STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS (CONTINUED); Congressional Record Vol. 141, No. 1
(Senate - January 04, 1995)

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[[Page S173]]

Vol. 141         WASHINGTON, WEDNESDAY, JANUARY 4, 1995           No. 1
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                                 Senate


            (Legislative day of Wednesday, January 4, 1995)

                             

      By Mr. DOMENICI (for himself, Mr. Exon, Mr. Craig, Mr. Bradley, 
        Mr. Cohen, and Mr. Dole):
  S. 14. A bill to amend the Congressional Budget and Impoundment 
Control Act of 1974 to provide for the expedited consideration of 
certain proposed cancellations of budget items; to the Committee on the 
Budget and the Committee on Governmental Affairs, jointly, pursuant to 
the order of August 4, 1977, with instructions that if one committee 
reports, the other committees have 30 days to report or be discharged.

                     legislative line item veto act

 Mr. DOMENICI. Mr. President, I introduce legislation to give the 
President a legislative line-item veto. I am particularly pleased to be 
joined by the distinguished ranking minority member of the Senate 
Budget Committee, Senator Exon, and Senators Craig, Bradley, and Dole 
in introducing this legislation. We have a bipartisan bill that I think 
will enjoy strong support in the Senate and has the best chance of 
becoming law.
  The American people are demanding greater accountability for the 
decisions that Congress makes. If Congress includes provisions in 
legislation that provide new spending that cannot stand on its merits, 
then there should be a procedure to extract this funding. The 
legislation we introduce today provides such a procedure.
  Mr. President, there is a great deal of support for an item veto. All 
but two Presidents in the 20th century have expressed their support for 
an item veto authority. President Clinton campaigned on a promise that 
he could cut spending by $10 billion from the enactment of a line-item 
veto. Forty-three of our 50 State Governors have some form of item veto 
authority. Finally, the House, even under Democratic control, has sent 
the Senate two separate rescission bills during the 103d Congress.
  There are two statutory line-item approaches that the Congress will 
consider. The first, Senator McCain's enhanced rescission bill would 
provide the President with unilateral authority to delete any item 
funded in an appropriations bill. In order to overturn the President's 
action, each House of the Congress would have to pass a bill of 
disapproval, send it to the President, and then override the 
President's veto of this bill of disapproval. This provides an 
extraordinary shift of power from the legislative branch to the 
executive branch.
  The second approach, embodied in the legislation that I introduce 
today, is frequently referred to as expedited rescission authority. 
Under this approach, the
 President proposes a rescission and is guaranteed a vote up or down by 
Congress on these proposed rescissions.

  Our legislation is stronger than the enhanced rescission bill in many 
respects, but I will just mention two provisions. Our bill provides a 
``lock box'' to guarantee that any savings go to deficit reduction. It 
also extends this rescission authority to direct spending, the real 
culprit behind the growth in Federal spending, and targeted tax 
benefits.
  There is no question that discretionary spending can contribute to 
deficit reduction, but discretionary spending is a shrinking as a 
portion of the budget. Direct spending, spending outside the control of 
the appropriations process, will grow from 54 percent to 62 percent of 
the budget over the next 10 years.
  Mr. President, the Constitution grants the President the power of the 
sword and the Congress the power of purse. The President has a great 
deal of power as Commander-in-Chief as we have most recently seen in 
Haiti. I am not ready today to turn as much of Congress' power over the 
purse over to the President as provided for in Senator McCain's 
enhanced rescission proposal. But I do think there is a need to 
recalibrate the scales, balance them, and guarantee the President a 
vote on his or her rescission proposals.
  Finally, Mr. President, I would like to take a moment to commend the 
senior Senator from Idaho, Senator Craig, for his leadership on this 
legislation. The legislation I introduce today, in many respects, 
represents the work product of the distinguished Senator from Idaho. In 
addition, the legislation borrows heavily from previous legislation 
written by the senior Senator from Maine, Senator Cohen, and the 
efforts of the senior Senator from New Jersey to fight tax breaks in 
our laws.
  Mr. President, I ask unanimous consent that a brief description and 
the text of this legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 14

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Legislative Line Item Veto 
     Act''.

     SEC. 2. EXPEDITED CONSIDERATION OF CERTAIN PROPOSED 
                   RESCISSIONS AND REPEALS OF TAX EXPENDITURES AND 
                   DIRECT SPENDING.

       (a) In General.--Title X of the Congressional Budget and 
     Impoundment Control Act of 1974 (2 U.S.C. 621 et seq.) is 
     amended by adding after section 1012 the following new 
     section:


 ``expedited consideration of certain proposed rescissions and repeals 
                of tax expenditures and direct spending

       ``Sec. 1012A. (a) Proposed Cancellation of Budget Item.--
     The President may propose, at the time and in the manner 
     provided in subsection (b), the cancellation of any budget 
     item provided in any Act.
       ``(b) Transmittal of Special Message.--
       ``(1)(A) Subject to the time limitations provided in 
     subparagraph (B), the President 
     [[Page S174]] may transmit to Congress a special message 
     proposing to cancel budget items and include with that 
     special message a draft bill that, if enacted, would only 
     cancel those budget items as provided in this section. The 
     bill shall clearly identify each budget item that is proposed 
     to be canceled including, where applicable, each program, 
     project, or activity to which the budget item relates. The 
     bill shall specify the amount, if any, of each budget item 
     that the President designates for deficit reduction as 
     provided in paragraph (4).
       ``(B) A special message may be transmitted under this 
     section--
       ``(i) during the 20-calendar-day period (excluding 
     Saturdays, Sundays, and legal holidays) commencing on the day 
     after the date of enactment of the provision proposed to be 
     rescinded or repealed; or
       ``(ii) at the same time as the President's budget.
       ``(2) In the case of an Act that includes budget items 
     within the jurisdiction of more than one committee of a 
     House, the President in proposing to cancel such budget item 
     under this section shall send a separate special message and 
     accompanying draft bill for each such committee.
       ``(3) Each special message shall specify, with respect to 
     the budget item proposed to be canceled--
       ``(A) the amount that the President proposes be canceled;
       ``(B) any account, department, or establishment of the 
     Government to which such budget item is available for 
     obligation, and the specific project or governmental 
     functions involved;
       ``(C) the reasons why the budget item should be canceled;
       ``(D) to the maximum extent practicable, the estimated 
     fiscal, economic, and budgetary effect (including the effect 
     on outlays and receipts in each fiscal year) of the proposed 
     cancellation; and
       ``(E) all facts, circumstances, and considerations relating 
     to or bearing upon the proposed cancellation and the decision 
     to effect the proposed cancellation, and to the maximum 
     extent practicable, the estimated effect of the proposed 
     cancellation upon the objects, purposes, and programs for 
     which the budget item is provided.
       ``(4)(A) Not later than 5 days after the date of enactment 
     of a bill containing an amount designated by the President 
     for deficit reduction under paragraph (1), the President 
     shall--
       ``(i) with respect to a rescission bill, reduce the 
     discretionary spending limits under section 601 of the 
     Congressional Budget Act of 1974 for the budget year and each 
     outyear to reflect such amount; and
       ``(ii) with respect to a repeal of a tax expenditure or 
     direct spending, adjust the balances for the budget year and 
     each outyear under section 252(b) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 to reflect such amount.
       ``(B) Not later than 5 days after the date of enactment of 
     a bill containing an amount designated by the President for 
     deficit reduction under paragraph (1), the chairs of the 
     Committees on the Budget of the Senate and the House of 
     Representatives shall revise levels under section 311(a) and 
     adjust the committee allocations under section 602(a) to 
     reflect such amount.
       ``(c) Procedures for Expedited Consideration.--
       ``(1)(A) Before the close of the second day of session of 
     the Senate and the House of Representatives, respectively, 
     after the date of receipt of a special message transmitted to 
     Congress under subsection (b), the majority leader or 
     minority leader of each House shall introduce (by request) 
     the draft bill accompanying that special message. If the bill 
     is not introduced as provided in the preceding sentence in 
     either House, then, on the third day of session of that House 
     after the date of receipt of that special message, any Member 
     of that House may introduce the bill.
       ``(B) The bill shall be referred to the appropriate 
     committee or (in the House of Representatives) committees. 
     The committee shall report the bill without substantive 
     revision and with or without recommendation. The committee 
     shall report the bill not later than the seventh day of 
     session of that House after the date of receipt of that 
     special message. If the committee fails to report the bill 
     within that period, the committee shall be automatically 
     discharged from consideration of the bill, and the bill shall 
     be placed on the appropriate calendar.
       ``(C) A vote on final passage of the bill shall be taken in 
     the Senate and the House of Representatives on or before the 
     close of the 10th day of session that House after the date of 
     the introduction of the bill in that House. If the bill is 
     passed, the Clerk of the Senate or the House of 
     Representatives, as the case may be, shall cause the bill to 
     be engrossed, certified, and transmitted to the other House 
     within one calendar day of the day on which the bill is 
     passed.
       ``(2)(A) During consideration under this subsection in the 
     House of Representatives, any Member of the House of 
     Representatives may move to strike any proposed cancellation 
     of a budget item if supported by 49 other Members.
       ``(B) A motion in the House of Representatives to proceed 
     to the consideration of a bill under this subsection shall be 
     highly privileged and not debatable. An amendment to the 
     motion shall not be in order, nor shall it be in order to 
     move to reconsider the vote by which the motion is agreed to 
     or disagreed to.
       ``(C) Debate in the House of Representatives on a bill 
     under this subsection shall not exceed 4 hours, which shall 
     be divided equally between those favoring and those opposing 
     the bill. A motion further to limit debate shall not be 
     debatable. It shall not be in order to move to recommit a 
     bill under this subsection or to move to reconsider the vote 
     by which the bill is agreed to or disagreed to.
       ``(D) Appeals from decisions of the Chair relating to the 
     application of the Rules of the House of Representatives to 
     the procedure relating to a bill under this section shall be 
     decided without debate.
       ``(E) Except to the extent specifically provided in this 
     section, consideration of a bill under this section shall be 
     governed by the Rules of the House of Representatives. It 
     shall not be in order in the House of Representatives to 
     consider any rescission bill introduced pursuant to the 
     provisions of this section under a suspension of the rules or 
     under a special rule.
       ``(3)(A) During consideration of a bill under this 
     subsection in the Senate, any Member of the Senate may move 
     to strike any proposed cancellation of a budget item if 
     supported by 11 other Members.
       ``(B) It shall not be in order to move to reconsider the 
     vote by which the motion is agreed to or disagreed to.
       ``(C) Debate in the Senate on a bill under this subsection, 
     and all debatable motions and appeals in connection therewith 
     (including debate pursuant to subparagraph (D)), shall not 
     exceed 10 hours. The time shall be equally divided between, 
     and controlled by, the majority leader and the minority 
     leader or their designees.
       ``(D) Debate in the Senate on any debatable motion or 
     appeal in connection with a bill under this subsection shall 
     be limited to not more than 1 hour, to be equally divided 
     between, and controlled by, the mover and the manager of the 
     bill, except that in the event the manager of the bill is in 
     favor of any such motion or appeal, the time in opposition 
     thereto, shall be controlled by the minority leader or his 
     designee. Such leaders, or either of them, may, from time 
     under their control on the passage of a bill, allot 
     additional time to any Senator during the consideration of 
     any debatable motion or appeal.
       ``(E) A motion in the Senate to further limit debate on a 
     bill under this subsection is not debatable. A motion to 
     recommit a bill under this subsection is not in order.
       ``(F) If the Senate proceeds to consider a bill introduced 
     in the House of Representatives under paragraph (1)(A), then 
     any Senator may offer as an amendment the text of the 
     companion bill introduced in the Senate under paragraph 
     (1)(A) as amended if amended (under subparagraph (A)). Debate 
     in the Senate on such bill introduced in the House of 
     Representatives, and all debatable motions and appeals in 
     connection therewith (including debate pursuant to 
     subparagraph (D)), and any amendment offered under this 
     subparagraph, shall not exceed 10 hours minus such times (if 
     any) as Senators consumed or yielded back during 
     consideration of the companion bill introduced in the Senate 
     under paragraph (1)(A).
       ``(4) Debate in the House of Representatives or the Senate 
     on the conference report on any bill considered under this 
     section shall be limited to not more than 2 hours, which 
     shall be divided equally between the majority leader and the 
     minority leader. A motion further to limit debate is not 
     debatable. A motion to recommit the conference report is not 
     in order, and it is not in order to move to reconsider the 
     vote by which the conference report is agreed to or disagreed 
     to.
       ``(d) Amendments and Divisions Prohibited.--Except as 
     otherwise provided by this section, no amendment to a bill 
     considered under this section shall be in order in either the 
     Senate or the House of Representatives. It shall not be in 
     order to demand a division of the question in the House of 
     Representatives (or in a Committee of the Whole). No motion 
     to suspend the application of this subsection shall be in 
     order in the House of Representatives, nor shall it be in 
     order in the House of Representatives to suspend the 
     application of this subsection by unanimous consent.
       ``(e) Requirement To Make Available for Obligation.--Any 
     budget item proposed to be canceled in a special message 
     transmitted to Congress under subsection (b) shall not be 
     made available for obligation or take effect until the day 
     after the date on which either House rejects the bill 
     transmitted with that special message.
       ``(f) Definitions.--For purposes of this section--
       ``(1) the term `appropriation Act' means any general or 
     special appropriation Act, and any Act or joint resolution 
     making supplemental, deficiency, or continuing 
     appropriations;
       ``(2) the term `direct spending' shall have the same 
     meaning given such term in section 250(c)(8) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985;
       ``(3) the term `budget item' means--
       ``(A) an amount, in whole or in part, of budget authority 
     provided in an appropriation Act;
       ``(B) an amount of direct spending; or
       ``(C) a targeted tax benefit;
       ``(4) the term `cancellation of a budget item' means--
       ``(A) the rescission of any budget authority provided in an 
     appropriation Act;
     [[Page S175]]   ``(B) the repeal of any amount of direct 
     spending; or
       ``(C) the repeal of any targeted tax benefit; and
       ``(5) the term `targeted tax benefit' means any provision 
     which has the practical effect of providing a benefit in the 
     form of a different treatment to a particular taxpayer or a 
     limited class of taxpayers, whether or not such provision is 
     limited by its terms to a particular taxpayer or a class of 
     taxpayers. Such term does not include any benefit provided to 
     a class of taxpayers distinguished on the basis of general 
     demographic conditions such as income, number of dependents, 
     or marital status.''.
       (b) Exercise of Rulemaking Powers.--Section 904 of the 
     Congressional Budget Act of 1974 (2 U.S.C. 621 note) is 
     amended--
       (1) in subsection (a), by striking ``and 1017'' and 
     inserting ``1012A, and 1017''; and
       (2) in subsection (d), by striking ``section 1017'' and 
     inserting ``sections 1012A and 1017''.
       (c) Clerical Amendments.--The table of sections for subpart 
     B of title X of the Congressional Budget and Impoundment 
     Control Act of 1974 is amended by inserting after the item 
     relating to section 1012 the following:

``Sec. 1012A. Expedited consideration of certain proposed rescissions 
              and repeals of tax expenditures and direct spending.''.
       (d) Effective Period.--The amendments made by this Act 
     shall--
       (1) take effect on the date of enactment of this Act;
       (2) apply only to budget items provided in Acts enacted on 
     or after the date of enactment of this Act; and
       (3) cease to be effective on September 30, 1998.

  Mr. CRAIG. Mr. President, I also wish to speak on S. 14 that has just 
been introduced by Budget Committee chairman Senator Domenici and also 
Senator Exon and myself. That is a new bill that will create a 
legislative line-item veto. We believe that is another important issue 
that the American people have been continually asking for for well over 
a decade now with calls the Congress refused to hear or to respond to. 
Now we think this new Congress will respond.
  While I remain a strong cosponsor of S. 4--S. 4 is the pure line-item 
veto that Senator McCain and Senator Coats have brought before this 
Senate year after year--I am also, in S. 14, offering an additional 
alternative.
  Make no confusion by my remarks. I will support the pure line-item 
veto S. 4. I think it is important that we give it a clean opportunity. 
But if that cannot be accomplished, I think it is important that the 
Budget Committee recognize, as they have with the introduction of S. 14 
by Senator Pete Domenici, an alternative piece of legislation of this 
type similar to that I introduced last year which also clearly allows 
the President to exercise a line-item veto and the Congress, through a 
procedure both timely and responsive, to address those items singled 
out by the President.
  These are important issues. It is important to the American people 
who are watching today the most historic event in 40 years to see a 
House sworn in, to see a Republican Speaker by the name of Newt 
Gingrich take his seat, or to see 11 new Members, Republican Members, 
come to the U.S. Senate and see a historic change once again in the 
leadership of the Senate; for those who observe us to know that we will 
address the Contract With America, we will address mandates, we will 
vote on a line-item veto, we will vote on a balanced budget amendment.
  That is what the American people have asked for. I believe that is 
what the 104th Congress will produce for them. That is historic. I 
think it is clearly important that we now respond to the mandate the 
American people sent us to this new Congress to address.
  In September of last year, I, along with a dozen of our Senate 
colleagues, introduced a legislative line-item veto as a part of S. 
2458, the Common Cents Budget Reform Act of 1994. This year, S. 14 
incorporates all the essentials of title III of that legislation and 
makes improvements in the fine tuning.
  This bill is also similar to H.R. 4600 in the 103d Congress, as it 
passed the House last June 14, by a vote of 342 to 69, after a weaker 
version was rejected.
  I want to acknowledge and commend the thoughtfulness and cooperation 
of the other original sponsors of S. 14. These also include the 
Senators from Maine [Mr. Cohen] and New Jersey [Mr. Bradley], both of 
whom have had their own legislation in this area, and the distinguished 
majority leader. They, along with the chairman and ranking member [Mr. 
Exon] of the Budget Committee have worked hard to achieve a meeting of 
the minds.
  As I have noted, I am also an original cosponsor of S. 4.
  In brief, S. 4 is an enhanced rescission bill, which would allow a 
Presidential rescission of spending to stand unless a disapproval of 
that rescission was enacted into law, presumably over the President's 
veto, which would require a two-thirds vote.
  Under S. 14 which contains an expedited rescission process, a 
Presidential proposal to cancel budget items--whether appropriations, 
narrowly targeted tax benefits, or new direct spending--would be given 
mandatory consideration in Congress, with approval or disapproval by 
majority vote concluded on an expedited basis.
  I prefer the pure approach taken in S. 4. But both versions are 
second, effective reforms. Both would increase accountability, promote 
fiscal responsibility, and improve public confidence in the budget 
process. This Senator is committed, and I call on my colleagues to 
commit, to passing the strongest legislative line item veto possible. 
The most effective line item veto is the one that becomes law.
  There are three principal reasons for Congress to pass this kind of 
budget reform:
  First, it would promote fiscal responsibility.
  According to GAO, since 1974, Presidents have requested 1,019 
individual rescissions of appropriations. Congress has approved 354--
34.5 percent--of these, amounting to 30 percent of the dollar volume of 
proposed rescissions.
  Excluding 1981, Congress has approved less than 20 percent of the 
dollar volume of rescissions proposed by Presidents.
  Congress has simply ignored $48 billion in rescissions proposed under 
title X of the 1974 Budget Act, refusing to take a vote on the merits.
  Alone, a line-item veto is not going to be enough to balance the 
budget. However, it's routinely estimated that an additional $10 
billion a year in discretionary spending could be saved this way. To 
quote the late Senator Everett Dirksen, and adjust him for inflation: 
``$10 billion here, $10 billion there, pretty soon we're talking about 
real money.''
  On the tax side, public cynicism regarding Congress has grown with 
increased attention to provisions, hidden away in large tax bills, 
which benefit narrow interests and special constituencies.
  For example, in H.R. 11, passed late in 1992--but vetoed, there were 
50 special tax provisions that cost more than the enterprise zones that 
were supposed to be the centerpiece of the bill.
  We've all heard the horror stories about tax breaks that benefit one 
sports stadium, one wealthy family, one large corporation, Our 
constituents have heard those stories, too. They're demanding that 
things change.
  Second, it would improve legislative accountability and produce a 
more thoughtful legislative process.
  A line-item veto would cast an additional dose of sunlight on the 
legislative process.
  All too often, large bills include individual items that would never 
stand up to public scrutiny.
  We're all familiar with the rush to get the legislative trains out on 
time. That means bills and reports spanning hundreds of pages that 
virtually no one is able to read--much less digest--in the day or two 
that they are voted on.
  Moreover, any more, virtually every appropriations bill--even the 13 
regular bills--and certainly every tax bill, is a huge bill.
  Knowing that any individual provision may have to return to Congress 
one more time to stand on its own merits will promote more responsible 
legislation in the first place.
  Third, it would improve executive accountability.
  There is always some concern that any form of line-item veto or 
expedited rescission process would transfer too much power from the 
Congress to the President.
  But there's another side to that coin.
  Many of us on both sides of the aisle have suggested, at different 
times, that Presidents aren't always serious about the rescission 
messages they send to Congress, or that the volume of rescissions they 
propose don't live up to their tough talk about what they would do if 
they had a line-item veto.
  [[Page S176]] I think it's time to call the President's bluff--and I 
mean every President, because this is a bipartisan issue.
  Already we are seeing groups like Citizens Against Government Waste 
and others come up with billions of dollars in long lists of pork 
items. Once we give the President expedited rescission authority, he or 
she will have to answer to the people if the use of that authority 
doesn't match the Presidential rhetoric.
  In particular, in S. 14, we give the President the chance to 
designate how much of his or her rescissions savings would be applied 
to the deficit through the use of a lockbox, or deficit reduction 
account.
  Under this expedited rescission procedure, Congress would not lose 
the power of the purse, but the power of the spotlight would be 
restored to the President.
  In conclusion:
  I commend to the attention of my colleagues both S. 4 and S. 14, and 
urge prompt consideration. This year, I believe, we will enact a line 
item veto law, and I look forward to this long overdue reform.
                                 ______

      By Mr. MOYNIHAN:
  S. 15. A bill to provide that professional baseball teams and leagues 
composed of such teams shall be subject to the antitrust laws; to the 
Committee on the Judiciary.


                   national pastime preservation act

 Mr. MOYNIHAN. Mr. President, in his book, ``God's Country and Mine,'' 
the author Jacques Barzun, a former history professor at Columbia 
University, wrote ``Whoever wants to know the heart and mind of America 
had better learn baseball. * * *''
  Baseball is America's national pastime. It was invented, at least 
according to the view espoused by New Yorkers, by General Abner 
Doubleday in Cooperstown, NY, in 1839. Today it is deeply embedded in 
our culture.
  Yet in recent years the game has become troubled. Baseball has had 
eight work stoppages over the last two decades, more than in all other 
professional sports combined. The existing strike has been with us 
since August, and no end is in sight. The 1995 season is in grave 
jeopardy. Indeed, many observers believe the future of baseball itself 
is in peril.
  The current difficulties may be traced back to 1922, when Justice 
Oliver Wendell Holmes delivered the opinion of the U.S. Supreme Court 
in Federal Baseball v. National League, 259 U.S. 200. It was therein 
decided that the Sherman Act did not apply to exhibitions of baseball 
because baseball was not interstate commerce.
  The Supreme Court has considered this matter on two subsequent 
occasions: In 1953 in Toolson v. New York Yankees, 346 U.S. 356, and in 
1972 in Flood v. Kuhn, 407 U.S. 258. In Flood, the most recent 
pronouncement, the Court concluded that the antitrust exemption was an 
``anomaly'' and an ``aberration confined to baseball'' and that 
``professional baseball is a business and it is engaged in interstate 
commerce.'' Even so, the Court refused to reverse its 1922 decision in 
Federal Baseball. Justice Blackman, delivering the opinion of the Court 
in Flood, wrote:

       If there is any inconsistency or illogic in all this, it is 
     an inconsistency and illogic of long standing that is to be 
     remedied by the Congress and not by this Court.

  This decision clearly laid responsibility for baseball's antitrust 
exemption on Congress. It also explicitly recognized baseball's 
evolution into a major industry. George F. Will aptly described this 
transformation in his bestselling book ``Men at Work'':

       It has been said that baseball in the pre-Civil War era 
     taught a puritanical America the virtues of play. But 
     industrialists of the Gilded Age would approve of the way 
     baseball has become a big business. Fifty years ago baseball 
     was a comparatively mom-and-pop operation. Sunday play was 
     not permitted in Pittsburgh and Philadelphia until 1934. In 
     1922 the U.S. Supreme Court held, for purposes of antitrust 
     regulations, that baseball is not a business. Today sports 
     columnist Jim Murray says, ``If it isn't, General Motors is a 
     sport.''

  As a result of this anomaly in American law, Mr. President, the World 
Series was cancelled in 1994 for the first time since 1904. With none 
of the legal restraints that prevent other businesses from engaging in 
anticompetitive behavior, the baseball team owners are free to act as a 
cartel. To end this monopoly, Congress must remove baseball's antitrust 
exemption and subject the game to the same rules of law that apply to 
all other major league sports.
  This is why I am introducing today the National Pastime Preservation 
Act, a bill to repeal the antitrust exemption for major league 
baseball. It may not solve all of baseball's troubles, but it is a 
necessary step and one that is decades overdue. Many Members of 
Congress have begun to examine this issue more closely in view of the 
seeming intractability of the strike. My friend Senator Orrin Hatch, 
the new chairman of the Judiciary Committee, has indicated that he 
supports repealing the exemption and is prepared to move a bill quickly 
through his committee. I look forward to working with him and other 
Members of Congress who share our concern about the future of major 
league baseball in America.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 15

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``National Pastime 
     Preservation Act of 1995''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) the business of organized professional baseball is in, 
     or affects, interstate commerce; and
       (2) the antitrust laws should be amended to reverse the 
     result of the decisions of the Supreme Court of the United 
     States in Federal Baseball Club of Baltimore, Inc. v. 
     National League of Professional Baseball Clubs, 259 U.S. 200 
     (1922), Toolson v. New York Yankees, Inc., 346 U.S. 356 
     (1953), and Flood v. Kuhn, 407 U.S. 258 (1972), which 
     exempted baseball from coverage under the antitrust laws.

     SEC. 3. APPLICATION OF ANTITRUST LAWS TO PROFESSIONAL 
                   BASEBALL.

       The Clayton Act (15 U.S.C. 12 et seq.) is amended by adding 
     at the end the following new section:
       ``Sec. 27. (a) In General.--Except as provided in Public 
     Law 87-331 (15 U.S.C. 291 et seq.) (commonly known as the 
     `Sports Broadcasting Act of 1961'), the antitrust laws shall 
     apply to the business of organized professional baseball.
       ``(b) Application of Section.--This section--
       (1) shall apply to any agreement that is in effect on or 
     after the date of enactment of this section and to conduct 
     engaged in after that date in furtherance of that agreement 
     or in furtherance of any other object; but
       (2) shall not apply to conduct engaged in before that 
     date.''.
                                 ______

      By Mr. DOLE:
  S. 16. A bill to establish a Commission to review the dispute 
settlement reports of the World Trade Organization, and for other 
purposes; to the Committee on Finance.


                wto dispute settlement review commission

  Mr. DOLE. Mr. President, just over 1 month ago, in consecutive 
special sessions, both Houses of Congress passed a landmark bill 
implementing the new GATT Agreement. The Agreement establishes a new 
international body, the World Trade Organization, to oversee with 
unprecedented authority the growth and development of international 
trade into the 21st century.
  I heard from Americans across the country in the days and weeks 
leading up to the vote. They wanted to know what effect the WTO would 
have on U.S. sovereignty. People from all over Kansas and just about 
everywhere else were deeply concerned that this entirely new 
international organization would rob us of our freedom. I set out to 
identify those things in this new organization that had the greatest 
potential to go awry, that might end up harming instead of helping U.S. 
interests in global trade. I believe the legislation I am introducing 
today goes a long way toward ensuring that America retains full control 
of her destiny, that no international organization staffed by unelected 
bureaucrats will dictate what we do here at home.
  I hope my colleagues understand, and I want the American people to 
understand, that the World Trade Organization is an experiment. It is 
an experiment that Congress has endorsed. But we have not done so 
unconditionally. Far from it. We have not signed away American 
sovereignty. To the contrary, Mr. President, we intend to scrutinize 
this institution--the WTO--to ensure that its every act is consistent 
with the interests of the United States.
  [[Page S177]] The WTO is an organization which is on trial. I know it 
is just starting out, just beginning the process of establishing 
itself. The outcome of that trial will depend on these early actions, 
on the strict observance by the WTO of its mandate, and in particular 
on the results of the dispute settlement mechanism.
  An effective dispute settlement mechanism was one of the major 
negotiating objectives for the United States. In the GATT talks, the 
United States sought to have binding and automatic dispute settlement. 
Trade disputes would be put to international panels, and the defendant 
would be deprived of any means of blocking the result. The United 
States supported this idea out of frustration largely with our European 
friends who maintained agricultural policies that adversely affected 
every other agricultural exporting nation.
  All other nations agreed with our proposal, obviously from a variety 
of motivations, not always identical with our own. They largely 
objected to our use of what they called our ``unilateral measures,'' 
actions which we have taken to defend our national
 commerical interests against their dumped and subsidized goods, or 
occasionally using our leverage of access to the world's largest, most 
open market to pry open the markets of others.

  Despite different motivations, for the first time in any 
international forum, there will be binding dispute settlement. This 
means that no nation will be able to prevent the result from being 
accepted by the body of nations in the WTO. The defendant will incur 
costs of various kinds if it ignores the findings of a dispute 
settlement panel--costs in terms of international condemnation, in 
terms of weakening international respect for the trading rules, and in 
terms of possible internationally sanctioned retaliation against its 
goods.
  This places a heavy burden on the new dispute settlement system, and 
all who manage it and participate in it.
  Make no mistake, the future of the World Trading System depends on 
this new dispute settlement process being used prudently and 
administered wisely. Those of us who voted for the GATT Agreement knew 
these risks when we accepted the overall package. There was no option 
for us, or for any other country, to pick and choose among the parts of 
the Agreement or to make any modifications.
  Therefore, we must do what we can with the Agreement that was 
negotiated, and make a good faith effort to make it work well, to 
further international trade and American national commercial interests.
  President Clinton assured me in this connection last month as we 
approached the vote on the GATT Agreement that he and his 
administration would fully support my effort to ensure that U.S. 
interests will be protected. Working with Ambassador Kantor, I 
developed a proposal, which I am introducing today, that will give the 
fullest possible protection against abuses by the WTO, and yet allow us 
to enjoy all of the benefits of the GATT Agreement.
  My proposal establishes the WTO Dispute Settlement Review Commission. 
It will be composed of five Federal appellate judges, appointed by the 
President in consultation with Congress. The Commission will be 
empowered to review every adverse decision produced by the WTO dispute 
settlement process. In cases where the dispute settlement panels 
adhered to the proper standard of review, and where they did not exceed 
or abuse their authority, no further action will be taken. But if a 
panel decision reaches an inappropriate result that amounts to abuse of 
its mandate, the Review Commission would transmit that determination to 
Congress. Any Members would then be permitted to introduce a privileged 
resolution requiring renegotiation of the WTO dispute settlement rules. 
After three determinations of inappropriate decisions by
 dispute settlement panels, any Member could introduce a resolution to 
withdraw from the WTO. I call this process ``Three strikes and we're 
out.''

  The United States is only one country, but we are the one most 
capable of exercising international leadership. My proposal today is a 
way to exercise that needed leadership.
  I want to avoid the worst of all possible results--a kind of 
nightmare scenario in which panelists who may come from countries whose 
firms engage in widespread dumping, whose governments heavily subsidize 
industry, agriculture, and services, and whose governments fail to live 
up to a reasonable standard of antitrust enforcement, advised by a WTO 
secretariat of international bureaucrats with an agenda of their own to 
modify existing international trade amendments, abuse their role, and 
reach inappropriate results.
  I am not making a prediction that such a scenario will occur. I am 
saying that the knowledge of the existence of a highly competent, 
impartial Commission of judges in the United States overseeing in 
detail the operation of these panels will serve as a protection against 
that outcome. If the dispute settlement process proves tyrannical and 
abusive rather than fair and impartial, the United States will be well 
on the road to withdrawal from the WTO.
  Mr. President, I ask unanimous consent that the bill and a letter to 
me from Ambassador Mickey Kantor dated today be inserted in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 16

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``WTO Dispute Settlement 
     Review Commission Act''.

     SEC. 2. CONGRESSIONAL FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds the following:
       (1) The United States joined the World Trade Organization 
     as a founding member with the goal of creating an improved 
     global trading system.
       (2) The American people must receive assurances that United 
     States sovereignty will be protected, and United States 
     interests will be advanced, within the global trading system 
     which the WTO will oversee.
       (3) The survival of the new WTO requires the continuation 
     of both trade liberalization and the ability to respond 
     effectively to unfair or otherwise harmful trade practices.
       (4) United States support for the WTO depends upon 
     obtaining mutual trade benefits through the openness of 
     foreign markets and the maintenance of effective United 
     States and WTO remedies against unfair or otherwise harmful 
     trade practices.
       (5) Congress passed the Uruguay Round Agreements Act based 
     upon its understanding that effective trade remedies would 
     not be eroded. These remedies are essential to continue the 
     process of opening foreign markets to imports of goods and 
     services and to prevent harm to American industry and 
     agriculture particularly through foreign dumping and 
     subsidization.
       (6) The continued support of the Congress for the WTO is 
     dependent upon a WTO dispute settlement system that--
       (A) operates in a fair and impartial manner;
       (B) does not add to the obligations of or diminish the 
     rights of the United States under the Uruguay Round 
     agreements; and
       (C) does not exceed its authority, scope, or established 
     standard of review.
       (b) Purpose.--It is the purpose of this Act to provide for 
     the establishment of the WTO Dispute Settlement Review 
     Commission to achieve the goals described in subsection 
     (a)(6).

     SEC. 3. ESTABLISHMENT OF COMMISSION.

       (a) Establishment.--There is established a commission to be 
     known as the WTO Dispute Settlement Review Commission 
     (hereafter in this Act referred to as the ``Commission'').
       (b) Membership.--
       (1) Composition.--The Commission shall be composed of 5 
     members all of whom shall be judges of the Federal judicial 
     circuits and shall be appointed by the President, after 
     consultation with the Majority Leader and Minority Leader of 
     the House of Representatives, the Majority Leader and 
     Minority Leader of the Senate, the chairman and ranking 
     member of the Committee on Ways and Means of the House of 
     Representatives, and the chairman and ranking member of the 
     Committee on Finance of the Senate.
       (2) Date.--The appointments of the members of the 
     Commission shall be made no later than 60 days after the date 
     of the enactment of this Act.
       (c) Period of Appointment; Vacancies.--
       (1) In general.--Members of the Commission first appointed 
     shall each be appointed for a term of 5 years. After the 
     initial 5-year term, 3 members of the Commission shall be 
     appointed for terms of 3 years and the remaining 2 members 
     shall be appointed for terms of 2 years.
       (2) Vacancies.--
       (A) In general.--Any vacancy on the Commission shall not 
     affect its powers, but shall be filled in the same manner as 
     the original appointment and shall be subject to the same 
     conditions as the original appointment.
     [[Page S178]]   (B) Unexpired term.--An individual chosen to 
     fill a vacancy shall be appointed for the unexpired term of 
     the member replaced.
       (d) Initial Meeting.--No later than 30 days after the date 
     on which all members of the Commission have been appointed, 
     the Commission shall hold its first meeting.
       (e) Meetings.--The Commission shall meet at the call of the 
     Chairman.
       (f) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (g) Chairman and Vice Chairman.--The Commission shall 
     select a Chairman and Vice Chairman from among its members.

     SEC. 4. DUTIES OF THE COMMISSION.

       (a) Review of WTO Dispute Settlement Reports.--
       (1) In general.--The Commission shall review--
       (A) all reports of dispute settlement panels or the 
     Appellate Body of the World Trade Organization in proceedings 
     initiated by other parties to the WTO which are adverse to 
     the United States and which are adopted by the Dispute 
     Settlement Body, and
       (B) upon request of the United States Trade Representative, 
     any other report of a dispute settlement panel or the 
     Appellate Body which is adopted by the Dispute Settlement 
     Body.
       (2) Scope of review.--In the case of reports described in 
     paragraph (1), the Commission shall conduct a complete review 
     and determine whether--
       (A) the panel or the Appellate Body, as the case may be, 
     exceeded its authority or its terms of reference;
       (B) the panel or the Appellate Body, as the case may be, 
     added to the obligations of or diminished the rights of the 
     United States under the Uruguay Round agreement which is the 
     subject of report;
       (C) the panel or the Appellate Body, as the case may be, 
     acted arbitrarily or capriciously, engaged in misconduct, or 
     demonstrably departed from the procedures specified for 
     panels and Appellate Bodies in the applicable Uruguay Round 
     Agreement; and
       (D) the report of the panel or the Appellate Body, as the 
     case may be, deviated from the applicable standard of review, 
     including in antidumping, countervailing duty, and other 
     unfair trade remedy cases, the standard of review set forth 
     in Article 17.6 of the Agreement on Implementation of Article 
     VI of the General Agreement on Tariffs and Trade 1994.
       (3) Affirmative determination.--If the Commission makes an 
     affirmative determination with respect to the action of a 
     panel or an Appellate Body under subparagraph (A), (B), (C), 
     or (D) of paragraph (2), the Commission shall determine 
     whether the action of the panel or Appellate Body materially 
     affected the outcome of the report of the panel or Appellate 
     Body.
       (b) Determination; Report.--
       (1) Determination.--No later than 120 days after the date 
     of a report of a panel or Appellate Body described in 
     subsection (a)(1) is adopted by the Dispute Settlement Body, 
     the Commission shall make a written determination with 
     respect to matters described in subsections (a)(2) and 
     (a)(3).
       (2) Reports.--The Commission shall report the 
     determinations described in paragraph (1) to the Committee on 
     Ways and Means of the House of Representatives and the 
     Committee on Finance of the Senate.

     SEC. 5. POWERS OF THE COMMISSION.

       (a) Hearings.--The Commission may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out the purposes of this Act.
       (b) Information From Interested Parties and Federal 
     Agencies.--
       (1) Notice of panel or appellate body report.--The United 
     States Trade Representative shall advise the Commission no 
     later than 5 days after the date the Dispute Settlement Body 
     adopts the report of a panel or Appellate Body that is 
     adverse to the United States and shall immediately publish 
     notice of such advice in the Federal Register, along with 
     notice of an opportunity for interested parties to submit 
     comments to the Commission.
       (2) Submissions and requests for information.--Any 
     interested party may submit comments to the Commission 
     regarding the panel or Appellate Body report. The Commission 
     may also secure directly from any Federal department or 
     agency such information as the Commission considers necessary 
     to carry out the provisions of this Act. Upon request of the 
     Chairman of the Commission, the head of such department or 
     agency shall furnish such information to the Commission.
       (3) Access to panel and appellate body documents.--The 
     United States Trade Representative shall make available to 
     the Commission all submissions and relevant documents 
     relating to the panel or Appellate Body report, including any 
     information contained in such submissions identified by the 
     provider of the information as proprietary information or 
     information treated as confidential by a foreign government.

     SEC. 6. REVIEW OF DISPUTE SETTLEMENT PROCEDURES AND 
                   PARTICIPATION IN THE WTO.

       (a) Affirmative Report by Commission.--
       (1) In general.--If a joint resolution described in 
     subsection (b)(1) is enacted into law pursuant to the 
     provisions of subsection (c), the President shall undertake 
     negotiations to amend or modify the rules and procedures of 
     the Understanding on Rules and Procedures Governing the 
     Settlement of Disputes to which such joint resolution 
     relates.
       (2) 3 affirmative reports by commission.--If a joint 
     resolution described in subsection (b)(2) is enacted into law 
     pursuant to the provisions of subsection (c), the approval of 
     the Congress, provided under section 101(a) of the Uruguay 
     Round Agreements Act, of the WTO Agreement shall cease to be 
     effective in accordance with the provisions of the joint 
     resolution and the United States shall cease to be a member 
     of the WTO.
       (b) Joint Resolutions Described.--
       (1) In general.--For purposes of subsection (a)(1), a joint 
     resolution is described in this paragraph, if it is a joint 
     resolution of the 2 Houses of Congress and the matter after 
     the resolving clause of such joint resolution is as follows: 
     ``That the Congress authorizes and directs the President to 
     undertake negotiations to amend or modify the rules and 
     procedures of the Understanding on Rules and Procedures 
     Governing the Settlement of Disputes relating to ____ with 
     respect to the affirmative determination submitted to the 
     Congress by the WTO Dispute Settlement Review Commission on 
     ____'', the first blank space being filled with the specific 
     rules and procedures with respect to which the President is 
     to undertake negotiations and the second blank space being 
     filled with the date of the affirmative determination 
     submitted to the Congress by the Commission pursuant to 
     section 4(b) which has given rise to the joint resolution.
       (2) Withdrawal resolution.--For purposes of subsection 
     (a)(2), a joint resolution is described in this paragraph, if 
     it is a joint resolution of the 2 Houses of Congress and the 
     matter after the resolving clause of such joint resolution is 
     as follows: ``That the Congress authorizes and directs the 
     President to undertake negotiations to amend or modify the 
     rules and procedures of the Understanding on Rules and 
     Procedures Governing the Settlement of Disputes relating to 
     ____ with respect to the affirmative report submitted to the 
     Congress by the WTO Dispute Settlement Review Commission on 
     ____ and if such negotiations do not result in a satisfactory 
     solution by ____, the Congress withdraws its approval, 
     provided under section 101(a) of the Uruguay Round Agreements 
     Act, of the WTO Agreement as defined in section 2(9) of that 
     Act'', the first blank space being filled with the specific 
     rules and procedures with respect to which the President is 
     to undertake negotiations, the second blank space being 
     filled with the date of the affirmative determination 
     submitted to the Congress by the Commission pursuant to 
     section 4(b) which has given rise to the joint resolution, 
     and the third blank space being filled with the date the 
     Congress withdraws its approval of the WTO Agreement.
       (c) Procedural Provisions.--
       (1) In general.--The requirements of this subsection are 
     met if the joint resolution is enacted in accordance with 
     this subsection, and--
       (A) in the case of a joint resolution described in 
     subsection (b)(1) the Congress adopts and transmits the joint 
     resolution to the President before the end of the 90-day 
     period (excluding any day described in section 154(b) of the 
     Trade Act of 1974), beginning on the date on which the 
     Congress receives an affirmative determination from the 
     Commission described in section 4(b), or
       (B) in the case of a joint resolution described in 
     subsection (b)(2), the Commission has made 3 affirmative 
     determinations described in section 4(b) during a 5-year 
     period, and the Congress adopts and transmits the joint 
     resolution to the President before the end of the 90-day 
     period (excluding any day described in section 154(b) of the 
     Trade Act of 1974), beginning on the date on which the 
     Congress receives the third such affirmative determination.
       (2) Presidential veto.--In any case in which the President 
     vetoes the joint resolution, the requirements of this 
     subsection are met, if each House of Congress votes to 
     override that veto on or before the later of the last day of 
     the 90-day period referred to in subparagraph (A) or (B), 
     whichever is applicable, or the last day of the 15-day period 
     (excluding any day described in section 154(b) of the Trade 
     Act of 1974) beginning on the date on which the Congress 
     receives the veto message from the President.
       (3) Introduction.--
       (A) Time.--A joint resolution to which this section applies 
     may be introduced at any time on or after the date on which 
     the Commission transmits to the Congress an affirmative 
     determination described in section 4(b), and before the end 
     of the 90-day period referred to in subparagraph (A) or (B), 
     as the case may be.
       (B) Any member may introduce.--A joint resolution described 
     in subsection (b) may be introduced in either House of the 
     Congress by any Member of such House.
       (4) Expedited procedures.--
       (A) General rule.--Subject to the provisions of this 
     subsection, the provisions of subsections (b), (d), (e), and 
     (f) of section 152 of the Trade Act of 1974 (19 U.S.C. 
     2192(b), (d), (e), and (f)) apply to joint resolutions 
     described in subsection (b) to the same extent as such 
     provisions apply to resolutions under such section.
       (B) Report or discharge of committee.--If the committee of 
     either House to which a joint resolution has been referred 
     has not reported it by the close of the 45th day after its 
     introduction (excluding any day described in section 154(b) 
     of the Trade Act of 1974), such committee shall be 
     automatically discharged 
     [[Page S179]] from further consideration of the joint 
     resolution and it shall be placed on the appropriate 
     calendar.
       (C) Finance and ways and means committees.--It is not in 
     order for--
       (i) the Senate to consider any joint resolution unless it 
     has been reported by the Committee on Finance or the 
     committee has been discharged under subparagraph (B); or
       (ii) the House of Representatives to consider any joint 
     resolution unless it has been reported by the Committee on 
     Ways and Means or the committee has been discharged under 
     subparagraph (B).
       (D) Special rule for house.--A motion in the House of 
     Representatives to proceed to the consideration of a joint 
     resolution may only be made on the second legislative day 
     after the calendar day on which the Member making the motion 
     announces to the House his or her intention to do so.
       (5) Consideration of second resolution not in order.--It 
     shall not be in order in either the House of Representatives 
     or the Senate to consider a joint resolution (other than a 
     joint resolution received from the other House), if that 
     House has previously adopted a joint resolution under this 
     section relating to the same matter.
       (d) Rules of House of Representatives and Senate.--This 
     section is enacted by the Congress--
       (1) as an exercise of the rulemaking power of the House of 
     Representatives and the Senate, respectively, and as such is 
     deemed a part of the rules of each House, respectively, and 
     such procedures supersede other rules only to the extent that 
     they are inconsistent with such other rules; and
       (2) with the full recognition of the constitutional right 
     of either House to change the rules (so far as relating to 
     the procedures of that House) at any time, in the same 
     manner, and to the same extent as any other rule of that 
     House.

     SEC. 7. PARTICIPATION IN WTO PANEL PROCEEDINGS.

       (a) In General.--If the United States Trade Representative, 
     in proceedings before a dispute settlement panel or the 
     Appellate Body of the WTO, seeks--
       (1) to enforce United States rights under a multilateral 
     trade agreement, or
       (2) to defend a challenged action or determination of the 
     United States Government,

     a private United States person that is supportive of the 
     United States Government's position before the panel or 
     Appellate Body and that has a direct economic interest in the 
     panel's or Appellate Body's resolution of the matters in 
     dispute shall be permitted to participate in consultations 
     and panel proceedings. The Trade Representative shall issue 
     regulations, consistent with subsections (b) and (c), 
     ensuring full and effective participation by any such private 
     person.
       (b) Access to Information.--The United States Trade 
     Representative shall make available to persons described in 
     subsection (a) all information presented to or otherwise 
     obtained by the Trade Representative in connection with a WTO 
     dispute settlement proceeding. The United States Trade 
     Representative shall promulgate regulations implementing a 
     protective order system to protect information designated by 
     the submitting member as confidential.
       (c) Participation in Panel Process.--Upon request from a 
     person described in subsection (a), the United States Trade 
     Representative shall--
       (1) consult in advance with such person regarding the 
     content of written submissions from the United States to the 
     WTO panel concerned or to the other member countries 
     involved;
       (2) include, where appropriate, such person or its 
     appropriate representative as an advisory member of the 
     delegation in sessions of the dispute settlement panel;
       (3) allow such special delegation member, where such member 
     would bring special knowledge to the proceeding, to appear 
     before the panel, directly or through counsel, under the 
     supervision of responsible United States Government 
     officials; and
       (4) in proceedings involving confidential information, 
     allow appearance of such person only through counsel as a 
     member of the special delegation.

     SEC. 8. DEFINITIONS.

       For purposes of this Act:
       (1) Appellate body.--The term ``Appellate Body'' means the 
     Appellate Body established under Article 17.1 of the Dispute 
     Settlement Understanding.
       (2) Adverse to the united states.--The term ``adverse to 
     the United States'' includes any report which holds any law, 
     regulation, or application thereof by a government agency to 
     be inconsistent with international obligations under the 
     Uruguay Round Agreement (or a nullification or impairment 
     thereof), whether or not there are other elements of the 
     decision which favor arguments made by the United States.
       (3) Dispute settlement panel; panel.--The terms ``dispute 
     settlement panel'' and ``panel'' mean a panel established 
     pursuant to Article 6 of the Dispute Settlement 
     Understanding.
       (4) Dispute settlement body.--The term ``Dispute Settlement 
     Body'' means the Dispute Settlement Body administering the 
     rules and procedures set forth in the Dispute Settlement 
     Understanding.
       (5) Dispute settlement understanding.--The term ``Dispute 
     Settlement Understanding'' means the Understanding on Rules 
     and Procedures Governing the Settlement of Disputes referred 
     to in section 101(d)(16) of the Uruguay Round Agreements Act.
       (6) Uruguay round agreement.--The term ``Uruguay Round 
     Agreement'' means one or more of the agreements described in 
     section 101(d) of the Uruguay Round Agreements Act.
       (7) World trade organization; wto.--The terms ``World Trade 
     Organization'' and ``WTO'' mean the organization established 
     pursuant to the WTO Agreement.
       (8) WTO agreement.--The term ``WTO Agreement'' means the 
     Agreement Establishing the World Trade Organization entered 
     into on April 15, 1994.
                                                                    ____

                                        U.S. Trade Representative,


                            Executive Office of the President,

                                  Washington, DC, January 4, 1995.
     Hon. Robert Dole,
     Senate Majority Leader,
     U.S. Senate,
     Washington, DC.
       Dear Senator Dole: Thank you for providing me with a draft 
     earlier today of your bill to establish a commission to 
     review adverse dispute settlement reports of the World Trade 
     Organization (WTO) and to provide for expedited Congressional 
     action in the event that the commission makes affirmative 
     determinations under the criteria set out in the bill.
       Your bill reflects the basic agreement we reached on those 
     subjects in November. It also adds a new provision regarding 
     participation by private persons in WTO dispute settlement 
     proceedings, which I look forward to reviewing with you.
       I hope to have the chance to discuss with you shortly the 
     details of your bill.
           Sincerely,
                                                   Michael Kantor.
                                 ______

      By Mr. SPECTER (for himself and Ms. Moseley-Braun):
  S. 17. A bill to promote a new urban agenda, and for other purposes; 
to the Committee on Finance.


                 new urban agenda for america's cities

  Mr. SPECTER. Mr. President, as we begin the 104th Congress, we have 
an historic opportunity to make fundamental changes in the Federal 
government. We have an opportunity to reduce the size of Government, to 
have less spending, to reduce taxes, to attack crime control, and to 
speak with a strong voice on foreign policy. I think it is very 
important, as we approach the issue of reducing expenses, that we be 
very careful and handle the issue with a scalpel as opposed to a meat 
axe. As we look forward to cutting taxes, we should examine the capital 
gains tax which should have been cut long ago, and which will probably 
produce more revenue because of more transactions. It is something we 
should have accomplished a long time ago. But where we have tax cuts we 
should not add to the deficit, unless we first have spending cuts so 
that we know precisely what we are doing.
  I agree with key points in the Contract With America. I have long 
urged the adoption of a constitutional amendment for a balanced budget 
when it came to the floor of the Senate more than a decade ago. And I 
have urged the President to exercise the line-item veto on the 
fundamental proposition that the President currently has authority 
under the Constitution to do so because the Federal provision is 
identical with the provision of the Massachusetts State constitution, 
followed by other States, where the Governors, the chief executive 
officers, have exercised the line-item veto. I tried to persuade 
President Bush to exercise the line-item veto under existing authority, 
and he said, ``Arlen, my lawyer tells me I cannot do that.'' I made 
perhaps the tempered suggestion that he change lawyers. I quickly added 
that he should not tell the Bar Association about that. I have urged 
President Clinton to do the same and sent him a detailed memorandum of 
law. These are items within the Contract With America, and others, 
which we can implement to have very sensible change in the Federal 
Government.
  I hope, Mr. President, that the Congress does not move to the 
activist social agenda. There is nothing in the Contract With America 
on school prayer. Although I very fervently believe in the power of 
prayer, I think that it belongs in the churches and synagogues and 
homes, and not in the schools. I recall my own experience as a child of 
six or seven in Wichita, KS, when there was school prayer. I recall how 
uncomfortable I felt--perhaps not quite intimidated--but I hope that 
issue does not come before the Congress. If it reaches the floor of the 
U.S. Senate, it is a matter which will take weeks or perhaps months 
before it is concluded.
  [[Page S180]] Also, I hope that we do not occupy the time of the U.S. 
Senate on the abortion issue. Here again, I personally am very much 
opposed to abortion, but I believe it is a matter for the individual, 
again and for families or ministers, priests and rabbis. And I hope 
that we will spend our time tackling the tough, substantive issues 
which I think last November's mandate calls upon the Congress to do.
  It is my hope, Mr. President, that we will not become embroiled in 
the gridlock and partisanship which occupied so much of the 103d 
Congress. I think it would be a mistake for those on this side of the 
aisle, Republicans, to think that the mandate of last November's 
election is a blanket endorsement for whatever views we have. In many 
quarters--and I think with some cause--it is viewed that last 
November's election was a repudiation of the Congress controlled by the 
Democrats for what the administration had
 done. So it is my hope that we will tackle these core issues and that 
we will deal with them in a way which does not get us bogged down in 
partisanship but looks to the national interests.

  When we talk about the agenda, I hope, Mr. President, that we will 
tackle health care reform early on. I think that there are a number of 
divergent positions regarding health care reform, but a centrist 
position is one I will urge the Congress to adopt. I will be 
introducing today a bill designated as Senate bill 18, by 
prearrangement, which is the same number my health care reform bill had 
last year. Senate bill 18 preserves the free enterprise entrepreneurial 
system, which provides the best health care in the world to 
approximately 85 percent of the American people, and then targets the 
specific problems to extend coverage to people when they change jobs, 
to cover preexisting conditions, where we find in the courts that 
lawyers spend more time arguing about what is a preexisting condition 
than it would take the doctors to treat the condition.
  We will also deal with the issue of spiraling health care costs, with 
more managed care in Medicare, for example, where the costs are 
astronomical and have to be brought under control. And managed care has 
to be very carefully calibrated so that the care is adequate and with a 
view to more than a profit motive. A significant provision of my 
legislation is dealing with low-birthweight babies. They are a human 
tragedy, weighing no more than a pound, a human about as big as the 
size of my hand, carrying scars for a lifetime and enormous health care 
costs of more than $150,000 per child. Provisions in S. 18 are one way 
of how we can curtail health care costs.
  Mr. President, I intend to introduce today Senate bill 17, a number 
arranged by a designation which will deal with an urban agenda for 
America's cities, which I will introduce on behalf of Senator Carol 
Moseley-Braun and myself. I think it may well be the case that the 
Federal Government, Washington, DC, has given up on America's cities, 
and I think that is a tragedy. We have long seen the unsuccessfulness 
and difficulties of throwing money at the problems of cities.
  My legislation embodied in the urban agenda for American cities is 
patterned after proposals suggested by the distinguished mayor of 
Philadelphia, Edward Rendell, and has the backing of many mayors in 
America and the National League of Cities. What it intends to do is to 
provide assistance to the cities, without additional Federal 
expenditures, by means such as a requirement that Federal procurement 
be located in the distressed areas of America's cities; that 15 percent 
of foreign aid be expended in distressed areas of American cities; that 
items like the historical tax credit, scaled back in 1986, be restored. 
It has been a revenue loser for the Federal Government to strike that 
form of a deduction, which had been tremendously developmental for 
American cities and had produced a net effect of more money. These 
items which are encompassed within the legislative proposal by Mayor 
Rendell and embodied in this bill will do much for America's cities.
  I live in one of America's great cities, the city of Philadelphia. My 
experience goes beyond the big city to my birthplace of Wichita, KS, 
which is a moderate-size city in America, and to the town where I moved 
when I was 12, Russell, KS, a city of 5,000. The problems of the 
cities, Mr. President, are not left for the cities alone, but they 
travel across America. Today, you may find the gangs of Los Angeles, 
the Bloods and the Crips, in Des Moines, IA, or in Lancaster, PA. So 
that in moving to assist the cities, we are moving to assist all of 
America.
  Mr. President, I know my time is short with the period set aside for 
each Senator being limited to 10 minutes. I thank my colleagues, and 
the distinguished Senator from West Virginia, for awaiting my 
presentation.
  Mr. President, We convene in legislative session eight weeks after 
the most extraordinary congressional election in American history. With 
a voice that was consistent throughout the nation, the American people 
repudiated the policies of the current Administration and its 
congressional majorities, and for the first time in four decades gave 
control of both houses of Congress to Republicans.
  The very extraordinariness of the election that has brought us here 
guarantees that the 104th Congress that we begin today will be 
historically memorable. We have it in our power now, and as we work 
together over the next two years, to determine whether this Congress 
will be remembered as the moment when a new majority and new 
legislative leadership spawned a new American Renaissance of growth, 
prosperity and accomplishment--or as the moment when Republicans showed 
that they were no more capable or governing than Democrats.


                   the failures of the 103d congress

  The 103d Congress just concluded will find its own way into the 
history books, and I do not believe the references will be 
complimentary. The legislative accomplishment of the last two years 
were meager, as we failed to do anything to expand access to health 
care; as we failed to enact meaningful Congressional reform or curb the 
influence of lobbyists; as we failed in our efforts at campaign finance 
reform; and as we consigned our children to more years of deficit and 
more mountains of debt by failing to adopt a balanced budget amendment 
to the Constitution.
  Only in the area of international trade, with most Republicans 
joining some Democrats to support the NAFTA and GATT agreements--
agreements worked out under both Republican and Democratic 
administrations--was there real legislative cooperation to promote the 
best interests of the nation.
  We also passed a Crime Bill that, while not perfect, should help to 
make America safer by providing more police, building more prisons, 
expanding the federal death penalty, and reducing violence against 
women--but we did so in such a spirit of legislative acrimony that the 
meanness of the debate nearly overswept the bill's value as an 
anticrime measure.
  In fact, it may be that the spirit more than the substance of the 
103d Congress is what endures. If so, it will not be a pleasant 
recollection. In my 14 years in this body, I do not recall a session 
when party and partisanship, rather than honest debate on the merits of 
the issues, played so large a role in determining what legislation 
would be considered, or when, or how it would be voted upon.
  Take the issue of health care. Faced only with the alternatives of 
the massive bureaucracy and government regulation proposed by the 
Clinton administration, on the one hand, and the determination of some 
in my own caucus to do nothing, on the other, we accomplished nothing. 
That failure was almost entirely a failure of process--begun by the 
administration, which excluded Congressional Republicans from the 
formulation of its health care proposals; and compounded by some in the 
Republican caucus who decided that it was more important to deny the 
President whatever credit there might be in a good health care bill 
than to address the problems of those Americans who lacked coverage, or 
were not getting care. The enormous miscalculation of the Democratic 
congressional leadership in refusing even to bring up health care until 
late August, when they thought the coercive power of a summer recess 
would let them force a bad bill through, was the final nail in the 
coffin.
  Had we gone about our work differently, we could have had a good 
[[Page S181]] health care bill in the last Congress--a bill that solved 
the problems of portability, of pre-existing conditions and other
 impediments to health insurance access, while at the same time 
maintaining the private market and patient-physician choice system that 
has given the best health care in the world to 86% of Americans. What 
we needed, but did not have, was an open process of bipartisan 
consideration and debate, where the needs of working Americans were 
considered ahead of tactical maneuverings for the next election.

  For my part, I have been pushing for wise health care reform since my 
first term in the Senate, when I sponsored the ``Health Care Cost 
Containment Act'' of 1983. In the 102d and 103d congressional sessions, 
I made repeated attempts to bring the health care issue to the floor in 
a setting where the issue could receive full and fair consideration. My 
attempts were, unfortunately, blocked by the Democratic leadership. 
What we got, instead, were partisan efforts to pass the so-called 
Clinton and Mitchell health care bills--bills drafted without 
Republican participation, and bills which relied on massive federal 
bureaucracy rather than free market forces to produce health care 
reform.
  Regrettably, the very process of health care reform turned the issue 
into a matter of partisanship. The Administration's health care task 
force met in secret, illegally as it turns out, and made no effort to 
reach out to Republican Senators with a demonstrated commitment to 
health care reform to create a broad base of Congressional support that 
crossed party lines. Similarly, the Democratic leadership in both 
houses made no effort to build bipartisan support, believing instead 
that they could pass a bill by legislative hardball.
  The result, not surprisingly, was a bad bill--a bill based on more 
Big Government and social engineering; a bill that undercut the 
longstanding determination we've had that health care choices should be 
made by patients and their physicians and not faceless bureaucrats; a 
bill that in the name of reform threatened to raise premiums and reduce 
choice for working Americans; a bill that, once it was understood, had 
no chance of passage.
  The result of this partisan hubris, unfortunately, was also to 
preclude those Republicans and Democrats who were interested in forging 
a compromise on health care from having the opportunity to do so. The 
American people would have welcomed a health care reform package that 
relied on market mechanisms to expand coverage and control costs, but 
the social engineers of the Democratic left demanded a bill that put 
America's whole health care system under the thumb of more than 150 
federal agencies, while the naysayers of the Republican right were only 
too happy to use the Democrats' excess as an excuse to do nothing.
  The 103d Congress is likely to be remembered more than anything else 
as the Congress of gridlock--and not just for its failure to enact 
health care reform. Senators of both parties were more willing than 
ever to invoke pointless procedural rules, like requiring bills to be 
read in full, to keep the Senate in session nearly all night and to 
delay adjournments. The results were short tempers and frayed nerves--
and an erosion of some of the sense of collegiality that ought to have 
allowed us to cross boundaries of partisanship and ideology in search 
of compromise and in service of the people's best interests.
  Obstructionism found its practitioners on both sides of the aisle; it 
was the delaying tactics of a Democratic chairman that forced us to 
return for a special post-election session to take up the GATT issue. 
The inability of Democrats in the Senate to reach agreement with their 
own colleagues in the House prevented campaign finance reform from 
coming to the Senate floor until the final days of session, when it had 
no chance for passage.
  The record of the 103d Congress is one we would do well not to 
replicate.
          the 104th congress: a new spirit of bipartisanship?

  Fiorello La Guardia, a great Republican Mayor of New York, once 
observed that ``There is no Democratic or Republican way of cleaning 
the streets.'' La Guardia did not mean that there were not differences, 
longstanding and important, between the two major American parties, but 
rather that sometimes those differences need to be overcome in doing 
the work of governing. I agree, and I share Woodrow Wilson's wish, 
expressed while he was a candidate for President, that ``party battles 
could be fought with less personal passion and more passion for the 
common good.'' I urge in the strongest terms that the spirit of putting 
the common good ahead of party advantage be the spirit of the 104th 
Congress.
  In a spirit of accommodation, I urge my colleagues across the aisle 
to recognize in the results of the last election the people's rejection 
of high taxes, big government and bureaucracy--and the people's 
rejection of an entrenched and tired Congressional leadership. But in 
that same spirit, I urge my colleagues on this side of the aisle not to 
misread the results of the last election as a mandate for uncaring or 
do nothing government, or a government that turns its back on people's 
problems--because if we do, our majorities will be short lived.
  I urge all my colleagues in this body, and those in the House, to 
hear in the election just past the voice of the American people calling 
on us to leave behind partisanship, to end gridlock, to stop wrangling 
for tactical advantage, and instead to forge a new spirit of compromise 
and cooperation that will enable the 104th to be remembered as a 
Congress of accomplishment.
  Sometimes, as one of the giants of this body, Scoop Jackson, 
observed, ``[t]he best politics is no politics.''
  A spirit of bipartisanship that in critical moments puts the national 
interest above party has always been part of the American grain. In his 
Farewell Address, Washington warned that ``[t]he alternate domination 
of one faction over another, sharpened by the spirit of revenge natural 
of party dissension * * * is itself a frightful despotism.'' At the 
close of his life, Jefferson wrote that a democratic government, like 
ours, demands

       much compromise of opinion; that things even salutary 
     should not be crammed down the throats of dissenting brethren 
     * * * and that a great deal of indulgence is necessary to 
     strengthen habits of harmony and fraternity.

  In more recent years, a great American who was to be elected 
President as a Democrat, John F. Kennedy, spoke out while a Senator to 
remind us ``not [to] seek the Republican answer or the Democratic 
answer, but the right answer.'' Another great American who was to be 
elected President as a Republican, Dwight Eisenhower, said that ``[t]o 
define democracy in one word, we must use the word `cooperation.'''
  Even in the bitter 103d Congress, we did have moments where we could 
lay partisanship aside and cooperate in seeking ``right answers'' for 
the American people. I have already mentioned NAFTA and GATT. President 
Clinton had the full backing of Congressional Republicans for his 
prompt response to last fall's provocative Iraqi troop movements, just 
as many Democrats had supported President Bush's liberation of Kuwait. 
So we know that today legislative bipartisanship is not an 
impossibility.
  I respectfully suggest to my colleagues that bipartisanship and 
cooperation are now not only possibilities, they are imperatives. In 
the last Congress, we too often did our legislative business with our 
eyes fixed on the electoral calendar, more concerned with polls and 
``spin'' and ``fallout''--with getting credit and placing blame--than 
with meeting the needs of the nation. The voters responded by 
repudiating the Congressional majority with unprecedented unanimity. So 
if the 104th Congress does no better, we should not be surprised if the 
people render the same verdict on its new Congressional majority.
  As World War I ended, and controversy swirled over whether America 
would continue to play a role in maintaining a peaceful world, 
President Wilson asked Americans ``What difference does
 party make when mankind is involved?'' Today, when our schools do not 
educate; when violent crime spreads from city to suburb to rural 
America; when a sixth of our population cannot get health insurance; 
when teen pregnancy rates soar and our welfare system works more as a 
trap of dependency than a door to opportunity; when our cities decay 
as 
[[Page S182]] jobs flee and their tax bases erode; when our prosperity 
at home and our competitiveness abroad are held back by a government 
that overspends, overtaxes and overregulates--Today, we ought to ask 
what difference does party make when the future of the nation is at 
stake?
  America's needs are real enough. Let us spend these two years 
addressing them without rancor or bitterness, looking on both sides of 
the aisles for honest answers and constructive solutions. Let us not 
waste time worrying about who will get the ``credit'' for our 
successes, because in that divisive struggle lies the certainty that we 
will all be held accountable for our failures.


            A FRAMEWORK FOR MEETING THE NEEDS OF THE NATION

  I believe that the Congressional session we begin today has the 
potential for historic greatness. The work that the Republican leaders 
in both houses have already done, to reduce the size of Congressional 
staffs and budgets and to open up the legislative process, represents 
an excellent beginning. The fact that even before our session has 
begun, the President and Congressional leaders are engaged in a dialog 
over how best to cut spending and provide tax relief to middle class 
Americans is a welcome sign.
  The prospects are excellent in the coming Congress for real health 
care reform targeted at problems and not at supplanting the system; for 
welfare reform to end dependency and reduce irresponsible teen 
pregnancy; for measures to lower the deficit and cut federal spending, 
including a balanced budget amendment to the constitution; for tax 
reforms that provide relief to working Americans while promoting growth 
and prosperity; and for a key step in the fight against violent crime 
by ending the absurd federal court delays in carrying out death 
sentences.
  The prospects for these accomplishments, and more, are there. But to 
attain them, we must avoid the pitfalls of the last Congress. We must, 
as I have said, legislate responsibility and without concern for 
political advantage. We must resist intransigence, recognizing as 
another future Republican President, Gerald Ford, told Congress in his 
vice-presidential confirmation hearings, that ``[c]ompromise is the oil 
that makes governments go.''
  We must also be careful not to misread the electoral mandate. For my 
part, I am convinced that the last election was a message for smaller 
government, but not uncaring government; for lower taxes, but not an 
end to government's efforts to help the disadvantaged, improve access 
to health care, reform our educational system and fight crime. I 
believe that we will respond best to what the people want if we look to 
find ways to meet the needs of the nation not with government programs 
and bureaucracies, but by engaging the most basic engine of our 
prosperity and growth, the free enterprise system, in bettering the 
lives of all Americans.
  For my part, I am also convinced that the last election was most 
emphatically not a mandate for Congress to enmesh itself in legislating 
a divisive social agenda. We should not let issues like school prayer 
or choice on abortion, on which Americans of both parties are divided, 
divert us from what we can accomplish.
  In the last Congress, I supported legislative initiatives to make 
federal education monies available for experiments in the private 
management of public schools; to provide assistance to distressed urban 
areas without new taxes, new spending or new government programs under 
a New Urban Agenda; and to improve health care, increase access and 
contain costs through market reforms and narrowly targeted solutions to 
specific problems. These legislative proposals shared a common 
framework as federal responses to critical national needs in which the 
free market, rather than more big government, is the central instrument 
of help.
  This framework, I believe, can be the basis for a bipartisan effort 
in the new Congress as many Democrats, now free to shed the outmoded 
ideas of big-government liberalism, join with constructive Republicans 
who recognize that even as we lower taxes, cut spending and reduce 
government, there remains a vital role for a federal Government that 
meets its citizens needs.
  It is my intention in the coming weeks to offer my own legislative 
program consistent with these principles:
  I will offer a revised comprehensive health care bill to solve 
targeted problems by an incremental process of trial and modification, 
which respects the free enterprise system and preserves patient-
physician choice.
  I will offer a revised Urban Agenda Bill, aimed at directing existing 
federal spending into cities, reviving the historic tax credit, and 
otherwise promoting urban revitalization and job creation without new 
federal outlays, programs or taxes.
  I will offer legislation to further charter schools and the private 
management concept, in an effort to use market competition, and not 
bureaucrats, to spearhead a drive for educational excellence--while at 
the same time preserving and strengthening our public school systems.
  I will offer legislation to make our tax code more growth oriented, 
including capital gains tax relief to encourage investment, expanded 
IRA deductions to provided for educational and medical expenses, and 
reinitiation of selected tax credits, such as those for research and 
development, to promote business expansion and job creation.
  In combatting the nation's number one domestic issue I will offer 
legislation to end the absurd federal court delays in carrying out the 
death sentences handed down in state courts, which will help 
reinvigorate the deterrent aspect of our criminal law.
  I will press my Judiciary Committee Resolution to urge Presidential 
use of the line-item veto under existing constitutional law.
  And in my role as Chairman of the Senate Intelligence Committee, I 
will offer legislation to restructure our intelligence agencies and 
make the CIA more open to public scrutiny and more responsive to our 
national needs in the post-Cold War world.
  For my part, I look forward to constructive work with all my 
colleagues in this chamber and this Congress. The extraordinary 
election that has brought us here has focused extraordinary attention 
upon us. I believe that if we are big enough to lay partisanship aside, 
to identify the issues honestly and work constructively to seek 
solutions that are neither Republican nor Democratic but right, this 
can be a Congress of extraordinary accomplishment.
  Mr. President, I have sought recognition to introduce legislation 
that will deal with the plight of our Nation's cities and Washington's 
increasing neglect of them. We have an opportunity to correct that and 
this legislation, which I introduced in the 103d Congress along with my 
distinguished colleague, Senator Carol Moseley-Braun, is an effort to 
give our cities some much needed attention and to do so without massive 
infusions of cash.
  If we are to really address the very serious issues that we face--
jobs, teenage pregnancy, welfare reform, and other pressing issues--we 
cannot give up on our cities. There must be new strategies for dealing 
with the problems of urban America.
  The days of ``Great Society'' Federal-aid type programs are clearly 
past, but that is no excuse for the national government to turn a blind 
eye to the problem of the cities. The recent November elections 
reaffirm the basic principle of limited government. Limited government, 
however, does not mean an uncaring or do-nothing government.
  Urban areas remain integral to America's greatness, as centers of 
commerce, industry, education, health care, and culture. Yet urban 
areas, particularly the inner cities which tend to have a 
disproportionate share of our Nation's neediest and most disadvantaged, 
also have special needs which must be recognized. We must develop ways 
of aiding our cities that do not require either new taxes or more 
government bureaucracy.
  I commend the Mayor of Philadelphia, Edward Rendell, for his efforts 
to revitalize America's cities. Collaborating with the Conference of 
Mayors and the National League of Cities, he proposed last year a ``New 
Urban Agenda.'' Much of that proposal is the basis of this legislation.
  As a Philadelphia resident, I have firsthand knowledge of the growing 
problems that plague our cities. I have 
[[Page S183]] long supported a variety of programs to assist our cities 
such as funding for community development block grants and legislation 
to establish enterprise and empowerment zones. To encourage similar 
efforts, in April 1994 I took the opportunity to host my Senate 
Republican colleagues on a visit to explore urban problems in my 
hometown. We talked with people who want to obtain work, but have found 
few opportunities. We saw a crumbling infrastructure and its impact on 
residents and businesses. We were reminded of the devastating effect 
that the loss of inner city businesses and jobs has had on our 
neighborhoods in America's cities.
  What my Republican colleagues saw then in Philadelphia was the rule 
across our country and not the exception. There are many who do not 
know of city life, who are far removed from the cities and would not be 
expected to have any kept interest in what goes on in the big cities of 
America.
  I cite my own boyhood experience illustratively: Born in Wichita, KS, 
raised in Russell, a small town of 5,000 people on the plains of 
Kansas, where there is not much knowledge of what goes on in 
Philadelphia, PA, my home, or other big cities like Los Angeles, San 
Francisco, New York, Miami, Pittsburgh, Dallas, Detroit or Chicago.
  Those big cities are alien to people in much of America. But there is 
a growing understanding that the small towns are very much affected by 
the problems of the big cities.
  What are the problems? Crime for one. Take the Bloods and the Crips 
gangs from Los Angeles, CA, and similar gangs; they are all over 
America. They are in Lancaster, PA, in Des Moines, IA, Portland, OR, 
Jackson, MS, Racine, WI, and Martinsburg, WV. They are literally 
everywhere, big city and small city alike.
  In addition, according to the National League of Cities 1992 report, 
``State of America's Cities,'' 397 randomly selected municipal leaders 
said that after overall economic conditions, crime, and drugs were the 
second and third items that had caused their cities to deteriorate the 
most in the prior 5 years. In Atlanta, the number of crimes per 100,000 
people was 18,953, making it number one in 1991. We have all heard of 
that unenviable moniker for our Nation's capital--the ``murder 
capital.'' And from an employer's perspective, Mr. Scott Zelov, 
president of VIZ Manufacturing located in the Germantown section of 
Philadelphia, told my staff that his workers can't even walk to work in 
safety anymore.
  Joblessness and a less skilled work force is another problem. At the 
end of the 103d Congress, I asked my staff to meet with various urban 
leaders and business people during the recess in order to help us 
understand and develop ideas to meet the needs of urban America. One of 
the most important issues that business people--minority and 
nonminority alike--told my staff about was the need for greater 
incentives to help people work and find jobs to meet their skills.
  I have introduced legislation in the last two Congresses to provide 
targeted tax incentives for investing in small minority- or women-owned 
businesses. Small businesses provide the bulk of the jobs in this 
country. Many minority entrepreneurs, for instance, have told me and my 
staff that they are dedicated to staying in the cities to employ people 
there, but continue to confront capital access issues. My ``Minority 
and Women Capital Formation Act'' would help remove the capital access 
barriers thereby facilitating the ability of these entrepreneurs to 
grow their businesses and employee base.
  Municipal leaders are stressing many of the same concerns that 
business people are voicing. In a July 1994 National League of Cities 
report dealing with poverty and economic development, municipal leaders 
ranked inadequate skills and education of workers as one of the top 
three reasons, in addition to shortage of jobs and below-poverty wages, 
for poverty and joblessness in their cities. They said, according to 
the survey, that more jobs must be created through local economic 
development initiatives.
  This ``skills deficit'' is highlighted in an urban revitalization 
plan prepared in 1991 by the National Urban League called ``Playing to 
Win: A Marshall Plan for America's Cities.'' The report cites a 
statistic by the Commission on Achieving Necessary Skills which showed 
that 60 percent of all 21 to 25 year-olds lack the basic reading and 
writing skills needed for the modern workplace, and only 10 percent of 
those in that age group have enough mathematical competence for today's 
jobs.
  The economic problems our cities are facing are not easy to deal with 
or answer. In a report by the National League of Cities entitled ``City 
Fiscal Conditions in 1994,'' municipal officials from 551 cities 
answered questions on the economic state of their cities. For instance, 
17.4 percent reported that they expect their 1994 expenditures to 
exceed 1994 revenues. Seventy percent had to raise taxes or user fees 
during the past 12 months. Just over half of these cities, 54.4 
percent, said they were better able to meet their cities' financial 
needs in 1994 as compared to 1993.
  These numbers are of concern to me and I believe they highlight the 
need for Federal legislation to enhance the ability of cities to 
achieve competitive economic status. An added concern is that city 
managers are forced to balance cuts in services or enact higher taxes. 
Neither choice is easy and it often counteracts municipal efforts to 
retain residents or businesses.
  One issue, in particular, that is hurting many cities is the erosion 
of their respective tax base, evidenced particularly by middle-class 
flight to the suburbs. Mr. Ronald Walters, professor of political 
science at Howard University, in testimony before the Senate Banking 
Committee in April 1993, stated that in 1950, 23 percent of the 
American population lived outside central cities; by 1988, that number 
was up to 46 percent.
  In an October 9, 1994, article in the Washington Post magazine, David 
Finkel profiled ward 7 of Washington, DC, and wrote that ward 7 lost 
13,000 residents between 1980 and 1990 alone. He noted further that the 
population decline in Washington, DC, has averaged 10,000 people a year 
since 1990. These losses are devastating, not only to the financial 
stability of the city, but to the social fabric as well.
  On the financial side, statistics show that these people were earning 
an average of $30,000 and $75,000 a year. On the social side, roughly 
half of these are African-American middle-class families. By losing 
this critical demographic group, the city loses much of what makes it 
strong.
  Eroding tax bases are also evidenced by job-flight and job loss. 
Professor Walters testified that Chicago lost 47 percent of its 
manufacturing jobs between 1972 and 1982. Los Angeles lost 327,000 
jobs, half of which were in the manufacturing
 sector. More recently, according to census data, New York City had 
only 11.4 percent of its population employed in manufacturing. 
According to Stephen Moore and Dean Stansel in a March 1994 USA Today 
magazine article, since the 1970's more than 50 Fortune 500 company 
headquarters have fled New York City, representing a loss of over 
500,000 jobs.

  Pittsburgh, according to the same data, had only 8.5 percent of its 
population in manufacturing jobs. I received a letter dated October 31, 
1994, from Pittsburgh City Councilman Bob O'Connor in response to a 
letter I sent him on October 5th regarding legislative issues in the 
104th Congress. In his response, Councilman O'Connor simply says: ``we 
need jobs, jobs, jobs!'' I ask unanimous consent that a copy of 
Councilman O'Connor's letter be printed in the Record at the end of my 
statement.
  It is clear that the social fabric of our cities is also 
deteriorating. The issues of infant mortality and single-parent 
families are tragic problems that plague American urban areas. 
According to 1990 census data, Washington, DC ranked first out of 77 
cities for infant death rates per 1,000 live births in 1988. Detroit 
led the same number of cities in the percentage of one-parent 
households in 1990 at 53 percent.
  When I traveled to Pittsburgh in 1984, I saw 1-pound babies for the 
first time and I learned that Pittsburgh had the highest infant 
mortality rate of African-American babies of any city in the United 
States. It is a human tragedy for a child to be born weighing 16 ounces 
with attendant problems that last a lifetime. I wondered, how could 
that be true of Pittsburgh, which has such enormous medical resources. 
It was an amazing thing for me to see a 1-pound baby, about as big as 
my hand. 
[[Page S184]] Indeed, our cities are desperate, and the issues are 
heavy.
  Historically, cities have been the center of commerce and culture. 
Surrounding communities have relied on a thriving, growing economy in 
our metropolitan areas to provide jobs and opportunities. As I have 
noted though, over the past several decades, America's cities have 
struggled with the loss or exodus of residents, businesses and industry 
and other problems. The resulting tax base shrinkage causes enormous 
budget problems for city governments. Across the country, cities such 
as New York, Los Angeles, and the District of Columbia have experienced 
the flight of major industries to the suburbs.
  As a result, city residents who remain are faced with problems 
ranging from increased tax burdens and lesser services therefor to 
dwindling economic opportunities leading to welfare dependence and 
unemployment assistance. In the face of all this, what do we do?
  The Federal Government has attempted to revitalize our ailing urban 
infrastructure by providing Federal funding for transit and sewer 
systems, roads and bridges. I have supported this. For example, I have 
been a strong supporter of public transit which provides critically 
needed transportation services in urban areas. Transit helps cities 
meet clean air standards, reduce traffic congestion, and allows 
disadvantaged persons access to jobs. Federal assistance for urban 
areas, however, has become increasingly scarce as we grapple with the 
Nation's deficit and debt. Therefore, we must find alternatives to 
reinvigorate our Nation's cities so they can once again be economically 
productive areas providing promising opportunities for residents and 
neighboring areas.
  I believe there are ways Congress can assist the cities. Mayor 
Rendell has come up with this legislative package which contains many 
good ideas.
  First, recognizing that the Federal Government is the Nation's 
largest purchaser of goods and services, this legislation would require 
that no less than 15 percent of Federal Government purchases be made 
from businesses and industries within designated urban empowerment 
zones and enterprise communities. Similarly, it would require that not 
less than 15 percent of foreign aid funds be redeemed through purchases 
of products manufactured in urban empowerment zones and enterprise 
communities. I presented this idea to then-treasury Secretary Bentsen 
at a March 22, 1994, hearing of the Appropriations Subcommittee on 
Foreign Operations. The Secretary responded favorably.
  I have also written to several mayors across the country regarding 
this concept. By letter dated July 28, 1994, Miami Mayor Stephen P. 
Clark responded: ``Miami's selection as a procurement center for 
foreign aid would be a natural complement to our status as the Business 
Capital of the Americas.'' Miami
 has a wide range of businesses, such as high-technology firms and 
medical equipment manufacturers that would benefit from this provision.

