium 
        of concerned government, industry, and academic leaders 
        that includes the U.S. Army, Navy, and Air Force, has 
        concluded that ``The supply of computer science 
        graduates is far short of the number needed by 
        industry.'' The Alliance concludes that the current 
        severe understaffing could lead to inflation and lower 
        productivity.
           The U.S. Department of Labor projects that 
        our economy will produce more than 130,000 information 
        technology jobs in each of the next 10 years, for a 
        total of more than 1.3 million.
           The Hudson Institute estimates that the 
        unaddressed shortage of skilled workers throughout the 
        U.S. economy will result in a 5 percent drop in the 
        growth rate of GDP. That translates into approximately 
        $200 billion in lost output, nearly $1,000 for every 
        American.
           In fiscal year 1997, U.S. companies and 
        universities reached the cap of 65,000 on H-1B 
        temporary visas a month before the end of the fiscal 
        year. In fiscal year 1998 the cap is expected to be 
        reached as early as May if Congress takes no action. 
        And it will be hit earlier each year until backlogs 
        develop of such a magnitude as to prevent U.S. 
        companies and researchers from having any timely access 
        to skilled foreign-born professionals.
           It is vital that more American young people 
        be encouraged and equipped to entertechnical fields, 
such as mathematics, engineering, and computer science.
           If American companies cannot find home-grown 
        talent, and if they cannot bring talent to this 
        country, a large number are likely to move key 
        operations overseas, sending those and related American 
        jobs with them.
           Inaction in these areas will carry 
        significant consequences for the future of American 
        competitiveness around the world and will seriously 
        undermine efforts to create and keep jobs here in the 
        United States.

Section 3. Increased access to skilled personnel for U.S. companies and 
        universities--additional numbers sunset after 5 years

    The Abraham-Hatch substitute to S. 1723, which passed the 
Judiciary Committee 12 to 6, would increase the 65,000 cap by 
30,000 to 95,000 for fiscal year 1998. In 1999, 2000, 2001, and 
2002, 10,000 visas would be subtracted from the 95,000, and 
those 10,000 would be allocated to a new H-1C category that 
would place a ceiling on physical therapists and other 
nonphysician health care professionals. This new category is 
not an increase in physical therapists or other health care 
professionals but rather a ceiling. The creation of a new 
category, rather than a limitation within the H-1B category, 
was recommended by both the INS and State Department to ease 
and clarify administrative requirements for the agencies and 
other affected parties. In addition, to avoid disruptions in 
1999 through 2002, the bill allows up to 20,000 H-2B visas to 
be made available to the H-1B category if the H-2B visas are 
unused in the previous fiscal year. If visas are unused in the 
H-1C category in a prior year, those visas also will be made 
available for use, if necessary, in the H-1B category. Also to 
avoid disruptions, the bill states that any H-1B petition filed 
in fiscal year 1998, even if not approved until fiscal year 
1999, will be counted against the new fiscal year 1998 cap 
called for in the legislation.

----------------------------------------------------------------------------------------------------------------
                                                                                             H-1C Visas (New    
                                                                                          Category for Physical 
                                                               H-1B Visas                  Therapists and Other 
                                                                                           Health Care Workers) 
----------------------------------------------------------------------------------------------------------------
FY 1998........................................  95,000 (current projected usage for FY  .......................
                                                  1998).                                                        
FY 1999........................................  85,000 (plus a maximum of 20,000 H-2B                    10,000
                                                  visas if unused in previous fiscal                            
                                                  year).                                                        
FY 2000........................................  Same as above.........................                  *10,000
FY 2001........................................  Same as above.........................                  *10,000
FY 2002........................................  Same as above.........................                  *10,000
----------------------------------------------------------------------------------------------------------------
Note: *If H-1C visas are unused in a fiscal year, they will be made available to the H-1B category in the next  
  year.                                                                                                         

Section 4. Education and training in science and technology

    The intent of this section of the bill is to authorize $50 
million for the State Student Incentive Grant (SSIG) program to 
create approximately 20,000 scholarships a year for low-income 
students pursuing an associate, undergraduate, or graduate 
level degree in mathematics, engineering or computer science. 
The program provides dollar-for-dollar Federal matching funds 
that will grow to $100 million with State matching. The 
scholarships will be for up to $5,000 each. The bill also 
authorizes $10 million a year to train unemployed American 
workers in new skills for the information technology industry.
    The $50 million for the scholarships is intended to be on 
top of the current $105 million authorized for the program. The 
legislative language in this bill strikes the $105 million and 
inserts $155 million. Although the intent is to authorize only 
$50 million annually, because the Higher Education Act has not 
yet passed and been reauthorized in this fiscal year, the 
Congressional Budget Office is scoring the entire SSIG program 
as being reauthorized by the American Competitiveness Act. This 
has resulted in scoring of $155 million annually for the 
scholarships in S. 1723, rather than $50 million. This 
artificially inflates the bill's total scoring by CBO by $105 
million a year.
    This section also authorizes $10 million and $8 million 
respectively per year for training unemployed individuals in 
information technology and an improved job database to match 
job skills and job openings in information technology.

Section 5. Increased enforcement penalties and improved operations

    (a) Increased Penalties for Violations of H-1B or H-1C 
Program. The bill increases fines by five-fold for willful 
violators of the H-1B or H-1C program, from the current $1,000 
to $5,000.
    (b) Spot Inspections During Probationary Period. This 
section allows the Department of Labor to conduct spot 
inspections, without a complaint being filed, of employers who 
commit willful violations of the H-1B program after the passage 
of this act. The probationary period in which such inspections 
can occur can last for up to 5 years at the discretion of the 
Secretary of Labor based on the severity of the offense.
    (c) Layoff Protection for U.S. Workers. Section 5 adds a 
significant ground for violation and fines for those failing to 
meet their statutory responsibilities. If an employer using the 
H-1B program is found liable for willfully failing to meet a 
condition of employment under the H-1B attestations (such as a 
failure to pay the required wage), or for making a willful 
misrepresentation of a material fact, the administrative 
judgeinvestigating the case can also determine whether the employer has 
laid off U.S. workers in the same jobs and replaced them with H-1B 
workers in the same jobs. If so, the employer will be fined $25,000 per 
violation and debarred from participating in the H-1B program and the 
permanent employment visa program for 2 years. The intent of this 
section is that this penalty be reserved for cases where the employer 
willfully underpays the required wage to an H-1B employee and in the 
course of that violation replaces a U.S. worker laid off from the same 
specific job with the individual on an H-1B visa whom the employer 
willfully underpaid.
    (d) Expedited Reviews and Decisions. This subsection 
requires INS to adjudicate H-1B petitions within 30 days. The 
Committee finds that INS currently takes up to 3 months to 
adjudicate H-1B petitions in some regions. To remain 
competitive, U.S. companies must have the ability to obtain 
skilled foreign workers in as timely and efficient a manner as 
possible.
    (e) Determinations on Labor Condition Attestation To Be 
Made By Attorney General. This subsection transfers authority 
for adjudication of Labor Condition Attestations (LCA) from the 
Secretary of Labor to the Attorney General. Enforcement 
authority with respect to LCA's will remain with the Secretary 
of Labor. Currently, employers file the LCA with the Regional 
DOL office. DOL merely checks the LCA for completeness. Absent 
a complaint, DOL does not investigate nor certify the accuracy 
of the information. Once certified, the LCA is then filed with 
the rest of the H-1B petition at the INS regional service 
center. The Committee believes the H-1B administrative process 
will be streamlined by moving LCA certification to the INS. A 
copy of the LCA would still be filed with DOL and DOL would 
retain all current enforcement authority. It is estimated that 
this transfer will eliminate 1 to 3 weeks processing time for 
employers seeking H-1B workers. Further, because of the large 
number of LCA's filed and the significant cuts in funding for 
alien labor certification programs, substantial resources are 
being diverted from DOL's processing of permanent labor 
certification applications to LCA's. This has contributed to 
significant backlogs for permanent labor certifications in some 
regions. Transferring LCA certification would add little burden 
to INS while freeing DOL resources to process permanent labor 
certification applications.
    (f) Prevailing Wage Considerations. Under current law an 
employer must attest on a Labor Condition Attestation that an 
individual on an H-1B will be paid the greater of the actual or 
prevailing wage paid to similarly employed U.S. workers. The 
bill seeks to correct for the inaccuracies in the current 
Department of Labor use and calculation of prevailing wage 
data.
    In Subsection (i)(1) the legislation provides that the 
prevailing wage level at institutions of higher education and 
nonprofit research institutes shall take into account only 
employees at such institutions. The provision separates the 
prevailing wage calculations between academic and research 
institutions and other nonprofit entities and those for for-
profit businesses. Higher education institutions and nonprofit 
research institutes conduct scientific research projects, for 
the benefit of the public and frequently with Federal funds, 
and recruit highly-trained researchers with strong academic 
qualifications to carry out their important missions. The bill 
establishes in statute that wages for employees at colleges, 
universities, nonprofit research institutes, and other 
nonprofit entities must be calculated separately from industry.
    Subsection (i)(2) modifies the prevailing wage criteria for 
professional sports. The Committee finds that where there is a 
collective bargaining agreement (CBA), the minimum wage 
established therein should be considered to be the prevailing 
pay rate. Where no CBA exists, the prevailing wage should be 
the minimum salary mandated by the professional sports league 
which teams must pay players--foreign nationals as well as U.S. 
workers. The system currently employed to determine the 
prevailing wage for minor league professional sports uses a 
``mean wage.'' Because salaries for professional athletes vary 
greatly (up to 20 times difference between lowest and highest 
paid players), using the mean wage to calculate prevailing wage 
actually encourages the leagues to pay approximately 50 percent 
of the U.S. athletes a lower salary than similarly situated 
foreign national athletes. This current system is a 
disincentive to increase U.S. workers' salaries.
    Subsection (i)(3) enables U.S. companies to use the same 
wage surveys generally relied upon in setting salaries for U.S. 
workers (whether they are regional, national, industry, or 
statewide surveys) to determine the prevailing wage for foreign 
workers. The Committee finds that companies are often unable to 
rely upon the market information used to determine wages for 
U.S. workers when calculating the prevailing wage for a foreign 
national simply because the survey does not meet DOL's 
requirement that the survey be limited to a specific 
geographical region or be cross-industry. In many occupations, 
salary is determined on a national, regional or industry basis. 
DOL would still have the ability to challenge the employer's 
prevailing wage determination based on these broader criteria. 
Employers attempting to use ``sham'' surveys to willfully 
underpay foreign workers would be subject to enhanced fines, 
inspections and debarment.
    (g) Posting Requirement. This provision allows employers to 
post LCA in the same manner as other job notices, including via 
electronic posting. For many companies, particularly those with 
remote employees, electronic posting provides notice to a 
greater number of employees than traditional posting on a 
bulletin board. The Committee believes that DOL regulations 
should reflect current business practices, including the use of 
technology to recruit and inform workers, to the extent 
possible.

Section 6. Annual and quarterly reports on H-1B visas

    This section requires quarterly reports on H-1B numbers. It 
also mandates annual reports on the occupations and 
compensation of aliens provided nonimmigrant status under such 
section during the previous fiscal year.

Section 7. Study

    This section requires a study and report on high tech, 
U.S., and global issues for the next 10 years overseen by the 
National Science Foundation and done by a panelestablished by 
the National Academy of Sciences to be transmitted to the Judiciary 
Committees of both Houses by October 1, 2000.

Section 8. Limitation on per country ceiling with respect to 
        employment-based immigrants

    This section modifies per country limits on employment-
based visas to eliminate the discriminatory effects of those 
per country limits on nationals from certain Asian Pacific 
nations. Currently, in a given year there are employment-based 
immigrant visas available within the annual limit of 140,000, 
yet U.S. law prevents individuals born in particular countries 
from being able to join employers who want to sponsor them as 
permanent employees because those countries have reached their 
per country limit. This amounts to preventing an employer from 
hiring or sponsoring permanently in that year someone because 
he or she is Chinese or Indian, even though the individuals 
meets all the proper legal criteria set forth by the U.S. 
government. The bill would end this prohibition itself leaving 
intact the annual level of 140,000.
    Section 8 also provides limited relief for nationals from 
countries who today have been adversely affected by the 
increasing demand for certain employment-based immigrant visas. 
The provision modifies the current caps on employment based 
visas for individuals from what are considered to be ``over-
subscribed'' countries, while leaving intact the total limit on 
employment-based immigration. If there are still unused 
employment-based immigrant visas available after the 
employment-based visas issuable during any calendar quarter 
have been issued according to the per-country limitations, 
those visas may then be issued without regard to the country of 
origin of the recipient. They may be issued, however, only to 
the limit of the total number of employment-based visas 
available for each category. The intention of this provision is 
to have no adverse impact on family immigration levels, 
particularly as it relates to the interaction of the per 
country limits on family and employment-based immigration.
    The section also affords a one-time protection for those 
who have previously been adversely affected, based upon their 
country of origin. The provision allows those with approved 
petitions, who cannot receive the immigrant visa because of the 
per country limit, to stay until such a visa becomes available. 
These immigrants would otherwise be forced to return home at 
the conclusion of their allotted time in H-1B status, 
disrupting projects and American workers. The provision enables 
these few individuals to remain in H-1B status until they are 
able to receive an immigrant visa and adjust their status 
within the United States, thus limiting the disruption to 
American businesses.

Section 9. Academic honoraria

    This section permits universities and other nonprofit 
entities to pay honoraria and incidental expenses for a usual 
academic activity or activities by visiting scholars and 
individuals holding similar visas.

                           VI. COST ESTIMATE

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington DC, April 24, 1998.
Hon. Orrin G. Hatch,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1723, the American 
Competitiveness Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Christina 
Hawley Sadoti and Mark Grabowicz.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

               Congressional Budget Office Cost Estimate

                 S. 1723--American Competitiveness Act

 As reported by the Senate Committee on the Judiciary on April 2, 1998

Summary

    S. 1723 would increase the number of nonimmigrant 
(temporary) visas available for certain skilled workers, 
authorize appropriations for various student assistance and 
job-training programs of the Department of Education (ED) and 
the Department of Labor (DOL), and make several other changes 
to current laws relating to the employment of immigrants. 
Assuming appropriation of the necessary funds, CBO estimates 
that implementing S. 1723 would result in additional 
discretionary spending of about $690 million over the 1999-2003 
period (if such sums authorizations are funded with adjustments 
for inflation after 1999) or $670 million (if they are funded 
at the 1999 level in all years). In addition, we estimate that 
the bill would increase direct spending by $1 million annually 
and receipts by less than $500,000 annually. Because S. 1723 
would affect direct spending and receipts, pay-as-you-go 
procedures would apply.
    S. 1723 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
(UMRA). The bill would increase the authorization of grants to 
states for educational grants to students of mathematics, 
computer science, and engineering.

Description of the bill's major provisions

    S. 1723 would amend part A, subpart 4 of Title IV of the 
Higher Education Act of 1965, relating to funds for state 
student incentive grants for degrees in mathematics, computer 
science, and engineering. The bill would authorize 
appropriations of $155 million for fiscal year 1999 and such 
sums as may be necessary for the following four fiscal years to 
ED for these purposes.
    S. 1723 also would direct DOL to improve its Internet-based 
job bank in order to better accommodate job seekers in the area 
of technology. In addition, it would require DOL to provide 
training in information technology to unemployed individuals 
who are seeking jobs. The bill would authorize $18 million per 
year for fiscal years 1999 through 2003 for these purposes--$8 
million for the job bank and $10 million for job training.
    S. 1723 would direct the National Academy of Sciences (NAS) 
to oversee a study to assess the labor market needs for workers 
with high technology skills during the next 10 years. The bill 
would require a report summarizing the results of the study by 
October 1, 2000.
    This legislation would increase the number of nonimmigrant 
visas for certain skilled workers. The bill would increase 
available visas by 30,000 in fiscal year 1998, by up to 50,000 
in each of the fiscal years 1999 through 2002, and by 10,000 in 
each year thereafter. The bill also would remove the current 
cap on the number of employment-related immigrant (permanent) 
visas that can be granted to persons from any one country in 
each year.
    S. 1723 would transfer from DOL to the Attorney General 
certain tasks relating to the review of employer applications 
to hire nonimmigrant labor. Finally, it would provide for new 
and increased civil monetary penalties for violations of 
certain laws relating to the hiring of nonimmigrant workers.

Estimated cost to the Federal Government

    The estimated budgetary impact of S. 1723 is shown in the 
following table. The bill would authorize such sums as are 
necessary for ED programs for fiscal years 2000 through 2003. 
The estimated authorization levels shown in the table reflect 
continued funding at the authorized level for 1999, with 
adjustments for anticipated inflation in subsequent years. The 
estimated changes in outlays subject to appropriation action 
total about $690 million over the 1999-2003 period. 
Alternatively, if the 2000-2003 authorization levels for state 
student incentive grants are held constant at the 1999 level--
without adjusting for anticipated inflation--the total change 
in discretionary outlays would be about $670 million over the 
same period. The costs of this legislation fall within budget 
functions 500 (education, employment, training, and social 
services) and 750 (administration of justice).

Basis of estimate--Spending subject to appropriation

    For the purposes of this estimate, CBO assumes that the 
estimated authorization levels for ED and DOL programs will be 
appropriated at the start of each fiscal year, with outlays 
following the historical spending trends for the authorized 
activities. For the authorization of such sums as necessary for 
ED's state student incentive grants, the estimates in the table 
reflect annual adjustments for anticipated inflation.
    Based on information from the NAS, CBO estimates that the 
study required by the bill would cost $2 million to $3 million 
over fiscal years 1999 and 2000, subject to the availability of 
appropriated funds.