  And by letter dated April 6, 1994, Harrisburg, Pennsylvania Mayor 
Stephen R. Reed wrote:

       Many of our existing businesses would no doubt seize upon 
     the opportunity to broaden their market by engaging in export 
     activity triggered by foreign aid vouchers * * *. Therefore, 
     in brief, we believe the voucher proposal has considerable 
     merit and that this city would benefit from the same.

  I ask unanimous consent that a copy of my letter and the letters from 
Mayor Clark and Mayor Reed be included in the Record at the end of my 
statement.
  To further enhance job opportunities within our urban centers, this 
legislation contains Mayor Rendell's recommendation that the 
manufacturing extension centers be located in the urban zones. These 
proposals do not require new expenditures of Federal funds. Instead, 
these proposals would require that a minimum amount of existing 
government procurement and foreign aid moneys be used to spur economic 
activity within urban areas.
  The second major provision of this bill would commit the Federal 
Government to play an active role in restoring the economic health of 
our cities by encouraging the location, or relocation, of Federal 
facilities in urban areas. To accomplish this, all Federal agencies 
would be required to prepare and submit to the President an urban 
impact statement detailing the impact that relocation or downsizing 
decisions would have on the affected city. Presidential approval would 
be required to place a Federal facility outside an urban area, or to 
downsize a city-based agency.
  The third critical component of this bill would revive and expand 
Federal tax incentives that were eliminated or restricted in the Tax 
Reform Act of 1986. These provisions offer meaningful incentives to 
business to invest in our cities. I am calling for the restoration of 
the Historic Rehabilitation Tax Credit which supports inner city 
revitalization projects.
  According to information provided by Mayor Rendell, there were 8,640 
construction jobs involved in 356 projects in Philadelphia from 1978 to 
1985 stimulated by the historic rehabilitation tax credit. In Chicago, 
302 projects prior to 1985 generated $524 million in investment and 
created 20,695 jobs. In St. Louis, 849 projects generated $653 million 
in investment and created 27,735 jobs.
  Nationally, according to National Park Service estimates for the 16 
years before the 1986 Act, the historic rehabilitation tax credit 
stimulated $16 billion in private investment for the rehabilitation of 
24,656 buildings and the creation of 125,306 homes which included 
23,377 low and moderate income housing units. The 1986 Tax Act 
dramatically reduced the pool of private investment capital available 
for rehabilitation projects. In Philadelphia, projects dropped from 356 
to 11 by 1988 from 1985 levels. During the same period, investments 
dropped 46 percent in Illinois and 92 percent in St. Louis.
  Another tool is to expand the authorization of commercial industrial 
development bonds. Under the Tax Reform Act of 1986, authorization for 
commercial industrial bonds was permitted to expire. Consequently, 
private investment in cities declined. For instance, according to Mayor 
Rendell, from 1986 (the last year commercial development bonds were 
permitted) to 1987, the total number of city-supported projects in 
Philadelphia was reduced by more than half.
  Industrial development or private activity bonds encourage private 
investment by allowing, under certain circumstances, tax-exempt status 
for projects where more than 10 percent of the bond proceeds are used 
for private business purposes. The availability of tax-exempt 
commercial industrial development bonds will encourage private 
investment in cities, particularly the construction of sports, 
convention and trade show facilities; free standing parking facilities 
owned and operated by the private sector, and, industrial parks.
  The bill I am introducing would allow this. It would also increase 
the small issue exemption--which means a way to help finance private 
activity in the building of manufacturing facilities--from $10 million 
to $50 million to allow increased private investment in our cities.
  A minor change in the Federal tax code related to arbitrage rebates 
on municipal bond interest earnings could also free additional capital 
for infrastructure and economic development by cities. Currently, 
municipalities are required to rebate to the Federal Government any 
arbitrage--a fancy financial term meaning interest earned in excess of 
interest paid on the debt--
 earned from the issuance of tax-free municipal bonds. I am informed 
that compliance, or the cost for consultants to perform the complicated 
rebate calculations, is actually costing municipalities more than the 
actual rebate owed to the government. This bill would allow cities to 
keep the arbitrage earned so that they can use it to fund city projects 
and for other necessary purposes.

  A fourth provision of this legislation provides needed reforms to 
regulations concerning affordable housing. This legislation provides 
language to study streamlining Federal housing program assistance to 
urban areas into ``block grant'' form so that municipal agencies can 
better serve local residents. The bill would improve the circumstances 
of public housing tenants by encouraging the location of newly built 
units on the lots of demolished older housing and allowing the original 
residents to 
[[Page S185]] move into the new units. This provision will contribute 
to community stability and promote urban renewal.
  Lastly, the development of urban areas can be accelerated by easing 
certain environmental restrictions on urban land known as ``brown 
fields.'' My legislative provides a ``governmental exception'' which 
will encourage the redevelopment of contaminated industrial sites by 
cities without assuming liability as ``potentially responsible 
parties'' under Superfund laws. While the cities would not be added as 
liable parties, liability would remain with others responsible under 
existing law. Increasingly, certain parcels of urban land that pose a 
very low environmental threat are left unused. If proper remediation 
occurs, they would be reused. This measure also contains a provision 
for a pilot powerplant designed to burn solid waste and create 
inexpensive energy for energy intensive industries. Such a plant will 
create jobs and help provide a solution for cities to deal with their 
treatment of waste.
  In the previous Congress, the New Urban Agenda Act, S. 2535, 
contained a section that would eliminate unfunded Federal mandates. I 
was a cosponsor of legislation in the 103d Congress, S. 993, introduced 
by my distinguished colleague from Idaho, Senator Kempthorne, that 
would eliminate unfunded Federal mandates. The language of S. 993 was 
written into this legislation when I introduced it in the 103d 
Congress. I have chosen to omit that provision from this bill because 
we will soon vote on free-standing unfunded Federal mandates 
legislation in this Congress.
  However, I want to mention some facts regarding how cities are 
adversely affected by unfunded mandates and how important it is that we 
enact such legislation promptly. In Senator Kempthorne's home State of 
Idaho, the city of Boise had to cover over $3 million for eight 
mandates in fiscal year 1993, according to a report done by the 
accounting firm of Price Waterhouse for the United States Conference of 
Mayors. I am informed that six Pennsylvania cities--Allentown, Altoona, 
Philadelphia, Pittsburgh, Wilkes-Barre, and York--faced 10 unfunded 
Federal mandates that cost them a collective total of $17 million for 
fiscal year 1993.
  All over the country the story is the same. In California, 54 cities 
had to cover a grand total $948.3 million in unfunded Federal mandates, 
with Los Angeles paying almost $582 million, according to the report 
done for the Conference of Mayors. In Texas, 27 cities had to cover 
$316 million in unfunded mandates, with Houston covering $154 million. 
New York had nine cities working to find $517 million and New York City 
was $475 million of that total. Illinois, in fiscal year 1993, had 22 
cities facing a total of $88 million, with Chicago comprising $70 
million of that number.
  Cities are facing incredible financial burdens from unfunded Federal 
mandates and must reallocate resources accordingly. Atlanta had to pay 
for nine unfunded Federal mandates--totaling almost $50 million--taking 
much needed funds from infrastructure projects, an overburdened 
criminal justice system, and housing programs. Phoenix has had to raise 
consumer's sewage and water rates to cover $36 million in unfunded 
Federal mandates, along with curtailing almost all of the city's 
service departments. The release from Federal mandates would allow 
Houston to allocate $154 million more for the maintenance of city 
property and public safety. The U.S. Conference of Mayors report 
presents similar facts on 314 cities. In addition, the National League 
of Cities report on city fiscal conditions in 1994 claims that unfunded 
Federal mandates was the second most important factor as a negative 
impact on city budgets. It is critical that as legislators we 
financially back the laws we write, or otherwise provide the 
appropriate assistance so that municipalities can comply.
  Mr. President, it may well be that America has given up on its 
cities. That is a stark statement, but it is one which I believe may be 
true--that America has given up on its cities. But this Senator has not 
done so. And I believe there are others in this body on both sides of 
the aisle who have not done so.
  As one of a handful of U.S. Senators who lives in a big city, I have 
seen firsthand both the problems and the promise of urban America. This 
legislation for our cities is good public policy. The plight of our 
cities must be of extreme concern to America. We can ill-afford for 
them to wither and die. I am committed to a new urban agenda that 
relies on market forces, and not welfare-statism, for urban 
revitalization. I invite the input and assistance of my colleagues in 
order to fashion a strong approach assisting the cities with their 
pressing problems.
  I ask unanimous consent that my bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 17

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``New Urban 
     Agenda Act of 1995''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

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

       TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT

Sec. 101. Federal purchases from businesses in empowerment zones, 
              enterprise communities, and enterprise zones.
Sec. 102. Minimum allocation of foreign assistance for purchase of 
              certain United States goods.
Sec. 103. Preference for location of manufacturing outreach centers in 
              urban areas.
Sec. 104. Preference for construction and improvement of Federal 
              facilities in distressed urban areas.
Sec. 105. Definitions.

   TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT.

Sec. 201. Treatment of rehabilitation credit under passive activity 
              limitations.
Sec. 202. Rehabilitation credit allowed to offset portion of 
              alternative minimum tax.
Sec. 203. Commercial industrial development bonds.
Sec. 204. Increase in amount of qualified small issue bonds permitted 
              for facilities to be used by related principal users.
Sec. 205. Simplification of arbitrage interest rebate waiver.

             TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT

Sec. 301. Block grant study.
Sec. 302. Demolition and disposition of public housing.

          TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES

                   Subtitle A--Environmental Cleanup

Sec. 401. Exemption from liability for local governments that are 
              owners or operators of facilities in distressed urban 
              areas.
Sec. 402. Standards for remediation in distressed urban areas.

              Subtitle B--Environmental-Economic Recovery

Sec. 411. Findings.
Sec. 412. Definitions.
Sec. 413. Loan authority.
Sec. 414. Facility.
Sec. 415. Reinvestment of savings.
Sec. 416. Report to Congress.
     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) cities in the United States have been facing an 
     economic downhill trend in the past several years; and
       (2) a new approach to help such cities prosper is 
     necessary.
       (b) Purposes.--It is the purpose of this Act to--
       (1) provide various incentives for the economic growth of 
     cities in the United States;
       (2) provide an economic agenda designed to reverse current 
     urban economic trends; and
       (3) revitalize the jobs and tax base of such cities without 
     significant new Federal outlays.
       TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT
     SEC. 101. FEDERAL PURCHASES FROM BUSINESSES IN EMPOWERMENT 
                   ZONES, ENTERPRISE COMMUNITIES, AND ENTERPRISE 
                   ZONES.

       (a) Requirements.--The Office of Federal Procurement Policy 
     Act (41 U.S.C. 401 et seq.) is amended by adding at the end 
     the following new section:


     ``purchases from businesses in empowerment zones, enterprise 
                   communities, and enterprise zones

       ``Sec. 29. (a) Minimum Purchase Requirement.--Not less than 
     15 percent of the total amount expended by executive agencies 
     for the purchase of goods in a fiscal year shall be expended 
     for the purchase of goods from businesses located in 
     empowerment zones, enterprise communities, or enterprise 
     zones.
       ``(b) Recycled Products.--To the maximum extent practicable 
     consistent with applicable law, the head of an executive 
     agency 
     [[Page S186]] shall purchase recycled products that meet the 
     needs of the executive agency from businesses located in 
     empowerment zones, enterprise communities, or enterprise 
     zones.
       ``(c) Regulations.--The Federal Acquisition Regulations 
     shall include provisions that ensure the attainment of the 
     minimum purchase requirement set out in subsection (a).
       ``(d) Definitions.--In this section:
       ``(1) The term `empowerment zone' means a zone designated 
     as an empowerment zone pursuant to subchapter U of chapter 1 
     of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et 
     seq.).
       ``(2) The term `enterprise community' means a community 
     designated as an enterprise community pursuant to subchapter 
     U of chapter 1 of the Internal Revenue Code of 1986 (26 
     U.S.C. 1391 et seq.).
       ``(3) The term `enterprise zone' has the meaning given such 
     term in section 701(a)(1) of the Housing and Community 
     Development Act of 1987 (42 U.S.C. 11501(a)(1)).''.
       (b) Effective Date.--Section 29 of the Office of Federal 
     Procurement Policy Act, as added by subsection (a), shall 
     take effect on the date of the enactment of this Act and 
     shall apply with respect to fiscal years beginning after 
     September 30, 1995.
     SEC. 102. MINIMUM ALLOCATION OF FOREIGN ASSISTANCE FOR 
                   PURCHASE OF CERTAIN UNITED STATES GOODS.

       (a) Allocation of Assistance.--Notwithstanding any other 
     provision of law, effective beginning with fiscal year 1996, 
     not less than 15 percent of United States assistance provided 
     in a fiscal year shall be provided in the form of credits 
     which may only be used for the purchase of United States 
     goods produced, manufactured, or assembled in empowerment 
     zones, enterprise communities, or enterprise zones within the 
     United States.
       (b) United States Assistance.--As used in this section, the 
     term ``United States assistance'' means--
       (1) any assistance under the Foreign Assistance Act of 
     1961;
       (2) sales, or financing of sales under the Arms Export 
     Control Act; and
       (3) assistance and other activities under the Support for 
     East European Democracy (SEED) Act of 1989 (Public Law 101-
     179, as amended).
     SEC. 103. PREFERENCE FOR LOCATION OF MANUFACTURING OUTREACH 
                   CENTERS IN URBAN AREAS.

       (a) Designation.--In designating an organization as a 
     manufacturing outreach center under paragraph (1) of section 
     304(c) of the Stevenson-Wydler Technology Innovation Act of 
     1980, the Secretary of Commerce shall, to the maximum extent 
     practicable, designate organizations that are located in 
     empowerment zones, enterprise communities, or enterprise 
     zones.
       (b) Financial Assistance.--In utilizing a competitive, 
     merit-based review process to determine the manufacturing 
     outreach centers to which to provide financial assistance 
     under paragraph (3) of such section, the Secretary shall give 
     such additional preference to centers located in empowerment 
     zones, enterprise communities, and enterprise zones as the 
     Secretary determines appropriate in order to ensure the 
     continuing existence of such centers in such zones.

     SEC. 104. PREFERENCE FOR CONSTRUCTION AND IMPROVEMENT OF 
                   FEDERAL FACILITIES IN DISTRESSED URBAN AREAS.

       (a) Preference.--Notwithstanding any other provision of 
     law, in determining the location for the construction of a 
     new facility of a department or agency of the Federal 
     Government, in determining to improve an existing facility 
     (including an improvement in lieu of such construction), or 
     in determining the location to which to relocate functions of 
     a department or agency, the head of the department or agency 
     making the determination shall take affirmative action to 
     construct or improve the facility, or to relocate the 
     functions, in a distressed urban area.
       (b) Urban Impact Statement.--A determination to construct a 
     new facility of a department or agency of the Federal 
     Government, to improve an existing facility, or to relocate 
     the functions of a department or agency may not be made until 
     the head of the department or agency making the determination 
     prepares and submits to the President a report that--
       (1) in the case of a facility to be constructed--
       (A) identifies at least one distressed urban area that is 
     an appropriate location for the facility;
       (B) describes the costs and benefits arising from the 
     construction and utilization of the facility in the area, 
     including the effects of such construction and utilization on 
     the rate of unemployment in the area; and
       (C) describes the effect on the economy of the area of the 
     closure or consolidation, if any, of Federal facilities 
     located in the area during the 10-year period ending on the 
     date of the report, including the total number of Federal and 
     non-Federal employment positions terminated in the area as a 
     result of such closure or consolidation;
       (2) in the case of a facility to be improved that is not 
     located in a distressed urban area--
       (A) identifies at least one facility located in a 
     distressed urban area that would serve as an appropriate 
     alternative location for the facility;
       (B) describes the costs and benefits arising from the 
     improvement and utilization of the facility located in such 
     area as an alternative location for the facility to be 
     improved, including the effect of the improvement and 
     utilization of the facility so located on the rate of 
     unemployment in such area; and
       (C) describes the effect on the economy of such area of the 
     closure or consolidation, if any, of Federal facilities 
     located in such area during the 10-year period ending on the 
     date of the report, including the total number of Federal and 
     non-Federal employment positions terminated in such area as a 
     result of such closure or consolidation;
       (3) in the case of a facility to be improved that is 
     located in a distressed urban area--
       (A) describes the costs and benefits arising from the 
     improvement and continuing utilization of the facility in the 
     area, including the effect of such improvement and continuing 
     utilization on the rate of unemployment in the area; and
       (B) describes the effect on the economy of the area of the 
     closure or consolidation, if any, of Federal facilities 
     located in the area during the 10-year period ending on the 
     date of the report, including the total number of Federal and 
     non-Federal employment positions terminated in the area as a 
     result of such closure or consolidation; or
       (4) in the case of a relocation of functions--
       (A) identifies at least one distressed urban area that 
     would serve as an appropriate location for the carrying out 
     of the functions;
       (B) describes the costs and benefits arising from carrying 
     out the functions in the area, including the effect of 
     carrying out the functions on the rate of unemployment in the 
     area; and
       (C) describes the effect on the economy of the area of the 
     closure or consolidation, if any, of Federal facilities 
     located in the area during the 10-year period ending on the 
     date of the report, including the total number of Federal and 
     non-Federal employment positions terminated in the area as a 
     result of such closure or consolidation.
       (c) Applicability to Department of Defense Facilities.--The 
     requirements set forth in subsections (a) and (b) shall apply 
     to a determination to construct or improve any facility of 
     the Department of Defense, or to relocate any functions of 
     the Department, unless the President determines that the 
     waiver of the application of such requirements to the 
     facility, or to such relocation, is in the national interest.
       (d) Definition.--In this section, the term ``distressed 
     urban area'' means any city having a population of more than 
     100,000 that meets (as determined by the Secretary of Housing 
     and Urban Development) the qualifications for a distressed 
     community that are otherwise established for large cities and 
     urban counties under section 570.452(c) of title 24, Code of 
     Federal Regulations.

     SEC. 105. DEFINITIONS.

       As used in this title:
       (1) The term ``empowerment zone'' means a zone designated 
     as an empowerment zone pursuant to subchapter U of chapter 1 
     of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et 
     seq.).
       (2) The term ``enterprise community'' means a community 
     designated as an enterprise community pursuant to subchapter 
     U of chapter 1 of the Internal Revenue Code of 1986 (26 
     U.S.C. 1391 et seq.).
       (3) The term ``enterprise zone'' has the meaning given such 
     term in section 701(a)(1) of the Housing and Community 
     Development Act of 1987 (42 U.S.C. 11501(a)(1)).
   TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT.
     SEC. 201. TREATMENT OF REHABILITATION CREDIT UNDER PASSIVE 
                   ACTIVITY LIMITATIONS.

       (a) General Rule.--Paragraphs (2) and (3) of section 469(i) 
     of the Internal Revenue Code of 1986 (relating to $25,000 
     offset for rental real estate activities) are amended to read 
     as follows:
       ``(2) Dollar limitations.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the aggregate amount to which paragraph (1) 
     applies for any taxable year shall not exceed $25,000 reduced 
     (but not below zero) by 50 percent of the amount (if any) by 
     which the adjusted gross income of the taxpayer for the 
     taxable year exceeds $100,000.
       ``(B) Phaseout not applicable to low-income housing 
     credit.--In the case of the portion of the passive activity 
     credit for any taxable year which is attributable to any 
     credit determined under section 42--
       ``(i) subparagraph (A) shall not apply, and
       ``(ii) paragraph (1) shall not apply to the extent that the 
     deduction equivalent of such portion exceeds--

       ``(I) $25,000, reduced by
       ``(II) the aggregate amount of the passive activity loss 
     (and the deduction equivalent of any passive activity credit 
     which is not so attributable and is not attributable to the 
     rehabilitation credit determined under section 47) to which 
     paragraph (1) applies after the application of subparagraph 
     (A).

       ``(C) $55,500 limit for rehabilitation credits.--In the 
     case of the portion of the passive activity credit for any 
     taxable year which is attributable to the rehabilitation 
     credit determined under section 47--
       ``(i) subparagraph (A) shall not apply, and
       ``(ii) paragraph (1) shall not apply to the extent that the 
     deduction equivalent of such portion exceeds--

       ``(I) $55,500, reduced by
       ``(II) the aggregate amount of the passive activity loss 
     (and the deduction equivalent of any passive activity credit 
     which is not so attributable) to which paragraph (1) applies 
     [[Page S187]] for the taxable year after the application of 
     subparagraphs (A) and (B).
       ``(3) Adjusted gross income.--For purposes of paragraph 
     (2)(A), adjusted gross income shall be determined without 
     regard to--
       ``(A) any amount includable in gross income under section 
     86,
       ``(B) any amount excludable from gross income under section 
     135,
       ``(C) any amount allowable as a deduction under section 
     219, and
       ``(D) any passive activity loss.''.
       (b) Conforming Amendments.--
       (1) Subparagraph (B) of section 469(i)(4) of the Internal 
     Revenue Code of 1986 is amended to read as follows:
       ``(B) Reduction for surviving spouse's exemption.--For 
     purposes of subparagraph (A), the $25,000 amounts under 
     paragraph (2)(A) and (2)(B)(ii) and the $55,500 amount under 
     paragraph (2)(C)(ii) shall each be reduced by the amount of 
     the exemption under paragraph (1) (determined without regard 
     to the reduction contained in paragraph (2)(A)) which is 
     allowable to the surviving spouse of the decedent for the 
     taxable year ending with or within the taxable year of the 
     estate.''.
       (2) Subparagraph (A) of section 469(i)(5) of such Code is 
     amended by striking clauses (i), (ii), and (iii) and 
     inserting the following:
       ``(i) `$12,500' for `$25,000' in subparagraphs (A) and 
     (B)(ii) of paragraph (2),
       ``(ii) `$50,000' for `$100,000' in paragraph (2)(A)'', and
       ``(iii) `$27,750' for `$55,500' in paragraph (2)(C)(ii).''.
       (3) The subsection heading for subsection (i) of section 
     469 of such Code is amended by striking ``$25,000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service on or after the 
     date of the enactment of this Act, in taxable years ending on 
     or after such date.

     SEC. 202. REHABILITATION CREDIT ALLOWED TO OFFSET PORTION OF 
                   ALTERNATIVE MINIMUM TAX.

       (a) In General.--Section 38(c) of the Internal Revenue Code 
     of 1986 (relating to limitation based on amount of tax) is 
     amended by redesignating paragraph (2) as paragraph (3) and 
     by inserting after paragraph (1) the following new paragraph:
       ``(2) Rehabilitation investment credit may offset portion 
     of minimum tax.--
       ``(A) In general.--In the case of the rehabilitation 
     investment tax credit--
       ``(i) this section and section 39 shall be applied 
     separately with respect to such credit, and
       ``(ii) for purposes of applying paragraph (1) to such 
     credit--

       ``(I) the tentative minimum tax under subparagraph (A) 
     thereof shall be reduced by the minimum tax offset amount 
     determined under subparagraph (B) of this paragraph, and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the 
     rehabilitation investment tax credit).

       ``(B) Minimum tax offset amount.--For purposes of 
     subparagraph (A)(ii)(I), the minimum tax offset amount is an 
     amount equal to--
       ``(i) in the case of a taxpayer not described in clause 
     (ii), the lesser of--

       ``(I) 25 percent of the tentative minimum tax for the 
     taxable year, or
       ``(II) $20,000, or

       ``(ii) in the case of a C corporation other than a closely 
     held C corporation (as defined in section 469(j)(1)), 5 
     percent of the tentative minimum tax for the taxable year.
       ``(C) Rehabilitation investment tax credit.--For purposes 
     of this paragraph, the term `regular investment tax credit' 
     means the portion of the credit under subsection (a) which is 
     attributable to the credit determined under section 47.''.
       (b) Conforming Amendment.--Section 38(d) of the Internal 
     Revenue Code of 1986 (relating to components of investment 
     credit) is amended by adding at the end the following new 
     paragraph:
       ``(4) Special rule for rehabilitation credit.--
     Notwithstanding paragraphs (1) and (2), the rehabilitation 
     investment tax credit (as defined in subsection (c)(2)(C)) 
     shall be treated as used last.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 203. COMMERCIAL INDUSTRIAL DEVELOPMENT BONDS.

       (a) Facility Bonds.--
       (1) In general.--Subsection (a) of section 142 of the 
     Internal Revenue Code of 1986 (relating to exempt facility 
     bond) is amended by striking ``or'' at the end of paragraph 
     (11), by striking the period at the end of paragraph (12) and 
     inserting a comma, and by adding at the end the following new 
     paragraphs:
       ``(13) sports facilities,
       ``(14) convention or trade show facilities,
       ``(15) freestanding parking facilities,
       ``(16) air or water pollution control facilities, or
       ``(17) industrial parks.''.
       (2) Industrial parks defined.--Section 142 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new subsection:
       ``(k) Industrial Parks.--A facility shall be treated as 
     described in subsection (a)(17) only if all of the property 
     to be financed by the net proceeds of the issue--
       ``(1) is--
       ``(A) land, and
       ``(B) water, sewage, drainage, or similar facilities, or 
     transportation, power, or communication facilities incidental 
     to the use of such land as an industrial park, and
       ``(2) is not structures or buildings (other than with 
     respect to facilities described in paragraph (1)(B)).''.
       (3) Conforming amendments.--
       (A) Section 147(c) of the Internal Revenue Code of 1986 
     (relating to limitation on use for land acquisition) is 
     amended by adding at the end the following new paragraph:
       ``(4) Special rule for industrial parks.--In the case of a 
     bond described in section 142(a)(17), paragraph (1)(A) shall 
     be applied by substituting `50 percent' for `25 percent'.''.
       (B) Section 147(e) of such Code (relating to no portion of 
     bonds may be issued for skyboxes, airplanes, gambling 
     establishments, etc.) is amended by striking ``A private 
     activity bond'' and inserting ``Except in the case of a bond 
     described in section 142(a)(13), a private activity bond''.
       (b) Small Issue Bonds.--Section 144(a)(12) of the Internal 
     Revenue Code of 1986 (relating to termination of qualified 
     small issue bonds) is amended--
       (1) by striking ``any bond'' in subparagraph (A)(i) and 
     inserting ``any bond described in subparagraph (B)'',
       (2) by striking ``a bond'' in subparagraph (A)(ii) and 
     inserting ``a bond described in subparagraph (B)'', and
       (3) by striking subparagraph (B) and inserting the 
     following:
       ``(B) Bonds for farming purposes.--A bond is described in 
     this subparagraph if it is issued as part of an issue 95 
     percent or more of the net proceeds of which are to be used 
     to provide any land or property not in accordance with 
     section 147(c)(2).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after December 31, 1995.

     SEC. 204. INCREASE IN AMOUNT OF QUALIFIED SMALL ISSUE BONDS 
                   PERMITTED FOR FACILITIES TO BE USED BY RELATED 
                   PRINCIPAL USERS.

       (a) In General.--Clause (i) of section 144(a)(4)(A) of the 
     Internal Revenue Code of 1986 (relating to $10,000,000 limit 
     in certain cases) is amended by striking ``$10,000,000'' and 
     inserting ``$50,000,000''.
       (b) Clerical Amendment.--The heading of paragraph (4) of 
     section 144(a) of the Internal Revenue Code of 1986 is 
     amended by striking ``$10,000,000'' and inserting 
     ``$50,000,000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to--
       (1) obligations issued after the date of the enactment of 
     this Act, and
       (2) capital expenditures made after such date with respect 
     to obligations issued on or before such date.
     SEC. 205. SIMPLIFICATION OF ARBITRAGE INTEREST REBATE WAIVER.

       (a) In General.--Clause (ii) of section 148(f)(4)(C) of the 
     Internal Revenue Code of 1986 (relating to exception from 
     rebate for certain proceeds to be used to finance 
     construction expenditures) is amended to read as follows:
       ``(ii) Spending requirement.--The spending requirement of 
     this clause is met if 100 percent of the available 
     construction proceeds of the construction issue are spent for 
     the governmental purposes of the issue within the 3-year 
     period beginning on the date the bonds are issued.''.
       (b) Conforming Amendments.--
       (1) Clause (iii) of section 148(f)(4)(C) of the Internal 
     Revenue Code of 1986 (relating to exception for reasonable 
     retainage) is repealed.
       (2) Subclause (II) of section 148(f)(4)(C)(vi) of such Code 
     (relating to available construction proceeds) is amended by 
     striking ``2-year period'' and inserting ``3-year period''.
       (3) Subclause (I) of section 148(f)(4)(C)(vii) of such Code 
     (relating to election to pay penalty in lieu of rebate) is 
     amended by striking ``, with respect to each 6-month period 
     after the date the bonds were issued,'' and ``, as of the 
     close of such 6-month period,''.
       (4) Clause (viii) of section 148(f)(4)(C) of such Code 
     (relating to election to terminate 1\1/2\ percent penalty) is 
     amended by striking ``to any 6-month period'' in the matter 
     preceding subclause (I).
       (5) Clause (ii) of section 148(c)(2)(D) of such Code 
     (relating to bonds used to provide construction financing) is 
     amended by striking ``2 years'' and inserting ``3 years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
             TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT

     SEC. 301. BLOCK GRANT STUDY.

       (a) In General.--The Secretary of Housing and Urban 
     Development shall conduct a study regarding--
       (1) the feasibility of consolidating existing public and 
     low-income housing programs under the United States Housing 
     Act of 1937 into a comprehensive block grant system of 
     Federal aid that--
       (A) provides assistance on an annual basis;
       (B) maximizes funding certainty and flexibility; and
       (C) minimizes paperwork and delay; and
       (2) the possibility of administering future public and low-
     income housing programs under the United States Housing Act 
     of 1937 in accordance with such a block grant system.
       (b) Report to Comptroller General.--Not later than 18 
     months after the date of 
     [[Page S188]] enactment of this Act, the Secretary of Housing 
     and Urban Development shall submit to the Comptroller General 
     of the United States a report that includes--
       (1) the results of the study conducted under subsection 
     (a); and
       (2) any recommendations for legislation.
       (c) Report to Congress.--Not later than 24 months after the 
     date of enactment of this Act, the Comptroller General of the 
     United States shall submit to the Congress a report that 
     includes--
       (1) an analysis of the report submitted under subsection 
     (b); and
       (2) any recommendations for legislation.

     SEC. 302. DEMOLITION AND DISPOSITION OF PUBLIC HOUSING.

       Section 18(b)(3) of the United States Housing Act of 1937 
     (42 U.S.C. 1437p(b)(3)) is amended--
       (1) in subparagraph (G), by striking ``and'' at the end;
       (2) in subparagraph (H), by adding ``and'' at the end; and
       (3) by adding at the end the following new subparagraph:
       ``(I) provides, subject to the approval of both the unit of 
     general local government in which the property on which the 
     units to be demolished or disposed of are located and the 
     local public housing agency, for--
       ``(i) the eventual reconstruction of units on the same 
     property on which the units to be demolished or disposed of 
     are located; and
       ``(ii) the ultimate relocation of displaced tenants to that 
     property;''.
          TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES
                   Subtitle A--Environmental Cleanup

     SEC. 401. EXEMPTION FROM LIABILITY FOR LOCAL GOVERNMENTS THAT 
                   ARE OWNERS OR OPERATORS OF FACILITIES IN 
                   DISTRESSED URBAN AREAS.

       Section 101 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601) is 
     amended--
       (1) in paragraph (20), by adding at the end the following:
       ``(E) Exclusion of distressed urban areas.--The term `owner 
     or operator' does not include a unit of local government for 
     a distressed urban area that--
       ``(i) purchased real property, in the distressed urban 
     area, on or in which a facility is located;
       ``(ii) purchased the property to further the redevelopment 
     of the property for industrial activities;
       ``(iii) did not conduct or permit the generation, 
     transportation, storage, treatment, or disposal of any 
     hazardous substance at the facility; and
       ``(iv) did not contribute to the release or threat of 
     release of a hazardous substance at the facility through any 
     action or omission.''; and
       (2) by adding at the end the following new paragraphs:
       ``(39) Distressed urban area.--The term `distressed urban 
     area' has the meaning given the term in section 104(d) of the 
     New Urban Agenda Act of 1995.
       ``(40) Industrial activity.--The term `industrial activity' 
     means commercial, manufacturing, or any other activity 
     carried out to further the development, manufacturing, or 
     distribution of goods and services, including administration, 
     research and development, warehousing, shipping, transport, 
     remanufacturing, and repair and maintenance of commercial 
     machinery and equipment.''.

     SEC. 402. STANDARDS FOR REMEDIATION IN DISTRESSED URBAN 
                   AREAS.

       Section 121 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9621) is 
     amended by adding at the end the following:
       ``(g) Facilities in Distressed Urban Areas.--
       ``(1) Identification.--The President shall identify the 
     facilities on the National Priorities List that are located 
     in distressed urban areas.
       ``(2) Study and report.--The President shall conduct, 
     directly or by grant or contract, a study of appropriate 
     response actions for facilities located in distressed urban 
     areas. In conducting the study, the President shall examine 
     the appropriate degree of cleanup of hazardous substances, 
     pollutants, and contaminants released into the environment at 
     such a facility, and the appropriate considerations for the 
     selection of a response action at such a facility.
       ``(3) Standards.--Notwithstanding any other provision of 
     this Act, the President shall by regulation establish 
     standards for the degree of cleanup described in paragraph 
     (2), and the considerations described in paragraph (2), for 
     such a facility. In establishing the standards, the President 
     shall take into consideration the results of the study 
     described in paragraph (2).''.
              Subtitle B--Environmental-Economic Recovery

     SEC. 411. FINDINGS.

       Congress finds that--
       (1) plants such as the SEMASS plant in Rochester, 
     Massachusetts, and the Wheelabrator plant in Baltimore, 
     Maryland, provide an effective and efficient means of 
     disposing of solid waste and obtaining inexpensive electrical 
     power and steam; and
       (2) the availability of such plants in a community will 
     attract energy intensive industry to the community, 
     increasing the tax base and strengthening the economy of the 
     community.

     SEC. 412. DEFINITIONS.

       As used in this subtitle:
       (1) Distressed urban area.--The term ``distressed urban 
     area'' has the meaning given the term in section 104(d).
       (2) Energy intensive industry.--The term ``energy intensive 
     industry'' means an industry that consumes more than 25,000 
     BTUs per dollar of value added, as determined by the 
     Secretary.
       (3) Fully operational.--The term ``fully operational'' 
     means at least 90 percent operational, determined by 
     averaging the percentage of solid waste intake capacity 
     achieved and the percentage of electric output capacity 
     achieved.
       (4) Market rate.--The term ``market rate'' means the 
     applicable rate for retail bulk power sales made by the 
     electric utility within the service territory concerned.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (6) Solid waste.--The term ``solid waste'' has the meaning 
     given the term in section 1004(27) of the Solid Waste 
     Disposal Act (42 U.S.C. 6903(27)).

     SEC. 413. LOAN AUTHORITY.

       (a) Loans.--
       (1) In general.--The Secretary shall make not more than 3 
     loans to units of local government for distressed urban areas 
     for the establishment of facilities described in section 414.
       (2) Priority.--In making one of the loans, the Secretary 
     shall give priority to a unit of local government that 
     demonstrates that the unit of local government will establish 
     the facility through a contract or agreement with an 
     organization that has demonstrated an ability to oversee and 
     manage the creation of a comprehensive, national, strategic, 
     energy intensive, environmental industry initiative.
       (b) Authority To Borrow.--
       (1) In general.--Subject to paragraphs (2), (3), and (4), 
     and notwithstanding any other provision of law, the Secretary 
     may borrow from the Treasury such funds as the Secretary 
     determines to be necessary to make loans under this section.
       (2) Amounts.--The Secretary may borrow funds under 
     paragraph (1) if amounts sufficient to pay for the cost, as 
     defined in section 502(5) of the Congressional Budget Act of 
     1974 (2 U.S.C. 661a(5)), of the loan involved are provided in 
     advance in appropriation Acts.
       (3) Terms.--Subject to paragraph (4), the Secretary may 
     borrow the funds on such terms as may be established by the 
     Secretary and the Secretary of the Treasury.
       (4) Interest.--The rate of interest to be charged in 
     connection with a loan made under paragraph (1) shall be not 
     less than a rate determined by the Secretary of the Treasury, 
     taking into consideration current market yields on 
     outstanding marketable obligations of the United States of 
     comparable maturities.

     SEC. 414. FACILITY.

       Each facility referred to in section 413--
       (1) shall produce electric power, or steam, from solid 
     waste;
       (2) shall have 2 boilers and be capable of expansion;
       (3) shall be located in a distressed urban area in the 
     United States;
       (4) shall provide electricity or steam to energy intensive 
     industry customers at no more than 40 percent of the market 
     rate for electricity;
       (5) may provide electricity to public entities or light 
     industry, but not to residential consumers; and
       (6) shall obtain a continuing supply of feedstock 
     sufficient to sustain maximum operational capability through 
     long-term contracts with municipal and other governmental 
     sources.

     SEC. 415. REINVESTMENT OF SAVINGS.

       (a) In General.--Any energy intensive industry customer 
     obtaining electricity or steam from the facility described in 
     section 414 shall--
       (1) invest in equipment, physical plant, or increased 
     employment at least 7 percent of the saving gained by such 
     customer; and
       (2) from the saving gained by such customer, make payments 
     to the Secretary, in an amount determined by the Secretary to 
     be appropriate, to assist in repaying the funds borrowed by 
     the Secretary under section 413 and the costs associated with 
     borrowing the funds.
       (b) Definition.--As used in this section, the term 
     ``saving'', used with respect to a customer obtaining 
     electricity or steam from a facility described in section 
     414, means an amount equal to--
       (1) the cost of obtaining an amount of such electricity or 
     steam from other sources during a period of time; minus
       (2) the cost of obtaining the same amount of such 
     electricity or steam from the facility during such period.

     SEC. 416. REPORT TO CONGRESS.

       (a) Report.--Not later than 1 year after the facilities 
     described in section 414 become fully operational, the 
     Secretary shall prepare and submit to Congress a report 
     containing a recommendation concerning whether the Federal 
     Government should make additional loans similar to the loans 
     authorized by this subtitle.
       (b) Analysis.--Such recommendation shall be based on 
     analysis of the Secretary concerning whether the loans made 
     under this subtitle have resulted in--
       (1) the creation of jobs in the communities in which the 
     facilities are located due to the relocation of energy 
     intensive industry;
       (2) the effective disposal of solid waste; and
     [[Page S189]]   (3) easier and less expensive production of 
     electricity and steam.
                                                                    ____

                                                     Bob O'Connor,


                               Councilman, City of Pittsburgh,

                                Pittsburgh, PA, October, 31, 1994.
     Hon. Arlen Spector,
     U.S. Senate, Washington, DC
       Dear Senator Spector: Thank you for your letter of October 
     5th, soliciting my input on your legislative agenda in the 
     U.S. Senate. I appreciate your interest.
       As you know, the City of Pittsburgh and Southwestern 
     Pennsylvania have been decimated economically beginning in 
     the 1970's and especially in the early 1980's. We have seen 
     our principal manufacturing base literally disappear, our 
     population decline, and lost corporate leadership due to 
     buyouts and consolidations.
       Your questions all can be answered with one response--we 
     need jobs, jobs, jobs! And, these jobs have to fill the full 
     spectrum of employment opportunities from high tech to low 
     tech.
       We have planted seeds for growth here in Pittsburgh which 
     will hopefully fuel our local economy. Those ``seeds'' 
     include robotics, high speed rail, motion pictures, tourism, 
     exporting and computer software.
       The federal government can foster the development of these 
     and other industries in the region by directing contracts and 
     research to this area which will enhance employment 
     opportunities.
       If we don't meet the challenge of job creation in this 
     region then we have no choice but to increase spending on 
     social welfare programs.
       I wish you well in your efforts to bring employment 
     opportunities to Pittsburgh. Your efforts on our behalf are 
     greatly appreciated.
           Sincerely,
                                                     Bob O'Connor,
     Councilman.
                                                                    ____



                                                  U.S. Senate,

                                   Washington, DC, March 31, 1994.
     Hon. Steve Clark,
     Mayor, City of Miami,
     Miami, FL.
       Dear Mayor Clark: I was interested to read in the 
     Washington Post on March 20, 1994, of Philadelphia Mayor 
     Rendell's interest in requiring some amount of foreign aid to 
     be issued in vouchers ``redeemable only in distressed 
     cities.'' I raised this idea with Secretary of Treasury 
     Bentsen at a hearing before the Foreign Operations 
     Subcommittee on Appropriations on Tuesday, March 22, 1994. I 
     agree that we must look for innovative ways to make cities 
     attractive investment opportunities for the businesses of the 
     future. Foreign aid vouchers could play an effective role in 
     accomplishing this objective.
       In order to flesh out this foreign aid proposal in more 
     detail, I am interested in your views on whether this would 
     be an effective tool in attracting investment capital to 
     cities. If you could have someone on your staff help us 
     identify which business activities and services in Miami 
     could be useful in extending foreign assistance, I would be 
     very appreciative. This information will help me in pursuing 
     this idea in my capacity as a member of the Foreign 
     Operations Subcommittee.
       I look forward to working with you on this important 
     matter. Please have you staff contact Morrie Ruffin (202 224-
     9016) of my staff with any information that could be useful 
     in this endeavor.
       My best.
           Sincerely,
     Arlen Specter.
                                                                    ____

                                                  U.S. Senate,

                                   Washington, DC, March 29, 1994.
     Hon. Stephen R. Reed,
     Mayor, City of Harrisburg,
     Harrisburg, PA.
       Dear Stephen: I was interested to read in the Washington 
     Post on March 20, 1994, of Philadelphia Mayor Rendell's 
     interest in requiring some amount of foreign aid to be issued 
     in vouchers ``redeemable only in distressed cities.'' I 
     raised this idea with Secretary of Treasury Bentsen at a 
     hearing before the Foreign Operations Subcommittee on 
     Appropriations on Tuesday, March 22, 1994. I agree that we 
     must look for innovative ways to make cities attractive 
     investment opportunities for the businesses of the future. 
     Foreign aid vouchers could play an effective role in 
     accomplishing this objective.
       In order to flesh out this foreign aid proposal in more 
     detail, I am interested in your views on whether this would 
     be an effective tool in attracting investment capital to 
     cities. If you could have someone on your staff help us 
     identify which business activities and services in Harrisburg 
     could be useful in extending foreign assistance, I would be 
     very appreciative. This information will help me in pursuing 
     this idea in my capacity as a member of the Foreign 
     Operations Subcommittee.
       I look forward to working with you on this important 
     matter. Please have your staff contact Morrie Ruffin (202 
     224-9016) of my staff with any information that could be 
     useful in this endeavor.
       My best.
           Sincerely,
     Arlen Specter.
                                                                    ____



                                             City of Miami, FL

                                         Miami, FL, July 28, 1994.
     Hon. Arlen Specter,
     Hart Senate Office Building, Washington, DC.
       Dear Senator Specter: On behalf of the City of Miami, thank 
     you for including our community in your and Mayor Rendell's 
     proposal to require some amount of foreign aid to be issued 
     in vouchers, which can be redeemed in distressed cities 
     throughout the country. The initiative set forth in Mayor 
     Rendell's New Urban Agenda, will benefit Greater Miami/Dade 
     County, should our application for Empowerment Zone or 
     Enterprise Community status be successful. Miami's selection 
     as a procurement center for foreign aid would be a natural 
     complement to our status as the Business Capital of the 
     Americas.
       My staff and The Beacon Council, Greater Miami/Dade 
     County's economic development organization, have been working 
     for the past several months with Doug Troutman of your staff 
     to determine which business activities and services in Miami 
     could be useful in extending foreign assistance: Toward this 
     end, Mr. Troutman has been extremely helpful in providing 
     further background information to assist our efforts. We look 
     forward to working with you and your staff further on this 
     important issue.
       On behalf of our community, thank you for involving Miami 
     in this significant project.
           Sincerely,
                                                 Stephen P. Clark,
     Mayor.
                                                                    ____

                                              Office of the Mayor,


                                       The City of Harrisburg,

                                    Harrisburg, PA, April 6, 1994.
     Hon. Arlen Specter,
     U.S. Senate,
     Senate Office Building, Washington, DC.
       Dear Senator Specter: This is to acknowledge and thank you 
     for your correspondence, which I was pleased to receive on 
     April 4, 1994, regarding the suggestion by the Mayor of 
     Philadelphia that a portion of foreign aid be issued in the 
     form of vouchers that would be redeemable only in distressed 
     cities.
       The concept has considerable merit and we would support 
     such. The key to such a voucher provision having a measurable 
     and nearly immediate impact in urban communities would be for 
     a proper and clearly stated definition of the words 
     ``distressed cities.'' At a minimum, such a definition should 
     stipulate that eligible cities would be those with 15% or 
     more of its households living at or below the Federal poverty 
     income level.
       I suspect that most cities would be able to benefit by such 
     a voucher program. It would redirect investment, development 
     and growth forces into such cities since foreign aid vouchers 
     would represent a far less speculative venture and, in some 
     cases, a literally guaranteed opportunity.
       In the case of the City of Harrisburg, there are few areas 
     of products and services which could not be provided. Many of 
     our existing businesses would no doubt seize upon the 
     opportunity to broaden their market by engaging in export 
     activity triggered by foreign aid vouchers. Our 
     infrastructure is sufficient to also accommodate additional 
     growth of existing and new businesses and industries.
       Therefore, in brief, we believe the voucher proposal has 
     considerable merit and that this City would benefit from the 
     same.
       I appreciate your affording us this opportunity to express 
     an opinion on the subject.
       WIth warmest personal regards, I am
           Yours sincerely,
                                                  Stephen R. Reed,
                                                            Mayor.
                                 ______

      By Mr. SPECTER:
  S. 18. A bill to provide improved access to health care, enhance 
informed individual choice regarding health care services, low health 
care costs through the use of appropriate providers, improve the 
quality of health care, improve access to long-term care, and for other 
purposes; to the Committee on Finance.


                       health care assurance act

  Mr. SPECTER. Mr. President, there are some who believe health care 
reform is dead and declared as much last Fall when Congress failed to 
enact reform legislation. But they are wrong. President Clinton was 
grossly in error when he proposed health care by government mandate and 
massive bureaucracy. But anyone who reads the repudiation of the 
Clinton bill as an excuse to do nothing is equally in error. There is 
as much need now as there was then to correct the problems in our 
health care system for the 14.6 percent or 39.7 million Americans, for 
whom the system does not work--a group which, according to the Census 
Bureau, contained 1.1 million more uninsured individuals in 1993 than 
the previous year. As I have said many times, we can do so without big 
government and turning the best health care system in the world, 
serving 85.4 percent of all Americans, on its head. The legislation I 
am introducing today, the Health Care Assurance Act of 1995, will do 
just that.
  While Congressional jaw-boning in the 103d Congress may have caused 
market competition to dampen cost increases a bit and encouraged more 
[[Page S190]] managed care, in my judgment no amount of congressional 
talk will fix many of the problems that still exist--for instance, the 
pre-existing condition problem, where people are denied health care 
insurance because of a pre-existing health problem; or the portability 
problem, where people lose their job or are otherwise between jobs and 
lose their health coverage; or the self-employed problem, where self-
employed individuals are denied the right to deduct as a business 
expense their health care costs unlike other employers who may deduct 
100 percent of that business expense; or the problem of employees in 
small businesses not having health coverage because their employer 
simply cannot afford to provide it.
  The recent November elections reaffirmed the basic principle of 
limited government. Limited government, however, does not mean an 
uncaring or do-nothing government. Consistent with this principle, 
Congress should enact health care reform legislation that focuses on 
these and other problems in the current system while leaving intact 
what already works for 220 million Americans.
  To be sure, health care reform remains a very complex issue for 
Congress to address. But it is not so complex that we cannot act now in 
a bipartisan way. As many of my colleagues will recall, in 1990 the 
Congress passed Clean Air Act amendments that many said were not 
doable. That issue was brought to the Senate floor, and task forces 
were formed which took up the complex question of sulfuric acid in the 
air. We targeted the removal of 10 million tons in a year. We made 
significant changes in industrial pollution and in tailpipe emissions. 
We produced a balanced bill which protected the environment and 
retained jobs. This can be done with health care reform. If we forces 
on the areas both Democrats and Republicans agree upon--insurance 
market reforms, full-deductibility for the self-employed, 
administrative
 simplification, to name a few--we will accomplish a lot in addressing 
problems with our current health care system.

  I have been advocating reform in one form or another throughout my 
now 15 years in the Senate. My strong interest in health care dates 
back to my first term when I sponsored the Health Care Cost Containment 
Act of 1983, S. 2051, which would have granted a limited anti-trust 
exemption to health insurers permitting them to engage in certain joint 
activities such as acquiring or processing information, and collecting 
and distributing insurance claims for health care services aimed at 
curtailing then escalating health care costs. Later, in 1985, I 
introduced the Community Based Disease Prevention and Health Promotion 
Projects Act of 1985, S. 1873, directed at reducing the human tragedy 
of low birthweight babies and infant mortality. Since 1983, I have 
introduced and cosponsored numerous other bills concerning health care 
in our country. A complete list of the 20 health care bills that I have 
sponsored since 1983 are included for the Record.
  During the 102d Congress, I pressed to have the Senate take action on 
this issue. On July 29, 1992, I offered an amendment on health care to 
legislation then pending on the Senate Floor. This amendment included 
provisions from legislation introduced by Senator Chafee, which I 
cosponsored and which was previously proposed by Senators Bentsen and 
Durenberger. The amendment included a change from 25 percent to 100 
percent deductibility for health care insurance purchased by self-
employed persons and small business insurance market reform to make 
health coverage more affordable for small businesses. When then-
Majority Leader George Mitchell argued that the health care amendment I 
was proposing did not belong on that bill, I offered to withdraw the 
amendment if he would set a date certain to take up health care, just 
as product liability legislation had been placed on the calendar for 
September 8, 1992. The Majority Leader rejected that suggestion and the 
Senate did not consider comprehensive health care legislation during 
the balance of the 102d Congress. The amendment was defeated on a 
procedural motion by a vote of 35 to 60 along party lines.
  The substance of that amendment, however, was adopted later by the 
Senate as part of broader tax legislation on September 23, 1992 when it 
was included in an amendment to H.R. 11 introduced by Senators Bentsen 
and Durenberger and which I cosponsored. This latter amendment, which 
included substantially the same self-employed deductibility and small 
group reforms that I had proposed on July 29, passed the Senate by 
voice vote. Unfortunately, these provisions were later dropped from 
H.R. 11 in the House-Senate conference. On January 23, 1994, when 
Senator Mitchell was asked on the television program ``Face The 
Nation'' about Senator Bentsen's bill from 1992, he stated that 
President Bush vetoed that provision as part of a broader bill. In 
fact, the legislation sent to President Bush never included that 
provision.
  On August 12, 1992, I introduced legislation entitled the ``Health 
Care Affordability and Quality Improvement Act of 1992,'' S. 3176, that 
would have enhanced informed individual choice regarding health care 
services by providing certain information to health care recipients, 
lowered the cost of health care through use of the most appropriate 
provider, and improves the quality of health care.
  On January 21, 1993, the first day of the 103d Congress, I introduced 
comprehensive health care legislation, entitled the ``Comprehensive 
Health Care Act of 1993,'' S. 18. This legislation was comprised of 
reform initiatives that our health care system could adopt immediately. 
They were reforms which both improved access and affordability of 
insurance coverage and implemented systemic changes to bring down the 
escalating cost of care in this country. S. 18, which is the principal 
basis of the legislation I am introducing today, melded the two health 
care reform bills I introduced and the one bill that I cosponsored in 
the 102d Congress and built upon with significant additions.
  On March 23, 1993, I introduced the Comprehensive Access and 
Affordability Health Care Act of 1993, S. 631, which was a composite of 
health care legislation introduced by Senators Cohen, Kassebaum, Bond, 
and McCain, as well as my bill, S. 18. I introduced this legislation in 
an attempt to move ahead on the consideration of health care 
legislation and provide a critical mass as a starting point. On April 
28, 1993, I proposed this bill as an amendment to then pending S. 171, 
the Department of
 Environment Act in an attempt to urge the Senate to act on health care 
reform.

  In total, I have taken to this floor on 13 occasions over the past 3 
years to urge the Senate to address health care reform. On two 
occasions I introduced health care related amendments.
  As early as June 26, 1984, I stated that the issue of health care is 
one of the most important matters facing the Nation today. That 
statement continues to ring true today, 10 years later. As reported in 
the New York Times on December 29, 1993, the Commerce Department 
estimated that health spending would total $942.5 billion in 1994 and 
would rise 12.5 percent in 1995. Moreover, there are an estimated 40 
million, or 15 percent of the American population without health 
insurance.
  Not long ago, Mr. President, in June 1993, I had my own health 
problem when a magnetic resonance imaging machine discovered an 
intercranial lesion in my head. I was the beneficiary of the greatest 
health care delivery system in the world. That experience made me ever 
more aware, knowledgeable of and sensitive to the subject than I had 
been in the past.
  I share the American people's frustration with government and their 
desire to have the problems addressed. This past November they made it 
abundantly clear that they want the problems fixed--be it health care, 
welfare, tax or spending reform. But I want to make clear, Mr. 
President, since it has been said from time to time that Republicans 
support only the status quo, that many of my Republican colleagues have 
shared my sentiment to pass health care legislation, and we continue to 
be committed to action. In the 102d Congress, for instance, Senate 
Republicans were instrumental in the passage of reforms that would have 
helped small businesses and self-employed individuals to afford 
coverage more easily. In the 103d Congress, Senate Republicans 
introduced numerous health care bills that did not go to the 
[[Page S191]] floor. And now I am introducing legislation that targets 
many of the problems and will result in affordable coverage for 
millions of the uninsured.
  From last year's debate, I believe we learned a great deal about our 
health care system and what the American people are willing to accept 
from the Federal Government. The message we heard loudest was that 
Congress was acting too hastily, and that Americans did not want a 
massive overhaul of the health care system. Instead, our constituents 
want Congress to proceed more slowly and to target what isn't working 
in the health care system while leaving in place what is working.
  As I have said both publicly and privately, I was willing to 
cooperate with President Clinton in solving the problems facing the 
country. However, there were many important areas where I differed with 
the President's approach and I did so because I believed that they were 
proposals that would have been deleterious to my fellow Pennsylvanians, 
to the American people, and to our health care system. Most 
importantly, I did not support creating a large new government 
bureaucracy because I believe that savings should go to health care 
services and not bureaucracies.
  On this latter issue, I first became concerned about the bureaucracy 
back in September 1993 after reading the President's 239-page 
preliminary health care reform proposal. I was surprised by the number 
of new boards, agencies, and commissions, so I asked my legislative 
assistant to make me a list of all of them. Instead, she decided to 
make a chart. The initial chart depicted 77 new entities and 54 
existing entities with new or additional responsibilities. When the 
President's 1,342-page Health Security Act was transmitted to Congress 
on October 27, 1993, my staff reviewed it and found an increase to 105 
new agencies, boards, and commissions and 47 existing departments, 
programs and agencies with new or expanded jobs. This chart received 
national attention after being used by Senator Bob Dole in his response 
to the President's State of the Union address on January 24, 1994. The 
response to the chart was tremendous, with more than 12,000 people from 
across the country contacting my office for a copy. Numerous groups and 
associations--such as United We Stand America, the American Small 
Business Association, the National Federation of Republican Women, and 
the Christian Coalition--reprinted the chart in their publications 
amounting to hundreds of thousands more in distribution. I might add, 
Mr. President, that proposals offered during last year's debate by 
Democratic leaders like Senator Kennedy, then-Chairman of the Labor 
Committee, and then-Majority Leader, Senator Mitchell, also
 suffered from the same big government affliction, as the Kennedy plan 
proposed 107 new entities and the Mitchell plan proposed 167 new 
entities.

  In addressing our health care problems, let me be clear: In creating 
solutions it is imperative that we do so without adversely affecting 
the many positive aspects of our health care system which works for 85 
percent of all Americans. I believe our approach should be to focus on 
affordable coverage for the approximately 15 percent of the population 
without insurance, covering people who change jobs, providing adequate 
coverage to the underinsured, holding down spiraling costs and 
generally addressing the specific problems with the current system 
rather than a massive change.
  If such reforms do not solve the problems of coverage and costs then 
we will need to revisit them. Different proposals introduced in the 
last Congress had a phase-in period under any reform plan. I believe 
that a prudent approach is to implement targeted reforms and then act 
to improve upon what we have done. I call this trial and modification. 
We must be careful not to damage the positive aspects of our health 
care system upon which more than 220 million Americans justifiably 
rely.
  Legislation which I am introducing today has four objectives: (1) to 
provide affordable health insurance for the 40 million Americans now 
not covered; (2) to reduce the health care costs for all Americans; (3) 
to increase the security of coverage and the portability of health 
insurance between jobs; and (4) to improve coverage for underinsured 
individuals and families. This legislation is comprised of initiatives 
that our health care system can readily adopt in order to meet these 
objectives, and it does not create an enormous new bureaucracy to meet 
them.
  This bill builds and improves upon provisions put forth in my 
legislation from the 103d Congress, S. 18, which included: full 
deductibility of health care costs for the self-employed; purchasing 
groups and insurance market reforms for small employers to have access 
to affordable health insurance; increased availability to prenatal care 
and outreach for the prevention of low-birthweight births; improved 
implementation of patients' rights regarding medical care at the end of 
life; improved health education; greater emphasis on and expanded 
access to primary and preventive health services; and improved 
utilization of non-physician providers, consumer information, and 
outcomes research.
  To this I have added: insurance market reforms to provide greater 
coverage security and portability between jobs; COBRA reform to extend 
the time period for employees who leave their jobs to continue their 
health benefits until alternative coverage becomes available and 
provide such individuals with additional affordable options; an 
obligation on employers to offer--but not to pay for--health care 
insurance; and a 1-year extension of the Medicare Select Program, which 
gives beneficiaries the option to select a managed care plan and 
provides Medicare recipients more choice in choosing supplemental 
insurance plans. Taken together, I believe these reforms will both 
improve the quality of health care delivery and will cut the escalating 
cost of health care in this country. They represent a blueprint which 
can be modified, improved and expanded. In total, I believe this bill 
can significantly reduce the number of uninsured Americans, improve the 
affordability of care, ensure the portability and security of coverage 
between jobs; and yield cost savings of billions of dollars to the 
Federal Government which can be used to insure the remaining uninsured 
and underinsured Americans.


                  increasing coverage and saving costs

  The 6 titles of the bill seek to reduce the health care costs and the 
concerns regarding security for the 220 million, or 85 percent of 
Americans now covered, and to increase coverage for the other 39.7 
million, or 15 percent, of Americans who are not.


                                coverage

  The 220 million Americans now covered derive their health insurance 
coverage as follows: approximately 57 percent from employer plans; 24.9 
percent from Medicare and Medicaid; 3.7 percent from the military; and 
13 percent from individual private insurance.
  Title I would implement health insurance reforms which include: 
extending full deductibility of health insurance premiums to the self-
employed; establishing small employer and individual health insurance 
purchasing groups; obligating employers to offer, but not pay for, at 
least two health
 insurance plans that protect individual freedom of choice and that 
meets a standard minimum benefit package; improving health insurance 
market practices to guarantee coverage of pre-existing conditions; and 
extending COBRA benefits and coverage options to provide portability 
and security of affordable coverage between jobs.

  While it is not possible to predict with certainty how many 
additional Americans will be covered as a result of the reforms in 
Title I, a reasonable expectation would be that the reforms included in 
this legislation will cover approximately 21 million Americans. This 
estimate encompasses the provisions included in Title I which I discuss 
in further detail below.
  Title I seeks to make insurance affordable by enhancing portability 
of insurance and choice to cover persons who are uninsured for brief 
periods between jobs. The reason that we often hear varying statistics 
cited regarding the number of uninsured persons is because a number of 
the uninsured are without insurance for limited periods of time between 
jobs. To address this portion of the uninsured, Title I includes 
reforms to increase the portability of coverage. These reforms also 
address the 220 million with insurance and their concerns with security 
and portability. These reforms include: (1) insurance market reform to 
cover pre- 
[[Page S192]] existing conditions, including hereditary conditions and 
pregnancy; (2) extending COBRA health benefits option from 18 to 24 
months and enhancing coverage options under COBRA to make insurance 
more affordable; and (3) providing individuals access to affordable 
insurance through purchasing groups.
  Coverage of pre-existing conditions is a concern of many people with 
insurance who face the potential threat of losing their coverage if 
they or a family member becomes ill. I believe that these practices are 
resulting in too much litigation and too much money being spent on 
lawyers rather than providing coverage for such persons. According to 
the Employee Benefit Research Institute, of the 5.9 million workers 
American who are denied coverage through their employers' health plan, 
100,000 workers are ineligible for insurance because of pre-existing 
health conditions. Under my bill, no one will be denied reasonably 
priced coverage or continued coverage due to a pre-existing condition.
  Title I also extends the COBRA benefit option from 18 months to 24 
months. COBRA refers to a measure which was enacted in 1985 as part of 
the Omnibus Budget Reconciliation Act [OBRA '85] to allow employees who 
leave their job, either through a law-off of choice, to continue 
receiving their health care benefits by paying the full cost of such 
coverage. By extending this option, such unemployed persons will have 
enhanced coverage options.
  In addition, options under COBRA are expanded to include plans with 
lower premiums and higher deductible of either $1,000 or $3,000. This 
provision is incorporated from legislation introduced in the 103rd 
Congress by Senator Phil Gramm and will provide an extra cushion of 
coverage options for people in transition. According to Senator Gramm, 
with these options, the typical monthly premium paid for a family of 
four would drop by as much as 20 percent when switching to a $1,000 
deductible and as much as 52 percent when switching to a $3,000 
deductible.
  With respect to the uninsured and underinsured, my bill would permit 
individuals and families to purchase guaranteed, comprehensive health 
coverage through purchasing groups. Health insurance plans offered 
through the purchasing groups would be required to meet basic, 
comprehensive standards with respect to benefits. Such benefits must 
include a variation of benefits permitted among actuarially equivalent 
plans to be developed by the National Association of Insurance 
Commissioners. The standard plan would consist of the following 
services when medically necessary or appropriate: (1) medical and 
surgical devices; (2) medical equipment; (3) preventive services; and 
(4) emergency transportation in frontier areas. It is estimated that 
for businesses with fewer than 50 employees, voluntary purchasing 
cooperatives such as those included in my legislation could cover up to 
17 million people who are currently uninsured.\8\
  My bill would also create individual health insurance purchasing 
groups for individuals wishing to purchase health insurance on their 
own. In today's market, such individuals often face a market where 
coverage options are not affordable. These purchasing groups will 
change that by allowing small businesses and individuals to buy 
coverage by pooling together within purchasing groups, and choose from 
among insurance plans
 that provide comprehensive benefits, with guaranteed enrollment and 
renewability, and equal pricing through community rating adjusted by 
age and family size. Community rating will assure that no one small 
business or individual will be singly priced out of being able to buy 
comprehensive health coverage because of health status. With community 
rating, a small group of individuals and businesses can join together, 
spread the risk, and have the same purchasing power that larger 
companies have today.

  For example, Pennsylvania has the fourth lowest rate of uninsured in 
the nation with over 90 percent of all Pennsylvanians enrolled in some 
form of heath coverage. Lewin and Associates found that one of the 
factors enabling Pennsylvania to achieve this low rate of uninsured 
persons is the practice by Pennsylvania's Blue Cross/Blue Shield plans 
which provide guaranteed enrollment and renewability, an open 
enrollment period, community rating, and coverage for persons with pre-
existing conditions. My legislation seeks to enact reforms to provide 
for more of these types of practices.
  The purchasing groups as developed and administered on a local level, 
in addition to the insurance market reforms related to pre-existing 
conditions for all insurance policies, will provide small businesses 
and all individuals with affordable health coverage options.
  For individuals who are self-employed, this bill seeks to extend the 
same tax advantage for the purchase of health insurance to these 
individuals as is afforded to all other employers. Under current law, 
businesses are permitted to deduct 100 percent of what they pay for the 
health insurance of their employees, but self-employed individuals may 
not deduct any of their cost. The provision permitting self-employed 
individuals to deduct 25 percent of their health insurance costs 
expired on December 31, 1993. It is hard to find a provision in the 
Internal Revenue Code that is more discriminatory than this one.
  According to the Congressional Research Service, 12 percent or 3.9 
million of uninsured workers are self-employed. Providing full 
deductibility of health insurance premiums, beginning with 
reinstatement of the 25 percent deduction for 1994 and reaching 100 
percent by 1999, for self-employed individuals is a simple matter of 
fairness. It also should make health insurance coverage more affordable 
for the estimated 3.9 million self-employed individuals and their 
families who are now uninsured.
  The Joint Committee on Taxation has estimated the cost of this 
provision at $1.0 billion in the first year and $5.2 billion over the 
next 5 years.
  Unique barriers to coverage exist in both rural and urban medically 
underserved areas. Within my home State of Pennsylvania, there are 
examples of such barriers due to a lack of health care providers in 
rural areas and other problems associated with the lack of coverage for 
indigent populations living in inner cities. This bill improves access 
to health care services for these populations by increasing Public 
Health Service programs and also through training more primary care 
providers to serve in such areas; increasing the utilization of non-
physician providers including nurse practitioners, clinical nurse 
specialists and physician assistants through direct reimbursements 
under the Medicare and Medicaid programs; and increasing support for 
education and outreach.
  While I reiterate the difficulty in making definitive conclusions 
regarding the reforms put forth under this legislation and 
accomplishing universal health coverage for all Americans, I believe 
that it is a promising starting point. Admittedly, the figures are 
inexact, but by my rough calculations potentially 21 million of the 40 
million uninsured will be able to obtain affordable health care 
coverage under my bill. I arrive at this figure by including the 17 
million that will be able to purchase insurance as a result of allowing 
individuals and small employers to purchase insurance through voluntary 
purchasing cooperatives, the 3.9 self-employed individuals who are 
uninsured that will now have full-deductibility for the cost of their 
health insurance, and the 100,000 who now will not be denied coverage 
due to pre-existing conditions. Certainly increasing the 220 million 
Americans with coverage to 241 million is a significant improvement. 
But we must not lose sight of those who for whatever reason may not 
achieve coverage under this plan. In this regard, I welcome any and all 
suggestions that make sense within our current constraints to increase 
coverage. I am committed to enacting reforms this year and committing 
to a
 time certain when the Congress must revisit the issue and act to 
modify these reforms and correct problems related to coverage where 
they still exist.


                              cost savings

  It is anticipated that the increased costs of coverage to employers 
choosing to cover employees under Title I would be offset by 
administrative savings from the development of the small employer 
purchasing groups. Such savings have been estimated as high as $9 
billion annually. In addition, if we address some of the areas within 
the 
[[Page S193]] health care system that are exacerbating costs, we can 
achieve significant savings to be redirected toward direct health care 
services.
  Title I includes a provision to extend the Medicare Select program, 
which already has demonstrated success in passing along savings to the 
consumer. The Medicine Select program is a demonstration project 
initiated in the Omnibus Reconciliation Act of 1990 that allows 
Medicare recipients to select managed care plans, specifically through 
preferred provider organizations, for their Medicare supplemental 
insurance. Fifteen States have demonstration sites and over 400,000 
Medicare beneficiaries are enrolled in the program. Medicare Select 
plans are 10 to 30 percent less expensive than traditional plans that 
offer the same benefits and quality is not sacrificed. The August 1994 
Consumer Reports rated Medicare Select plans as some of the best 
Medigap products nationwide. Of the top 15 Medigap rated policies, 8 
were Medicare Select plans.
  While savings from such reforms are difficult to predict, I believe 
that savings of $214 billion over 5 years can be achieved through the 
reforms set forth in this legislation.
  While examining the issues that contribute to our health care crisis, 
I was struck by the fact that so much attention is being focused on 
treating the symptoms and so little on some of its root causes. 
Granted, our existing health care system suffers from very serious 
structural problems. But there also are some common sense steps we can 
take to head off problems before they reach crisis proportions. Title 
II of my bill includes three initiatives which enhance primary and 
preventive care services aimed at preventing disease and ill-health.
  Each year about 7 percent, or 287,000, of the 4,100,000 American 
babies born in the U.S. are born of low birth weight, multiplying their 
risk of death and disability. Nearly 37,000 of those born die before 
their first birthday. Approximately 1,000 of those deaths are 
preventable. Although the infant mortality rate in the United States 
fell to an all-time low in 1989, an increasing percentage of babies 
still are born of low birth weight. The Executive Director of the 
National Commission To Prevent Infant Mortality, put it this way, 
``More babies are being born at risk and all we are doing is saving 
them with expensive technology.''
  It is a human tragedy for a child to be born weighing 16 ounces with 
attendant problems which last a lifetime. I first saw 1-pound babies in 
1984 when I was astounded to learn that Pittsburgh, PA, had the highest 
infant mortality rate of African-American babies of any city in the 
United States. I wondered, how could that be true of Pittsburgh, which 
has such enormous medical resources. It was an amazing thing for me to 
see a 1-pound baby, about as big as my hand.
  Beyond the human tragedy of low birth weight there are the financial 
consequences. Low birth weight children, those who weigh less than 5.5 
pounds, account for 16 percent of all costs for initial 
hospitalization, re-hospitalization and special services up to age 35. 
The short and long-term costs of saving and caring for infants of low 
birth weight is staggering. A study issued by the Office of Technology 
Assessment in 1988, concluded that $8 billion was expended in 1987 for 
the care of 262,000 low birth weight infants in excess of that which 
would have been spent on an equivalent number of babies born of normal 
weight birth averted by earlier or more frequent prenatal care, the 
U.S. health care system saves between $14,000 and $30,000 in the first 
year in addition to the projected savings in lifetime care.
  The Department of Health and Human Services estimated that by 
reducing the number of children born of low birth weight by 82,000 
births, we could save between $1.1 billion and $2.5 billion per year.
  We know that in most instances prenatal care is effective in 
preventing low birth weight babies. Numerous studies have
 demonstrated that low birth weight, that does not have a genetic link, 
is associated with inadequate prenatal care or lack of prenatal care.

  To improve pregnancy outcomes for women at risk of low birth weight, 
Title II authorizes the Secretary of Health and Human Services to award 
grants to States for projects to reduce infant mortality and low birth 
weight births and to improve the health and well-being of mothers and 
their families, pregnant women and infants. The funds would be awarded 
to community-based consortia, made up of State and local governments, 
the private sector, religious groups, community and migrant health 
centers, and hospitals and medical schools, whose goal would be to 
develop and coordinate effective health care and social support 
services for women and their babies.
  The second initiative under Title II involves the provision of 
comprehensive health education for our nation's children. The Carnegie 
Foundation for the Advancement of Teaching recently conducted a survey 
of teachers. More than half of the respondents said that poor 
nourishment among students is a serious problem at their schools; 60 
percent cited poor health as a serious problem. Another study issued in 
1992 by the Children's Defense Fund reported that children deprived of 
basic health care and nutrition are ill-prepared to learn. Both studies 
indicated that poor health and social habits are carried into adulthood 
and often passed on to the next generation.
  To interrupt this tragic cycle, this nation must invest in proven 
preventive health education programs. My legislation includes 
comprehensive health education and prevention initiatives through 
increased support to local educational agencies to develop and 
strengthen comprehensive health education programs and to Head Start 
resource centers to support health education training programs for 
teachers and other day care workers.
  Title II further expands the authorization for a variety of public 
health programs, such as breast and cervical cancer prevention, 
childhood immunizations, family planning and community health centers. 
These existing programs are designed to improve the public health and 
prevent disease through primary and secondary prevention initiatives. 
It is essential that we invest more resources now in these programs if 
we are to make any substantial progress in reducing the costs of acute 
care in this country.
  The proposed expansions in preventive health services included in 
Title II are conservatively projected to save approximately $2.5 
billion per year or $12.5 billion over 5 years. I believe the savings 
will be higher. Again, it is impossible to be certain of such savings; 
only experience will tell. For example, how do you quantify today the 
savings that will surely be achieved tomorrow from future generations 
of children that are truly educated in a range of health-related 
subjects including hygiene, nutrition, physical and emotional health, 
drug and alcohol abuse, accident prevention and safety, et cetera? I 
suggest these projections, subject to future modification, only to give 
some generalized perspective on the impact of this bill.
  Title III would establish a federal standard and create uniform 
national forms concerning the patient's right to decline medical 
treatment. Nothing in my bill mandates the use of uniform forms, 
rather, the purpose of this provision is to make it easier for 
individuals to make their own choices and determination regarding their 
treatment during this vulnerable and highly personal time. Studies have 
also found that improved access to living wills and advanced directives 
will lead to substantial dollar savings. According to a 1978 study by 
the Health Care Financing Administration, about 30 percent of 
expenditures for people who died were spent in the last 30 days of life 
and constituted 8 percent of total Medicare expenditures that year. 
Approximately 27 percent of Medicare expenditures are made in the final 
days of life, and conservatively estimating that approximately 10 
percent of such expenditures are unwanted, we could save nearly $4 
billion per year. I believe that such savings could be greater. A 
recent study by researchers at Thomas Jefferson University Medical 
College in Philadelphia also concluded the notion that greater use of 
advanced directives have potential for enormous cost savings. This 
study also cited research which found that about 90 percent of the 
American population expresses interest in participating in advance 
directives discussion although 
[[Page S194]] only 8 to 15 percent of
 adults have prepared a living will. Provisions in my bill would 
provide information on individuals' rights regarding living wills and 
advanced directives and would make it clearer for people to have their 
rights known and honored.

  Title IV provides incentives to improve the supply of generalist 
physicians and would increase the utilization of non-physician 
providers like nurse practitioners, clinical nurse specialists and 
physician assistants through direct reimbursement under the Medicare 
and Medicaid programs. These provisions I believe will also yield 
substantial savings. A study of the Canadian health system utilizing 
nurse practitioners projected a 10 to 15 percent savings for all 
medical costs--or $300 million to $450 million. While our system is 
dramatically different from Canada's, it may not be unreasonable to 
project a 5 percent--or $41.5 billion--savings from the increase in the 
number of primary care providers in our system. Again, experience will 
raise or lower this projection. Assuming this savings, though, it seems 
reasonable, based on an average expenditure for health care of $3,299 
per person in 1993, that we could cover over 10 million more uninsured 
persons.
  Outcomes research is another area where we can achieve considerable 
health care savings in the long run and improve the quality of care. 
According to the former editor-in-chief of the New England Journal of 
Medicine, Dr. Marcia Angell, 20 to 30 percent of health care procedures 
are either inappropriate, ineffective or unnecessary. If the 
implementation of medical practice guidelines eliminates 10 to 20 
percent of these costs, savings between $8 and $16 billion can be 
realized annually. To achieve this we must, as Dr. C. Everett Koop, 
former Surgeon General of the United States says, have a well funded 
program for outcomes research. Title V would accomplish this by 
imposing a one-tenth of 1 cent surcharge on all health insurance 
premiums. Based on the Congressional Budget Office's estimate that in 
1993 private health insurance premiums totalled $315 billion, this 
surcharge would result in a $315 million outcomes research fund--
compared to the approximately $81 million appropriated for fiscal year 
1995.
  Title V also includes provisions to reduce the administrative costs 
incurred by our health care system. Estimates for administrative costs 
range as high a 25 cents per dollar spent on health care, or over $225 
billion annually. A reasonable expectation is that we can reduce 
administrative costs by 25 percent through such reforms. This would 
yield savings of $55 billion over the next 5 years. While the 
development of a national electronic claims system to handle the 
billions of dollars in claims is complex and will take time to 
implement fully, I believe it is essential for operating a more 
efficient health care system and achieving the savings necessary to 
provide insurance for the remaining uninsured Americans.
  Title V also includes a provision to improve consumer access to 
health care information. True cost containment and competition cannot 
occur it purchasers of health care do not have the information 
available to them to compare cost and quality.
  Title V authorizes the Secretary of Health and Human Services to 
award grants to States to establish or improve a health care data 
information system. Currently, there are 39 States that have a mandate 
to establish such a system, and 20 States are in various stages of 
implementation. In my own State, the Pennsylvania Health Care Cost 
Containment Council has received national recognition for the work it 
has done in providing important information regarding health care costs 
and quality. Consumers, businesses, labor, insurance companies, health 
maintenance organizations, and hospitals have utilized this 
information. For example, hospitals have used information provided by 
the Pennsylvania's Cost Containment Council to become more competitive 
in the marketplace; businesses and labor have used this data to lower 
their health care expenditures; health plans have used this information 
when contracting with providers; and consumers have used this 
information to compare costs and outcomes of health care providers and 
procedures.
  States have not yet produced any figures on statewide savings as a 
result of implementing health information systems, however, there are 
many examples of savings from users of these systems all across the 
country. In Pennsylvania, for example, Accutrex, a mid-size company 
that is part of an alliance of businesses in southwest Pennsylvania, 
reported a savings of $1 million over a 6-month period by using 
information produced by the Pennsylvania Cost Containment Council.
  There are many other examples of savings such as this, and I believe 
that if such systems where in place in every State, the savings could 
be substantial.
  Title VI addresses the issue of home nursing care. The costs of such 
care to those requiring it are exorbitant. Title VI proposes, among 
other things, a tax credit for premiums paid to purchase private long-
term care insurance and tax deductions to offset long-term care 
expenses and proposes home and community-based care benefits as less 
costly alternatives to institutional care. The Joint Tax Committee 
estimates that the cost to the Treasury of this proposal is 
approximately $20 billion. Other tax incentives and reforms to make 
long term care insurance more affordable are: (1) allowing employees to 
select long-term care insurance as part of a cafeteria plan and 
allowing employers to deduct this expense; (2) excluding life insurance 
savings used to pay for long term care from income tax; and (3) setting 
standards for long term care insurance that reduce the bias that favors 
institutional care over community and home-based alternatives.
  While precision is again impossible, it is a reasonable projection 
that we could achieve under my proposal a net savings of approximately 
$174.9 million. I arrive at this sum by totaling the projected savings 
of $214 billion over 5 years--$45 billion in small employer market 
reforms coupled with employer purchasing groups; $12.5 billion for 
preventive health services; $20 billion for reducing unwanted care; 
$41.5 billion from increasing primary care providers; $40 billion 
through outcomes research; and $55 billion through reducing 
administrative costs--and netting against that the projected cost of 
$39.1 billion--$5.2 billion for extending full deductibility of health 
insurance cost to the self employed; $20 billion for long term care; 
and approximately $13.9 billion in funding for primary and preventive 
health care programs and the initiatives that I am proposing.
  Since there are no precise estimates in each one of these areas, 
experience will require modification of these projections, but at least 
it is a beginning. I am prepared to work with other Senators in the 
development of implementing legislation, to press this important area 
of health care reform.


                               Conclusion

  The provisions which I have outlined today contain the framework for 
providing affordable health care for all Americans. I am opposed to 
rationing health care. I do not want rationing for myself, for my 
family, or for America. The question is whether we have essential 
resources--doctors and other health care providers, hospitals, 
pharmaceutical products, et cetera--to provide medical care for all 
Americans. I am confident that we do.
  In my judgment, we should not scrap, but build on our current health 
delivery system. We do not need the overwhelming bureaucracy that 
President Clinton and other Democratic leaders proposed last year to 
accomplish this. I believe we can provide care for the almost 40 
million Americans who are now not covered and reduce health care costs 
for those who are covered within the currently growing $884.2 billion 
in health spending.
  With the savings projected in this bill, I believe it is possible to 
provide access to comprehensive affordable health care for all 
Americans. This bill is a significant first-step in obtaining that 
objective. It is obvious that the total answer to the health care issue 
will not be achieved immediately or easily but the time has come for 
concerted action on this subject.
  I understand that there are several controversial issues presented in 
this bill and I am open to suggestions on possible modifications. I 
urge the Congressional leadership, including the appropriate committee 
chairmen, to move this legislation and other health care bills forward 
promptly.
   [[Page S195]] I ask unanimous consent that a summary and the full 
text of the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 18

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Health 
     Care Assurance Act of 1995''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                TITLE I--HEALTH CARE INSURANCE COVERAGE

                        Subtitle A--Definitions

Sec. 100. Definitions.