----------------------------------------------------------------------------------------------------------------
                                                                   By fiscal year, in nillions of dollars       
                                                           -----------------------------------------------------
                                                              1998     1999     2000     2001     2002     2003 
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
Spending Under Current Law:                                                                                     
    Estimated Authorization Level \1\.....................      175      153      157      161      164      168
    Estimated Outlays.....................................      169      155      123      156      158      162
Proposed Changes: \2\                                                                                           
    Estimated Authorization Level.........................        0      175      176      180      184      188
    Estimated Outlays.....................................        0       20      137      172      179      183
Spending Under S. 1723:                                                                                         
    Estimated Authorization Level.........................      175      328      333      341      348      356
    Estimated Outlays.....................................      169      175      260      328      337      345
                                                                                                                
                                           CHANGES IN DIRECT SPENDING                                           
                                                                                                                
Estimated Budget Authority................................        0        1        1        1        1        1
Estimated Outlays.........................................        0        1        1        1        1        1
                                                                                                                
                                               CHANGES IN REVENUES                                              
                                                                                                                
Estimated Revenues........................................        0      (3)      (3)      (3)      (3)      (3)
----------------------------------------------------------------------------------------------------------------
\1\ The 1998 level is sum of amounts appropriated for that year for state student incentive grants ($25         
  million), and for the State Unemployment Insurance and Employment Service Operations (SUIESO), where the job  
  bank is currently funded. SUIESO is permanently authorized at such sums as may be necessary. One-Stop Career  
  Centers (OSCC), the SUIESO account from which the job bank is funded, received an appropriation of $150       
  million for 1998. The OSCC authorization levels shown for 1999 through 2003 reflect inflation adjustments to  
  the 1998 level.                                                                                               
\2\ Without adjustments for inflation, additional outlays would be $20 million in 1999, $136 million in 2000,   
  $168 million in 2001, and $172 million in each of the years 2002 and 2003.                                    
\3\ Less than $500,000.                                                                                         

Direct spending and revenues

    S. 1723 would increase the number of nonimmigrant visas 
available to certain skilled workers by 30,000 in fiscal year 
1998, by up to 50,000 in each of the fiscal years 1999 through 
2002, and by 10,000 in each year thereafter. The increases in 
immigration in 1999 through 2002 would depend on the number of 
unused visas from other categories that--under the bill's 
provisions--could be granted to skilled workers. The fee for 
these visas is $85, so enacting the bill could increase fees 
collected by the Immigration and Naturalization Service (INS) 
by up to about $3 million in 1998, by about $4 million in each 
of the fiscal years 1999 through 2002, and by about $1 million 
in each year thereafter. We expect that the INS would spend the 
fees (without appropriation action), mostly in the year in 
which they are collected, so enacting S. 1723 would result in a 
negligible net budgetary impact on annual spending by the INS.
    Current law provides for a cap on the number of employment-
related immigrant visas that can be granted to natives of any 
one country in a given year. The bill would remove this cap, 
which could increase the number of visas granted and thus the 
amount of fees collected by the INS. We expect that additional 
fees would not exceed $500,000 annually, most of which would be 
spent in the same year, resulting in a negligible net budgetary 
impact.
    Under current procedures, DOL administers the review and 
approval process for employers that want to hire nonimmigrants; 
S. 1723 would transfer some of these responsibilities to the 
INS. The net effect on federal spending of this shift in 
workload would be negligible, but increased spending by the INS 
probably would come from existing fee income and would be 
classified as direct spending (whereas the current spending by 
DOL is discretionary). CBO estimates that direct spending would 
increase by about $1 million annually, accompanied by an 
equivalent reduction in spending by DOL that would be subject 
to appropriation. It is possible that the INS eventually could 
offset this increase in spending by raising fees for 
nonimmigrant visas, but CBO has no basis for predicting when or 
if any change in fees would occur.
    S. 1723 would provide for new and increased civil penalties 
that could be assessed against employers that violate certain 
laws relating to hiring immigrant labor. This could result in 
increased collections of civil fines, which are classified as 
revenues (governmental receipts), but we estimate that any such 
increase would be less than $500,000 annually.

Pay-as-you-go considerations

    Section 252 of the Balanced Budget and Emergency Deficit 
Control Act of 1985 sets up pay-as-you-go procedures for 
legislation affecting direct spending or receipts. The net 
changes in outlays and governmental receipts that are subject 
to pay-as-you-go procedures are shown in the following table. 
For the purposes of enforcing pay-as-you-go procedures, only 
the effects in the current year, the budget year, and the 
succeeding four years are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            By fiscal year, in millions dollars                         
                                                                 ---------------------------------------------------------------------------------------
                                                                   1998    1999    2000    2001    2002    2003    2004    2005    2006    2007    2008 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays..............................................       0       1       1       1       1       1       1       1       1       1       1
Changes in receipts.............................................       0       0       0       0       0       0       0       0       0       0       0
--------------------------------------------------------------------------------------------------------------------------------------------------------

Estimated impact on State, local, and tribal governments

    S. 1723 contains not intergovernmental mandates as defined 
in UMRA. The bill would increase the authorization of grants to 
states for educational grants to students of mathematics, 
computer science, and engineering.

Estimated impact on the private sector

    This bill contains no private-sector mandates as defined in 
UMRA.
    Estimate prepared by: DOL and ED costs: Christina Hawley 
Sadoti; INS and NAS costs: Mark Grabowicz.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                    VII. REGULATORY IMPACT STATEMENT

    In compliance with paragraph 11(b)(1), rule XXVI of the 
Standing Rules of the Senate, it is hereby stated that the 
Committee finds that the bill will have no additional direct 
regulatory impact.

  VIII. ADDITIONAL VIEWS OF SENATORS LEAHY, KENNEDY, BIDEN, FEINGOLD, 
                   DURBIN, TORRICELLI, AND FEINSTEIN

                              Introduction

    All of us want to be responsive to our Nation's need for 
high-tech workers. High-tech industries are the top source of 
job growth in America today and in the coming years. The Labor 
Department's Bureau of Labor Statistics projects that there 
will be over 1.3 million job openings for computer programmers 
and engineers between 1996 and the year 2006. That is 138,000 
new computer jobs every year. Our free market is already 
adjusting to the demand for more workers as greater and greater 
numbers of Americans seek the training they need to compete for 
these good jobs.
    The majority report makes the case for temporarily 
increasing the quota of visas in the ``H-1B'' visa program to 
respond to our Nation's need for high-tech workers. We agree 
that the quota should be increased. But the majority views miss 
the key point--that how we do this really matters.
    It matters to American workers who want these high-skilled, 
high-wage jobs. It matters to out Nation's future 
competitiveness. And it matters to our innovative high-tech 
industries as they seek to remain on the cutting edge well into 
the next century.
    The very fact that we need to increase the immigration 
quota--even temporarily--is an embarrassing indictment of our 
failure to provide adequate training opportunities for our own 
workers.
    Most of us voted against the committee bill and some of us 
voted for it. But we all supported the Kennedy-Feinstein 
substitute because we are united in the belief that it 
represents a better way. It raises the quota while assuring 
U.S. workers of two important commitments:
           that real training opportunities are on the 
        way so they can compete for these good, high tech jobs 
        in the new economy.
           that programs intended to protect workers 
        will be held accountable.
    It is not enough to throw in the towel and just raise the 
visa numbers. In raising the quota, we have an obligation to 
provide real money to train U.S. workers to compete for these 
good jobs. And we must strengthen enforcement and 
accountability in the program to guarantee that U.S. firms are 
not gaming the high quotas by laying off U.S. workers and 
hiring cheaper foreign replacements.