  Subtitle B--Increased Availability and Continuity of Health Coverage

   Part 1--Reform of Health Insurance Marketplace for Small Employers


                   Subpart A--Insurance Market Reform

Sec. 111. Requirement for insurers to offer qualified health insurance 
              plans.
Sec. 112. Actuarial equivalence in benefits permitted.
Sec. 113. Establishment of health insurance plan standards.


 Subpart B--Additional Standards for Health Insurance Plans Offered to 
                            Small Employers

Sec. 121. General issuance requirements.
Sec. 122. Rating limitations for community-rated market.
Sec. 123. Rating practices and payment of premiums.


              Subpart C--Small Employer Purchasing Groups

Sec. 131. Qualified small employer purchasing groups.
Sec. 132. Agreements with small employers.
Sec. 133. Enrolling eligible employees, eligible individuals, and 
              certain uninsured individuals in qualified health 
              insurance plans.
Sec. 134. Receipt of premiums.
Sec. 135. Marketing activities.
Sec. 136. Grants to States and qualified small employer purchasing 
              groups.
Sec. 137. Qualified small employer purchasing groups established by a 
              State.

       Part 2--Standards Applicable to All Health Insurance Plans

Sec. 141. Coverage requirements.

      Part 3--Enforcement of Standards for Health Insurance Plans

Sec. 151. Enforcement by excise tax on insurers.

                        Part 4--Effective Dates

Sec. 161. Effective dates.

   Subtitle C--Required Coverage Options for Eligible Employees and 
                     Dependents of Small Employers

Sec. 171. Requiring small employers to offer coverage for eligible 
              individuals.
Sec. 172. Compliance with applicable requirements through multiple 
              employer health arrangements.
Sec. 173. Enforcement by excise tax on small employers.

 Subtitle D--Required Coverage Options for Individuals Insured Through 
                           Association Plans

                  Part 1--Qualified Association Plans

Sec. 181. Treatment of qualified association plans.
Sec. 182. Qualified association plan defined.
Sec. 183. Definitions and special rules.

 Part 2--Special Rule for Church, Multiemployer, and Cooperative Plans

Sec. 191. Special rule for church, multiemployer, and cooperative 
              plans.

                          Part 3--Enforcement

Sec. 1001. Enforcement by excise tax on qualified associations.

            Subtitle E--1-Year Extension of Medicare Select

Sec. 1011. 1-year extension of period for issuance of medicare select 
              policies.

                       Subtitle F--Tax Provisions

Sec. 1021. Deduction for health insurance costs of self-employed 
              individuals.
Sec. 1022. Amendments to COBRA.

             TITLE II--PRIMARY AND PREVENTIVE CARE SERVICES

Sec. 201. Grants to States for healthy start initiatives.
Sec. 202. Reauthorization of certain programs providing primary and 
              preventive care.
Sec. 203. Comprehensive school health education program.
Sec. 204. Comprehensive early childhood health education program.

        TITLE III--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT

Sec. 301. Patient's right to decline medical treatment.

            TITLE IV--PRIMARY AND PREVENTIVE CARE PROVIDERS

Sec. 401. Expanded coverage of certain nonphysician providers under the 
              medicare program.
Sec. 402. Requiring coverage of certain nonphysician providers under 
              the medicaid program.
Sec. 403. Medical student tutorial program grants.
Sec. 404. General medical practice grants.

                       TITLE V--COST CONTAINMENT

Sec. 501. New drug clinical trials program.
Sec. 502. Medical treatment effectiveness.
Sec. 503. National health insurance data and claims system.
Sec. 504. Health care cost containment and quality information program.

                        TITLE VI--LONG-TERM CARE

    Subtitle A--Tax Treatment of Qualified Long-Term Care Insurance 
                         Policies and Services

Sec. 601. Amendment of 1986 Code.
Sec. 602. Qualified long-term care services treated as medical care.
Sec. 603. Definition of qualified long-term care insurance policy.
Sec. 604. Treatment of qualified long-term care insurance as accident 
              and health insurance for purposes of taxation of 
              insurance companies.
Sec. 605. Treatment of accelerated death benefits under life insurance 
              contracts.

  Subtitle B--Tax Incentives for Purchase of Qualified Long-Term Care 
                               Insurance

Sec. 611. Credit for qualified long-term care premiums.
Sec. 612. Exclusion from gross income of benefits received under 
              qualified long-term care insurance policies.
Sec. 613. Employer deduction for contributions made for long-term care 
              insurance.
Sec. 614. Inclusion of qualified long-term care insurance in cafeteria 
              plans.
Sec. 615. Exclusion from gross income for amounts received on 
              cancellation of life insurance policies and used for 
              qualified long-term care insurance policies.
Sec. 616. Use of gain from sale of principal residence for purchase of 
              qualified long-term health care insurance.
                TITLE I--HEALTH CARE INSURANCE COVERAGE
                        Subtitle A--Definitions

     SEC. 100. DEFINITIONS.

       For purposes of this title:
       (1) Dependent.--The term ``dependent'' means, with respect 
     to any individual, any person who is--
       (A) the spouse or surviving spouse of the individual; or
       (B) under regulations of the Secretary, a child (including 
     an adopted child) of such individual and--
       (i) under 19 years of age; or
       (ii) under 25 years of age and a full-time student.
       (2) Eligible employee.--The term ``eligible employee'' 
     means, with respect to an employer, an employee who normally 
     performs on a monthly basis at least 30 hours of service per 
     week for that employer.
       (3) Eligible individual.--The term ``eligible individual'' 
     means, with respect to an eligible employee, such employee, 
     and any dependent of such employee.
       (4) Employer.--The term ``employer'' shall have the meaning 
     given such term in section 3(5) of the Employee Retirement 
     Income Security Act of 1974.
       (5) Group health plan.--The term ``group health plan'' 
     means an employee welfare benefit plan providing medical care 
     (as defined in section 213(d) of the Internal Revenue Code of 
     1986) to participants or beneficiaries directly or through 
     insurance, reimbursement, or otherwise, but does not include 
     any type of coverage excluded from the definition of a health 
     insurance plan under paragraph (6)(B).
       (6) Health insurance plan.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``health insurance plan'' means any hospital or 
     medical service policy or certificate, hospital, or medical 
     service plan contract, or health maintenance organization 
     group contract offered by an insurer.
       (B) Exception.--Such term does not include any of the 
     following:
       (i) Coverage only for accident, dental, vision, disability 
     income, or long-term care insurance, or any combination 
     thereof.
       (ii) Medicare supplemental health insurance.
       (iii) Coverage issued as a supplement to liability 
     insurance.
       (iv) Worker's compensation or similar insurance.
       (v) Automobile medical-payment insurance.
       (vi) Any combination of the insurance described in clauses 
     (i) through (v).
       (7) Health maintenance organization.--The term ``health 
     maintenance organization'' includes an organization 
     recognized under State law as a health maintenance 
     organization or managed care organization or a similar 
     organization regulated under State law for solvency that 
     offers to provide health services on a prepaid, at-risk basis 
     primarily through a defined set of providers.
       (8) Insurer.--The term ``insurer'' means any person that 
     offers a health insurance plan including--
       (A) a licensed insurance company;
       (B) a prepaid hospital or medical service plan;
       (C) a health maintenance organization;
     [[Page S196]]   (D) a self-insurer carrier;
       (E) a reinsurance carrier; and
       (F) a multiple small employer welfare arrangement (a 
     combination of small employers associated for the purpose of 
     providing health insurance plan coverage for their 
     employees).
       (9) NAIC.--The term ``NAIC'' means the National Association 
     of Insurance Commissioners.
       (10) Qualified health insurance plan.--The term ``qualified 
     health insurance plan'' shall have the meaning given such 
     term in section 111(b).
       (11) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (12) Small employer.--The term ``small employer'' means, 
     with respect to a calendar year, an employer that normally 
     employs more than 1 but not more than 50 eligible employees 
     on a typical business day. For the purposes of this 
     paragraph, the term ``employee'' includes a self-employed 
     individual. For purposes of determining if an employer is a 
     small employer, rules similar to the rules of subsection (b) 
     and (c) of section 414 of the Internal Revenue Code of 1986 
     shall apply.
       (13) State.--The term ``State'' means the 50 States, the 
     District of Columbia, Puerto Rico, the Virgin Islands, Guam, 
     and American Samoa.
  Subtitle B--Increased Availability and Continuity of Health Coverage

   PART 1--REFORM OF HEALTH INSURANCE MARKETPLACE FOR SMALL EMPLOYERS

                   Subpart A--Insurance Market Reform

     SEC. 111. REQUIREMENT FOR INSURERS TO OFFER QUALIFIED HEALTH 
                   INSURANCE PLANS.

       (a) Requirement To Offer.--Each insurer that makes 
     available a health insurance plan to a small employer in a 
     State shall make available to each small employer in the 
     State a qualified health insurance plan (as defined in 
     subsection (b)).
       (b) Qualified Health Insurance Plan.--The term ``qualified 
     health insurance plan'' means a health insurance plan 
     (whether a managed-care plan, indemnity plan, or other plan) 
     that is designed to provide standard coverage (consistent 
     with section 112(b)).
       (c) Marketing Requirements.--The requirements of subsection 
     (a) are not met unless the plan described in subsection (a) 
     is made available to small employers using at least the 
     marketing methods and other sales practices which are used in 
     selling other health insurance plans within the same class of 
     business made available by the insurer.

     SEC. 112. ACTUARIAL EQUIVALENCE IN BENEFITS PERMITTED.

       (a) Set of Rules of Actuarial Equivalence.--
       (1) Initial determination.--The NAIC is requested to submit 
     to the Secretary, within 6 months after the date of the 
     enactment of this Act, a set of rules which the NAIC 
     determines is sufficient for determining, in the case of any 
     health insurance plan and for purposes of this section, the 
     actuarial value of the coverage offered by the plan.
       (2) Certification.--If the Secretary determines that the 
     NAIC has submitted a set of rules that comply with the 
     requirements of paragraph (1), the Secretary shall certify 
     such set of rules for use under this subtitle. If the 
     Secretary determines that such a set of rules has not been 
     submitted or does not comply with such requirements, the 
     Secretary shall promptly establish a set of rules that meets 
     such requirements.
       (b) Standard Coverage.--
       (1) In general.--A health insurance plan is considered to 
     provide standard coverage consistent with this subsection if 
     the benefits are determined, in accordance with the set of 
     actuarial equivalence rules certified under subsection (a), 
     to have a value that is within 5 percentage points of the 
     target actuarial value for standard coverage established 
     under paragraph (2).
       (2) Initial determination of target actuarial value for 
     standard coverage.--
       (A) Initial determination.--
       (i) In general.--The NAIC is requested to submit to the 
     Secretary, within 6 months after the date of the enactment of 
     this Act, a target actuarial value for standard coverage 
     equal to the average actuarial value of the coverage 
     described in clause (ii). No specific procedure or treatment, 
     or classes thereof, is required to be considered in such 
     determination by this Act or through regulations. The 
     determination of such value shall be based on a 
     representative distribution of the population of eligible 
     employees offered such coverage and a single set of 
     standardized utilization and cost factors.
       (ii) Coverage described.--The coverage described in this 
     clause is coverage for medically necessary and appropriate 
     services consisting of medical and surgical services, medical 
     equipment, preventive services, and emergency transportation 
     in frontier areas. No specific procedure or treatment, or 
     classes thereof, is required to be covered in such a plan, by 
     this Act or through regulations.
       (B) Certification.--If the Secretary determines that the 
     NAIC has submitted a target actuarial value for standard 
     coverage that complies with the requirements of subparagraph 
     (A), the Secretary shall certify such value for use under 
     this subtitle. If the Secretary determines that a target 
     actuarial value has not been submitted or does not comply 
     with the requirements of subparagraph (A), the Secretary 
     shall promptly determine a target actuarial value that meets 
     such requirements.
       (c) Subsequent Revisions.--
       (1) NAIC.--The NAIC may submit from time to time to the 
     Secretary revisions of the set of rules of actuarial 
     equivalence and target actuarial values previously 
     established or determined under this section if the NAIC 
     determines that revisions are necessary to take into account 
     changes in the relevant types of health benefits provisions 
     or in demographic conditions which form the basis for the set 
     of rules of actuarial equivalence or the target actuarial 
     values. The provisions of subsection (a)(2) shall apply to 
     such a revision in the same manner as they apply to the 
     initial determination of the set of rules.
       (2) Secretary.--The Secretary may by regulation revise the 
     set of rules of actuarial equivalence and target actuarial 
     values from time to time if the Secretary determines such 
     revisions are necessary to take into account changes 
     described in paragraph (1).

     SEC. 113. ESTABLISHMENT OF HEALTH INSURANCE PLAN STANDARDS.

       (a) Establishment of General Standards.--
       (1) Role of naic.--The NAIC is requested to submit to the 
     Secretary, within 9 months after the date of the enactment of 
     this Act, model regulations that specify standards with 
     respect to the requirement, under section 111(a), that 
     insurers make available qualified health insurance plans. If 
     the NAIC develops recommended regulations specifying such 
     standards within such period, the Secretary shall review the 
     standards. Such review shall be completed within 60 days 
     after the date the regulations are developed. Unless the 
     Secretary determines within such period that the standards do 
     not meet the requirement under section 111(a), such standards 
     shall serve as the standards under this section, with such 
     amendments as the Secretary deems necessary.
       (2) Contingency.--If the NAIC does not develop such model 
     regulations within the period described in paragraph (1), or 
     the Secretary determines that such regulations do not specify 
     standards that meet the requirement under section 111(a), the 
     Secretary shall specify, within 15 months after the date of 
     the enactment of this Act, standards to carry out such 
     requirement.
       (3) Effective date.--The standards specified in the model 
     regulations shall apply to health insurance plans in a State 
     on or after the respective date the standards are implemented 
     in the State under subsection (b).
       (4) No preemption of state law.--A State may implement 
     standards for health insurance plans made available to small 
     employers that are more stringent than the requirements under 
     this section, except that a State may not implement standards 
     that prevent the offering by an insurer of at least one 
     health insurance plan that provides standard coverage (as 
     described in section 112(b)).
       (b) Application of Standards Through States.--
       (1) In general.--Each State shall submit to the Secretary, 
     by the deadline specified in paragraph (2), a report on the 
     steps the State is taking to implement and enforce the 
     standards with respect to insurers, and qualified health 
     insurance plans offered, not later than such deadline.
       (2) Deadline for report.--
       (A) 1 year after standards established.--Subject to 
     subparagraph (B), the deadline under this paragraph is 1 year 
     after the date the standards are established under subsection 
     (a).
       (B) Exception for legislation.--In the case of a State 
     which the Secretary identifies, in consultation with the 
     NAIC, as--
       (i) requiring State legislation (other than legislation 
     appropriating funds) in order for insurers and qualified 
     health insurance plans offered to meet the standards 
     established under subsection (a), but
       (ii) having a legislature which is not scheduled to meet in 
     1997 in a legislative session in which such legislation may 
     be considered,
     the date specified in this paragraph is the first day of the 
     first calendar quarter beginning after the close of the first 
     legislative session of the State legislature that begins on 
     or after January 1, 1998. For purposes of the previous 
     sentence, in the case of a State that has a 2-year 
     legislative session, each year of such session shall be 
     deemed to be a separate regular session of the State 
     legislature.
       (3) Federal role.--If the Secretary determines that a State 
     has failed to submit a report by the deadline specified under 
     paragraph (1) or finds that the State has not implemented and 
     provided adequate enforcement of the standards under such 
     paragraph, the Secretary shall notify the State and provide 
     the State a period of 60 days in which to submit the report 
     or to implement and enforce the standards. If, after that 60-
     day period, the Secretary finds that the failure has not been 
     corrected, the Secretary shall provide for the implementation 
     and enforcement of the standards in the State in such a way 
     as the Secretary determines to be appropriate. Such 
     implementation and enforcement shall take effect with respect 
     to insurers and qualified health insurance plans offered or 
     renewed on or after 3 months after the date of the 
     Secretary's finding under the previous sentence and until the 
     date the Secretary finds that such a failure has been 
     corrected.
  [[Page S197]] Subpart B--Additional Standards for Health Insurance 
                    Plans Offered to Small Employers

     SEC. 121. GENERAL ISSUANCE REQUIREMENTS.

       (a) General Rule.--Any insurer offering a health insurance 
     plan to a small employer shall meet the following 
     requirements:
       (1) The guaranteed issue requirements of subsection (b).
       (2) The mandatory registration and disclosure requirements 
     of subsection (c).
       (b) Guaranteed Issue.--
       (1) In general.--The requirements of this subsection are 
     met if the insurer offering a health insurance plan to small 
     employers in the State--
       (A) accepts every small employer in the State that applies 
     for coverage under the plan; and
       (B) accepts for enrollment under the plan every eligible 
     individual who applies for enrollment on a timely basis 
     (consistent with paragraph (3)).
       (2) Special rules for health maintenance organizations.--In 
     the case of a plan offered by a health maintenance 
     organization, the plan may--
       (A) limit the employers that may apply for coverage to 
     those with eligible individuals residing in the service area 
     of the plan;
       (B) limit the individuals who may be enrolled under the 
     plan to those who reside in the service area of the plan; and
       (C) within the service area of the plan, deny coverage to 
     such employers if the plan demonstrates that--
       (i) it will not have the capacity to deliver services 
     adequately to enrollees of any additional groups because of 
     its obligations to existing group contract holders and 
     enrollees; and
       (ii) it is applying this subparagraph uniformly to all 
     employers without regard to the health status, claims 
     experience, or duration of coverage of those employers and 
     their employees.
       (3) Clarification of timely enrollment.--
       (A) General initial enrollment requirement.--Except as 
     provided in this paragraph, a health insurance plan may 
     consider enrollment of an eligible individual not to be 
     timely if the eligible employee or dependent fails to enroll 
     in the plan during an initial enrollment period, if such 
     period is at least 30 days long.
       (B) Enrollment due to loss of previous employer coverage.--
     Enrollment in a health insurance plan is considered to be 
     timely in the case of an eligible individual who--
       (i) was covered under another health insurance plan or 
     group health plan at the time of the individual's initial 
     enrollment period;
       (ii) stated at the time of the initial enrollment period 
     that coverage under a health insurance plan or a group health 
     plan was the reason for declining enrollment;
       (iii) lost coverage under another health insurance plan or 
     group health plan (as a result of the termination of the 
     other plan's coverage, termination or reduction of 
     employment, or other reason); and
       (iv) requests enrollment within 30 days after termination 
     of such coverage.
       (C) Requirement applies during open enrollment periods.--
     Each health insurance plan shall provide for at least one 
     period (of not less than 30 days) each year during which 
     enrollment under the plan shall be considered to be timely.
       (D) Exception for court orders.--Enrollment of a spouse or 
     minor child of an employee shall be considered to be timely 
     if--
       (i) a court has ordered that coverage be provided for the 
     spouse or child under a covered employee's group health plan; 
     and
       (ii) a request for enrollment is made within 30 days after 
     the date the court issues the order.
       (E) Enrollment of spouses and dependents.--
       (i) In general.--Enrollment of the spouse (including a 
     child of the spouse) and any dependent child of an eligible 
     employee shall be considered to be timely if a request for 
     enrollment is made either--

       (I) within 30 days of the date of the marriage or of the 
     date of the birth or adoption of a child, if family coverage 
     is available as of such date; or
       (II) within 30 days of the date family coverage is first 
     made available.

       (ii) Coverage.--If a plan makes family coverage available 
     and enrollment is made under the plan on a timely basis under 
     clause (i)(I), the coverage shall become effective not later 
     than the first day of the first month beginning after the 
     date of the marriage or the date of birth or adoption of the 
     child (as the case may be).
       (4) Financial capacity exception.--Paragraph (1) shall not 
     require any insurer to issue a health insurance plan to the 
     extent that the issuance of such plan would result in such 
     insurer violating the financial solvency standards (if any) 
     established by the State in which such plan is to be issued.
       (5) Delivery capacity exception.--
       (A) In general.--Paragraph (1) shall not prohibit an 
     insurer from ceasing enrollment under a health insurance plan 
     if--
       (i) the insurer ceases to enroll any new small employers 
     under the plan; and
       (ii) the insurer can demonstrate to the Secretary that its 
     provider capacity to serve previously covered groups or 
     individuals (and additional individuals who will be expected 
     to enroll because of affiliation with such previously covered 
     groups or individuals) will be impaired if it is required to 
     enroll other small employers.
       (B) First-come-first-served.--An insurer is only eligible 
     to exercise the exceptions provided for in subparagraph (A) 
     if such insurer provides for enrollment on a first-come-
     first-served basis (except in the case of additional 
     individuals described in subparagraph (A)(ii)).
       (6) Additional exceptions.--Paragraph (1) shall not apply 
     to a failure to issue a health insurance plan to a small 
     employer if--
       (A) such employer is unable to pay the premium for such 
     contract; or
       (B) in the case of a small employer with fewer than 15 
     employees, such employer fails to enroll a minimum percentage 
     of the employer's employees for coverage under such plan, so 
     long as such percentage is enforced uniformly for all small 
     employers of comparable size.
       (7) Exception for alternative state programs.--
       (A) In general.--Paragraph (1) shall not apply if the State 
     in which the health insurance plan is issued--
       (i) has a program which--

       (I) assures the availability of health insurance plans to 
     small employers through the equitable distribution of high 
     risk groups among all insurers offering such contracts to 
     such small employers; and
       (II) is consistent with a model program developed by the 
     NAIC;

       (ii) has a qualified State-run reinsurance program; or
       (iii) has a program which the Secretary has determined 
     assures all small employers in the State an opportunity to 
     purchase a health insurance plan without regard to any risk 
     characteristic.
       (B) Reinsurance program.--
       (i) Program requirements.--For purposes of subparagraph 
     (A)(ii), a State-run reinsurance program is qualified if such 
     program is one of the NAIC reinsurance program models 
     developed under clause (ii) or is a variation of one of such 
     models, as approved by the Secretary.
       (ii) Models.--Not later than 120 days after the date of the 
     enactment of this Act, the NAIC shall develop several models 
     for a reinsurance program, including options for program 
     funding.
       (c) Mandatory Registration Requirements.--The requirements 
     of this subsection are met if the insurer offering health 
     insurance plans to small employers in any State registers 
     with the State commissioner or superintendent of insurance or 
     other State authority responsible for regulation of health 
     insurance.
     SEC. 122. RATING LIMITATIONS FOR COMMUNITY-RATED MARKET.

       (a) Standard Premiums With Respect to Community-Rated 
     Eligible Employees and Eligible Individuals.--
       (1) In general.--Each health insurance plan offered to a 
     small employer shall establish within each community rating 
     area in which the plan is to be offered, a standard premium 
     for enrollment of eligible employees and eligible individuals 
     for the standard coverage (as defined under section 112(b)).
       (2) Establishment of community rating area.--
       (A) In general.--Not later than January 1, 1996, each State 
     shall, in accordance with subparagraph (B), provide for the 
     division of the State into 1 or more community rating areas. 
     The State may revise the boundaries of such areas from time 
     to time consistent with this paragraph.
       (B) Geographic area variations.--For purposes of 
     subparagraph (A), a State--
       (i) may not identify an area that divides a 3-digit zip 
     code, a county, or all portions of a metropolitan statistical 
     area;
       (ii) shall not permit premium rates for coverage offered in 
     a portion of an interstate metropolitan statistical area to 
     vary based on the State in which the coverage is offered; and
       (iii) may, upon agreement with one or more adjacent States, 
     identify multi-State geographic areas consistent with clauses 
     (i) and (ii).
       (3) Eligible individuals.--For purposes of this section, 
     the term ``eligible individuals'' includes certain uninsured 
     individuals (as described in section 133).
       (b) Uniform Premiums Within Community Rating Areas.--
       (1) In general.--Subject to paragraphs (2) and (3), the 
     standard premium for each health insurance plan shall be the 
     same, but shall not include the costs of premium processing 
     and enrollment that may vary depending on whether the method 
     of enrollment is through a qualified small employer 
     purchasing group (established under subpart C), through a 
     small employer, or through a broker.
       (2) Application to enrollees.--
       (A) In general.--The premium charged for coverage in a 
     health insurance plan which covers eligible employees and 
     eligible individuals shall be the product of--
       (i) the standard premium (established under paragraph (1));
       (ii) in the case of enrollment other than individual 
     enrollment, the family adjustment factor specified under 
     subparagraph (B); and
       (iii) the age adjustment factor (specified under 
     subparagraph (C)).
       (B) Family adjustment factor.--
       (i) In general.--The standards established under section 
     113 shall specify family adjustment factors that reflect the 
     relative actuarial costs of benefit packages based on family 
     classes of enrollment (as compared with such costs for 
     individual enrollment).
       (ii) Classes of enrollment.--For purposes of this Act, 
     there are 4 classes of enrollment:
     [[Page S198]]   (I) Coverage only of an individual (referred 
     to in this Act as the ``individual'' enrollment or class of 
     enrollment).
       (II) Coverage of a married couple without children 
     (referred to in this Act as the ``couple-only'' enrollment or 
     class of enrollment).
       (III) Coverage of an individual and one or more children 
     (referred to in this Act as the ``single parent'' enrollment 
     or class of enrollment).
       (IV) Coverage of a married couple and one or more children 
     (referred to in this Act as the ``dual parent'' enrollment or 
     class of enrollment).

       (iii) References to family and couple classes of 
     enrollment.--In this subtitle:

       (I) Family.--The terms ``family enrollment'' and ``family 
     class of enrollment'' refer to enrollment in a class of 
     enrollment described in any subclause of clause (ii) (other 
     than subclause (I)).
       (II) Couple.--The term ``couple class of enrollment'' 
     refers to enrollment in a class of enrollment described in 
     subclause (II) or (IV) of clause (ii).

       (iv) Spouse; married; couple.--

       (I) In general.--In this subtitle, the terms ``spouse'' and 
     ``married'' mean, with respect to an individual, another 
     individual who is the spouse of, or is married to, the 
     individual, as determined under applicable State law.
       (II) Couple.--The term ``couple'' means an individual and 
     the individual's spouse.

       (C) Age adjustment factor.--The Secretary, in consultation 
     with the NAIC, shall specify uniform age categories and 
     maximum rating increments for age adjustment factors that 
     reflect the relative actuarial costs of benefit packages 
     among enrollees. For individuals who have attained age 18 but 
     not age 65, the highest age adjustment factor may not exceed 
     3 times the lowest age adjustment factor.
       (3) Administrative charges.--
       (A) In general.--In accordance with the standards 
     established under section 113, a health insurance plan which 
     covers eligible employees and eligible individuals may add a 
     separately-stated administrative charge which is based on 
     identifiable differences in legitimate administrative costs 
     and which is applied uniformly for individuals enrolling 
     through the same method of enrollment. Nothing in this 
     subparagraph may be construed as preventing a qualified small 
     employer purchasing group from negotiating a unique 
     administrative charge with an insurer for a health insurance 
     plan.
       (B) Enrollment through a qualified small employer 
     purchasing group.--In the case of an administrative charge 
     under subparagraph (A) for enrollment through a qualified 
     small employer purchasing group, such charge may not exceed 
     the lowest charge of such plan for enrollment other than 
     through a qualified small employer purchasing group in such 
     area.
       (c) Treatment of Negotiated Rate as Community Rate.--
     Notwithstanding any other provision of this section, an 
     insurer which negotiates a premium rate (exclusive of any 
     administrative charge described in subsection (b)(3)) with a 
     qualified small employer purchasing group in a community 
     rating area shall charge the same premium rate to all 
     eligible employees and eligible individuals.

     SEC. 123. RATING PRACTICES AND PAYMENT OF PREMIUMS.

       (a) Full Disclosure of Rating Practices.--
       (1) In general.--An insurer shall fully disclose rating 
     practices for such plan to the appropriate certifying 
     authority (as determined under section 121(c)).
       (2) Notice on expiration.--An insurer shall provide for 
     notice of the terms for renewal of a health insurance plan at 
     the time of the offering of the plan and at least 90 days 
     before the date of expiration of the plan.
       (3) Actuarial certification.--Each insurer shall file 
     annually with the appropriate certifying authority a written 
     statement by a member of the American Academy of Actuaries 
     (or other individual acceptable to such authority) who is not 
     an employee of the insurer certifying that, based upon an 
     examination by the individual which includes a review of the 
     appropriate records and of the actuarial assumptions of such 
     insurer and methods used by the insurer in establishing 
     premium rates and administrative charges for health insurance 
     plans--
       (A) such insurer is in compliance with the applicable 
     provisions of this subtitle; and
       (B) the rating methods are actuarially sound.
     Each insurer shall retain a copy of such statement at its 
     principal place of business for examination by any 
     individual.
       (b) Payment of Premiums.--
       (1) In general.--With respect to a new enrollee in a health 
     insurance plan, the plan may require advanced payment of an 
     amount equal to the monthly applicable premium for the plan 
     at the time such individual is enrolled.
       (2) Notification of failure to receive premium.--If a 
     health insurance plan fails to receive payment on a premium 
     due with respect to an eligible employee or eligible 
     individual covered under the plan, the plan shall provide 
     notice of such failure to the employee or individual within 
     the 20-day period after the date on which such premium 
     payment was due. A plan may not terminate the enrollment of 
     an eligible employee or eligible individual unless such 
     employee or individual has been notified of any overdue 
     premiums and has been provided a reasonable opportunity to 
     respond to such notice.

              Subpart C--Small Employer Purchasing Groups

     SEC. 131. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.

       (a) Qualified Small Employer Purchasing Groups Described.--
       (1) In general.--A qualified small employer purchasing 
     group is an entity that--
       (A) is a nonprofit entity certified under State law;
       (B) has a membership consisting solely of small employers;
       (C) is administered solely under the authority and control 
     of its member employers;
       (D) with respect to each State in which its members are 
     located, consists of not fewer than the number of small 
     employers established by the State as appropriate for such a 
     group;
       (E) offers a program under which qualified health insurance 
     plans are offered to eligible employees and eligible 
     individuals through its member employers and to certain 
     uninsured individuals in accordance with section 122; and
       (F) an insurer, agent, broker, or any other individual or 
     entity engaged in the sale of insurance--
       (i) does not form or underwrite; and
       (ii) does not hold or control any right to vote with 
     respect to.
       (2) State certification.--A qualified small employer 
     purchasing group formed under this section shall submit an 
     application to the State for certification. The State shall 
     determine whether to issue a certification and otherwise 
     ensure compliance with the requirements of this Act.
       (3) Special rule.--Notwithstanding paragraph (1)(B), an 
     employer member of a small employer purchasing group that has 
     been certified by the State as meeting the requirements of 
     paragraph (1) may retain its membership in the group if the 
     number of employees of the employer increases such that the 
     employer is no longer a small employer.
       (b) Board of Directors.--Each qualified small employer 
     purchasing group established under this section shall be 
     governed by a board of directors or have active input from an 
     advisory board consisting of individuals and businesses 
     participating in the group.
       (c) Domiciliary State.--For purposes of this section, a 
     qualified small employer purchasing group operating in more 
     than one State shall be certified by the State in which the 
     group is domiciled.
       (d) Membership.--
       (1) In general.--A qualified small employer purchasing 
     group shall accept all small employers and certain uninsured 
     individuals residing within the area served by the group as 
     members if such employers or individuals request such 
     membership.
       (2) Voting.--Members of a qualified small employer 
     purchasing group shall have voting rights consistent with the 
     rules established by the State.
       (e) Duties of Qualified Small Employer Purchasing Groups.--
     Each qualified small employer purchasing group shall--
       (1) enter into agreements with insurers offering qualified 
     health insurance plans;
       (2) enter into agreements with small employers under 
     section 132;
       (3) enroll only eligible employees, eligible individuals, 
     and certain uninsured individuals in qualified health 
     insurance plans, in accordance with section 133;
       (4) provide enrollee information to the State;
       (5) meet the marketing requirements under section 135; and
       (6) carry out other functions provided for under this Act.
       (f) Limitation on Activities.--A qualified small employer 
     purchasing group shall not--
       (1) perform any activity involving approval or enforcement 
     of payment rates for providers;
       (2) perform any activity (other than the reporting of 
     noncompliance) relating to compliance of qualified health 
     insurance plans with the requirements of this Act;
       (3) assume financial risk in relation to any such health 
     plan; or
       (4) perform other activities identified by the State as 
     being inconsistent with the performance of its duties under 
     this Act.
       (g) Rules of Construction.--
       (1) Establishment not required.--Nothing in this section 
     shall be construed as requiring--
       (A) that a State organize, operate or otherwise establish a 
     qualified small employer purchasing group, or otherwise 
     require the establishment of purchasing groups; and
       (B) that there be only one qualified small employer 
     purchasing group established with respect to a community 
     rating area.
       (2) Single organization serving multiple areas and 
     states.--Nothing in this section shall be construed as 
     preventing a single entity from being a qualified small 
     employer purchasing group in more than one community rating 
     area or in more than one State.
       (3) Voluntary participation.--Nothing in this section shall 
     be construed as requiring any individual or small employer to 
     purchase a qualified health insurance plan exclusively 
     through a qualified small employer purchasing group.

     SEC. 132. AGREEMENTS WITH SMALL EMPLOYERS.

       (a) In General.--A qualified small employer purchasing 
     group shall offer to enter into an agreement under this 
     section with each small employer that employs eligible 
     employees in the area served by the group.
       (b) Payroll Deduction.--
     [[Page S199]]   (1) In general.--Under an agreement under 
     this section between a small employer and a qualified small 
     employer purchasing group, the small employer shall deduct 
     premiums from an eligible employee's wages.
       (2) Additional premiums.--If the amount withheld under 
     paragraph (1) is not sufficient to cover the entire cost of 
     the premiums, the eligible employee shall be responsible for 
     paying directly to the qualified small employer purchasing 
     group the difference between the amount of such premiums and 
     the amount withheld.

     SEC. 133. ENROLLING ELIGIBLE EMPLOYEES, ELIGIBLE INDIVIDUALS, 
                   AND CERTAIN UNINSURED INDIVIDUALS IN QUALIFIED 
                   HEALTH INSURANCE PLANS.

       (a) In General.--Each qualified small employer purchasing 
     group shall offer--
       (1) eligible employees,
       (2) eligible individuals, and
       (3) certain uninsured individuals,
     the opportunity to enroll in any qualified health insurance 
     plan which has an agreement with the qualified small employer 
     purchasing group for the community rating area in which such 
     employees and individuals reside.
       (b) Uninsured individuals.--For purposes of this section, 
     an individual is described in subsection (a)(3) if such 
     individual is an uninsured individual who is not an eligible 
     employee of a small employer that is a member of a qualified 
     small employer purchasing group or a dependent of such 
     individual.

     SEC. 134. RECEIPT OF PREMIUMS.

       (a) Enrollment Charge.--The amount charged by a qualified 
     small employer purchasing group for coverage under a 
     qualified health insurance plan shall be equal to the sum 
     of--
       (1) the premium rate offered by such health plan;
       (2) the administrative charge for such health plan; and
       (3) the purchasing group administrative charge for 
     enrollment of eligible employees, eligible individuals and 
     certain uninsured individuals through the group.
       (b) Disclosure of Premium Rates and Administrative 
     Charges.--Each qualified small employer purchasing group 
     shall, prior to the time of enrollment, disclose to enrollees 
     and other interested parties the premium rate for a qualified 
     health insurance plan, the administrative charge for such 
     plan, and the administrative charge of the group, separately.

     SEC. 135. MARKETING ACTIVITIES.

       Each qualified small employer purchasing group shall market 
     qualified health insurance plans to members through the 
     entire community rating area served by the purchasing group.

     SEC. 136. GRANTS TO STATES AND QUALIFIED SMALL EMPLOYER 
                   PURCHASING GROUPS.

       (a) In General.--The Secretary shall award grants to States 
     and small employer purchasing groups to assist such States 
     and groups in planning, developing, and operating qualified 
     small employer purchasing groups.
       (b) Application Requirements.--To be eligible to receive a 
     grant under this section, a State or small employer 
     purchasing group shall prepare and submit to the Secretary an 
     application in such form, at such time, and containing such 
     information, certifications, and assurances as the Secretary 
     shall reasonably require.
       (c) Use of Funds.--Amounts awarded under this section may 
     be used to finance the costs associated with planning, 
     developing, and operating a qualified small employer 
     purchasing group. Such costs may include the costs associated 
     with--
       (1) engaging in education and outreach efforts to inform 
     small employers, insurers, and the public about the small 
     employer purchasing group;
       (2) soliciting bids and negotiating with insurers to make 
     available health care benefit plans;
       (3) preparing the documentation required to receive 
     certification by the Secretary as a qualified small employer 
     purchasing group; and
       (4) such other activities determined appropriate by the 
     Secretary.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated for awarding grants under this subsection 
     such sums as may be necessary.

     SEC. 137. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS 
                   ESTABLISHED BY A STATE.

       A State may establish a system in all or part of the State 
     under which qualified small employer purchasing groups are 
     the sole mechanism through which health care coverage for the 
     eligible employees of small employers shall be purchased or 
     provided.

       PART 2--STANDARDS APPLICABLE TO ALL HEALTH INSURANCE PLANS

     SEC. 141. COVERAGE REQUIREMENTS.

       (a) General Rule.--Any insurer offering a health insurance 
     plan shall meet the coverage requirements of subsection (b).
       (b) Coverage Requirements.--
       (1) In general.--The requirements of this subsection are 
     met with respect to any health insurance plan if, under the 
     terms and operation of the plan, the following requirements 
     are met:
       (A) Guaranteed eligibility.--No individual (and any 
     dependent of the individual eligible for coverage) may be 
     denied, limited, conditioned, or excluded from coverage under 
     (or benefits of) the plan for any reason, including health 
     status, medical condition, claims experience, receipt of 
     health care, medical history, anticipated need for health 
     care expenses, disability, or lack of evidence of 
     insurability, of the individual.
       (B) Limitations on coverage of preexisting conditions.--Any 
     limitation under the plan on any preexisting condition--
       (i) may not extend beyond the 6-month period beginning with 
     the date an insured is first covered by the plan;
       (ii) may only apply to preexisting conditions which 
     manifested themselves, or for which medical care or advice 
     was sought or recommended, during the 3-month period 
     preceding the date an insured is first covered by the plan;
       (iii) may not extend to an individual who, as of the date 
     of birth, was covered under the plan; and
       (iv) may not relate to pregnancy.
       (C) Guaranteed renewability.--
       (i) In general.--The plan must be renewed at the election 
     of the insured unless the plan is terminated for cause.
       (ii) Cause.--For purposes of this subparagraph, the term 
     ``cause'' means--

       (I) nonpayment of the required premiums;
       (II) fraud or misrepresentation of the insured or their 
     representatives;
       (III) noncompliance with the plan's minimum participation 
     requirements;
       (IV) noncompliance with the plan's employer contribution 
     requirements; or
       (V) repeated misuse of a provider network provision in the 
     plan.

       (2) Waiting periods.--Paragraph (1)(A) shall not apply to 
     any period an employee is excluded from coverage under the 
     plan solely by reason of a requirement applicable to all 
     employees that a minimum period of service with the employer 
     is required before the employee is eligible for such 
     coverage.
       (3) Determination of periods for rules relating to 
     preexisting conditions.--For purposes of paragraph (1)(B), 
     the date on which an insured is first covered by a plan shall 
     be the earlier of--
       (A) the date on which coverage under such plan begins; or
       (B) the first day of any continuous period--
       (i) during which the insured was covered under one or more 
     other health insurance arrangements; and
       (ii) in the case of an employee, which does not end more 
     than 120 days before the date employment with the employer 
     begins.
       (4) Cessation of business.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, an insurer shall not be treated as failing to meet 
     the requirements of paragraph (1)(C) if such insurer 
     terminates the class of business which includes the health 
     insurance plan.
       (B) Notice requirement.--Subparagraph (A) shall apply only 
     if the insurer gives notice of the decision to terminate at 
     least 90 days before the expiration of the plan.
       (C) 5-year moratorium.--If, within 5 years of the year in 
     which an insurer terminates a class of business under 
     subparagraph (A), such insurer establishes a new class of 
     business, the issuance of plans in that year shall be treated 
     as a failure to which this section applies.
       (D) Transfers.--If, upon a failure to renew a plan to which 
     subparagraph (A) applies, an insurer offers to transfer such 
     plan to another class of business, such transfer must be made 
     without regard to risk characteristics.
       (5) Class of business.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``class of business'' means, with respect to health 
     care insurance provided to persons, all health care insurance 
     provided to such persons.
       (B) Establishment of groupings.--
       (i) In general.--An issuer may establish separate classes 
     of business with respect to health care insurance provided to 
     all persons but only if such classes are based on one or more 
     of the following:
       (I) Business marketed and sold through insurers not 
     participating in the marketing and sale of such insurance to 
     other persons.
       (II) Business acquired from other insurers as a distinct 
     grouping.
       (III) Business provided through an association of not less 
     than 20 small employers which was established for purposes 
     other than obtaining insurance.
       (IV) Business related to managed care plans.
       (V) Any other business which the Secretary determines needs 
     to be separately grouped to prevent a substantial threat to 
     the solvency of the insurer.

       (ii) Exception allowed.--Except as provided in subparagraph 
     (C), an insurer may not establish more than one distinct 
     group of persons for each category specified in clause (i).
       (C) Special rule.--An insurer may establish up to 2 groups 
     under each category in subparagraph (A) or (B) to account for 
     differences in characteristics (other than differences in 
     plan benefits) of health insurance plans that are expected to 
     produce substantial variation in health care costs.

      PART 3--ENFORCEMENT OF STANDARDS FOR HEALTH INSURANCE PLANS

     SEC. 151. ENFORCEMENT BY EXCISE TAX ON INSURERS.

       (a) In General.--Chapter 43 of the Internal Revenue Code of 
     1986 (relating to qualified pension, etc., plans) is amended 
     by adding at the end the following new section:
     [[Page S200]] ``SEC. 4980C. FAILURE OF INSURER TO COMPLY WITH 
                   CERTAIN STANDARDS FOR HEALTH INSURANCE PLANS.

       ``(a) Imposition of Tax.--
       ``(1) In general.--There is hereby imposed a tax on the 
     failure of an insurer to comply with the requirements 
     applicable to such insurer under parts 1 and 2 of subtitle B 
     of title I of the Health Care Assurance Act of 1995.
       ``(2) Exception.--Paragraph (1) shall not apply to a 
     failure by an insurer in a State if the Secretary of Health 
     and Human Services determines that the State has in effect a 
     regulatory enforcement mechanism that provides adequate 
     sanctions with respect to such a failure by such an insurer.
       ``(b) Amount of Tax.--
       ``(1)  In general.--Subject to paragraph (2), the amount of 
     the tax imposed by subsection (a) shall be $100 for each day 
     during which such failure persists for each person to which 
     such failure relates. A rule similar to the rule of section 
     4980B(b)(3) shall apply for purposes of this section.
       ``(2) Limitation.--The amount of the tax imposed by 
     subsection (a) for an insurer with respect to a health 
     insurance plan shall not exceed 25 percent of the amounts 
     received under the plan for coverage during the period such 
     failure persists.
       ``(c) Liability for Tax.--The tax imposed by this section 
     shall be paid by the insurer.
       ``(d) Limitations on Amount of Tax.--
       ``(1) Tax not to apply to failures corrected within 30 
     days.--No tax shall be imposed by subsection (a) on any 
     failure if--
       ``(A) such failure was due to reasonable cause and not to 
     willful neglect, and
       ``(B) such failure is corrected during the 30-day period 
     (or such period as the Secretary may determine appropriate) 
     beginning on the first date the insurer knows, or exercising 
     reasonable diligence could have known, that such failure 
     existed.
       ``(2) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive relative to the failure involved.
       ``(e) Definitions.--For purposes of this section, the terms 
     `health insurance plan' and `insurer' have the meanings given 
     such terms in section 100 of the Health Care Assurance Act of 
     1995.''.
       (b) Clerical Amendment.--The table of sections for such 
     chapter 43 is amended by adding at the end the following new 
     item:

``Sec. 4980C. Failure of insurer to comply with certain standards for 
              health insurance plans.''.
                        PART 4--EFFECTIVE DATES

     SEC. 161. EFFECTIVE DATES.

       (a) In General.--Except as provided in this subtitle, the 
     provisions of this subtitle are effective on the date of the 
     enactment of this Act.
       (b) Exception.--The provisions of section 121(b) shall 
     apply to contracts which are issued, or renewed, after the 
     date which is 18 months after the date of the enactment of 
     this Act.
   Subtitle C--Required Coverage Options for Eligible Employees and 
                     Dependents of Small Employers

     SEC. 171. REQUIRING SMALL EMPLOYERS TO OFFER COVERAGE FOR 
                   ELIGIBLE INDIVIDUALS.

       (a) Requirement To Offer.--Each small employer shall make 
     available with respect to each eligible employee a group 
     health plan under which--
       (1) coverage of each eligible individual with respect to 
     such an eligible employee may be elected on an annual basis 
     for each plan year;
       (2) coverage is provided for at least the standard coverage 
     specified in section 112(b); and
       (3) each eligible employee electing such coverage may elect 
     to have any premiums owed by the employee collected through 
     payroll deduction.
       (b) No Employer Contribution Required.--An employer is not 
     required under subsection (a) to make any contribution to the 
     cost of coverage under a group health plan described in such 
     subsection.
       (c) Special Rules.--
       (1) Exclusion of new employers and certain very small 
     employers.--Subsection (a) shall not apply to any small 
     employer for any plan year if, as of the beginning of such 
     plan year--
       (A) such employer (including any predecessor thereof) has 
     been an employer for less than 2 years;
       (B) such employer has no more than 2 eligible employees; or
       (C) no more than 2 eligible employees are not covered under 
     any group health plan.
       (2) Exclusion of family members.--Under such procedures as 
     the Secretary may prescribe, any relative of a small employer 
     may be, at the election of the employer, excluded from 
     consideration as an eligible employee for purposes of 
     applying the requirements of subsection (a). In the case of a 
     small employer that is not an individual, an employee who is 
     a relative of a key employee (as defined in section 416(i)(1) 
     of the Internal Revenue Code of 1986) of the employer may, at 
     the election of the key employee, be considered a relative 
     excludable under this paragraph.
       (3) Optional application of waiting period.--A group health 
     plan shall not be treated as failing to meet the requirements 
     of subsection (a) solely because a period of service by an 
     eligible employee of not more than 60 days is required under 
     the plan for coverage under the plan of eligible individuals 
     with respect to such employee.
       (d) Construction.--Nothing in this section shall be 
     construed as limiting the group health plans, or types of 
     coverage under such a plan, that an employer may offer to an 
     employee.

     SEC. 172. COMPLIANCE WITH APPLICABLE REQUIREMENTS THROUGH 
                   MULTIPLE EMPLOYER HEALTH ARRANGEMENTS.

       (a) In General.--In any case in which an eligible employee 
     is, for any plan year, a participant in a group health plan 
     which is a multiemployer plan, the requirements of section 
     171(a) shall be deemed to be met with respect to such 
     employee for such plan year if the employer requirements of 
     subsection (b) are met with respect to the eligible employee, 
     irrespective of whether, or to what extent, the employer 
     makes employer contributions on behalf of the eligible 
     employee.
       (b) Employer Requirements.--The employer requirements of 
     this subsection are met under a plan with respect to an 
     eligible employee if--
       (1) the employee is eligible under the plan to elect 
     coverage on an annual basis and is provided a reasonable 
     opportunity to make the election in such form and manner and 
     at such times as are provided by the plan;
       (2) coverage is provided for at least the standard coverage 
     specified in section 112(b);
       (3) the employer facilitates collection of any employee 
     contributions under the plan and permits the employee to 
     elect to have employee contributions under the plan collected 
     through payroll deduction; and
       (4) in the case of a plan to which part 1 of subtitle B of 
     title I of the Employee Retirement Income Security Act of 
     1974 does not otherwise apply, the employer provides to the 
     employee a summary plan description described in section 
     102(a)(1) of such Act in the form and manner and at such 
     times as are required under such part 1 with respect to 
     employee welfare benefit plans.

     SEC. 173. ENFORCEMENT BY EXCISE TAX ON SMALL EMPLOYERS.

       (a) In General.--Chapter 47 of the Internal Revenue Code of 
     1986 (relating to excise taxes on certain group health plans) 
     is amended by inserting after section 5000 the following new 
     section:

     ``SEC. 5000A. SMALL EMPLOYER REQUIREMENTS.

       ``(a) General Rule.--There is hereby imposed a tax on the 
     failure of any small employer to comply with the requirements 
     of subtitle C of title I of the Health Care Assurance Act of 
     1995.
       ``(b) Amount of Tax.--The amount of tax imposed by 
     subsection (a) shall be equal to $100 for each day for each 
     individual for which such a failure occurs.
       ``(c) Limitation on Tax.--
       ``(1) Tax not to apply where failures corrected within 30 
     days.--No tax shall be imposed by subsection (a) with respect 
     to any failure if--
       ``(A) such failure was due to reasonable cause and not to 
     willful neglect, and
       ``(B) such failure is corrected during the 30-day period 
     (or such period as the Secretary may determine appropriate) 
     beginning on the 1st date any of the individuals on whom the 
     tax is imposed knew, or exercising reasonable diligence would 
     have known, that such failure existed.
       ``(2) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive relative to the failure involved.''.
       (b) Clerical Amendment.--The table of sections for such 
     chapter 47 is amended by adding at the end the following new 
     item:

``Sec. 5000A. Small employer requirements.''.
 Subtitle D--Required Coverage Options for Individuals Insured Through 
                           Association Plans

                  PART 1--QUALIFIED ASSOCIATION PLANS

     SEC. 181. TREATMENT OF QUALIFIED ASSOCIATION PLANS.

       (a) General Rule.--For purposes of this subtitle, in the 
     case of a qualified association plan--
       (1) except as otherwise provided in this part, the plan 
     shall meet all applicable requirements of subpart A of part 1 
     and part 2 of subtitle B and subtitle C for group health 
     plans offered to and by small employers;
       (2) if such plan is certified as meeting such requirements 
     and the requirements of this part, such plan shall be treated 
     as a plan established and maintained by a small employer, and 
     individuals enrolled in such plan shall be treated as 
     eligible employees; and
       (3) any individual who is a member of the association not 
     enrolling in the plan shall not be treated as an eligible 
     employee solely by reason of membership in such association.
       (b) Election To Be Treated as Purchasing Cooperative.--
     Subsection (a) shall not apply to a qualified association 
     plan if--
       (1) the health plan sponsor makes an irrevocable election 
     to be treated as a qualified small employer purchasing group 
     for purposes of subpart C of subtitle B; and
       (2) such sponsor meets all requirements of this title 
     applicable to a purchasing cooperative.

     SEC. 182. QUALIFIED ASSOCIATION PLAN DEFINED.

       (a) General Rule.--For purposes of this part, a plan is a 
     qualified association plan if the plan is a multiple employer 
     welfare arrangement or similar arrangement--
     [[Page S201]]   (1) which is maintained by a qualified 
     association;
       (2) which has at least 500 participants in the United 
     States;
       (3) under which the benefits provided consist solely of 
     medical care (as defined in section 213(d) of the Internal 
     Revenue Code of 1986);
       (4) which may not condition participation in the plan, or 
     terminate coverage under the plan, on the basis of the health 
     status or health claims experience of any employee or member 
     or dependent of either;
       (5) which provides for bonding, in accordance with 
     regulations providing rules similar to the rules under 
     section 412 of the Employee Retirement Income Security Act of 
     1974, of all persons operating or administering the plan or 
     involved in the financial affairs of the plan; and
       (6) which notifies each participant or provider that it is 
     certified as meeting the requirements of this subtitle 
     applicable to it.
       (b) Self-Insured Plans.--In the case of a plan which is not 
     fully insured (within the meaning of section 514(b)(6)(D) of 
     the Employee Retirement Income Security Act of 1974), the 
     plan shall be treated as a qualified association plan only 
     if--
       (1) the plan meets minimum financial solvency and cash 
     reserve requirements for claims which are established by the 
     Secretary of Labor and which shall be in lieu of any other 
     such requirements under this subtitle;
       (2) the plan provides an annual funding report (certified 
     by an independent actuary) and annual financial statements to 
     the Secretary of Labor and other interested parties; and
       (3) the plan appoints a plan sponsor who is responsible for 
     operating the plan and ensuring compliance with applicable 
     Federal and State laws.
       (c) Certification.--
       (1) In general.--A plan shall not be treated as a qualified 
     association plan for any period unless there is in effect a 
     certification by the Secretary of Labor that the plan meets 
     the requirements of this part. For purposes of this subtitle, 
     the Secretary of Labor shall be the appropriate certifying 
     authority with respect to the plan.
       (2) Fee.--The Secretary of Labor shall require a $5,000 fee 
     for the original certification under paragraph (1) and may 
     charge a reasonable annual fee to cover the costs of 
     processing and reviewing the annual statements of the plan.
       (3) Expedited procedures.--The Secretary of Labor may by 
     regulation provide for expedited registration, certification, 
     and comment procedures.
       (4) Agreements.--The Secretary of Labor may enter into 
     agreements with the States to carry out the Secretary's 
     responsibilities under this part.
       (d) Availability.--Notwithstanding any other provision of 
     this subtitle, a qualified association plan may limit 
     coverage to individuals who are members of the qualified 
     association establishing or maintaining the plan, an employee 
     of such member, or a dependent of either.
       (e) Special Rules for Existing Plans.--In the case of a 
     plan in existence on January 1, 1995--
       (1) the requirements of subsection (a) (other than 
     paragraph (4), (5), and (6) thereof) shall not apply;
       (2) no original certification shall be required under this 
     part; and
       (3) no annual report or funding statement shall be required 
     before January 1, 1997, but the plan shall file with the 
     Secretary of Labor a description of the plan and the name of 
     the plan sponsor.

     SEC. 183. DEFINITIONS AND SPECIAL RULES.

       (a) Qualified Association.--For purposes of this part, the 
     term ``qualified association'' means any organization which--
       (1) is organized and maintained in good faith by a trade 
     association, an industry association, a professional 
     association, a chamber of commerce, a religious organization, 
     a public entity association, or other business association 
     serving a common or similar industry;
       (2) is organized and maintained for substantial purposes 
     other than to provide a health plan;
       (3) has a constitution, bylaws, or other similar governing 
     document which states its purpose; and
       (4) receives a substantial portion of its financial support 
     from its active, affiliated, or federation members.
       (b) Multiple Employer Welfare Arrangement.--For purposes of 
     this subchapter, the term ``multiple employer welfare 
     arrangement'' has the meaning given such term by section 
     3(40) of the Employee Retirement Income Security Act of 1974.
       (c) Coordination With Part 2.--The term ``qualified 
     association plan'' shall not include a plan to which part 2 
     applies.
 PART 2--SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND COOPERATIVE PLANS

     SEC. 191. SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND 
                   COOPERATIVE PLANS.

       (a) General Rule.--For purposes of this subtitle, in the 
     case of a group health plan to which this section applies--
       (1) except as otherwise provided in this part, the plan 
     shall be required to meet all applicable requirements of 
     subpart A of part 1 and part 2 of subtitle B and subtitle C 
     for group health plans offered to and by small employers;
       (2) if such plan is certified as meeting such requirements, 
     such plan shall be treated as a plan established and 
     maintained by a small employer and individuals enrolled in 
     such plan shall be treated as eligible employees; and
       (3) any individual eligible to enroll in the plan who does 
     not enroll in the plan shall not be treated as an eligible 
     employee solely by reason of being eligible to enroll in the 
     plan.
       (b) Modified Standards.--
       (1) Certifying authority.--For purposes of this subtitle, 
     the Secretary of Labor shall be the appropriate certifying 
     authority with respect to a plan to which this section 
     applies.
       (2) Availability.--Rules similar to the rules of subsection 
     (e) of section 182 shall apply to a plan to which this 
     section applies.
       (3) Access.--An employer which, pursuant to a collective 
     bargaining agreement, offers an employee the opportunity to 
     enroll in a plan described in subsection (c)(2) shall not be 
     required to make any other plan available to the employee.
       (4) Treatment under state laws.--A church plan described in 
     subsection (c)(1) which is certified as meeting the 
     requirements of this section shall not be deemed to be a 
     multiple employer welfare arrangement or an insurance company 
     or other insurer, or to be engaged in the business of 
     insurance, for purposes of any State law purporting to 
     regulate insurance companies or insurance contracts.
       (c) Plans to Which Section Applies.--This section shall 
     apply to a health plan which--
       (1) is a church plan (as defined in section 414(e) of the 
     Internal Revenue Code of 1986) which has at least 100 
     participants in the United States;
       (2) is a multiemployer plan (as defined in section 3(37) of 
     the Employee Retirement Income Security Act of 1974) which is 
     maintained by a health plan sponsor described in section 
     3(16)(B)(iii) of such Act and which has at least 500 
     participants in the United States; or
       (3) is a plan which is maintained by a rural electric 
     cooperative or a rural telephone cooperative association 
     (within the meaning of section 3(40) of such Act) and which 
     has at least 500 participants in the United States.

                          PART 3--ENFORCEMENT

     SEC. 1001. ENFORCEMENT BY EXCISE TAX ON QUALIFIED 
                   ASSOCIATIONS.

       (a) In General.--Chapter 43 of the Internal Revenue Code of 
     1986 (relating to qualified pension, etc., plans), as amended 
     by section 151, is amended by adding at the end the following 
     new section:

     ``SEC. 4980D. FAILURE OF QUALIFIED ASSOCIATIONS, ETC., TO 
                   COMPLY WITH CERTAIN STANDARDS FOR HEALTH 
                   INSURANCE PLANS.

       ``(a) Imposition of Tax.--
       ``(1) In general.--There is hereby imposed a tax on the 
     failure of a qualified association (as defined in section 183 
     of the Health Care Assurance Act of 1995), church plan (as 
     defined in section 414(e) of the Internal Revenue Code of 
     1986), multiemployer plan (as defined in section 3(37) of the 
     Employee Retirement Income Security Act of 1974), or plan 
     maintained by a rural electric cooperative or a rural 
     telephone cooperative association (within the meaning of 
     section 3(40) of such Act) to comply with the requirements 
     applicable to such association or plans under parts 1 and 2 
     of subtitle D of title I of the Health Care Assurance Act of 
     1995.
       ``(2) Exception.--Paragraph (1) shall not apply to a 
     failure by a qualified association, church plan, 
     multiemployer plan, or plan maintained by a rural electric 
     cooperative or a rural telephone cooperative association in a 
     State if the Secretary of Health and Human Services 
     determines that the State has in effect a regulatory 
     enforcement mechanism that provides adequate sanctions with 
     respect to such a failure by such a qualified association or 
     plan.
       ``(b) Amount of Tax.--The amount of the tax imposed by 
     subsection (a) shall be $100 for each day during which such 
     failure persists for each person to which such failure 
     relates. A rule similar to the rule of section 4980B(b)(3) 
     shall apply for purposes of this section.
       ``(c) Liability for Tax.--The tax imposed by this section 
     shall be paid by the qualified association or plan.
       ``(d) Limitations on Amount of Tax.--
       ``(1) Tax not to apply to failures corrected within 30 
     days.--No tax shall be imposed by subsection (a) on any 
     failure if--
       ``(A) such failure was due to reasonable cause and not to 
     willful neglect, and
       ``(B) such failure is corrected during the 30-day period 
     (or such period as the Secretary may determine appropriate) 
     beginning on the first date the qualified association, church 
     plan, multiemployer plan, or plan maintained by a rural 
     electric cooperative or a rural telephone cooperative 
     association knows, or exercising reasonable diligence could 
     have known, that such failure existed.
       ``(2) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive relative to the failure involved.''.
       (b) Clerical Amendment.--The table of sections for such 
     chapter 43, as amended by section 151, is amended by adding 
     at the end the following new item:

[[Page S202]]

``Sec. 4980D. Failure of qualified associations, etc., to comply with 
              certain standards for health insurance plans.''.
            Subtitle E--1-Year Extension of Medicare Select

     SEC. 1011. 1-YEAR EXTENSION OF PERIOD FOR ISSUANCE OF 
                   MEDICARE SELECT POLICIES.

       (a) In General.--Section 4358(c) of the Omnibus Budget 
     Reconciliation Act of 1990 (42 U.S.C. 1320c-3 note) is 
     amended by striking ``3\1/2\-year'' and inserting ``4\1/2\-
     year''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in the enactment of the 
     Omnibus Budget Reconciliation Act of 1990.
                       Subtitle F--Tax Provisions

     SEC. 1021. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
                   EMPLOYED INDIVIDUALS.

       (a) Phase-in Deduction.--Section 162(l) of the Internal 
     Revenue Code of 1986 (relating to special rules for health 
     insurance costs of self-employed individuals) is amended--
       (1) by striking paragraph (6); and
       (2) by striking paragraph (1) and inserting the following:
       ``(1) Allowance of deduction.--
       ``(A) In general.--In the case of an individual who is an 
     employee within the meaning of section 401(c)(1), there shall 
     be allowed as a deduction under this section an amount equal 
     to the applicable percentage of the amount paid during the 
     taxable year for insurance which constitutes medical care for 
     the taxpayer, his spouse, and dependents.
       ``(B) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage shall be determined as 
     follows:

``If the taxable year                                    The applicable
begins in:                                               percentage is:
 25 percent5...........................................................
 50 percent7...........................................................
 75 percent9...........................................................
100 percent.eafter.....................................................
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1993.

     SEC. 1022. AMENDMENTS TO COBRA.

       (a) Lower Cost Coverage Options.--Subparagraph (A) of 
     section 4980B(f)(2) of the Internal Revenue Code of 1986 
     (relating to continuation coverage requirements of group 
     health plans) is amended to read as follows:
       ``(A) Type of benefit coverage.--The coverage must consist 
     of coverage which, as of the time the coverage is being 
     provided--
       ``(i) is identical to the coverage provided under the plan 
     to similarly situated beneficiaries under the plan with 
     respect to whom a qualifying event has not occurred,
       ``(ii) is so identical, except such coverage is offered 
     with an annual $1,000 deductible, and
       ``(iii) is so identical, except such coverage is offered 
     with an annual $3,000 deductible.

     If coverage under the plan is modified for any group of 
     similarly situated beneficiaries, the coverage shall also be 
     modified in the same manner for all individuals who are 
     qualified beneficiaries under the plan pursuant to this 
     subsection in connection with such group.''.
       (b) Termination of COBRA Coverage After Eligible for 
     Employer-Based Coverage for 90 Days.--Clause (iv) of section 
     4980B(f)(2)(B) of such Code (relating to period of coverage) 
     is amended--
       (1) by striking ``or'' at the end of subclause (I),
       (2) by redesignating subclause (II) as subclause (III), and
       (3) by inserting after subclause (I) the following new 
     subclause:

       ``(II) eligible for such employer-based coverage for more 
     than 90 days, or''.

       (c) Reduction of Period of Coverage.--Clause (i) of section 
     4980B(f)(2)(B) of such Code (relating to period of coverage) 
     is amended by striking ``18 months'' each place it appears 
     and inserting ``24 months''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to qualifying events occurring after the date of 
     the enactment of this Act.
             TITLE II--PRIMARY AND PREVENTIVE CARE SERVICES

     SEC. 201. GRANTS TO STATES FOR HEALTHY START INITIATIVES.

       (a) In General.--The Secretary shall make grants to States 
     with applications approved under this section in order to 
     significantly reduce infant mortality and low birth weight 
     births and improve the health and well-being of pregnant 
     women, mothers, infants, and their families over a 5-year 
     period through accelerated implementation of innovative 
     strategies.
       (b) Projects Described.--
       (1) In general.--In order to achieve the purposes described 
     in subsection (a), grant funds under this section shall be 
     used to conduct projects in eligible project areas (as 
     defined in paragraph (3)). A project under this section shall 
     be conducted by a community-based consortium (as defined in 
     paragraph (4)) located in such eligible project area.
       (2) Certain activities.--A community-based consortium 
     conducting a project under this section shall--
       (A) have the ability to maximize and coordinate existing 
     Federal, State, and local resources and acquire additional 
     resources;
       (B) ensure substantial involvement in State and local 
     maternal and child health agencies and other agencies;
       (C) have a demonstrated ability to effectively manage the 
     project's fiscal resources;
       (D) have the leadership capability to achieve the project 
     goals and objectives; and
       (E) target communities in which problems are most severe, 
     resources can be concentrated, implementation is manageable, 
     and progress can be measured.
       (3) Eligible project area.--The term ``eligible project 
     area'' means an area which is composed of one or more 
     contiguous or noncontiguous geographic areas which have--
       (A) an average annual infant mortality rate of 150 percent 
     of the State's average annual infant mortality rate based 
     upon an average of the most recently available official vital 
     statistics data for the previous 5-year period; and
       (B) at least 50 infant deaths per year, but not more than 
     200 infant deaths per year.
       (4) Community-based consortium.--The term ``community-based 
     consortium'' means a group of project area providers and 
     consumers, including public health departments, community and 
     migrant health centers, hospitals, local professional 
     associations, medical schools, grant-making foundations, 
     civic groups, schools, churches, social and fraternal 
     organizations, and residents of areas to be served.
       (5) Duration.--A project receiving funds under this section 
     shall operate for no more than 5 years.
       (c) Application.--
       (1) In general.--To be eligible to receive a grant under 
     this section a State shall prepare and submit to the 
     Secretary for approval an application at such time, in such 
     manner, and containing such information, as the Secretary may 
     require, including a description of the use to which the 
     State will apply any amounts received under the grant and the 
     information required under paragraph (3). A State may submit 
     only one application under this subsection.
       (2) Applications on behalf of consortia.--Applications for 
     grant funds shall be submitted under paragraph (1) on behalf 
     of a community-based consortium located in an eligible 
     project area. Such applications shall be approved by the 
     highest elected official of the city or county in which the 
     consortium is based.
       (3) Information required.--The information required is a 
     detailed description of the following:
       (A) The extent to which the State has justified and 
     documented the need for the project to be funded by the grant 
     and developed measurable goals and objectives for meeting the 
     need.
       (B) The level of community commitment and involvement with 
     the project.
       (C) The extent to which the community-based consortium 
     operating in the project area has demonstrated plans for 
     coordinating and maximizing existing and proposed Federal, 
     State, and local and private resources.
       (D) The extent of the involvement of State and local 
     providers of primary care and public health services in the 
     project.
       (E) The State's approach to planning for a public education 
     campaign to address the maintenance of early and continuous 
     prenatal care and of preventive health practices during 
     pregnancy and infancy.
       (F) Other factors which the Secretary determines will 
     increase the potential of projects to reduce by 50 percent 
     the rate of infant mortality.
       (d) Funding.--
       (1) Authorization of appropriations.--For the purposes of 
     carrying out this section, there are authorized to be 
     appropriated $150,000,000 for fiscal year 1996, $250,000,000 
     for fiscal year 1997, and $300,000,000 for fiscal years 1998 
     through 2001.
       (2) Distribution of funds.--
       (A) In general.--For a fiscal year, each State shall be 
     allocated an amount equal to the applicable percentage 
     determined under subparagraph (B) of the total amount 
     available under this section for all States.
       (B) Applicable percentage.--The applicable percentage for a 
     State for a fiscal year is the amount (expressed as a 
     percentage) equal to--
       (i) the amount available to the State in the preceding 
     fiscal year under title V of the Social Security Act; divided 
     by
       (ii) the total amount available to all States in the 
     preceding fiscal year under such title.

     SEC. 202. REAUTHORIZATION OF CERTAIN PROGRAMS PROVIDING 
                   PRIMARY AND PREVENTIVE CARE.

       (a) Immunization Programs.--Section 317(j)(1)(A) of the 
     Public Health Service Act (42 U.S.C. 247b(j)(1)(A)) is 
     amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (2) by striking ``each of the fiscal years 1992 through 
     1995'' and inserting ``each of the fiscal years 1992 through 
     1995, $600,000,000 for fiscal years 1996 and 1997, and such 
     sums as may be necessary for each of the fiscal years 1998 
     through 2000''.
       (b) Tuberculosis Prevention Grants.--Section 317(j)(2) of 
     the Public Health Service Act (42 U.S.C. 247b(j)(2)) is 
     amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (2) by striking ``each of the fiscal years 1992 through 
     1995'' and inserting ``each of the fiscal years 1992 through 
     1995, $150,000,000 for fiscal year 1996, and such sums as may 
     be necessary for each of the fiscal years 1997 through 
     1999''.
       (c) Sexually Transmitted Diseases.--Section 318(d)(1) of 
     the Public Health Service Act (42 U.S.C. 247c(d)(1)) is 
     amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (2) by inserting before the first period the following: 
     ``$125,000,000 for fiscal years 1996 and 1997, and such sums 
     as may be necessary 
     [[Page S203]] for each of the fiscal years 1998 through 
     2000''.
       (d) Migrant Health Centers.--Section 329(h)(1)(A) of the 
     Public Health Service Act (42 U.S.C. 254b(h)(1)(A)) is 
     amended by striking ``and 1991, and such sums as may be 
     necessary for each of the fiscal years 1992 through 1994'' 
     and inserting ``through 1995, $80,000,000 for fiscal year 
     1996, and such sums as may be necessary for each of the 
     fiscal years 1997 through 1999''.
       (e) Community Health Centers.--Section 330(g)(1)(A) of the 
     Public Health Service Act (42 U.S.C. 254c(g)(1)(A)) is 
     amended by striking ``and 1991, and such sums as may be 
     necessary for each of the fiscal years 1992 through 1994'' 
     and inserting ``through 1995, $700,000,000 for fiscal year 
     1996, and such sums as may be necessary for each of the 
     fiscal years 1997 through 1999''.
       (f) Health Care Services for the Homeless.--Section 
     340(q)(1) of the Public Health Service Act (42 U.S.C. 
     256(q)(1)) is amended--
       (1) by striking ``and such'' and inserting ``such''; and
       (2) by striking ``and 1994.'' and inserting ``through 1995, 
     $90,000,000 for fiscal years 1996 and 1997, and such sums as 
     may be necessary for each of the fiscal years 1998 through 
     2000.''.
       (g) Family Planning Project Grants.--Section 1001(d) of the 
     Public Health Service Act (42 U.S.C. 300(d)) is amended--
       (1) by striking ``and $158,400,000'' and inserting 
     ``$158,400,000''; and
       (2) by inserting before the period the following: ``; 
     $200,000,000 for fiscal year 1996, and such sums as may be 
     necessary for each of the fiscal years 1997 through 1999''.
       (h) Breast and Cervical Cancer Prevention.--Section 1509(a) 
     of the Public Health Service Act (42 U.S.C. 300n-5(a)) is 
     amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (2) by striking ``for each of the fiscal years 1992 and 
     1993'' and inserting ``for each of the fiscal years 1992 
     through 1995, $100,000,000 for fiscal year 1996, and such 
     sums as may be necessary for each of the fiscal years 1997 
     through 1999''.
       (i) Preventive Health and Health Services Block Grant.--
     Section 1901(a) of the Public Health Service Act (42 U.S.C. 
     300w(a)) is amended by striking ``$205,000,000'' and 
     inserting ``$235,000,000''.
       (j) HIV Early Intervention.--Section 2655 of the Public 
     Health Service Act (42 U.S.C. 300ff-55) is amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (2) by inserting before the period ``, $650,000,000 for 
     fiscal year 1996, and such sums as may be necessary for each 
     of the fiscal years 1997 through 1999''.
       (k) Maternal and Child Health Services Block Grant.--
     Section 501(a) of the Social Security Act (42 U.S.C. 701(a)) 
     is amended by striking ``$705,000,000 for fiscal year 1994 
     and each fiscal year thereafter'' and inserting 
     ``$705,000,000 for fiscal years 1994 and 1995, $800,000,000 
     for fiscal year 1996, and such sums as may be necessary in 
     each of the fiscal years 1997 through 1999''.

     SEC. 203. COMPREHENSIVE SCHOOL HEALTH EDUCATION PROGRAM.

       (a) Purpose.--It is the purpose of this section to 
     establish a comprehensive school health education and 
     prevention program for elementary and secondary school 
     students.
       (b) Program Authorized.--The Secretary of Education 
     (referred to in this section as the ``Secretary''), through 
     the Office of Comprehensive School Health Education 
     established in subsection (e), shall award grants to States 
     from allotments under subsection (c) to enable such States 
     to--
       (1) award grants to local or intermediate educational 
     agencies, and consortia thereof, to enable such agencies or 
     consortia to establish, operate, and improve local programs 
     of comprehensive health education and prevention, early 
     health intervention, and health education, in elementary and 
     secondary schools (including preschool, kindergarten, 
     intermediate, and junior high schools); and
       (2) develop training, technical assistance, and 
     coordination activities for the programs assisted pursuant to 
     paragraph (1).
       (c) Reservations and State Allotments.--
       (1) Reservations.--From the sums appropriated pursuant to 
     the authority of subsection (f) for any fiscal year, the 
     Secretary shall reserve--
       (A) 1 percent for payments to Guam, American Samoa, the 
     Virgin Islands, the Republic of the Marshall Islands, the 
     Federated States of Micronesia, the Northern Mariana Islands, 
     and the Republic of Palau, to be allotted in accordance with 
     their respective needs; and
       (B) 1 percent for payments to the Bureau of Indian Affairs.
       (2) State allotments.--From the remainder of the sums not 
     reserved under paragraph (1), the Secretary shall allot to 
     each State an amount which bears the same ratio to the amount 
     of such remainder as the school-age population of the State 
     bears to the school-age population of all States, except that 
     no State shall be allotted less than an amount equal to 0.5 
     percent of such remainder.
       (3) Reallotment.--The Secretary may reallot any amount of 
     any allotment to a State to the extent that the Secretary 
     determines that the State will not be able to obligate such 
     amount within 2 years of allotment. Any such reallotment 
     shall be made on the same basis as an allotment under 
     paragraph (2).
       (d) Use of Funds.--Grant funds provided to local or 
     intermediate educational agencies, or consortia thereof, 
     under this section may be used to improve elementary and 
     secondary education in the areas of--
       (1) personal health and fitness;
       (2) prevention of chronic diseases;
       (3) prevention and control of communicable diseases;
       (4) nutrition;
       (5) substance use and abuse;
       (6) accident prevention and safety;
       (7) community and environmental health;
       (8) mental and emotional health;
       (9) parenting and the challenges of raising children; and
       (10) the effective use of the health services delivery 
     system.
       (e) Office of Comprehensive School Health Education.--The 
     Secretary shall establish within the Office of the Secretary 
     an Office of Comprehensive School Health Education which 
     shall have the following responsibilities:
       (1) To recommend mechanisms for the coordination of school 
     health education programs conducted by the various 
     departments and agencies of the Federal Government.
       (2) To advise the Secretary on formulation of school health 
     education policy within the Department of Education.
       (3) To disseminate information on the benefits to health 
     education of utilizing a comprehensive health curriculum in 
     schools.
       (f) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated 
     $50,000,000 for fiscal year 1996 and such sums as may be 
     necessary for each of the fiscal years 1997 and 1998 to carry 
     out this section.
       (2) Availability.--Funds appropriated pursuant to the 
     authority of paragraph (1) in any fiscal year shall remain 
     available for obligation and expenditure until the end of the 
     fiscal year succeeding the fiscal year for which such funds 
     were appropriated.

     SEC. 204. COMPREHENSIVE EARLY CHILDHOOD HEALTH EDUCATION 
                   PROGRAM.

       (a) Purpose.--It is the purpose of this section to 
     establish a comprehensive early childhood health education 
     program.
       (b) Program.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') shall 
     conduct a program of awarding grants to agencies conducting 
     Head Start training to enable such agencies to provide 
     training and technical assistance to Head Start teachers and 
     other child care providers. Such program shall--
       (1) establish a training system through the Head Start 
     agencies and organizations conducting Head Start training for 
     the purpose of enhancing teacher skills and providing 
     comprehensive early childhood health education curriculum;
       (2) enable such agencies and organizations to provide 
     training to day care providers in order to strengthen the 
     skills of the early childhood workforce in providing health 
     education;
       (3) provide technical support for health education programs 
     and curricula; and
       (4) provide cooperation with other early childhood 
     providers to ensure coordination of such programs and the 
     transition of students into the public school environment.
       (c) Use of Funds.--Grant funds under this section may be 
     used to provide training and technical assistance in the 
     areas of--
       (1) personal health and fitness;
       (2) prevention of chronic diseases;
       (3) prevention and control of communicable diseases;
       (4) dental health;
       (5) nutrition;
       (6) substance use and abuse;
       (7) accident prevention and safety;
       (8) community and environmental health;
       (9) mental and emotional health; and
       (10) strengthening the role of parent involvement.
       (d) Reservation for Innovative Programs.--The Secretary 
     shall reserve 5 percent of the funds appropriated pursuant to 
     the authority of subsection (e) in each fiscal year for the 
     development of innovative model health education programs or 
     curricula.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated $40,000,000 for fiscal year 1996 and such 
     sums as may be necessary for each of the fiscal years 1997 
     and 1998 to carry out this section.
        TITLE III--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT

     SEC. 301. PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT.