              Increase H-1B Numbers, but Only Temporarily

    We believe that a temporary increase in the 65,000 annual 
cap on H-1B visas is warranted--not a permanent change in the 
quota. Even the substitute language adopted by the Committee 
abandons the permanent increase called for in S. 1723 as 
introduced and instead sunsets the increase after a 5-year 
period. That is certainly a step in the right direction.
    The wise course of action is to permit a temporary increase 
in the H-1B cap. Failing to provide for this increase could put 
at risk the health and competitiveness of America's thriving 
computer industry.
    This is too important an issue to make policy based on 
guesswork. A short-term increase will buy us time to study the 
size and expected duration of the worker shortfall. While there 
have been studies of the high-tech labor-market performed by 
the Information Technology Association of America (ITAA) \1\ 
and the Department of Commerce, we cannot be confident in their 
reliability. The General Accounting Office analyzed those 
studies in a March 20 report and found the Department of 
Commerce study suffers from ``serious analytical and 
methodological weaknesses that undermine the credibility of its 
conclusion that a shortage of information technology workers 
exists'' and criticized the methodology of the ITAA study a 
well. GAO concluded that ``additional information and data are 
needed to more accurately characterize the information 
technology labor market now and in the future.'' \2\
---------------------------------------------------------------------------
    \1\ The majority report asserts that the GAO made a mistake in 
evaluating the ITAA's study responses, and that the actual response 
rate was 60 percent rather than 36 percent as reported by GAO. The ITAA 
study states that out of the sample of 1,493 employers, 597 interviews 
were conducted. The remaining 961 firms were not interviewed for a 
variety of reasons; 597 interviews out of a 1,493 sample calculates out 
to an overall response rate of 36 percent.
    \2\ ``Information Technology: Assessment of the Department of 
Commerce's Report on Workforce Demand and Supply (GAO/HEHS-98-106, Mar. 
20, 1998). p. 2.
---------------------------------------------------------------------------
    A temporary increase fills the gap while our free market 
economy works its magic. The U.S. labor market appears to be 
adjusting as it should to the demand for high-tech workers. And 
we should not tilt the balance unfairly against U.S. workers by 
guaranteeing employers that they can always tap into a growing 
pool of foreign workers.
    As the Immigration Subcommittee heard in testimony, 
``Ironically, the policy of expanding immigrant visas for 
information technology positions is potentially counter-
productive because it can increase uncertainty and reduce the 
incentive to enter the field. Prospective U.S. students may 
choose not to prepare for the information technology field if 
they see that foreigners will gain easy access to visas simply 
by entering an information technology occupation.'' \3\
---------------------------------------------------------------------------
    \3\ ``Information Technology Workers and Public Policy,'' hearing 
before the Committee on the Judiciary, 105th Cong., Feb. 25, 1998 
(testimony of Dr. Robert I. Lerman, Director, Human Resources Policy 
Center, Urban Institute).
---------------------------------------------------------------------------
    In fact, there are already indications that there are more 
computer scientists in the college pipeline than there have 
been in the recent past. Computer science enrollment has 
dramatically reversed its declining trend since 1995, jumping 
by 91 percent from fall 1995 to fall 1997, according to data 
provided by the Computing Research Association (CRA), a 
national consortium of university computer science 
departments.\4\
---------------------------------------------------------------------------
    \4\ 1996-1997 Computing Research Association Taulbee Survey, Dexter 
Kozen and Stu Zweben, co-chairs.
---------------------------------------------------------------------------
    But as GAO points out, college enrollments in computer 
degrees is not the sum total of computer programmers entering 
high-tech positions. According to a National Science Foundation 
study, only a quarter of those working as programmers had 
computer science degrees. The remainder held degrees from such 
diverse fields as business, social science, math, psychology, 
economics, education, political science, and physical 
science.\5\
---------------------------------------------------------------------------
    \5\ National Science Foundation's SESTAT Data System on Scientists 
and Engineers, Division of Science Resources Studies.
---------------------------------------------------------------------------
    There are other factors to look at when we try to size up 
the scope and duration of any shortages of computer personnel. 
For example, we need to count the willing and skilled middle-
aged and older computer workers who, while not fresh out of 
college, have a wealth of experience in the computer field and 
who can be rapidly retrained to fill the open jobs. And we must 
also consider what will happen just a few years down the road, 
when the many thousands of analysts and programmers now 
dedicated to solving the Year 2000 crisis are available to do 
other projects.
    All of the above are clear indicators to ``go slow'' on 
infusing foreign workers into our labor market. And raising the 
immigration quota only temporarily is consistent with this 
approach.

Training U.S. Workers: The Committee Bill Does Not Assure U.S. Workers 
             of a Single Additional Dime for Their Training

    The movement is open the doors to more foreign workers is 
obscuring an embarrassing fact--this country's failure to give 
U.S. workers the skills they need to take advantage of these 
good high-tech jobs. We all agree that the first, best way to 
fill the jobs in the computer profession is to find qualified 
U.S. workers for them. If it takes additional training to ready 
them for it, then we should make that training accessible.
    As Senator Feinstein has put it,

          America must make a long-term investment in our 
        nation's children so that our high tech industries are 
        not dependent on foreign workers as a long-term 
        solution. There is no question that the American high 
        tech industry must remain competitive in the 
        international marketplace. But as we address this 
        important issue, we must not lose sight of the need to 
        ensure that American workers and our children are 
        prepared to meet the needs of a 21st century economy. * 
        * * Permanently increasing the number of foreign 
        workers is the wrong answer to our long-term need for 
        high tech workers.\6\
---------------------------------------------------------------------------
    \6\ Statement of Senator Feinstein on Mar. 26, 1998, issued prior 
to introduction of S. 1878, ``The High Tech Immigration and United 
States Worker Protection Act.''

    The jobs that are up for grabs in the H-1B category are 
worth fighting for. According to statistics from the Department 
of Labor, three-quarters of the jobs for which employers seek 
H-1B workers pay between $25,000 and $50,000.\7\ These are 
good, middle-class jobs in a desirable and growing field.
---------------------------------------------------------------------------
    \7\ U.S. Department of Labor, Employment and Training 
Administration, FY1997 data on H-1B jobs certified * * *.


    The Committee bill fails to assure American workers that a 
single dime will go toward their training.--It is only an 
authorization and must compete with other priority programs for 
every dime it gets. The Committee bill authorizes $10 million a 
year to train unemployed U.S. workers in new skills for the 
information technology industry and authorizes $8 million for 
online talent banks. In addition, the Committee bill calls for 
the authorization of an additional $50 million for the State 
Student Incentive Grant (SSIG) program to create a scholarships 
for low-income students who pursue degrees in math, engineering 
or computer science.
    In fact, the Senate Labor Committee recently reported a 
bill reauthorizing the Higher Education Act including a 
redesign of the SSIG program, renamed the Leveraging 
Educational Assistance Program (LEAP). The 1998 amendments to 
the Higher Education Act, including this provision, was voted 
out of the Labor Committee unanimously. We should not undo the 
thoughtful redesign of this program created by the committee of 
jurisdiction.
    Unlike the Committee substitute, the Kennedy-Feinstein 
proposal would have put real money on the table for American 
workers. Instead of relying on taxpayer dollars for additional 
training, it proposed a $250 application fee for each foreign 
worker sought under the immigration quota. This modest fee 
would raise approximately $100 million each year which could be 
used to fund training opportunities for American workers. And 
it accomplishes it without using a single dime of the 
taxpayers' money.

   Accountability: Before Adding Even One Visa to the Quota, We Must 
  Assure Employers and Workers That the Laws Will Be Equally Enforced

    Any law worth passing is worth enforcing. Right now, under 
the H-1B visa program, the Department of Labor is hamstrung by 
a compliant-driven system of enforcement. The only time that 
the Labor Department can intervene to make certain an employer 
is playing by the rules is when a complaint has been filed 
against that employer. This limitation makes it nearly 
impossible to hold employers accountable for promises they make 
about fair treatment of their workers. U.S. workers need to be 
secure in the knowledge that the laws on the books are being 
enforced and their jobs are being protected.
    The Kennedy-Feinstein substitute that was narrowly voted 
down in Committeewould have established simple steps to address 
the lack of accountability measures now found in the H-1B program. The 
need for accountability resonates well beyond the Judiciary minority. 
In the House, H.R. 3736, introduced by the chairman of the House 
Subcommittee on Immigration and Claims, also reflects concerns about 
enforcement, and that bill was passed by voice vote out of the House 
Immigration Subcommittee.
    Two years ago, the Inspector General of the Labor 
Department completed the most comprehensive study every made of 
our laws and procedures for admitting foreign workers. Some may 
quibble with certain findings of the report, as evidenced by 
the majority views, but there is no disputing the hard facts: 
75 percent of employers hiring temporary foreign workers could 
not prove that they paid the proper wage. That was out of a 
survey of 720 cases covering employers in twelve states.
    Of the few who properly documented the wages paid, 19 
percent paid the foreign workers below the promised wage. These 
are hard facts, not matters of interpretation. These figures 
tell us that ``the system is broken and needs to be fixed.'' In 
fact, that was the title of the Inspector General's report.\8\
---------------------------------------------------------------------------
    \8\ ``The Department of Labor's Foreign Labor Certification 
Programs: The System is Broken and Needs To Be Fixed'' U.S. Department 
of Labor Office of Inspector General Office of Audit, Rept. No. 06-96-
002-03-321.
---------------------------------------------------------------------------
    The program needs greater authority and resources to 
initiate investigations when employers have broken the law, 
such as failing to pay the proper wage and comply with the 
other requirements for hiring foreign workers. Under current 
law, the Labor Department cannot intervene unless there is a 
complaint--and few workers are willing to complain, because 
they are afraid of losing promotions or even losing their jobs.
    The Department of Labor's ability to ensure accountability 
in this program is far more limited under current law than 
under other similar programs. It is strikingly so when compared 
to enforcement powers vested in other bodies which watch over 
labor conditions and immigration requirements. For example, INS 
investigators can inspect certain hiring documents of employers 
at any time to ensure that they are not hiring illegal 
immigrants. No complaint is required, and employers must 
provide ``reasonable access'' to INS officers.\9\
---------------------------------------------------------------------------
    \9\ See section 274A (e) and (f) of the Immigration and Nationality 
Act (8 U.S.C. 1324(a)).
---------------------------------------------------------------------------
    Similarly, within the Department of Labor itself, the Wage 
and Hour Division has extensive investigative authority. For 
example, labor inspectors may investigate any industry for 
compliance with the Fair Labor Standards Act, as well as the 
Family and Medical Leave Act, without requiring that a 
compliant first be lodged.\10\ Wage and Hour can also 
investigate, without a complaint being filed, compliance of the 
Migrant and Seasonal Agricultural Worker Protection Act.\11\ 
The same is true in connection with its enforcement authority 
under the Public Contracts Act and Service Contracts Act.\12\ 
In each of the instances just named, the Department also has 
supeona authority,\13\ which it lacks in its enforcement 
activities connected with the H-1B program. Wage and Hour also 
has statutory authority to ensure employer compliance with the 
terms and conditions of employment under the H-2A Temporary 
Agricultural Workers immigration program; again, no complaint 
is required in order for an investigation to commerce.\14\
---------------------------------------------------------------------------
    \10\ Fair Labor Standards Act (FLSA) and Family and Medical Leave 
Act (FMLA), 29 U.S.C. 211(a) and 2616(a).
    \11\ Migrant and Seasonal Agricultural Worker Protection Act (MSPA) 
29 U.S.C. 1862(a).
    \12\ Public Contracts Act (PCA) and Services Contracts Act (SCA) 41 
U.S.C. 38 and 353(a).
    \13\ For FLSA and FMLA, 29 U.S.C. 209 and 2616(d); for MSPA, 29 
U.S.C. 1862(b); for PCA and SCA, 41 U.S.C. 39 and 353(a).
    \14\ Immigration and Nationality Act, 9 U.S.C. 1188(g)(2).
---------------------------------------------------------------------------
    It is unfair to the vast majority of honest employers to 
ignore unscrupulous practices by the few. Honest employers 
should not have to compete against dishonest ones who too 
easily get away with cutting costs by abusing and underpaying 
foreign workers.