       (a) Right To Decline Medical Treatment.--
       (1) Rights of competent adults.--
       (A) In general.--Except as provided in subparagraph (B), a 
     State may not restrict the right of a competent adult to 
     consent to, or to decline, medical treatment.
       (B) Limitations.--
       (i) Affect on third parties.--A State may impose 
     limitations on the right of a competent adult to decline 
     treatment if such limitations protect third parties 
     (including minor children) from harm.
       (ii) Treatment which is not medically indicated.--Nothing 
     in this subsection shall be construed to require that any 
     individual be offered, or to state that any individual may 
     demand, medical treatment which the health care provider does 
     not have available, or which is, under prevailing medical 
     standards, either futile or otherwise not medically 
     indicated.
       (2) Rights of incapacitated adults.--
       (A) In general.--Except as provided in subparagraph (B)(i) 
     of paragraph (1), States 
     [[Page S204]] may not restrict the right of an incapacitated 
     adult to consent to, or to decline, medical treatment as 
     exercised through the documents specified in this paragraph, 
     or through similar documents or other written methods of 
     directive which evidence the adult's treatment choices.
       (B) Advance directives and powers of attorney.--
       (i) In general.--In order to facilitate the communication, 
     despite incapacity, of an adult's treatment choices, the 
     Secretary, in consultation with the Attorney General, shall 
     develop a national advance directive form that--

       (I) shall not limit or otherwise restrict, except as 
     provided in subparagraph (B)(i) of paragraph (1), an adult's 
     right to consent to, or to decline, medical treatment; and
       (II) shall, at minimum--

       (aa) provide the means for an adult to declare such adult's 
     own treatment choices in the event of a terminal condition;
       (bb) provide the means for an adult to declare, at such 
     adult's option, treatment choices in the event of other 
     conditions which are medically incurable, and from which such 
     adult likely will not recover; and
       (cc) provide the means by which an adult may, at such 
     adult's option, declare such adult's wishes with respect to 
     all forms of medical treatment, including forms of medical 
     treatment such as the provision of nutrition and hydration by 
     artificial means which may be, in some circumstances, 
     relatively nonburdensome.
       (ii)  National durable power of attorney form.--The 
     Secretary, in consultation with the Attorney General, shall 
     develop a national durable power of attorney form for health 
     care decisionmaking. The form shall provide a means for any 
     adult to designate another adult or adults to exercise the 
     same decisionmaking powers which would otherwise be exercised 
     by the patient if the patient were competent.
       (iii) Honored by all health care providers.--The national 
     advance directive and durable power of attorney forms 
     developed by the Secretary shall be honored by all health 
     care providers.
       (iv) Limitations.--No individual shall be required to 
     execute an advance directive. This section makes no 
     presumption concerning the intention of an individual who has 
     not executed an advance directive. An advance directive shall 
     be sufficient, but not necessary, proof of an adult's 
     treatment choices with respect to the circumstances addressed 
     in the advance directive.
       (C) Definition.--For purposes of this paragraph, the term 
     ``incapacity'' means the inability to understand or to 
     communicate concerning the nature and consequences of a 
     health care decision (including the intended benefits and 
     foreseeable risks of, and alternatives to, proposed treatment 
     options), and to reach an informed decision concerning health 
     care.
       (3) Health care providers.--
       (A) In general.--No health care provider may provide 
     treatment to an adult contrary to the adult's wishes as 
     expressed personally, by an advance directive as provided for 
     in paragraph (2)(B), or by a similar written advance 
     directive form or another written method of directive which 
     clearly and convincingly evidence the adult's treatment 
     choices. A health provider who acts in good faith pursuant to 
     the preceding sentence shall be immune from criminal or civil 
     liability or discipline for professional misconduct.
       (B) Health care providers under the medicare and medicaid 
     programs.--Any health care provider who knowingly provides 
     services to an adult contrary to the adult's wishes as 
     expressed personally, by an advance directive as provided for 
     in paragraph (2)(B), or by a similar written advance 
     directive form or another written method of directive which 
     clearly and convincingly evidence the adult's treatment 
     choices, shall be denied payment for such services under 
     titles XVIII and XIX of the Social Security Act.
       (C) Transfers.--Health care providers who object to the 
     provision of medical care in accordance with an adult's 
     wishes shall transfer the adult to the care of another health 
     care provider.
       (4)  Definition.--For purposes of this subsection, the term 
     ``adult'' means--
       (A) an individual who is 18 years of age or older; or
       (B) an emancipated minor.
       (b) Federal Right Enforceable in Federal Courts.--The 
     rights recognized in this section may be enforced by filing a 
     civil action in an appropriate district court of the United 
     States.
       (c) Suicide and Homicide.--Nothing in this section shall be 
     construed to permit, condone, authorize, or approve suicide 
     or mercy killing, or any affirmative act to end a human life.
       (d) Rights Granted by States.--Nothing in this section 
     shall impair or supersede rights granted by State law which 
     exceed the rights recognized by this section.
       (e) Effect on Other Laws.--
       (1) In general.--Except as specified in paragraph (2), 
     written policies and written information adopted by health 
     care providers pursuant to sections 4206 and 4751 of the 
     Omnibus Budget Reconciliation Act of 1990 (Public Law 101-
     508), shall be modified within 6 months after the enactment 
     of this section to conform to the provisions of this section.
       (2) Delay period for uniform forms.--Health care providers 
     shall modify any written forms distributed as written 
     information under sections 4206 and 4751 of the Omnibus 
     Budget Reconciliation Act of 1990 (Public Law 101-508) not 
     later than 6 months after promulgation of the forms referred 
     to in clauses (i) and (ii) of subsection (a)(2)(B) by the 
     Secretary.
       (f) Information Provided to Certain Individuals.--The 
     Secretary shall provide on a periodic basis written 
     information regarding an individual's right to consent to, or 
     to decline, medical treatment as provided in this section to 
     individuals who are beneficiaries under titles II, XVI, 
     XVIII, and XIX of the Social Security Act.
       (g) Recommendations to Congress on Issues Relating to a 
     Patient's Right of Self-Determination.--Not later than 180 
     days after the date of the enactment of this Act, and 
     annually thereafter for a period of 3 years, the Secretary 
     shall provide recommendations to Congress concerning the 
     medical, legal, ethical, social, and educational issues 
     related to in this section. In developing recommendations 
     under this subsection the Secretary shall address the 
     following issues:
       (1) The contents of the forms referred to in clauses (i) 
     and (ii) of subsection (a)(2)(B).
       (2) Issues pertaining to the education and training of 
     health care professionals concerning patients' self-
     determination rights.
       (3) Issues pertaining to health care professionals' duties 
     with respect to patients' rights, and health care 
     professionals' roles in identifying, assessing, and 
     presenting for patient consideration medically indicated 
     treatment options.
       (4) Issues pertaining to the education of patients 
     concerning their rights to consent to, and decline, 
     treatment, including how individuals might best be informed 
     of such rights prior to hospitalization and how uninsured 
     individuals, and individuals not under the regular care of a 
     physician or another provider, might best be informed of 
     their rights.
       (5) Issues relating to appropriate standards to be adopted 
     concerning decisionmaking by incapacitated adult patients 
     whose treatment choices are not known.
       (6) Such other issues as the Secretary may identify.
       (h) Effective Date.--
       (1) In general.--This section shall take effect on the date 
     that is 6 months after the date of enactment of this Act.
       (2) Subsection (g) .--The provisions of subsection (g) 
     shall take effect on the date of enactment of this Act.
            TITLE IV--PRIMARY AND PREVENTIVE CARE PROVIDERS

     SEC. 401. EXPANDED COVERAGE OF CERTAIN NONPHYSICIAN PROVIDERS 
                   UNDER THE MEDICARE PROGRAM.

       (a) In General.--Section 1833(a)(1) of the Social Security 
     Act (42 U.S.C. 1395l(a)(1)) is amended--
       (1) in subparagraph (K), by striking ``80 percent'' and all 
     that follows through ``physician)'' and inserting ``85 
     percent of the fee schedule amount provided under section 
     1848 for the same service performed by a physician''; and
       (2) by amending subparagraph (O) to read as follows: ``(O) 
     with respect to services described in section 1861(s)(2)(K) 
     (relating to services provided by a nurse practitioner, 
     clinical nurse specialist, or physician assistant) the 
     amounts paid shall be 85 percent of the fee schedule amount 
     provided under section 1848 for the same service performed by 
     a physician, and''.
       (b) Nurse Practitioners and Physician Assistants.--Section 
     1842(b)(12) of the Social Security Act (42 U.S.C. 
     1395u(b)(12)) is amended to read as follows:
       ``(12) With respect to services described in clause (i), 
     (ii), or (iv) of section 1861(s)(2)(K) (relating to physician 
     assistants and nurse practitioners)--
       ``(A) payment under this part may only be made on an 
     assignment-related basis; and
       ``(B) the prevailing charges determined under paragraph (3) 
     shall not exceed--
       ``(i) in the case of services performed as an assistant at 
     surgery, 85 percent of the amount that would otherwise be 
     recognized if performed by a physician who is serving as an 
     assistant at surgery, or
       ``(ii) in other cases, 85 percent of the fee schedule 
     amount specified in section 1848 for such services performed 
     by physicians who are not specialists.''.
       (c) Direct Payment for All Nurse Practitioners or Clinical 
     Nurse Specialists.--(1) Section 1832(a)(2)(B)(iv) of the 
     Social Security Act (42 U.S.C. 1395k(a)(2)(B)(iv)) is amended 
     by striking ``provided in a rural area (as defined in section 
     1886(d)(2)(D))''.
       (2) Subparagraph (C) of section 1842(b)(6) of such Act (42 
     U.S.C. 1395u(b)(6)) is amended by striking ``shall'' and 
     inserting ``may''.
       (d) Removal of Restrictions on Settings.--Section 
     1861(s)(2)(K) of the Social Security Act (42 U.S.C. 
     1395x(s)(2)(K)) is amended--
       (1) in clause (i), by striking ``(I) in a hospital'' and 
     all that follows through ``professional shortage area,'';
       (2) in clause (ii), by striking ``in a skilled'' and all 
     that follows through ``1919(a)''; and
       (3) in clause (iii), by striking ``in a rural'' and all 
     that follows through ``(d)(2)(D))''.

     SEC. 402. REQUIRING COVERAGE OF CERTAIN NONPHYSICIAN 
                   PROVIDERS UNDER THE MEDICAID PROGRAM.

       Section 1905(a) of the Social Security Act (42 U.S.C. 
     1396d(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (24),
       (2) by redesignating paragraph (25) as paragraph (26), and
     [[Page S205]]   (3) by inserting after paragraph (24) the 
     following new paragraph:
       ``(25) services furnished by a physician assistant, nurse 
     practitioner, clinical nurse specialist (as defined in 
     section 1861(aa)(5)), and certified registered nurse 
     anesthetist (as defined in section 1861(bb)(2)); and''.

     SEC. 403. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

       Part C of title VII of the Public Health Service Act is 
     amended by adding at the end thereof the following new 
     section:

     ``SEC. 753. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

       ``(a) Establishment.--The Secretary shall establish a 
     program to award grants to eligible schools of medicine or 
     osteopathic medicine to enable such schools to provide 
     medical students for tutorial programs or as participants in 
     clinics designed to interest high school or college students 
     in careers in general medical practice.
       ``(b) Application.--To be eligible to receive a grant under 
     this section, a school of medicine or osteopathic medicine 
     shall prepare and submit to the Secretary an application at 
     such time, in such manner, and containing such information as 
     the Secretary may require, including assurances that the 
     school will use amounts received under the grant in 
     accordance with subsection (c).
       ``(c) Use of Funds.--
       ``(1) In general.--Amounts received under a grant awarded 
     under this section shall be used to--
       ``(A) fund programs under which students of the grantee are 
     provided as tutors for high school and college students in 
     the areas of mathematics, science, health promotion and 
     prevention, first aide, nutrition and prenatal care;
       ``(B) fund programs under which students of the grantee are 
     provided as participants in clinics and seminars in the areas 
     described in paragraph (1); and
       ``(C) conduct summer institutes for high school and college 
     students to promote careers in medicine.
       ``(2) Design of programs.--The programs, institutes, and 
     other activities conducted by grantees under paragraph (1) 
     shall be designed to--
       ``(A) give medical students desiring to practice general 
     medicine access to the local community;
       ``(B) provide information to high school and college 
     students concerning medical school and the general practice 
     of medicine; and
       ``(C) promote careers in general medicine.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $5,000,000 for fiscal year 1996, and such sums as may be 
     necessary for fiscal year 1997.''.

     SEC. 404. GENERAL MEDICAL PRACTICE GRANTS.

       Part C of title VII of the Public Health Service Act (as 
     amended by section 403) is further amended by adding at the 
     end thereof the following new section:

     ``SEC. 754. GENERAL MEDICAL PRACTICE GRANTS.

       ``(a) Establishment.--The Secretary shall establish a 
     program to award grants to eligible public or private 
     nonprofit schools of medicine or osteopathic medicine, 
     hospitals, residency programs in family medicine or 
     pediatrics, or to a consortium of such entities, to enable 
     such entities to develop effective strategies for recruiting 
     medical students interested in the practice of general 
     medicine and placing such students into general practice 
     positions upon graduation.
       ``(b) Application.--To be eligible to receive a grant under 
     this section, an entity of the type described in subsection 
     (a) shall prepare and submit to the Secretary an application 
     at such time, in such manner, and containing such information 
     as the Secretary may require, including assurances that the 
     entity will use amounts received under the grant in 
     accordance with subsection (c).
       ``(c) Use of Funds.--Amounts received under a grant awarded 
     under this section shall be used to fund programs under which 
     effective strategies are developed and implemented for 
     recruiting medical students interested in the practice of 
     general medicine and placing such students into general 
     practice positions upon graduation.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $25,000,000 for each of the fiscal years 1996 through 2000, 
     and such sums as may be necessary for fiscal years 
     thereafter.''.
                       TITLE V--COST CONTAINMENT

     SEC. 501. NEW DRUG CLINICAL TRIALS PROGRAM.

       Part B of title IV of the Public Health Service Act (42 
     U.S.C. 284 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 409B. NEW DRUG CLINICAL TRIALS PROGRAM.

       ``(a) In General.--The Director of the National Institutes 
     of Health (referred to in this section as the `Director') is 
     authorized to establish and implement a program for the 
     conduct of clinical trials with respect to new drugs and 
     disease treatments determined to be promising by the 
     Director. In determining the drugs and disease treatments 
     that are to be the subject of such clinical trials, the 
     Director shall give priority to those drugs and disease 
     treatments targeted toward the diseases determined--
       ``(1) to be the most costly to treat;
       ``(2) to have the highest mortality; or
       ``(3) to affect the greatest number of individuals.
       ``(b) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $120,000,000 for fiscal year 1996, and such sums as may be 
     necessary for each of the fiscal years 1997 through 2000.''.

     SEC. 502. MEDICAL TREATMENT EFFECTIVENESS.

       (a) Research on Cost-Effective Methods of Health Care.--
     Section 926 of the Public Health Service Act (42 U.S.C. 299c-
     5) is amended--
       (1) in subsection (a), by striking ``and'' and inserting 
     ``and such sums as may be necessary for each of the fiscal 
     years 1996 through 1998''; and
       (2) by adding at the end the following new subsection:
       ``(f) Use of Additional Appropriations.--Within amounts 
     appropriated under subsection (a) for each of the fiscal 
     years 1995 through 1997 that are in excess of the amounts 
     appropriated under such subsection for fiscal year 1993, the 
     Secretary shall give priority to expanding research conducted 
     to determine the most cost-effective methods of health care 
     and for developing and disseminating new practice guidelines 
     related to such methods. In utilizing such amounts, the 
     Secretary shall give priority to diseases and disorders that 
     the Secretary determines are the most costly to the United 
     States and evidence a wide variation in current medical 
     practice.''.
       (b) Research on Medical Treatment Outcomes.--
       (1) Imposition of tax on health insurance policies.--
       (A) In general.--Chapter 36 of the Internal Revenue Code of 
     1986 (relating to certain other excise taxes) is amended by 
     adding at the end thereof the following new subchapter:
            ``Subchapter G--Tax on Health Insurance Policies
``Sec. 4501. Imposition of tax.
``Sec. 4502. Liability for tax.
     ``SEC. 4501. IMPOSITION OF TAX.

       ``(a) General Rule.--There is hereby imposed a tax equal to 
     .001 cent on each dollar, or fractional part thereof, of the 
     premium paid on a policy of health insurance.
       ``(b) Definition.--For purposes of subsection (a), the term 
     `policy of health insurance' means any policy or other 
     instrument by whatever name called whereby a contract of 
     insurance is made, continued, or renewed with respect to the 
     health of an individual or group of individuals.

     ``SEC. 4502. LIABILITY FOR TAX.

       ``The tax imposed by this subchapter shall be paid, on the 
     basis of a return, by any person who makes, signs, issues, or 
     sells any of the documents and instruments subject to the 
     tax, or for whose use or benefit the same are made, signed, 
     issued, or sold. The United States or any agency or 
     instrumentality thereof shall not be liable for the tax.''.
       (B) Conforming amendment.--The table of subchapters for 
     chapter 36 of the Internal Revenue Code of 1986 is amended by 
     adding at the end thereof the following new item:

``Subchapter G. Tax on health insurance policies.''.
       (2) Establishment of trust fund.--
       (A) In general.--Subchapter A of chapter 98 of such Code 
     (relating to trust fund code) is amended by adding at the end 
     thereof the following new section:

     ``SEC. 9512. TRUST FUND FOR MEDICAL TREATMENT OUTCOMES 
                   RESEARCH.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Trust Fund for Medical Treatment Outcomes Research' 
     (referred to in this section as the `Trust Fund'), consisting 
     of such amounts as may be appropriated or credited to the 
     Trust Fund as provided in this section or section 9602(b).
       ``(b) Transfers to Trust Fund.--There is hereby 
     appropriated to the Trust Fund an amount equivalent to the 
     taxes received in the Treasury under section 4501 (relating 
     to tax on health insurance policies).
       ``(c) Distribution of Amounts in Trust Fund.--On an annual 
     basis the Secretary shall distribute the amounts in the Trust 
     Fund to the Secretary of Health and Human Services. Such 
     amounts shall be available to the Secretary of Health and 
     Human Services to pay for research activities related to 
     medical treatment outcomes.''.
       (B) Conforming amendment.--The table of sections for 
     subchapter A of chapter 98 of such Code is amended by adding 
     at the end thereof the following new item:

``Sec. 9512. Trust Fund for Medical Treatment Outcomes Research.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to policies issued after December 31, 1995.

     SEC. 503. NATIONAL HEALTH INSURANCE DATA AND CLAIMS SYSTEM.

       (a) In General.--Using advanced technologies to the maximum 
     extent practicable, the Secretary of Health and Human 
     Services (referred to in this section as the ``Secretary'') 
     shall establish and maintain a national health insurance data 
     and claims system, which shall be comprised of--
       (1) a centralized national data base for health insurance 
     and health outcomes information;
       (2) a standardized, universal mechanism for electronically 
     processing health insurance and health outcomes data; and
     [[Page S206]]   (3) a standardized system for uniform claims 
     and uniform transmission of claims.
       (b) National Data Base for Health Insurance Information.--
     The national data base for health insurance and health 
     outcomes information shall--
       (1) be centrally located;
       (2) rely on advanced technologies to the maximum extent 
     practicable; and
       (3) be readily accessible for data input and retrieval.
       (c) Standardized System for Uniform Claims and Transmission 
     of Claims.--
       (1) Consultation with the naic.--The Secretary shall 
     consult with the National Association of Insurance 
     Commissioners in connection with the establishment of the 
     system under subsection (a)(3).
       (2) Use of recognized standards.--The Secretary shall, to 
     the maximum extent practicable, establish standards for the 
     system under subsection (a)(3) that are consistent with 
     standards that are widely recognized and adopted.
       (3) Timing for establishment of system.--
       (A) In general.--Not later than 12 months after the date of 
     the enactment of this Act, the Secretary shall establish 
     standards for the system under subsection (a)(3).
       (B) Review.--Not later than 24 months after standards have 
     been established under subparagraph (A), the Secretary shall 
     review such standards and make any modifications determined 
     appropriate by the Secretary.
       (d) Confidentiality.--The Secretary shall ensure that all 
     patient information collected under this section is managed 
     so that confidentiality is protected.
       (e) Authorization of Appropriations.--There shall be 
     authorized to be appropriated such sums as may be necessary 
     to carry out the purposes of this section.

     SEC. 504. HEALTH CARE COST CONTAINMENT AND QUALITY 
                   INFORMATION PROGRAM.

       (a) Grant Program.--
       (1) In general.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') shall make 
     grants to States that establish or operate health care cost 
     containment and quality information systems (as defined in 
     subsection (f)(1)). In order to be eligible for a grant under 
     this section, a State must establish or operate a system 
     which, at a minimum, meets the Federal standards established 
     under subsection (c).
       (2) Use of funds.--States may use grant funds received 
     under this section only to establish a health care cost 
     containment and quality information system or to improve an 
     existing system operated by the State.
       (b) Submission of Applications.--To be eligible for a grant 
     under this section, a State must submit an application to the 
     Secretary within 2 years after the date of the enactment of 
     this section. Such application shall be submitted in a manner 
     determined appropriate by the Secretary and shall include the 
     designation of a State agency that will operate the health 
     care cost containment and quality information system for the 
     State. The Secretary shall approve or disapprove a State 
     application within 6 months after its submission.
       (c) Minimum Federal Standards.--Not later than 6 months 
     after the date of the enactment of this section, the 
     Secretary, after consultation with the Agency for Health Care 
     Policy and Research, other Federal agencies, the Joint 
     Commission on Accreditation of Hospitals, States, health care 
     providers, consumers, insurers, health maintenance 
     organizations, businesses, academic health centers, and labor 
     organizations that purchase health care, shall establish 
     Federal standards for the operation of health care cost 
     containment and quality information systems by States 
     receiving grants under this section.
       (d) Collection and Public Dissemination of Information by 
     States.--
       (1) In general.--A State receiving a grant under this 
     section shall require that a health care cost containment and 
     quality information system will collect at least the 
     information described in paragraph (2) and publicly 
     disseminate such information in a useful format to 
     appropriate persons such as businesses, consumers of health 
     care services, labor organizations, health plans, hospitals, 
     and other States.
       (2) Information described.--The information described in 
     this paragraph is the following:
       (A) Information on hospital charges.
       (B) Clinical data.
       (C) Demographic data.
       (D) Information regarding treatment of individuals by 
     particular health care providers.
       (3) Electronic transmission of information.--The State 
     program under this section shall provide that any information 
     described in paragraph (2) with respect to which the 
     Secretary has established standards for data elements and 
     information transactions under section 503 shall be 
     transmitted to the State health care cost containment and 
     quality information system in accordance with such standards.
       (4) Privacy and confidentiality.--The State cost 
     containment and quality information system shall ensure that 
     patient privacy and confidentiality is protected at all 
     times.
       (e) Compliance.--If the Secretary determines that a State 
     receiving grant funds under this section has failed to 
     operate a system in accordance with the terms of its approved 
     application, the Secretary may withhold payment of such funds 
     until the State remedies such noncompliance.
       (f) Definitions.--For purposes of this section--
       (1) the term ``health care cost containment and quality 
     information system'' means a system which is established or 
     operated by a State in order to collect and disseminate the 
     information described in subsection (d)(2) in accordance with 
     subsection (d)(1) for the purpose of providing information on 
     health care costs and outcomes in the State; and
       (2) the term ``State'' means a State, the District of 
     Columbia, the Commonwealth of Puerto Rico, the Virgin 
     Islands, Guam, American Samoa, and includes the Commonwealth 
     of the Northern Mariana Islands.
       (g) Authorization.--
       (1) In general.--There are authorized to be appropriated 
     for the purpose of carrying out this section not more than 
     $150,000,000 for fiscal years 1996 through 1998, and such 
     sums as may be necessary thereafter, to remain available 
     until expended.
       (2) Allocation to states.--The Secretary shall allocate the 
     amounts available for grants under this section in any fiscal 
     year in accordance with a formula developed by the Secretary 
     which takes into account--
       (A) the number of hospitals in a State relative to the 
     total number of hospitals in all States;
       (B) the population of the State relative to the total 
     population of all States; and
       (C) the type of system operated or intended to be operated 
     by the State, including whether the State establishes an 
     independent State agency to operate the system.
                        TITLE VI--LONG-TERM CARE
    Subtitle A--Tax Treatment of Qualified Long-Term Care Insurance 
                         Policies and Services

     SEC. 601. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

     SEC. 602. QUALIFIED LONG-TERM CARE SERVICES TREATED AS 
                   MEDICAL CARE.

       (a) General Rule.--Paragraph (1) of section 213(d) 
     (defining medical care) is amended by striking ``or'' at the 
     end of subparagraph (B), by redesignating subparagraph (C) as 
     subparagraph (D), and by inserting after subparagraph (B) the 
     following new subparagraph:
       ``(C) for qualified long-term care services (as defined in 
     subsection (g)), or''.
       (b) Qualified Long-Term Care Services Defined.--Section 213 
     (relating to the deduction for medical, dental, etc., 
     expenses) is amended by adding at the end the following new 
     subsections:
       ``(g) Qualified Long-Term Care Services.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified long-term care 
     services' means necessary diagnostic, curing, mitigating, 
     treating, preventive, therapeutic, and rehabilitative 
     services, and maintenance and personal care services (whether 
     performed in a residential or nonresidential setting) which--
       ``(A) are required by an individual during any period the 
     individual is an incapacitated individual (as defined in 
     paragraph (2)),
       ``(B) have as their primary purpose--
       ``(i) the provision of needed assistance with 1 or more 
     activities of daily living (as defined in paragraph (3)), or
       ``(ii) protection from threats to health and safety due to 
     severe cognitive impairment, and
       ``(C) are provided pursuant to a continuing plan of care 
     prescribed by a licensed professional (as defined in 
     paragraph (4)).
       ``(2) Incapacitated individual.--The term `incapacitated 
     individual' means any individual who--
       ``(A) is unable to perform, without substantial assistance 
     from another individual (including assistance involving 
     cueing or substantial supervision), at least 2 activities of 
     daily living as defined in paragraph (3), or
       ``(B) has severe cognitive impairment as defined by the 
     Secretary in consultation with the Secretary of Health and 
     Human Services.
     Such term shall not include any individual otherwise meeting 
     the requirements of the preceding sentence unless a licensed 
     professional within the preceding 12-month period has 
     certified that such individual meets such requirements.
       ``(3) Activities of daily living.--Each of the following is 
     an activity of daily living:
       ``(A) Eating.
       ``(B) Toileting.
       ``(C) Transferring.
       ``(D) Bathing.
       ``(E) Dressing.
       ``(4) Licensed professional.--The term `licensed 
     professional' means--
       ``(A) a physician or registered professional nurse, or
       ``(B) any other individual who meets such requirements as 
     may be prescribed by the Secretary after consultation with 
     the Secretary of Health and Human Services.
       ``(5) Certain services not included.--The term `qualified 
     long-term care services' shall not include any services 
     provided to an individual--
       ``(A) by a relative (directly or through a partnership, 
     corporation, or other entity) unless the relative is a 
     licensed professional with respect to such services, or
       ``(B) by a corporation or partnership which is related 
     (within the meaning of section 267(b) or 707(b)) to the 
     individual.
     [[Page S207]] For purposes of this paragraph, the term 
     `relative' means an individual bearing a relationship to the 
     individual which is described in paragraphs (1) through (8) 
     of section 152(a).
       ``(h) Special Rule for Certain Long-Term Care Expenses.--
     For purposes of subsection (a), the term `dependent' shall 
     include any parent or grandparent of the taxpayer for whom 
     the taxpayer has expenses for qualified long-term care 
     services described in subsection (g), but only to the extent 
     of such expenses.''.
       (c) Technical Amendments.--
       (1) Subparagraph (D) of section 213(d)(1) (as redesignated 
     by subsection (a)) is amended to read as follows:
       ``(D) for insurance (including amounts paid as premiums 
     under part B of title XVIII of the Social Security Act, 
     relating to supplementary medical insurance for the aged) 
     covering medical care referred to in--
       ``(i) subparagraphs (A) and (B), or
       ``(ii) subparagraph (C), but only if such insurance is 
     provided under a qualified long-term care insurance policy 
     (as defined in section 7705(a)) and the amount paid for such 
     insurance is not disallowed under section 7705(b).''
       (2) Paragraph (6) of section 213(d) is amended--
       (A) by striking ``subparagraphs (A) and (B)'' and inserting 
     ``subparagraph (A), (B), and (C)'', and
       (B) by striking ``paragraph (1)(C)'' in subparagraph (A) 
     and inserting ``paragraph (1)(D)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 603. DEFINITION OF QUALIFIED LONG-TERM CARE INSURANCE 
                   POLICY.

       (a) In General.--Chapter 79 (relating to definitions) is 
     amended by adding at the end the following new section:

     ``SEC. 7705. QUALIFIED LONG-TERM CARE INSURANCE POLICY.

       ``(a) Qualified Long-Term Care Insurance Policy.--For 
     purposes of this title--
       ``(1) In general.--The term `qualified long-term care 
     insurance policy' means any long-term care policy that--
       ``(A) limits benefits under such policy to individuals who 
     are certified by a licensed professional (as defined in 
     section 213(g)(4)) within the preceding 12-month period--
       ``(i) as being unable to perform, without substantial 
     assistance from another individual (including assistance 
     involving cueing or substantial supervision), 2 or more 
     activities of daily living (as defined in section 213(g)(3)), 
     or
       ``(ii) having a severe cognitive impairment (as defined in 
     section 213(g)(2)(B)), and
       ``(B) satisfies the requirements of paragraphs (2), (3), 
     (4), (5), and (6).
       ``(2) Premium requirements.--The requirements of this 
     paragraph are met with respect to a policy if such policy 
     provides that premium payments may not be made earlier than 
     the date such payments would have been made if the contract 
     provided for level annual payments over the life expectancy 
     of the insured or 20 years, whichever is shorter. A policy 
     shall not be treated as failing to meet the requirements of 
     the preceding sentence solely by reason of a provision in the 
     policy providing for a waiver of premiums if the insured 
     becomes an individual certified in accordance with paragraph 
     (1)(A).
       ``(3) Prohibition of cash value.--The requirements of this 
     paragraph are met if the policy does not provide for a cash 
     value or other money that can be paid, assigned, pledged as 
     collateral for a loan, or borrowed, other than as provided in 
     paragraph (4).
       ``(4) Refunds of premiums and dividends.--The requirements 
     of this paragraph are met with respect to a policy if such 
     policy provides that--
       ``(A) policyholder dividends are required to be applied as 
     a reduction in future premiums or, to the extent permitted 
     under paragraph (6), to increase benefits described in 
     subsection (a)(2),
       ``(B) refunds of premiums upon a partial surrender or a 
     partial cancellation are required to be applied as a 
     reduction in future premiums, and
       ``(C) any refund on the death of the insured, or on a 
     complete surrender or cancellation of the policy, cannot 
     exceed the aggregate premiums paid under the contract.
     Any refund on a complete surrender or cancellation of the 
     policy shall be includible in gross income to the extent that 
     any deduction or exclusion was allowable with respect to the 
     premiums.
       ``(5) Coordination with other entitlements.--The 
     requirements of this paragraph are met with respect to a 
     policy if such policy does not pay, or provide reimbursement 
     for, expenses incurred to the extent that such expenses are 
     also paid or reimbursed under title XVIII of the Social 
     Security Act or are paid or reimbursed under a qualified 
     health insurance plan (as defined in section 100(10) of the 
     Health Care Assurance Act of 1995).
       ``(6) Maximum benefit.--
       ``(A) In general.--The requirements of this paragraph are 
     met if the benefits payable under the policy for any period 
     (whether on a periodic basis or otherwise) may not exceed the 
     dollar amount in effect for such period.
       ``(B) Nonreimbursement payments permitted.--Benefits shall 
     include all payments described in subsection (a)(2) to or on 
     behalf of an insured individual without regard to the 
     expenses incurred during the period to which the payments 
     relate. For purposes of section 213(a), such payments shall 
     be treated as compensation for expenses paid for medical 
     care.
       ``(C) Dollar amount.--The dollar amount in effect under 
     this paragraph shall be $150 per day (or the equivalent 
     amount within the calendar year in the case of payments on 
     other than a per diem basis).
       ``(D) Adjustments for increased costs.--
       ``(i) In general.--In the case of any calendar year after 
     1996, the dollar amount in effect under subparagraph (C) for 
     any period or portion thereof occurring during such calendar 
     year shall be equal to the sum of--

       ``(I) the amount in effect under subparagraph (C) for the 
     preceding calendar year (after application of this 
     subparagraph), plus
       ``(II) the product of the amount referred to in subclause 
     (I) multiplied by the cost-of-living adjustment for the 
     calendar year.

       ``(ii) Cost-of-living adjustment.--For purposes of clause 
     (i), the cost-of-living adjustment for any calendar year is 
     the percentage (if any) by which the cost index under clause 
     (iii) for the preceding calendar year exceeds such index for 
     the second preceding calendar year.
       ``(iii) Cost index.--The Secretary, in consultation with 
     the Secretary of Health and Human Services, shall before 
     January 1, 1997, establish a cost index to measure increases 
     in costs of nursing home and similar facilities. The 
     Secretary may from time to time revise such index to the 
     extent necessary to accurately measure increases or decreases 
     in such costs.
       ``(iv) Special rule for calendar year 1997.--
     Notwithstanding clause (ii), for purposes of clause (i), the 
     cost-of-living adjustment for calendar year 1997 is the sum 
     of 1.5 percent plus the percentage by which the CPI for 
     calendar year 1996 (as defined in section 1(f)(4)) exceeds 
     the CPI for calendar year 1995 (as so defined).
       ``(E) Period.--For purposes of this paragraph, a period 
     begins on the date that an individual has a condition which 
     would qualify for certification under subsection (b)(1)(A) 
     and ends on the earlier of the date upon which--
       ``(i) such individual has not been so certified within the 
     preceding 12-months, or
       ``(ii) the individual's condition ceases to be such as to 
     qualify for certification under subsection (b)(1)(A).
       ``(F) Aggregation rule.--For purposes of this paragraph, 
     all policies issued with respect to the same insured shall be 
     treated as one policy.
       ``(b) Treatment of Coverage Provided as Part of a Life 
     Insurance Contract.--No deduction shall be allowed under 
     section 213(a) for charges against a life insurance 
     contract's cash surrender value (within the meaning of 
     section 7702(f)(2)(A)), unless such charges are includible in 
     income as a result of the application of section 72(e)(10) 
     and the coverage provided by the rider is a qualified long-
     term care insurance policy under subsection (a).''.
       (b) Clerical Amendment.--The table of sections for chapter 
     79 is amended by inserting after the item relating to section 
     7704 the following new item:

``Sec. 7705. Qualified long-term care insurance.''.
     SEC. 604. TREATMENT OF QUALIFIED LONG-TERM CARE INSURANCE AS 
                   ACCIDENT AND HEALTH INSURANCE FOR PURPOSES OF 
                   TAXATION OF INSURANCE COMPANIES.

       (a) In General.--Section 818 (relating to other definitions 
     and special rules) is amended by adding at the end the 
     following new subsection:
       ``(g) Qualified Long-Term Care Insurance Treated as 
     Accident or Health Insurance.--For purposes of this 
     subchapter, any reference to noncancellable accident or 
     health insurance contracts shall be treated as including a 
     reference to qualified long-term care insurance.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.
     SEC. 605. TREATMENT OF ACCELERATED DEATH BENEFITS UNDER LIFE 
                   INSURANCE CONTRACTS.

       (a) Exclusion of Amounts Received.--Section 101 (relating 
     to certain death benefits) is amended by adding at the end 
     the following new subsection:
       ``(g) Treatment of Certain Accelerated Death Benefits.--
       ``(1) In general.--For purposes of this section, any amount 
     paid to an individual under a life insurance contract on the 
     life of an insured who is a terminally ill individual, who 
     has a dread disease, or who has been permanently confined to 
     a nursing home shall be treated as an amount paid by reason 
     of the death of such insured.
       ``(2) Terminally ill individual.--For purposes of this 
     subsection, the term `terminally ill individual' means an 
     individual who has been certified by a physician, licensed 
     under State law, as having an illness or physical condition 
     which can reasonably be expected to result in death in 12 
     months or less.
       ``(3) Dread disease.--For purposes of this subsection, the 
     term `dread disease' means a medical condition which has been 
     certified by a physician as having required or requiring 
     extraordinary medical intervention without which the insured 
     would die, or a medical condition which would, in the absence 
     of extensive or extraordinary medical treatment, result in a 
     drastically limited life span.
     [[Page S208]]   ``(4) Permanently confined to a nursing 
     home.--For purposes of this subsection, an individual has 
     been permanently confined to a nursing home if the individual 
     is presently confined to a nursing home and has been 
     certified by a physician, licensed under State law, as having 
     an illness or cognitive impairment or loss of functional 
     capacity which can reasonably be expected to result in the 
     individual remaining in a nursing home for the rest of the 
     individual's life.''.
       (b) Treatment of Qualified Accelerated Death Benefit Riders 
     as Life Insurance.--
       (1) In general.--Section 818 (relating to other definitions 
     and special rules), as amended by section 603, is amended by 
     adding at the end the following new subsection:
       ``(h) Qualified Accelerated Death Benefit Riders Treated as 
     Life Insurance.--For purposes of this part--
       ``(1) In general.--Any reference to a life insurance 
     contract shall be treated as including a reference to a 
     qualified accelerated death benefit rider on such contract.
       ``(2) Qualified accelerated death benefit rider.--For 
     purposes of this subsection, the term `qualified accelerated 
     death benefit rider' means any rider or addendum on, or other 
     provision of, a life insurance contract which provides for 
     payments to an individual on the life of an insured upon such 
     insured becoming a terminally ill individual (as defined in 
     section 101(g)(2)), incurring a dread disease (as defined in 
     section 101(g)(3)), or being permanently confined to a 
     nursing home (as defined in section 101(g)(4)).''.
       (2) Definitions of life insurance and modified endowment 
     contracts.--
       (A) Rider treated as qualified additional benefit.--
     Subparagraph (A) of section 7702(f)(5) (relating to 
     definition of life insurance contract) is amended by striking 
     ``or'' at the end of clause (iv), by redesignating clause (v) 
     as clause (vi), and by inserting after clause (iv) the 
     following new clause:
       ``(v) any qualified accelerated death benefit rider (as 
     defined in section 818(h)(2)), or any qualified long-term 
     care insurance which reduces the death benefit, or''.
       (B) Transitional rule.--For purposes of applying section 
     7702 or 7702A of the Internal Revenue Code of 1986 to any 
     contract (or determining whether either such section applies 
     to such contract), the issuance of a rider or addendum on, or 
     other provision of, a life insurance contract permitting the 
     acceleration of death benefits (as described in section 
     101(g)) or for qualified long-term care insurance shall not 
     be treated as a modification or material change of such 
     contract.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.
  Subtitle B--Tax Incentives for Purchase of Qualified Long-Term Care 
                               Insurance

     SEC. 611. CREDIT FOR QUALIFIED LONG-TERM CARE PREMIUMS.

       (a) General Rule.--Subpart C of part IV of subchapter A of 
     chapter 1 (relating to refundable credits) is amended by 
     redesignating section 35 as section 36 and by inserting after 
     section 34 the following new section:

     ``SEC. 35. LONG-TERM CARE INSURANCE CREDIT.

       ``(a) General Rule.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     subtitle for the taxable year an amount equal to the 
     applicable percentage of the premiums for a qualified long-
     term care insurance policy (as defined in section 7705(a)) 
     paid during such taxable year for such individual or the 
     spouse of such individual.
       ``(b) Applicable Percentage.--
       ``(1) In general.--For purposes of this section, the term 
     `applicable percentage' means 28 percent reduced (but not 
     below zero) by 1 percentage point for each $1,000 (or 
     fraction thereof) by which the taxpayer's adjusted gross 
     income for the taxable year exceeds the base amount.
       ``(2) Base amount.--For purposes of paragraph (1) the term 
     `base amount' means--
       ``(A) except as otherwise provided in this paragraph, 
     $25,000,
       ``(B) $40,000 in the case of a joint return, and
       ``(C) zero in the case of a taxpayer who--
       ``(i) is married at the close of the taxable year (within 
     the meaning of section 7703) but does not file a joint return 
     for such taxable year, and
       ``(ii) does not live apart from his or her spouse at all 
     times during the taxable year.
       ``(c) Coordination With Medical Expense Deduction.--Any 
     amount allowed as a credit under this section shall not be 
     taken into account under section 213.''.
       (b) Clerical Amendment.--The table of sections for subpart 
     C of part IV of subchapter A of chapter 1 is amended by 
     striking the item relating to section 35 and inserting the 
     following:

``Sec. 35. Long-term care insurance credit.
``Sec. 36. Overpayments of tax.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 612. EXCLUSION FROM GROSS INCOME OF BENEFITS RECEIVED 
                   UNDER QUALIFIED LONG-TERM CARE INSURANCE 
                   POLICIES.

       (a) In General.--Section 105 (relating to amounts received 
     under accident and health plans) is amended by adding at the 
     end the following new subsection:
       ``(j) Special Rules Relating to Qualified Long-Term Care 
     Insurance Policy.--For purposes of section 104, this section, 
     and section 106--
       ``(1) Benefits treated as payable for sickness, etc.--Any 
     benefit received through a qualified long-term care insurance 
     policy shall be treated as amounts received through accident 
     or health insurance for personal injuries or sickness.
       ``(2) Expenses for which reimbursement provided under 
     qualified long-term care insurance policy treated as incurred 
     for medical care or functional loss.--
       ``(A) Expenses.--Expenses incurred by the taxpayer or 
     spouse, or by the dependent, parent, or grandparent of 
     either, to the extent of benefits paid under a qualified 
     long-term care insurance policy shall be treated for purposes 
     of subsection (b) as incurred for medical care (as defined in 
     section 213(d)).
       ``(B) Benefits.--Benefits received under a qualified long-
     term care insurance policy shall be treated for purposes of 
     subsection (c) as payment for the permanent loss or loss of 
     use of a member or function of the body or the permanent 
     disfigurement of the taxpayer or spouse, or the dependent, 
     parent, or grandparent of either.
       ``(3) References to accident and health plans.--Any 
     reference to an accident or health plan shall be treated as 
     including a reference to a plan providing qualified long-term 
     care services (as defined in section 213(a)).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 613. EMPLOYER DEDUCTION FOR CONTRIBUTIONS MADE FOR LONG-
                   TERM CARE INSURANCE.

       (a) In General.--Subparagraph (B) of section 404(b)(2) 
     (relating to plans providing certain deferred benefits) is 
     amended to read as follows:
       ``(B) Exceptions.--Subparagraph (A) shall not apply to--
       ``(i) any benefit provided through a welfare benefit fund 
     (as defined in section 419(e)), or
       ``(ii) any benefit provided under a qualified long-term 
     care insurance policy through the payment (in whole or in 
     part) of premiums for such policy by an employer pursuant to 
     a plan for its active or retired employees, but only if any 
     refund or premium is applied to reduce the future costs of 
     the plan or increase benefits under the plan.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 614. INCLUSION OF QUALIFIED LONG-TERM CARE INSURANCE IN 
                   CAFETERIA PLANS.

       (a) In General.--Paragraph (2) of section 125(d) (relating 
     to the exclusion of deferred compensation) is amended by 
     adding at the end the following new subparagraph:
       ``(D) Exception for qualified long-term care insurance 
     policies.--For purposes of subparagraph (A), amounts paid or 
     incurred for any qualified long-term care insurance policy 
     shall not be treated as deferred compensation to the extent 
     section 404(b)(2)(A) does not apply to such amounts by reason 
     of section 404(b)(2)(B)(ii).''.
       (b) Conforming Amendment.--Subsection (f) of section 125 
     (relating to qualified benefits) is amended by striking ``and 
     such term includes'' and inserting the following: ``, 
     qualified long-term care insurance policies, and''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 615. EXCLUSION FROM GROSS INCOME FOR AMOUNTS RECEIVED ON 
                   CANCELLATION OF LIFE INSURANCE POLICIES AND 
                   USED FOR QUALIFIED LONG-TERM CARE INSURANCE 
                   POLICIES.

       (a) In General.--
       (1) Exclusion from gross income.--
       (A) In general.--Part III of subchapter B of chapter 1 
     (relating to items specifically excluded from gross income) 
     is amended by redesignating section 136 as section 137 and by 
     inserting after section 135 the following new section:

     ``SEC. 136. AMOUNTS RECEIVED ON CANCELLATION, ETC. OF LIFE 
                   INSURANCE CONTRACTS AND USED TO PAY PREMIUMS 
                   FOR QUALIFIED LONG-TERM CARE INSURANCE.

       ``No amount (which but for this section would be includible 
     in the gross income of an individual) shall be included in 
     gross income on the whole or partial surrender, cancellation, 
     or exchange of any life insurance contract during the taxable 
     year if--
       ``(1) such individual has attained age 59\1/2\ on or before 
     the date of the transaction, and
       ``(2) the amount otherwise includible in gross income is 
     used during such year to pay for any qualified long-term care 
     insurance policy which--
       ``(A) is for the benefit of such individual or the spouse 
     of such individual if such spouse has attained age 59\1/2\ on 
     or before the date of the transaction, and
       ``(B) may not be surrendered for cash.''.
       (B) Clerical amendment.--The table of sections for such 
     part III is amended by striking the last item and inserting 
     the following new items:

``Sec. 136. Amounts received on cancellation, etc. of life insurance 
              contracts and used to pay premiums for qualified long-
              term care insurance.
``Sec. 137. Cross references to other Acts.''.
       (2) Certain exchanges not taxable.--Subsection (a) of 
     section 1035 (relating to certain exchanges of insurance 
     contracts) is amended by striking the period at the end of 
     paragraph (3) and inserting ``; or'', and by adding at the 
     end the following new paragraph:
     [[Page S209]]   ``(4) in the case of an individual who has 
     attained age 59\1/2\, a contract of life insurance or an 
     endowment or annuity contract for a qualified long-term care 
     insurance policy, if such policy may not be surrendered for 
     cash.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 616. USE OF GAIN FROM SALE OF PRINCIPAL RESIDENCE FOR 
                   PURCHASE OF QUALIFIED LONG-TERM HEALTH CARE 
                   INSURANCE.

       (a) In General.--Subsection (d) of section 121 (relating to 
     1-time exclusion of gain from sale of principal residence by 
     individual who has attained age 55) is amended by adding at 
     the end the following new paragraph:
       ``(10) Eligibility of home equity conversion sale-leaseback 
     transaction for exclusion.--
       ``(A) In general.--For purposes of this section, the term 
     `sale or exchange' includes a home equity conversion sale-
     leaseback transaction.
       ``(B) Home equity conversion sale-leaseback transaction.--
     For purposes of subparagraph (A), the term `home equity 
     conversion sale-leaseback' means a transaction in which--
       ``(i) the seller-lessee--

       ``(I) has attained the age of 55 before the date of the 
     transaction,
       ``(II) sells property which during the 5-year period ending 
     on the date of the transaction has been owned and used as a 
     principal residence by such seller-lessee for periods 
     aggregating 3 years or more,
       ``(III) uses a portion of the proceeds from such sale to 
     purchase a qualified long-term care insurance policy, which 
     policy may not be surrendered for cash,
       ``(IV) obtains occupancy rights in such property pursuant 
     to a written lease requiring a fair rental, and
       ``(V) receives no option to repurchase the property at a 
     price less than the fair market price of the property 
     unencumbered by any leaseback at the time such option is 
     exercised, and

       ``(ii) the purchaser-lessor--

       ``(I) is a person,
       ``(II) is contractually responsible for the risks and 
     burdens of ownership and receives the benefits of ownership 
     (other than the seller-lessee's occupancy rights) after the 
     date of such transaction, and
       ``(III) pays a purchase price for the property that is not 
     less than the fair market price of such property encumbered 
     by a leaseback, and taking into account the terms of the 
     lease.

       ``(C) Additional definitions.--For purposes of subparagraph 
     (B)--
       ``(i) Occupancy rights.--The term `occupancy rights' means 
     the right to occupy the property for any period of time, 
     including a period of time measured by the life of the 
     seller-lessee on the date of the sale-leaseback transaction 
     (or the life of the surviving seller-lessee, in the case of 
     jointly held occupancy rights), or a periodic term subject to 
     a continuing right of renewal by the seller-lessee (or by the 
     surviving seller-lessee, in the case of jointly held 
     occupancy rights).
       ``(ii) Fair rental.--The term `fair rental' means a rental 
     for any subsequent year which equals or exceeds the rental 
     for the first year of a sale-leaseback transaction.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales after December 31, 1995, in taxable 
     years beginning after such date.
                                                                    ____

                   Health Care Assurance Act of 1995


                            senator specter

                          summary of the bill

       Title I: Health Insurance Market Reforms: Market reforms 
     include:
       Insurance Standards: Title I establishes standards for 
     health insurers which would include guaranteed issue and 
     renewability requirements of coverage to all individuals 
     regardless of the existence of pre-existing conditions.
       Tax Equity for the Self-Employed: Title I provides self-
     employed individuals and their families 100 percent tax 
     deductibility for the cost of health insurance coverage. 
     Under current law, no deduction exists for the self-employed 
     since the law which provided only a 25 percent deduction for 
     such costs expired on December 31, 1993. However, all other 
     employers may deduct 100 percent of such costs. Title I 
     corrects this inequity for the self-employed, 3.9 million of 
     which are currently uninsured.
       Small Employer and Individual Purchasing Groups: Title I 
     establishes voluntary small employer and individual 
     purchasing groups designed to provide affordable, 
     comprehensive health coverage options for such employers, 
     their employees, and other uninsured and underinsured 
     individuals and families. Health plans offering coverage 
     through such groups will: (1) provide a standard health 
     benefits package; (2) guarantee issue and renewability of 
     coverage including persons with pre-existing health 
     conditions; (3) adjusted community rated premiums by age and 
     family size in order to spread risk and provide price equity 
     to all; and (4) meet certain other guidelines involving 
     marketing practices.
       Empoyer Mandate to Offer: Title I provides that each small 
     employer shall offer at least 2 health care plans, one of 
     which is a fee-for-service plan or a plan with a point-of-
     service option. There is no requirement that employers pay 
     for coverage in this bill. This provision is to increase 
     consumers availability of choice in their health care 
     coverage.
       Standard Benefits Package: The standard package of benefits 
     would include a variation of benefits permitted among 
     actuarially equivalent plans developed through the National 
     Association of Insurance Commissioners (NAIC). The standard 
     plan will consist of the following services when medically 
     necessary or appropriate: (1) medical and surgical services; 
     (2) medical equipment; (3) preventive services; and (4) 
     emergency transportation in frontier areas.
       Portability: For those persons who are uninsured between 
     jobs, and for insured persons who fear losing coverage should 
     they lose their jobs, Title I reforms existing COBRA law by: 
     (1) extending to 24 months the minimum time period in which 
     COBRA covers former employees through their former employers' 
     plans; and (2) expanding coverage options to include plans 
     with a lower premium and a $1,000 deductible--saving a 
     typical family of four 20 percent in monthly premiums--and 
     plans with a lower premium and a $3,000 deductible--saving a 
     family of four 52 percent in monthly premiums.
       Medicare Select Program: Title I extends the Medicare 
     Select Program, which expires on June 30, 1995, for one year. 
     This program authorizes States to conduct demonstration 
     projects to give Medicare recipients the option of enrolling 
     in a Preferred Provider Organization for their supplemental 
     Medicare insurance. Currently, there are demonstration 
     projects in 15 States.
       Title II: Primary and Preventive Care Services: Title II 
     authorizes the Secretary of Health and Human services to 
     provide grants to States for projects (healthy start 
     initiatives) to reduce infant mortality and low birth weight 
     births and to improve the health and well-being of mothers 
     and their families, pregnant women and infants. Title II also 
     would provide assistance through a grant program to local 
     education agencies and pre-school programs to provide 
     comprehensive health education. In addition, Title II 
     increases authorization of several existing preventive health 
     programs, such as, breast and cervical cancer prevention, 
     childhood immunizations, and community health centers.
       Title III: Patient's Right to Decline Medical Treatment: 
     Improve the effectiveness and portability of advance 
     directives by strengthening the federal law regarding patient 
     self-determination and establishing uniform federal forms 
     with regard to self-determination.
       Title IV: Primary and Preventive Care Providers: Utilizing 
     non-physician providers, such as nurse practitioners, 
     physician assistants, and clinical nurse specialists, by 
     providing direct reimbursement without regard to the setting 
     where services are provided through the Medicare and Medicaid 
     programs. Title IV also seeks to encourage students early on 
     in their medical training to pursue a career in primary care, 
     and it provides assistance to medical training programs to 
     recruit such students.
       Title V: Cost Containment: Cost containment provisions 
     include:
       Outcomes Research: Expands funding for outcomes research 
     necessary for the development of medical practice guidelines 
     and increasing consumers' access to information in order to 
     reduce the delivery of unnecessary and overpriced care.
       New Drug Clinical Trials Program: Title V authorize a 
     program at the National Institutes of Health to expand 
     support
      for clinical trials on promising new drugs and disease 
     treatments with priority given to the most costly diseases 
     impacting the greatest number of people.
       National Health Insurance Data and Claims System: Title V 
     authorizes the development of a National Health Insurance 
     Data System to curtail the escalating costs associated with 
     paper work and bureaucracy. The Secretary of Health and Human 
     Services is directed to create a system to centralize health 
     insurance and health outcomes information incorporating 
     effective privacy protections. Standardizing such information 
     will reduce the time and expense involved in processing 
     paperwork, increase efficiency, and reduce costs.
       Health Care Cost Containment and Quality Information 
     Project: Title V authorizes the Secretary of Health and Human 
     Services to award grants to States to establish a health care 
     cost and quality information system or to improve an existing 
     system. Currently 39 States have State mandates to establish 
     an information system, and of those 39, approximately 20 
     States have information systems in operation. Information, 
     such as hospital charge data and patient procedure outcomes 
     data, which the State agency or council collects is used by 
     businesses, labor, health maintenance organizations, 
     hospitals, researchers, consumers, States, etc. Such data has 
     enabled hospitals to become more competitive, businesses to 
     save health care dollars, and consumers to make informed 
     choices regarding their care.
       Title VI: Long-Term Care: Title VI increases access to 
     long-term care by: (1) establishing a tax credit and 
     deduction for amounts paid towards long-term care services of 
     family members; (2) excluding life insurance savings used to 
     pay for long-term care from income tax; (3) allowing 
     employees to select long-term care insurance as part of a 
     cafeteria plan and allowing employers to deduct this expense; 
     (4) setting standards 
     [[Page S210]] that require long-term care to eliminate the 
     current bias that favors institutional care over community 
     and home-based alternatives.


                               footnotes

     \1\Bureau of the Census Statistical Brief, ``Health Insurance 
     Coverage: 1993,'' October 1994.
     \2\98th Congress 1/3/83 until 1/2/85--(1) S. 811: The Health 
     Care for Displaced Workers Act of 1983 (3/15/83); (2) S. 
     2051: The Health Care Cost Containment Act of 1983 (11/4/83); 
     99th Congress 1/3/85 until 1/2/87--(3) S. 379: The Health 
     Care Cost Containment Act of 1985 (2/5/85); (4) S. 1873: The 
     Community Based Disease Prevention and Health Promotion 
     Projects Act of 1985 (11/21/85); 100th Congress 1/3/87 until 
     1/2/89--(5) S. 281: The Aid to Families and Employment 
     Transition Act (1/6/87); (6) S. 1871: The Pediatric Acquired 
     Immunodeficiency Syndrome (AIDS) Resource Centers Act (11/17/
     87); (7) S. 1872: The Minority Acquired Immunodeficiency 
     Syndrome (AIDS) Awareness and Prevention Projects Act (11/17/
     87); 101st Congress 1/3/89 until 1/2/91--(8) S. 896: The 
     Pediatric AIDS Resource Centers Act (5/2/89); (9) S. 1607: 
     Authorization of the Office of Minority Health (9/12/89); 
     102nd Congress 1/3/91 until 1/5/93--(10) S. 1122: The Long-
     Term Care Incentives Act of 1991 (5/22/91); (11) S. 1214: The 
     Change in Designation of Lancaster County, PA, for Purposes 
     of Medicare Services (6/4/91); (12) S. 1864: The Children's 
     Hospital of Philadelphia Medical Research Facility Act (10/
     23/91); (13) S. 1995: The Health Care Access and 
     Affordability Act of 1991 (11/20/91); (14) S. 2028: The Women 
     Veteran's Health Equity Act of 1991 (11/22/91); (15) S. 2029: 
     Self-Funding of Veteran's Administration Health Care Act (11/
     22/91); (16) S. 2188: Rural Veterans Health Care Facilities 
     Act (2/5/92); (17) S. 3176: The Health Care Affordability and 
     Quality Improvement Act of 1992 (8/12/92); (18) S. 3353: The 
     Deferred Acquisition Cost Act (10/6/92); 103rd Congress 1/5/
     93 until 2/3/94--(19) S. 18: The Comprehensive Health Care 
     Act of 1993 (1/21/93); (20) S. 631: The Comprehensive Access 
     and Affordability Health Care Act of 1993 (3/23/93).
     \3\``We did pass that bill twice, and President Bush vetoed 
     it twice as part of a broader bill.'' Senator George 
     Mitchell; CBS ``Face The Nation''; Sunday, January 23, 1994.
     \4\August 5, 1992; March 11, 1993; April 1, 1993; May 6, 
     1993; May 13, 1993; September 24, 1993; October 7, 1993; 
     October 27, 1993; January 27, 1994; August 5, 1994; August 
     10, 1994; August 11, 1994; September 26, 1994.
     5. July 29, 1992 and April 27, 1993. A third amendment was 
     filed on March 26, 1993.
     6. Bureau of the Census Statistical Brief, ``Health Insurance 
     Coverage: 1993,'' October 1994.
     7. Employee Benefit Research Institute, Analysis of March 
     1993 Current Population Survey, January 1994.
     8. Employee Benefit Research Institute, Analysis of March 
     1993 Current Population Survey, January 1994.
     9. Congressional Budget Office Testimony before the Committee 
     on Ways and Means, U.S. House of Representatives, March 4, 
     1992.
     10. J. Lubitz and R. Prihoda, ``The Use and Costs of Medicare 
     Services in the Last Two Years of Life,'' Health Care 
     Financing Review, Spring, 1984.
     11. Based on 1993 Medicare expenditures from the Health Care 
     Financing Administration of $143 billion and 1994 projected 
     expenditures of $158 billion.
     12. HHS News, U.S. Department of Health and Human Services, 
     ``National Health Expenditures for 1993,'' November 22, 1994.
     13. Dr. Marcia Angell, former Editor of the New England 
     Journal of Medicine, ``Cost Containment and the Physician,'' 
     The Journal of the American Medical Association, September 6, 
     1985.
     14. The Reporter, Lansdale, PA, March 30, 1993.
     15. HHS News, U.S. Department of Health and Human Services, 
     ``National Health Expenditures for 1993,'' November 22, 1994.
                                 ______

      By Mr. NICKLES (for himself, Mr. Helms, Mr. Smith, and Mr. 
        Grassley):
  S. 19. A bill to amend title IV of the Social Security Act to enhance 
educational opportunity, increase school attendance, and promote self-
sufficiency among welfare recipients; to the Committee on Finance.


                         learnfare legislation

 Mr. NICKLES. Mr. President, today I along with Senators Helms, Smith, 
and Grassley introduce legislation that will give States greater 
flexibility in enacting laws that link school attendance to welfare 
benefits. These innovative State initiatives are known as Learnfare.
  We are all aware that this Congress will face the larger issue of 
comprehensive which emphasizes individual choice and responsibility as 
the key to leaving welfare and getting out of poverty, not a bloated 
bureaucracy. A very significant part of that reform which will break 
the welfare cycle is education and innovative Learnfare programs.
  State governments all over the Nation are looking for new ways to 
reduce the prevalence of welfare dependency and lower high school 
dropout rates. Learnfare calls on adults to be held accountable for 
their actions, and holds parents on public assistance accountable for 
the education of their children. This is just plain common sense.
  Most policymakers agree that education is the best way to break the 
cycle of
 generational poverty that plagues our Nation's poor. Children who drop 
out of high school are more likely to be unemployed, more likely to 
turn to a life of crime, and more likely to end up on welfare than 
their peers who remain in school. We must take every measure possible 
to insure that every child in the country benefits from our Nation's 
educational systems.

  Pioneered in Wisconsin, Learnfare is the linkage of AFDC dollars to 
school attendance. Interest in these programs has been voiced from 
Massachusetts to California and from Washington to Florida as well as 
the State of Oklahoma. Currently, States are able to enact these 
measures by obtaining a waiver from the Department of Health and Human 
Services to expand their mandated Job Opportunities and Basic Skills 
[JOBS] programs to include school-age dependents of AFDC recipients. 
Unfortunately, States seeking to gain this waiver have met with 
Federal, bureaucratic stonewalling. I want to stress that this is not a 
mandate on the States but simply gives them the option by removing 
barriers which currently exist if they chose to implement a Learnfare 
program.
  My legislation will remove this Federal stumbling block by amending 
the State programs section of the social Security code's AFDC 
regulations to allow States the option of implementing Learnfare 
programs. Doing away with the necessity for a Federal waiver will 
encourage States to implement innovative ways of keeping at-risk youths 
in school. It is important to note that this legislation places no 
mandates on the States--it simply gives them the option to establish a 
program if they chose. Knowing the importance of educational 
opportunities, the Nation's Governors adopted a 90-percent graduation 
rate as one of the national education goals. Learnfare will help attain 
this goal.
  I truly hope this will be the first step toward reestablishing the 
once commonplace notion that individuals are answerable for their 
actions. Requiring responsible actions of welfare recipients will 
create a two-way obligation between the States and those on welfare. 
States are obliged to assist recipients in getting off the welfare 
rolls and recipients, in turn, are encouraged to use their benefits to 
better their situation.
  We must challenge all Americans to take a stake in our Nation's 
education systems. As the debate on welfare reform unfolds, I challenge 
my colleagues to support this legislation and ensure that it is a key 
part of any welfare reform package. It will give the States the 
opportunity to enact programs the ensure every school-age child in 
America the educational opportunity they deserve.
                                 ______

      By Mr. MOYNIHAN:
  S. 20. A bill to amend title 18, United States Code, with respect to 
the licensing of ammunition manufacturers, and for other purposes; to 
the Committee on the Judiciary.


                     handgun ammunition control act

 Mr. MOYNIHAN. Mr. President, I introduce a measure to improve our 
information about the regulation and criminal use of ammunition and to 
prevent the irresponsible production of ammunition. This bill has three 
components. First, it would require importers and manufacturers of 
ammunition to keep records and submit an annual report to the Bureau of 
Alcohol, Tobacco and Firearms (BATF) on the disposition of ammunition, 
including the amount, caliber and type of ammunition imported or 
manufactured. Second, it would require the Secretary of the Treasury, 
in consultation with the National Academy of Sciences, to conduct a 
study of ammunition use and make recommendations on the efficacy of 
reducing crime by restricting access to ammunition. Finally, it would 
amend title 18 of the United States Code to raise the application fee 
for a license to manufacture certain calibers of ammunition.
  While there are enough handguns in circulation to last well into the 
22nd century, there is perhaps only a 4-year supply of ammunition. But 
how much of what kind of ammunition? Where does it come from? Where 
does it go? There are currently no reporting requirements for 
manufacturers or importers of ammunition; earlier reporting 
requirements were repealed in 1986. The Federal Bureau of 
Investigation's annual Uniform Crime Reports, based on information 
provided by local law enforcement agencies, does not record the 
caliber, type, or quantity of
 ammunition used in crime. In short, our data base is woefully 
inadequate.

  I supported the Brady law, which requires a waiting period before the 
purchase of a handgun, and the recent ban on semiautomatic weapons. But 
while the debate over gun control continues, I offer another 
alternative: Ammunition control. After all, as I have said 
[[Page S211]] before, guns do not kill people; bullets do.
  Ammunition control is not a new idea. In 1982 Phil Caruso of the New 
York City Patrolmen's Benevolent Association asked me to do something 
about armor-piercing bullets. Jacketed in tungsten or other materials, 
these rounds could penetrate four police flak jackets and five Los 
Angeles County telephone books. They are of no sporting value. I 
introduced legislation, the Law Enforcement Officers Protection Act, to 
ban the ``cop-killer'' bullets in the 97th, 98th and 99th Congresses. 
It enjoyed the overwhelming support of law enforcement groups and, 
ultimately, tacit support from the National Rifle Association. It was 
finally signed into law by President Reagan on August 28, 1986.
  The Crime Bill enacted in 1994 contained my amendment to broaden the 
1986 ban to cover new thick steel-jacketed armor-piercing rounds.
  Our cities are becoming more aware of the benefits to be gained from 
ammunition control. The District of Columbia and some other cities 
prohibit a person from possessing ammunition without a valid license 
for a firearm of the same caliber or gauge as the ammunition. Beginning 
in 1990, the City of Los Angeles banned the sale of all ammunition 1 
week prior to Independence Day and new Year's Day in an effort to 
reduce injuries and deaths caused by the firing of guns into the air. 
And most recently, in September of 1994, the City of Chicago became the 
first in America to ban the sale of all handgun ammunition.
  Such efforts are laudable. But they are isolated attempts to cure 
what is in truth a national disease. We need to do more, but to do so, 
we need information to guide policy-making. This bill would fulfill 
that need by requiring annual reports to BATF by manufacturers and 
importers and by directing a study by the National Academy of Sciences. 
We also need to encourage manufacturers of ammunition to be more 
responsible. By substantially increasing application fees for licenses 
to manufacture .25 caliber, .32 caliber, and 9 mm ammunition, this bill 
would discourage the reckless production of unsafe ammunition or 
ammunition which causes excessive damage.
  I urge my colleagues to support this measure, and ask unanimous 
consent that its full text be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 20

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, that this 
     Act may be cited as the ``Handgun Ammunition Control Act of 
     1995''.

     SECTION 1. RECORDS OF DISPOSITION OF AMMUNITION.

       (a) Amendment of Title 18, United States Code.--Section 
     923(g) of title 18, United States Code, is amended--
       (1) in paragraph (1)(A) by inserting after the second 
     sentence ``Each licensed importer and manufacturer of 
     ammunition shall maintain such records of importation, 
     production, shipment, sale or other disposition of ammunition 
     at the place of business of such importer or manufacturer for 
     such period and in such form as the Secretary may by 
     regulations prescribe. Such records shall include the amount, 
     caliber, and type of ammunition.''; and
       (2) by adding at the end the following new paragraph:
       ``(8) Each licensed importer or manufacturer of ammunition 
     shall annually prepare a summary report of imports, 
     production, shipments, sales, and other dispositions during 
     the preceding year. The report shall be prepared on a form 
     specified by the Secretary, shall include the amounts, 
     calibers, and types of ammunition that were disposed of, and 
     shall be forwarded to the office specified thereon not later 
     than the close of business on the date specified by the 
     Secretary.''.
       (b) Study of Criminal Use and Regulation of Ammunition.--
     The Secretary of the Treasury shall request the National 
     Academy of Sciences to--
       (1) prepare, in consultation with the Secretary, a study of 
     the criminal use and regulation of ammunition; and
       (2) to submit to Congress, not later than July 31, 1997, a 
     report with recommendations on the potential for preventing 
     crime by regulating or restricting the availability of 
     ammunition.

     SEC. 2. INCREASE IN LICENSING FEES FOR MANUFACTURERS OF 
                   AMMUNITION.

       Section 923(a) of title 18, United States Code, is 
     amended--
       (1) in paragraph (1)--
       (A) by redesignating subparagraphs (A), (B), (C), and (D) 
     as subparagraphs (B), (C), (D), and (E) respectively;
       (2) by inserting after paragraph (1), the following new 
     paragraph:
       ``(A) of .25 caliber, .32 caliber, or 9 mm ammunition, a 
     fee of $10,000 per year;''
                                 ______

      By Mr. Dole (for himself, Mr. Lieberman, Mr. Helms, Mr. Thurmond, 
        Mr. McConnell, Mr. Lott, Mr. Feingold, Mr. D'Amato, Mr. McCain, 
        Mr. Biden, Mr. Mack, Mr. Kyl, Mr. Gorton, Mr. Hatch, Mr. 
        Specter, Mr. Packwood and Mr. Craig):
  S. 21. A bill to terminate the United States arms embargo applicable 
to the Government of Bosnia and Herzegovina; to the Committee on 
Foreign Relations.


                  BOSNIA-HERZEGOVINA SELF-DEFENSE ACT

  Mr. DOLE. Mr. President, I will also introduce another bill, which 
will have the number S. 21, together with the distinguished Senator 
from Connecticut, Senator Lieberman. The bill is known as the Bosnia-
Herzegovina Self-Defense Act of 1995, which would terminate the United 
States arms embargo on Bosnia. We are pleased to be joined by a number 
of bipartisan sponsors, and we have had a lot of bipartisan votes. In 
fact, the last time we had a vote we had 58 votes.
  Mr. President, I was hoping that we would not have to offer this 
legislation again this year. I was hoping that after more than a 
thousand days of Sarajevo's Siege, after more than thousand excuses 
from the leaders of the international community, that finally some 
action would be taken. Tragically, despite countless promises of tough 
action against brutal Serb aggression, the international community has 
chosen to confront this egregious violation of international law and 
the affront to principles of humanity, with what amounts to 
appeasement. Ironically, the only promise this administration, the 
Europeans, and the United Nations have kept is their promise to 
continue to deny the Bosnian people the right to defend themselves 
against genocidal aggression.
  What is so disappointing about this situation, is that the last time 
the Senate debated this matter, the Clinton administration made the 
following predictions and commitments: First, the contact group 
countries were serious about living up to the commitments they made in 
the July 30 communique, which included stricter enforcement and 
expansion of the exclusion zones in Bosnia; Second, the Clinton 
administration would seek a multilateral lifting of the arms embargo in 
the U.N. Security Council; and Third no further concessions would be 
made to the Bosnian Serbs, the contact group plan being a ``Peaceful 
Ultimatum.''
  Nearly 6 months later, what do we see? In Bihac we saw that there is 
no will to fulfill current NATO and U.N. commitment to protect the safe 
havens in Bosnia, let alone take on greater responsibilities;
  A U.S.-sponsored resolution to lift the embargo lies dormant in the 
U.N. Security Council for more than 2 months now; and
  Representatives from contact group countries are rushing to Belgrade 
and to Pale to further sweeten the pot for the Bosnian Serbs and their 
mentor, Slobodan Milosevic. The have tacitly agreed to a confederation 
between Serb-controlled areas of Bosnia and Serbia, and are moving 
toward extending sanctions relief for Serbia even though Milosevic's 
announced embargo of the Bosnian Serbs has proven to be a sham.
  We still every day hope peace is around the corner. We are told, let 
us pass some more resolutions, let somebody in the United Nations make 
a statement, let us listen to the British, let us listen to the French, 
let us do all these things and we have been doing it and doing it and 
nothing happens.
  The United Nations has a dual key approach, which means NATO cannot 
do anything in Bosnia, if they want to do anything, and even that is 
questionable.
  Another ceasefire has been reached--and maybe it will hold--but by 
their own admission, the Bosnian Serbs have only agreed to the contact 
group plan as a ``basis for further negotiations.'' Can we really call 
that progress?
  And so, we are offering legislation to lift the arms embargo once 
more. This bill does allow for the possibility that the ceasefire may 
hold for 4 months; it would not lift the arms embargo until 
[[Page S212]] May 1 of this year unless there is a formal request from 
the Bosnian Government prior to that time.
  There are those who will say that this bill undermines the ceasefire 
and the peace process. I strongly disagree. Since when does leverage 
undermine diplomacy? So far, the only leverage is on the Bosnian Serb 
side--because they control 70 percent of Bosnia, they hold U.N. troops 
hostage with impunity, they shut down the Sarajevo airlift by 
threatening NATO planes, because they do these things and all they have 
to fear is another visit by Yasushi Akashi. On the other side are the 
Bosnians, who are nominally protected in their safe havens, and can 
only see evidence of their rights as a sovereign nation on paper--in 
the U.N. Charter or some U.N. resolution.
  The bottom line is that if this legislation is passed and no peace 
settlement is reached, Radovan Karadzic and his thugs will have to face 
greater consequences than another meeting of the contact group. That 
would be a great improvement on the empty threats of the last 33 
months.
  I would like to quote from the late Secretary General of NATO, 
Manfred Woerner, who gave a speech in the Fall of 1993 about NATO and 
foreign policy in the 21st century. He said, and I quote: ``First, 
political solutions and diplomatic efforts will only work if backed by 
the necessary military power and the credible resolve to use it against 
an aggressor. Second, if you cannot or do not want to help the victim 
of aggression, enable him to help himself.''
  The United States and the members of the alliance would do well to 
consider the wise words of Manfred Woerner--one of the strongest 
secretaries general in NATO's history. The contact group's diplomacy is 
not backed by the necessary military power or credible resolve--and 
that is why its diplomatic efforts have failed, causing considerable 
damage to the credibility of the alliance. Furthermore, since after 
these long months it is apparent that the international community is 
unwilling to confront Serbian aggression, we should help the victim of 
this aggression, Bosnia.
  Mr. President, I would also like to address some of the arguments 
made against ``unilaterally'' lifting the arms embargo. First, if the 
United States acts first, that does not mean we will not be joined by 
other countries. I believe that despite British and French objections, 
even some of our NATO allies would join us. Moreover, there are other 
countries, including the gulf states and moderate Islamic governments 
that would participate in financing and providing military assistance. 
As for the argument that leading the way would lead to the demise of 
other embargoes against aggressor states, such as Iraq, this argument 
assumes that our allies cannot tell the difference between a legal and 
illegal embargo.
  Second, the provision of training and arms would not require the 
deployment of U.S. ground troops. The Bosnians have an
 advantage in manpower--what they need are weapons. Indeed, it is the 
administration's policy of committing the United States to assist in 
the enforcement of the contact group settlement that would lead to the 
potential deployment of tens of thousands of U.S. ground troops--and 
for a considerable length of time because the Bosnians would still be 
unable to protect their territory.

  Third, contrary to those who point to reports of arms shipments from 
Iran to Bosnia, a decision to arm the Bosnians would reduce the 
potential influence and role of radical extremists states like Iran. 
The Muslins in Bosnia are secular Muslims, not fundamentalists, who 
have lived with Christians and Jews in peace for centuries. Ironically, 
our policy toward Bosnia has fueled anti-Western extremism in the 
Middle East.
  Some say it is too late, the Bosnians have lost and it would take too 
long for them to achieve the capability to defend themselves against 
the powerful Serb forces. In my view, that judgment should be left to 
the Bosnians--it is their country and their future. Furthermore, the 
fact is that Serb forces have not paid a price for their aggression and 
we do not know what the impact of leveling the military playing field 
will have on the effectiveness of Serb forces. Let us recall that some 
in our Government greatly overestimated the cohesiveness and morale of 
the Iraqi forces, and underestimated the military and political impact 
that stingers had on the mighty Soviet Red Army in Afghanistan. Serb 
forces are not the Red army, they are not the Iraqi army.
  As for the extent of military assistance required, the Bosnians do 
not need to duplicate the inventory of Serb forces, only acquire the 
means to counter them. Earlier Pentagon estimates that $5 billion in 
military assistance is required to assist the Bosnians amount to a 
scare tactic. The Bosnians need Soviet-style weapons--which are readily 
available and less expensive than top of the line U.S. systems--in 
addition to training in strategy and tactics.
  Finally, I would like to address the argument I heard in London, that 
the withdrawal of U.N. protection forces would result in the serious 
deterioration of the humanitarian situation in Bosnia. This would 
likely be true in the short term, particularly in the eastern enclaves. 
However, we must recognize that the circumstances have worsened in 
recent months despite the presence of U.N. protection forces. Should 
the Bosnian Serbs choose to target their forces on the eastern 
enclaves, as they did in Bihac, U.N. protection would probably amount 
to very little. The bottom line is that over the long term, the 
Bosnians are better off putting their future into their own hands, than 
in the hands of international bureaucrats--even if in the short term, 
the situation worsens.
  Mr. President, we are rapidly approaching the third anniversary of 
this tragic war. We have an opportunity to take real action, to take 
meaningful action, by terminating this illegal and unjust arms embargo 
on Bosnia-Herzegovina. I urge my colleagues to sign up as cosponsors 
and take a firm stand in support of democracy, international law and 
humanity.
  Mr. President, I ask unanimous consent that my entire statement be 
made a part of the Record, and also a statement by Senator Lieberman 
and Senator Feingold. And I would indicate to my colleagues the other 
cosponsors. Of course, our resolution is open to additional cosponsors. 
The cosponsors are Senators Dole and Lieberman, Helms, Thurmond, 
McConnell, Lott, Feingold, D'Amato, McCain, Biden, Mack, Kyl, Gorton, 
Hatch, Specter, Packwood and Gregg.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 21

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Bosnia and Herzegovina Self-
     Defense Act of 1995''.

     SEC. 2. FINDINGS.

       The Congress makes the following findings:
       (1) For the reasons stated in section 520 of the Foreign 
     Relations Authorization Act, Fiscal Years 1994 and 1995 
     (Public Law 103-236), the Congress has found that continued 
     application of an international arms embargo to the 
     Government of Bosnia and Herzegovina contravenes that 
     Government's inherent right of individual or collective self-
     defense under Article 51 of the United National Charter and 
     therefore is inconsistent with international law.
       (2) The United States has not formally sought multilateral 
     support for terminating the arms embargo against Bosnia and 
     Herzegovina through a vote on a United Nations Security 
     Council resolution since the enactment of section 1404 of the 
     National Defense Authorization Act for Fiscal Year 1995 
     (Public Law 103-337).
       (3) The United Nations Security Council has not taken 
     measures necessary to maintain international peace and 
     security in Bosnia and Herzegovina since the aggression 
     against that country began in April 1992.

     SEC. 3. STATEMENT OF SUPPORT.

       The Congress supports the efforts of the Government of the 
     Republic of Bosnia and Herzegovina--
       (1) to defend its people and the territory of the Republic;
       (2) to preserve the sovereignty, independence, and 
     territorial integrity of the Republic; and
       (3) to bring about a peaceful, just, fair, viable, and 
     sustainable settlement of the conflict in Bosnia and 
     Herzegovina.

     SEC. 4. TERMINATION OF ARMS EMBARGO.

       (a) Termination.--The President shall terminate the United 
     States arms embargo of the Government of Bosnia and 
     Herzegovina on--
     [[Page S213]]   (1) the date of receipt from that Government 
     of a request for assistance in exercising its right of self-
     defense under Article 51 of the United Nations Charter, or
       (2) May 1, 1995,
     whichever comes first.
       (b) Definition.--As used in this section, the term ``United 
     States arms embargo of the Government of Bosnia and 
     Herzegovina'' means the application to the Government of 
     Bosnia and Herzegovina of--
       (1) the policy adopted July 10, 1991, and published in the 
     Federal Register of July 19, 1991 (58 F.R. 33322) under the 
     heading ``Suspension of Munitions Export Licenses to 
     Yugoslavia''; and
       (2) any similar policy being applied by the United States 
     Government as of the date of receipt of the request described 
     in subsection (a) pursuant to which approval is denied for 
     transfers of defense articles and defense services to the 
     former Yugoslavia.
       (c) Rule of Construction.--Nothing in this section shall be 
     interpreted as authorization for deployment of United States 
     forces in the territory of Bosnia and Herzegovina for any 
     purpose, including training, support, or delivery of military 
     equipment.