                Attestation by Employers Against Layoff

    Believe it or not, it is perfectly legal under the current 
immigration law for employers to lay off American workers and 
replace them with foreign workers in the same job. The Kennedy-
Feinstein substitute proposed to outlaw this practice. It said 
employers can't get H-1B workers if in the last 6 months they 
have laid off U.S. workers in jobs requiring ``substantially 
equivalent qualifications and experience.'' And if they lay off 
such workers during the 90 days after the H-1B workers arrives, 
then the H-1B worker is the first to go--not the American 
worker.
    The no-layoff assurance from employers is not a complicated 
process. It would be accomplished through the simple addition 
of a checkoff box on a form employers complete when they apply 
to bring in foreign workers.
    The Committee substitute recognizes that layoffs are a 
problem and contains a narrow layoff protection for U.S. 
workers that would be applicable only in very limited 
circumstances. Instead of providing a fig leaf, we believe we 
must provide U.S. workers with real layoff protection under the 
H-1B program by requiring employers to attest, as a condition 
of participation in the H-1B program, that they have not laid 
off U.S. workers and sought to replace them with foreign 
workers under the H-1B visa program.

                        Recruitment Attestation

    Most Americans agree that U.S. workers should get first 
crack at these good jobs. Common sense suggests that U.S. 
employers would look at home before recruiting workers from 
abroad. But this is not a requirement under current law.
    The need for this requirement is further underscored by the 
fact that most workers entering under this program are lower-
level professionals who earn less than $50,000 a year--not the 
best and brightest. In fact, as the majority views state, 
``many H-1Bs are foreign students recruited off U.S. college 
campuses.''
    Because of this fact, the Kennedy-Feinstein substitute 
required that employers attest that they have looked at home 
first before they submit an application for an H-1B worker. We 
believe that most employers do this already. In fact, the 
majority views describe companies ``desperate for workers'' and 
record numbers of recruitment ads being run in the newspapers. 
Therefore, the majority of high-tech employers will have no 
trouble attesting that they have made a good-faith effort at 
recruiting workers in the United States. Under Kennedy-
Feinstein, in completing the application for foreign workers 
under the H-1B program, they would have checked the box marked 
``recruitment,'' and moved on.
    However, we exempted the best and brightest workers from 
this new requirement. We are the last ones who would hinder 
operations on university campuses and at research institutes by 
barring the entry of a researcher who could unlock the mystery 
of Alzheimer's, or the crown-jewel professor sought by an 
American university's physics department. We made specific 
allowances that waive the recruitment requirements for those 
with extraordinary ability, such as outstanding professors, 
researchers, and certain multinational executives and managers.
    We are not proposing to duplicate the recruitment process 
that is required before bringing in a worker on a permanent, 
immigrant visa. That is admittedly, and justifiably, a more 
complex process. Our substitute language simply required that 
employers use normal industrywide methods and standards to 
advertise job openings in the United States.
    The majority views suggest that we should cede 
determinations of immigration law and policy to America's CEO's 
They argue that requirements to recruit at home first, before 
seeking workers from abroad, are ``micromanagement of the human 
resources policies of U.S. companies and universities 
throughout America.''
    We believe, however, that we have a duty to ensure that our 
immigration laws and policies represent a proper balance--that 
they strive to meet the needs of our businesses, protect our 
workers, and otherwise reflect our national interests.
    The substitute amendment adopted by the Committee fails to 
acknowledge the obvious--that Americans can't compete for job 
openings that they are not told about. We believe that American 
workers, properly trained, can stand toe-to-toe with foreign 
workers and be competitive for the gamut of jobs now being 
filled thought the H-1B program.

      These Requirements Will Not Lengthen the Application Process

    None of the steps that need to be taken to provide 
accountability should delay the processing of applications for 
temporary workers. In fact, the Kennedy-Feinstein amendment, 
unlike the Committee substitute, would have expedited the 
processing of employers' applications. It did this by providing 
real money, at least $5 million, taken from the $250 fee paid 
by employers, to be used by the Department of Labor to carry 
out enforcement activities and take measures necessary to speed 
up processing.
    The Committee substitute, on the other hand, will make 
matters worse. It shifts responsibility for handling employers' 
applications from the Labor Department to INS. We are concerned 
that INS is already overwhelmed with a huge backlog of other 
immigration applications. It takes INS a year or more to 
process applications filed by American citizens to bring their 
spouses and children here--supposedly a very high priority at 
INS. And it take 2 years or more for INS to process an 
application for American citizenship.
    We believe that it is a mistake to assign this program to 
an agency such as INS--already so overwhelmed with other 
backlogs and management challenges.
    The current procedure under the H-1B program simply 
requires an employer to submit a one-page form to the Labor 
Department. On that form the employers attest, by checking a 
box, that they have met the program criteria. The Labor 
Department does not investigate before approving the 
application. There is no lengthy screening process. The 
employers' attestation is accepted as is, as long as it 
contains no glaring inaccuracies.
    The Kennedy-Feinstein proposal would not have changed this 
process an iota. It would simply have added two more boxes to 
the current form on which employers would have attested (1) 
that they have not laid off U.S. workers in the job they are 
now trying to fill with foreign workers, and (2) they have 
tried and failed, to recruit workers locally for that job. 
That's all. No reams of documents are required for submission 
to the Labor Department for approval. Just two additional check 
marks on the same form employers file now.

                               Conclusion

    We are committed to meeting the needs of our high-tech 
industry. But we also need to be committed to getting a fair 
deal for U.S. workers. We believe the Kennedy-Feinstein 
substitute came far closer to achieving these goals than the 
Committee bill.

                                   Patrick Leahy.
                                   Edward Kennedy.
                                   Joseph Biden, Jr.
                                   Dianne Feinstein.
                                   Russell Feingold.
                                   Richard Durbin.
                                   Robert Torricelli.