  Mr. LIEBERMAN. Mr. President, the people of Bosnia-Herzegovina are in 
the midst of their third terrible winter of war. For most Bosnians, 
uncertain food supplies, running water, heat and fuel compound the 
misery of loss--of family members, and friends, personal security and 
their former multicultural identity. Bosnia, a United Nations member 
state, has been the victim of aggression from neighboring Serbia, has 
suffered genocide in the guise of ``ethnic cleansing,'' and has been 
effectively forced by the so-called ``Great Powers'' to trade 
sovereignty over more than half of its territory in exchange for 
unfulfilled promises of peace.
  Why did these terrible things happen to Bosnia? Has it blown up 
civilian aircraft? Assassinated policeman? Kidnapped diplomats? Built 
or exported nuclear weapons? No. Bosnia had the temerity to be one of 
four states to leave the former Yugoslavia pursuant to a vote by its 
citizens.
  When the remnants of the former Yugoslavia retaliated by invading 
Bosnia, how did the United Nations respond? It has not supported member 
state Bosnia's right of self-defense. It has not effectively defended 
the safe areas it persuaded Bosnia to agree to. It has assisted the 
Serbs with ethnic cleansing by moving populations out of contested 
areas and providing a share of fuel and humanitarian supplies to Serb 
forces--even while they shelled civilians and U.N. peacekeepers.
  The intention behind these misguided policies was to stop the 
fighting in Bosnia. It was thought that an evenhanded policy taking 
sides against the aggressor was the best way to restore peace. But the 
practical effect of this policy has been anything but evenhanded.
  The divisions rending the former Yugoslavia are not new since the end 
of the cold war. The emotions propelling the violence in that region 
festered invisibly for years but did not disappear under authoritarian 
communism. Similarly, they will not disappear under an unjust peace 
imposed under the United Nations. This is the post-cold war era, when 
democracy and human rights are supposed to be free to flower. It is 
inconsistent both with the opportunities presented by the end of the 
cold war and with the United States' commitment to human rights and 
democracy to participate in a policy which does not side with the 
victims against the aggressor and reward democratic leaders instead of 
authoritarian dictators.
  The United Nations asserts that lifting the arms embargo against 
Bosnia will lead to further violence in Bosnia, expansion of the 
conflict to neighboring Balkan States, the withdrawal of UNPROFOR and 
Serbian conquest of even more of Bosnia. Rather than risk these 
consequences, some argue the United States should continue to acquiesce 
in a peace process that has resulted in more and more concessions from 
the Bosnian side in exchange for more and more broken promises by the 
Serbs and the United Nations. But as the continued shelling of Sarajevo 
and strangling of supplies to the eastern areas shows, this process has 
not produced peace. The attack launched from Croatia into Bihac in 
November demonstrated that it has not prevented spillover to other 
Balkan States. And as President Izethegovic stated at the CSCE Summit 
in Budapest, and unjust peace will not prevent the outgunned Bosnians 
from continuing their fight for freedom.
  Evenhandedness between a victim and an aggressor is not only immoral; 
it is dangerous. If Serbian aggression and intransigence is successful 
in Bosnia, we can expect more of it, not only in the Balkans but 
elsewhere as well. No peace based on injustice will endure long in a 
democracy. In international relations as in medicine, an intervener 
should be sure first to do no harm. These should be the starting points 
of United States' and United Nations' policy in Bosnia. We should not 
presume a U.N. role first and then allow a preoccupation with the 
practicalities of it to obscure our purpose.
  I have heard warnings that if the United States unilaterally lifts 
the arms embargo on Bosnia, not only Bosnia but also the institutions 
of the United Nations and even NATO will be harmed. It do not see the 
consequences of the United States' correcting its policy in Bosnia in 
such stark terms. But I am prepared to live with the consequences that 
follow. To some, Bosnian sovereignty seems a small price to pay in 
order to preserve NATO and the U.N. But if NATO, which stood for a 
strong defense against potential aggression during the cold war, stands 
for timidity in the face of aggression in the New World, then it needs 
to be rethought. Similarly, if the United Nations, created as a forum 
to fairly resolve post-World War II disputes is not preoccupied with 
preserving the status quo at enormous cost and without regard to 
justice, then it too is in need of change.
  Of this much I am certain: the United States should turn away from 
acquiescence in a policy which immorally equates victim and aggressor, 
makes promises to the victims which it does not honor and establishes 
as a tenet of the new world order that determined aggression pays. 
During the current cessation of hostilities in Bosnia, the Bosnian 
Serbs have one more change to reach a peaceful settlement with the 
Bosnian Government. If they do not take advantage of this opportunity 
or violate the cessation of hostilities, the United States should lift 
the arms embargo, preferably with but if necessary without the 
concurrence of the United Nations.
  Mr. FEINGOLD. Mr. President, I rise today as an original co-sponsor 
of the Dole-Lieberman bill to terminate the U.S. arms embargo against 
the Republic of Bosnia and Herzegovina. By introducing this bill on the 
first day of the 104th Congress, we are signalling that we will do all 
we can to pursue a just and moral policy toward Bosnia, and are 
designating it a top foreign policy priority. Of course, the partition 
of a member state of the United Nations should be of utmost concern to 
every member of the international community, but I also believe that 
this debate is about how our post-World War II structures and cold war 
principles respond in practice to post-cold war crises.
  This feels a bit like deja vu. When I came to the Senate 2 years ago, 
the war in Bosnia was already raging. The Bosnian Serbs, egged on by 
Serbia, were fighting to create a greater Serbia at the expense of a 
sovereign nation, and at any cost to humanity and international law. We 
were horrified by evidence of ethnic cleansing of non-Serbs by Serbian 
forces; of systematic rape of Bosnian women by Serb military; and of 
naked aggression against a member state of the United Nations. Informed 
by resolutions after the Holocaust in 1945 that ``never again'' would 
we ``bear witness'' to such atrocities, we debated whether to lift the 
U.N. arms embargo against Bosnia, and permit the Bosnian Government to 
exercise its guaranteed right of self-defense. In March 1993 I 
introduced the first resolution urging the United States to work with 
the United Nations to lift the embargo, and then I joined Senators 
Dole, Lieberman, and others in offering several floor amendments to 
lift the U.S. embargo unilaterally.
  In the Senate Foreign Relations Committee, on the floor of the 
Senate, and in conference on major foreign policy bills during the 103d 
Congress we voted repeatedly on the question of whether to lift the 
arms embargo against Bosnia, either multilaterally or unilaterally. I 
and others argued that as a sovereign nation, Bosnia was entitled to 
exercise its right of self-defense, and that since the negotiating 
strength of each party is dependent to 
[[Page S214]] some degree on equity in access to arms, no peace plan 
would meet success unless Bosnia had an opportunity to counter Serbian 
aggression on its own.
  There was overwhelming majority support to lift the embargo, though 
the Senate was closely divided on any given day about whether the 
United States should proceed unilaterally or only in concert with the 
United Nations. Finally, in response to congressional direction, 
President Clinton announced on November 12 that the United States would 
no longer enforce the embargo. This is a welcome step, but falls short 
of the imperative to terminate the embargo altogether.
  I maintain that the United States is authorized to lift the embargo 
unilaterally because it contravenes Article 51 of the United Nations 
Charter, and is therefore non-binding. Article 51 protects the inherent 
right of individuals and states to self-defense ``until the Security 
Council has taken measures necessary to maintain international peace 
and security.'' Clearly, the United Nations has yet to take measures 
which do that.
  As a substitute, the United Nations has passed resolutions to 
restrain the Serb advances; deployed an international peacekeeping 
force to deliver humanitarian aid to starving Bosnians; and sponsored a 
series of failed and misguided peace plans. NATO has also threatened 
air attacks, obliquely coordinated with the United Nations in certain 
cases. The promises to be a surrogate protector were all supposed to 
compensate Bosnia for the denial of its self-defense by the 
international community.
  But, while some of these measures may have saved lives, there is no 
substitute for self-defense, Mr. President. In fact, these policies 
have subverted the rules of international law and order, and have made 
the United Nations and NATO, through inaction, false fatalism, and now 
appeasement, party to the aggression they were created after World War 
II to combat.
  Mr. President, after taking responsibility for Bosnia's security, the 
member nations of the U.N. Security Council through the Contact Group 
are selling out Bosnia and presiding over the dismemberment of a 
sovereign state of the United Nations. The administration, perhaps 
tired of a difficult situation, has apparently decided to appease the 
Bosnian Serbs by concessions instead of sanctions, implying that the 
war is over and that the Serbs have won because they have demonstrated 
the most force, fought the most viciously, and in the end occupy the 
most land.
  This is hardly a formula for peace. As we learned in World War II, 
and even during the Persian Gulf crisis, appeasement does not work; 
rewarding aggression does not work. Through the latest Contact Group 
plan, and the apparent shift in United States policy, Serbian 
belligerence and nationalism have only been emboldened. U.N. Security 
Council resolutions, along with NATO threats of force, have not been 
enforced and have been proven hollow: in fact, the United Nations has 
so little leverage in the region, Bosnian Serbs are even kidnapping 
U.N. peacekeepers with impunity. Each act of appeasement has only 
whetted their appetite for more, and threatens exactly the wider war 
the administration and NATO say they want to contain. Given this 
situation, I am skeptical that the 4-month ceasefire signed this 
weekend--and, at Serbian insistence, explicitly without any linkage to 
peace talks--will hold: after all, with everything to gain for 
violating it, what incentive do the Serbs have to honor it?
  There may be little the world can do to stop further carnage in 
Bosnia. However, we have an option to pursue justice in Bosnia, an 
option far better than appeasement, an option that would create a level 
playing field: lift the arms embargo against Bosnia, either with or 
without our NATO allies or U.N. approval. The embargo has not contained 
violence in the former Yugoslavia, but rather has helped to victimize 
further Bosnia; it has, as
  President Izetbegovic said at the United Nations in September, 
``turned justice into injustice.''
  If the Contact Group wishes to succeed, then any settlement it 
negotiates will have to include a lifting of the embargo--not just 
because it will restore dignity to the people of Bosnia, but also 
because it is the only type of pressure which may ensure that the Serbs 
abide by the agreement and do not seek additional concessions as time 
goes on. Lifting the embargo may mean the departure of U.N. 
peacekeepers in Bosnia. If it is done in connection with a peace 
agreement, this may be warranted, and perhaps even U.N. weapons in the 
region can be transferred to the Bosnian army. If the U.N. presence 
continues to be the only reason not to lift the embargo, then I would 
submit that the United Nations is standing in the way of a just 
settlement, and its purpose in the region should be re-thought.
  Though I firmly believe legally the United States can send weapons to 
the Bosnians, I think the administration would be well-served 
politically if it continued to work to lift the arms embargo 
multilaterally. In October the U.S. presented a resolution to the 
Security Council to lift the embargo, but has never moved it. At a 
minimum, the United States should call for a vote on the resolution, 
and then work to round up multinational support for it similar to what 
the administration did for its invasion into Haiti. We might lose, but 
at least we would have tried to cooperate with our allies. At least we 
would not be relegating Bosnia to the lowest level of importance in our 
international relationships, or behaving as if we cannot influence what 
the United Nations does.
  I would also urge the administration to continue its efforts to 
negotiate a comprehensive solution to the Balkan war. The Contact Group 
plan addresses only Bosnia, yet Bosnia is just one component of Serbian 
aggression. The Serbs have grabbed about one-third of Croatian 
territory, and the United Nations has not implemented its resolutions 
to cut off those areas. The Croatian-Muslim federation has been one of 
the most positive developments this year, and every step should be 
taken to strengthen this union: indeed, both countries depend on each 
other for survival. Therefore, provided that Croatia continues to 
contribute to an overall peaceful resolution in the Balkans, I would be 
inclined to lift the embargo against Croatia as well. We must remember 
that if there is an agreement between Bosnia and the Serbs, the region 
will quickly erupt again if Croatia's grievances are not addressed as 
well.
  The Balkan war is complex, ugly, and terrifying. The risks and 
potential for further violence are mind-boggling. But, it is also a 
test for the international community to define its interests, 
philosophies, and methods in the post-cold war world. So far, it has 
failed deplorably in principle and practice, and it won't get it right 
until the arms embargo is lifted.
                                 ______

      By Mr. DOLE (for himself, Mr. Heflin, Mr. Brown, Mr. Burns, Mr. 
        Hatch, Mr. Nickles, Mr. Craig and Mrs. Kassebaum:

  )S.22. A bill to require Federal agencies to prepare private property 
taking impact analyses; to the Committee on Governmental Affairs.


                THE PRIVATE PROPERTY RIGHTS ACT OF 1995

  Mr. DOLE.
   Mr. President, time and again I have heard from the people all 
across America that Congress must do more to stop the infringement on 
private property rights. I believe we have all heard this message. 
Today, I along with Senators Heflin, Brown, Craig, Kassebaum, Burns, 
Hatch and Nickles are introducing the private property Rights Act of 
1995. This legislation will serve as a small step toward ensuring that 
government mandates and government bureaucrats do not continue to run 
over individual citizens and individual rights.

  Now, a lot has been said on this floor regarding private property 
rights. I think many of us agree on the need to protect private 
property. The question is--How do we best proceed to get the government 
out of the peoples' backyards?
  Last year I introduced the private property rights Act of 1994. Some 
Members in this Chamber may recall a modified version of that 
legislation was later attached to the Safe Drinking Water Act. Today, I 
am introducing the Private Property Rights Act of 1995. This bill has 
incorporated some of the changes proposed during the debate of the 1994 
Safe Drinking Water Act, although there are still differences.
  This bill takes a ``look before you leap'' approach to the regulatory 
process. The legislation requires Federal 
[[Page S215]] agencies to conduct a takings impact assessment when 
promulgating any agency policy, regulation, guideline or before 
recommending legislative proposals to Congress. This bill does not stop 
legitimate regulatory processes and it only applies to any action which 
could result in an actual taking.
  The assessment must consider the effect of the agency action, the 
cost of the action to the Federal Government, the reduction in the 
value to the owners property, and require the agency to consider 
alternatives to taking private property.
  It is important to note that taking can occur even though title to 
the property remains with the original owner and the government has 
only placed restrictions on its use. Fortunately, courts have 
recognized these partial takings are subject to just compensation. 
Unfortunately, the only check on the enforcement of the Constitution 
has been through the court system, wherein citizens can, at the expense 
of vast amounts of money and time, ensure the government complies with 
the Constitution.
  The rights of property owners are supposed to be protected from the 
Federal Government under the fifth amendment and from State governments 
by the fourteenth amendment. Unfortunately, those who have sworn to 
uphold our Constitution are not always as vigilant as they need to be. 
Let's face it, there are billions of dollars in claims filed against 
the Federal Government by landowners who believe their private property 
has been taken.
  This bill is the first step toward putting the people back in charge 
of their land. This is a good government bill. It brings government 
into the sunshine. If you support the Freedom of Information Act, if 
you support the National Environmental Policy Act, if you support the 
Administrative Procedures Act, then you should support the Private 
Property Rights Act of 1995.
  Mr. President, I ask my colleagues to ask small business owners, 
farmers and ranchers, and those who believe in the private property 
rights contained in our Constitution, what they think about this bill? 
When they do, I am certain they will agree we should adopt this 
legislation in 1995.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 22

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

     SECTION 1. PRIVATE PROPERTY RIGHTS.

       (a) Short Title.--This Act may be cited as the ``Private 
     Property Rights Act of 1995''.
       (b) Findings.--The Congress finds that--
       (1) the protection of private property from a taking by the 
     Government without just compensation is an integral 
     protection for private citizens incorporated into the United 
     States Constitution by the fifth amendment and made 
     applicable to the States by the fourteenth amendment; and
       (2) Federal agencies should take into consideration the 
     impact of governmental actions on the use and ownership of 
     private property.
       (c) Purpose.--The Congress, recognizing the important role 
     that the use and ownership of private property plays in 
     ensuring the economic and social well-being of the Nation, 
     declares that the Federal Government should protect the 
     health, safety, and welfare of the public and, in doing so, 
     to the extent practicable, avoid takings of private property.
       (d) Definitions.--For purposes of this section--
       (1) the term ``agency'' means a department, agency, 
     independent agency, or instrumentality of the United States, 
     including any military department, Government corporation, 
     Government-controlled corporation, or other establishment in 
     the executive branch of the United States Government; and
       (2) the term ``taking of private property'' means any 
     action whereby private property is taken in such a way as to 
     require compensation under the fifth amendment to the United 
     States Constitution.
       (e) Private Property Taking Impact Analysis.--
       (1) In general.--The Congress authorizes and directs that, 
     to the fullest extent possible--
       (A) the policies, regulations, and public laws of the 
     United States shall be interpreted and administered in 
     accordance with the policies under this title; and
       (B) subject to paragraph (2), all agencies of the Federal 
     Government shall complete a private property taking impact 
     analysis before issuing or promulgating any policy, 
     regulation, proposed legislation, or related agency action 
     which is likely to result in a taking of private property.
       (2) Nonapplication.--The provisions of paragraph (1)(B) 
     shall not apply to--
       (A) an action in which the power of eminent domain is 
     formally exercised;
       (B) an action taken--
       (i) with respect to property held in trust by the United 
     States; or
       (ii) in preparation for, or in connection with, treaty 
     negotiations with foreign nations;
       (C) a law enforcement action, including seizure, for a 
     violation of law, of property for forfeiture or as evidence 
     in a criminal proceeding;
       (D) a communication between an agency and a State or local 
     land-use planning agency concerning a planned or proposed 
     State or local activity that regulates private property, 
     regardless of whether the communication is initiated by an 
     agency or is undertaken in response to an invitation by the 
     State or local authority;
       (E) the placement of a military facility or a military 
     activity involving the use of solely Federal property;
       (F) any military or foreign affairs function (including a 
     procurement function under a military or foreign affairs 
     function), but not including the civil works program of the 
     Army Corps of Engineers; and
       (G) any case in which there is an immediate threat to 
     health or safety that constitutes an emergency requiring 
     immediate response or the issuance of a regulation under 
     section 553(b)(B) of title 5, United States Code, if the 
     taking impact analysis is completed after the emergency 
     action is carried out or the regulation is published.
       (3) Content of analysis.--A private property taking impact 
     analysis shall be a written statement that includes--
       (A) the specific purpose of the policy, regulation, 
     proposal, recommendation, or related agency action;
       (B) an assessment of the likelihood that a taking of 
     private property will occur under such policy, regulation, 
     proposal, recommendation, or related agency action;
       (C) an evaluation of whether such policy, regulation, 
     proposal, recommendation, or related agency action is likely 
     to require compensation to private property owners;
       (D) alternatives to the policy, regulation, proposal, 
     recommendation, or related agency action that would achieve 
     the intended purposes of the agency action and lessen the 
     likelihood that a taking of private property will occur; and
       (E) an estimate of the potential liability of the Federal 
     Government if the Government is required to compensate a 
     private property owner.
       (4) Submission to omb.--Each agency shall provide the 
     analysis required by this section as part of any submission 
     otherwise required to be made to the Office of Management and 
     Budget in conjunction with the proposed regulation.
       (5) Public availability of analysis.--An agency shall--
       (A) make each private property taking impact analysis 
     available to the public; and
       (B) to the greatest extent practicable, transmit a copy of 
     such analysis to the owner or any other person with a 
     property right or interest in the affected property.
       (f) Guidance and Reporting Requirements.--
       (1) Guidance.--The Attorney General shall provide legal 
     guidance in a timely manner, in response to a request by an 
     agency, to assist the agency in complying with this section.
       (2) Reporting.--Not later than 1 year after the date of 
     enactment of this Act and at the end of each 1-year period 
     thereafter, each agency shall provide a report to the 
     Director of the Office of Management and Budget and the 
     Attorney General identifying each agency action that has 
     resulted in the preparation of a taking impact analysis, the 
     filing of a taking claim, or an award of compensation 
     pursuant to the Just Compensation Clause of the Fifth 
     Amendment to the Constitution. The Director of the Office of 
     Management and Budget and the Attorney General shall publish 
     in the Federal Register, on an annual basis, a compilation of 
     the reports of all agencies made pursuant to this paragraph.
       (g) Presumptions in Proceedings.--For the purpose of any 
     agency action or administrative or judicial proceeding, there 
     shall be a rebuttable presumption that the costs, values, and 
     estimates in any private property takings impact analysis 
     shall be outdated and inaccurate, if--
       (1) such analysis was completed 5 years or more before the 
     date of such action or proceeding; and
       (2) such costs, values, or estimates have not been modified 
     within the 5-year period preceding the date of such action or 
     proceeding.
       (h) Rules of Construction.--Nothing in this Act shall be 
     construed to--
       (1) limit any right or remedy, constitute a condition 
     precedent or a requirement to exhaust administrative 
     remedies, or bar any claim of any person relating to such 
     person's property under any other law, including claims made 
     under this Act, section 1346 or 1402 of title 28, United 
     States Code, or chapter 91 of title 28, United States Code; 
     or
       (2) constitute a conclusive determination of--
       (A) the value of any property for purposes of an appraisal 
     for the acquisition of property, or for the determination of 
     damages; or
       (B) any other material issue.
     [[Page S216]]   (i) Effective Date.--The provisions of this 
     Act shall take effect 120 days after the date of the 
     enactment of this Act.

  Mr. HEFLIN. Mr. President, I rise today to support the Private 
Property Rights Act of 1995--a bill similar to the private property 
rights legislation Senator Dole and I introduced during the 103d 
Congress. This bill recognizes the important role the use and ownership 
of property plays in American society and declares the policy of the 
Federal Government to be one that will minimize takings of private 
property.
  The fifth amendment to the Constitution clearly provides that private 
property cannot be taken for public use without just compensation. As 
such, the Dole-Heflin bill creates a method whereby the impact on 
private property rights is duly considered in Federal regulatory 
activities. Specifically, the bill will require Federal agencies to 
certify to the Attorney General that a taking impact assessment has 
been completed prior to promulgating any agency policy. The takings 
impact assessment must consider the effect of the agency action, the 
cost of the action to the Federal Government, the reduction in value to 
private property owners, and requires the agency to consider 
alternatives to taking private property. In effect, compliance with 
this act will not only help avoid inadvertent takings of 
constitutionally guaranteed rights but will also reduce the Federal 
Government's financial liability for such compensable takings.
  In closing, I believe that private property rights are the foundation 
of the individual liberties we all enjoy as Americans. Therefore, I 
urge my colleagues to join me in supporting this important legislation.
                                 ______

      By Mr. HELMS:
  S. 23. A bill to protect the First Amendment rights of employees of 
the Federal Government; read the first time.


 PROTECTING FEDERAL EMPLOYEES' RIGHTS TO QUESTION HOMOSEXUAL AGENDA IN 
                             THE WORKPLACE

  Mr. HELMS. Mr. President, it became an embarrassment to the decency 
of the American people last year that in many high places within 
Government, free speech was to be permitted only when organized 
homosexuals agreed to it.
  There was an episode on July 20, 1994, when 58 Senators voted in 
defense of a faithful and longtime employee of the Department of 
Agriculture--Dr. Karl Mertz, whose first amendment rights were 
callously violated after he dared to stand up against sodomy. Took a 
stand, on his own time, by stating his opposition to special rights for 
homosexuals. As a result of that Senate vote and my holding up USDA 
nominations and legislation, the former Secretary of Agriculture, Mike 
Espy, restored that employee, Dr. Karl Mertz, to his previous position.
  While the amendment I offered last summer only protected the first 
amendment rights of employees at the USDA, I said at the time that it 
was also imperative that all employees throughout the Federal 
Government be assured that they are able to exercise, without fear of 
reprisal, their right to question the special rights for homosexuals 
that have been proposed by numerous Federal agencies.
  And that is the intent for the legislation I am introducing today. 
For Senators who did not hear the text of the bill when it was read by 
the clerk, let me read it again.

       Notwithstanding any other provision of law, no employee of 
     the Federal Government shall be peremptorily removed without 
     public hearings from his or her position because of remarks 
     made during personal time in opposition to the Federal 
     Government's policies, or proposed policies, regarding 
     homosexuals, and any such individual so removed prior to date 
     of this Act shall be reinstated to his or her previous 
     position.

  Senators might belittle this bill as needless. Nothing could be 
further from the truth. Simply put, this bill protects the rights of 
Federal employees to speak their mind on their own time when it comes 
to matters
 of moral and spiritual significance. If they lose this right--as Dr. 
Mertz almost did at the Department of Argriculture--then all Americans 
lose.

  Mr. President, Americans have very strong feelings about the 
religious and moral implications of homosexuality. And Americans 
opposed to it have every bit as much a right to oppose the Government's 
efforts to extend special rights to homosexuals.
  As the homosexuals have to ask for special rights, privileges, and 
protections from the Government. Allowing homosexuals to characterize 
free speech opposing their agenda as hate speech--as the news media 
does as well--is one thing; but allowing the Federal Government to take 
their side in the public debate--and in the Federal workplace--is quite 
another.
  That is why this legislation is designed, if enacted, to ensure that 
the Federal Government remains neutral in the on-going cultural debate 
over homosexuality. Federal employees will be able to state their true 
feelings on the issue without having to worry about so-called 
politically correct bureaucrats getting them fired.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 23

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
       Section. 1. Notwithstanding any other provision of law, no 
     employee of the Federal Government shall be peremptorily 
     removed without public hearings from his or her position 
     because of remarks made during personal time in opposition to 
     the Federal Government's policies, or proposed policies 
     regarding homosexuals, and any such individual so removed 
     prior to date of enactment of this Act shall be reinstated to 
     his or her previous position.
                                 ______

      By Mr. HELMS:
  S. 24. A bill to make it a violation of a right secured by the 
Constitution and laws of the United States to perform an abortion with 
knowledge that such abortion is being performed solely because of the 
gender of the fetus, and for other purposes; read the first time.


                      CIVIL RIGHTS OF INFANTS ACT

  Mr. HELMS. Mr. President, all who value the rights of the unborn are 
indebted to our distinguished former colleague from New Hampshire, Mr. 
Humphrey. From the day he arrived in the Senate, until the day he left, 
he championed the cause of the most innocent, most helpless, victims of 
the permissive society that plagues America.
  It was Senator Humphrey who in 1989 brought to the attention of the 
Senate a new and particularly brutal form of discrimination in 
America--abortions performed solely because the prospective mother 
prefers a child of a gender other than that of the fetus in her womb.
  Senator Humphrey brought to Senators' attention a New York Times 
article published on Christmas morning of 1988, headed ``Fetal Sex Test 
used as Step to Abortion.''
  I remember well my own consternation when I read the article, which 
began:

       In a major change in medical attitudes and practices, many 
     doctors are providing prenatal diagnoses to pregnant women 
     who want to abort a fetus on the basis of the gender of the 
     unborn child.
       Geneticists say that the reasons for this change in 
     attitude are an increased availability of diagnostic 
     technologies, a growing disinclination of doctors to be 
     paternalistic, deciding for patients what is best, and an 
     increasing tendency for patients to ask for the tests. Many 
     geneticists and ethicists say they are disturbed by the 
     trend.

  Professor George Annas of the Boston University School of Medicine 
was quoted as saying:

       I think the [medical] profession should set limits and I 
     think most people would be outraged and properly so at the 
     notion that you would have an abortion because you don't want 
     a boy or you don't want a girl. If you are worried about a 
     woman's right to an abortion, the easiest way to lose it is 
     not set any limits on this technology.

  Mr. President, I recall my disbelief after having read the article 
that any mother in a civilized society would be willing to destroy her 
unborn female child simply when she preferred a male--or vice-versa. 
But believe it. It has happened and continues to happen with the 
acquiescence of the U.S. Government.
  That is why I am today again offering legislation to limit this cruel 
and inhumane practice. The 103d Congress declined to act on my 
legislation in this regard. I pray that the 104th Congress will take 
action to end this callous cruelty.
  Specifically, the legislation I've sent to the desk proposes to amend 
title 42 of the United States Code--the statute governing civil 
rights--so as to provide that abortionists who administer an abortion--
because the mother doesn't 
[[Page S217]] like the gender of the infant in her womb--will be 
subject to the same laws which protect other citizens who are victims 
of other forms of discrimination.
  Then, Mr. President, there was a USA Today article published February 
2, 1989, which reported:

       In a break with past medical attitudes more geneticists are 
     open to identifying gender for parents early--so they can 
     decide whether to abort.
       The change has ethicists debating where a parent's right to 
     information ends and the rights of the unborn begin.
       A recent national survey of 212 medical geneticists found 
     20 percent approved of performing prenatal testing for sex 
     selection; in a 1973 survey, only 1 percent approved.
       ``Probably 99 percent of nonmedical requests for prenatal 
     diagnosis are made because people want a boy,'' says Dr.
      Mark Evans, an obstetrician and geneticist at Wayne State 
     University, Detroit. Some experts are concerned about the 
     social impact.
       Evans turns down nonmedical sex selection requests. ``Being 
     female,'' he says, ``is not a disease.''

  Mr. President, how can various feminist groups such as the National 
Organization of Women remain silent while America hurtles down the path 
taken in India 5 years ago when a survey in Bombay 5 years ago revealed 
that of 8,000 abortions, 7,999 were female?
  Mr. President, I have never been able to countenance the senseless 
slaughter of unborn babies. I have sought in vain for someone to 
explain the logic--aside from the moral and spiritual aspects--of 
deliberately destroying literally millions of little baby boys and 
girls when hundreds of thousands of Americans are standing in line to 
adopt babies.
  A Boston Globe poll reported that 93 percent of the American people 
reject the taking of life as a means of gender selection. So, Mr. 
President, when NOW, NARAL, and the other antifamily groups invade 
Capitol Hill from time to time, Molly Yard, Patricia Ireland, and many 
others chant the mantra that when it comes to abortion-on-demand ``it's 
time for Congress to understand we are the majority,'' they may want to 
redo their calculations, based on the November 8 elections.
  Hopefully, this 104th Congress can take some early action to fulfill 
the desires of the 93 percent of the American people who rightfully 
believe it is immoral to destroy unborn babies because the mother 
happens to prefer a boy instead of a girl, or a girl instead of a boy.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 24

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Civil Rights of Infants 
     Act''.

     SEC. 2. DEPRIVING PERSONS OF THE EQUAL PROTECTION OF LAWS 
                   BEFORE BIRTH.

       Section 1979 of the Revised Statutes (42 U.S.C. 1983) is 
     amended--
       (1) by inserting ``(a)'' before ``Every person''; and
       (2) by adding at the end thereof the following new 
     subsection:
       ``(b) For purposes of subsection (a), and for purposes of 
     other provisions of law, it shall be a deprivation of a 
     `right' secured by the laws of the United States for an 
     individual to perform an abortion with the knowledge that the 
     pregnant woman is seeking the abortion solely because of the 
     gender of the fetus. No pregnant woman who seeks to obtain an 
     abortion solely on the basis of the gender of the fetus shall 
     be liable in any manner under this section.''.
                                 ______

      By Mr. HELMS:
  S. 25. A bill to stop the waste of taxpayer funds on activities by 
Government agencies to encourage its employees or officials to accept 
homosexuality as a legitimate or normal lifestyle; read the first time.


ending taxpayer support for homosexual agendas in the federal workplace

  Mr. HELMS. Mr. President, the American people declared on November 8, 
that there's more government running their lives than is either wanted 
or needed--and certainly more wasteful government than the American 
people should be forced to pay for.
  And Congress, for a half century, has been wasting billions of 
dollars, running up a Federal debt of $4.8 trillion. As a matter of 
fact, the exact Federal debt as of the close of business on December 30 
was $4,800,149,946,143.
  I know of no American who favors adding to this horrendous Federal 
debt--some, of course, don't care as long as the Federal Government 
continues to conduct seminars, fund programs--or hire staff for the 
purpose of persuading, indeed, intimidating--Federal employees to 
accept homosexuality as a legitimate and normal lifestyle.
  But that is precisely how so much of the taxpayer's money is being 
used at numerous Federal agencies including the Department of 
Agriculture, the Department of Housing and Urban Development, the 
Department of Transportation, and the Department of Defense.
  Here are just a few examples of how the taxpayer's money is being 
spent:
  On March 25, 1994, the USDA officially sanctioned GLOBE--The Gay, 
Lesbian, and Bisexual Employee Organization, thus allowing USDA time, 
money, and resources to be used to promote GLOBE's agenda. I might add, 
GLOBE chapters exist in many Federal agencies. The Department of 
Agriculture went further when they created a Gay, Lesbian, and Bisexual 
Program Manager position within the Foreign Agriculture Service.
  The Family Research Council reports that on September 8, 1994, the 
Clinton administration, under the auspices of the U.S. Navy, hosted 
pro-gay and anti-religious diversity training for civilian and military 
Federal employees. The costs of Diversity Day '94, as it was named, 
included: The pay for hundreds of Federal employees, speakers fees, use 
of leased space, transportation, live diversity entertainment, 
Diversity Day '94 trinkets, video and equipment rental costs, and 
reproduction of printed material.
  For Senators who may not have been in the Chamber when the text of 
the bill was read by the clerk, let me read it again for the Record:

       No funds appropriated out of the Treasury of the United 
     States may be used by any entity to fund, promote, or carry 
     out any seminar or program for employees of the Government, 
     or to fund any position in the Government, the purpose of 
     which is to compel, instruct, encourage, urge, or persuade 
     employees or officials to--
       (1) recruit, on the basis of sexual orientation, 
     homosexuals for employment with the Government; or
       (2) embrace, accept, condone, or celebrate homosexuality as 
     a legitimate or normal lifestyle.

  This legislation is similar to an amendment offered by this Senator 
to the 1995 Agriculture Appropriations bill. Although the amendment was 
adopted by the Senate by a vote of 92 to 8, it was subsequently dropped 
in conference. That amendment applied to only the Department of 
Agriculture. The legislation I introduce today applies to USDA and to 
all other agencies of the Federal Government. That, Mr. President, is 
the only difference.
  I wish this legislation was not necessary. But it is and it is a sad 
day for America because of it. You see, the Clinton administration has 
conducted a concerted effort to give homosexual rights, privileges, and 
protections throughout the Federal agencies--to extend the homosexuals 
special rights in the Federal workplace, rights not accorded to most 
other groups and individuals. No other group in America is given 
special rights based on their sexual preferences.
  So, I urge Senators members to consider this bill in light of the 
mandate given by the American people regarding wasteful government 
spending. But I also ask them to consider it in light of whether it is 
proper for the Federal Government to use tax dollars to promote, 
ratify, and protect a lifestyle that most Americans, and most 
religions, consider a sexual and moral perversion.
  Mr. President, I ask unanimous consent that the bill and the Family 
Research Council article titled ``Federal Government Promotes 
Homosexuality Using `Diversity' Cover'' be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 25

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     [[Page S218]] SECTION 1. LIMITATION ON USE OF APPROPRIATED 
                   FUNDS.

       No funds appropriated out of the Treasury of the United 
     States may be used by any entity to fund, promote, or carry 
     out any seminar or program for employees of the Government, 
     or to fund any position in the Government, the purpose of 
     which is to compel, instruct, encourage, urge, or persuade 
     employees or officials to--
       (1) recruit, on the basis of sexual orientation, 
     homosexuals for employment with the Government; or
       (2) embrace, accept, condone, or celebrate homosexuality as 
     a legitimate or normal lifestyle.
                                                                    ____

  Federal Government Promotes Homosexuality Using ``Diversity'' Cover

                        (By Robert L. Maginnis)

       The federal government is using taxpayer money to promote 
     homosexuality as the moral equivalent to heterosexuality. 
     This is happening under the guise of diversity and it links 
     virtually every aspect of government to the homosexual 
     agenda.


         federal government grants homosexuals official status

       During the first two years of the Clinton Administration, 
     most federal agencies have amended their equal employment 
     opportunity and civil rights policies to include the term 
     ``sexual orientation.'' These changes are not justified by 
     law.
       For example, Carol Browner, Administrator of the 
     Environmental Protection Agency, sent a memo to all EPA 
     employees on October 14, 1994 stating, ``Today, the EPA joins 
     the growing list of public and private sector employers which 
     have added `sexual orientation' to our equal employment 
     opportunity policy.''\1\
     \1\Footnotes at end of article.
---------------------------------------------------------------------------
       Housing and Urban Development Secretary Henry Cisneros did 
     the same in August, 1994 with a memo that states, ``Sexual 
     harassment and discrimination based on sexual orientation are 
     unacceptable in the workplace and will not be condoned at 
     HUD.''\2\
       Department of Transportation Secretary Federico Pena 
     published his statement in 1993 which declares, ``[N]o one be 
     denied opportunities because of his or her race, color, 
     religion, sex. . .or sexual orientation.''\3\
       The Federal Bureau of Investigation joined the chorus when 
     director Louis Freeh stressed that ``homosexual conduct is 
     not per se misconduct'' and adopted a new policy to admit 
     homosexuals to the ranks of the Bureau.\4\ Several 
     homosexuals are now being trained to become FBI agents.
       Freeh's boss, Attorney General Janet Reno, declared that 
     the Department of Justice will not discriminate on the basis 
     of sexual orientation when conducting security clearances.\5\ 
     Although homosexuality has long been a marker for homosexual 
     misconduct, Reno removed any reference to sexual orientation 
     from application forms. Congressman Barney Frank (D-MA), an 
     openly homosexual man, stated, ``The clear implication is 
     that, outside the uniformed military services, being gay will 
     not be a relevant factor.''\6\
       Moreover, Reno ruled that a foreigner who claimed that he 
     was persecuted by his government for being homosexual may be 
     eligible to immigrate to the U.S.\7\ In 1994 the Attorney 
     General waived immigration laws so that avowed HIV-infected 
     homosexuals could participate in New York's ``Gay-
     Olympics.''\8\
       This official recognition of homosexuals is taking place 
     without legislative action. Indeed, there are no laws 
     requiring these changes, and little chance that such laws 
     could be passed. Homosexuals are being awarded a special 
     class status solely based on behavior, not on a benign 
     characteristic like race or gender.
       The Administration's official recognition goes further. 
     Office of Personnel Management Director James King sent a 
     memo to all OPM employees in January, 1994 announcing the 
     formal recognition of the Gay, Lesbian and Bisexual Employees 
     (GLOBE) as a professional association. This recognition 
     bestows on GLOBE the same privileges extended to other 
     associations. For example, GLOBE can now use government 
     facilities communication systems, bulletin boards, and have 
     official representation at personnel meetings.\9\
       GLOBE's stated purpose is to ``promote understanding of 
     issues affecting gay, lesbian and bisexual employees; provide 
     outreach to the gay, lesbian and bisexual community; serve as 
     a resource group to the Secretary on issues of concern to 
     gay, lesbian and bisexual employees; work for the creation of 
     diverse work force that assures respect and civil rights for 
     gay, lesbian and bisexual employees; and create a forum for 
     the concerns of the gay, lesbian and bisexual 
     community.''\10\ There are more than 40 chapters throughout 
     the federal government.\11\
       The Department of Transportation GLOBE chapter earned some 
     notoriety when posters depicting famous people alleged to be 
     homosexual were displayed on bulletin boards. The posters 
     were made at government expense and identified Eleanor 
     Roosevelt, Virginia Woolf, Errol Flynn, and Walt Whitman as 
     homosexuals.\12\
       Federal Aviation Administration employee Anthony Venchieri 
     complained when he received a DOT voice mail message inviting 
     him to ``celebrate with us the diversity of the gay and 
     lesbian community.'' The message was broadcast to all 4,100 
     DOT voice-mail users. He was removed from the system after 
     complaining but was later reinstated. FAA's Office of Civil 
     Rights spokesman stated, ``The Department of Transportation 
     has officially recognized the organization [GLOBE]. . . . The 
     FAA complies with this recognition of an employee association 
     which contributes to employee welfare and morale and assists 
     in fostering a climate of diversity and inclusion.''\13\
       GLOBE also uses government facilities to promote 
     homosexuality. During June 1994, many federal agencies permit 
     GLOBE chapter to use space to host homosexual programs. For 
     example, DOT hosted six events in the Washington 
     headquarters. Those included: a panel of DOT officials 
     discussing diversity; a presentation by Parent, Friends and 
     Families of Lesbians and Gays; and a program on the gay and 
     lesbian Asian Pacific American community.\14\


                          The diversity agenda

       ``Diversity'' is a vogue concept that is being used to 
     advance the homosexual agenda.\15\
       The U.S. Fish and Wildlife Service has embraced diversity. 
     In a July 1994 memo entitled, ``Stepping Stones to Diversity: 
     An Action Plan,'' the service proclaims that ``Managing 
     diversity needs to be a top service priority. . . . The 
     service must also recognize that the differences among people 
     are important.''\16\
       DOT's Secretary Pena left no doubt about what he means by 
     diversity. In a policy statement he defines it as 
     ``inclusion--hiring developing promoting and retaining 
     employees of all races ethnic groups, sexual orientations, 
     and cultural backgrounds. . . .''\17\
       The Department of Agriculture joined the diversity movement 
     in March 1994 by establishing a GLOBE chapter.\18\ A report 
     in The Sacramento Valley Mirror shows just what the 
     Department of Agriculture and, more specifically, a 
     subordinate organization, the Forest Service, means by 
     diversity.\19\ According to that article, diversity means a 
     redefinition of family promoting gay pride month, and 
     encouraging the use of federal resource to promote homosexual 
     causes.
       A letter from Region 5 Forester Ronald E. Stewart to his 
     employees outlines Forest Service recommendations concerning 
     homosexuals. Stewart's memo to ``All Region 5 Employees'' 
     says, ``We can not allow our personal beliefs to be 
     transformed into behaviors that would discriminate against 
     another employee.''\20\ The recommended policy:
       Prohibits discrimination based on sexual orientation.
       Empowers homosexuals to serve as mentors and network 
     coordinators.
       Incorporates sexual orientation awareness training.
       Establishes a computerized network for isolated homosexual 
     employees.
       Awards pro-gay work settings.
       Encourages local ``multicultural awareness celebrations'' 
     like gay pride month.
       Directs supervisors to consider an employee's domestic 
     partner when assigning schedules.
       Prohibits private permitters and concessionaires from 
     discriminating against domestic partners.
       Mandates unions to become proactive in the ``sexual 
     diversity'' movement.
       Requires that contracts include domestic partner services.
       Guarantees government child care for children of an 
     employee's domestic partner.
       Considers gay and lesbian owned businesses when arranging 
     local purchase agreements.
       The proposals encourage Forest Service employees to lobby 
     for the following.
       Amend federal travel regulations to incorporate the needs 
     of domestic partners.
       Adopt this definition of a family. ``A unit of 
     interdependent and interacting persons, related together over 
     time by strong social and emotional bonds and/or by ties of 
     marriage, birth, and adoption, whose central purpose is to 
     create, maintain, and promote the social, mental, physical 
     and emotional development and well being of each of its 
     members.''
       Advocate to the Small Business Administration the inclusion 
     of gay and lesbian owned businesses eligible for minority 
     set-aside contracts.
       Advocate that retirement benefits include domestic 
     partners.
       Add non-discrimination provisions to all private sector 
     contracts prohibiting discrimination based on sexual 
     orientation except for bona fide religions and youth groups.


                      diversity training mandatory

       Bureau of Labor Statistics Commissioner Katherine Abraham, 
     whose performance agreement with Secretary of Labor Robert 
     Reich includes diversity training, hosted three-hour 
     diversity training sessions for BLS employees. The paid guest 
     speaker began each session by stating, ``Diversity means our 
     national survival.''\21\ He closed the session by reading a 
     letter from homosexual BLS employees complaining about 
     discrimination. The guest concluded, ``What's necessary in 
     the workplace is for everybody to have the attitude that 
     people are not good, not bad, just different.''\22\
       The U.S. Postal Service is also promoting diversity. During 
     a November 1, 1994 diversity seminar a guest psychologist 
     suggested ``aggressive recruitment is needed; develop, 
     attract and retain members from under-represented groups.'' 
     His speech followed legal 
     [[Page S219]] counsel's presentation on the new non-
     discrimination policy for gays, lesbians, and bisexuals.\23\
       The Forest Service has a training booklet entitled, 
     ``Valuing Diversity.'' Inside the booklet are statements such 
     as: ``Fact: Psychological and social influences alone cannot 
     cause homosexuality. . . . Fact: A biological (genetic, 
     hormonal, neurological, other) predisposition toward 
     homosexual, bisexual, or heterosexual orientation is present 
     at birth in all boys and girls.'' No source for these 
     ``facts'' is provided, nor could there be.\24\ So-called 
     genetic studies on homosexuality are flawed and conducted by 
     homosexual activists.
       The U.S. Health and Human Services sponsored a ``Multi-
     Culture Day'' in Dallas, Texas in April, 1994. An HHS 
     employee gained official permission to man an exhibit, 
     ``Highlighting Our Gay and Lesbian Culture.''\25\
       Four federal agencies hosted a ``Global Diversity Day'' on 
     May 25, 1994 at San Francisco's U.S. Customs House. The 
     activities were attended by 300 federal employees and 
     included displays by gay, lesbian, and bisexual 
     representatives. On display were a rainbow flag that was 
     flown at the 1993 March on Washington, posters displaying 
     famous homosexuals, and cultural items such as books and 
     GLOBE applications.\26\
       Possibly the largest diversity event was hosted by the U.S. 
     Navy on September 8, 1994 near the Pentagon. Diversity Day 
     '94 included an opening ceremony with a welcome by a three-
     star admiral who stated, ``The federal and private sector 
     must make diversity part of business.''\27\ He also said that 
     the work environment ``is not a matter for moral 
     issues.''\28\
       The government's guest speaker was diversity expert and 
     professor at Northeastern Illinois University Dr. Samuel 
     Betances. He equated racism, sexism, and homophobia and then 
     stated, ``We can start all over if need be.''\29\ He 
     explained that former Alabama Governor George Wallace, a one-
     time racist, started over by recanting his racist beliefs.
       Betances encouraged homosexuals to organize ``to get 
     respect'' much like women, blacks, and Latinos organized.\30\ 
     He emphasized that all of us ``must be prepared to unlearn'' 
     old ways. He observed that homosexuals are ``part of the 
     diversity equation whether we like it or not'' and they 
     ``need a climate of respect.''\31\
       The activities included a seminar entitled ``Another Color 
     of the Rainbow: Sexual Minorities in the Workplace'' taught 
     by an acknowledged lesbian, and a videotape, ``On Being 
     Gay,'' which promotes homosexuality as the moral equivalent 
     to heterosexuality.
       The U.S. Air Force Academy already has a diversity day 
     scheduled for April 1995. The symposium is entitled, 
     ``Strength Through Diversity Leadership Symposium.'' 
     Conference director Colonel David Wagie says that his program 
     will not include ``sexual orientation'' issues. He explained. 
     ``We are interested only in using the term as officially 
     defined and used by DOD.''\32\
       The Navy, however, is cruising toward sexual diversity. 
     Secretary of the Navy John Dalton wrote the following in his 
     diversity policy statement on May 23, 1994: ``Our continued 
     success requires that each civilian employee and applicant be 
     afforded the opportunity to excel without regard to his or 
     her race, color, gender, sexual orientation. . . .''\33\


               aids awareness or more diversity training?

       President Clinton announced on September 30, 1993 to all 
     heads of executive departments his HIV/AIDS policy. The 
     policy requires each secretary to designate a senior staff 
     member to implement HIV/AIDS education and prevention 
     programs and to develop workplace policies for employees with 
     HIV/AIDS.
       The training has received a mixed review. Federal employees 
     have called the Family Research Council to complain that they 
     found the training offensive.
       Two supervisors and 41 employees in the Federal 
     Communication Commission's audio services division chose not 
     to attend mandatory ``AIDS Awareness Training.'' An FCC 
     employee stated, ``The classes are basically an adult 
     versions of high school sex ed, with the modern-day 
     sensitivity training thrown in.''\34\
       The training includes a brief history of HIV, symptoms and 
     prevention and risk reduction. There is a discussion of 
     needle sharing and sexual contact. Federal employees are told 
     to reduce their HIV contraction risk by practicing ``safer 
     sex'' by using barriers like condoms, dental dams, plastic 
     wrap, and latex gloves. The manual states, ``A dental dam (a 
     small, square piece of latex) or plastic may be used for any 
     oral-vaginal or oral-anal contact. All types of barriers 
     (condoms, dental dams, and plastic wrap) are effective 
     aganist HIV transmission only if they are used correctly and 
     consistently from start to finish.''\36\
       The training materials are based on government ``evidence'' 
     and the materials espouse confidence in latex which is not 
     supported by research. For example, the U.S. Centers for 
     Disease Control and Prevention misrepresent a wealth of 
     conflicting scientific evidence. The CDC does a disservice to 
     the American public when it promotes condoms as a responsible 
     prevention strategy. CDC places its hopes on the correct and 
     consistent use of condoms, an unreached and unreachable 
     goal.''\37\
       The Energy Department makes a disclaimer: ``HIV is 
     transmitted without regard to gender, age, race, ethnicity, 
     sexual orientation, religion, or identification with any 
     group. For this reason, we avoid referring to `high risk 
     groups.''' Not identifying ``high risk groups, is 
     irresponsible. The HIV/AIDS Surveillance Report shows that at 
     least 87 percent of HIV victims either contracted the virus 
     from homosexual encounters or by sharing needles.
       Probably the most outrageous example of government 
     sponsored AIDS training was done for the Forest Service. It 
     took place in the Forest Service's Tahoe Region on May 6, 
     1994 and was conducted by a local health official with 
     degrees in sexology, a self-described homosexual phlebotomist 
     [individual who draws blood], and an HIV-positive woman from 
     the community.\39\
       Most of the ``infectious disease training'' addressed HIV/
     AIDS. The phlebotomist was an exconvict who tried to debunk 
     ``homophobic'' misconceptions. He speculated that many 
     husbands were involved in homosexual affairs. He showed a 
     variety of condoms and how to apply them to a life size 
     replica of erect male genitalia. He even explained a 
     technique for using one's mouth to apply the condom. He also 
     explained the proper cleaning techniques when sharing 
     hypodermic needles.\40\
       One of the workers in the audience later complained, 
     ``There seems to be no logic or equity in penalizing one 
     employee for repeatedly bringing up `Christmas' at work, 
     during December because he or she believes in God, while 
     instructing other employees how to use intravenous drugs or 
     engage in anal sex.''\41\


                  federal money funds ``gay science''

       In Fiscal Year 1993, in addition to more than $2 billion 
     for AIDS, the U.S. Department of Health and Human Services 
     awarded 84 grants worth over $20 million to research topics 
     that primarily involve homosexuals.\42\ These grants include:
       ``Phone counseling in reducing barriers to AIDS 
     prevention,'' which studies homosexual men who are 
     purportedly unable to avoid unsafe sexual behavior.\43\
       A project that examines how ``stress generated by societal 
     reactions leads adolescents who are coming-out to be at 
     higher risk of problems'' than their heterosexual peers.\44\
       A project entitled ``Drinking, drug use and unsafe sex 
     among gay and bisexual couples'' which explores the 
     relationship ``between drinking, drug use and unprotected sex 
     . . . among gay and bisexual couples.''\45\
       A study designed to analyze behavioral data about HIV 
     transmission among bisexual men in Mexico.\46\
       A study by Dr. Dean Hamer provides a good example of how 
     federal funds are being used to help advance gay political 
     activism.
       Dr. Hamer, chief of the Gene Structure and Regulation 
     Section, Laboratory of Biochemistry of the National Cancer 
     Institute, National Institutes of Health, Department of 
     Health and Human Services, published the results of his two 
     year ``gay-gene'' research project, ``A Linkage Between DNA 
     Markers on the X Chromosome and Male Sexual Orientation,'' in 
     the July, 1993 edition of Science.\47\
       The Family Research Council published an investigative 
     report on Dr. Hamer's study. The report shows problems with 
     the study, Hamer's promotion of homosexuality in the media, 
     and questions whether federal funds were properly used.\48\
       While published NCI budgets do not identify money earmarked 
     for Dr. Hamer's research, funding for Hamer's research (which 
     totaled $420,000) apparently came from money designated for 
     research into Kaposi's sarcoma (KS).\49\ NCI's press office 
     indicated that Hamer's study looked at KS, which is an AIDS-
     related cancer prevalent among gay men.\50\ And Hamer 
     promoted his research as a multifactorial study investigating 
     host genetic factors for Kaposi's sarcoma and lymphoma.\51\
       Yet, curiously, Hamer ``ran no tests to determine whether 
     his clients had KS.''\52\ And Hamer stated in a court 
     deposition that he has never published anything on Kaposi's 
     sarcoma.''\53\
       More taxpayer-funded gay research is in the works. Hamer 
     wrote a letter to Health and Human Services Secretary Donna 
     Shalala arguing for the creation of an NIH Office of Gay and 
     Lesbian Health Concerns. The American Medical News reports 
     that the HHS will seriously consider Hamer's proposal. Hamer 
     envisions the office going beyond research into the origins 
     of sexual orientation to include HIV and other sexually 
     transmitted diseases, breast and gynecologic cancers, 
     substance abuse and adolescent suicide.\54\
       In addition, Angela Pattatucci, one of Hamer's research 
     assistants, has an ongoing project that deals with genetics 
     and lesbianism. According to Victoria L. Magnuson of Hamer's 
     NIH office, Pattatucci's ``lesbian study has a cancer 
     component.'' Yet the advertising fliers developed for this 
     study call it a study of the ``genetic nature of sexual 
     orientation . . . a gay gene study.'' They state that ``per 
     diem and travel expenses'' would be covered by ``NIH,'' and 
     that subjects would be interviewed by ``gay-positive'' 
     persons.\55\
       (Pattatucci's track record raises serious questions about 
     her objectivity as a researcher. She recently told Network, a 
     homosexual magazine based in New Jersey, ``I believe the most 
     important thing a gay person 
     [[Page S220]] can do is to be public about his or her 
     homosexuality.'' That article included a picture of Dr. 
     Pattatucci holding her jacket open to reveal a T-shirt with 
     the work ``DYKE'' written in large, bold type.\56\ )


               federal employees on the gay agenda front

       U.S. Patent and Trademark Commissioner Bruce Lehman is a 
     self-described homosexual who promotes Commerce Secretary Ron 
     Brown's ``Diversity Policy.'' For those who object, Lehman 
     states, ``As far as I'm concerned, it's got to be forced down 
     their throats. If they want to be bigots, they can go work 
     for someone else's department.'' The agency's director of 
     human resources created a ``diversity recruitment support 
     team'' to spend up to 15 days of diversity recruiting in 
     1995.\57\
       The nation's former Surgeon General Joycelyn Elders told 
     homosexual magazine The Advocate, ``Americans need to know 
     that sex is wonderful and a normal . . . and healthy part of 
     our being, whether it is homosexual or heterosexual.'' She 
     endorses adoption of children by homosexuals and called the 
     Boy Scouts' ban on homosexual Scouts and Scout leaders 
     ``unfair.''\58\
       Roberta Achtenberg is HUD's assistant secretary for Fair 
     Housing and Equal Opportunity. She appeared in San 
     Francisco's 1992 gay pride parade riding in the back seat of 
     a convertible next to her ``partner'' (Mary Morgan, a San 
     Francisco municipal court judge) and ``their'' child. The 
     sign on the car said: ``Celebrating Family Values.''\59\
       While a member of the San Francisco board of supervisors 
     and a member of a United Way chapter in that area, Achtenberg 
     helped to defund the Boy Scouts for their moral standards. 
     She has continued her activism in the federal government.\60\
       In February 1994 Achtenberg signed a diversity policy that 
     requires managers to ``participate as active members of 
     minority, feminist or other cultural organization's'' to 
     qualify for an ``outstanding'' rating.\61\
       Some federal agencies have appointed homosexual watchdogs 
     to ensure employee compliance with pro-gay diversity 
     policies. For example, the Foreign Agriculture Service has a 
     gay, lesbian and bisexual program manager. This is a 
     collateral duty to take no more than 20 percent of the 
     manager's time. Her task is to promote gay, lesbian and 
     bisexual employment program and develop and disseminate 
     information on employment matters throughout the agency.\62\


                          Discouraging Dissent

       Federal employees who object to the diversity push beware! 
     U.S. Merit Systems Protection Board Chairman Ben Erdreich has 
     embraced diversity. The MSPB is the agency that rules on 
     federal employee appeals of personnel actions. Erdriech told 
     his employees on November 19, 1994: ``I have a strong 
     commitment to diversity and equitable treatment in the 
     workplace. . . . Managers will be graded on . . . respect for 
     diversity in the workplace and performs responsibilities 
     without regard to the differences of race, color . . . sexual 
     orientation. . . .''\63\
       Department of Agriculture and senior EEO manager Karl Mertz 
     ran into the diversity wall. On March 4, 1994 Mertz told a 
     reporter when asked about Secretary Espy's gay-rights agenda, 
     the AG Department should be headed ``toward Camelot, not 
     Sodom and Gomorrah.''\64\
       Mertz was later told that his interview disagrees with 
     Department civil rights policy ``which could seriously 
     undermine your ability to perform your responsibilities.'' He 
     was transferred to a non-management job.\65\


                               conclusion

       The Clinton Administration is methodically unleashing an 
     avalanche of pro-homosexual policies and advocacy. It is 
     costing the federal taxpayer millions of dollars and 
     discriminates against workers who object on religious 
     grounds. The 104th Congress should investigate this abuse and 
     reverse the federal government's promotion of homosexuality 
     under the label of diversity.


                                endnotes

     \1\Environmental Protection Agency memo to all EPA employees, 
     October 14, 1994, signed Carol Browner.
     \2\U.S. Department of Housing and Urban Development, memo for 
     ``All HUD Employees,'' Subject: Policy Statement--Equal 
     Employment Opportunity, Affirmative Employment, Prevention of 
     Sexual Harassment, Discrimination Based on Sexual 
     Orientation, August 30, 1994, signed by Henry G. Cisneros.
     \3\``Equal Opportunity Policy Statement, U.S. Department of 
     Transportation memo ``To All DOT Employees,'' May 27, 1993, 
     signed Federico Pena.
     \4\``FBI Guidelines Stress Ethical, Sexual Behavior,'' The 
     Washington Post, March 8, 1994, p. A-3 and David Johnston, 
     ``Gay Stand Costs Prospect a Justice Post, New York Times, 
     October 20, 1994, p. A-20.
     \5\Joan Biskupic, ``Reno Prohibits Bias Against Gays in 
     Security Clearances,'' The Washington Times, December 3, 
     1993, p. A-4.
     \6\Ibid.
     \7\Memorandum for Mary Maguire Dunne, Acting Chair Board of 
     Immigration Appeals, from The Attorney General (signed by 
     Janet Reno); Subject: Attorney General Order Designating 
     Board of Immigration Appeals Case as Precedent, undated.
     \8\Paula Span, ``A Week About Gay Pride, And Prejudice,'' The 
     Washington Post, June 16, 1994, p. A-1.
     \9\``GLOBE Gains Official Recognition in OPM,'' Federal EEO 
     Update, Vol. 5, No. 01, January 1994, p. 1.
     \10\USDA GLOBE Bylaws, U.S. Department of Agriculture, March 
     25, 1994.
     \11\GLOBE/GSA (Gay, Lesbian or Bisexual Employees/GSA) flier 
     with statement of purpose and lists a GSA Diversity 
     Coordinator at 202-501-2127.
     \12\``Rest in Peace?,'' The Washington Times, July 12, 1993, 
     p. A-6.
     \13\Ruth Larson, ``FAA Employee Objects to Gay-Pride Voice 
     Mail,'' The Washington Times, June 28, 1994.
     \14\``Community Closeness: DOT GLOBE Celebrates Gay Pride 
     Month,'' Intercom, May 31, 1994, p. 6.
     \15\The American Heritage Dictionary (Houghton Mifflin Co: 
     Boston, 1991), p. 412.
     \16\Alston Chase, ``Does Ranger Rick Love Murphy Brown?,'' 
     The Washington Times, August 30, 1994.
     \17\``Diversity Policy Statement,'' Secretary of 
     Transportation memorandum ``To All DOT Employees,'' May 27, 
     1993, signed by Federico Pena.
     \18\``Establishment of USDA GLOBE,'' Department of 
     Agriculture memo to Pat Browne, Spokesperson, USDA GLOBE, 
     signed Wardell C. Townsend, Jr., March 25, 1994.
     \19\Tim Crews, ``U.S.F.S. Now `Proactive' For Gays, Lesbians, 
     Bisexuals,'' The Sacramento Valley Mirror, March 15, 1993.
     \20\``RMT Decisions on Sexual Orientation Report 
     Recommendations,'' U.S. Department of Agriculture, Forest 
     Service, February 24, 1993, signed by Ronald E. Stewart, 
     Regional Forester.
     \21\Kishore Jayabalan, ``Typecasting `Diversity,''' The 
     Washington Post, December 4, 1994, p. C-5.
     \22\Ibid.
     \23\``Inspection Service Diversity Network Meeting Memo,'' 
     United States Postal Service, Cincinnati, Ohio, October 31 to 
     November 1, 1994.
     \24\``Valuing Diversity,'' U.S. Forest Service, Northern 
     Region Phase II, not dated.
     \25\The Washington Times, April 18, 1994.
     \26\``Pacific Southwest News Log,'' U.S. Department of 
     Agriculture, Forest Service, Pacific Southwest Region, June, 
     1994, pp. 12-13.
     \27\Robert L. Maginnis attended the Diversity Day '94 
     welcoming ceremony. This comment reflects notes taken by 
     Maginnis at that ceremony on September 8, 1994 in the Crystal 
     City Forum.
     \28\Ibid.
     \29\Ibid.
     \30\Ibid.
     \31\Ibid.
     \32\``Strength Through Diversity Symposium,'' Center for 
     Character Development, Commandant of Cadets, United States 
     Air Force Academy, October 12, 1994.
     \33\``Equal Employment Opportunity/Diversity Policy 
     Statement,'' Department of the Navy, Office of the Secretary, 
     May 23, 1994, signed by John H. Dalton.
     \34\``Big Brother Is Watching,'' Inside the Beltway, The 
     Washington Times, August 8, 1994, p. A-8.
     \35\``Information about the Federal Workplace AIDS Education 
     Initiative and Class Schedule Announcement,'' Department of 
     Energy, from Donald Donaldson, Federal Workplace HIV/AIDS 
     Education Coordinator, October 9, 1994.
     \36\``Walkin' the Talk,'' HIV Education Materials for 
     Managers, Supervisors and Team Leaders, The Department of 
     Energy, Office of Economic Impact and Diversity, in 
     conjunction with the Federal Workplace HIV Education 
     Initiative, not dated, p. 8.
     \37\Robert L. Maginnis, ``New CDC Report Encourages False 
     Confidence In Condoms,'' Insight by the Family Research 
     Council, IS93K1CI, p. 7.
     \38\``HIV/AIDS Surveillance Report,'' U.S. Department of 
     Health and Human Services, Centers for Disease Control and 
     Prevention, Vol. 5, No. 4, December 1993, p. 8.
     \39\``Infectious Disease Training,'' Forest Service memo to 
     Hope Pineda, Personnel Officer, Tahoe NF, June 7, 1994.
     \40\Ibid.
     \41\Ibid.
     \42\Robert L. Maginnis, ``Taxpayer Funded `Gay-Science' or 
     Legitimate Cancer Research?,'' Family Research Council 
     Insight IS94B2HS, p. 1.
     \43\Project number MH46792-03. The investigator is Roger A. 
     Roffman with the University of Washington, Seattle, 
     Washington.
     \44\Project number MH43520-06, Title: HIV Center--Clinical 
     and Behavioral Studies. The investigator is Mary Jane 
     Rotheram-Borus of New York, NY.
     \45\Project number AA09320-02. The investigator is George R. 
     Seage of Boston, MA.
     \46\NIH project number HD28305-04, Title: Influencing Risk 
     Behaviors of Bisexual Males in Mexico. Kathryn Tolbert is the 
     investigator.
     \47\Dean H. Hamer, Stella Hu, Victoria L. Magnuson, Nan Hu, 
     Angela M. L. Pattatucci, ``A Linkage Between DNA markers on 
     the X Chromosome and Male Sexual Orientation,'' Science, Vol. 
     261, July 16, 1993, pp. 321-327.
     \48\Robert L. Maginnis, op cit.
     \49\NCI Fact Book, National Cancer Institute, 1992, 
     ``Acquired Immunodeficiency Syndrome (AIDS) Funding Activity 
     Fiscal Year 1992,'' Division of Cancer Biology, Diagnosis and 
     Centers $13,620,000. This is cited from page 68. The 1991 
     version of NCI's Fact book (page 63) awards Dr. Hamer's 
     division $13,457,000. These funds are not broken down to the 
     individual sections or laboratories. This researcher visited 
     the office of Dr. Alan Rabson, Chief for the Division of 
     Cancer Biology, Diagnosis and Centers on December 8, 1993 
     (room 3A11, building 31, NIH) and asked for copies of the 
     Division's budgets for FY1991-94. No one was available to 
     discuss the budgets nor did anyone return telephone calls. 
     Linda Anderson, Office of Cancer Communications, Building 31, 
     Bethesda, Maryland stated that Dr. Hamer's study cost 
     $420,000. She indicated that this figure includes salaries. 
     This information comes from a telephone conversation between 
     Ms. Anderson and FRC researcher Craig Gottlieb on December 1, 
     1993. Ms. Anderson followed their conversation with a fax 
     transmission on December 2d which states, ``The budget 
     figured I gave you for Dr. Hamer's study is total including 
     staff salaries.'' Dr. Magnuson indicated that the salaries 
     for research salaries are not part of Hamer's research 
     budget.
     \50\Conversation between Linda Anderson, NCI's press office 
     and Craig Gottlieb on December 1, 1993.
     \51\NCI Press Release entitled ``New Study Finds Genetic Link 
     to Homosexuality,'' July 15, 1993. This information is taken 
     from Dr. Hamer's answer to question 9: ``Why was the research 
     supported by the National Cancer Institute?
     \52\``National Cancer Institute Scandal: Gay Rights Instead 
     of Cancer Research,'' Family Research Report, September-
     October, 1993, p. 6.
     \53\Telephone Deposition of Dean Hamer, taken October 11, 
     1993 in case of Richard G. Evans, et al., v. Roy Romer, et 
     al., District Court, City and County of Denver, State of 
     Colorado, Case No. 92-CV-7223, Courtroom 19, p. 70. A search 
     of NIH Library's files on Dr. Hamer reveals 71 postings for 
     published studies. The ``gay-gene'' study was the first of 
     its kind for Dr. Hamer.
     \54\Brian McCormick, ``Researchers, Doctors Press for Gay 
     Office at NIH,'' American Medical News, September 13, 1993. 
     p. 10.
     \55\Interview of Victoria L. Magnuson, NCI's Biochemistry 
     Laboratory, Building 37, NIH, December 8, 1993. The interview 
     was conducted by FRC research assistant Craig Gottlieb, a 
     Cornell University student.
     \56\``Media Spike `Gay Gene' Researcher's Homosexuality,'' 
     Lambda Report, October 1993, p. 12.
     \57\The Washington Times, September 8, 1994, p. A-6.
     \58\Joyce Price, ``Elders Calls Gay Sex `Wonderful,' 
     `Healthy,''' The Washington Times, March 19, 1994.
     [[Page S221]] \59\Joyce Price, ``Lesbian Nominee's Foes Light 
     Up Senate Phones,'' The Washington Times, May 21, 1993, p. A-
     3.
     \60\Ibid.
     \61\``Certification of the Mandatory Equal Employment 
     Opportunity/Affirmative Employment (EEO/AE), Cultural 
     Diversity Critical Element and Performance Standards for 
     Managers and Supervisors,'' U.S. Department of Housing and 
     Urban Development, January 13, 1994, signed by Roberta 
     Achtenberg, Assistant Secretary for Fair Housing and Equal 
     Opportunity and Marilynn A. Davis, Assistant Secretary for 
     Administration.
     \62\``Announcement Soliciting Applications: Gay, Lesbian and 
     Bi-Sexual Program Manager (Collateral Duty Assignment), 
     Foreign Agriculture Service, not dated.
     \63\Ruth Larson, ``Employees To Be Graded On Support For 
     Diversity,'' The Washington Times, December 2, 1993, p. A-7.
     \64\Max Boot, ``A Different Kind of Whistle-Blower,'' The 
     Wall Street Journal, April 27, 1994.
     \65\Ibid.
                                 ______

      By Mr. HELMS:
  S. 26. A bill to amend the Civil Rights Act of 1964 to make 
preferential treatment an unlawful employment practice, and for other 
purposes; read the first time.


                      civil rights restoration act

  Mr. HELMS. Mr. President, 3\1/2\ years ago, on June 25, 1991, I 
offered an amendment to the Omnibus Crime Bill to do away with quotas 
in the workplace by amending Title VII of the Civil Rights Act of 1964. 
I recall an article in the August 12 of the New Republic magazine which 
reported that my amendment had caused a great deal of agitation in the 
Senate because it required Senators who claimed back home that they 
were opposed to quotas to take a stand on outlawing the practice of 
racial preferences.
  The New Republic went on to say that in order to force ``a showdown 
on preferences in hiring and promotion.'' I should accept a 
modification of the original amendment offered by the distinguished 
Republican Leader, (Mr. Dole). Senators may recall that Senator Dole 
did propose during the June 1991 debate, that the Helms amendment 
contain language which would permit special recruitment of minorities 
and women for the employer's applicant pool--i.e, a broadly acceptable 
form of affirmative action.
  At the time I agreed that Senator Dole's modification would be an 
important addition to my amendment. However, Democrats objected to such 
a modification, and it never happened.
  Mr. President, the legislation I'm introducing today--the Civil 
Rights Restoration Act of 1995--offers Senators the opportunity to pick 
up the gauntlet laid down by Senator Dole and me. This legislation is 
quite simple: It prevents Federal agencies, and the Federal courts, 
from interpreting Title VII of the Civil Rights Act of 1964 to permit 
an employer to grant preferential treatment in employment to any group 
or individual on account of race.
  The Helms proposal prohibits the use of racial quotas in employment 
once and for all. During the past 2 years, almost every member of the 
Senate--and the President of the United States--have proclaimed that 
they are opposed to quotas. This bill will give Senators an opportunity 
to reinforce their statements by voting in a roll call vote against 
quotas.
  I am not here merely on behalf of businesses, large, medium, or 
small. I am here on behalf of working people of all races, ethnic 
groups and gender all over this Nation. The working people don't have 
500 organizations trying to ``protect'' their civil rights. They are 
not organized into Washington pressure groups. They simply want to work 
for a living free of discrimination.
  Unfortunately, Government-imposed and Government-encouraged quotas 
are a fact of life. According to the June 3, 1991, edition of Newsweek 
magazine, a substantial number of Fortune 500 companies have very clear 
minority hiring ``goals'' which is a euphemism for quotas. In a survey 
of CEOs of Fortune 500 companies, 72 percent acknowledged that they use 
some form of--now get this--quota hiring system. Only 14 percent of the 
CEOs claimed that they hire solely on merit.
  I note with interest that the Business Roundtable favored the 
socalled Civil Rights Act passed in the last Congress. Mr. President, 
for whom does the Business Roundtable speak? Surely not for the little 
man. As the Newsweek article suggests, these are big businesses that 
regularly engage in reverse discrimination. They are interested in 
public relations, not the civil rights of their individual workers.
  Mr. President, all the Helms legislation says is, that from here on 
out, employers must hire on a race neutral basis. They can reach out 
into the community to the disadvantaged--something all Senators 
support--and they can even have businesses with 80 percent, 90 percent, 
minority workforces as long as the motivating factor in employment is 
not race.
  The Helms legislation clarifies section 703 (j) of Title VII of the 
Civil Rights Act of 1964 to make it consistent with the intent of its 
authors, Hubert Humphrey and Everett Dirksen. Let me state it for the 
Record:

       It shall be an unlawful employment practice for any 
     employer, employment agency, labor organization, or joint 
     labor committee that is subject to this title to grant 
     preferential treatment, with respect to selection, 
     compensation, terms, condition, or privileges of employment 
     or union membership, to any individual or to any group of 
     individuals on account of the race, color, religion, sex, or 
     national origin of such individual or group for any purpose, 
     except as provided in subsection (e) of this section.
       It shall not be an unlawful employment practice for any 
     person described in paragraph (1) to establish an affirmative 
     action program designed to recruit qualified minorities and 
     women to expand the applicant pool of the person.

  Mr. President, this legislation is necessary because in the 29 years 
since the passage of the Civil Rights Act, the Federal Government and 
the courts have combined to corrupt the spirit of the Act as enumerated 
by both Hubert Humphrey and Everett Dirksen who made clear that they 
were unalterably opposed to racial quotas.
  Specifically, this bill proposes to make part (j) of Section 703 of 
the 1964 Civil Rights Act consistent with subsections (a) and (d) of 
that section. It contains the identical language used in those sections 
to make preferential treatment on the basis of race--that is, quotas--
an unlawful
 employment practice.

  This legislation will forbid the Federal Government from ever again 
terrorizing the small businesses of this country with threats and fines 
for not meeting some bureaucrat's vision of a proportionalized and 
racially ``correct'' society.
  Perhaps Senators are familiar with the Daniel Lamp Company, a small 
Chicago lamp factory recently visited by the investigators of the Equal 
Employment Opportunity Commission [EEOC]. On March 24, 1991 the CBS 
News program, 50 Minutes, blew the cover off of the EEOC's attempt to 
impose its quota mentality on one defenseless businessman.
  As Morley Safer put it, the Daniel Lamp Company ``is guilty of not 
playing the numbers game.'' You see, the EEOC found the owner of the 
Daniel Lamp Company to be a practitioner of racial discrimination and 
leveled a fine of $148,000 against him. What was interesting about the 
charges was the fact that of the company's 28 employees the only two 
who were neither black nor Hispanic were the owner and his father--who, 
by the way, is a survivor of Auschwitz. There were 18 Hispanics and 8 
blacks on the payroll when 60 Minutes began its investigation.
  The trouble began when a disgruntled job applicant filed an EEOC 
racial discrimination complaint against the Daniel Lamp Company. The 
EEOC demanded the records of the company. The owner, who hired only 
minorities, was proud of his work force and happy to allow the Federal 
Government to inspect the ledger. He thought he might be commended for 
providing jobs for minorities. How wrong he was.
  In its investigation CBS found that the only information the EEOC was 
using against the Daniel Lamp Company was the agency's computerized 
quota numbers. The EEOC's computer told the agency that based on the 
employment statistics of Chicago businesses with over 100 employees--a 
fascinating comparison since the Lamp Company never had more than 
thirty workers--the Daniel Lamp Company had to employ exactly 8.45 
blacks. That sounds like a quota to me, and it even sounded like a 
quota to Morley Safer who was puzzled as to why the agency was 
disobeying the law which as Mr. Safer put it ``says the EEOC can't set 
quotas.''
  Despite the denials by the EEOC, Mr. Safer concluded that, ``it --the 
EEOC--did set numbers by telling Mike--the owner of the company--that 
based on other larger companies' personnel, Daniel Lamp should employ 
8.45 
[[Page S222]] blacks.'' When the Daniel Lamp Company stood up to the 
intimidation of the EEOC, the agency tightened the noose. Not only did 
the company have to meet the quota and pay a huge fine, it also had to 
spend $10,000 to advertise in newspapers to tell other job applicants 
that they might have been discriminated against and to please contact 
the Daniel Lamp Company for a potential financial windfall.
  Mr. President, do you see what is going on here? The Daniel Lamp 
Company wasn't one of those Fortune 500 companies that can afford a 
gaggle bunch of lawyers and can placate the various special interest 
groups by hiring according to quotas. The Daniel Lamp Company was a 
small, struggling enterprise which can afford to pay its few employees 
a scant $4.00 an hour. This company hired only minorities. But that 
wasn't good enough for the quota bureaucrats in Washington. They said 
the company didn't hire enough of the ``right'' minorities.
  This bill will put an end to this disgraceful power play by the quota 
crowd in the Federal bureaucracy.
  Mr. President, do we want a nation where privilege and employment are 
handed out on the basis of group identity rather than merit? Already 
police and firemen in our major cities are clashing over who can be 
classified as black or Hispanic to ensure they receive job preference 
because of their minority status. Check the newspapers in San 
Francisco, Chicago, and Boston to see if I'm correct.
  The Helms legislation protects the Daniel Lamp Company and the 
firemen and the policemen, of whatever race, who are out there working 
hard at their jobs in the belief that they will be rewarded for their 
hard work--not judged on the color of their skin.
  This proposal also includes an important safeguard which will protect 
those businesses and institutions whose special needs require personnel 
qualified for the job on the basis of religion, sex, or national 
origin. Like the other sections of title VII, this amendment protects 
the religious school
 or institution which grants preferences in hiring or admission to 
those of its own religion. It protects those ethnic-based enterprises 
which require special language skills and familiarity with particular 
customs.

  Mr. President, some may defensively claim that the Helms legislation 
destroys affirmative action and outreach programs. That flimsy strawman 
comes tumbling down with even a casual examination of the legislation.
  If one equates affirmative action with ``goals'' otherwise known as 
hiring by the numbers, it is clear that this bill does indeed forbid 
that practice.
  But Senators who support race conscious programs, and who support 
race norming tests, will be rebuffed by this legislation and that's why 
they oppose it.
  Those Senators who equate affirmative action with outreach programs 
have had nothing to worry about. Under the language supplied in 1991 by 
the distinguished Republican Leader, a company can recruit and hire in 
the inner city, prefer people who are disadvantaged, create literacy 
programs, recruit in the schools, establish day care programs, and 
expand its labor pool in the poorest sections of the community. In 
other words expansion of the employee pool--Senator Dole calls it good 
affirmative action--is specifically provided for under this act.
  Mr. President, America was founded on the philosophy of individual 
rights with no group entitlement. With that understanding, the former 
Mayor of the City of New York, Ed Koch addressed the issue of numbers 
oriented affirmative action. In a letter to me, Mr. Koch made the 
following observation:

       As to the already existing social problems caused by 
     preferential affirmative action programs, several scholars, 
     including the noted professor and sociologist Thomas Sowell, 
     have observed that racial quotas and discriminatory 
     affirmative action programs have not helped the intended 
     beneficiaries. Those who are often preferred are the very 
     ones who could have competed with the best * * * if we are to 
     uphold our commitment to civil rights--as we should--we must 
     set in motion programs to ensure that all
      deprived persons--without regard to race, color, religion, 
     sex or national origin--have the opportunity to achieve 
     their full potential.
       We should focus our attention on assisting minorities who 
     have suffered from unequal opportunity * * * never excluding 
     from programs others equally poor or deprived simply because 
     they are white. The solution is not to place unqualified 
     minority workers, or others of different national origin, in 
     jobs for which they are not adequately trained as a band-aid 
     to end discrimination. If anything that is the way to destroy 
     the self-esteem of many workers, heightening anger and 
     discrimination among fellow employees when some members of 
     the workforce are unable to carry their fair share of the 
     load * * * such practices unfairly reflect upon many minority 
     members who were hired because they were qualified and are 
     better than other applicants. They unfairly become judged, 
     not individuals, but as members of a protected class, not 
     able to compete with others.

  Mayor Koch's comments cut to the heart of the matter.
  It makes absolutely no sense to that Congress should support programs 
that discriminate against the poor Asians from San Francisco, or the 
poor whites from any where in America simply because they don't fall 
into the class of protected minorities.
  Mr. President, a few days ago I came across a scholarly paper titled, 
``Equality and the American Creed: Understanding the Affirmative Action 
Debate,'' by Seymour Lipset. By the way, this paper was sponsored by 
the Democratic Leadership Council. The central thesis of this paper was 
summed up in this fashion:

       Affirmative action policies--hiring or promoting people by 
     the numbers or group identify--challenge the basic American 
     tenet that rights to equal treatment should be guaranteed to 
     individuals, and that remedial preferences should not be 
     given to groups. And given the strength of individualism in 
     American tradition, it is not surprising that most Americans, 
     including a considerable majority of women and a plurality of 
     blacks, have continued to reject applying emphasis on 
     protected rights to groups.
       It is crucial that civil rights leaders, liberals, and 
     Democrats rethink the politics of special preference. The 
     American Left from Jefferson to Humphrey stood for making 
     equality of opportunity a reality.

  Mr. President, those sentiments are right on the mark. I applaud the 
DLC for its foresight and hope its members join the fight to eliminate 
the use of quotas in our society.
  The Helms proposition puts America back on the course that Thomas 
Jefferson, Hubert Humphrey, and Sam Ervin envisioned. It offers 
Senators an opportunity to back up their speeches and press statements 
against quotas. It gives Senators an opportunity to vote against 
quotas, and this they should do.
  I ask unanimous consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 26

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Civil Rights Restoration Act 
     of 1995'.

     SEC. 2. PREFERENTIAL TREATMENT.

       (a) Unlawful Employment Practice.--Section 703(j) of the 
     Civil Rights Act of 1964 (42 U. (j)) is amended to read as 
     follows:
       ``(j)(1) It shall be an unlawful employment practice for 
     any entity that is an employer, employment agency, labor 
     organization, or joint labor-management committee subject to 
     this title to grant preferential treatment to any individual 
     or group with respect to selection for, discharge from, 
     compensation for, or the terms, conditions or privilege of, 
     employment or union membership, on the basis of the race, 
     color, religion, sex, or national origin of such individual 
     or group, for any purpose, except as provided in subsection 
     (e) or paragraph (2).
       ``(2) It shall not be an unlawful employment practice for 
     an entity described in paragraph (1) to undertake affirmative 
     action designed to recruit individuals of an underrepresented 
     race, color, religion, sex, or national origin, to expand the 
     applicant pool of the individuals seeking employment or union 
     membership with the entity.''.
       (b) Construction.--Nothing in the amendment made by 
     subsection (a) shall be construed to affect the authority of 
     courts to remedy intentional discrimination under section 
     706(g) of the Civil Rights Act of 1964 (42 U.(g)).
                                 ______

      By Mr. HELMS:
  S. 27. A bill to prohibit the provision of Federal funds to any State 
or local educational agency that denies or prevents participation in 
constitutionally-protected prayer in schools; read the first time.


                 voluntary school prayer protection act

  Mr. HELMS. Mr. President, like so many others, I often contemplate 
the obvious fact that America is in the midst of an historic struggle 
between 
[[Page S223]] those who, on the one hand, yearn for a restoration of 
the heritage of traditional values envisioned by our Founding Fathers 
and those who, on the other hand, contend that anything goes no matter 
how destructive--especially when the Federal Government finances it. 
Seldom mentioned is the fact that the Federal Government has no money 
except that which it forcibly extracts from the pockets of the American 
taxpayers back home in our States.
  So, what we have is a struggle for the soul of America. How it is 
finally resolved will determine whether America will move forward--or 
end up on history's ash heap, as have so many nations before us.
  The American people are more aware than ever before about what is at 
stake. They are sick and tired of crime, pornography, mediocre schools, 
and politicians who cater to every fringe group and perverse lifestyle. 
The voters resoundingly and unmistakably demonstrated their anger at 
the polls this past November.
  Mr. President, Reader's Digest presaged this public outcry when it 
published an article a few years ago titled ``Let Us Pray'', in which 
the magazine reported the results of a Wirthlin poll. That poll found 
that 80 percent of the American people resent the Supreme Court's 
ruling that it is unconstitutional for prayers to be offered at high 
school graduations. The poll showed that 75 percent of Americans favor 
prayer in public schools. But a profound impression was found in the 
subtitle which read ``Why can't the voice of the people be heard on 
prayer in schools?''
  As Reader's Digest pointed out, those pro-prayer opinions ``were 
expressed by Democrats, Republicans, blacks and whites, rich and poor, 
high-school dropouts and college graduates--reflecting a profound 
disparity between the citizenry and the Court.'' Yet, despite this 
massive outcry, the liberals in Congress and in the media prate that 
the Constitution somehow forbids governmental establishment of religion 
and ipso facto prayer in school cannot be permitted.
  Well, the voice of the people was unmistakable this past November 8. 
The question before us now is whether we in the Congress are going to 
really listen to them for a change--that's the real change the people 
voted for.
  For instance, seldom is it heard on the issue of school prayer that 
the Constitution also forbids governmental restrictions on the free 
exercise of religion, or that the Constitution protects students' free 
speech--whether religious or not--and that student-initiated, voluntary 
prayer expressed at an appropriate time, place and manner has never 
been outlawed by the Supreme Court.
  But back to the Reader's Digest question: ``Why can't the voice of 
the people be heard on prayer in schools?'' The simple answer is that 
many of the Nation's politicians have misled--and continue to mislead--
the voters about where they really stand on the issue of school prayer. 
They go home at election time--some even run campaign commericals--
proclaiming their staunch support for school prayer and traditional 
family values. Back in Washington they vote otherwise.
  Yet while these same people are in Washington, they knowingly and 
willingly allow the liberal Democratic leadership in the Congress to 
beat back school prayer time after time. That's so these so-called 
moderate family values politicians can vote with a wink and a nod for 
school prayer on the floor of the House and Senate and then go home 
again and lie to their constituents again about how strongly they 
support school prayer when they are in Washington.
  Mr. President, last year was a perfect example of the continuing 
deceit politicians have perpetrated against the voters. The liberal 
Democrats in Congress--and specifically the senior Senator from 
Massachusetts--killed school prayer not once, but twice last year, 
despite overwhelming 3 to 1 votes for school prayer in both the House 
and Senate. However, with the help of the press and the other news 
media, they tried once again to keep the voters in the dark about who 
the true voices are in support of school prayer when they walked into 
the voting booths this past November.
  But no matter how the media tries to explain it away, for once the 
people--the voters--were not fooled in November. They know who has been 
responsible for wrecking the American dream over the past four 
decades--a dream which was built on individual responsibility and an 
acknowledgement of God's governance in the affairs of men.
  Mr. President, my friend Bill Bennett told me recently that America 
has become the kind of country that civilized countries once dispatched 
missionaries to centuries ago. If we care about cleaning up the streets 
and the classrooms, if we care about the long term survival of our 
Nation--how could there be anything more important for Congress to 
protect than the right of America's children to participate in 
voluntary, constitutionally-protected prayer in their schools?
  We already spend more money per pupil than any other industrialized 
country and what has it bought? We have the lowest math scores, the 
lowest language scores, and the highest crime rate of any of our major 
trading partners. We can spend all the money we can tax out of people 
and it will not improve our children's achievement, happiness, or well-
being one whit unless and until we take traditional morality out of 
government-imposed exile and restore it to the prominence and respect 
it once enjoyed.
  As Michael Novak of the American Enterprise Institute has pointed 
out:

       There is no issue in American life in which the public will 
     is so clear and the political establishment is so heedless. 
     The cultural and political elites have simply ignored the 
     overwhelming support of the American people for voluntary 
     school prayer--indeed for the role of religion and faith in 
     the nation's life.