                      IX. CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 1723, as reported, are shown as follows (existing law which 
would be omitted is enclosed in bold brackets, new matter is 
printed in italic, and existing law in which no change is 
proposed is shown in roman type):

UNITED STATES CODE

           *       *       *       *       *       *       *


Title 8--Aliens and Nationality

           *       *       *       *       *       *       *


CHAPTER 12--IMMIGRATION AND NATIONALITY

           *       *       *       *       *       *       *


Subchapter II--Immigration

           *       *       *       *       *       *       *


    PART II--ADMISSION QUALIFICATIONS FOR ALIENS; TRAVEL CONTROL OF 
CITIZENS AND ALIENS

           *       *       *       *       *       *       *


Sec. 1182. Excludable aliens

    (a) Classes of Aliens Ineligible for Visas or Admission.--
Except as otherwise provided in this chapter, aliens who are 
inadmissible under the following paragraphs are ineligible to 
receive visas and ineligible to be admitted to the United 
States:

           *       *       *       *       *       *       *

    (n) Labor Condition Application.--(1) No alien may be 
admitted or provided status as a nonimmigrant described in 
section 1101(a)(15)(H)(i)(b) of this title in an occupational 
classification unless the employer has filed with the Secretary 
of Labor an application stating the following:

           *       *       *       *       *       *       *

    (2)(A) The Secretary shall establish a process for the 
receipt, investigation, and disposition of complaints 
respecting a petitioner's failure to meet a condition specified 
in an application submitted under paragraph (1) or a 
petitioner's misrepresentation of material facts in such an 
application. Complaints may be filed by any aggrieved person or 
organization (including bargaining representatives). No 
investigation or hearing shall be conducted on a complaint 
concerning such a failure or misrepresentation unless the 
complaint was filed not later than 12 months after the date of 
the failure or misrepresentation, respectively. The Secretary 
shall conduct an investigation under this paragraph if there is 
reasonable cause to believe such a failure or misrepresentation 
has occurred.

           *       *       *       *       *       *       *

    (C) If the Secretary finds, after notice and opportunity 
for a hearing, [a failure to meet a condition of paragraph 
(1)(B), a substantial failure to meet a condition of paragraphs 
(1)(C) or (1)(D), a willful failure to meet a condition of 
paragraph (1)(A), or a misrepresentation of material fact in an 
application--] a willful failure to meet a condition in 
paragraph (1) or a willful misrepresentation of a material fact 
in an application--
          (i) the Secretary shall notify the Attorney General 
        of such finding and may, in addition, impose such other 
        administrative remedies (including civil monetary 
        penalties in an amount not to exceed [$1,000] $5,000 
        per violation) as the Secretary determines to be 
        appropriate, and
          (ii) the Attorney General shall not approve petitions 
        filed with respect to that employer under section 1154 
        or 1184(c) of this title during a period of at least 1 
        year for aliens to be employed by the employer.
    (D) The Secretary of Labor may, on a case-by-case basis, 
subject an employer to random inspections for a period of up to 
five years beginning on the date that such employer is found by 
the Secretary of Labor to have engaged in a willful failure to 
meet a condition of subparagraph (A), or a misrepresentation of 
material fact in an application.
    [(D)] (E) If the Secretary finds, after notice and 
opportunity for a hearing, that an employer has not paid wages 
at the wage level specified under the application and required 
under paragraph (1), the Secretary shall order the employer to 
provide for payment of such amounts of back pay as may be 
required to comply with the requirements of paragraph (1), 
whether or not a penalty under subparagraph (C) has been 
imposed.
    (F)(i) If the Secretary finds, after notice and opportunity 
for a hearing, a willful failure to meet a condition in 
paragraph (1) or a willful misrepresentation of a material fact 
in an application, in the course of which the employer has 
replaced a United States worker with a non-immigrant described 
in section 101(a)(15)(H)(i) (b) or (c) within the 6-month 
period prior to, or within 90 days following, the filing of the 
application--
          (I) the Secretary shall notify the Attorney General 
        of such finding, and may, in addition, impose such 
        other administrative remedies (including civil monetary 
        penalties in an amount not to exceed $25,000 per 
        violation) as the Secretary determines to be 
        appropriate; and
          (II) the Attorney General shall not approve petitions 
        filed with respect to the employer under section 204 or 
        214(c) during a period of at least 2 years for aliens 
        to be employed by the employer.
    (ii) For purposes of this subparagraph:
          (I) The term ``replace'' means the employment of the 
        nonimmigrant at the specific place of employment and in 
        the specific employment opportunity from which a United 
        States worker with substantially equivalent 
        qualifications and experience in the specific 
        employment opportunity has been laid off.
          (II) The term ``laid off'', with respect to an 
        individual, means the individual's loss of employment 
        other than a discharge for inadequate performance, 
        violation of workplace rules, cause, voluntary 
        departure, voluntary retirement, or the expiration of a 
        grant, contract, or other agreement. The term ``laid 
        off'' does not include any situation in which the 
        individual involved is offered, as an alternative to 
        such loss of employment, a similar employment 
        opportunity with the same employer at the equivalent or 
        higher compensation and benefits as the position from 
        which the employee was discharged, regardless of 
        whether or not the employee accepts the offer.
          (III) The term ``United States worker'' means--
                  (aa) a citizen or national of the United 
                States;
                  (bb) an alien who is lawfully admitted for 
                permanent residence; or
                  (cc) an alien authorized to be employed by 
                this Act or by the Attorney General.

           *       *       *       *       *       *       *


Sec. 1184. Admission of nonimmigrants

    (a) Regulations.--(1) The admission to the United States of 
any alien as a nonimmigrant shall be for such time and under 
such conditions as the Attorney General may by regulations 
prescribed, including when he deems necessary the giving of a 
bond with sufficient sure in such sum and containing such 
conditions as the Attorney General shall prescribe, insure that 
at the expiration of such time or upon failure to maintain the 
status under which he was admitted, or to maintain any status 
subsequently acquired under section 1258 of this title, such 
alien will depart from the United states. No alien admitted 
Guam without a visa pursuant to section 1182(l) of this title 
may be authorized to enter or stay in the United States other 
than in Guam or to remain in Guam for a period exceeding 
fifteen days from date of admission to Guam. No alien admitted 
to the United States without a visa pursuant to section 1187 of 
this title may be authorized to remain in the United States as 
a nonimmigrant visitor for a period exceeding 90 days from the 
date of admission.

           *       *       *       *       *       *       *

    (c) Petition of Importing Employer; Involvement of 
Departments of Labor and Agriculture.--(1) The question of 
importing any alien as a nonimmigrant under section 
1101(a)(15)(H), (L), (O), or (P)(i) of this title in any 
specific case or specific cases shall be determined by the 
Attorney General, after consultation with appropriate agencies 
of the Government, upon petition of the importing employer. 
Such petition, shall be made and approved before the visa is 
granted. The petition shall be in such form and contain such 
information as the Attorney General shall prescribe. The 
approval of such a petition shall not, of itself, be construed 
as establishing that the alien is a nonimmigrant. For purposes 
of this subsection with respect to nonimmigrants described in 
section 1101(a)(15)(H)(ii)(a) of this title, the term 
``appropriate agencies of Government'' means the Department of 
Labor and includes the Department of Agriculture. The 
provisions of section 1188 of this title shall apply to the 
question of importing any alien as a nonimmigrant under section 
1101(a)(15)(H)(ii)(a) of this title.
    (2)(A) * * *

           *       *       *       *       *       *       *

    (C) The Attorney General shall provide a process for 
reviewing and acting upon petitions under this subsection with 
respect to nonimmigrants described in section 101(a)(15)(L) or 
section 101(a)(15)(H)(i)(b) with 30 days after the date of 
completed petition has been filed.

           *       *       *       *       *       *       *

    [(g) Temporary Workers and Trainees; Limitation on 
Numbers.--(1) The total number of aliens who may be issued 
visas or otherwise provided nonimmigrant status during any 
fiscal year (beginning with fiscal year 1992)--
          [(A) under section 1101(a)(15)(H)(i)(b) of this title 
        may not exceed 65,000, or
          [(B) under section 1101(a)(15)(H)(ii)(b) of this 
        title may not exceed 66,000.
          [(C) Repealed. Pub. L. 102-232, Title II, 
        Sec. 202(a), Dec. 12, 1991, 105 Stat. 1737]
    (g)(1) The total number of aliens who may be issued visas 
or otherwise provided nonimmigrant status during any fiscal 
year--
          (A) under section 101(a)(15)(H)(i)(b)--
                  (i) for each of fiscal years 1992 through 
                1997, may not exceed 65,000,
                  (ii) for fiscal year 1998, may not exceed 
                95,000,
                  (iii) for fiscal year 1999, may not exceed 
                the number determined for fiscal year 1998 
                under such section, minus 10,000, plus the 
                number of unused visas under subparagraph (B) 
                for the fiscal year preceding the applicable 
                fiscal year, and
                  (iv) for fiscal year 2000, and each 
                applicable fiscal year thereafter through 
                fiscal year 2002, may not exceed the number 
                determined for fiscal year 1998 under such 
                section, minus 10,000, plus the number of 
                unused visas under subparagraph (B) for the 
                fiscal year preceding the applicable fiscal 
                year, plus the number of unused visas under 
                subparagraph (C) for the fiscal year preceding 
                the applicable fiscal year;
          (B) under section 101(a)(15)(H)(ii)(b), beginning 
        with fiscal year 1992, may not exceed 66,000; or
          (C) under section 101(a)(15)(H)(i)(c), beginning with 
        fiscal year 1999, may not exceed 10,000.
For purposes of determining the ceiling under subparagraph (A) 
(iii) and (iv), not more than 20,000 of the unused visas under 
subparagraph (B) may be taken into account for any fiscal year.