  Mr. President, since the sea change wrought by the November 
elections, there has been a great deal of discussion concerning a 
constitutional amendment regarding school prayer. I must admit that I 
was a bit shocked by the number of so-called friends of school prayer 
who have changed their tune now that it appears Congress might actually 
be able to enact such an amendment--or at least see it brought up for 
discussion on the House and Senate floors. Some groups now question 
either the wisdom of, or the need for, a Constitutional amendment while 
other groups are wrangling over the proper wording for such an 
amendment.
  However, before we get mired in myriad debates about a Constitutional 
amendment, Congress can do something immediately to protect school 
prayer. Congress can enact into the law the school prayer amendment 
that last year overwhelming passed the Senate once, 75-22, and the 
House twice, 367-55 and 345-64. Senators will recall that this was the 
amendment which was dropped in the closing 60 seconds of a conference 
with no debate, no discussion, no vote, just a wink and a nod between 
the Senator from Massachusetts and his counterpart on the House side.
  That amendment, offered by Senator Lott and this Senator would have 
prevented public schools from prohibiting constitutionally-protected, 
voluntary student-initiated school prayer. The amendment did not, as 
was falsely asserted, mandate school prayer. It did not require schools 
to write any particular prayer, nor did it compel any student to 
participate in prayer. It did not stop school districts from 
establishing appropriate time, place, and manner restrictions on 
voluntary prayer--the same kind of restrictions that are placed on 
other forms of free speech in the schools.
  Again, what the amendment would have done is prevent school districts 
from establishing official policies or procedures with the intent of
 prohibiting students from exercising their constitutionally-protected 
right to lead, or participate in, voluntary prayer in school.

  And that is why the amendment met with such vehement opposition and 
subterfuge. It exploded the myth popular among school administrators 
and bureaucrats--a myth perpetuated by liberal groups such as the 
American Civil Liberties Union--that the United States Constitution 
somehow prohibits every last vestige of religion from the public 
schools. However, even the ACLU when it gets to court acknowledges that 
voluntary, student-initiated school prayer may be protected under the 
Constitution on the same basis that students' other non-religious free 
speech is protected--i.e. as long as the 
[[Page S224]] speech in question is uttered in an appropriate time, 
place, and manner, such that the speech does not materially disrupt the 
school day.
  Once the Helms-Lott amendment exploded the old school prayer myths, 
those opposed to school prayer at all costs switched to the argument 
that it was unfair to put school administrators in the position of 
having to be Constitutional scholars in order to determine what 
religious activities must be allowed to prevent their federal funding 
from being put at risk. They missed the whole point--which was that 
school administrators for almost 3 decades have already been acting as 
Constitutional scholars--and bad ones at that--by uniformly prohibiting 
all students from praying or exercising their religion at school in any 
way at any time.
  Why is it that under the liberals' double standard they are so 
concerned that a school district's funding might be adversely affected 
by a school official's Constitutional ignorance, but they don't give 
one whit that an individual child's Constitutional rights might be 
trampled on by such Constitutional ignorance on the part of school 
officials? So much for the liberals always casting themselves as the 
eternal defenders of the individual against the powers of the state.
  The answer is that contrary to the neutrality they profess about 
religious issues, liberals are in fact virulently anti-religious and 
have taken sides in the cultural war against America's--and the 
Founding Fathers'--Judeo-Christian traditions.
  Mr. President, that is why I am introducing the Helms-Lott amendment
   as a bill in the 104th Congress to be known as the ``Voluntary 
School Prayer Protection Act.''

  I reiterate that the intent of the bill is to counteract the 
unbalanced pressure currently being exerted on school boards by the 
ACLU and their legal allies, groups which are in the legal driver's 
seat as far as this issue is concerned. They swoop down on any 
offending school district and threaten its official with a law suit if 
any kind of voluntary student-initiated prayer or religious activity is 
even rumored.
  Under the proposed legislation, school districts could not continue--
in Constitutional ignorance--enforcing blanket denials of students' 
rights to voluntary prayer and religious activity in the schools. 
Schools for the first time would be faced with some real consequences 
for making uninformed and unconstitutional decisions prohibiting all 
voluntary prayer. The bill thus creates a complete system of checks and 
balances to ensure that school districts do not shortchange their 
students one way or the other.
  Mr. President, the bill would ensure that student-initiated prayer is 
treated the same as all other student-initiated free speech--which the 
United States Supreme Court has upheld as constitutionally-protected as 
long as it is done in an appropriate time, place, and manner such that 
it ``does not materially disrupt the school day.'' [Tinker v. Des 
Moines School District, 393 U.S. 503.]
  George Washington's final counsel--and warning--to the Nation is 
significant and just as relevant today as 200 years ago. Washington 
counseled the new nation,

       Of all the dispositions and habits which lead to political 
     prosperity, religion and morality are indispensable supports. 
     In vain would that man claim the tribute of patriotism who 
     should labor to subvert these great pillars of human 
     happiness.

  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 27

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Voluntary School Prayer 
     Protection Act''.

     SEC. 2. FUNDING CONTINGENT ON RESPECT FOR CONSTITUTIONALLY-
                   PROTECTED SCHOOL PRAYER.

       (a) In General.--Notwithstanding any other provision of 
     law, no funds made available through the Department of 
     Education shall be provided to any State or local educational 
     agency that has a policy of denying, or that effectively 
     prevents participation in, constitutionally-protected prayer 
     in public schools by individuals on a voluntary basis.
       (b) Limitation.--No person shall be required to participate 
     in prayer or influence the form or content of any 
     constitutionally-protected prayer in public schools.
      By Mr. HELMS:
  S. 28. A bill to protect the lives of unborn human beings, and for 
other purposes; read the first time.


                   UNBORN CHILDREN'S CIVIL RIGHTS ACT

  Mr. HELMS. Mr. President, 2 years ago and on occasions prior to that, 
I have offered the Unborn Children's Civil Rights Act, which proposes 
to take that important first step in reversing the infamous Roe v. Wade 
decision. Today, as the 104th Congress is beginning its work, I hope 
that all Senators will give thought to the need to put an end to the 
legalized slaughter of innocent, helpless babies.
  The Unborn Children's Civil Rights Act proposes four things:
  First, to put Congress clearly on record in declaring that (1) every 
abortion destroys deliberately, the life of an unborn child, (2) that 
the U.S. Constitution sanctions no right to abortion, and (3) that Roe 
versus Wade was improperly decided.
  Second, this legislation will prohibit Federal funding to pay for, or 
to promote, abortion. Further, this legislation proposes to defund 
abortion permanently, thereby relieving Congress of annual legislative 
battles about abortion restrictions in appropriation bills.
  Third, the Unborn Children's Civil Rights Act proposes to end 
indirect Federal funding for abortions by (1) prohibiting 
discrimination, at all federally-funded institutions, against citizens 
who as a matter of conscience object to abortion and (2) curtailing 
attorney's fees in abortion-related cases.
  Fourth, this legislation proposes that appeals to the Supreme Court 
be provided as a right if and when any lower Federal court declares 
restrictions on abortion unconstitutional, thus effectively assuring 
Supreme Court reconsideration of the abortion issue.
  Mr. President, if even the warning was applicable that those who 
cannot remember the past are condemned to repeat it--this is it. Fifty 
years ago, millions of European Jews and others died at the hands of 
Hitler's Nazis. Today many forget that horror--and the lesson that all 
human life is sacred.
  We are today reliving another kind of holocaust, by another name. It 
is called abortion, but it is the same horrible fate--except that now, 
in our time, it is being met by millions of unborn children in America. 
Killing
 unborn babies has become a sort of tool-of-convenience in today's 
permissive society. At latest count, more than 32 million unborn 
children have been deliberately, intentionally, destroyed.

  Mr. President, Roe versus Wade has no foundation whatsoever in the 
text or history of the constitution. It was a callous invention. Mr. 
Justice White said it best in his dissent: ``Roe was an exercise in raw 
judicial power,'' he declared.
  Why has this Supreme Court exercise in raw judicial power been 
allowed to stand? Why have we stood idly by for 22 years while 4,000 
unborn babies are deliberately, intentionally destroyed every day as a 
result of legalized abortion?
  The answer is simple, Mr. President. Even though Roe versus Wade was 
and is an unconstitutional decision, Congress has been unwilling to 
exercise its powers to check and balance a Supreme Court that 
deliberately destroyed the lives of the most defenseless, most innocent 
humanity imaginable.
  So, Mr. President, Roe versus Wade still stands and the holocaust 
continues. It is not a failure of the Constitution. It is a failure of 
the supreme Court--but, more importantly, it is the failure of Congress 
for 22 years to do its duty, to overturn Roe versus Wade. Untold 
millions of innocent, helpless little ones have been slaughtered.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 28

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Unborn Children's Civil 
     Rights Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
     [[Page S225]]   (1) scientific evidence demonstrates that 
     abortion takes the life of an unborn child who is a living 
     human being;
       (2) a right to abortion is not secured by the Constitution; 
     and
       (3) in the cases of Roe v. Wade, 410 U.S. 113 (1973) and 
     Doe v. Bolton, 410 U.S. 179 (1973) the Supreme Court erred in 
     not recognizing the humanity of the unborn child and the 
     compelling interest of the States in protecting the life of 
     each person before birth.

     SEC. 3. PROHIBITION ON USE OF FUNDS FOR ABORTION.

       No funds appropriated by Congress shall be used to take the 
     life of an unborn child, except that such funds may be used 
     only for those medical procedures required to prevent the 
     death of either the pregnant woman or her unborn child so 
     long as every reasonable effort is made to preserve the life 
     of each.

     SEC. 4. PROHIBITION ON USE OF FUNDS TO ENCOURAGE OR PROMOTE 
                   ABORTION.

       No funds appropriated by Congress shall be used to promote, 
     encourage, counsel for, refer for, pay for (including travel 
     expenses), or do research on, any procedure to take the life 
     of an unborn child, except that such funds may be used in 
     connection with only those medical procedures required to 
     prevent the death of either the pregnant woman or her unborn 
     child so long as every reasonable effort is made to preserve 
     the life of each.

     SEC. 5. PROHIBITION ON ENTERING INTO CERTAIN INSURANCE 
                   CONTRACTS.

       Neither the United States, nor any agency or department 
     thereof shall enter into any contract for insurance that 
     provides for payment or reimbursement for any procedure to 
     take the life of an unborn child, except that the United 
     States, or an agency or department thereof may enter into 
     contracts for payment or reimbursement for only those medical 
     procedures required to prevent the death of either the 
     pregnant woman or her unborn child so long as every 
     reasonable effort is made to preserve the life of each.

     SEC. 6. LIMITATIONS ON RECIPIENTS OF FEDERAL FUNDS.

       No institution, organization, or other entity receiving 
     Federal financial assistance shall--
       (1) discriminate against any employee, applicant for 
     employment, student, or applicant for admission as a student 
     on the basis of such person's opposition to procedures to 
     take the life of an unborn child or to counseling for or 
     assisting in such procedures;
       (2) require any employee or student to participate, 
     directly or indirectly, in a health insurance program which 
     includes procedures to take the life of an unborn child or 
     which provides counseling or referral for such procedures; or
       (3) require any employee or student to participate, 
     directly or indirectly, in procedures to take the life of an 
     unborn child or in counseling, referral, or any other 
     administrative arrangements for such procedures.

     SEC. 7. LIMITATION ON CERTAIN ATTORNEY'S FEES.

       Notwithstanding any other provision of Federal law, 
     attorneys' fees shall not be allowable in any civil action in 
     Federal court involving, directly or indirectly, a law, 
     ordinance, regulation, or rule prohibiting or restricting 
     procedures to take the life of an unborn child.

     SEC. 8. APPEALS OF CERTAIN CASES.

       Between the first and second paragraphs of section 1252 of 
     title 28, United States Code, insert the following new 
     paragraph:
       ``Notwithstanding the absence of the United States as a 
     party, if any State or any subdivision of any State enforces 
     or enacts a law, ordinance, regulation, or rule prohibiting 
     procedures to take the life of an unborn child, and such law, 
     ordinance, regulation, or rule is declared unconstitutional 
     in an interlocutory or final judgment, decree, or order of 
     any court of the United States, any party in such a case may 
     appeal such case to the Supreme Court, notwithstanding any 
     other provision of law.''.
                                 ______

      By Mr. HELMS:
  S. 29. A bill to amend title X of the Public Health Service Act to 
permit family planning projects to offer adoption services, and for 
other purposes; read the first time.


                 federal adoption services act of 1995

  Mr. HELMS. Mr. President, a significant question about the use of the 
American taxpayers' money is: should family planning clinics, funded 
under Title X of the Public Health Services Act, be forbidden to offer 
adoption services to pregnant women?
  My own answer is: Absolutely not. To the contrary such clinics should 
regard the advocacy of adopting babies, instead of deliberately 
destroying them, their number one responsibility. And there are 
numerous polls indicating that the vast majority of Americans agree.
  With this in mind, I offer today the Federal Adoption Services Act of 
1995, a bill that proposes to amend Title X of the Public Health 
Services Act to permit federally-funded family planning services to 
provide adoption services based on two factors: (1) the needs of the 
community in which the clinic is located, and (2) the ability of an 
individual clinic to provide such services.
  Mr. President, those familiar with the many Senate debates of the 
past regarding Title X will recall the excessive emphasis placed on 
preventing and/or spacing of pregnancies, and limiting the size of the 
American family.
  I hope that this year, we can refocus this debate, to shift the 
emphasis to the need to affirm life rather than preventing or 
terminating it.
  Sure, the radical feminists and other pro-abortionists will voice 
their usual hysterical outcries. So before they raise their voices, 
let's make clear what this legislation will not do. For example:
  No woman will be threatened or cajoled into giving up her child for 
adoption. Family planning clinics will not be required to provide 
adoption services. Rather, this legislation will make it clear that 
federal policy will allow, even encourage adoption as a means of family 
planning to help assure women who use Title X services--one-third of 
whom are teenagers--will be in a better position to make informed, 
compassionate judgments about the as yet unborn children they are 
carrying.
  Mr. President, adoption has rightly been called ``the loving 
adoption''. It brought joy to my own family as well as to countless 
others. In a world where hundreds of children are destroyed every day--
some because their mothers prefer another gender--is it not time to 
stop and ponder the question: Why not give life a chance?
  Is it not the responsibility of civilized society to protect the most 
innocent, most helpless among us?
  Mr. President, I ask unanimous consent that the text of the Federal 
Adoption Services Act of 1995 be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 29

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Federal Adoption Services 
     Act of 1995''.

     SEC. 2. ADOPTION SERVICES.

       Section 1001(a) of the Public Health Service Act (42 U.S.C. 
     300(a)) is amended by inserting after the first sentence the 
     following new sentences: ``Such projects may also offer 
     adoption services. Any adoption services provided under such 
     projects shall be nondiscriminatory as to race, color, 
     religion, or national origin.''.
                                 ______

      By Mr. McCAIN (for himself, Mr. Bryan, Mr. Coats, Mr. Gorton, Mr. 
        Heflin, Mr. Helms, Mr. Kyl, Mr. Lott, Mr. Mack, Mr. Reid, Mr. 
        Shelby, Mr. Smith, Mr. Stevens, Mr. Warner, and Mr. Gramm):
  S. 31. A bill to amend title II of the Social Security Act to 
eliminate the earnings test for individuals who have attained 
retirement age; to the Committee on Finance.


                  older americans freedom to work act

 Mr. McCAIN. Mr. President, I am pleased to be joined by my colleagues, 
Senators Bryan, Coats, Gorton, Heflin, Kyl, Lott, Mack, Reid, Shelby, 
Smith, Stevens, and Warner in introducing this bill, the Older 
Americans Freedom to Work Act, to fully repeal the Social Security 
Earnings Test for older Americans between the ages of 65 and 69. This 
legislation would provide freedom, opportunity and fairness for our 
Nation's senior citizens.
  Most people are amazed to find that older Americans are actually 
penalized for their productivity. For every $3 earned by a retiree over 
the $11,160 limit, they lose $1 in Social Security benefits. Due to 
this cap on earnings, our senior citizens, many of whom exist on low 
incomes, are effectively burdened with a 33.3 percent tax. Combined 
with Federal, State and other Social Security taxes, it will amount to 
a shocking 55-65 percent tax bite, and sometimes even more: Federal 
tax--15 percent, FICA--7.65 percent, earnings test penalty--33.3 
percent, State and local tax--5 percent. Obviously, this earnings cap 
is a tremendous disincentive to work. No one who is struggling along at 
$11,000 a year wants to face an effective marginal tax rate which 
exceeds 55 percent.
  Mr. President, this is unquestionably an issue of fairness. No 
American should be discouraged from working. Unfortunately, as a result 
of the earnings test, Americans over the age of 65 are being punished 
for attempting to be 
[[Page S226]] productive. The earnings test does not take into account 
an individual's desire or ability to contribute to society. It 
arbitrarily mandates that a person retire at age 65 or face losing 
benefits. It is plainly age discrimination; it is plainly wrong.
  There are more than 40 million Americans age 60 or older who have 
over 1 billion years of cumulative work experience--all going to waste. 
Three out of five of these people do not have any disability that would 
preclude them against working. Furthermore, almost half a million 
elderly individuals who do work earn annual incomes within 10 percent 
of the earnings limit. They are struggling to get ahead without hitting 
the limit. If not for the earnings test, many more seniors would work, 
but the system is coercing them into retirement and idleness.
  Perhaps most importantly, the earnings cap is a serious threat to the 
welfare of low-income senior citizens. Once the earnings cap has been 
met, a person with a job providing just $5 an hour would find the after 
tax value of that wage dropping to only $2.20. A person with no private 
pension or liquid investments--which, by the way, are not counted as 
``earnings''--from his or her working years may need to work in order 
to meet the most basic expenses, such as shelter and food. Health care 
costs, rising at an astronomical rate, are another expense many elderly 
Americans have trouble meeting. There is also a myth that repeal of the 
earnings test would only benefit the rich. Nothing could be further 
from the truth. The highest effective marginal rates are imposed on the 
middle income elderly who must work to supplement their income.
  Finally, it is simply outrageous to pursue a policy that keeps people 
out of the work force who are experienced and want to work. We have 
been warned to expect a labor shortage. Why should we discourage our 
senior citizens from meeting that challenge? As the U.S. Chamber of 
Commerce, which strongly supports this legislation, has pointed out, 
``retraining older workers already is a priority in labor intensive 
industries, and will become even more critical as we approach the year 
2000.''
  We have a massive Federal deficit. Studies have found that repealing 
the earnings test could net $140 million in extra Federal revenue. 
Furthermore, the earnings test is costing us $15 billion a year in 
reduced production. Taxes on that lost production would go a long way 
toward reducing the budget deficit. Nor, as it continues to become 
tougher to compete globally, can America afford to pursue any policy 
that adversely affects production or effectively prevents our citizens 
from working.
  Repeal would also save the taxpayer over $200 million a year in 
reduced compliance costs. According to the Social Security 
Administration, the earnings test is the largest administrative burden. 
Sixty percent of all overpayment and 45 percent of benefit underpayment 
are attributable to the earnings test.
  Several of our Nation's largest seniors organizations strongly 
support this particular bill: National Committee to Preserve Social 
Security and Medicare, Seniors Coalition, National Alliance of Senior 
Citizens, Retired Officers Association, and the National Association of 
Retired Federal Employees.
  I can say, in closing, that America cannot afford to continue to 
pursue a policy that adversely effects production or effectively 
prevents our citizens from working. Our Nation would be better served 
if we eliminate the burdensome earnings test and allow our Nation's 
senior citizens to return to the work force.
  Mr. BRYAN. Mr. President, today I am pleased to join as an original 
cosponsor of Senator John McCain's ``Older Americans' Freedom to Work 
Act'' to repeal the Social Security earnings limitation test.
  I understand the frustration of seniors who want to work without 
being penalized by a reduction in their Social Security earnings 
limitation test, and since coming to the Senate in 1988, I have 
supported efforts to repeal this test. During the last Congress, 
Senator McCain tried to add this same bill as an amendment to the 
Unemployment Compensation Act. Unfortunately, only 45 Senators joined 
me in voting in favor of the amendment.
  As seniors live healthier and longer lives, we have a tremendous 
human resource that wants to continue to play a positive role in our 
workforce. These seniors represent incredible knowledge and work 
experience, skills our Nation very much needs to remain competitive 
both at home and abroad. But for those seniors, ages 65 through 69, who 
want to contribute by continuing to work, their decision to remain in 
the workplace means they face reduced Social Security benefits because 
of the Social Security earnings limitation test. We should not place 
such financial penalties in their way. The Social Security earnings 
limitation test must go.
  The Social Security earnings limitation test reduces the Social 
Security benefits of senior beneficiaries, if their earned income from 
work is above a certain sum. After Social Security beneficiaries reach 
age 70, they are no longer subject to the test. In 1995, the maximum 
amount of money that beneficiaries, between the ages 65 and 69, can 
earn without reducing the amount of their Social Security benefits is 
$11,280. For every $3 a person earns over this limit, $1 is withheld 
from his or her benefit. The exempt amounts are currently adjusted each 
year to rise in proportion to average wages in the economy.
  I am optimistic this Congress will pass and enact this important 
legislation to repeal this earnings limitation test. I encourage my 
colleagues to join with me in this effort to free seniors to continue 
to work, without penalty, for as long as they choose.
                                 ______

      Mr. BREAUX (for himself and Mr. Johnson):
  S. 32. A bill to amend the Internal Revenue Code of 1986 to provide a 
tax credit for the production of oil and gas from existing marginal oil 
and gas wells and from new oil and gas wells; to the Committee on 
Finance.
  S. 33. A bill to amend the Oil Pollution Act of 1990 to clarify the 
financial responsibility requirements for offshore facilities.
  S. 34. A bill to amend the Internal Revenue Code of 1986 to treat 
geological, geophysical, and surface casing costs like intangible 
drilling and development costs, and for other purposes; to the 
Committee on Finance.
  S. 35. A bill to amend the Internal Revenue Code of 1986 to allow a 
tax credit for fuels produced from offshore deep-water projects; to the 
Committee on Finance.


    HIGH TECH JOB GROWTH AND DOMESTIC ENERGY PRODUCTION LEGISLATION

  Mr. BREAUX. Mr. President, I rise today to introduce four separate 
bills that will help create jobs in the U.S. domestic energy industry 
and will help achieve domestic energy security. These four bills are: 
deepwater production tax incentives, clarification of the tax treatment 
of geological and geophysical costs, marginal well production tax 
incentives, and clarification of the financial responsibility 
requirements under the Oil Pollution Act of 1990.
  Mr. President, oil imports are still too high. We continue to import 
over 50 percent of our oil needs. The warning signals are here. We can 
change politics as usual--the politics of crisis management--and we can 
work now to avert an energy crisis in the future.
  The domestic energy industry continues to decline. Thousands of oil 
industry workers have been laid off and it looks like many more may 
become unemployed in the near future. Over 400,000 jobs have been lost 
in the oil and gas industry in the last 10 years; by some estimates, 
40,000 to 50,000 may have been lost in 1992 alone.
  Our national security depends on access to dependable domestic energy 
reserves. Unfortunately, our domestic oil and gas industry cannot turn 
on a dime. There is no magic spigot that can be turned on when the need 
for secure domestic oil reserves become acute. The expertise needed to 
develop oil and gas is highly skilled and trained, particularly now 
that the remaining domestic reserves are increasingly more difficult to 
recover.
  Unless we take steps today to help preserve a viable domestic 
industry, the next energy crisis may be chronic and very damaging to 
our economy. Unless we act to preserve a core of talent and capital in 
the United States, the domestic industry may not be able 
[[Page S227]] to deploy the necessary capital investment and trained 
labor necessary to quickly add large increments to our overall domestic 
supply of oil and petroleum products.
  The jobs in the oil industry today are very different than those of 
yesterday. The reserves that are fast and easy to recover through 
simple hard labor are no more. Increasingly extraction of oil and gas 
requires very sophisticated technology that requires skilled and highly 
educated work force. The energy industry of today creates the kinds of 
jobs we want for tomorrow--high technology, high paying jobs.
  This country would never allow us to import over 50 percent of our 
food supply. Why is our energy supply any less important? Let's not 
forget the oil shocks of the 70's and let's not forget that several 
years ago we sent our young Americans to the Persian Gulf to protect 
our strategic interest in the oil there.
  These four bills are simple and easy steps that can be accomplished 
now that can help maintain a viable domestic energy industry. This is 
not just an oil and gas state issue. This is a national interest 
concern. Energy fuels our cars, heats our
  homes, runs our factories in every part of the country. Also, let's 
not forget the thousands of jobs that are created in other non-energy 
related sectors to service the energy industry: computers, metals, 
transportation, financial and other service industries. When domestic 
oil and gas producing increases so do the jobs created in all of these 
sectors.

  My bills address four major areas. First, to encourage production in 
the frontier areas of production, I am introducing legislation to 
provide a tax credit for deepwater Outer Continental Shelf [OCS] 
production, especially in the Gulf of Mexico. Second, to help all 
producers afford sophisticated exploration technology, I am introducing 
legislation to allow for the immediate expending of geophysical and 
geological costs. Third, to prevent the needless plugging of marginal 
and stripper wells and to encourage new stripper and marginal well 
production, I am introducing legislation to provide tax incentives for 
existing and new marginal well production. Finally, to prevent the 
shutting down of onshore and offshore oil and gas producers because 
they cannot meet onerous Federal financial responsibility standards, I 
am introducing legislation to clarify the financial responsibility 
requirements of the Oil Pollution Act of 1990. More detail on each of 
these bills will follow.


                    deepwater production incentives

  The first bill I am introducing today would provide a $5-per barrel 
tax credit for oil and gas produced from deep water production--defined 
as 400 meters or more. This legislation is vitally needed to reduce our 
reliance on foreign oil, reduce the trade deficit, maintain a vital 
infrastructure, create jobs, and minimize the risk of oil spills.
  An important part of our strategy to assure the availability of 
domestic supply is the development of the Outer Continental Shelf 
[OCS], in particular areas in the deep water, well over 1,200 feet. The 
OCS contains almost one quarter of all estimated remaining domestic oil 
and gas reserves; much of the reserves are in deep water. According to 
estimates from the Department of the Interior, there are 11 billion 
barrels of oil equivalent in the Gulf of Mexico in waters of a depth of 
200 meters or more. The costs of finding and producing oil and gas in 
deep water areas is astronomical; for example, a state-of-the-art rig 
in deep water, over 3,000 feet, can cost more than $1 billion, as 
opposed to $300 million for a conventional fixed leg platform in 800 
feet of water.
  Based on similar large-scale projects, the development of the deep 
water of the Gulf of Mexico would create tens of thousands of jobs in 
the oil industry and a multiple of that in the general economy. The 
investment required to find, develop, and produce 5 to 10 billion 
barrels of oil could range from 50 to 100 billion dollars. Since 
various studies have estimated that every billion dollars worth of 
investment could create 20,000 jobs; a large scale effort could 
ultimately create up to one million jobs.
  Under current economic conditions, most oil and gas
   potential in the deep water Gulf of Mexico will not attract 
investment, due to the high cost of finding and producing hydrocarbons 
in a hostile deep water environment. Therefore, I am introducing 
legislation to provide a $5-per-barrel credit for production of 
qualified fuels, defined as domestic crude and natural gas produced 
from a property located under at least 400 meters of water. Unlike the 
general business credit, the deep water credit cannot be carried back 3 
years. Unused credits can be carried forward 15 years. The credit could 
be used to offset the corporate alternative minimum tax since many 
companies in the oil production and services industries are subject to 
the minimum tax.

  Mr. President, I must emphasize that I have designed the credit to 
minimize revenue loss to the Government. Since there is typically 5 to 
8 years between discovery and production of oil and gas in commercial 
quantities, there should not be a negative near-term impact on tax 
revenues. In fact, in the first years, the deep water credit could 
raise revenue. During this interim time period, significant investments 
will be made to assure that the oil and gas be brought to market. 
Suppliers, contractors, and employers will pay taxes on the additional 
income generated by these development activities. Their increased 
spending will increase the earnings and stimulate employment in many 
industries throughout the United States.
  Also, contrary to popular belief, oil and gas production on the Outer 
Continental Shelf is environmentally sound. The most recent data 
obtained from the Minerals Management Survey shows that only 2 percent 
of the world's oil spills are the result of Outer Continental Shelf 
[OCS] development. In contrast, 45 percent of the world's oil spills 
come from transportation related, or tanker spills. The more we import, 
the higher risk there is of large oil spills.


                  geological and geophysical expenses

  One very important fact about the domestic oil and gas industry that 
is too often overlooked, is that it is an extremely high-technology 
industry. Particularly now that reserves are harder to recover, 
exploring and producing these remaining reserves requires very 
sophisticated technology. Some of the most sophisticated technology 
used in any industry, even more sophisticated than that used in the air 
and space industry, is the use of 3-D seismic technology by the oil and 
gas industry. The basic purpose of these tools are to survey and 
interpret subsurface geology.
  Obviously, this very sophisticated technology is extremely costly. 
Currently, this kind of technology is the most economically viable for 
the major oil and gas producers. Independent oil and gas producers, who 
produce 31 percent of domestic crude oil and about 60 percent of 
domestic natural gas production, need greater financial access to this 
type of equipment.
  Therefore, this legislation that I am introducing today would allow 
oil and gas producers that incur geological and geophysical [G&G] costs 
to expense those costs rather than
 capitalize them regardless of whether a will is producing or dry. I 
understand the administration is also considering supporting a similar 
initiative on which I hope to work with them.


                        marginal well production

  Last spring, a bipartisan group of House and Senate Members met with 
President Clinton to outline our concerns about the domestic energy 
industry. The president was given a list of proposals that was 
developed in consultation with the energy industry. That list included 
the deepwater credit, the G&G proposal and also a new idea for a 
marginal well production credit for new and existing wells.
  The third bill I am introducing today would create a new set of tax 
incentives for marginal production. Mr. President of the nation's 
600,000 oil wells, more than 450,000 produce less than 3 barrels per 
day. These small wells are extremely sensitive to oil prices. Between 
October 1993 and March 1994, oil prices plunged more than 40 percent 
placing in jeopardy these wells. Energy policy is needed that protects 
this vital source of production during periods of low prices.
  There are two main elements of this proposal. First, for existing 
wells, the bill would provide a maximum $3 per barrel tax credit for 
the first 3 barrels of daily production from an existing marginal 
well--a well that produces less than 15 barrels per day or produces 
[[Page S228]] heavy oil. For natural gas, the bill would provide a 
maximum $0.50 per thousand cubic feet [MCF] tax credit for the first 18 
MCF of natural gas produced per day from a marginal gas well--a well 
that produces less than 90 MCF per day. In addition, the definition of 
marginal wells would be expanded to include high water cut property.
  The second major element of this bill is the creation of a new credit 
for newly drilled marginal wells. For those wells drilled after 
December 31, 1994 the following new credits would apply. Oil production 
would receive a maximum $3 per barrel for the first 15 barrels of daily 
oil production. Natural gas production would receive a maximum credit 
of $.50 per MCF for the first 90 MCF of daily natural gas production.
  To make sure that the tax incentives are truly targeted to when the 
price of oil and gas are the most threatening to domestic production, 
the benefit of these credits would phase out for oil when the price of 
oil is between $14 and $20 per barrel and for natural gas when gas 
prices reach between $2.49 and $3.55.


 financial responsibility requirements of the oil pollution act of 1990

  The Oil Pollution Act of 1990 was passed in response to the Exxon 
Valdez oil spill and was designed to prevent oil spills and if oil 
spills do occur to make sure sufficient financial resources are 
available to clean up those spills. The statute establishes liability 
limits and requirements of financial responsibility to meet those 
limits. However, recent interpretation of the statute by the Department 
of the Interior
 indicates that legislative changes are needed to meet congressional 
intent in the area of financial responsibility for onshore facilities 
and to correct the overly burdensome financial responsibility 
requirements for offshore facilities that threaten the viability of 
many offshore producers.

  When the Congress adopted the Oil Pollution Act, it clearly intended 
that onshore facilities would not have to demonstrate evidence of 
financial responsibility. However, a recent Interior Department 
Solicitor's opinion indicates that due to the interrelationship of 
several definitions in the act, that they interpret the statute to 
require financial responsibility be demonstrated by onshore facilities. 
Mr. President, clearly, Congress did not and does not want to require 
small marina operators or other onshore facilities to demonstrate $150 
million of financial responsibility. Therefore, the bill I am 
introducing today clarifies the congressional intent on the law with 
respect to financial responsibility for onshore facilities.
  Also, I have proposed to give the Minerals Management Service the 
authority to require evidence of financial responsibility between $35 
million and $150 million based on the amount of environmental risk 
posed by the facility. Current law is inflexible on this point, all 
offshore facilities must provide evidence of $150 million regardless of 
the amount of oil they handle, their history of oil spills, or other 
factors that would determine the true risk of oil spill. In addition, 
my bill would provide that any producer that handles less than 1,000 
barrels of oil at any one time would be exempt from the financial 
responsibility requirement. Both the $35 million financial 
responsibility level and the 1,000 barrels were included in prior law--
the Outer Continental Shelf Lands Act. Unless, this flexibility is 
provided for offshore facilities, the Oil Pollution Act requirements 
will freeze out small and independent companies that drill the majority 
of wells offshore. These onerous requirements, unless fixed, will lead 
to a loss of jobs in the oil and gas industry.
  This bill is a starting point. I expect the Domestic Petroleum 
Council to develop specific recommendations on the issue raised by the 
Oil Pollution Act in the near future. I look forward to seeing those 
and to working to further revise this legislation. There are other 
issues that we may have to address such as self-insurance, guarantor 
liability on which I hope we can get specific recommendations by the 
council.
  Mr. President, I hope my colleagues will have an opportunity to 
support this legislation so that we can act on these proposals during 
this Congress.
                                 ______

      By Mr. KOHL:
  S. 36. A bill to replace the Aid to Families with Dependent Children 
under title IV of the Social Security Act and a portion of the food 
stamp program under the Food Stamp Act of 1977 with a block grant to 
give the States the flexibility to create innovative welfare to work 
programs, and for other purposes; to the Committee on Finance.


                          WELFARE TO WORK ACT

 Mr. KOHL. Mr. President, today I am reintroducing a welfare reform 
proposal that I introduced in the 103d Congress. My legislation is 
based on one fundamental conviction: that the current welfare system is 
so bad--so removed from the American values of work, family, and 
responsibility--that it must be completely abolished. My bill will take 
the Federal Government out of the business of welfare and put the 
States into the business of empowering their residents to find and keep 
jobs.
  Before I describe our bill, let me talk a moment about the current 
system. It discourages work, discourages marriage, and discourages 
responsible choices about parenthood. We have set up a cash grant 
program that tells young women--don't work, don't marry, have children, 
and you will get support. Work, marry, plan your family for when you 
can afford to support it, and we will leave you out in the cold--in 
fact, we will take your tax money to support those who have decided not 
to work. The current welfare system pays people to reject the values of 
work and family that have made this country strong, and the time has 
come to reject that approach.
  Right now, State and local governments that want to reject this 
system and implement something that helps those down on their luck get 
jobs don't have the freedom to do so--they have to beg Washington for 
waivers from myriad Federal rules, and often as not, they get turned 
down or have to wait years and years for an answer. Meanwhile, another 
generation grows up in our broken welfare system.
  I think there is a better way. A simple, common sense approach, that 
is consistent with American values. This legislation truly ends welfare 
as we know it by abolishing AFDC and most of food stamps. The money now 
used for welfare payments and Federal administrative costs is turned 
over to the States in the form of a block grant. They will use the 
grant to establish welfare-to-work systems designed to meet the needs 
of their local communities.
  My legislation ensures that the elderly and disabled continue to get 
food stamp assistance and that needy children get food through an 
expansion of WIC. Beyond that, States are allowed to use the money we 
now spend on welfare to connect people to work in any way they 
determine will be successful--through job placement assistance, job 
training, children care, transportation assistance, earnings 
supplements, public service jobs, etc.
  To have its block grant renewed each year, all a State would have to 
do is show that it is moving people into work. If it meets this test, 
then it is doing better than we have ever done at the Federal level, 
and its block grant will be continued.
  My welfare-to-work legislation will spend not one penny more on 
welfare than we currently spend. There are many who would argue that we 
have to add more money to the current system to get it to work. But, as 
most people operating in the private sector know, it doesn't matter how 
much you spend to dress up a product nobody wants, in the end, all you 
have is an expensive product nobody wants. It is time to stop pouring 
money into a welfare system that doesn't help anyone, because in the 
end all we will get is an expensive welfare system that still doesn't 
help anyone. We can use the money currently spent on welfare--including 
$3 billion in administrative expenses--to let the States design systems 
that work for them and their citizens. By turning over to the States 
most of the money we currently spend on Federal administrative costs, 
and getting States to re-orient their systems away from check-writing 
and toward helping people find jobs, we can make big strides in getting 
people to work.
  Another reason I have proposed keeping the block grant at current 
welfare spending levels is the fact that placing people in jobs will 
generate savings for State welfare-to-work programs, since such 
individuals won't need as much 
[[Page S229]] assistance as they were getting before, allowing those 
savings to be used to help harder-to-place people get the job training/
child care/and other assistance they need to get and keep jobs. Another 
part of the answer lies in encouraging States to better utilize other 
Federal resources they already get. Right now, we give States over $7 
billion to help people attain, and maintain self-sufficiency through 
child care, social services, and job training grants.
 These grants could be better targeted, and if connected to State 
welfare-to-work systems, could provide additional support to help 
welfare-to-work programs be even more successful.

  Economic circumstances and people in Kenosha, WI, are different from 
those in Ottumwa, IA. Portland, ME, is not San Diego, CA. A one-size-
fits-all welfare plan designed in Washington cannot work for all these 
communities. By introducing this bill, we are saying that it is time to 
face the fact that the answer to something as hard as helping people 
get work is not going to be developed in Washington--the many answers 
we need are going to come from communities throughout this country. 
State and local governments have been pleading for flexibility to 
design programs that work--it is time to get out of their way!
  Some may think that I'm bashing the Federal Government when I say 
that I don't think it can solve this problem. I'm not. I'm simply 
saying that there are some things Washington is good at, such as the 
relatively straight-forward tasks of collecting payments for Social 
Security and sending out the checks our elderly so depend on. And there 
are some things our Federal Government is not good at, such as trying 
to help individuals get back on their feet. This is because so much of 
the answer to getting welfare beneficiaries into jobs depends on an 
individual's circumstances and the local situation--both of which are 
impossible to take completely into account when developing a 
comprehensive, national solution.
  The crucial difference between my bill and others you may hear about 
is this: instead of adding yet another layer to the overly complex 
welfare system we have today, we admit that it needs to be abolished 
and completely replaced, and propose to do so with a simple program, 
run by States, that moves people to work.
  Many of us are concerned that welfare reform plans need to show 
compassion for children. I think this proposal meets that test: it 
ensures needy children will get nutrition assistance through WIC and 
that their parents will receive assistance getting connected to a job. 
Frankly, I think the most compassionate thing we can do for these 
children is to help their parents get a job, which is more than the 
current system can say. My bill says that government has the 
responsibility to provide a helping hand to assist individuals, but 
also that individuals have the responsibility to use the assistance to 
help themselves.
  As a final note, let me point out that this plan would remove the 
requirement that families break up before they can get assistance. With 
this block grant, States can help families who need help before they 
break up. This is one more reason why we think this bill is more 
consistent with American values--the values of compassion, work, 
family, and responsibility--than our current welfare system.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 36

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Welfare to 
     Work Act of 1995''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purpose.
Sec. 4. Definition of State.
Sec. 5. Applications by States.
Sec. 6. State welfare to work program described.
Sec. 7. State grants.
Sec. 8. State maintenance of effort.
Sec. 9. Termination of certain Federal welfare programs.
Sec. 10. Eligibility for WIC program.
Sec. 11. Secretarial submission of legislative proposal for amendments 
              to medicaid eligibility provisions and technical and 
              conforming amendments.
     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) The current welfare system is broken and requires 
     replacement.
       (2) Work is what works best for American families.
       (3) Since State and local governments know the best methods 
     of connecting welfare recipients to work and since each 
     community faces different circumstances, Federal assistance 
     to the States should be flexible.
       (4) Government has the responsibility to provide a helping 
     hand to assist individuals but individuals have the 
     responsibility to use the assistance to help themselves.

     SEC. 3. PURPOSE.

       The purpose of this Act is to create a block grant program 
     to replace the aid to families with dependent children 
     program under title IV of the Social Security Act and a 
     portion of the food stamp program under the Food Stamp Act of 
     1977 and give the States the flexibility to create innovative 
     welfare to work programs.

     SEC. 4. DEFINITION OF STATE.

       For purposes of this Act, the term ``State'' means each of 
     the several States of the United States, the District of 
     Columbia, the Commonwealth of Puerto Rico, the Virgin 
     Islands, Guam, and American Samoa.

     SEC. 5. APPLICATIONS BY STATES.

       (a) In General.--Each State desiring to receive a grant to 
     operate a State welfare to work program described in section 
     6 shall annually submit an application to the Secretary of 
     Health and Human Services (hereafter in this Act referred to 
     as the ``Secretary'') containing the matter described in 
     subsection (b) in such manner as the Secretary may require.
       (b) Contents.--
       (1) Fiscal year 1996.--An application for a grant to 
     operate a State welfare to work program during fiscal year 
     1996 shall contain a description of the program in accordance 
     with section 6.
       (2) Subsequent fiscal years.--
       (A) In general.--
       (i) Contents.--Except as provided in clause (ii), an 
     application for a grant to operate a State welfare to work 
     program during fiscal year 1997 and each subsequent fiscal 
     year shall contain--

       (I) a description of the program in accordance with section 
     6;
       (II) the State work percentage (as determined under 
     subparagraph (B)) for each of the 2 preceding fiscal years;
       (III) a statement of the number of participants who became 
     ineligible for participation in the program due to increased 
     income for each of the 2 preceding fiscal years; and
       (IV) a statement of the amount of non-Federal resources 
     that the State invested in the program in the preceding 
     fiscal year.

       (ii) Special rule for applications submitted for fiscal 
     year 1997.--An application for a grant to operate a State 
     welfare to work program during fiscal year 1997 shall contain 
     the information described in subclauses (II) and (III) of 
     clause (i) only for the preceding fiscal year in lieu of such 
     information for each of the 2 preceding fiscal years.
       (B) State work percentage.--For purposes of subparagraph 
     (A)(ii), the State work percentage (prior to any adjustment 
     under subparagraph (C)) for a fiscal year is equal to--
       (i) the number of participants in the State welfare to work 
     program in the fiscal year who were employed in private 
     sector or public sector jobs for at least 20 hours per week 
     for 26 weeks out of the year, divided by
       (ii) the total number of participants in the State welfare 
     to work program in the fiscal year.
       (C) Adjustment.--
       (i) In general.--The State work percentage determined under 
     subparagraph (B) for a fiscal year shall be adjusted by 
     subtracting 1 percentage point from such State work 
     percentage for each 5 percentage points by which the 
     percentage of individuals described in subparagraph (B)(i) 
     who are also described in clause (ii) participating in the 
     program in such fiscal year falls below 75 percent of the 
     number of individuals described in subparagraph (B)(i) in 
     such fiscal year.
       (ii) Individual described.--An individual described in this 
     clause is a custodial parent or other individual who is 
     primarily responsible for the care of a child under the age 
     of 18.
       (D) Monitoring of data.--The Secretary shall ensure the 
     validity of the data provided by a State under this 
     paragraph.
       (c) Approval.--
       (1) Fiscal years 1996 and 1997.--The Secretary shall 
     approve each application for a grant to operate a State 
     welfare to work program--
       (A) during fiscal year 1996, if the application contains 
     the information described in subsection (b)(1); and
       (B) during fiscal year 1997, if the application contains 
     the information described in subsection (b)(2).
       (2) Automatic approval in subsequent fiscal years.--The 
     Secretary shall approve any application for a grant to 
     operate a State welfare to work program during fiscal year 
     1998 and each succeeding fiscal year if the State's 
     application reports that--
     [[Page S230]]   (A) the State work percentage for the 
     preceding fiscal year is greater than the State work 
     percentage for the second preceding fiscal year; or
       (B) more participants became ineligible for participation 
     in the State welfare to work program during the preceding 
     fiscal year due to increased income than became ineligible 
     for participation in the program in the second preceding 
     fiscal year as a result of increased income.
       (3) Secretarial review.--
       (A) In general.--If a State application for a grant under 
     this Act is not automatically approved under paragraph (2), 
     the Secretary shall approve the application upon a finding 
     that the application--
       (i) provides an adequate explanation of why the State work 
     percentage or the number of participants who became 
     ineligible for participation in the State welfare to work 
     program due to increased income during the preceding fiscal 
     year did not exceed such State work percentage or the number 
     of participants who became ineligible for participation in 
     the program in the second preceding fiscal year; and
       (ii) provides a plan of remedial action which is 
     satisfactory to the Secretary.
       (B) Adequate explanations.--An adequate explanation under 
     subparagraph (A) may include an explanation of economic 
     conditions in the State, failed program innovations, or other 
     relevant circumstances.
       (4) Resubmission.--A State may resubmit an application for 
     a grant under this Act until the Secretary finds that the 
     application meets the requirements of paragraph (3)(A).

     SEC. 6. STATE WELFARE TO WORK PROGRAM DESCRIBED.

       (a) In General.--A State welfare to work program described 
     in this section shall provide that--
       (1) during fiscal year 1996, the State shall designate 
     individuals who are eligible for participation in the program 
     and such individuals shall include at least those individuals 
     who received benefits under the State plan approved under 
     part A of title IV of the Social Security Act during fiscal 
     year 1996;
       (2) during fiscal year 1997 and each subsequent fiscal 
     year, the State shall designate individuals who are eligible 
     for participation in the program (as determined by the 
     State), with priority given to those individuals most in need 
     of such services; and
       (3) the program shall be designed to move individuals from 
     welfare to self-sufficiency and may include--
       (A) job placement and training;
       (B) supplementation of earned income;
       (C) nutrition assistance and education;
       (D) education;
       (E) vouchers to be used for rental of privately owned 
     housing;
       (F) child care;
       (G) State tax credits;
       (H) health care;
       (I) supportive services;
       (J) community service employment; or
       (K) any other assistance designed to move such individuals 
     from welfare to self-sufficiency.
       (b) No Entitlement.--Notwithstanding any criteria a State 
     may establish for participation in a State welfare to work 
     program, no individual shall be considered to be entitled to 
     participate in the program.
     SEC. 7. STATE GRANTS.

       (a) In General.--The Secretary shall annually award to each 
     State with an application approved under section 5(c) an 
     amount equal to--
       (1) in fiscal year 1996, 100 percent of the State's base 
     amount;
       (2) in fiscal year 1997, the sum of 80 percent of the 
     State's base amount, 20 percent of the State's share of the 
     national grant amount, and any applicable bonus payment;
       (3) in fiscal year 1998, the sum of 60 percent of the 
     State's base amount, 40 percent of the State's share of the 
     national grant amount, and any applicable bonus payment;
       (4) in fiscal year 1999, the sum of 40 percent of the 
     State's base amount, 60 percent of the State's share of the 
     national grant amount, and any applicable bonus payment;
       (5) in fiscal year 2000, the sum of 20 percent of the 
     State's base amount, 80 percent of the State's share of the 
     national grant amount, and any applicable bonus payment; and
       (6) in fiscal year 2001 and each subsequent fiscal year, 
     the sum of 100 percent of the State's share of the national 
     grant amount and any applicable bonus payment.
       (b) State Base Amount.--
       (1) In general.--For purposes of subsection (a), a State's 
     base amount is equal to--
       (A) for fiscal year 1996, 100 percent of the amount 
     determined under paragraph (2); and
       (B) for fiscal year 1997 and succeeding fiscal years, 99.6 
     percent of the amount determined under paragraph (2).
       (2) Amount determined.--The amount determined under this 
     paragraph for a State is an amount equal to the sum of--
       (A) the amount of Federal financial participation received 
     by the State under section 403 of the Social Security Act 
     during fiscal year 1995; and
       (B) an amount equal to the sum of--
       (i) the benefits under the food stamp program under the 
     Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), including 
     benefits provided under section 19 of such Act (7 U.S.C. 
     2028), during fiscal year 1995 other than benefits provided 
     to elderly or disabled individuals in the State (as 
     determined under section 3(r)) of such Act (7 U.S.C. 2012); 
     and
       (ii) the amount paid to the State under section 16 of the 
     Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) during fiscal 
     year 1995 for administrative expenses for providing benefits 
     to non elderly and non disabled individuals.
       (c) State Share of the National Grant Amount.--
       (1) In general.--For purposes of subsection (a), the 
     State's share of the national grant amount for a fiscal year 
     is equal to the sum of the amounts determined under paragraph 
     (2) (relating to economic need) and paragraph (3) (relating 
     to State effort) for the State.
       (2) Economic need.--The amount determined under this 
     paragraph is equal to the sum of the amounts determined under 
     subparagraphs (A) and (B) for the State.
       (A) State per capita income measure.--The amount determined 
     under this subparagraph is an amount which bears the same 
     ratio to one-quarter of the national grant amount as the 
     product of--
       (i) the population of the State; and
       (ii) the allotment percentage of the State (as determined 
     under paragraph (4)),
     bears to the sum of the corresponding products for all 
     States.
       (B) State unemployment measure.--The amount determined 
     under this subparagraph is an amount which bears the same 
     ratio to one-quarter of the national grant amount as the 
     number of individuals in the State who are estimated as being 
     unemployed according to the Department of Labor's annual 
     estimates bears to the number of individuals who are 
     estimated as being unemployed according to the Department of 
     Labor's annual estimates in all States.
       (3) State effort.--The amount determined under this 
     paragraph is the amount which bears the same ratio to one-
     half of the national grant amount as the product of--
       (A) the dollar amount the State invested in the State 
     welfare to work program in the previous fiscal year, as 
     reported in section 5(b)(2)(A)(iv); and
       (B) the allotment percentage of the State (as determined 
     under paragraph (4)),
     bears to the sum of the corresponding products for all 
     States.
       (4) Allotment percentage.--
       (A) In general.--Except as provided in subparagraph (C), 
     the allotment percentage for any State shall be 100 percent, 
     less the State percentage.
       (B) State percentage.--The State percentage shall be the 
     percentage which bears the same ratio to 50 percent as the 
     per capita income of such State bears to the per capita 
     income of all States.
       (C) Exception.--The allotment percentage shall be 70 
     percent in the case of Puerto Rico, the Virgin Islands, Guam, 
     and American Samoa.
       (5) Determination of grant amounts.--Each State's share of 
     the national grant amount shall be determined under this 
     subsection on the basis of the average per capita income of 
     each State and all States for the most recent fiscal year for 
     which satisfactory data are available from the Department of 
     Commerce and the Department of Labor.
       (6) National grant amount.--The term ``national grant 
     amount'' means an amount equal to 99.6 percent of sum of the 
     amounts determined under subsection (b)(2) for all States.
       (d) Bonus Payment.--Beginning with fiscal year 1997, the 
     Secretary may use 0.4 percent of the sum of the amounts 
     determined under subsection (b)(2) for all States to award 
     additional bonus payments under this section to those States 
     which have the highest or most improved State work percentage 
     as determined under section 5(b)(2)(B). The Secretary shall 
     designate one State as the leading job placement State and 
     such State shall receive the highest bonus payment under the 
     preceding sentence and the President is authorized and 
     requested to acknowledge such State with a special 
     Presidential award.
       (e) Use of Funds for Administrative Purposes.--A State 
     shall not use more than 10 percent of the amount it receives 
     under this section for the administration of the State 
     welfare to work program.
       (f) Capped Entitlement.--This section constitutes budget 
     authority in advance of appropriations Acts, and represents 
     the obligation of the Federal Government to provide the 
     payments described in subsection (a) (in an amount not to 
     exceed the sum of the amounts determined under subsection 
     (b)(2) for all States).

     SEC. 8. STATE MAINTENANCE OF EFFORT.

       Any funds available for the activities covered by a State 
     welfare to work program conducted under this Act shall 
     supplement, and shall not supplant, funds that are expended 
     for similar purposes under any State, regional, or local 
     program.

     SEC. 9. TERMINATION OF CERTAIN FEDERAL WELFARE PROGRAMS.

       (a) Termination of AFDC and JOBS Programs.--
       (1) AFDC.--Part A of title IV of the Social Security Act 
     (42 U.S.C. 601 et seq.) is amended by adding at the end the 
     following new section:


                       ``termination of authority

       ``Sec. 418. The authority provided by this part shall 
     terminate on October 1, 1995.''.
       (2) JOBS.--Part F of title IV of the Social Security Act 
     (42 U.S.C. 681 et seq.) is amended by adding at the end the 
     following new section:


                       ``termination of authority

       ``Sec. 488. The authority provided by this part shall 
     terminate on October 1, 1995.''.
       (b) Food Stamp Program To Serve Only Elderly and Disabled 
     Individuals.--
     [[Page S231]]   (1) Definitions.--Section 3 of the Food Stamp 
     Act of 1977 (7 U.S.C. 2012) is amended--
       (A) in subsection (g)--
       (i) in paragraph (4), by striking ``(and their spouses)'';
       (ii) in paragraph (5)--

       (I) by striking ``in the case of'' and inserting ``in the 
     case of elderly or disabled''; and
       (II) by inserting ``disabled'' before ``children''; and

       (iii) in paragraph (8), by inserting ``elderly or 
     disabled'' before ``women and children temporarily'';
       (B) in subsection (i)--
       (i) in the first sentence--

       (I) in paragraph (1), by inserting ``elderly or disabled'' 
     before ``individual''; and
       (II) in paragraph (2), by inserting ``, each of whom is 
     elderly or disabled,'' after ``individuals'';
       (ii) in the second sentence, by inserting before the period 
     at the end the following: ``, if each of the individuals is 
     elderly or disabled'';
       (iii) in the third sentence--

       (I) by striking ``, together'' and all that follows through 
     ``of such individual,''; and
       (II) by striking ``, excluding the spouse,''; and

       (iv) in the fifth sentence--

       (I) by striking ``coupons, and'' and inserting ``coupons, 
     and elderly or disabled''; and
       (II) by inserting ``disabled'' after ``together with 
     their''; and

       (C) in subsection (r), by striking ``Elderly'' and all that 
     follows through ``who'' and inserting the following: 
     ```Elderly or disabled', with respect to a member of a 
     household or other individual, means a member or other 
     individual who''.
       (2) Conforming amendments.--
       (A) Eligibility.--Section 5 of such Act (7 U.S.C. 2014) is 
     amended--
       (i) in the first sentence of subsection (c)--

       (I) by striking ``program if--'' and all that follows 
     through ``household's income'' and inserting ``program if the 
     income of the household'';
       (II) by striking ``respectively; and'' and inserting 
     ``respectively.''; and
       (III) by striking paragraph (2); and

       (ii) in subsection (e)--

       (I) in the first sentence, by striking ``containing an 
     elderly or disabled member and determining benefit levels 
     only for all other households'';
       (II) in the fifteenth sentence--

       (aa) by striking ``containing an elderly or disabled 
     member''; and
       (bb) in subparagraph (A), by striking ``elderly or disabled 
     members'' and inserting ``the members'';

       (III) in the seventeenth sentence, by striking ``elderly 
     and disabled''; and
       (IV) by striking the fourth through fourteenth sentences.

       (B) Periodic reporting.--Section 6(c)(1)(A)(iv) of such Act 
     (7 U.S.C. 2015(c)(1)(A)(iv)) is amended by striking ``and in 
     which all adult members are elderly or disabled''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply on and after October 1, 1995.
       (c) References in Other Laws.--
       (1) In general.--Any reference in any law, regulation, 
     document, paper, or other record of the United States to any 
     provision that has been terminated by reason of the 
     amendments made in subsection (a) shall, unless the context 
     otherwise requires, be considered to be a reference to such 
     provision, as in effect immediately before the date of the 
     enactment of this Act.
       (2) State plans.--Any reference in any law, regulation, 
     document, paper, or other record of the United States to a 
     State plan that has been terminated by reason of the 
     amendments made in subsection (a), shall, unless the context 
     otherwise requires, be considered to be a reference to such 
     plan as in effect immediately before the date of the 
     enactment of this Act.

     SEC. 10. ELIGIBILITY FOR WIC PROGRAM.

       (a) In General.--Section 17(d)(1) of the Child Nutrition 
     Act of 1966 (42 U.S.C. 1786(d)(1)) is amended by adding at 
     the end the following new sentence: ``For purposes of 
     participation in the program under this section, a child 
     shall be considered to be at nutritional risk if such child 
     is in the care of a custodial parent or other individual 
     primarily responsible for the care of such child who is a 
     participant in a State welfare to work program which receives 
     Federal funds under the Welfare to Work Act of 1995.''.
       (b) Conforming Amendments.--Section 17(d)(2)(A)(ii) of the 
     Child Nutrition Act of 1966 (42 U.S.C. 1786(d)(2)(A)(ii)) is 
     amended--
       (1) by striking ``(ii)(I)'' and inserting ``(ii)''; and
       (2) by striking subclause (II).
       (c) Effective Date.--The amendments made by this section 
     shall apply on and after October 1, 1995.

     SEC. 11. SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL FOR 
                   AMENDMENTS TO MEDICAID ELIGIBILITY CRITERIA AND 
                   TECHNICAL AND CONFORMING AMENDMENTS.

       The Secretary shall, within 90 days after the date of 
     enactment of this Act, submit to the appropriate committees 
     of Congress, a legislative proposal providing eligibility 
     criteria for medical assistance under a State plan under 
     title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) 
     in lieu of the eligibility criteria under section 
     1902(a)(10)(A)(i) of such Act (42 U.S.C. 1396a(a)(10)(A)(i)) 
     relating to the receipt of aid to families with dependent 
     children under a State plan under part A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.) and such 
     technical and conforming amendments in the law as are 
     required by the provisions of this Act.
                                 ______

      By Mr. FEINGOLD (for himself and Mr. Kohl):
  S. 37. A bill to terminate the Extremely Low Frequency Communication 
System of the Navy; to the Committee on Armed Services.


 extremely low frequency communication system termination and deficit 
                             reduction act

 Mr. FEINGOLD. Mr. President, today I am reintroducing legislation for 
myself and Senator Kohl which we offered during the 103d Congress to 
terminate the Extremely Low Frequency Communications System, located in 
Clam Lake, WI., and Republic, MI. This project has been opposed by 
residents of Wisconsin since its inception, but for years, we were told 
that the national security considerations of the cold war outweighed 
our concerns about this installation in our State. This year, as the 
Department of Defense is scrambling to meet a tighter budget, and with 
the Base Closure Commission making its final recommendations, Project 
ELF should be closed down. If enacted, my bill would save $9 to $20 
million a year.
  Project ELF was developed in the late 1970's as an added protection 
against the Soviet naval nuclear deployment. It is an electromagnetic 
messenger system--otherwise known as a bell ringer--which only tells a 
deeply submerged Trident submarine that it needs to come to shallow 
water to retrieve a message. Because it communicates through very 
primitive pulses, called phonetic-letter-spelled-out [PLSO] messages, 
ELF's radiowaves cannot transmit any messages themselves. Thus, in the 
case of a nuclear attack, ELF is not useful because during a nuclear 
attack a Trident would not surface at all. And, in the absence of a 
Soviet naval nuclear threat from which to hide, its usefulness is even 
more difficult to justify.
  Since its major justification has apparently disappeared, Project ELF 
itself becomes hard to justify. Trident submarines no longer need to 
take that extra precaution against Soviet nuclear forces. They can now 
surface on a regular basis with less danger of detection or attack. 
They can also receive more complicated messages through very low 
frequency [VLF] radiowaves, or lengthier messages through satellite 
systems, if it can be done more cheaply.
  Not only do many Wisconsinites think the mission of Project ELF is 
unnecessary and anachronistic, but they are also concerned about 
possible environmental and public health hazards associated with it. 
While I have heard some ELF supporters say there is no apparent 
environmental impact of Project ELF, we can only conclude that we do 
not know that: in fact, we do not know much about its affects at all.
  The Navy itself has yet to conclude definitively that operating 
Project ELF is safe for the residents living near the site. If you are 
a resident in Clam Lake, that is unsettling news. In 1982, the Illinois 
Institute of Technology Research Institute undertook a study of ELF's 
health effects. The results have thus far proven inconclusive, and are 
still being reviewed and analyzed by the National Academy of Sciences. 
After the NAS reviews the data, it will, at my request, be forwarded to 
the Office of Management and Budget and the Office of Technology 
Assessment.
  We also know that other studies give Wisconsinites reason to be 
concerned. In 1992, a Swedish study found that children exposed to 
relatively weak magnetic fields from powerlines develop leukemia at 
almost four times the expected rate. We also know that in 1984, a U.S. 
district court ruling on State of Wisconsin versus Weinberger ordered 
Project ELF to be shut down because the Navy paid inadequate attention 
to the system's possible health effects, and violated the National 
Environmental Policy Act. That decision was overturned on appeal, 
however, in a ruling that claimed national security interests at the 
time prevailed over environmental concerns. I would hope that in post-
cold-war 1995 that conclusion would be reconsidered.
  Last session, I worked with the Senator from Georgia [Senator Nunn] 
to include an amendment in the National 
[[Page S232]] Defense Authorization Act for fiscal year 1994 requiring 
a report by the Secretary of Defense on the benefits and costs of 
continued operation of Project ELF. The report issued by DOD was 
particularly disappointing because it basically argued that because 
Project ELF may have had a purpose during the cold war, it should 
continue to operate after the cold war as part of the complete 
complement of command and control links configured for the cold war. I 
am hoping that OTA will also issue an independent assessment of the 
strategic capabilities of Project ELF, as described in the Senate-
passed amendment in 1993.
  I have also proposed that the Base Closure Commission [BRAC] look at 
Project ELF this year. I understand that in addition to military value, 
the BRAC will consider recommendations according to four other 
criteria: return on investment; the economic impact on the community; 
the ability of both the existing and potential receiving communities' 
infrastructure to support forces, missions and personnel; and 
environmental impact. On all these grounds, ELF qualifies as a 
candidate for closure.
  Did Project ELF play a role in helping to minimize the Soviet threat? 
Perhaps. Did it do so at risk to the community? Perhaps. Does it 
continue to play a vital security role to the Nation? No.
  Most of us in Wisconsin don't want it anymore. Many of my 
constituents have opposed Project ELF since its inception, and my 
constituent mail today runs 8-1 against it. Congressman David Obey has 
consistently sought to terminate Project ELF, and in fact, we have him 
to thank in part for getting ELF scaled down from the large-scale 
project first conceived by the Carter administration. I look forward to 
continue working with him on this issue when he introduces a similar 
measure in the House this year.
  As the Department of Defense and the Armed Services Committee 
consider what they say are very tight defense budgets for fiscal year 
1996, I hope they will zero out the ELF transmitter system, as I 
propose in this bill, and save the taxpayer $9 to $20 million a year. 
Given both its apparently diminished strategic value and the potential 
environmental and public health hazards, Project ELF is a perfect 
target for termination. I can only echo the words of an October 2 
editorial in the Wausau Daily Herald: ``ELF isn't needed. It isn't 
wanted. It's an unwarranted expense.''
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 37

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Extremely Low Frequency 
     Communication System Termination and Deficit Reduction Act of 
     1995''.

     SEC. 2. PROHIBITION OF FURTHER FUNDING OF THE EXTREMELY LOW 
                   FREQUENCY COMMUNICATION SYSTEM.

       (a) Prohibition on Use of Funds.--Except as provided in 
     subsection (b), funds appropriated on or after the date of 
     the enactment of this Act to or for the use of the Department 
     of Defense may not be obligated or expended for the Extremely 
     Low Frequency Communication System of the Navy.
       (b) Limited Exception for Termination Costs.--Subsection 
     (a) does not apply to expenditures solely for termination of 
     the Extremely Low Frequency Communication System.
                                 ______

      By Mr. HATCH (for himself, Mr. Dole, Mr. Thurmond, Mr. Simpson, 
        Mr. Grassley, Mr. Kyl, Mr. Abraham, Mr. Nickles, Mr. Gramm, Mr. 
        Santorum, and Mr. Ashcroft):
  S. 38. A bill to amend the Violent Crime Control and Law Enforcement 
Act of 1994, and for other purposes; to the Committee on the Judiciary.


        VIOLENT CRIME CONTROL AND LAW ENFORCEMENT AMENDMENTS ACT

  Mr. HATCH. Mr. President, I rise today to introduce the Violent Crime 
Control and Law Enforcement Amendments Act of 1995. This legislation 
corrects the most glaring flaws in the 1994 Crime bill, and is intended 
as only a first step in enacting the comprehensive anti-crime laws the 
American people are demanding. Each of the provisions of this bill is 
also included in our comprehensive Crime bill, S. 3, introduced earlier 
today. As with S. 3, I am pleased to be joined in this effort by the 
distinguished majority leader. I am also pleased that Senators 
Thurmond, Simpson, Grassley, Kyl, Abraham, Nickles, Gramm, Santorum, 
and Ashcroft have joined me as cosponsors of this bill as well.
  The people of Utah and across our Nation understand that the best 
crime prevention program is to ensure the swift apprehension of 
criminals and their certain and lengthy imprisonment. My earlier 
statement today set forth the details of our crime problem. Congress 
can do better than the legislation it passed last year. That bill 
wasted billions on duplicative social spending programs, devoted 
insufficient resources to the needed emergency build-up in prison 
space, failed to enact tough penalties for Federal violent and drug 
crimes, weakened mandatory minimum sentences for drug trafficking, and 
failed to ensure that violent criminals are ordered to pay restitution 
to their victims.
  Now the American people expect us to fix these flaws, and this bill 
begins that task with several straight-forward provisions first 
proposed during the last Congress. A number of these overwhelmingly 
passed this body, only to be scrapped during the conference on last 
year's Crime bill.
  First, it eliminates the wasteful social programs passed in the 1994 
Crime bill, including the Local Partnership Act, the National Community 
Economic Partnership Act and the Family Unity Demonstration Project, 
among many others. These programs would have wasted billions of dollars 
on duplicative, top-down spending programs without reducing violent 
crime. Having Washington bureaucrats impose untested programs on the 
States would do little to prevent crime.
  Of the over $4.5 billion saved by eliminating these programs, 
approximately $1 billion is redirected to prison construction and 
operation grants.
  Second, in addition to increasing the amount authorized for state 
prison grants, our bill also ensures that these grants will be used for 
the construction and operation of brick-and-mortar prisons. The bill 
removes conditions requiring the states to adopt specified corrections 
plans in order to qualify for the Federal funds. Our bill also 
eliminates wasteful grants for ``alternative sanctions'' for young 
offenders, saving the taxpayers another $150 million.
  Third, our bill also includes several tough Federal criminal 
penalties either omitted from or weakened in the 1994 Crime bill. For 
instance, it includes the provisions requiring tough
 mandatory minimum sentences for Federal crimes committed with a 
firearm, for the sale of drugs to minors or the use of a minor in the 
commission of a drug crime, and for violations of drug-free zones.

  Our bill also replaces the overly broad reform of mandatory minimum 
sentences with an approach that will insure the just imposition of 
those sentences. Thus, while providing less leeway to judges to avoid 
imposing minimum mandatory sentences than the 1994 Crime bill, it 
allows such discretion where it is merited. The truly first-time, non-
violent, low-level offender deserving some measure of leniency will be 
treated more justly under our legislation, without providing a windfall 
to career drug dealers. I should note that our provision was 
overwhelmingly supported by the Senate in the last Congress.
  Lastly, we also include in our bill provisions for restitution to 
victims of federal crimes to ensure that crime victims receive the 
restitution they are due from those who have preyed on them.
  With this legislation, we have an opportunity to begin to fulfill our 
commitment to the American people. It is only a start, but it is a 
measure that I believe this body could pass quickly. We must at the 
same time continue our efforts to pass a more comprehensive crime bill 
that addresses the American people's concern over rampant violent crime 
in a way that empowers them and that respects the competencies and 
powers of the State and Federal spheres of government. Additionally, we 
must remain committed to ensuring that our legislation does not 
increase the Federal deficit.
  [[Page S233]] I believe that the bills we have introduced today will 
give the American people the crime control legislation they demand and 
deserve. I urge the support of my colleagues for this important 
legislation.
  Mr. President, I ask unanimous consent that a section-by-section 
summary of this bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
      The Violent Crime Control and Law Enforcement Amendments Act

       This legislation is based on Republican proposals 
     championed during the debate on the Conference Report on the 
     1994 Crime Bill. The bill eliminates much of the ``pork'' 
     contained in the 1994 Crime Bill and strengthens prison and 
     sentencing provisions.
       Should you have questions about the bill not answered by 
     this summary, please call Mike O'Neill or Mike Kennedy of the 
     Judiciary Committee staff of extension 4-5225.


                      SECTION-BY-SECTION ANALYSIS
       Sec. 1. Short Title.
       The short title of the bill is the Violent Crime Control 
     and Law Enforcement Amendments Act of 1995.
       Sec. 2. Elimination of Ineffective Programs.
       Section 2 eliminates the wasteful social programs passed in 
     the 1994 Crime Bill, including the Local Partnership Act, the 
     National Community Economic Partnership Act and the Family 
     Unity Demonstration Project, among many others. These 
     programs would have wasted billions of dollars on 
     duplicative, top-down spending programs without reducing 
     violent crime.
       Of the over $4.5 billion dollars saved by eliminating these 
     programs, approximately $1 billion is redirected to prison 
     construction and operation grants.
       Sec. 3. Amendment of Violent Offender Incarceration And 
     Truth In Sentencing Incentive Grant Program.
       Section 3 amends the prisons grants included in the 1994 
     Crime Bill to insure that the funds are spent on the actual 
     construction and operation of prisons for violent offenders 
     and would also remove provisions tying the funds to federal 
     mandates on state corrections systems. Specifically, the 
     proposal would make the following changes:
       The Act currently allows prison funds to be spent on 
     alternative correctional facilities in order ``to free 
     conventional prison space.'' This section requires that 
     prison grants be spent on conventional prisons to house 
     violent offenders, not on alternative facilities.
       The proposal removes from the Act a provision which would 
     have conditioned state receipt of the prison grants on 
     adoption of a comprehensive correctional plan that would 
     include diversion programs, jobs skills programs for 
     prisoners, and post-release assistance. Accordingly, these 
     grants will be used exclusively to build and operate prisons.
       The proposal amends the prisons grant allocation provisions 
     of the Act by increasing the minimum per-state allocation and 
     removing the Attorney General's discretionary grant 
     authority.
       Sec. 4. Punishment For Young Offenders.
       Section 4 repeals Subtitle B of title II of the 1994 Crime 
     Bill, which authorized $150 million in discretionary grants 
     for alternate sanctions for criminal juveniles.
       Sec. 5. Increased Mandatory Minimum Sentences For Criminals 
     Using Firearms.
       Section 5 establishes a mandatory minimum penalty of 10 
     years' imprisonment for anyone who uses or carries a firearm 
     during a federal crime of violence or federal drug 
     trafficking crime. If the firearm is discharged, the person 
     faces a mandatory minimum penalty of 20 years' imprisonment. 
     If death results, the penalty is death or life imprisonment.
       Sec. 6. Mandatory Minimum Prison Sentences For Those Who 
     Use Minors in Drug Trafficking Activities.
       Section 6 establishes a mandatory minimum sentence of 10 
     years' imprisonment for anyone who employs a minor in drug 
     trafficking activities. The section also establishes a 
     sentence of mandatory life imprisonment for a second offense.
       Sec. 7. Mandatory Minimum Sentences For Persons Convicted 
     Of Distribution Of Drugs To Minors.
       Section 7 establishes a mandatory minimum sentence of 10 
     years' imprisonment for anyone 21 years of age or older who 
     sells drugs to a minor. The section also establishes a 
     sentence of mandatory life imprisonment for a second offense.
       Sec. 8. Penalties For Drug Offenses In Drug-Free Zones.
       Section 8 establishes new mandatory minimum sentences for 
     drug offenses in drug-free zones which were omitted from the 
     1994 Crime Bill.
       Sec. 9. Flexibility In Application of Mandatory Minimum 
     Sentence Provisions In Certain Circumstances.
       Section 9 includes a narrowly circumscribed mandatory 
     minimum reform measure that returns a small degree of 
     discretion to the federal courts in the sentencing of truly 
     first-time, non-violent low-level drug offenders. To deviate 
     from the mandatory minimum, the court would have to find that 
     the defendant did not finance the drug sale, did not sell the 
     drugs, and did not act as a leader or organizer.
       Sec. 10. Mandatory Restitution To Victims Of Violent Crime.
       Section 10 amends 18 U.S.C. 3663 by mandating Federal 
     judges to enter orders requiring defendants to provide 
     restitution to the victims of their crimes.
                                 ______

      By Mr. STEVENS (for himself, Mr. Kerry, and Mr. Murkowski):
  S. 39. A bill to amend the Magnuson Fishery Conservation and 
Management Act to authorize appropriations, to provide for sustainable 
fisheries, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.


                     the sustainable fisheries act

  Mr. STEVENS. Mr. President, I am pleased on this first day of the 
104th Congress to introduce with my colleagues from Massachusetts and 
Alaska a bill to significantly strengthen and improve the Magnuson 
Fishery Conservation and Management Act.
  The bill we introduce today is a continuation of the effort Senator 
Kerry and I began in the 103rd Congress to reauthorize the Magnuson 
Act--one of the most important federal laws in our home states.
  Our bill includes a number of important new protections for our 
fishery resources and for the fishermen who depend upon them. These 
include: (1) significant new across-the-board mandates to reduce waste 
in U.S. fisheries; (2) a new section specifically mandating the 
reduction of fishery waste in the fisheries off Alaska--with a specific 
time frame that the North Pacific Council must follow; (3) new 
conflict-of-interest and recusal requirements for fishery management 
council members, as well as other reforms to the Council process; (4) 
guidelines for individual transferable quotas, or ITQs, to help define 
and ensure the fairness in the use of this relatively new management 
tool; and (5) a new National Standard to ensure that conservation and 
management measures take into account the importance of the harvest of 
fish to fishery dependent communities, such as the many communities 
along our Alaska coasts.
  These are just a few of the improvements we are proposing that will 
help ensure the sustainability of our fishery resources for generations 
to come.
  As chairman of the new Oceans Subcommittee, I intend to hold 
oversight hearings on this legislation early in the session, and look 
forward to working with my colleagues to complete the reauthorization 
process before the end of the summer.
  I would like to ask that the remainder of my statement describing the 
bill be printed in the Record as if read, along with the text of the 
bill.


                            Waste Reduction

  The bill incorporates virtually all of the operative provisions of S. 
2022, the bill I introduced last year to address the problems of 
fishery waste in the North Pacific.
  The bill would add specific definitions for ``bycatch,'' ``economic 
discards'' and ``regulatory discards'' (which we in the North Pacific 
call prohibited species) to the Magnuson Act in order to clearly 
delineate between specific types of waste which may require different 
solutions.
  The bill requires each Council to assess bycatch and to minimize the 
mortality caused by economic and regulatory discards in each fishery 
which is managed by that Council.
  For the North Pacific, the bill also requires the Council to 
incorporate provisions in its fishery management plans to reduce 
bycatch, economic and regulatory discards, as well as to reduce 
``processing waste'' and to achieve full retention and full utilization 
by specific dates. These are the same mandates for the North Pacific 
and the same basic definitions as those that I included in S. 2022 last 
year.
  The bill directs the Council to take additional steps to ensure that 
the valuable fishery resources off Alaska are available for future 
generations.
  In addition to provisions from S. 2022, we've also added a definition 
of ``overfishing'' to the Magnuson Act. The bill requires each Council 
to include in each fishery management plan specific criteria for 
determining when a fishery under that Council's jurisdiction is 
overfished or is approaching such a condition.
  [[Page S234]] The intent is to get the Councils to establish a 
mechanism to provide sufficient warning so that preventive measures can 
be put in place before any additional fisheries become overfished.
  The Secretary of Commerce (Secretary) will use the criteria to report 
to Congress (and back to the Councils) on the fisheries within each 
Council's geographical area that are overfished or approaching a 
condition of being overfished. Each Council will have one year to 
submit appropriate fishery management plans, amendments or regulations 
to prevent the overfishing of fisheries approaching that condition, and 
to stop overfishing and begin to rebuild
 fisheries that are already overfished.

  If the Council fails to take action to begin this process within one 
year, the Secretary will be required to prepare an appropriate fishery 
management plan or plan amendment.
  We know from current National Marine Fisheries Service data that our 
fisheries in Alaska are not overfished. These new provisions in the 
Magnuson Act will make sure Alaska's fisheries remain healthy for 
generations to come.


                             council reform

  The bill includes measures to reform the Council process, perhaps the 
most difficult issue we've dealt with in our review of the Magnuson 
Act.
  Our bill would prevent Council members from voting on certain matters 
that benefit them financially, but it does not require such widespread 
recusal by Council members that the Councils would be rendered 
ineffective.
  I still believe in the basic goal Senator Magnuson and I had for the 
original Act--that the councils should be made up of the people 
directly affected by fishery management decisions.
  Senator Kerry and I have incorporated valuable portions of other 
proposals, including the Administration's proposal (which was based on 
the existing Alaska Board of Fisheries recusal process) and Senator 
Breaux's proposal, in the recusal section of our bill.
  The bill requires Council members to recuse themselves from voting on 
Council decisions that would have a ``significant and predictable 
effect`` on their financial interests. A Council decision would be 
considered to have a ``significant and predictable effect'' if there is 
``a close causal link between the Council decision and an expected 
disproportionate benefit, shared only by a minority of persons within 
the same industry sector or gear group, to the financial interest'' of 
the Council member.
  This language will prevent Council members from voting on decisions 
that give a disproportionate benefit only to themselves or a minority 
in their gear group, but will not prevent them from expressing views or 
from voting on most matters on which they have expertise.
  The Secretary, with the concurrence of a majority of the voting 
members of the Council, will select a ``designated official'' with 
Federal conflict-of-interest experience to attend Council meetings and 
make determinations regarding the financial interests of members. These 
determinations will occur at the request of the affected Council member 
or at the initiative of the designated official.
  Any Council member can ask for a review by the Secretary of a 
determination, but this review will not be treated as cause for the 
invalidation or reconsideration by the Secretary of a Council decision. 
At its own discretion, the Council could decide to postpone voting on a 
matter until receiving the result from the Secretary's review of a 
determination, or could decide to reconsider a vote that had occurred 
if the Secretary's review was different than the designation official's 
determination had been.
  This bill also increases Council reporting requirements, and includes 
a provision to require a roll call vote for the record at the request 
of any Council member.


                                  itqs
  This bill establishes a definition and sets out general requirements 
for any individual transferable quota (ITQ) system. The bill prohibits 
the Secretary from approving any more ITQ plans until ITQ guidelines 
are completed based on these requirements. The Secretary would convene 
an advisory panel to provide recommendations for the ITQ guidelines.
  The bill requires the guidelines to, among other things: (1) provide 
for the fair and equitable allocation of fishing privileges; (2) 
provide for the collection of fees of up to four percent annually of 
the value of the fish harvested or processed under an ITQ, and an 
additional one percent of the value of fish harvested or processed by a 
person receiving an initial quota or transferring a quota; (3) address 
methods for providing for new entrants, including, in fisheries where 
appropriate, mechanisms to provide a portion of the annual harvest for 
entry-level fishermen or small vessel owners who do not hold an ITQ; 
and (4) provide requirements for the effective monitoring and 
enforcement of ITQ systems, and provide for penalties, including the 
revocation of fishing privileges under ITQ systems.
  The bill clearly states that an ITQ does not constitute a property 
right, and that no provision of law shall be construed to limit the 
ability of the Secretary to terminate or limit an ITQ at any time and 
without compensation.
  The bill also specifies that holders of an ITQ may include fishing 
vessel owners, fishermen, crew members or other citizens of the United 
States, as well as United States fish processors.
  Upon reviewing the October 7, 1994 version of our bill (S. 2538), a 
number of Alaskans expressed concerns to me about the effect of these 
ITQ provisions on the halibut and sablefish individual fishing quota 
(IFQ) plan off Alaska.
  The primary concerns were related to the mistaken impression that the 
ITQ provisions of the bill would require a reallocation of halibut/
sablefish quota shares (i.e. to crew members, skippers, etc.) after the 
initial allocation (which is taking place now), and that the bill would 
require the halibut/sablefish plan to include processor quotas.
  Neither S. 2538, nor the bill we are introducing today, requires 
these things.
  While the bill defines ITQs to allow the Councils to include 
processor shares (in addition to harvesting shares), it does not 
require ITQ plans to include processor shares.
  Processor quotas were added because the North Pacific Council is 
exploring their use for the Bering Sea pollock fishery, and because 
doubt has been expressed by the National Oceanic and Atmospheric 
Administration about the Council's current authority to create 
processor quotas. Our bill simply clarifies that the Councils have this 
tool to use at their discretion--it does not require their use.
  The concern that the bill would require a reallocation of halibut and 
sablefish quota to skippers and crew members is also without basis.
  The bill specifies that holders of ITQs may include crewmen (as well 
as skippers), but does not require that crewmen (or skippers) receive 
an initial allocation.
  While I share the concern of skippers and other crewmen--as well as 
future generations of Alaskans--who were left out of the initial 
halibut/sablefish allocation, it would not be feasible or appropriate 
to require the North Pacific council to adopt a wholesale reallocation, 
particularly when shares will already have been purchased and sold 
before any reallocation could take place.
  As I have mentioned, the bill we are introducing today does require 
the Secretary of Commerce to complete ITQ guidelines to: (1) ensure the 
fair and equitable allocation of fishing privileges, and (2) to provide 
methods for allowing new entrants into ITQ fisheries.
  It also requires existing ITQ plans to comply with these guidelines 
within 3 years.
  The halibut/sablefish plan in Alaska already includes provisions to 
meet most of these requirements.
  The plan includes provisions to restrict the transfer of quota shares 
between vessel size categories, and to prevent the consolidation of 
initial quota blocks--two mechanisms which help provide for new 
entrants.
  The ``fair and equitable allocation'' requirement for ITQs in our 
bill is already a general requirement in the National Standards section 
of the existing Magnuson Act. Because the Secretary has already 
approved the qualifying criteria for the halibut/sablefish plan under 
this National Standard, it would also be approved under the specific 
``fair and equitable'' requirement we have added for ITQs.
   [[Page S235]] The bill we are introducing today provides for 
increased fees to be assessed on any ITQ in order to, among other 
things, allow the Secretary to recoup the increased enforcement costs 
of ITQ systems, and to extract from ITQ holders an increased rent 
commensurate with the increased privilege received form ITQs.


                     fishery dependent communities

  The bill defines the term, ``fishery dependent community'' for 
purposes of its use in the Magnuson Act as part of a new national 
standard and for purposes of defining who is eligible for programs 
included in new sections 315 and 316 of the Magnuson Act.
  A new National Standard is added to the Magnuson Act which requires 
all Councils ``to take into account the importance of the harvest of 
fishery resources to fishery dependent communities'' in recommending 
conservation and management measures under each fishery management 
plan.
  This new standard has been included in the bill as a means of 
ensuring that all of the Councils consider measures like the closure of 
the Gulf of Alaska pollock fishery to certain vessels, community 
development quotas (CDQs), and the allocation of Pacific whiting to 
shore plants that have already been included in fishery management 
plans by the North Pacific Council and the Pacific Council in order to 
address the needs of certain fishery dependent communities.
  Another provision requires consideration be given to fishery 
dependent communities in developing any limiting access systems, 
including ITQ systems.
  By including these new provisions we intend to increase the Councils' 
consideration of the needs of coastal communities dependent on fishery 
resources.
  I agree with Judge Singleton's recent ruling in Alliance Against IFQs 
v. Ronald H. Brown that National Standard Four of the Magnuson Act 
(which prohibits conservation and management measures form 
discriminating between residents of
 different states) does not apply to the CDQ program, and with his 
affirmation of the North Pacific Council's and Secretary's existing 
authority to create CDQs.

  CDQs are one of the appropriate tools the North Pacific Council and 
Secretary have already used to help address the needs of fishery 
dependent communities.


           vessel and permit buyout programs/emergency relief

  The bill contains important new sections authorizing vessel and 
permit buy-back programs, and creating a relief program for commercial 
fishery failures which occur beyond the control of the fishery 
management councils, or for unknown reasons.
  Section 315 of the bill authorizes the Secretary, with the 
concurrence of a majority of the appropriate Council, to develop and 
implement a program to buy out fishing vessels or permits.
  The bill would require that any buyout program ensure that vessels or 
permits cannot reenter the fishery.
  This buyout section authorizes Councils to implement a fee system to 
pay for the buyout, but also authorizes the Federal Government to pay 
for up to 50 percent of a buyout.
  Section 316 of the bill authorizes the Secretary, at his or her own 
discretion or at the request of a Governor or affected fishery 
dependent community, to declare a commercial fishery failure, and to 
then make money available to restore the fishery and to assist fishery 
dependent communities affected by the failure.
  The Federal Government could pay for up to 75 percent of this type of 
relief.
  Recently, the Secretary of Commerce used existing authority to 
provide relief to New England and Pacific Northwest fishermen.
  These new Magnuson Act provisions, in addition to providing needed 
guidance for such relief, would help to ensure that affected States and 
fishermen also contribute to relief efforts and buyout programs.
  I am aware of the concerns of some of my colleagues about these 
particular provisions, and look forward to working with them to address 
their concerns before the Commerce Committee marks up this bill.


                            other provisions

  I will briefly mention some of the other improvements to the Magnuson 
Act included in our bill.
  The bill simplifies the review process by the Secretary of fishery 
management plans and amendments by eliminating a preliminary evaluation 
required under current law.
  The bill also would provide a framework for Secretarial review of 
proposed regulations, giving the Councils greater certainty that 
proposed regulations and regulatory amendments will be implemented in a 
timely manner.
  The bill also includes provisions providing for the increased 
protection of fishery habitat essential to the life cycles of fish 
stocks.
  I look forward to working with Senator Kerry, our new Commerce 
Committee Chairman and Ranking Member, and with our other colleagues to 
complete this reauthorization process.
  I ask that the complete text of the sustainable Fisheries Act be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 39

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Sustainable Fisheries Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
TITLE I--CONSERVATION AND MANAGEMENT
Sec. 101. Amendment of the Magnuson Fishery Conservation and Management 
              Act.
Sec. 102. Findings; purposes; policy.
Sec. 103. Definitions.
Sec. 104. Authorization of appropriations.
Sec. 105. Highly migratory species.
Sec. 106. Foreign fishing.
Sec. 107. Permits for foreign fishing.
Sec. 108. Large-scale driftnet fishing.
Sec. 109. National standards.
Sec. 110. Regional fishery management councils.
Sec. 111. Fishery management plans.
Sec. 112. Plan review and implementation.
Sec. 113. Ecosystem management.
Sec. 114. State jurisdiction.
Sec. 115. Prohibited acts.
Sec. 116. Civil penalties and permit sanctions.
Sec. 117. Enforcement.
Sec. 118. North Pacific fisheries conservation.
Sec. 119. Transition to sustainable fisheries.
TITLE II--FISHERY MONITORING AND RESEARCH
Sec. 201. Change of title.
Sec. 202. Registration and data management.
Sec. 203. Data collection.
Sec. 204. Observers.
Sec. 205. Fisheries research.
Sec. 206. Incidental harvest research.
Sec. 207. Repeal.
Sec. 208. Clerical amendments.
TITLE III--FISHERIES STOCK RECOVERY FINANCING
Sec. 301. Short title.
Sec. 302. Fisheries stock recovery refinancing.
Sec. 303. Federal financing bank relating to fishing vessels and 
              fishery facilities.
Sec. 304. Fees for guaranteeing obligations.
Sec. 305. Sale of acquired collateral.
                  TITLE I--CONSERVATION AND MANAGEMENT

     SEC. 101. AMENDMENT OF MAGNUSON FISHERY CONSERVATION AND 
                   MANAGEMENT ACT.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Magnuson Fishery Conservation and 
     Management Act (16 U.S.C. 1801 et seq.).

     SEC. 102. FINDINGS; PURPOSES; POLICY.

       Section 2 (16 U.S.C. 1801) is amended--
       (1) by striking subsection (a)(2) and inserting the 
     following:
       ``(2) Certain stocks of fish have declined to the point 
     where their survival is threatened, and other stocks of fish 
     have been so substantially reduced in number that they could 
     become similarly threatened as a consequence of (A) increased 
     fishing pressure, (B) the inadequacy of fishery resource 
     conservation and management practices and controls, or (C) 
     direct and indirect habitat losses which have resulted in a 
     diminished capacity to support existing fishing levels.'';
       (2) by inserting ``to facilitate long-term protection of 
     essential fish habitats,'' in subsection (a)(6) after 
     ``conservation,'';
       (3) by adding at the end of subsection (a) the following:
       ``(9) One of the greatest long-term threats to the 
     viability of commercial and recreational fisheries is the 
     continuing loss of marine, estuarine, and other aquatic 
     habitats on a national level. Habitat considerations should 
     receive increased attention for 
     [[Page S236]] the conservation and management of fishery 
     resources of the United States.'';
       (4) by inserting ``in a non-wasteful manner'' in subsection 
     (b)(6) after ``such development''; and
       (5) by adding at the end of subsection (b) the following:
       ``(7) to promote the protection of essential fish habitat 
     in the review of projects conducted under Federal permits, 
     licenses, or other authorities that affect or have the 
     potential to affect such habitat.''.

     SEC. 103. DEFINITIONS.

       Section 3 (16 U.S.C. 1802) is amended--
       (1) by redesignating paragraphs (2) through (32) as 
     paragraphs (3) through (33) respectively, and inserting after 
     paragraph (1) the following:
       ``(2) The term `bycatch' means fish which are harvested by 
     a fishing vessel, but which are not sold or kept for personal 
     use, including, but not limited to, economic and regulatory 
     discards.'';
       (2) by redesignating paragraphs (7) through (33) (as 
     redesignated) as paragraphs (9) through (35), respectively, 
     and inserting after paragraph (6) (as redesignated) the 
     following:
       ``(7) The term `economic discards' means fish which are the 
     target of a fishery, but which are not retained by the 
     fishing vessel which harvested them because they are of an 
     undesirable size, sex or quality, or for other economic 
     reasons.
       ``(8) The term `essential fish habitat' means any area 
     essential to the life cycle of a stock of fish, or to the 
     production of maximum sustainable yield of one or more 
     fisheries managed under this Act.'';
       (3) by redesignating paragraphs (12) through (35) (as 
     redesignated) as paragraphs (13) through (36), respectively, 
     and inserting after paragraph (11) (as redesignated) the 
     following:
       ``(12) The term `fishery dependent community' means a 
     community which is substantially dependent on the harvest of 
     fishery resources to meet social and economic needs.'';
       (4) by redesignating paragraphs (19) through (36) (as 
     redesignated) as paragraphs (20) through (37), respectively, 
     and inserting after paragraph (18) (as redesignated) the 
     following:
       ``(19) The term `individual transferable quota' means a 
     revocable Federal authorization to harvest or process a 
     quantity of fish under a unit or quota share that represents 
     a percentage of the total allowable catch of a stock of fish, 
     that may be received or held by a specific person or persons 
     for their exclusive use, and that may be transferred in whole 
     or in part by the holder to another person or persons for 
     their exclusive use.'';
       (5) by redesignating paragraphs (22) through (37) (as 
     redesignated) as paragraphs (23) through (38), respectively, 
     and inserting after paragraph (21) (as redesignated) the 
     following:
       ``(22) The term `limited access system' means any system 
     for controlling fishing effort which includes such measures 
     as license limitations, individual transferable quotas, and 
     non-transferable quotas.'';
       (6) by striking ``Pacific Marine Fisheries Commission'' in 
     paragraph (23), as redesignated, and inserting ``Pacific 
     States Marine Fisheries Commission'';
       (7) by striking paragraph (27), as redesignated, and 
     inserting the following:
       ``(27) The term `optimum', with respect to the yield from a 
     fishery, means the amount of fish which--
       ``(A) will provide the greatest overall benefit to the 
     Nation, with particular reference to food production and 
     recreational opportunities, and taking into account the 
     protection of marine ecosystems;
       ``(B) is prescribed on the basis of the maximum sustainable 
     yield from a fishery, as modified by any relevant social, 
     economic, or ecological factor; and
       ``(C) provides for the rebuilding of an overfished fishery 
     to a level consistent with producing the maximum sustainable 
     yield.'';
       (8) by redesignating paragraphs (28) through (38) (as 
     redesignated) as paragraphs (29) through (39), respectively, 
     and inserting after paragraph (27) (as redesignated) the 
     following:
       ``(28) The terms `overfishing' and `overfished' mean a 
     level or rate of fishing mortality that jeopardizes the 
     capacity of a fishery to produce the maximum sustainable 
     yield on a continuing basis.'';
       (9) by redesignating paragraphs (30) through (39) (as 
     redesignated) as paragraphs (31) through (40), respectively, 
     and inserting after paragraph (29) (as redesignated) the 
     following:
       ``(30) The term `regulatory discards' means fish caught in 
     a fishery which fishermen are required by regulation to 
     discard whenever caught, or are required by regulation to 
     retain but not sell.'';
       (10) by striking ``for which a fishery management plan 
     prepared under title III or a preliminary fishery management 
     plan prepared under section 201(h) has been implemented'' in 
     paragraph (38), as redesignated, and inserting ``regulated 
     under this Act''; and
       (11) by redesignating paragraph (40), as redesignated, as 
     (41), and inserting after paragraph (39) the following:
       ``(40) The term `vessel subject to the jurisdiction of the 
     United States' has the same meaning as in section 3(c) of the 
     Maritime Drug Law Enforcement Act (46 U.S.C. App. 
     1903(c)).''.

     SEC. 104. AUTHORIZATION OF APPROPRIATIONS.

       The Act is amended by inserting after section 3 the 
     following:

     ``SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to the Secretary 
     for the purposes of carrying out the provisions of this Act, 
     not to exceed the following sums (of which 15 percent in each 
     fiscal year shall be used for enforcement activities):
       ``(1) $102,000,000 for fiscal year 1993;
       ``(2) $106,000,000 for fiscal year 1994;
       ``(3) $143,000,000 for fiscal year 1995;
       ``(4) $147,000,000 for fiscal year 1996;
       ``(5) $151,000,000 for fiscal year 1997;
       ``(6) $155,000,000 for fiscal year 1998; and
       ``(7) $159,000,000 for fiscal year 1999.''.

     SEC. 105. HIGHLY MIGRATORY SPECIES.

       Section 102 (16 U.S.C. 1812) is amended by striking 
     ``promoting the objective of optimum utilization'' and 
     inserting ``shall promote the achievement of optimum yield''.

     SEC. 106. FOREIGN FISHING.

       Section 201 (16 U.S.C. 1821) is amended--
       (1) by inserting a comma and ``or is approved under section 
     204(b)(6)(A)(ii)'' before the semicolon in subsection (a)(1);
       (2) by striking ``(g)'' in subsection (a)(2) and inserting 
     ``(f)'';
       (3) by striking ``(i)'' in subsection (c)(2)(D) and 
     inserting ``(h)'';
       (4) by striking ``, including any regulations promulgated 
     to implement any applicable fishery management plan or any 
     preliminary fishery management plan'' in subsection (c); and
       (5) by striking subsection (f) and redesignating 
     subsections (g), (h), (i), and (j) as (f), (g), (h), and (i), 
     respectively.

     SEC. 107. PERMITS FOR FOREIGN FISHING.

       (a) So much of section 204(b) (16 U.S.C. 1824(b)) as 
     precedes paragraph (2) is amended to read as follows:
       ``(b) Applications and Permits.--
       ``(1) Eligibility.--
       ``(A) Each foreign nation with which the United States has 
     entered into a governing international fishery agreement 
     shall submit an application to the Secretary of State each 
     year for a permit for each of its fishing vessels that wishes 
     to engage in fishing described in subsection (a).
       ``(B) An owner of a vessel, other than a vessel of the 
     United States, who wishes to engage in the transshipment at 
     sea of fish products in the exclusive economic zone or within 
     the boundary of any State, may submit an application to the 
     Secretary each year for a permit for a vessel belonging to 
     that owner, whether or not such vessel is subject to an 
     international fishery agreement described in section 201(b) 
     or (c).
       ``(C) No permit issued under this section may be valid for 
     longer than a year. Section 558(c) of title 5, United States 
     Code, does not apply to the renewal of any such permit.''.
       (b) Section 204(b)(4) (16 U.S.C. 1824(b)(4)) is amended--
       (1) by inserting ``(A)'' after the caption;
       (2) by inserting ``submitted under paragraph (1)(A)'' after 
     ``any application'';
       (3) by redesignating subparagraphs (A), (B), and (C) as 
     clauses (i), (ii), and (iii), respectively; and
       (4) by inserting at the end thereof the following:
       ``(B) Upon receipt of any application submitted under 
     paragraph (1)(B) which complies with the requirements of 
     paragraph (3), the Secretary shall promptly transmit copies 
     of the application or summary as indicated under 
     subparagraphs (A)(ii) and (iii), and shall also promptly 
     transmit such application or summary to States bordering the 
     exclusive economic zone where such transshipment is proposed 
     to occur.''.
       (c) Section 204(b)(5) (16 U.S.C. 1824(b)(5)) is amended by 
     striking ``under paragraph (4)(C)'' and inserting ``submitted 
     under paragraph (1)''.
       (d) Section 204(b)(6) (16 U.S.C. 1824(b)(6)) is amended--
       (1) by striking ``transmitted under paragraph (4)(A)'' in 
     subparagraph (A) and inserting ``submitted under paragraph 
     (1)(A)'';
       (2) by inserting ``(i)'' before ``After'' in subparagraph 
     (A); and
       (3) by inserting before subparagraph (B) the following:
       ``(ii) In the case of any application submitted under 
     paragraph (1)(B), the Secretary, after taking into 
     consideration any comments submitted by the Council under 
     paragraph (5) or any affected State, may approve the 
     application upon determining that the activity described in 
     the application will be in the interest of the United States 
     and will meet the applicable requirements of this Act, and 
     that the owners or operators have agreed to comply with 
     requirements set forth in section 201(c)(2) and have 
     established any bonds or financial assurances that may be 
     required by the Secretary; or the Secretary may disapprove 
     all or any portion of the application.''.
       (e) Section 204(b)(8) (16 U.S.C. 1824(b)(8)) is amended--
       (1) by inserting a comma and ``or the agent for the foreign 
     vessel owner for any application submitted under paragraph 
     (1)(B)'' before the semicolon at the end of subparagraph (A); 
     and
       (2) by inserting ``and any affected State'' before the 
     period at the end of subparagraph (C).
       (f) Section 204(b)(9) (16 U.S.C. 1824(b)(9)) is amended--
       (1) by inserting ``paragraph (1)(A) of'' after ``by a 
     foreign nation under'';
       (2) by inserting ``(A)'' after the heading in paragraph 
     (9); and
      [[Page S237]]   (3) by adding at the end thereof the 
     following:
       ``(B) If the Secretary does not approve any application 
     submitted by a foreign vessel owner under paragraph (1)(B) of 
     this subsection, the Secretary shall promptly inform the 
     vessel owner of the disapproval and the reasons therefore. 
     The owner, after taking into consideration the reasons for 
     disapproval, may submit a revised application under this 
     subsection.''.
       (g) Section 204(b)(11) (16 U.S.C. 1824(b)(11)) is amended--
       (1) by inserting ``(A)'' after the paragraph heading,
       (2) by inserting ``submitting an application under 
     paragraph (1)(A)'' after ``If a foreign nation''; and
       (3) adding at the end thereof the following:
       ``(B) If the vessel owner submitting an application under 
     paragraph (1)(B) notifies the Secretary of acceptance of the 
     conditions and restrictions established by the Secretary 
     under paragraph (7), and upon payment of the applicable fees 
     established pursuant to paragraph (10) and confirmation of 
     any bonds or financial assurances that may be required for 
     such transshipment of fish, the Secretary shall thereupon 
     issue a permit for the vessel.''.
       (h) Section 204 (16 U.S.C. 1824) is amended by adding at 
     the end thereof the following:
       ``(d) Prohibition on Permit Issuance.--Notwithstanding any 
     other provision of this Act, the Secretary is prohibited from 
     issuing, before December 1, 1999, any permit to authorize the 
     catching, taking, or harvesting of Atlantic mackerel or 
     Atlantic herring by foreign fishing vessels within the 
     exclusive economic zone. This subsection shall not apply to 
     permits to authorize foreign fish processing vessels to 
     process Atlantic mackerel or Atlantic herring harvested by 
     fishing vessels of the United States.''.

     SEC. 108. LARGE-SCALE DRIFTNET FISHING.

       (a) Section 206(e) (16 U.S.C. 1826(e)) is amended by 
     striking paragraphs (3) and (4), and redesignating paragraphs 
     (5) and (6) as (3) and (4), respectively.
       (b) Section 206(f) (16 U.S.C. 1826(f)) is amended by 
     striking ``(6)'' and inserting ``(4)''.

     SEC. 109. NATIONAL STANDARDS.

       (a) Paragraph (1) of section 301(a) (16 U.S.C. 1851(a)) is 
     amended to read as follows:
       ``(1) Conservation and management measures shall prevent 
     overfishing and rebuild overfished fishery resources while 
     achieving, on a continuing basis, the optimum yield from each 
     fishery.''.
       (b) Section 301(a)(5) (16 U.S.C. 1851(a)(5)) is amended by 
     striking ``promote'' and inserting ``consider''.
       (c) Section 301(a) (16 U.S.C. 1851(a)) is amended by adding 
     at the end thereof the following:
       ``(8) Conservation and management measures shall take into 
     account the importance of the harvest of fishery resources to 
     fishery dependent communities.''.

     SEC. 110. REGIONAL FISHERY MANAGEMENT COUNCILS.

       (a) Section 302(a) (16 U.S.C. 1852(a)) is amended--
       (1) by inserting ``(1)'' after the subsection heading;
       (2) by redesignating paragraphs (1) through (7) as 
     subparagraphs (A) through (H);
       (3) by striking ``section 304(f)(3)'' wherever it appears 
     and inserting in lieu thereof ``paragraph (3)'';
       (4) by striking paragraph (1)(F), as redesignated, and 
     inserting the following:
       ``(F) Pacific Council.--The Pacific Fishery Management 
     Council shall consist of the States of California, Oregon, 
     Washington, and Idaho and shall have authority over the 
     fisheries in the Pacific Ocean seaward of such States. The 
     Pacific Council shall have 13 voting members, including 7 
     appointed by the Secretary in accordance with subsection 
     (b)(2) (at least one of whom shall be appointed from each 
     such State), and including one appointed from an Indian tribe 
     with Federally recognized fishing rights from California, 
     Oregon, Washington, or Idaho in accordance with subsection 
     (b)(5).'';
       (5) by indenting the sentence at the end thereof and 
     inserting ``(2)'' in front of ``Each Council'', and by 
     inserting ``The Secretary shall establish the boundaries 
     between the geographical areas of authority of adjacent 
     Councils.'' after ``authority.''; and
       (6) by adding at the end the following:
       ``(3) The Secretary shall have authority over any highly 
     migratory species fishery that is within the geographical 
     area of authority of more than one of the following Councils: 
     New England Council, Mid-Atlantic Council, South Atlantic 
     Council, Gulf Council, and Caribbean Council.''.
       (b) Section 302(b) (16 U.S.C. 1852(b)) is amended--
       (1) by striking subparagraph (C) of subsection (b)(1) and 
     inserting the following:
       ``(C) The members required to be appointed by the Secretary 
     in accordance with subsections (b)(2) and (5).'';
       (2) by redesignating paragraph (5) as paragraph (6), and 
     inserting after paragraph (4) the following:
       ``(5)(A) The Secretary shall appoint to the Pacific Fishery 
     Management Council one representative of an Indian tribe with 
     Federally recognized fishing rights from California, Oregon, 
     Washington, or Idaho, from a list of not less than 3 
     individuals submitted by the tribal governments. The 
     representative shall serve for a term of 3 years and may not 
     serve more than 3 consecutive terms. The Secretary, in 
     consultation with the Secretary of the Interior and tribal 
     governments, shall establish by regulation the procedure for 
     submitting lists under this subparagraph.
       ``(B) Representation shall be rotated among the tribes 
     taking into consideration--
        ``(i) the qualifications of the individuals on the list 
     referred to in subparagraph (A),
        ``(ii) the various treaty rights of the Indian tribes 
     involved and judicial cases that set forth how those rights 
     are to be exercised, and
        ``(iii) the geographic area in which the tribe of the 
     representative is located.
       ``(C) A vacancy occurring prior to the expiration of any 
     term shall be filled in the same manner set out in 
     subparagraphs (A) and (B), except that the Secretary may use 
     the list from which the vacating representative was 
     chosen.''; and,
       (3) by striking ``subsection (b)(2)'' in paragraph (6), as 
     redesignated, and inserting ``subsections (b)(2) and (5)''.
       (c) Section 302(e) (16 U.S.C. 1852(e)) is amended by adding 
     at the end the following:
       ``(5) At the request of any voting member of a Council, the 
     Council shall hold a roll call vote on any matter before the 
     Council. The official minutes and other appropriate records 
     of any Council meeting shall identify all roll call votes 
     held, the name of each voting member present during each roll 
     call vote, and how each member voted on each roll call 
     vote.''.
       (d) Section 302(g) (16 U.S.C. 1852(g)) is amended by 
     redesignating paragraph (4) as (5), and by inserting after 
     paragraph (3) the following:
       ``(4) The Secretary shall establish advisory panels to 
     assist in--
       ``(A) the collection and evaluation of information relevant 
     to the development of or amendment to any fishery management 
     plan under section 303(e)(2); and
       ``(B) carrying out the purposes of section 303(f).''.
       (e) Section 302(h) (16 U.S.C. 1852(h)) is amended--
       (1) by striking ``section 304(f)(3)'' in paragraphs (1) and 
     (5) and inserting ``subsection (a)(3)''; and
       (2) by striking ``204(b)(4)(C)'' in paragraph (2) and 
     inserting ``204(b)(4)(A)(iii)''.
       (f) Section 302(i) (16 U.S.C. 1852(i)) is amended to read 
     as follows:
       ``(i) Negotiated Conservation and Management Measures.--
       ``(1) A Council may, in consultation with the Secretary, 
     establish a negotiation panel to assist in the development of 
     specific conservation and management measures for a fishery 
     under authority of such Council. In making the decision to 
     establish such panel, the Council shall consider whether--
       ``(A) there are a finite number of identifiable interests 
     that will be significantly affected by the development of 
     such measures;
       ``(B) there is a reasonable likelihood that a negotiation 
     panel can be convened with a balanced representation of 
     persons who--
       ``(i) can adequately represent the interests identified 
     under subparagraph (A); and
       ``(ii) are willing to act in good faith to reach a 
     consensus on the development of a such measures;
       ``(C) there is reasonable likelihood that a negotiation 
     panel will contribute to the development of such measures 
     within a fixed period of time; and
       ``(D) the process under this subsection will not 
     unreasonably delay the development of any conservation and 
     management measure or its submission to the Secretary.
       ``(2) If the Council decides to establish a negotiation 
     panel it shall notify all identifiable interests of its 
     intention to convene such panel at least 30 calendar days 
     prior to the appointment of members. Such notification shall 
     be published in accordance with subsection (j)(2)(C) of this 
     section and shall include--
       ``(A) a description of the subject and scope of the 
     measures to be developed and the issues to be considered;
       ``(B) a list of interests likely to be significantly 
     affected by the measures to be developed;
       ``(C) a list of the persons proposed to represent such 
     interests, the person or persons proposed to represent the 
     Council, and the person or persons proposed to be nominated 
     as facilitator;
       ``(D) an explanation of how a person may apply or nominate 
     another person for membership on the negotiation panel; and
       ``(E) a proposed agenda and schedule for completing the 
     work of the negotiation panel.
       ``(3) No more than 45 calendar days after providing this 
     notification the Council shall make appointments to the 
     negotiation panel in such a manner as to achieve balanced 
     representation of all significant interests to the 
     conservation and management measures. Such interests shall 
     include, where appropriate, representatives from the fishing 
     industry, consumer groups, the scientific community, tribal 
     organizations, conservation organizations and other public 
     interest organizations, and Federal and State fishery 
     managers.
       ``(4) Each negotiation panel established under this section 
     shall attempt to reach a consensus concerning specific 
     conservation and management measures and any other issue such 
     panel determines is relevant to such measures. The Council, 
     to the maximum extent possible consistent with its legal 
     obligations and the best scientific information available, 
     will use the consensus of the negotiation panel, with respect 
     to 
     [[Page S238]] such measures, as the basis for the development 
     of the conservation and management measures to be adopted by 
     the Council for submission by the Council to the Secretary in 
     accordance with this Act.
     ``(5) The person or persons representing the Council on a 
     negotiation panel shall participate in the deliberations and 
     activities of such panel with the same rights and 
     responsibilities as other panel members.
       ``(6) Any facilitator nominated by the Council to a 
     negotiation panel must be approved by the panel by consensus. 
     If the panel does not approve a facilitator nominated by the 
     Council the panel shall select by consensus another person to 
     serve as facilitator. No person appointed by the Council to 
     the negotiation panel to represent any interest on the 
     Council may serve as facilitator or otherwise chair such 
     panel.
       ``(7) A facilitator approved or selected by a negotiation 
     panel shall--
       ``(A) chair the meetings of such panel in an impartial 
     manner;
       ``(B) impartially assist the panel members in conducting 
     discussions and negotiations; and
       ``(C) manage the keeping of any minutes or records, (except 
     that any personal notes and materials of the facilitator or 
     the panel members shall not be subject to disclosure, except 
     upon order of a court).
       ``(8) A negotiation panel may adopt any additional 
     procedures for the operation of the negotiation panel not in 
     conflict with those specified in this section.
       ``(9) At the conclusion of the negotiation process, if the 
     negotiation panel reaches a consensus on proposed 
     conservation and management measures, such panel shall 
     transmit to the Council, and present to the Council at the 
     next scheduled meeting of the Council, a report containing 
     the proposed conservation and management measures. If the 
     negotiation panel does not reach consensus on proposed 
     conservation and management measures, such panel shall 
     transmit to the Council, and present to the Council at the 
     next scheduled meeting of the Council, a report specifying 
     its recommendations and describing the areas in which the 
     negotiation panel reached consensus and the areas in which 
     consensus was not achieved. The negotiation panel may include 
     in a report any other information or materials that such 
     panel considers appropriate. Any panel member may include, as 
     an addendum to the report, additional information or 
     materials.
       ``(10) A negotiation panel shall terminate upon transmittal 
     and presentation to the Council of the report required under 
     paragraph (9) unless the Council in consultation with the 
     panel specifies an alternative termination date.
       ``(11) For the purposes of this subsection--
       ``(A) The term `negotiation panel' means an advisory panel 
     established by a Council under section (g)(2) to assist in 
     the development of specific conservation and management 
     measures through the process established under this 
     subsection.
       ``(B) The term `consensus' means general but not unanimous 
     concurrence among the interests represented unless such 
     panel--
       ``(i) agrees by consensus to define such term to mean a 
     unanimous concurrence; or
       ``(ii) agrees by consensus upon another specified 
     definition.
       ``(C) The term `facilitator' means a person experienced or 
     trained in group mediation and negotiation who impartially 
     aids in the discussions and negotiations among the members of 
     a negotiation panel.
       ``(D) The term `interest' means, with respect to this 
     subsection, multiple persons or parties who have a similar 
     point of view or which are likely to be affected in a similar 
     manner.''.
       (g) Section 302(j) (16 U.S.C. 1852(j)) is amended--
       (1) by striking ``of the Councils'' in paragraph (1) and 
     inserting ``established under subsection (g)''; and
       (2) by striking ``of a Council:'' in paragraph (2) and 
     inserting ``established under subsection (g):''.
       (3) by adding the following at the end of paragraph (2)(C): 
     ``Interested persons may propose to modify the published 
     agenda of a meeting by submitting to a Council, panel or 
     committee within 14 calendar days of the published date of 
     the meeting a notice containing a written description of the 
     proposed modification signed by not less than two Council 
     members.'';
       (4) by adding the following at the end of paragraph (2)(D): 
     ``All written data submitted to a Council by an interested 
     person shall include a statement of the source and date of 
     such information. Any oral or written statement shall include 
     a brief description of the qualifications and interests of 
     the person in the subject of the oral or written 
     statement.'';
       (5) by amending paragraph (2)(E) to read as follows:
       ``(E) Detailed minutes of each meeting of the Council shall 
     be kept and shall contain a record of the persons present, a 
     complete and accurate description of matters discussed and 
     conclusions reached, and copies of all statements filed, 
     issued, or approved by the Council. The Chairman shall 
     certify the accuracy of the minutes of each meeting and 
     submit a copy thereof to the Secretary. The minutes shall be 
     made available to any court of competent jurisdiction.''; and
       (6) by striking ``303(d)'' in paragraph (2)(F) and 
     inserting ``402(b)''.
       (g) Section 302(k) (16 U.S.C. 1852(k)) is amended--
       (1) by inserting ``and recusal'' in the subsection heading;
       (2) by striking paragraph (1) and inserting the following:
       ``(1) For the purposes of this subsection--
       ``(A) the term `affected individual' means an individual 
     who--
       ``(i) is nominated by the Governor of a State for 
     appointment as a voting member of a Council in accordance 
     with subsection (b)(2); or
       ``(ii) is a voting member of a Council appointed under 
     subsection (b)(2); and
       ``(B) the term `designated official' means a person with 
     expertise in Federal conflict-of-interest requirements who is 
     designated by the Secretary, with the concurrence of a 
     majority of the voting members of the Council, to attend 
     Council meetings and make determinations under paragraph 
     (7)(B).'';
       (3) by striking ``(1)(A)'' in paragraph (3)(A) and 
     inserting ``(1)(A)(i)'';
       (4) by striking ``(1)(B) or (C)'' in paragraph (3)(B) and 
     inserting ``(1)(A)(ii)'';
       (5) by striking ``(1)(B) or (C)'' in paragraph (4) and 
     inserting ``(1)(A)(ii)'';
       (6)(A) by striking ``and'' at the end of paragraph (5)(A);
       (B) by striking the period at the end of paragraph (5)(B) 
     and inserting a semicolon and the word ``and''; and
       (C) by adding at the end of paragraph (5) the following:
       ``(C) be kept on file by the Secretary for use in reviewing 
     determinations under paragraph (7)(B) and made available for 
     public inspection at reasonable hours.'';
       (7) by striking ``(1)(B) or (C)'' in paragraph (6) and 
     inserting ``(1)(A)(ii)'';
       (8) by redesignating paragraph (7) as (8) and inserting 
     after paragraph (6) the following:
       ``(7)(A) An affected individual required to disclose a 
     financial interest under paragraph (2) shall not vote on a 
     Council decision which would have a significant and 
     predictable effect on such financial interest. A Council 
     decision shall be considered to have a significant and 
     predictable effect on a financial interest if there is a 
     close causal link between the Council decision and an 
     expected and disproportionate benefit, shared only by a 
     minority of persons within the same industry sector or gear 
     group, to the financial interest. An affected individual who 
     may not vote may participate in Council deliberations 
     relating to the decision after notifying the Council of the 
     voting recusal and identifying the financial interest that 
     would be affected.
       ``(B) At the request of an affected individual, or at the 
     initiative of the appropriate designated official, the 
     designated official shall make a determination for the record 
     whether a Council decision would have a significant and 
     predictable effect on a financial interest.
       ``(C) Any Council member may submit a written request to 
     the Secretary to review any determination by the designated 
     official under subparagraph (B) within 10 days of such 
     determination. Such review shall be completed within 30 days 
     of receipt of the request.
       ``(D) Any affected individual who does not participate in a 
     Council decision in accordance with this subsection shall 
     state for the record how he or she would have voted on such 
     decision if he or she had voted.
       ``(E) If the Council makes a decision before the Secretary 
     has reviewed a determination under subparagraph (C), the 
     eventual ruling may not be treated as cause for the 
     invalidation or reconsideration by the Secretary of such 
     decision.
       ``(F) No later than December 1, 1995, the Secretary, in 
     consultation with the Councils, shall issue guidelines with 
     respect to voting recusals under subparagraph (A) and the 
     making of determinations under subparagraph (B).''; and
       (9) by striking ``(1)(B) or (C)'' in paragraph (8), as 
     redesignated, and inserting ``(1)(A)(ii)''.

     SEC. 111. FISHERY MANAGEMENT PLANS.

       (a) Section 303(a) (16 U.S.C. 1853(a)) is amended--
       (1) by striking paragraph (6) and inserting the following:
       ``(6) consider and provide for, after consultation with the 
     Coast Guard and persons participating in the fishery and to 
     the extent practicable without adversely affecting 
     conservation efforts in other fisheries or discriminating 
     among participants in the affected fishery--
       ``(A) safety of life and property at sea;
       ``(B) temporary adjustments regarding access to the fishery 
     for vessels otherwise prevented from harvesting because of 
     weather or other ocean conditions affecting the safe conduct 
     of the fishery; and
       ``(C) effective enforcement measures (including an estimate 
     of the resources necessary for such measures).'';
       (2) by striking paragraph (7) and inserting the following:
       ``(7) facilitate the protection of essential fish habitat 
     by--
       ``(A) summarizing available information on the significance 
     of such habitat to the fishery and the effects of changes to 
     such habitat on the fishery; and
       ``(B) identifying Federal actions that should be considered 
     to promote the long-term protection of essential fish 
     habitats.'';
       (3) by striking ``and'' at the end of paragraph (8);
       (4) by striking the period at the end of paragraph (9) and 
     inserting a semicolon; and
       (5) by adding at the end the following:
       ``(10) specify objective and measurable criteria for 
     classifying when the fishery to 
     [[Page S239]] which the plan applies would be or is 
     overfished, with an analysis of how the criteria were 
     determined and the relationship of the criteria to the 
     reproductive potential of stocks of fish in that fishery;
       ``(11) assess the level of bycatch occurring in the 
     fishery, and to the extent practicable, assess and specify 
     the effect of the fishery on stocks of fish to which the plan 
     does not apply, but which are associated with the ecosystem 
     of the fishery; and
       ``(12) to the extent practicable, minimize mortality caused 
     by economic and regulatory discards in the fishery.''.
       (b) Section 303(b) (16 U.S.C. 1853(b)) is amended--
       (1) by striking paragraph (6) and inserting the following:
       ``(6) establish a limited access system for the fishery in 
     order to achieve optimum yield if--
       ``(A) in developing such system, the Council and the 
     Secretary take into account present participation in the 
     fishery, historical fishing practices in and dependence on 
     the fishery, the economics of the fishery, the capability of 
     fishing vessels used in the fishery to engage in other 
     fisheries, the cultural and social framework relevant to the 
     fishery and fishery dependent communities, and any other 
     relevant considerations; and
       ``(B) in the case of any system that provides for 
     individual transferable quotas, such system also complies 
     with the guidelines and fee requirements established under 
     section 303(f);''; and
       (2) by striking ``and'' at the end of paragraph (9);
       (3) by striking the period at the end of paragraph (10) and 
     inserting a semicolon and ``and''; and
       (4) by adding at the end the following:
       ``(11) include, consistent with the other provisions of 
     this Act, conservation and management measures that provide a 
     harvest preference or other incentives for fishing vessels 
     within each gear group that employ fishing practices 
     resulting in lower levels of bycatch.''.
       (c) Section 303 (16 U.S.C. 1853) is amended by striking 
     subsection (c) and all thereafter and inserting the 
     following:
       ``(c) Regulations to Implement a Fishery Management Plan.--
     Proposed regulations which the Council deems necessary or 
     appropriate for the purposes of implementing a fishery 
     management plan or amendment to a plan may be submitted to 
     the Secretary for action under section 304--
       ``(1) simultaneously with submission of the plan or 
     amendment to the Secretary for action under section 304; or
       ``(2) at any time after the plan or amendment is approved.
       ``(d) Fisheries Under Authority of More Than One Council.--
       ``(1) Except as provided in section 302(a)(3), if any 
     fishery extends beyond the geographical area of authority of 
     any one Council, the Secretary may--
       ``(A) designate which Council shall prepare the fishery 
     management plan for such fishery and any amendment to such 
     plan, as well as any proposed regulations for such fishery; 
     or
       ``(B) require that the plan, amendment, and proposed 
     regulations be prepared jointly by the Councils concerned.
       ``(2) No jointly prepared fishery management plan, 
     amendment, or proposed regulations may be submitted to the 
     Secretary unless approved by a majority of the voting 
     members, present and voting, of each Council concerned.
       ``(e) Preparation by the Secretary.--
       ``(1) The Secretary shall prepare a fishery management plan 
     with respect to any fishery (other than a fishery to which 
     section 302(a)(3) applies), or any amendment to any such 
     plan, in accordance with the national standards, the other 
     provisions of this Act, and any other applicable law, if--
       ``(A) the appropriate Council fails to develop and submit 
     to the Secretary, after a reasonable period of time, a 
     fishery management plan for such fishery, or any necessary 
     amendment to such plan, if such fishery requires conservation 
     and management and the Secretary provides written notice to 
     the Council of the need for such conservation and management;
       ``(B) the Secretary disapproves or partially disapproves 
     any such plan or amendment, or disapproves a revised plan or 
     amendment, and the Council involved fails, after a reasonable 
     period of time, to take final action on a revised or further 
     revised plan or amendment, as the case may be; or
       ``(C) the Secretary determines that the appropriate Council 
     has failed to take sufficient action on a fishery management 
     plan, a plan amendment or proposed regulations to rebuild an 
     overfished fishery pursuant to section 305(b) within 1 year 
     after determining that such fishery is overfished.
       ``(2) The Secretary shall prepare a fishery management plan 
     with respect to any highly migratory species fishery to which 
     section 302(a)(3) applies that requires conservation and 
     management, or any amendment to any such plan, in accordance 
     with the national standards, the other provisions of this 
     Act, and any other applicable law. In preparing and 
     implementing any such plan or amendment, the Secretary 
     shall--
       ``(A) conduct public hearings, at appropriate times and in 
     appropriate locations in the geographical areas concerned, so 
     as to allow interested persons an opportunity to be heard in 
     the preparation and amendment of the plan and any regulations 
     implementing the plan;
       ``(B) consult with and consider the comments and views of 
     affected Councils, as well as commissioners and advisory 
     groups appointed under Acts implementing relevant 
     international fishery agreements pertaining to highly 
     migratory species;
       ``(C) establish an advisory panel under section 302(g) for 
     each fishery management plan to be prepared under this 
     paragraph, which shall consist of a balanced number of 
     representatives (but not less than 7) who are knowledgeable 
     and experienced with respect to the fishery concerned 
     selected from among members of advisory groups appointed 
     under Acts implementing relevant international fishery 
     agreements pertaining to highly migratory species and other 
     interested parties;
       ``(D) evaluate the likely effects, if any, of conservation 
     and management measures on participants in the affected 
     fisheries and minimize, to the extent practicable, any 
     disadvantage to United States fishermen in relation to 
     foreign competitors;
       ``(E) with respect to a highly migratory species for which 
     the United States is authorized to harvest an allocation or 
     quota or fishing mortality level under a relevant 
     international fishery agreement, provide fishing vessels of 
     the United States with a reasonable opportunity to harvest 
     such allocation, quota, or fishing mortality level;
       ``(F) review, on a continuing basis (and promptly whenever 
     a recommendation pertaining to fishing for highly migratory 
     species has been made under a relevant international fishery 
     agreement), and revise as appropriate, the conservation and 
     management measures included in the plan;
       ``(G) diligently pursue, through international entities 
     (such as the International Commission for the Conservation of 
     Atlantic Tunas), comparable international fishery management 
     measures with respect to fishing for highly migratory 
     species; and
       ``(H) ensure that conservation and management measures 
     adopted under this paragraph--
       ``(i) promote international conservation of the affected 
     fishery;
       ``(ii) take into consideration traditional fishing patterns 
     of fishing vessels of the United States and the operating 
     requirements of the fisheries; and
       ``(iii) are fair and equitable in allocating fishing 
     privileges among United States fishermen and not have 
     economic allocation as the sole purpose.
       ``(3) In preparing any plan or amendment under this 
     subsection, the Secretary shall consult with the Secretary of 
     State with respect to foreign fishing and with the Secretary 
     of the department in which the Coast Guard is operating with 
     respect to enforcement at sea.
       ``(4) The Secretary may not include in any fishery 
     management plan, or any amendment to any such plan, prepared 
     by the Secretary under paragraph (1), a provision 
     establishing a limited access system, unless such system is 
     first approved by a majority of the voting members of each 
     appropriate Council.
       ``(f) Individual Transferable Quotas.--
       ``(1) The Secretary may not approve a fishery management 
     plan that includes individual transferable quotas until the 
     Secretary has promulgated guidelines under paragraph (2). 
     Thereafter, the Secretary may approve a fishery management 
     plan or amendment that includes individual transferable 
     quotas only if the plan or amendment is consistent with the 
     guidelines promulgated under paragraph (2).
       ``(2) The Secretary shall promulgate, after consultation 
     with the Councils and public notice and comment, mandatory 
     guidelines for the establishment of any individual 
     transferable quota system. The guidelines shall--
       ``(A) ensure that any individual transferable quota 
     system--
       ``(i) is consistent with the requirements for limited 
     access systems under section 303(b)(6),
       ``(ii) promotes conservation,
       ``(iii) requires collection of fees from holders of 
     individual transferable quotas under section 304(f)(2),
       ``(iv) provides for the fair and equitable allocation of 
     fishing privileges, and minimizes negative social and 
     economic impacts on fishery dependent communities;
       ``(v) establishes a national lien registry system for the 
     identification, perfection, determination of lien priorities, 
     and nonjudicial foreclosure of encumbrances or individual 
     transferable quotas; and
       ``(vi) facilitates a reduction in excessive fishing 
     capacity in the fishery;
       ``(B) address the characteristics of fisheries that are 
     relevant to the design of suitable individual transferable 
     quota systems, the nature and extent of the privilege 
     established under an individual transferable quota system, 
     factors in making initial allocations and determining 
     eligibility for ownership of individual transferable quotas, 
     limitations on the consolidation of individual transferable 
     quotas, and methods of providing for new entrants, including, 
     in fisheries where appropriate, mechanisms to provide a 
     portion of the annual harvest for entry-level fishermen or 
     small vessel owners who do not hold individual transferable 
     quotas;
       ``(C) provide for effective monitoring and enforcement of 
     individual transferable quota 
     [[Page S240]] systems, including providing for the inspection 
     of fish harvested under such systems before the fish is 
     transported beyond the geographic area under a Council's 
     jurisdiction or the jurisdiction of the United States;
       ``(D) provide for appropriate penalties for violations of 
     individual transferable quota systems, including the 
     revocation of individual transferable quotas for such 
     violations; and
       ``(E) include recommendations for potential management 
     options related to individual transferable quotas, including 
     the authorization of individual units or quotas that may not 
     be transferred by the holder, and the use of leases or 
     auctions by the Federal government in the establishment or 
     allocation of individual transferable or nontransferable 
     units or quotas.
       ``(3) Any fishery management plan which includes individual 
     transferable quotas that the Secretary approved on or before 
     the date of enactment of the Sustainable Fisheries Act shall 
     be amended within 3 years after that date to be consistent 
     with this subsection and any other applicable provisions of 
     this Act.
       ``(4) No later than 60 days after the date of enactment of 
     the Sustainable Fisheries Act, the Secretary shall establish 
     an advisory panel on individual transferable quotas under 
     section 302(g)(3) which shall be comprised of fishery 
     scientists and representatives of the Councils, 
     representatives of affected States and fishery dependent 
     communities, fishery participants and conservation 
     organizations. Such advisory panel shall provide 
     recommendations on the guidelines required under paragraph 
     (2), a list of all United States fisheries that may be suited 
     for the development of limited access systems that include 
     individual transferable quotas, and other information as the 
     Secretary or the advisory panel deem appropriate.
       ``(5) An individual transferable quota does not constitute 
     a property right. Nothing in this section or in any other 
     provision of law shall be construed to limit the authority of 
     the Secretary to terminate or limit such individual 
     transferable quota at any time and without compensation to 
     the holder of such quota. The term `holder of an individual 
     transferable quota' includes (A) fishing vessel owners, 
     fishermen, crew members or other citizens of the United 
     States, and (B) United States fish processors.''.

     SEC. 112. PLAN REVIEW AND IMPLEMENTATION.

       Section 304 (16 U.S.C. 1854) is amended to read as follows:

     ``SEC. 304. PLAN REVIEW AND IMPLEMENTATION.

       ``(a) Action by the Secretary After Receipt of Plan.--
       ``(1) Upon transmittal by the Council to the Secretary of a 
     fishery management plan, or amendment to such plan, the 
     Secretary shall--
       ``(A) immediately commence a review of the management plan 
     or amendment to determine whether it is consistent with the 
     national standards, the other provisions of this Act, and any 
     other applicable law; and
       ``(B) immediately publish in the Federal Register a notice 
     stating that the plan or amendment is available and that 
     written data, views, or comments of interested persons on the 
     document or amendment may be submitted to the Secretary 
     during the 60-day period beginning on the date the notice is 
     published.
       ``(2) In undertaking the review required under paragraph 
     (1), the Secretary shall--
       ``(A) take into account the data, views, and comments 
     received from interested persons;
       ``(B) consult with the Secretary of State with respect to 
     foreign fishing; and
       ``(C) consult with the Secretary of the department in which 
     the Coast Guard is operating with respect to enforcement at 
     sea and to fishery access adjustments referred to in section 
     303(a)(6).
       ``(3) The Secretary shall approve, disapprove, or partially 
     approve a plan or amendment within 30 days of the end of the 
     comment period under paragraph (1) by written notice to the 
     Council. A notice of disapproval or partial approval shall 
     specify--
       ``(A) the applicable law with which the plan or amendment 
     is inconsistent;
       ``(B) the nature of such inconsistencies; and
       ``(C) recommendations concerning the actions that could be 
     taken by the Council to conform such plan or amendment to the 
     requirements of applicable law.
       ``(4) If the Secretary disapproves or partially approves a 
     plan or amendment, the Council may submit a revised plan or 
     amendment to the Secretary for review under this subsection.
       ``(b) Action on Regulations.--
       ``(1) Upon transmittal by the Council to the Secretary of 
     proposed regulations prepared under section 303(c), the 
     Secretary shall immediately initiate an evaluation of the 
     proposed regulations to determine whether they are consistent 
     with the fishery management plan, this Act and other 
     applicable law. Within 15 days of initiating such evaluation 
     the Secretary shall make a determination and--
       ``(A) if that determination is affirmative, the Secretary 
     shall publish such regulations, with such technical changes 
     as may be necessary for clarity and an explanation of those 
     changes, in the Federal Register for a public comment period 
     of 15 to 60 days; or
       ``(B) if that determination is negative, the Secretary 
     shall notify the Council in writing of the inconsistencies 
     and provide recommendations on revisions that would make the 
     proposed regulations consistent with the fishery management 
     plan, this Act, and other applicable law.
       ``(2) Upon receiving a notification under paragraph (1)(B), 
     the Council may revise the proposed regulations and submit 
     them to the Secretary for reevaluation under paragraph (1).
       ``(3) The Secretary shall promulgate final regulations 
     within 30 days after the end of the comment period under 
     paragraph (1)(A). The Secretary shall consult with the 
     Council before making any revisions to the proposed 
     regulations, and must publish in the Federal Register an 
     explanation of any differences between the proposed and final 
     regulations.
       ``(c) Definition.-- For purposes of subsections (a) and 
     (b), the term `immediately' means on or before the 5th day 
     after the day on which a Council transmits to the Secretary a 
     plan, amendment, or proposed regulation that the Council 
     characterizes as final.
       ``(d) Secretarial Plan Review.--
       ``(1)(A) Whenever, under section 303(e), the Secretary 
     prepares a fishery management plan or amendment, the 
     Secretary shall immediately--
       ``(i) for a plan or amendment prepared under section 
     303(e)(1), submit such plan or amendment to the appropriate 
     Council for consideration and comment; and
       ``(ii) publish in the Federal Register a notice stating 
     that the plan or amendment is available and that written 
     data, views, or comments of interested persons on the plan or 
     amendment may be submitted to the Secretary during the 60-day 
     period beginning on the date the notice is published.
       ``(B) Whenever a plan or amendment is submitted under 
     subsection (1)(A)(i), the appropriate Council must submit its 
     comments and recommendations, if any, regarding the plan or 
     amendment to the Secretary before the close of the 60-day 
     period referred to in subparagraph (A)(ii). After the close 
     of such 60-day period, the Secretary, after taking into 
     account any such comments and recommendations, as well as any 
     views, data, or comments submitted under subparagraph 
     (A)(ii), may adopt such plan or amendment.
       ``(2) The Secretary may propose regulations in the Federal 
     Register to implement any plan or amendment prepared by the 
     Secretary. The comment period on proposed regulations shall 
     be 60 days, except that the Secretary may shorten the comment 
     period on minor revisions to existing regulations.
       ``(3) The Secretary shall promulgate final regulations 
     within 30 days after the end of the comment period under 
     paragraph (3). The Secretary must publish in the Federal 
     Register an explanation of any substantive differences 
     between the proposed and final rules. All final regulations 
     must be consistent with the plan, with the national standards 
     and other provisions of this Act, and with any other 
     applicable law.
       ``(e) Judicial Review.--
       ``(1) Regulations promulgated by the Secretary under this 
     Act and actions described in paragraph (2) shall be subject 
     to judicial review to the extent authorized by, and in 
     accordance with, chapter 7 of title 5, United States Code, if 
     a complaint for such review is filed within 30 days after the 
     date on which the regulations are promulgated or the action 
     is published in the Federal Register, as applicable; except 
     that--
       ``(A) section 705 of such title is not applicable, and
       ``(B) the appropriate court shall only set aside any such 
     regulation or action on a ground specified in section 
     706(2)(A), (B), (C), or (D) of such title.
       ``(2) The actions referred to in paragraph (1) are actions 
     that are taken by the Secretary under regulations which 
     implement a fishery management plan, including but not 
     limited to actions that establish the date of closure of a 
     fishery to commercial or recreational fishing.
       ``(3) (A) Notwithstanding any other provision of law, the 
     Secretary shall file a response to any complaint filed in 
     accordance with paragraph (1) not later than 45 days after 
     the date the Secretary is served with that complaint, except 
     that the appropriate court may extend the period for filing 
     such a response upon a showing by the Secretary of good cause 
     for that extension.
       ``(B) A response of the Secretary under this paragraph 
     shall include a copy of the administrative record for the 
     regulations that are the subject of the petition.
       ``(4) Upon a motion by the person who files a complaint 
     under this subsection, the appropriate court shall assign the 
     matter for hearing at the earliest possible date and shall 
     expedite the matter in every possible way.
       ``(f) Establishment of Fees.--
       ``(1) The Secretary shall by regulation establish the level 
     of any fees that are authorized to be charged pursuant to 
     section 303(b)(1). The Secretary may enter into a cooperative 
     agreement with the States concerned under which the States 
     administer the permit system and the agreement may provide 
     that all or part of the fees collected under the system shall 
     accrue to the States. The level of fees charged under this 
     paragraph shall not exceed the administrative costs incurred 
     in issuing the permits.
       ``(2)(A) Notwithstanding paragraph (1), the Secretary shall 
     collect a fee from each person holding an individual 
     transferable quota pursuant to a limited access system 
     established under section 303(b)(6). Fees assessed under this 
     paragraph shall be sufficient to recover the cost of managing 
     the fishery to 
     [[Page S241]] which the quota applies, including reasonable 
     costs for salaries, training, data analysis and other costs 
     directly related to fishery management and enforcement, up 
     to--
       ``(i) four percent annually of the value of fish harvested 
     or processed in that year under the individual transferable 
     quota; and
       ``(ii) an additional 1 percent of the value of fish 
     authorized to be harvested or processed for that year under 
     the individual transferable quota to be assessed on a person 
     receiving an initial quota or transferring a quota.
       ``(B) The Secretary, in consultation with the Councils, 
     shall promulgate regulations, prescribing the method of 
     determining the value of fish authorized to be taken, the 
     amount of each fee, and the method of collecting fees. Fees 
     collected under this paragraph shall meet the requirements of 
     section 9701(b) of title 31, United States Code. Fees 
     collected under this paragraph shall be an offsetting 
     collection and shall be available only to the Secretary for 
     the purposes of administering and implementing this Act in 
     the region in which the fees were collected.
       ``(C) Persons holding individual transferable quota 
     pursuant to limited access systems established in the surf 
     clam and ocean quahog fishery or in the wreckfish fishery are 
     exempt from the collection of fees under this paragraph for a 
     period ending 5 years after the date of enactment of the 
     Sustainable Fisheries Act.
       ``(g) Effect of Certain Laws on Certain Time 
     Requirements.--The Secretary shall comply with any applicable 
     provisions of chapter 35 of title 44, United States Code, 
     chapter 6 of title 5, United States Code, and Executive Order 
     Numbered 12866, dated September 30, 1993, within the time 
     limitations specified in subsections (a) and (b).
       ``(h) Responsibility of the Secretary.--The Secretary shall 
     have general responsibility to carry out the provisions of 
     this Act. The Secretary may promulgate such regulations, in 
     accordance with section 553 of title 5, United States Code, 
     as may be necessary to discharge such responsibility.''.

     SEC. 113. ECOSYSTEM MANAGEMENT.

       Section 305 (16 U.S.C. 1855) is amended to read as follows:

     ``SEC. 305. ECOSYSTEM MANAGEMENT.

       ``(a) Report on Status of Fisheries.--The Secretary shall 
     report annually to the Congress and the Councils on the 
     status of fisheries within each Council's geographical area 
     of authority and identify those fisheries that are 
     approaching a condition of being overfished or are 
     overfished. For those fisheries managed under a fishery 
     management plan, the status shall be assessed using the 
     criteria for overfishing specified by the appropriate Council 
     under section 303(a)(10). A fishery shall be classified as 
     approaching a condition of being overfished if, based on 
     trends in fishing effort, fishery resource size, and other 
     appropriate factors, the Secretary estimates that the fishery 
     will become overfished within 2 years. Any fishery determined 
     to be a commercial fishery failure under section 316, shall 
     be deemed to be overfished for the purposes of subsections 
     (a) and (b).
       ``(b) Fishery Recovery Effort.--
       ``(1) The Council shall take immediate action to prepare a 
     fishery management plan, a plan amendment, or proposed 
     regulations for fisheries under such Council's authority--
       ``(A) to prevent overfishing of a fishery from occurring 
     whenever such fishery is classified under subsection (a) as 
     approaching an overfished condition, or
       ``(B) to stop overfishing of a fishery whenever such 
     fishery is classified under subsection (a) as overfished, and 
     to rebuild affected stocks of fish.
       ``(2) The Council shall submit a fishery management plan, 
     amendment or proposed regulations required under paragraph 
     (1) to the Secretary within 1 year from the date of 
     transmittal of the report on the status of stocks under 
     subsection (a). For a fishery that is overfished, such 
     fishery management plan, amendment or proposed regulations 
     shall specify a time period for stopping overfishing and 
     rebuilding the fishery. The time period shall be as short as 
     possible, taking into account the status and biology of the 
     overfished stock of fish, the needs of fishery-dependent 
     communities, and the interaction of the overfished stock of 
     fish within the marine ecosystem. The time period may not be 
     more than 10 years, except under extraordinary circumstances.
       ``(3) During the development of a fishery management plan, 
     a plan amendment, or proposed regulations under this 
     subsection, the Council may request that the Secretary 
     promulgate emergency regulations under subsection (e)(2) to 
     reduce overfishing. Any request by the Council under this 
     paragraph shall be deemed an emergency.
       ``(c) Fish Habitat.--
       ``(1) The Secretary, in cooperation with the Councils and 
     the Secretary of the Interior, after notice and public 
     comment, shall identify the essential fish habitat for each 
     fishery for which a fishery management plan is in effect. The 
     identification shall be based on the description of essential 
     fish habitat contained in the plan.
       ``(2) Each Council--
       ``(A) may comment on and make recommendations concerning 
     any activity undertaken, or proposed to be undertaken, by any 
     Federal or State agency that, in the view of the Council, may 
     have an adverse effect on essential fish habitat of a fishery 
     under its authority; and
       ``(B) shall comment on and make recommendations to any 
     Federal or State department or agency concerning any such 
     activity that, in the view of the Council is likely to 
     substantially affect the habitat of an anadromous fishery 
     resource under its jurisdiction.
       ``(3) If the Secretary receives information from a Council 
     or determines from other sources that an action authorized, 
     funded, carried out, or proposed to be carried out by any 
     Federal agency may result in the destruction or adverse 
     modification of any essential fish habitat identified under 
     paragraph (1), the Secretary shall comment on and make 
     recommendations to the Federal agency concerning that action.
       ``(4) Within 45 days after receiving a comment or 
     recommendation under paragraphs (2) or (3) from a Council or 
     the Secretary, a Federal agency shall provide a detailed 
     response, in writing, to the commenting Council and the 
     Secretary regarding the matter. The response shall include a 
     description of measures being considered by the agency for 
     avoiding, mitigating, or offsetting the impact of the 
     activity on such habitat. In the case of a response that is 
     inconsistent with a recommendation from any Council or the 
     Secretary, the Federal agency shall explain its reasons for 
     not following the recommendations.
       ``(d) Gear Evaluation and Notification of Entry.--
       ``(1) Each Council shall submit to the Secretary by June 1, 
     1996, information describing (A) all fishing technologies 
     employed under such Council's authority; and (B) all 
     fisheries under the authority of such Council. The Secretary 
     shall compile such information, along with information to 
     comply with both (A) and (B) for fisheries to which section 
     302(a)(3) applies.
       ``(2) By July 15, 1996, the Secretary shall publish a 
     proposed list of all technologies and fisheries, for each 
     Council and for fisheries to which section 302(a)(3) applies, 
     in the Federal Register for a public comment period of not 
     less than 60 days. The Secretary shall include with such list 
     specific guidelines for determining when a technology or 
     fishery is sufficiently different from those listed as to 
     require notification under paragraph (3). Within 30 days 
     after the close of the public comment period the Secretary 
     shall publish in the Federal Register a final list (including 
     the guidelines), after taking into account any public comment 
     received.
       ``(3) Beginning on the date that is 180 days after the date 
     of the publication of the final list required under paragraph 
     (2), no person or vessel shall employ a fishing technology or 
     engage in a fishery that is not included on the final list 
     for the appropriate Council or for fisheries to which section 
     302(a)(3) applies without first giving 90 days advance 
     written notice of the intent to employ such unlisted 
     technology or engage in such unlisted fishery to the 
     appropriate Council, or the Secretary with respect to a 
     fishery to which section 302(a)(3) applies. Such notice shall 
     be by first class mail, return receipt requested, and shall 
     include information on the use of the unlisted technology in 
     other fisheries, if any, and a detailed description, 
     including drawings, maps or diagrams if appropriate, of the 
     unlisted technology or unlisted fishery which such person or 
     vessel seeks to employ or engage in.
       ``(4) A Council may submit to the Secretary amendments to 
     the final list published under paragraph (2) to reflect any 
     substantial changes in the fishing technologies employed or 
     fisheries engaged in under the authority of such Council. The 
     Secretary may submit any amendments for fisheries to which 
     section 302(a)(3) applies. The Secretary shall publish any 
     such amendments in the Federal Register as proposed 
     amendments (along with any proposed revisions to the 
     guidelines) to the final list for a public comment period of 
     not less than 60 days. Within 45 days of the close of the 
     comment period, the Secretary shall publish a revised final 
     list incorporating such proposed amendments, after taking 
     into account any public comments received.
       ``(5) A Council may request the Secretary to promulgate 
     emergency regulations under subsection (e) prohibiting any 
     persons or vessels from employing an unlisted technology or 
     engaging in an unlisted fishery if the appropriate Council, 
     or the Secretary for fisheries to which section 302(a)(3) 
     applies, determines that use of such technology or entry into 
     such fishery would compromise the effectiveness of 
     conservation and management efforts under this Act.
       ``(6) If, after providing the notice required under 
     paragraph (3), no emergency regulations are implemented under 
     paragraph (5), the person or vessel submitting notice under 
     paragraph (3) may, after the required 90 day period has 
     lapsed, employ the unlisted technology or enter the unlisted 
     fishery to which such notice applies. The signed return 
     receipt shall constitute adequate evidence of the submittal 
     of such notice and the date upon which the 90-day period 
     begins.
       ``(7) A violation of this subsection shall be considered a 
     violation of section 307, punishable under section 308.
       ``(e) Emergency Actions.--
       ``(1) If the Secretary finds that an emergency exists 
     involving any fishery, he may promulgate emergency 
     regulations necessary to address the emergency, without 
     regard to whether a fishery management plan exists for such 
     fishery.
       ``(2) If a Council finds that an emergency exists involving 
     any fishery within its jurisdiction, whether or not a fishery 
     management plan exists for such fishery--
      [[Page S242]]   ``(A) the Secretary shall promulgate 
     emergency regulations under paragraph (1) to address the 
     emergency if the Council, by unanimous vote of the voting 
     members of the Council, requests the taking of such action; 
     and
       ``(B) the Secretary may promulgate emergency regulations 
     under paragraph (1) to address the emergency if the Council, 
     by less than a unanimous vote, requests the taking of such 
     action.
       ``(3) Any emergency regulation which changes an existing 
     fishery management plan shall be treated as an amendment to 
     such plan for the period in which such regulation is in 
     effect. Any emergency regulation promulgated under this 
     subsection--
       ``(A) shall be published in the Federal Register together 
     with the reasons therefor;
       ``(B) shall, except as provided in subparagraph (C), remain 
     in effect for not more than 180 days after the date of 
     publication, and may be extended by publication in the 
     Federal Register for an additional period of not more than 
     180 days, provided the public has had an opportunity to 
     comment on the emergency regulation, and, in the case of a 
     Council recommendation for emergency regulations, the Council 
     is actively preparing a fishery management plan, amendment, 
     or proposed regulations to address the emergency on a 
     permanent basis;
       ``(C) that responds to a public health emergency may remain 
     in effect until the circumstances that created the emergency 
     no longer exist, provided that the Secretary of Health and 
     Human Services concurs with the Secretary's action and the 
     public has an opportunity to comment after the regulation is 
     published;
       ``(D) that reduces overfishing may be approved without 
     regard to the requirements of section 301(a)(1); and
       ``(E) may be terminated by the Secretary at an earlier date 
     by publication in the Federal Register of a notice of 
     termination, except for emergency regulations promulgated 
     under paragraph (2) in which case such early termination may 
     be made only upon the agreement of the Secretary and the 
     Council concerned.
       ``(4) The Secretary may, pursuant to guidelines established 
     by a Council in a fishery management plan, close or restrict 
     a particular fishery covered by such fishery management plan 
     in order to prevent overfishing or reduce bycatch. Any such 
     guidelines shall specify appropriate means for providing 
     timely notice to fishermen of any closure or restriction. In 
     exercising the authority granted under this paragraph, the 
     Secretary shall not be required to provide an opportunity for 
     notice and comment if such closure or restriction is done in 
     accordance with the fishery management plan guidelines and 
     does not extend beyond the end of the current fishing period 
     established for that fishery by the fishery management 
     plan.''.

     SEC. 114. STATE JURISDICTION.

       (a) Section 306(b) (16 U.S.C. 1856(b)) is amended by adding 
     at the end the following:
       ``(3) If the State involved requests that a hearing be held 
     pursuant to paragraph (1), the Secretary shall conduct such 
     hearing prior to taking any action under paragraph (1).''.
       (b) Section 306(c)(1) (16 U.S.C. 1856(c)(1)) is amended--
       (1) by striking ``and'' in subparagraph (A);
       (2) by striking the period at the end of subparagraph (B) 
     and inserting a semicolon and the word ``and''; and
       (3) by inserting after subparagraph (B) the following:
       ``(C) the owner or operator of the vessel submits reports 
     on the tonnage of fish received from U.S. vessels and the 
     locations from which such fish were harvested, in accordance 
     with such procedures as the Secretary by regulation shall 
     prescribe.''.

     SEC. 115. PROHIBITED ACTS.

       (a) Section 307(1)(J)(i) (16 U.S.C. 1857(1)(J)(i)) is 
     amended by striking ``American Lobster Fishery Management 
     Plan, as implemented by'' and ``, or any successor to that 
     plan, implemented under this title''.
       (b) Section 307(1)(L) (16 U.S.C. 1857(1)(L)) is amended to 
     read as follows:
       ``(L) to forcibly assault, resist, oppose, impede, 
     intimidate, sexually harass, or interfere with any observer 
     on a vessel under this Act, or any data collector employed by 
     or under contract to the National Marine Fisheries 
     Service;''.
       (c) Section 307(1)(M) (16 U.S.C. 1857(1)(M)) is amended to 
     read as follows:
       ``(M) to engage in large-scale driftnet fishing on a vessel 
     of the United States or a vessel subject to the jurisdiction 
     of the United States upon the high seas beyond the exclusive 
     economic zone of any nation or within the exclusive economic 
     zone of the United States, (and any vessel that is shoreward 
     of the outer boundary of the exclusive economic zone of the 
     United States or beyond the exclusive economic zone of any 
     nation, and that has onboard gear that is capable of use for 
     large-scale driftnet fishing, shall be presumed to be engaged 
     in such fishing, but that presumption may be rebutted); or''.
       (d) Section 307(2)(A) (16 U.S.C. 1857(2)(A)) is amended to 
     read as follows:
       ``(A) in fishing within the boundaries of any State, 
     except--
       ``(i) recreational fishing permitted under section 201(i),
       ``(ii) fish processing permitted under section 306(c), or
       ``(iii) transshipment at sea of fish products within the 
     boundaries of any State in accordance with a permit approved 
     under section 204(b)(6)(A)(ii);''.
       (e) Section 307(2)(B) (16 U.S.C. 1857(2)(B)) is amended by 
     striking ``201(j)'' and inserting ``201(i)''.
       (f) Section 307(3) (16 U.S.C. 1857(3)) is amended to read 
     as follows:
       ``(3) for any vessel of the United States, and for the 
     owner or operator of any vessel of the United States, to 
     transfer at sea directly or indirectly, or attempt to so 
     transfer at sea, any United States harvested fish to any 
     foreign fishing vessel, while such foreign vessel is within 
     the exclusive economic zone or within the boundaries of any 
     State except to the extent that the foreign fishing vessel 
     has been permitted under section 204(b)(6)(B) or section 
     306(c) to receive such fish;''.
       (g) Section 307(4) (16 U.S.C. 1857(4)) is amended by 
     inserting ``or within the boundaries of any State'' after 
     ``zone''.

     SEC. 116. CIVIL PENALTIES AND PERMIT SANCTIONS.

       (a) The first sentence of section 308(b) (16 U.S.C. 
     1858(b)) is amended to read as follows: ``Any person against 
     whom a civil penalty is assessed under subsection (a), or 
     against whom a permit sanction is imposed under subsection 
     (g) (other than a permit suspension for nonpayment of penalty 
     or fine), may obtain review thereof in the United States 
     district court for the appropriate district by filing a 
     complaint against the Secretary in such court within 30 days 
     from the date of such order.''.
       (b) Section 308(g)(1)(C) (16 U.S.C. 1858(g)(1)(C)) is 
     amended by striking the matter from ``(C) any'' through 
     ``overdue,'' and inserting the following: ``(C) any amount in 
     settlement of a civil forfeiture imposed on a vessel or other 
     property, or any civil penalty or criminal fine imposed on a 
     vessel or owner or operator of a vessel or any other person 
     who has been issued or has applied for a permit under any 
     marine resource law enforced by the Secretary, has not been 
     paid and is overdue,''.
       (c) Section 308(16 U.S.C. 1858) is amended by inserting at 
     the end thereof the following:
       ``(h) After deduction for any administrative or enforcement 
     costs incurred or other expenditures authorized under this 
     Act, all funds collected under this section shall be 
     deposited in a separate account of the Ocean Conservation 
     Trust Fund established under section 315.''.

     SEC. 117. ENFORCEMENT.

       (a) Section 311(e)(1) (16 U.S.C. 1861(e)(1)) is amended--
       (1) by striking ``fishery'' each place it appears and 
     inserting ``marine'';
       (2) by inserting ``of not less than 20 percent of the 
     penalty collected'' after ``reward'' in subparagraph (B), and
       (3) by striking subparagraph (E) and inserting the 
     following:
       ``(E) claims of parties in interest to property disposed of 
     under section 612(b) of the Tariff Act of 1930 (19 U.S.C. 
     1612(b)), as made applicable by section 310(c) of this Act or 
     by any other marine resource law enforced by the Secretary, 
     to seizures made by the Secretary, in amounts determined by 
     the Secretary to be applicable to such claims at the time of 
     seizure; and''.
       (b) Section 311(e)(2) (16 U.S.C. 1861(e)(2)) is amended to 
     read as follows:
       ``(2) Any person found in an administrative or judicial 
     proceeding to have violated this Act or any other marine 
     resource law enforced by the Secretary shall be liable for 
     the cost incurred in the sale, storage, care, and maintenance 
     of any fish or other property lawfully seized in connection 
     with the violation.''.
       (c) Section 311 (16 U.S.C. 1861) is amended by 
     redesignating subsection (f) as subsection (h), and by 
     inserting the following after subsection (e):
       ``(f) Annual Report on Enforcement.--Each year at the time 
     the President's budget is submitted to the Congress, the 
     Secretary and the Secretary of the Department in which the 
     Coast Guard is operating shall, after consultation with the 
     Councils, submit a report on the effectiveness of the 
     enforcement of fishery management plans and regulations to 
     implement such plans under the jurisdiction of each Council, 
     including--
       ``(1) an analysis of the adequacy of federal personnel and 
     funding resources related to the enforcement of fishery 
     management plans and regulations to implement such plans; and
       ``(2) recommendations to improve enforcement that should be 
     considered in developing amendments to plans or to 
     regulations implementing such plans.
       ``(g) Fishermen's Information Networks.--The Secretary, in 
     consultation with the Secretary of the department in which 
     the Coast Guard is operating, shall conduct a program to 
     encourage the formation of volunteer networks, to be 
     designated as Fishermen's Information Networks, to advise on 
     and assist in the monitoring, reporting, and prevention of 
     violations of this Act.''.

     SEC. 118. NORTH PACIFIC FISHERIES CONSERVATION.