           *       *       *       *       *       *       *


TITLE 20--EDUCATION

           *       *       *       *       *       *       *


CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE

           *       *       *       *       *       *       *


                   Subchapter IV--Student Assistance

  PART A--GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF HIGHER 
                               EDUCATION

            Subpart 1--Basic Educational Opportunity Grants

Sec. 1070a. Basic educational opportunity grants: amount and 
                    determinations; applications

    (a) Program Authority and Method of Distribution.--(1) The 
Secretary shall, during the period beginning July 1, 1972, and 
ending September 30, 1998, pay to each eligible institution 
such sums as may be necessary to pay to each eligible student 
(defined in accordance with section 1091 of this title) for 
each academic year during which that student is in attendance 
at an institution of higher education, as an undergraduate, a 
basic grant in the amount for which that student is eligible, 
as determined pursuant to subsection (b) of this section. Not 
less than 85 percent of such sums shall be advanced to eligible 
institutions prior to the start of each payment period and 
shall be based upon an amount requested by the institution as 
needed to pay eligible students, except that this sentence 
shall not be construed to limit the authority of the Secretary 
to place an institution on a reimbursement system of payment.

           *       *       *       *       *       *       *


Sec. 1070c. Purpose; appropriations authorized

    (a) Purpose of Subpart.--It is the purpose of this subpart 
to make incentive grants available to States to assist States 
in providing grants to--

           *       *       *       *       *       *       *

    (b) Authorization of Appropriations; Availability.--(1) In 
general.--There are authorized to be appropriated [$105,000,000 
for fiscal year 1993] $155,000,000 for fiscal year 1999, and 
such sums as may be necessary for each of the 4 succeeding 
fiscal years, of which the amount in excess of $25,000,000 for 
each fiscal year that does not exceed $50,000,000 shall be 
available to carry out section 415F for the fiscal year.

SEC. 415F. DEGREE IN MATHEMATICS, COMPUTER SCIENCE, AND ENGINEERING.

    (a) Allotments and Grants.--From amounts made available to 
carry out this section under section 415A(b)(1) for a fiscal 
year, the Secretary shall make allotments to States to enable 
the States to pay not more than 50 percent of the amount of 
grants awarded to low-income students in the States.
    (b) Use of Grants.--Grants awarded under this section shall 
be used by the students for attendance on a full-time basis at 
an institution of higher education in a program of study 
leading to an associated, baccalaureate or graduate degree in 
mathematics, computer science, or engineering.
    (c) Comparability.--The Secretary shall make allotments and 
grants shall be awarded under this section in the same manner, 
and under the same terms and conditions, as--
          (1) the Secretary makes allotments and grants are 
        awarded under this subpart (other than this section); 
        and
          (2) are not inconsistent with this section.

           *       *       *       *       *       *       *


                    Immigration and Nationality Act

                        TITLE I--101 DEFINITIONS

    Sec. 101. (a) As used in this Act--
          (1) The term ``administrator'' means the official 
        designated by the Secretary of State pursuant to 
        section 104(b) of this Act.

           *       *       *       *       *       *       *

          (15) The term ``immigrant'' means every alien except 
        an alien who is within one of the following classes of 
        nonimmigrant aliens
                  (A)(i) an ambassador, public minister, or 
                career diplomatic or consular officer who has 
                been accredited by a foreign government 
                recognized de jure by the United States and who 
                is accepted by the President or by the 
                Secretary of State, and the members of the 
                alien's immediate family;

           *       *       *       *       *       *       *

                  (H) an alien
                          (i)(a) who is coming temporarily to 
                        the United States to perform services 
                        as a registered nurse, who meet the 
                        qualifications described in section 
                        212(m)(1), and with respect to whom the 
                        Secretary of Labor determines and 
                        certifies to the Attorney General that 
                        an unexpired attestation is on file and 
                        in effect under section 212(m)(2) for 
                        each facility (which facility shall 
                        include the petitioner and each 
                        worksite, other than a private 
                        household worksite, if the worksite is 
                        not the alien's employer or controlled 
                        by the employer) for which the alien 
                        will perform the services, or (b) 
                        subject to section 212(j)(2), who is 
                        coming temporarily to the United States 
                        to perform services (other than 
                        services described in subclause (a) 
                        during the period in which such 
                        subclause applies and other than 
                        services described in subclause (ii)(a) 
                        or in subparagraph (O) or (P)) and 
                        other than services described in clause 
                        (c) in a specialty occupation described 
                        in section 214(i)(1) or as a fashion 
                        model, who meets the requirements for 
                        the occupation specified in section 
                        214(i)(2) or, in the case of a fashion 
                        model, is of distinguished merit and 
                        ability, and [with respect to whom the 
                        Secretary of Labor determines and 
                        certifies to the Attorney General that 
                        the intending employer has filed with 
                        the Secretary] with respect to whom the 
                        Attorney General determines that the 
                        intending employer has filed with the 
                        Attorney General an application under 
                        section 212(n)(1), or (c) who is coming 
                        temporarily to the United States to 
                        perform labor as a health care worker, 
                        other than a physician, in a specialty 
                        occupation described in section 
                        214(i)(1), who meets the requirements 
                        of the occupation specified in section 
                        214(i)(2), who qualifies for the 
                        exemption from the grounds of 
                        inadmissibility described in section 
                        212(a)(5)(C), and with respect to whom 
                        the Attorney General certifies that the 
                        intending employer has filed with the 
                        Attorney General an application under 
                        section 212(n)(1); or
                          (ii) the expiration of the period in 
                        which the alien is permitted to seek 
                        review of such order by the Board of 
                        Immigration Appeals.
                          (i)(1) In computing the prevailing 
                        wage level for an occupational 
                        classification in an area of employment 
                        for purposes of section 
                        212(n)(1)(A)(i)(II) and section 
                        212(a)(5)(A) in the case of an employee 
                        of--
                                  (A) an institution of higher 
                                education (as defined in 
                                section 1201(a) of the Higher 
                                Education Act of 1965), or a 
                                related or affiliated nonprofit 
                                entity, or
                                  (B) a nonprofit or Federal 
                                research institute or agency,
                        the prevailing wage level shall only 
                        take into account employees at such 
                        institutions, entities, and agencies in 
                        the area of employment.
                          (2) With respect to a professional 
                        athlete (as defined in section 
                        212(a)(5)(A)(iii)(II)) when the job 
                        opportunity is covered by professional 
                        sports league rules or regulations, the 
                        wage set forth in those rules or 
                        regulations shall be considered as not 
                        adversely affecting the wages of United 
                        States workers similarly employed and 
                        be considered the prevailing wage.
                          (3) To determine the prevailing wage, 
                        employers may use either government or 
                        nongovernment published surveys, 
                        including industry, region, or 
                        statewide wage surveys, to determine 
                        the prevailing wage, which shall be 
                        considered correct and valid if the 
                        survey was conducted in accordance with 
                        generally accepted industry standards 
                        and the employer has maintained a copy 
                        of the survey information.

           *       *       *       *       *       *       *


                         TITLE II--IMMIGRATION

CHAPTER 1--SELECTION SYSTEM

           *       *       *       *       *       *       *


                     worldwide level of immigration

    Sec. 201. (a) In General.--Exclusive of aliens described in 
subsection (b), aliens born in a foreign state or dependent 
area who may be issued immigrant visas or who may otherwise 
acquire the status of an alien lawfully admitted to the United 
States for permanent residence are limited to--

           *       *       *       *       *       *       *

    Sec. 202. (a) Per Country Level.--
          (1) Nondiscrimination.--Except as specifically 
        provided in paragraph (2) and in sections 101(a)(27), 
        201(b)(2)(A)(i), and 203, no person shall receive any 
        preference or priority or be discriminated against in 
        the issuance of an immigrant visa because of the 
        person's race, sex, nationality, place of birth, or 
        place of residence.
          (2) Per country levels for family-sponsored and 
        employment-based immigrants.--Subject to [paragraphs 
        (3) and (4)] paragraphs (3), (4), and (5), the total 
        number of immigrant visas made available to natives of 
        any single foreign state or dependent area under 
        subsections (a) and (b) of section 203 in any fiscal 
        year may not exceed 7 percent (in the case of a single 
        foreign state) or 2 percent (in the case of a dependent 
        area) of the total number of such visas made available 
        under such subsections in that fiscal year.

           *       *       *       *       *       *       *

                  (D) Limiting pass down for certain countries 
                subject to subsection (e).--In the case of a 
                foreign state or dependent area to which 
                subsection (e) applies, if the total number of 
                visas issued under section 203(a)(2) exceeds 
                the maximum number of visas that may be made 
                available to immigrants of the state or area 
                under section 203(a)(2) consistent with 
                subsection (e) (determined without regard to 
                this paragraph), in applying paragraphs (3) and 
                (4) of section 203(a) under subsection (e)(2) 
                all visas shall be deemed to have been required 
                for the classes specified in paragraphs (1) and 
                (2) of such section.
          (5) Rules for employment-based immigrants.--
                  (A) Employment-based immigrants not subject 
                to per country limitation if additional visas 
                available.--If the total number of visas 
                available under paragraph (1), (2), (3), (4), 
                or (5) of section 203(b) for a calendar quarter 
                exceeds the number of qualified immigrants who 
                may otherwise be issued such visas, the visas 
                made available under that paragraph shall be 
                issued without regard to the numerical 
                limitation under paragraph (2) of this 
                subsection during the remainder of the calendar 
                quarter.
                  (B) Limiting fall across for certain 
                countries subject to subsection (e).--In the 
                case of a foreign state or dependent area to 
                which subsection (e) applies, if the total 
                number of visas issued under section 203(b) 
                exceeds the maximum number of visas that may be 
                made available to immigrants of the state or 
                area under section 203(b) consistent with 
                subsection (e) (determined without regard to 
                this paragraph), in applying subsection (e) all 
                visas shall be deemed to have been required for 
                the classes of aliens specified in section 
                203(b).

           *       *       *       *       *       *       *

    (e) Special Rules for Countries at Ceiling.--If it is 
determined that the total number of immigrant visas made 
available under subsections (a) and (b) of section 203 to 
natives of any single foreign state or dependent area will 
exceed the numerical limitation specified in subsection (a)(2) 
in any fiscal year, in determining the allotment of immigrant 
visa numbers to natives under subsection (a) and (b) of section 
203, visa numbers with respect to natives of that state or area 
shall be allocated (to the extent practicable and otherwise 
consistent with this section and section 203) in a manner so 
that--
          (1) * * *

           *       *       *       *       *       *       *

          (3) [the proportion of the visa numbers] except as 
        provided in subsection (a)(5), the proportion of the 
        visa numbers made available under each of paragraphs 
        (1) through (5) of section 203(b) is equal to the ratio 
        of the total number of visas made available under the 
        respective paragraph to the total number of visas made 
        available under section 203(b).

           *       *       *       *       *       *       *


 CHAPTER 2--QUALIFICATIONS FOR ADMISSION OF ALIENS; TRAVEL CONTROL OF 
CITIZENS AND ALIENS

           *       *       *       *       *       *       *


    Sec. 212. (a) Classes of Excludable Aliens.--Except as 
otherwise provided in this Act, the following describes classes 
of excludable aliens who are ineligible to receive visas and 
who shall be excluded from admission into the United States:

           *       *       *       *       *       *       *

    (n)(1) No alien may be admitted or provided status as a 
nonimmigrant described in section 101(a)(15)(H)(i) (b) or (c) 
in an occupational classification unless the employer has filed 
with the [Secretary of Labor] Attorney General an application 
stating the following:
          (A) The employer--
                  (i) is offering and will offer during the 
                period of authorized employment to aliens 
                admitted or provided status as a nonimmigrant 
                described in section 101(a)(15)(H)(i)(b) wages 
                that are at least--

           *       *       *       *       *       *       *

          (C) The employer, at the time of filing the 
        application--
                  (i) has provided notice of the filing under 
                this paragraph to the bargaining representative 
                (if any) of the employer's employees in the 
                occupational classification and area for which 
                aliens are sought, or
                  [(ii) if there is no such bargaining 
                representative, has posted notice of filing in 
                conspicuous locations at the place of 
                employment.]
                  (ii) if there is no such bargaining 
                representative, has provided notice of filing 
                in the occupational classification through such 
                methods as physical posting in a conspicuous 
                location, or electronic posting through an 
                internal job bank, or electronic notification 
                available to employees in the occupational 
                classification.

           *       *       *       *       *       *       *

        The employer shall make available for public 
        examination, within one working day after the date on 
        which an application under this paragraph is filed, at 
        the employer's principal place of business or worksite, 
        a copy of each such application (and such accompanying 
        documents as are necessary). The Secretary of Labor 
        shall compile, on a current basis, a list (by employer 
        and by occupational classification) of the applications 
        filed under this subsection. Such list shall include 
        the wage rate, number of aliens sought, period of 
        intended employment, and date of need. The Secretary of 
        Labor shall make such list available for public 
        examination in Washington, D.C. The [Secretary of 
        Labor] Attorney General shall review such an 
        application only for completeness and obvious 
        inaccuracies. [Unless the Secretary finds that the 
        application is incomplete or obviously inaccurate, the 
        Secretary shall provide the certification described in 
        section 101(a)(15)(H)(i) (b) or (c) within 7 days of 
        the date of the filing of the application.] Unless the 
        Attorney General finds that the application is 
        incomplete or obviously inaccurate, the Attorney 
        General shall provide the certification described in 
        section 101(a)(15)(H)(i)(b) and adjudicate the 
        nonimmigrant visa petition.
    (2)(A) The [Secretary] Secretary of Labor shall establish a 
process for the receipt, investigation, and disposition of 
complaints respecting a petitioner's failure to meet a 
condition specified in an application submitted under paragraph 
(1) or a petitioner's misrepresentation of material facts in 
such an application. Complaints may be filed by any aggrieved 
person or organization (including bargaining representatives). 
No investigation or hearing shall be conducted on a complaint 
concerning such a failure or misrepresentation unless the 
complaint was filed not later than 12 months after the date of 
the failure or misrepresentation, respectively. The Secretary 
shall conduct an investigation under this paragraph if there is 
reasonable cause to believe that such a failure or 
misrepresentation has occurred.

           *       *       *       *       *       *       *

    (D) If the Secretary finds, after notice and opportunity 
for a hearing, that an employer has not paid wages at the wage 
level specified under the application and required under 
paragraph (1), the Secretary shall order the employer to 
provide for payment of such amounts of back pay as may be 
required to comply with the requirements of paragraph (1), 
whether or not a penalty under subparagraph (C) has been 
imposed.
    Such application shall be filed with the employer's 
petition for a non-immigrant visa for the alien, and the 
Attorney General shall transmit a copy of such application to 
the Secretary of Labor.
    (3) Using data from petitions for visas issued under 
section 101(a)(15)(H)(i)(b), the Attorney General shall 
annually submit the following reports to Congress:
          (A) Quarterly reports on the numbers of aliens who 
        were provided nonimmigrant status under section 
        101(a)(15)(H)(i)(b) during the previous quarter and who 
        were subject to the numerical ceiling for the fiscal 
        year established under section 214(g)(1).
          (B) Annual reports on the occupations and 
        compensation of aliens provided nonimmigrant status 
        under such section during the previous fiscal year.

           *       *       *       *       *       *       *

    (o) An alien who has been physically present in the United 
States shall not be eligible to receive an immigrant visa 
within ninety days following departure therefrom unless--

           *       *       *       *       *       *       *

    (p) Any alien admitted under section 101(a)(15)(B) may 
accept an honorarium payment and associated incidental expenses 
for a usual academic activity or activities, as defined by the 
Attorney General in consultation with the Secretary of 
Education, if such payment is offered by an institution of 
higher education (as defined in section 1201(a) of the Higher 
Education Act of 1965) or other nonprofit entity and is made 
for services conducted for the benefit of that institution or 
entity.

           *       *       *       *       *       *       *

    Sec. 214. (a)(1) The admission to the United States of any 
alien as a nonimmigrant shall be for such time and under such 
conditions as the Attorney General may be regulations 
prescribe, including when he deems necessary the giving of a 
bond with sufficient surety in such sum and containing such 
conditions as the Attorney General shall prescribe, to insure 
that at the expiration of such time or upon failure to maintain 
the status under which he was admitted, or to maintain any 
status subsequently acquired under section 248, such alien will 
depart from the United States. No alien admitted to Guam 
without a visa pursuant to section 212(l) may be authorized to 
enter or stay in the United States other than in Guam or to 
remain in Guam for a period exceeding fifteen days from date of 
admission to Guam. No alien admitted to the United States 
without a visa pursuant to section 217 may be authorized to 
remain in the United States as a nonimmigrant visitor for a 
period exceeding 90 days from the date of admission.

           *       *       *       *       *       *       *

    (i)(1) For purposes of section 101(a)(15)(H)(i) (b) or (c) 
and paragraph (2), the term ``specialty occupation'' means an 
occupation that requires--
          (A) theoretical and practical application of a body 
        of highly specialized knowledge, and
          (B) attainment of a bachelor's or higher degree in 
        the specific specialty (or its equivalent) as a minimum 
        for entry into the occupation in the United States.
    (2) For purposes of section 101(a)(15)(H)(i) (b) or (c), 
the requirements of this paragraph, with respect to a specialty 
occupation, are--
          (A) full state licensure to practice in the 
        occupation, if such licensure is required to practice 
        in the occupation,
          (B) completion of the degree described in paragraph 
        (1)(B) for the occupation, or
          (C) (i) experience in the specialty equivalent to the 
        completion of such degree, and (ii) recognition of 
        expertise in the specialty through progressively 
        responsible positions relating to the specialty.

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