       Section 313 (16 U.S.C. 1862) is amended--
       (1) by striking ``research plan'' in the section heading 
     and inserting ``conservation''; and
       (b) by adding at the end the following:
       ``(f) Reduction of Waste.--
       ``(1) No later than June 1, 1996, the North Pacific Fishery 
     Management Council shall include in each fishery management 
     plan under its jurisdiction conservation and management 
     measures, including fees or other 
     [[Page S243]] incentives, to reduce bycatch in each fishery. 
     Notwithstanding section 304(d), in implementing this 
     subsection the Council may recommend, and the Secretary may 
     approve and implement any such recommendation, consistent 
     with the other provisions of this Act, a system of fees to 
     provide an incentive to reduce bycatch, and, in particular, 
     economic and regulatory discards. Any such system of fees or 
     incentives shall be fair and equitable to all fishermen and 
     United States fish processors, and shall not have economic 
     allocation as its sole purpose.
       ``(2) Not later than January 1, 1997, the North Pacific 
     Fishery Management Council shall recommend, and the Secretary 
     may approve and implement any such recommendation, consistent 
     with the other provisions of this Act, conservation and 
     management measures to ensure total catch measurement in each 
     fishery under the Council's jurisdiction. Such conservation 
     and management measures shall ensure the accurate enumeration 
     of target species, economic discards, and regulatory 
     discards.
       ``(3) Beginning on January 1, 1998, such conservation and 
     management measures shall include a harvest preference or 
     other incentives to fishing and processing practices within 
     each gear group that result in the lowest levels of economic 
     discards, processing waste, regulatory discards, and other 
     bycatch. In determining which practices shall be given 
     priority, the reduction of economic discards shall be given 
     the greatest weight, followed by processing waste (where 
     applicable), regulatory discards and other bycatch, in that 
     order.
       ``(4) In determining the level of target species catch, 
     economic discards, regulatory discards, other bycatch, and 
     processing waste, the Council and Secretary shall base such 
     determinations on observer data or the best available 
     information.
       ``(5) In the case of fisheries occurring under an 
     individual transferable quota system under the jurisdiction 
     of the North Pacific Fishery Management Council after January 
     1, 1998--
       ``(A) the Council shall designate non-target species, 
     bycatch species, and regulatory discards for each such 
     fishery;
       ``(B) the Council may not recommend, and the Secretary may 
     not approve, any assignment or allocation of individual 
     transferable quotas for regulatory discards, or non-target 
     species for those fisheries, other than for each individual 
     fishing season on an annual basis pursuant to subparagraph 
     (C) of this paragraph; and
       ``(C) any harvest preference required under paragraph (3) 
     shall be implemented by giving priority in the allocation of 
     quotas for regulatory discards and non-target species and to 
     fishing practices that result in the lowest levels of 
     economic discards, regulatory discards, processing waste, and 
     other bycatch.
       ``(6) Nothing in this section shall be construed to 
     preclude the North Pacific Fishery Management Council from 
     allocating a portion of any quota for a directed fishery for 
     use as bycatch in another fishery or fisheries, if the 
     Council determines such allocation is necessary to prosecute 
     a fishery, after taking into account the requirements of this 
     section regarding reduction of bycatch and processing waste.
       ``(g) Full Retention and Full Utilization.--
       ``(1) The North Pacific Fishery Management Council shall, 
     consistent with the other provisions of this Act, submit to 
     the Secretary by January 1, 1997, a plan to phase-in by 
     January 1, 2000, to the maximum extent practicable, fishery 
     management plan amendments to require full retention by 
     fishing vessels and full utilization by United States fish 
     processors of all fishery resources, except regulatory 
     discards, caught under the jurisdiction of such Council if 
     such fishery resources cannot be quickly returned alive to 
     the sea with the expectation of extended survival.
       ``(2) The plan shall include conservation and management 
     measures to minimize processing waste and ensure the optimum 
     utilization of target species, including standards setting 
     minimum percentages of target species harvest which must be 
     processed for human consumption.
       ``(3) In determining the maximum extent practicable, the 
     North Pacific Fishery Management Council shall consider--
       ``(A) the state of available technology;
       ``(B) the extent to which species brought on board can be 
     safely returned alive, with the expectation of extended 
     survival, to the sea;
       ``(C) the extent to which each species is fully utilized as 
     a target species by United States fishermen;
       ``(D) the impact of different processing practices on the 
     price paid to fishermen and processors;
       ``(E) the nature and economic costs of each specific 
     fishery; and
       ``(F) the effect of a full retention or full utilization 
     requirement in a given fishery on other fisheries when 
     compared with the beneficial effect of reducing economic 
     discards and processing waste.
       ``(4) Notwithstanding section 304(f), the North Pacific 
     Fishery Management Council may propose, and the Secretary may 
     approve and implement any such recommendation, consistent 
     with the other provisions of this Act, a system of fines or 
     other incentives to implement this section. Any such fines or 
     incentive system shall be fair and equitable to all fishing 
     vessels and United States fish processors, and shall not have 
     economic allocation as its sole purpose.
       ``(h) Regulatory Discards.--
       ``(1) Regulatory discards shall not be considered an 
     economic discard for purposes of this section, however, the 
     North Pacific Fishery Management Council shall seek to reduce 
     the incidental catch of regulatory discards to the maximum 
     extent practicable while allowing for the prosecution of 
     fisheries under its jurisdiction.
       ``(2) Not later than June 1, 1996, the North Pacific 
     Fishery Management Council shall propose, and the Secretary 
     may approve and implement any such recommendation, consistent 
     with the other provisions of this Act, for each groundfish 
     fishery under the Council's jurisdiction, conservation and 
     management measures to reduce the incidental harvest of 
     regulatory discards to the minimum level necessary to 
     prosecute directed fisheries for designated target species, 
     and to otherwise meet the requirements of this section. 
     Notwithstanding section 304(f), such conservation and 
     management measures may include a system of fines, caps, or 
     other incentives to reduce the incidental harvest of 
     regulatory discards. Any system of fines or incentives under 
     this section shall be fair and equitable to all fishing 
     vessels and United States fish processors, and shall not have 
     economic allocation as its sole purpose.
       ``(3) The North Pacific Fishery Management Council shall 
     establish for each fishery which incidentally harvests 
     regulatory discards under the Council's jurisdiction a cap 
     which prevents such regulatory discards from being overfished 
     or from being placed in risk of being overfished. Upon 
     reaching such cap, the commercial fishery in which such 
     regulatory discards are incidentally caught shall be closed 
     for that season.
       ``(i) Observer Program.--
       ``(1) Beginning June 1, 1996, the North Pacific Fishery 
     Management Council shall require under the authority granted 
     to it by subsection (a)--
       ``(A) 100 percent observer coverage on all fishing vessels 
     which can safely accommodate an observer or observers, and at 
     all United States fish processors to the extent that funding 
     for such coverage is available, and
       ``(B) for vessels which cannot safely accommodate an 
     observer, statistically reliable sampling of a fishing 
     vessel's effort in each fishery in which that fishing vessel 
     participates,

     when such vessel or processor is fishing in a fishery under 
     the North Pacific Fishery Management Council's jurisdiction. 
     In implementing subparagraph (A) the North Pacific Fishery 
     Management Council shall require that more than one observer 
     be stationed on a fishing vessel or at a United States fish 
     processor whenever the Council determines that more than one 
     such observer is necessary to accurately monitor that vessel 
     or processor's operation.
       ``(2) Observers stationed on fishing vessels or at United 
     States fish processors under the authority of this section 
     shall be paid by the Secretary using funds deposited in the 
     North Pacific Fishery Observer Fund. Such payment shall not 
     make an observer an employee of the Federal Government, 
     unless such observer is otherwise employed by an agency of 
     the United States.
       ``(3) Failure to pay the fee established by the North 
     Pacific Fishery Management Council under subsection (a) shall 
     be a considered a violation of section 307, punishable under 
     section 308. Any fines collected pursuant to the authority 
     granted by this subsection shall be deposited in the North 
     Pacific Fishery Observer Fund account in the United States 
     Treasury, and shall remain available until expended under the 
     terms of that fund.
       ``(4) Notwithstanding sections 304(f) and subsection (b), 
     the Secretary is authorized to recover from vessels 
     participating in a fishery under an individual fishing quota 
     regime or other limited access program established by the 
     North Pacific Fishery Management Council, the full cost of 
     any observers stationed on such vessel (including all costs 
     for salaries, expenses, equipment, food and lodging, 
     transportation, insurance, and analysis of observer data, 
     plus reasonable costs for training and administrative 
     overhead). Each participant in an individual fishing quota 
     regime shall only be required to contribute the same 
     proportion of the costs as that participant's quota shares 
     represent to the total number of quota shares in such regime. 
     To the extent that the costs recovered under this paragraph 
     exceed the fee established by the Council under subsection 
     (b), the Secretary shall deduct any payment by a vessel under 
     subsection (b) from the amount owed by such vessel under this 
     paragraph. The Secretary shall deposit any fees collected 
     under this paragraph in the North Pacific Fishery Observer 
     Fund account in the United States Treasury.
       ``(j) Industry Assistance.--
       ``(1) The Secretary shall submit a plan by January 1, 1996, 
     to the Committee on Commerce, Science, and Transportation of 
     the Senate and the Committee on Resources of the House of 
     Representatives to develop jointly with industry accurate 
     methods of weighing the fish harvested by U.S. fishing 
     vessels in fisheries under the jurisdiction of the North 
     Pacific Fishery Management Council. Such plan shall include 
     methods for assessing contributions from industry to fund 
     such development, as well as recommendations from the 
     Secretary concerning the level of funds needed to 
     successfully implement the plan in fiscal year 1997.
      [[Page S244]]   ``(2) The Secretary shall submit by January 
     1, 1996, to the Committee on Commerce, Science, and 
     Transportation of the Senate and the Committee on Resources 
     of the House of Representatives a plan to develop markets and 
     harvesting and processing techniques for arrowtooth flounder. 
     The Secretary shall include in such plan recommendations 
     concerning the level of funds needed to successfully 
     implement the plan in fiscal year 1997.
       ``(3) For fiscal years 1996, 1997, 1998, and 1999, $50,000 
     is authorized to be appropriated for the purposes of 
     implementing paragraph (1), and $250,000 is authorized to be 
     appropriated for programs to implement paragraph (2).
       ``(k) Definition.--For the purposes of this section, 
     `processing waste' means that portion of a fish which is 
     processed and which could be used for human consumption or 
     other commercial use, but which is not so used.''.

     SEC. 119. TRANSITION TO SUSTAINABLE FISHERIES.

       (a) The Act is amended by adding at the end of title III 
     the following:

     ``SEC. 315. TRANSITION TO SUSTAINABLE FISHERIES.

       ``(a) Sustainable Development Strategy.--
       ``(1) At the discretion of the Secretary or at the request 
     of the Governor of an affected State or a fishery dependent 
     community, the Secretary, in consultation with the Councils 
     and Federal agencies, as appropriate, may work with regional 
     authorities, affected States, fishery dependent communities, 
     the fishing industry, conservation organizations, and other 
     interested parties, to develop a sustainable development 
     strategy for any fishery classified as overfished under 
     section 305(a) or determined to be a commercial fishery 
     failure under section 316.
       ``(2) Such sustainable development strategy shall--
       ``(A) take into consideration the economic, social, and 
     ecological factors affecting the fishery and provide 
     recommendations for addressing such factors in the 
     development of a fishery recovery effort under section 
     305(b);
       ``(B) identify Federal and State programs which can be used 
     to provide assistance to fishery dependent communities during 
     development and implementation of a fishery recovery effort;
       ``(C) develop a balanced and comprehensive long-term plan 
     to guide the transition to a sustainable fishery, identifying 
     alternative economic opportunities and establishing long-term 
     objectives for the fishery including vessel types and sizes, 
     harvesting and processing capacity, and optimal fleet size;
       ``(D) establish procedures to implement such a plan and 
     facilitate consensus and coordination in regional decision-
     making; and
       ``(E) include any program established under subsection (b) 
     to reduce the number of vessels or level of capital 
     investment in the fishery.
       ``(2) Report.--The Secretary shall complete and submit to 
     the Congress a report on any sustainable development strategy 
     developed under this section within 6 months and annually 
     thereafter.
       ``(b) Buy-out Program.--
       ``(1) The Secretary, in consultation with the appropriate 
     Council, may develop and implement a buy-out program for 
     fishing vessels or permits in a fishery for the purpose of 
     reducing the number of fishing vessels and fishing effort in 
     such fishery, if the Secretary, with the concurrence of the 
     majority of the voting members of such Council, determines 
     that a buy-out program is necessary for the development and 
     implementation of a fishery recovery effort under section 
     305(b).
       ``(2) Any buy-out program developed or implemented in a 
     fishery shall--
       ``(A) require a fishery management plan to be in place for 
     such fishery that is adequate to limit access to the fishery 
     and prevent the replacement of fishing effort removed by the 
     buy-out program;
       ``(B) require fishing vessels or permits acquired under 
     such program to be disposed of in a manner ensuring that such 
     vessels or permits do not re-enter the fishery or contribute 
     to excess fishing effort in other fisheries;
       ``(C) establish criteria for determining types and numbers 
     of vessels which are eligible for participation in such 
     program consistent with--
       ``(i) any strategy developed under subsection (a);
       ``(ii) the requirements of applicable fishery management 
     plans; and
       ``(iii) the need to minimize program costs;
       ``(D) establish procedures (such as submission of owner bid 
     under an auction system or fair market-value assessment) to 
     be used in determining the level of payment for fishing 
     vessels or permits acquired under the program; and
       ``(E) identify Federal and non-Federal mechanisms for 
     funding the buy-out program, consistent with paragraphs (3) 
     and (4).
       ``(3) The Federal share of the cost of a buy-out program 
     implemented under this section shall not exceed 50 percent of 
     the cost of that program. Such Federal share may be provided 
     from monies deposited in the Ocean Conservation Trust under 
     section 308(h) or monies made available under section 316(b) 
     of this Act or under section 2(b) of the Act of August 11, 
     1939 (15 U.S.C. 713c-3(b)).
       ``(4) Notwithstanding section 305(f)(1), the Secretary, 
     with the concurrence of a majority of the voting members of 
     the affected Council, may establish a fee system to collect 
     those funds required for the non-Federal share of such 
     program that are not available from other non-Federal 
     sources. Under such fee system, the Secretary may assess an 
     annual fee on holders of fishing permits in the fishery for 
     which the buy-out program is established which may not exceed 
     5 percent annually of the value of the fish harvested under 
     the fishing permit. Assessments may not be used to pay any 
     costs of administrative overhead or other costs not directly 
     incurred in carrying out the specific buy-out program under 
     which they are collected. Assessments shall be deposited in 
     the Ocean Conservation Trust fund established under 
     subsection (d) and shall be considered part of the non-
     Federal share of the cost of a buyout program.
       ``(5)(A) Upon completion of a proposal for a buy-out 
     program (including any fee system to be established under 
     this subsection), the Secretary shall immediately--
       ``(i) submit the proposed program and regulations necessary 
     for its implementation to the appropriate Council for 
     consideration and comment; and
       ``(ii) publish in the Federal Register a notice stating 
     that the proposed program and regulations are available and 
     that written data, views, or comments of interested persons 
     on the proposed program and regulations may be submitted to 
     the Secretary during the 60-day period beginning on the date 
     the notice is published.
       ``(B) During the 60-day public comment period--
       ``(i) the Secretary shall conduct a public hearing in each 
     State affected by the proposed buy-out program; and
       ``(ii) the appropriate Council shall submit its comments 
     and recommendations, if any, regarding the proposed program 
     and regulations.
       ``(C) Within 45 days after the close of the public comment 
     period, the Secretary, in consultation with the affected 
     Council, shall analyze the public comment received and 
     publish a final buy-out program and regulations for its 
     implementation. The Secretary shall include an explanation of 
     any substantive differences between the proposed and final 
     program and regulations.
       ``(c) Task Force.--The Secretary shall establish a task 
     force to assist in the development of a sustainable 
     development strategy or a buy-out program under this section. 
     Such task force shall, at a minimum, consist of members of 
     the affected communities and individuals with expertise in 
     fishery management and conservation, economics, and 
     sociology. Members of the task force are authorized to 
     receive per diem and travel expenses consistent with section 
     302 of this Act.
       ``(d) Ocean Conservation Trust Fund.--There is established 
     in the Treasury an Ocean Conservation Trust Fund. The Fund 
     shall be available, without appropriation or fiscal year 
     limitation, only to the Secretary for the purpose of carrying 
     out the provisions of this section subject to the 
     restrictions of this Act. This fund shall consist of all 
     monies deposited into it in accordance with this section and 
     section 308(h). Sums in the Fund that are not currently 
     needed for the purpose of this section shall be kept on 
     deposit or invested in obligations of, or guaranteed by, the 
     United States.

     ``SEC. 316. FISHERIES DISASTER RELIEF.

       ``(a) Determination of Failure.--At the discretion of the 
     Secretary or at the request of the Governor of an affected 
     State or a fishery dependent community, the Secretary shall 
     determine whether there is a commercial fishery failure due 
     to a fishery resource disaster as a result of--
       ``(1) natural causes;
       ``(2) man-made causes beyond the control of fishery 
     managers to mitigate through conservation and management 
     measures; or
       ``(3) undetermined causes.
       ``(b) Economic Assistance.--
       ``(1) Upon the determination under subsection (a) that 
     there is a commercial fishery failure, the Secretary is 
     authorized to make sums available to be used by the affected 
     State, fishery dependent community, or by the Secretary in 
     cooperation with the affected State or fishery dependent 
     community for--
       ``(A) assessing the economic and social effects of the 
     commercial fishery failure; and
       ``(B) any activity that the Secretary determines is 
     appropriate to restore the fishery or prevent a similar 
     failure in the future and to assist a fishery dependent 
     community affected by such failure.
       ``(2) Before making funds available for an activity 
     authorized under this section, the Secretary shall make a 
     determination that such activity will not expand the size or 
     scope of the commercial fishery failure into other fisheries 
     or other geographic regions.
       ``(c) Federal Cost-sharing.--The Federal share of the cost 
     of any activity carried out under the authority of this 
     section shall not exceed 75 percent of the cost of that 
     activity.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary such sums as 
     are necessary for each of the fiscal years 1995, 1996, 1997, 
     1998 and 1999, provided that such sums are designated by 
     Congress as an emergency requirement pursuant to section 
     251(b)(2)(D)(i) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985.''.
       (b)Section 2(b)(1)(A) of the Act of August 11, 1939 (15 
     U.S.C. 713c-3(b)(1)(A)) is amended--
       (1) by striking ``and'' at the end of clause (ii); and
      [[Page S245]]   (2) by adding at the end the following new 
     clause:
       ``(iii) to fund the Federal share of a buy-out program 
     established under section 315(b) of the Magnuson Fishery 
     Conservation and Management Act.''.
               TITLE II--FISHERY MONITORING AND RESEARCH

     SEC. 201. CHANGE OF TITLE.

       The heading of title IV (16 U.S.C. 1881 et seq.) is amended 
     to read as follows:
             ``TITLE IV--FISHERY MONITORING AND RESEARCH''.

     SEC. 202. REGISTRATION AND DATA MANAGEMENT.

       Title IV (16 U.S.C. 1881 et seq.) is amended by inserting 
     after the title heading the following:

     ``SEC. 401. REGISTRATION AND DATA MANAGEMENT.

       ``(a) Standardized Fishing Vessel Registration and Data 
     Management System.--The Secretary shall, in cooperation with 
     the Secretary of the department in which the Coast Guard is 
     operating, the States, the Councils, and Marine Fisheries 
     Commissions, develop recommendations for implementation of a 
     standardized fishing vessel registration and data management 
     system on a regional basis. The proposed system shall be 
     developed after consultation with interested governmental and 
     nongovernmental parties and shall--
       ``(1) be designed to standardize the requirements of vessel 
     registration and data collection systems required by this 
     Act, the Marine Mammal Protection Act (16 U.S.C. 1361 et 
     seq.), and any other marine resource law implemented by the 
     Secretary;
       ``(2) integrate programs under existing fishery management 
     plans into a nonduplicative data collection and management 
     system;
       ``(3) avoid duplication of existing state, tribal, or 
     federal systems (other than a federal system under paragraph 
     (1)) and utilize, to the maximum extent practicable, 
     information collected from existing systems;
       ``(4) provide for implementation through cooperative 
     agreements with appropriate State, regional, or tribal 
     entities and Marine Fisheries Commissions;
       ``(5) establish standardized units of measurement, 
     nomenclature, and formats for the collection and submission 
     of information;
       ``(6) minimize the paperwork required for vessels 
     registered under the system;
       ``(7) include all species of fish within the geographic 
     areas of authority of the Councils and all fishing vessels, 
     except for private recreational fishing vessels used 
     exclusively for pleasure; and
       ``(8) prescribe procedures necessary to ensure the 
     confidentiality of information collected under this section.
       ``(b) Fishing Vessel Information.--The registration and 
     data management system should, at a minimum, obtain the 
     following information for each fishing vessel--
       ``(1) the name and official number or other identification, 
     together with the name and address of the owner or operator 
     or both;
       ``(2) vessel capacity, type and quantity of fishing gear, 
     mode of operation (catcher, catcher processor or other), and 
     such other pertinent information with respect to vessel 
     characteristics as the Secretary may require;
       ``(3) identification of the fisheries in which the fishing 
     vessel participates;
       ``(4) estimated amounts of fish caught, and processed (if 
     applicable) in each fishery; and
       ``(5) the geographic area of operations and the season or 
     period during which the fishing vessel operates.
       ``(c) Fishery Information.--The registration and data 
     management system should, at a minimum, provide basic 
     fisheries performance data for each fishery, including--
       ``(1) the number of vessels participating in the fishery;
       ``(2) the time period in which the fishery occurs;
       ``(3) the approximate geographic location, or official 
     reporting area where the fishery occurs;
       ``(4) a description of fishery gear used in the fishery, 
     including the amount of such gear and the appropriate unit of 
     fishery effort;
       ``(5) catch and ex-vessel value of the catch for each stock 
     of fish in the fishery; and
       ``(6) the amount and types of economic and regulatory 
     discards, and an estimate of any other bycatch.
       ``(d) Public Comment.--Within one year after the date of 
     enactment of the Sustainable Fisheries Act, the Secretary 
     shall publish in the Federal Register for a 60-day public 
     comment period, a proposal that would provide for 
     implementation of a standardized fishing vessel registration 
     and data collection system that meets the requirements of 
     subsections (a) through (c). The proposal shall include--
       ``(1) a description of the arrangements for consultation 
     and cooperation with the department in which the Coast Guard 
     is operating, the States, the Councils, Marine Fisheries 
     Commissions, the fishing industry and other interested 
     parties; and
       ``(2) proposed regulations and legislation necessary to 
     implement the proposal.
       ``(e) Congressional Transmittal.--Within 60 days after the 
     end of the comment period and after consideration of comments 
     received under subsection (d), the Secretary shall transmit 
     to the Committee on Commerce, Science, and Transportation of 
     the Senate and the Committee on Resources of the House of 
     Representatives a proposal for implementation of a national 
     fishing vessel registration system that includes--
       ``(1) any modifications made after comment and 
     consultation;
       ``(2) a proposed implementation schedule; and
       ``(3) recommendations for any such additional legislation 
     as the Secretary considers necessary or desirable to 
     implement the proposed system.
       ``(f) Report to Congress.--Within 15 months after the date 
     of enactment of the Sustainable Fisheries Act, the Secretary 
     shall report to Congress on the need to include private 
     recreational fishing vessels used exclusively for pleasure 
     into a national fishing vessel registration and data 
     collection system. In preparing its report, the Secretary 
     shall cooperate with the Secretary of the department in which 
     the Coast Guard is operating, the States, the Councils, and 
     Marine Fisheries Commissions, and consult with governmental 
     and nongovernmental parties.''.

     SEC. 203. DATA COLLECTION.

       Section 402 is amended to read as follows:

     ``SEC. 402. DATA COLLECTION.

       ``(a) Council Requests.--If a Council determines that 
     additional information and data (other than information and 
     data that would disclose proprietary or confidential 
     commercial or financial information regarding fishing 
     operations or fish processing operations) would be beneficial 
     for developing, implementing, or revising a fishery 
     management plan or for determining whether a fishery is in 
     need of management, the Council may request that the 
     Secretary implement a data collection program for the fishery 
     which would provide the types of information and data (other 
     than information and data that would disclose proprietary or 
     confidential commercial or financial information regarding 
     fishing operations or fish processing operations) specified 
     by the Council. The Secretary shall approve such a data 
     collection program if he determines that the need is 
     justified, and shall promulgate regulations to implement the 
     program within 60 days after such determination is made. If 
     the Secretary determines that the need for a data collection 
     program is not justified, the Secretary shall inform the 
     Council of the reasons for such determination in writing. The 
     determinations of the Secretary under this subsection 
     regarding a Council request shall be made within a reasonable 
     period of time after receipt of that request.
       ``(b) Confidentiality of Information.--Any information 
     submitted to the Secretary by any person in compliance with 
     any requirement under this Act shall be confidential and 
     shall not be disclosed if disclosure would significantly 
     impair the commercial interests of the person from whom the 
     information was obtained, except--
       ``(1) to Federal employees and Council employees who are 
     responsible for fishery management plan development and 
     monitoring;
       ``(2) to State or Marine Fisheries Commission employees 
     pursuant to an agreement with the Secretary that prevents 
     public disclosure of the identity or business of any person;
       ``(3) when required by court order;
       ``(4) when such information is used to verify catch under 
     an individual transferable quota system; or
       ``(5) unless the Secretary has obtained written 
     authorization from the person submitting such information to 
     release such information and such release does not violate 
     other requirements of this subsection.

     The Secretary shall, by regulation, prescribe such procedures 
     as may be necessary to preserve such confidentiality, except 
     that the Secretary may release or make public any such 
     information in any aggregate or summary form which does not 
     directly or indirectly disclose the identity or business of 
     any person who submits such information. Nothing in this 
     subsection shall be interpreted or construed to prevent the 
     use for conservation and management purposes by the 
     Secretary, or with the approval of the Secretary, the 
     Council, of any information submitted in compliance with 
     regulations promulgated under this Act.
       ``(c) Restriction on Use of Certain Data.--
       ``(1) The Secretary shall promulgate regulations to 
     restrict the use, in civil enforcement or criminal 
     proceedings under this Act, the Marine Mammal Protection Act 
     of 1972 (16 U.S.C. 1361 et seq.), or the Endangered Species 
     Act (16 U.S.C. 1531 et seq.), of information collected by 
     voluntary fishery data collectors, including sea samplers, 
     while aboard any vessel for conservation and management 
     purposes if the presence of such a fishery data collector 
     aboard is not required by any of such Acts or regulations 
     thereunder.
       ``(2) The Secretary may not require the submission of a 
     Federal or State income tax return or statement as a 
     prerequisite for issuance of a Federal fishing permit until 
     such time as the Secretary has promulgated regulations to 
     ensure the confidentiality of information contained in such 
     return or statement, to limit the information submitted to 
     that necessary to achieve a demonstrated conservation and 
     management purpose, and to provide appropriate penalties for 
     violation of such regulations.''.

     SEC. 204. OBSERVERS.

       Title IV of the Act (16 U.S.C. 1882) is amended by adding 
     the following new section 403:
     [[Page S246]] ``SEC. 403. OBSERVERS.

       ``(a) Guidelines for Carrying Observers.--Within one year 
     of the date of enactment of the Sustainable Fisheries Act, 
     the Secretary shall promulgate regulations, after notice and 
     public comment, for fishing vessels that are required to 
     carry observers. The regulations shall include guidelines for 
     determining--
       ``(1) when a vessel is not required to carry an observer on 
     board because the facilities of such vessel for the 
     quartering of an observer, or for carrying out observer 
     functions, are so inadequate or unsafe that the health or 
     safety of the observer or the safe operation of the vessel 
     would be jeopardized; and
       ``(2) actions which vessel owners or operators may 
     reasonably be asked to take to render such facilities 
     adequate and safe.
       ``(b) Training.--The Secretary, in cooperation with State 
     programs and the National Sea Grant College Program, shall--
       ``(1) establish programs to ensure that each observer 
     receives adequate training in collecting and analyzing data 
     necessary for the conservation and management purposes of the 
     fishery to which such observer is assigned; and
       ``(2) require that an observer demonstrate competence in 
     fisheries science and statistical analysis at a level 
     sufficient to enable such person to fulfill the 
     responsibilities of the position.
       ``(c) Wages as Maritime Liens.--Claims for observers' wages 
     shall be considered maritime liens against the vessel and be 
     accorded the same priority as seamen's liens under admiralty 
     and general maritime law.''.

     SEC. 205. FISHERIES RESEARCH.

       Section 404 is amended to read as follows:

     ``SEC. 404. FISHERIES RESEARCH.

       ``(a) In General.--The Secretary shall initiate and 
     maintain, in cooperation with the Councils, a comprehensive 
     program of fishery research to carry out and further the 
     purposes, policy, and provisions of this Act. Such program 
     shall be designed to acquire knowledge and information, 
     including statistics, on fishery conservation and management 
     and on the economics of the fisheries.
       ``(b) Strategic Plan.--Within one year after the date of 
     enactment of the Sustainable Fisheries Act, and at least 
     every 3 years thereafter, the Secretary shall develop and 
     publish in the Federal Register a strategic plan for 
     fisheries research for the five years immediately following 
     such publication. The plan shall--
       ``(1) identify and describe a comprehensive program with a 
     limited number of priority objectives for research in each of 
     the areas specified in subsection (c);
       ``(2) indicate the goals and timetables for the program 
     described in paragraph (1); and
       ``(3) provide a role for commercial fishermen in such 
     research, including involvement in field testing.
       ``(c) Areas of Research.--The areas of research referred to 
     in subsection (a) are as follows:
       ``(1) Research to support fishery conservation and 
     management, including but not limited to, research on the 
     economics of fisheries and biological research concerning the 
     abundance and life history parameters of stocks of fish, the 
     interdependence of fisheries or stocks of fish, the 
     identification of essential fish habitat, the impact of 
     pollution on fish populations, the impact of wetland and 
     estuarine degradation, and other matters bearing upon the 
     abundance and availability of fish.
       ``(2) Conservation engineering research, including the 
     study of fish behavior and the development and testing of new 
     gear technology and fishing techniques to minimize bycatch 
     and any adverse effects on essential fish habitat and promote 
     efficient harvest of target species.
       ``(3) Information management research, including the 
     development of a fishery information base and an information 
     management system that will permit the full use of data in 
     the support of effective fishery conservation and management.
       ``(d) Public Notice.--In developing the plan required under 
     subsection (a), the Secretary shall consult with relevant 
     Federal, State, and international agencies, scientific and 
     technical experts, and other interested persons, public and 
     private, and shall publish a proposed plan in the Federal 
     Register for the purpose of receiving public comment on the 
     plan. The Secretary shall ensure that affected commercial 
     fishermen are actively involved in the development of the 
     portion of the plan pertaining to conservation engineering 
     research. Upon final publication in the Federal Register, the 
     plan shall be submitted by the Secretary to the Committee on 
     Commerce, Science, and Transportation of the Senate and the 
     Committee on Resources of the House of Representatives.''.

     SEC. 206. INCIDENTAL HARVEST RESEARCH.

       Section 405 is amended to read as follows:

     ``SEC. 405. INCIDENTAL HARVEST RESEARCH.

       ``(a) Collection of Data.--Within 9 months after the date 
     of enactment of the Sustainable Fisheries Act, the Secretary 
     shall, after consultation with the Gulf of Mexico Fishery 
     Management Council and South Atlantic Fishery Management 
     Council, conclude the collection of data in the program to 
     assess the impact on fishery resources of incidental harvest 
     by the shrimp trawl fishery within the authority of such 
     Councils. Within the same time period, the Secretary shall 
     make available to the public aggregated summaries of data 
     collected prior to June 30, 1994 under such program.
       ``(b) Identification of Stock.--The program concluded 
     pursuant to subsection (a) shall provide for the 
     identification of stocks of fish which are subject to 
     significant incidental harvest in the course of normal shrimp 
     trawl fishing activity.
       ``(c) Collection and Assessment of Specific Stock Data.--
     For stocks of fish identified pursuant to subsection (b), 
     with priority given to stocks which (based upon the best 
     available scientific information) are considered to be 
     overfished, the Secretary shall conduct--
       ``(1) a program to collect and evaluate data on the nature 
     and extent (including the spatial and temporal distribution) 
     of incidental mortality of such stocks as a direct result of 
     shrimp trawl fishing activities;
       ``(2) an assessment of the status and condition of such 
     stocks, including collection of information which would allow 
     the estimation of life history parameters with sufficient 
     accuracy and precision to support sound scientific evaluation 
     of the effects of various management alternatives on the 
     status of such stocks; and
       ``(3) a program of data collection and evaluation for such 
     stocks on the magnitude and distribution of fishing mortality 
     and fishing effort by sources of fishing mortality other than 
     shrimp trawl fishing activity.
       ``(d) Incidental Mortality Reduction Program.--The 
     Secretary shall, in cooperation with affected interests, 
     commence a program to design and evaluate the efficacy of 
     technological devices and other changes in fishing technology 
     for the reduction of incidental mortality of nontarget 
     fishery resources in the course of shrimp trawl fishing 
     activity which are designed to be inexpensive to operate and 
     which cause insignificant loss of shrimp. Such program shall 
     take into account local conditions and include evaluation of 
     any reduction in incidental mortality, as well as any 
     reduction or increase in the retention of shrimp in the 
     course of normal fishing activity.
       ``(e) Report to the Congress.--The Secretary shall, within 
     one year of completing the programs required by this 
     subsection, submit a detailed report on the results of such 
     programs to the Committee on Commerce, Science, and 
     Transportation of the Senate and the Committee on Resources 
     of the House of Representatives.
       ``(f) Implementation Criteria.--Any measure implemented 
     under this Act to reduce the incidental mortality of 
     nontarget fishery resources in the course of shrimp trawl 
     fishing shall, to the extent practicable,--
       ``(1) apply to such fishing throughout the range of the 
     nontarget fishery resource concerned; and
       ``(2) be implemented first in those areas and at those 
     times where the greatest reduction of such incidental 
     mortality can be achieved.''.

     SEC. 207. REPEAL.

       Section 406 (16 U.S.C. 1882) is repealed.

     SEC. 208. CLERICAL AMENDMENTS.

       The table of contents is amended by striking the matter 
     relating to title IV and inserting the following:

``Sec. 315. Transition to sustainable fisheries.
``Sec. 316. Fisheries disaster relief.
``TITLE IV--FISHERY MONITORING AND RESEARCH
``Sec. 401. Registration.
``Sec. 402. Data collection.
``Sec. 403. Observers.
``Sec. 404. Fisheries research.
``Sec. 405. Incidental harvest research.''.
             TITLE III--FISHERIES STOCK RECOVERY FINANCING

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Fisheries Stock Recovery 
     Financing Act''.

     SEC. 302. FISHERIES STOCK RECOVERY REFINANCING.

       Title XI of the Merchant Marine Act, 1936 (46 U.S.C. 1271 
     et seq.), is amended by adding at the end the following new 
     section:
       ``Sec. 1111. (a) Pursuant to the authority granted under 
     section 1103(a) of this title, the Secretary shall, under 
     such terms and conditions as the Secretary shall prescribe by 
     regulation, guarantee and make commitments to guarantee the 
     principal of, and interest on, obligations which aid in 
     refinancing, in a manner consistent with the reduced cash 
     flows available to obligors because of reduced harvesting 
     allocations during implementation of a fishery recovery 
     effort, existing obligations relating to fishing vessels or 
     fishery facilities. Guarantees under this section shall be 
     subject to all other provisions of this title not 
     inconsistent with the provisions of this section. The 
     provisions of this section shall, notwithstanding any other 
     provisions of this title, apply to guarantees under this 
     section.
       ``(b) Obligations eligible to be refinanced under this 
     section shall include all obligations which financed or 
     refinanced any expenditures associated with the ownership or 
     operation of fishing vessels or fishery facilities, including 
     but not limited to expenditures for reconstructing, 
     reconditioning, purchasing, equipping, maintaining, 
     repairing, supplying, or any other aspect whatsoever of 
     operating fishing vessels or fishery facilities, excluding 
     only such obligations--
       ``(1) which were not in existence prior to the time the 
     Secretary approved a fishery recovery effort eligible for 
     guarantees under this section and whose purpose, in whole or 
     in part, involved expenditures which resulted in increased 
     vessel harvesting capacity; and
       ``(2) as may be owed by an obligor either to any 
     stockholder, partner, guarantor, or 
     [[Page S247]] other principal of such obligor or to any 
     unrelated party if the purpose of such obligation had been to 
     pay an obligor's preexisting obligation to such stockholder, 
     partner, guarantor, or other principal of such obligor.
       ``(c) The Secretary shall refinance up to 100 percent of 
     the principal of, and interest on, such obligations, but, in 
     no event, shall the Secretary refinance an amount exceeding 
     75 percent of the unencumbered (after deducting the amount to 
     be refinanced by guaranteed obligations under this section) 
     market value, as determined by an independent marine 
     surveyor, of the fishing vessel or fishery facility to which 
     such obligations relate plus 75 percent of the unencumbered 
     (including but not limited to homestead exemptions) market 
     value, as determined by an independent marine surveyor, of 
     all other supplementary collateral. The Secretary shall do so 
     regardless of--
       ``(1) any fishing vessel or fishery facility's actual cost 
     or depreciated actual cost; and
       ``(2) any limitations elsewhere in this title on the amount 
     of obligations to be guaranteed or such amount's relationship 
     to actual cost or depreciated actual cost.
       ``(d) Obligations guaranteed under this section shall have 
     such maturity dates and other provisions as are consistent 
     with the intent and purpose of this section (including but 
     not limited to provisions for obligors to pay only the 
     interest accruing on the principal of such obligations during 
     the period in which fisheries stocks are recovering, with the 
     principal and interest accruing thereon being fully amortized 
     between the date stock recovery is projected to be completed 
     and the maturity date of such obligations).
       ``(e) No provision of section 1104A(d) of this title shall 
     apply to obligations guaranteed under this section.
       ``(f) The Secretary shall neither make commitments to 
     guarantee nor guarantee obligations under this section 
     unless--
       ``(1) the Secretary has first approved the fishery recovery 
     effort, for the fishery in which vessels eligible for the 
     guarantee of obligations under this section are participants; 
     and
       ``(2) the Secretary has considered such factors as--
       ``(A) the projected degree and duration of reduced 
     fisheries allocations;
       ``(B) the projected reduction in fishing vessel and fishery 
     facility cash flows;
       ``(C) the projected severity of the impact on fishing 
     vessels and fishery facilities;
       ``(D) the projected effect of the fishery recovery effort;
       ``(E) the provisions of any related fishery management plan 
     under the Magnuson Fishery Conservation and Management Act 
     (16 U.S.C. 1801 et seq.); and
       ``(F) the need for and advisability of guarantees under 
     this section;
       ``(3) the Secretary finds that the obligation to be 
     guaranteed will, considering the projected effect of the 
     fishery recovery effort involved and all other aspects of the 
     obligor, project, property, collateral, and any other aspects 
     whatsoever of the obligation involved, constitute, in the 
     Secretary's opinion, a reasonable prospect of full repayment; 
     and
       ``(4) the obligors agree to provide such security and meet 
     such other terms and conditions as the Secretary may, 
     pursuant to regulations prescribed under this section, 
     require to protect the interest of the United States and 
     carry out the purpose of this section.
       ``(g) All obligations guaranteed under this section shall 
     be accounted for separately, in a subaccount of the Federal 
     Ship Financing Fund to be known as the Fishery Recovery 
     Refinancing Account, from all other obligations guaranteed 
     under the other provisions of this title and the assets and 
     liabilities of the Federal Ship Financing Fund and the 
     Fishery Recovery Refinancing Account shall be segregated 
     accordingly.
       ``(h) For the purposes of this section, the term `fishery 
     recovery effort' means a fishery management plan, amendment, 
     or regulations required under section 305(b) of the Magnuson 
     Fishery Conservation and Management Act (16 U.S.C. 1854(b)) 
     to rebuild a fishery which the Secretary has determined to be 
     a commercial fishery failure under section 316 of such 
     Act.''.

     SEC. 303. FEDERAL FINANCING BANK RELATING TO FISHING VESSELS 
                   AND FISHERY FACILITIES.

       Section 1104A(b)(2) of the Merchant Marine Act, 1936 (46 
     U.S.C. 1274(b)(2)), is amended by striking ``Provided, 
     further, That in the case of a fishing vessel or fishery 
     facility, the obligation shall be in an aggregate principal 
     amount equal to 80 percent of the actual cost or depreciated 
     actual cost of the fishing vessel or fishery facility, except 
     that no debt may be placed under this proviso through the 
     Federal Financing Bank:'' and inserting the following: 
     ``Provided, further, That in the case of a fishing vessel or 
     fishery facility, the obligation shall be in an aggregate 
     principal amount not to exceed 80 percent of the actual cost 
     or depreciated actual cost of the fishing vessel or fishery 
     facility, and obligations related to fishing vessels and 
     fishery facilities under this title shall be placed through 
     the Federal Financing Bank unless placement through the 
     Federal Financing Bank is not reasonably available or 
     placement elsewhere is available at a lower annual effective 
     yield than placement through the Federal Financing Bank:''.

     SEC. 304. FEES FOR GUARANTEEING OBLIGATIONS.

       Section 1104A(e) of the Merchant Marine Act, 1936 (46 
     U.S.C. 1274(e)), is amended to read as follows:
       ``(e)(1) The Secretary is authorized to fix a fee for the 
     guarantee of obligations under this title. Obligors shall pay 
     all such fees to the Secretary when moneys are first advanced 
     under guaranteed obligations and at least 60 days prior to 
     each anniversary date thereafter. All such fees shall be 
     computed and shall be payable to the Secretary under such 
     regulations as the Secretary may prescribe.
       ``(2) For fishing vessels and fishery facilities, such fee 
     shall--
       ``(A) if the obligation will not be purchased by the 
     Federal Financing Bank, be in an amount equal to 1 percent 
     per year of the average principal amount of the obligation 
     outstanding (unless such obligation is issued under section 
     1111 of this title, in which case such fee shall be 1 and 
     one-half percent per year of such average principal amount; 
     and
       ``(B) if the obligation will be purchased by the Federal 
     Financing Bank, be in an amount equal to 2 percent per year 
     of the average principal amount of the obligation outstanding 
     (unless such obligation is issued under section 1111 of this 
     title, in which case such fee shall be 2 and one-half percent 
     per year of such average principal amount), less any fee the 
     Federal Financing Bank customarily charges for its services 
     with respect to federally guaranteed obligations purchased by 
     it and less the amount, if any, by which the interest rate on 
     such obligation (which shall be fixed at the time the Federal 
     Financing Bank commits to purchase such obligation) exceeds 
     the current new issue rate on outstanding marketable 
     obligations of the United States of comparable maturity.
       ``(3) For everything other than fishing vessels and fishery 
     facilities, such fee shall--
       ``(A) if the security for the guarantee of an obligation 
     under this title relates to a delivered vessel, not be less 
     than one-half of 1 percent per year nor more than 1 percent 
     per year of the average principal amount of such obligation 
     outstanding, excluding the average amount (except interest) 
     on deposit in an escrow fund created under section 1108 of 
     this title; and
       ``(B) if the security for the guarantee of an obligation 
     under this title relates to a vessel to be constructed, 
     reconstructed, or reconditioned, not be less than one-quarter 
     of 1 percent per year nor more than one-half of 1 percent per 
     year of the average principal amount of such obligation 
     outstanding, excluding the average amount (except interest) 
     on deposit in an escrow fund created under section 1108 of 
     this title. For the purposes of this subsection, if the 
     security for the guarantee of an obligation under this title 
     relates both to a delivered vessel or vessels and to a vessel 
     or vessels to be constructed, reconstructed, or 
     reconditioned, the principal amount of such obligation shall 
     be prorated in accordance with regulations prescribed by the 
     Secretary. The regulations to be prescribed by the Secretary 
     under this subsection shall provide a formula for determining 
     the creditworthiness of obligors under which the most 
     creditworthy obligors pay a fee computed on the lowest 
     allowable percentage and the least creditworthy obligors pay 
     a fee which may be computed on the highest allowable 
     percentage (the range of creditworthiness to be based on 
     obligors which have actually issued guaranteed 
     obligations).''.

     SEC. 305. SALE OF ACQUIRED COLLATERAL.

       Section 1104A(a)(3) of the Merchant Marine Act, 1936 (46 
     U.S.C. 1274(a)(3)), is amended by inserting after 
     ``financing'' the following: ``(without requiring subsidy 
     cost ceiling or other authorization under the Federal Credit 
     Reform Act of 1990)''.
  Mr. KERRY. Mr. President, on March 1, 1977, the Fishery Conservation 
and Management Act was signed into law in response to an urgent threat 
to the valuable living marine resources of our coastal waters. At that 
time, the threat to our domestic fisheries came in the form of an 
efficient and aggressive state-of-the-art foreign fishing fleet that 
was operating within sight of our shores and displacing our domestic 
fishermen and processors. In response, Congress, led by Senator Warren 
Magnuson, passed the Fishery Conservation and Management Act 
establishing a 200-mile fishery conservation zone and asserting United 
States management authority over fish within the conservation zone, as 
well as over anadromous species such as salmon throughout their 
migratory range. In honor of Senator Magnuson's leadership, in 1980, 
the act was officially retitled the Magnuson Fishery Conservation and 
Management Act.
  The Magnuson Act succeeded--it limited the operation of foreign 
fishing vessels and processors and encouraged the development of the 
U.S. domestic fishing fleet and processing industry. In 1993, U.S. 
commercial fishermen landed over 10 billion pounds of fish, producing 
$3.4 billion in dockside revenues. By weight of catch, the United 
States is now the world's sixth largest fishing nation. The United 
States is also the top seafood exporter, with exports valued at $3.1 
billion in 1993.
  [[Page S248]] However, we have succeeded too well in some ways, and 
today there is another threat to our coastal fisheries. The threat is 
not from abroad but from ourselves. Since the implementation of the 
Magnuson Act, the number of commercial groundfish vessels in New 
England has increased by 70 percent, and the number of fishermen has 
risen by 130 percent. Although fish and shellfish are renewable 
resources, they are not unlimited. In several U.S. fisheries, a pattern 
has been repeated: Fishermen, lured by the promise of large and 
lucrative harvests, enter a fishery when fish populations are abundant. 
As the fishery develops, larger boats often replace smaller boats, the 
number of boats increases, and new technologies are continually 
introduced to improve each vessel's fishing power and efficiency. In 
several U.S. fisheries, these trends have been bolstered by government 
policies, including tax incentives and Federal loan guarantees, 
designed to stimulate development of the domestic fishing industry. The 
result is that the harvesting capacity in many fisheries has out-paced 
the capacity of the fisheries to renew themselves. U.S. fisheries also 
have suffered from destruction of essential habitat, destructive 
fishing practices, and water pollution.
  The key to the success of the Magnuson Act is the ability of the 
eight regional fisheries management councils established under the act 
to work with the National Marine Fisheries Service to manage the 
fisheries on a regional level while meeting the national standards set 
forth in the act. The councils have made a substantial effort to manage 
the Nation's fisheries--as of September 1, 1993, 33 fishery management 
plans are in effect with several others in development. However, their 
success in managing the nation's fisheries has been mixed. Critics 
charge that since the enactment of the Magnuson Act, the councils have 
sometimes reacted to developments in fisheries rather than anticipating 
problems--even when looming problems are apparent. In addition, the 
complexity of the process has impeded the council response, often 
exacerbating the problem. In many instances, minor management actions 
could have been taken sooner to avoid the need for more dramatic 
measures later. In some regions, including parts of the Northwest, the 
council members are no longer perceived as stewards of the public 
resource, providing fair and balanced representation, but are seen as 
protectors of special economic interests. The Magnuson Act requires 
that council members be knowledgeable or experienced with regard to the 
conservation and management, or the recreational or commercial harvest, 
of the fishery resources within their respective geographic areas of 
responsibility. However, this requirement has created situations in 
which a council member may have personal or financial interests in a 
fishery he or she is responsible for managing.
  In fact, despite the work of the councils, problems continue to exist 
in varying degrees in many regions. These include: continued 
overfishing; lack of coordination between councils and the Federal 
Government; lack of accountability; inconsistency in State and Federal 
management measures; and adoption of unenforceable management measures.
  Perhaps the most visible example of the problems in fisheries 
management is one with which I unfortunately am too familiar--the 
collapse of the traditional New England groundfish stocks of cod, 
haddock, and yellowtail flounder. In 1990, the commercial fishing 
industry in Massachusetts was a $300 million industry. By 1993, 
revenues had dropped to almost $232 million, and their year revenues 
are certain to be much lower.
  In 1993, the decline of these valuable fish stocks necessitated a 
substantial amendment to the fisheries management plan for these stocks 
in an effort to eliminate overfishing by cutting in half fishing 
mortality over the next 5 to 7 years. The initiation of regulations 
necessary to rebuild the fishery has already had significant economic 
impact on the coastal communities throughout New England. However, even 
before those programs could be fully implemented, scientific 
information from the National Marine Fisheries Service indicated that 
the situation was worse than predicted, and as a result the New England 
Fisheries Management Council voted to recommend that the Secretary of 
Commerce take emergency action to address the crisis in New England
 while it develops a plan amendment under normal procedures. In 
December, the Secretary took emergency action to close portions of U.S. 
waters of the Georges Bank and southern New England to commercial 
fishing in an effort to save the traditional groundfish stocks from 
commercial extinction. These emergency measures are the latest blows to 
the New England fishing industry that is already staggering from the 
dire situation which they face. Further fishing restrictions are likely 
to have disastrous economic and social impacts on the historic fishing 
communities of the Northeast. These problems must be addressed and 
reversed for the sake of the fishermen and the fish in New England and 
throughout the Nation.

  Over the last 2 years, the Commerce Committee has conducted a series 
of hearings here in Washington and in fishing communities around the 
U.S. coast. We have reviewed comments from members of the fishing 
industry, the administration, conservation groups and other public 
interest groups. This has been a bipartisan effort. I have worked 
closely with the senior Senator from Alaska. We and our colleagues 
share the desire to ensure plentiful yields of fish for years to come. 
The bill that I am introducing today is an effort to address the 
existing problems of the fisheries management process.
  I recognize that this bill is ambitious in scope. However, the 
fisheries of the United States are at a crossroads and significant 
action is required to remedy our fisheries management problems and 
preserve the way of life of our fishing communities. Fish on the dinner 
table is something that many Americans may have taken for granted in 
the past; but unless we take steps to ensure that these vital resources 
are conserved, they will not be there for future generations. I hope my 
colleagues will join me in committing themselves to passing legislation 
as soon as possible to ensure that the fisheries of the United States 
once again will be bountiful and sustainable. I look forward to working 
with the new chairman of the Commerce Committee, Senator Pressler, and 
his staff and of course, the former chairman and new ranking Democratic 
member, Senator Hollings and his staff, toward this end. I want to 
thank Senator Hollings, Senator Stevens and his staff, and the staff of 
the majority and the minority, for their assistance in preparing this 
bipartisan bill for introduction today.
  I ask unanimous consent that a summary of the bill's principal 
provisions, and the bill itself, appear in the Record following my 
remarks.

     Summary of Major Provisions--Sustainable Fisheries Act of 1995

       The Sustainable Fisheries Act amends the Magnuson Fishery 
     Conservation and Management Act to extend the authorization 
     of appropriations through 1999, strengthen conservation 
     efforts and rebuild depleted fisheries. Major provisions 
     include the following:


                         FISHERIES CONSERVATION

       Preventing overfishing and rebuilding depleted fisheries. 
     The bill would require the Councils to define overfishing in 
     each fishery management plan. It also calls for an annual 
     report by the Secretary of Commerce (Secretary) on the status 
     of fisheries under each Council and identification of 
     fisheries that are overfished or approaching an overfished 
     condition. A Council would have one year to come up with a 
     plan to stop overfishing and rebuild the fishery, and the 
     Secretary would be required to step in if the Council fails 
     to act. While a plan is under development, interim measures 
     to reduce overfishing could be implemented as emergency 
     measures. To deal with the socioeconomic issues associated 
     with rebuilding the fishery, the Secretary would work with 
     the states and local communities to develop a sustainable 
     development strategy.
       Habitat protection. The Secretary would be required to 
     identify essential habitat for all fisheries under 
     management, based on information provided by the Councils. 
     The bill also would expand the existing authority of the 
     Councils and the Secretary to comment and make 
     recommendations to Federal agencies concerning actions that 
     would affect essential fish habitat. In addition, the 
     Secretary and the Councils would develop and publish a list 
     of fisheries and approved gear for each fishery. Ninety days 
     prior to using a new gear type or expanding into a new 
     fishery, a fisherman would be required to provide a Council 
     with notice and the opportunity to take emergency action to 
     restrict such gear or fishery.
       Bycatch and waste reduction. The bill defines categories of 
     bycatch and requires any 
     [[Page S249]] fishery management plan developed by a Council 
     or the Secretary to (1) assess the level of bycatch 
     concurring in each fishery, including the effect of a fishery 
     on other stocks of fish in the ecosystem; and (2) minimize, 
     to the extent practicable, mortality caused by waste and 
     discards of unusable fish. In addition, the bill would 
     encourage plans to provide incentives for fishing vessels 
     within each gear group to reduce bycatch. Finally, provisions 
     are included to establish specific timetables for reducing 
     waste and promoting full utilization in the North Pacific 
     fisheries.


                           MANAGEMENT PROCESS

       Streamlining the approval process for plans and 
     regulations. The bill simplifies and tightens the approval 
     process for fishery management plans and regulations.
       Council procedures and conflicts of interest. The bill 
     proposes a number of changes to increase Council 
     accountability, requiring that (1) a Council member be 
     recused from voting on a Council decision ``which would have 
     a significant and predictable effect'' on any financial 
     interest; (2) each Council keep detailed minutes of each 
     Council meeting, including a complete and accurate 
     description of discussions and conclusions; (3) each Council 
     record all roll call votes; and (4) with advance notice and 
     member concurrence, each Council consider additional agenda 
     items at meetings. The bill also establishes procedures for 
     appointing a treaty tribe representative to the Pacific 
     Council.
       Individual transferable quotas (ITQ). The bill prohibits 
     the Secretary from approving ITQ programs until guidelines 
     are established to deal with ITQ-related issues such as 
     initial allocation, eligibility for participation, 
     consolidation, and access by entry-level fishermen. To cover 
     management costs of an ITQ program, the Secretary would be 
     authorized to establish an annual fee of up to four percent 
     of the value of the fish harvested or processed, and an 
     additional one percent transfer fee. A 5-year fee exemption 
     is provided in the existing programs for the surf clam and 
     ocean quahog fishery and the wreckfish fishery. The bill also 
     clarifies that ITQs do not convey a property right and are 
     subject to termination at any time.
       Scientific basis for management. The bill includes several 
     provisions to improve monitoring and data collection for 
     fisheries management: (1) development (in cooperation with 
     the states and the Councils) of a federal plan for a 
     standardized vessel registration and data management system 
     to ensure the availability of basic fisheries data: (2) 
     establishment of an observer training and education program 
     and regulations for vessels that carry observers, including 
     protection from sexual harassment; and (3) an expanded 
     research program to provide better biological information and 
     to study the effects of fishing on the marine ecosystem.
       Enforcement. The bill would (1) establish voluntary 
     fishermen's networks to promote compliance with fishery 
     regulations; (2) require an annual report analyzing the 
     adequacy and effectiveness of enforcement efforts; (3) 
     encourage a reward of not less than 20 percent of any penalty 
     assessed for information leading to an enforcement action; 
     (4) require that fishery management plans identify needed 
     enforcement.


                  transition to sustainable fisheries

       Fisheries disaster relief. At the discretion of the 
     Secretary or at the request of an affected state or 
     community, the Secretary would (1) determine whether there is 
     a commercial fishery failure; and (2) make relief funds 
     available to the affected State or community, with the 
     Federal cost-share not to exceed 75 percent.
       Vessel or permit buy-out. As part of a sustainable 
     development strategy and to limit effort in an overfished 
     fishery, the Secretary would be authorized to develop and 
     implement a vessel or permit buy-out program requiring that 
     (1) a fishery management plan is in place that limits access 
     to the fishery and prevents replacement of fishing effort 
     that is bought out; (2) vessels or permits acquired under the 
     buy-out program cannot re-enter the fishery or contribute to 
     excess fishing effort in other fisheries; and (3) criteria 
     are established to determine types and numbers of vessels 
     which are eligible for participation. The bill specifies that 
     the Federal share of a buy-out program may not exceed 50 
     percent of the program costs. Working with the Council, the 
     Secretary would be authorized to establish a fee system to 
     collect the non-Federal share of funds for the program. 
     Annual fees could not exceed 5 percent of the value of fish 
     harvested in the fishery and would be deposited into a newly 
     established Ocean Conservation Trust fund.
       Vessel refinancing. The bill would amend Title XI of the 
     Merchant Marine Act of 1936 to provide for a fisheries stock 
     recovery refinancing program under the Fishing Vessel 
     Obligation Guarantee Program. For those fisheries in which a 
     fishery recovery effort is under way, the Secretary would be 
     authorized to refinance vessel mortgages, providing for an 
     extended repayment schedule (including interest-only 
     payments) that reflects reduced vessel income due to stock 
     rebuilding restrictions.
 Mr. MURKOWSKI. Mr. President. I am very pleased to join with my 
friends and colleagues Senator Stevens and Senator Kerry in the 
introduction of S. 39, a bill to reauthorize and revitalize the Fishery 
Conservation and Management Act, also known as the Magnuson Act.
  This bill is similar in almost all respects with the bill we 
introduced in the final days of the last Congress. As promised, that 
bill and this one both mark our intention that Magnuson Act discussions 
in this new Congress should focus on outstanding differences, rather 
than starting from scratch and covering old ground.
  A tremendous amount of work already has been done on this matter by 
fishing industry groups, the environmental community and others in 
Congress, so that this year's hearings will start with a solid, 
carefully laid platform.
  I have a great interest in seeing this bill move expeditiously 
through the legislative process to the President's desk. The Magnuson 
Act is the basis for all marine fisheries regulation in this country, 
and as such it is vital that it be reauthorized. As the regional 
fishery management councils created by this act struggle with new and 
evolving problems, we must take steps to allow the law to evolve.
  My own primary efforts are focused on an issue and I believe is about 
to explode into prominence throughout the world--the need to identify 
and reduce the levels of fishery bycatch and discard in America's 
fisheries. That's why I introduced the first bill to address bycatch 
back in November of last year. Today's bill follows the lead I 
established in October 1993, by requiring regional fishery management 
councils to adopt specific measures for bycatch reduction and 
assessment. This would become a mandatory part of every fishery 
management plan in the country, and would put us on the road to 
stopping the shameful waste that is currently occurring in many 
fisheries.
  Following up on this principle, Senator Stevens has authored a 
separate section of the bill for Alaska only, in which more specific 
targets are set for the North Pacific Fishery Management Council. 
Because the North Pacific Council is farther advanced in addressing 
this issue than many, I think it only appropriate that this 
reauthorization reflect that reality.
  Another amendment adopted from my 1993 bill is a change of only one 
word of one of the national standards established by Magnuson. However, 
that change, from `promote' to `consider,' is very important to 
ensuring a fair deal for Alaska's fishermen and shore-based processors. 
The national standards currently say that conservation and management 
plans should `promote' efficiency. This became a clear problem for 
Alaskan interests during the consideration of regulations to protect 
onshore interests from being preempted by offshore factory-trawlers, 
because it was seen as requiring the most economically efficient 
methods--rather than those that contributed to the overall welfare of 
fishing communities. The change will eliminate that threat, and allow 
all relevant issues to be fully considered.
  Among other provisions, this bill will improve fisheries conservation 
and utilization, on which so many individuals in our coastal 
communities depend. It will for the first time address the problem of 
overfishing by requiring corrective action to be taken when a fishery 
is or is in danger of becoming overfished. It will also strengthen the 
fisheries management process by improving the way that regional fishery 
councils function, improve the way fisheries research is conducted and 
make many other changes of great importance and urgent need.
  There are still many issues that need to be addressed and answers 
that need to be clarified. However, we will have an ample opportunity 
to address these areas and to hear from all those concerned during the 
deliberative process. I am assured that Senator Stevens and Senator 
Kerry wish to renew this effort as soon as possible this year, and I 
look forward to working with them both and with the interested members 
of the fisheries community.
                                 ______

      By Mr. FEINGOLD (for himself and Mr. Kohl):
  S. 40. A bill to direct the Secretary of the Army to transfer to the 
State of Wisconsin lands and improvements associated with the LaFarge 
Dam and Lake portion of the project for flood control and allied 
purposes, Kickapoo River, WI, and for other purposes; to the Committee 
on Environment and Public Works.

[[Page S250]]

                        LAFARGE DAM LEGISLATION

 Mr. FEINGOLD. Mr. President, I am pleased to join with my colleague 
from Wisconsin, Senator Kohl, in again introducing a bill to complete 
some unfinished business the Federal Government began in our State in 
1962, a public works project on the Kickapoo River that left a 
community expecting Federal flood control relief in a state of economic 
devastation. Identical legislation is being introduced today in the 
other Chamber by our colleagues from Wisconsin, Representatives 
Gunderson and Petri.
  Senator Kohl and I brought this measure before the Senate in the 103d 
Congress, and although it was passed by the other Chamber in the 
omnibus Water Resources Development Act [WRDA] we were not able to 
complete action on that measure in the Senate in the closing days of 
the 103d Congress. It is tenacity and enduring spirit of the people in 
this area, and their desire to turn away from the past, that brings us 
again to the floor on their behalf. It is also our responsibility, not 
only as members of the Wisconsin delegation, but also as Senators to 
seek to correct Federal actions when they adversely affect local areas. 
This legislation presents this body with such an opportunity.
  Mr. President, the story of the LaFarge Dam remains the same. More 
than 30 years ago, the U.S. Army Crops of Engineers planned to build a 
dam across the Kickapoo River, near the village of LaFarge, WI, which 
is located in southwest portion of my State. The dam was supposed to 
provide flood control in an often flooded valley. In addition, local 
residents were told of the economic benefits in tourism dollars that 
the planned lake and other improvements would bring to the area.
  Federal legislation authorizing the LaFarge Dam passed in 1962, and 
construction began in 1971. Despite the best of intentions, the project 
was never completed. Construction ended in 1975, leaving the proposed 
dam only 61 present complete, while 80 percent of the land needed to 
build the dam had been acquired by the Federal Government, including 
the private homes and farms of 140 families who were evicted in order 
to begin the project.
  The area, already struggling economically prior to the dam's 
development, was devastated. By 1990, it was estimated that annual 
losses resulting from the cessation of family farm operations and the 
unrealized tourism benefits that had been promised with the dam totaled 
more 300 jobs and $8 million for the local economy per year. In fact, 
the only remaining legacy of the project is a fragmented landscape. It 
is dotted with scattered remains of former farm homes, and a 103-foot 
tall, concrete shell of the dam that stands like an eerie sentinel, 
with the Kickapoo River flowing unimpeded through a 1000 foot gap. The 
most important benefit of the dam, its flood control protection, as 
never realized. The area continues to experience frequent floods today.
  The legislation we are introducing will being this chapter of the 
history of LaFarge to a close, but not by completing construction of 
the dam. Local residents who were once convinced that completion of the 
dam was the only ways out of their plight have now reached consensus 
the project should not continue.
  Instead, Mr. President, for the past 4 years, members of the local 
community, the Army Corps of Engineers, University of Wisconsin--
Extension, Wisconsin Department of Natural Resources, Wisconsin 
Department of Transportation, Wisconsin State Historic Society, the 
Governor's office, State legislators, Wisconsin environmental groups, 
and the members of the congressional delegation who join in introducing 
this legislation, have collaborated together to develop a plan to 
reclaim the dam area and manage it under a combination of State and 
local control.
  This legislation is the embodiment of that consensus. It contains 
several simple components.
  First, it deauthorizes the dam and accompanying 8,569 acres of 
federally-owned land and turns the land over to the State of Wisconsin. 
The Wisconsin State Legislature passed legislation last year to take 
over management of the Kickapoo Valley lands in preparation for Federal 
action. It provides that the deauthorized land will be managed as a 
reserve under the auspices of the newly created Kickapoo Valley 
Governing Board. The board is required, by Wisconsin State law, to 
preserve and enhance the unique environmental, scenic, and cultural 
features of the Kickapoo Valley, to provide facilities for the use and 
enjoyment of visitors to the area and to promote the area as a 
destination
 for vacationing and recreation.

  Strong environmental protection provisions are included in the State 
law including limits on development and an outright ban on any mining 
activities. In addition the board is required to consult with the State 
historical society and Wisconsin Indian tribes in managing the 
historical and cultural content of the lands.
  The Kickapoo Valley is truly a beautiful area of the State, filled 
with unique natural features such as sandstone cliffs, hearty forest 
lands, and scenic valleys. It is home to many rare plants and several 
State threatened and endangered animals, as well as more than 400 
archeological sites.
  It is these very attributes which contributed to the demise of dam 
plans, and which were long regarded to be standing in the way of 
progress. Now, the local community has embraced protection of these 
natural treasures as a means to revitalize the region.
  Second, Mr. President, the legislation that I am introducing 
maintains and slightly modifies authorization for improvement projects 
which were included in the original designs. These improvements include 
renovation of three roads, and construction of an education and 
interpretation complex that includes buildings, parking areas, 
recreational trails, and canoe facilities. The legislation also 
provides for environmental cleanup and site restoration of abandoned 
wells and farm sites in the area.
  These projects provide hope for the area and fulfillment of Federal 
promises made long ago. When the 140 families were forced to leave 
their homes in the 1960's, many of them left the region entirely. As I 
mentioned, many of those who stayed in the area lost income and the 
land they once owned was removed from the local tax base. Local 
businesses which once relied on these customers, suffered, and the 
school system lost property tax funding along with approximately one-
third of its students. Today, the median income is only slightly above 
half of the State average. And the heartfelt bitterness toward what is 
widely considered an irresponsible Federal boondoggle has been tempered 
only recently with plans for Federal deauthorization.
  Mr. President, that is why I am convinced the legislation we offer 
today is the best option. It is based on consensus, allows for 
responsible local and State control, and fulfills the Federal 
Government's responsibility to this area. It is not often that we are 
able to consider truly beneficial proposals that local communities want 
and need.
  As many in this Chamber know, I am concerned about the fiscal 
implications of all legislation that I bring before this body. The Army 
Corps of Engineers estimates that if the LaFarge Dam were to be 
completed today, the total cost would be $102 million of which only 
$18.6 million has already been expended. The legislation we offer 
completes the promised improvements to the area at a cost of $17 
million--a substantial savings of $66.4 million over costs for dam 
completion.
  In closing, Mr. President, I would like to extend my thanks to my 
colleagues who join me in introducing this legislation today. I also 
want to acknowledge the support and hard work of the people of the 
Kickapoo Valley in bringing this legislation to fruition.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 40

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

     SECTION 1. KICKAPOO RIVER, WISCONSIN.

       (a) Project Modification.--The project for flood control 
     and allied purposes, Kickapoo River, Wisconsin, authorized by 
     section 203 of the Flood Control Act of 1962 (76 Stat. 1190), 
     as modified by section 814 of the Water Resources Development 
     Act of 1986 (100 Stat. 4169), is further modified as provided 
     by this section.
     [[Page S251]]   (b) Transfer of Property.--
       (1) In general.--Subject to the requirements of this 
     subsection, the Secretary shall transfer to the State of 
     Wisconsin, without consideration, all right, title, and 
     interest of the United States in and to the lands described 
     in paragraph (2), including all works, structures, and other 
     improvements on the lands.
       (2) Land description.--The lands to be transferred pursuant 
     to paragraph (1) are the approximately 8,569 acres of land 
     associated with the LaFarge Dam and Lake portion of the 
     project referred to in subsection (a) in Vernon County, 
     Wisconsin, in the following sections:
       (A) Section 31, Township 14 North, Range 1 West of the 4th 
     Principal Meridian.
       (B) Sections 2 through 11, and 16, 17, 20, and 21, Township 
     13 North, Range 2 West of the 4th Principal Meridian.
       (C) Sections 15, 16, 21 through 24, 26, 27, 31, and 33 
     through 36, Township 14 North, Range 2 West of the 4th 
     Principal Meridian.
       (3) Terms and conditions.--The transfer under paragraph (1) 
     shall be made on the condition that the State of Wisconsin 
     enters into a written agreement with the Secretary to hold 
     the United States harmless from all claims arising from or 
     through the operation of the lands and improvements subject 
     to the transfer.
       (4) Deadlines.--Not later than July 1, 1995, the Secretary 
     shall transmit to the State of Wisconsin an offer to make the 
     transfer under this subsection. The offer shall provide for 
     the transfer to be made in the period beginning on November 
     1, 1995, and ending on December 31, 1995.
       (5) Deauthorization.--The LaFarge Dam and Lake portion of 
     the project referred to in subsection (a) is not authorized 
     after the date of the transfer under this subsection.
       (6) Interim management and maintenance.--The Secretary 
     shall continue to manage and maintain the LaFarge Dam and 
     Lake portion of project referred to in subsection (a) until 
     the date of the transfer under this subsection.
       (c) Completion of Project Features.--
       (1) Requirement.--The Secretary shall undertake the 
     completion of the following features of the project referred 
     to in subsection (a):
       (A) The continued relocation of State Highway Route 131 and 
     County Highway Routes P and F substantially in accordance 
     with plans contained in Design Memorandum No. 6, Relocation-
     LaFarge Reservoir, dated June 1970, except that the 
     relocation shall generally follow the road right-of-way 
     through the Kickapoo Valley in existence on the date of 
     enactment of this Act.
       (B) Construction of a visitor and education complex to 
     include buildings, parking areas, recreational trails, and 
     canoe facilities substantially in accordance with plans 
     contained in Design Memorandum No. 3, Preliminary Master Plan 
     for Resource Management, Kickapoo River, Wisconsin, dated May 
     1967, and Design Memorandum No. 7, Master Recreation Plan for 
     Resource Management, LaFarge Lake Kickapoo River, Wisconsin, 
     dated July 1974.
       (C) Environmental cleanup and site restoration of abandoned 
     wells, farm sites, and safety modifications to the water 
     control structures.
       (D) Cultural resource activities to meet the requirements 
     of Federal law.
       (2) Participation by state of wisconsin.--In undertaking 
     the completion of the features identified in paragraph (1), 
     the Secretary shall determine the requirements of the State 
     of Wisconsin on the location and design of each such feature.
       (d) Costs.--The cost of the project referred to in 
     subsection (a) is modified to authorize the Secretary to 
     carry out the project at a total cost of $17,000,000, with a 
     first Federal cost of $17,000,000.

     SEC. 2. SECRETARY DEFINED.

       As used in this Act, the term ``Secretary'' means the 
     Secretary of the Army, acting through the Chief of Engineers.

  Mr. KOHL. Mr. President, we in the Senate spend a great deal of time 
arguing about the appropriate role of the Federal Government. Certainly 
this past election has shown us that the American people are changing 
their opinions about the role that the Federal Government ought to play 
in our lives. That debate will continue long into the future.
  But one thing that we can probably all agree on is that one 
appropriate role of the Federal Government is to rectify its past 
mistakes, whenever possible. I know that my colleagues of all 
ideological stripes can list specific instances in which Federal 
intervention has caused undue pain and suffering to individuals or 
communities. Today I join with my colleague from Wisconsin, Senator 
Feingold in introducing a bill to address one of those mistakes that 
occurred some 30 years ago in the Kickapoo River Valley of Wisconsin. 
And I'm proud to say that the ``fix'' to this problem also saves the 
taxpayers millions of dollars.
  In the mid 1960s, Congress authorized the Corps of Engineers to build 
a flood control dam on the Kickapoo River at LaFarge in Vernon County, 
WI. In order to proceed with the project, the Corp of Engineers 
condemned 140 farms covering an area of about 8,500 acres. To LaFarge, 
a community of only 840 people, the loss of these farms dealt a 
significant blow to the local economy.
  With the loss of economic activity, the community eagerly awaited the 
completion of the dam, and the creation of a lake that promised to 
provide some economic benefits in the form of recreational and tourism 
activities. But because of budgetary and environmental concerns, the 
project never happened. And the people of LaFarge were left holding the 
bag.
  But I am proud to say that the reintroduction of this bill today 
represents a milestone in the cooperative effort of the citizens of the 
Kickapoo River Valley, the state of Wisconsin, and local environmental 
leaders to turn this bad situation into an outstanding success for the 
community, the State, and the Federal taxpayers.
  The LaFarge Dam legislation would modify the original LaFarge Dam 
authorization, returning the federally condemned property to the state 
of Wisconsin. Anticipating this action, the State Legislature and 
Governor Thompson acted last year to authorize the use of this 8,500 
property as a state recreational and environmental management area.
  The highway repairs envisioned by the original dam authorization 
would remain. Because the original authorization required an area to be 
flooded, the highway was targeted for relocation. The project has been 
in limbo all these years, the relocation never took place, nor have any 
improvements or needed maintenance been done on the highway. Now, over 
30 years later, the road has fallen into extreme disrepair, and this 
bill would authorize the necessary road improvements.
  The bill also reauthorizes the construction of a recreational 
facility to help interpret the surrounding environment for the 
visitors.
  While the original dam and flood control project, in today's dollars, 
would have cost the Federal Government $102 million, the modified 
project as authorized by the bill introduced today would only cost $17 
million.
  Late last year, both the House and Senate attempted to pass a Water 
Resources bill. A provision addressing the LaFarge dam project was 
included in the bill passed by the House, as well as the bill proposed 
for consideration in the Senate. Unfortunately, time grew short, and 
the bill was bogged down in the Senate Environment and Public Works 
Committee.
  Mr. President, it is my hope that the House and Senate will be able 
to work together early in the 104th Congress to pass a Water Resources 
bill, and that this legislation will be included in that bill.
                                 ______

      By Mr. BAUCUS (for himself and Mr. Burns):
  S. 41. A bill for the relief of Wade Bomar, and for other purposes; 
to the Committee on the Judiciary.


                         WADE BOMAR RELIEF ACT

 Mr. BAUCUS. Mr. President, today, along with Senator Burns, I am 
introducing a bill for the private relief of Wade Bomar. This bill 
would provide Mr. Bomar with relief in the amount he would qualify for 
under the Public Safety Officers' Benefit Act.
  Almost 5\1/2\ years ago, Wade volunteered to help the Bureau of 
Indian Affairs extinguish the Pryor Gap Fire, which was threatening the 
Crow Indian Reservation. While fighting the fire, a burning 50 foot 
pine crashed down on Wade. The accident left him paralyzed and unable 
to work again.
  As the fire raged in the Pryor Gap, the Senate was debating the 
Public Safety Officers' Benefit Act [PSOBA]. The bill passed and went 
into effect a few months later. Had Wade been injured a little while 
later he would have qualified for a payment of around $100,000 under 
this Act.
  Wade, the father of three young children, has dealt with his injury 
courageously. But beyond the physical and emotional pain, the accident 
left him and his family without medical insurance provided by his 
former job as a laborer to help pay for the huge medical bills. Because 
of these medical bills, he can't afford health or dental insurance for 
his children.
  Wade is a strong and courageous fighter, and I know he can make it on 
his own. But unable to work, the injury has left him with a hospital 
debt that 
[[Page S252]] he simply will not be able to pay. With the money 
provided by this bill, Wade will be able to bring himself out of debt 
once and for all. He will be able to give his family some security.
  This very bill passed the Senate unanimously last October. 
Unfortunately, time was short, and the House of Representatives failed 
to act. My hope is that Congress will act soon to give Wade the relief 
he has earned.
  I extend my appreciation to my colleagues in the Senate who supported 
this effort in the 103d Congress. And I ask for their support again to 
do what is right for a good man who was injured while helping others.
  I ask unanimous consent that the full text of this legislation be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 41

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

     SECTION 1. RELIEF OF WADE BOMAR.

       The Secretary of the Treasury shall pay, out of any money 
     in the Treasury not otherwise appropriated, $100,000 to Mr. 
     Wade Bomar in full settlement of a claim for injuries 
     sustained by Mr. Bomar in the line of duty on August 6, 1989, 
     while fighting the Pryor Gap fire, permanently depriving him 
     of the use of his limbs.
                                 ______

      By Mr. FEINGOLD:
  S. 42. A bill to terminate the Uniformed Services University of the 
Health Sciences; to the Committee on Armed Services.


             Terminating the University of Health Sciences

 Mr. FEINGOLD. Mr. President, I am today reintroducing legislation 
terminating the Uniformed Services University of the Health Sciences 
[USUHS]. This is a measure I introduced in the 103d Congress and is 
part of my 82-point plan to reduce the Federal deficit which I proposed 
when I ran for the U.S. Senate in 1992.
  USUHS is a medical school run by the Department of Defense [DOD]. 
Along with the Armed Forces Health Professionals Scholarship Program 
[AFHPSP] and other sources, including volunteers, it provides 
physicians for the military.
  Created in 1972, USUHS was intended to supply the bulk of the 
military's physician requirements. Today, USUHS only accounts for a 
fraction of the Department's needs--less than 9 percent in 1991 
according to the Congressional Budget Office [CBO].
  The other body has voted to terminate this program on several 
occasions, and last year, the Vice President's national performance 
review joined others, ranging from the Grace Commission to the CBO, in 
raising the question of whether this medical school, which graduated 
its first class in 1980, should be closed in light of the high cost of 
providing military physicians under this program in contrast to other, 
less costly sources.
  Last session, in assessing the 5-year budget impact of a plan to 
phase-down the school, the Office of Management and Budget [OMB] 
estimated $286.5 million in savings, including offsetting increases in 
the AFHPSP--a less costly mechanism for obtaining military physicians. 
After USUHS is fully closed, the annual savings would be in excess of 
$80 million.
  Mr. President, according to the Pentagon, USUHS is the single most 
expensive source of military physicians. It costs the Government more 
than four times as much to acquire a doctor from USUHS as it does to 
acquire one through the scholarship program.
  Even taking into account the longer service obligation of USUHS 
graduates, the CBO reports that accession costs are still three times 
those of AFHPSP physicians.
  As a practical matter, though, the military does not rely primarily 
on USUHS for its doctors. USUHS provides only about 1 of every 10 of 
the physicians for our military, while nearly three-fourths come from 
the scholarship program.
  Nor, evidently, has relying primarily on these other sources 
compromised the ability of military physicians to meet the needs of the 
Pentagon. According to OMB, of the approximately 2,000 physicians 
serving in Desert Storm, only 103, about 5 percent, were USUHS trained.
  Mr. President, though I am persuaded that there is sufficient reason 
to begin phasing out USUHS, there are a variety of questions that have 
arisen about the school that should be explored. Last session I 
authored an amendment to the fiscal year 1995 Defense authorization 
bill directing the General Accounting Office [GAO] to examine some of 
those issues. That amendment resulted from negotiations between myself 
and other Senators concerned with the future of USUHS, the senior 
Senator from Hawaii [Mr. Inouye] and the senior Senator from Maryland 
[Mr. Sarbanes], and was aimed at having GAO examine some critical 
issues relating to USUHS.
  Among those matters are whether USUHS is fulfilling its statutory 
mandate. A 1990 report of the DOD's inspector general noted that 
although there have been three studies on the cost effectiveness of 
USUHS, there had been no evaluation of how well USUHS meets DOD 
objectives, nor had there been an evaluation of the quality of the 
medical education.
  Mr. President, this lack of evaluation is particularly troubling as 
the inspector general's report noted that questions have been raised as 
to whether the style of education provided at USUHS--``. . . may be in 
danger of inhibiting the students from developing those critical 
abilities considered essential for innovation and/or ready adaptation 
to expected changes in biomedical technology anticipated during the 
military/civilian careers of the students.''
  Mr. President, another area of concern is how USUHS is meeting the 
needs of today's military structure. The proponents of USUHS frequently 
cite the higher retention rates of USUHS graduates over physicians 
obtained from other sources as a justification for continuation of this 
program. And there may be evidence that a greater percentage of USUHS 
trained physicians may remain in the military longer than those from 
other sources.
  But there does not appear to be a good understanding of what factors 
might contribute to longer retention rates. The body of students 
entering USUHS, for example, is disproportionately made up of members 
of the military, an aspect of USUHS grads that may have a large impact 
on their retention rates, and a feature that could be built into the 
military's alternative physician sources if needed.
  Nor is there any systematic analysis of how retention rates compare 
to the needs of the services for military physicians during a period of 
downsizing. This issue may be of particular relevance given the 
downsizing of our force levels.
  Testimony by the Department of Defense before the Subcommittee on 
Force Requirements and Personnel suggested that, based upon a 1989 
study, it needed to maintain a 10 percent of retention rate of 
physicians beyond 12 years, and that alternative sources like the 
AFHPSP may already be meeting the retention needs of the services.
  That prompted the chairman of the Armed Service Committee, the senior 
Senator from Georgia [Mr. Nunn], to question, during hearings held in 
the 103d Congress, whether these figures meant that we are retaining a 
more senior force than we need, a crucial consideration in determining 
the role of USUHS. This is a question GAO is addressing in its review.
  Mr. President, another question that can be raised is what other 
options are available to provide the unique contribution of USUHS. 
Suggestions have been made that civilian medical schools could provide 
the basic medical education with USUHS taking over a greater role in 
graduate and specialized military medical education.
  Since 90 percent of the military physicians come from sources other 
than USUHS, it is fair to ask whether all military physicians should 
receive some specialized training along the lines offered at this 
facility, rather than limiting it to a tiny percentage of military 
physicians. Perhaps the mission of USUHS should be refocused in this 
direction.
  Mr. President, these are all important matters that certainly merit 
examination, and I look forward to reviewing the work that the GAO will 
be doing in its study.
  I expect GAO to have much of its work done in time for consideration 
of the future of USUHS, and the legislation I am introducing today, 
during the 
[[Page S253]] 1995 deliberations on the Department of Defense 
authorization and appropriations bills.
  Mr. President, in conclusion, let me say that I fully recognize that 
USUHS has some dedicated supporters in the U.S. Senate, and I realize 
that there are legitimate arguments that those supporters have made in 
defense of this institution. The problem, however, is that the Federal 
Government can no longer afford to continue every program that provides 
some useful function.
  In the face of our staggering national debt and annual deficits, we 
must prioritize and eliminate programs that can no longer be sustained 
with limited Federal dollars, or where a more cost-effective means of 
fulfilling those functions can be substituted. The future of USUHS 
continues to be debated precisely because in these times of budget 
restraint it does not appear to pass the higher threshold tests which 
must be applied to all Federal spending programs.
  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 42

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Uniformed Services 
     University of the Health Sciences Termination and Deficit 
     Reduction Act of 1995''.

     SEC. 2. TERMINATION OF THE UNIFORMED SERVICES UNIVERSITY OF 
                   THE HEALTH SCIENCES.

       (1) Termination.--(1) The Uniformed Services University of 
     the Health Sciences is terminated.
       (2)(A) Chapter 104 of title 10, United States Code, is 
     repealed.
       (B) The table of chapters at the beginning of subtitle A of 
     such title, and at the beginning of part III of such 
     subtitle, are each amended by striking out the item relating 
     to chapter 104.
       (b) Effective Date.--The termination referred to in 
     subsection (a), and the amendments made by such subsection, 
     shall take effect on the date of the graduation from the 
     Uniformed Services University of the Health Sciences of the 
     last class of students that enrolled in such university on or 
     before the date of the enactment of this Act.
                                 ______

      By Mr. FEINGOLD:
  S. 43. A bill to phase out Federal funding of the Tennessee Valley 
Authority; to the Committee on Environment and Public Works.


                 TENNESSEE VALLEY AUTHORITY LEGISLATION

 Mr. FEINGOLD. Mr. President, I am pleased to introduce S. 43, 
legislation that phases out funding for the Tennessee Valley Authority, 
and reduces the deficit by about $600 million over 5 years.
  The Tennessee Valley Authority [TVA], a federally owned and chartered 
corporation created in 1933, is one of the largest electric utilities 
in the country, supplying power to an 80,000 square mile, 125 county, 7 
State region.
  In addition to providing power, however, the TVA operates several 
other programs. Federal appropriations to the TVA support programs 
concerning nonpoint-source water pollution; economic development; a 
stewardship program that maintains a system of dams, reservoirs, and 
manages 300,000 acres of public land; recreational programs including 
the Land Between the Lakes region in the western part of Tennessee and 
Kentucky; a fertilizer research center, recently renamed the 
Environmental Research Center; and other programs.
  Mr. President, this legislation phases out Federal funding for TVA 
over 2 years. Funding for the fertilizer research center is eliminated 
beginning in fiscal year 1996 and funding for other activities is 
phased out by fiscal year 1997.
  The legislation directs the Office of Management and Budget to submit 
a plan to Congress by no later than January 1, 1996, outlining which 
programs the TVA will continue and how they will be funded, and which 
programs will be turned over to other entities.
  Mr. President, Federal law requires the TVA's electric power program 
to be financially self-supporting, and the Congressional Budget Office 
[CBO] has noted, in its March 1994, report ``Reducing the Deficit: 
Spending and Revenue Options,'' that ``because many of TVA's 
stewardship activities are necessary to maintain its power system, 
their costs would more appropriately be borne by users of the power,'' 
rather than the Federal taxpayer.
  In its 1992 study of energy subsidies, the Department of Energy 
reported that the TVA power operation benefits from a significant 
subsidy already, the ability to borrow capital at much lower interest 
rates than paid by investor-owned utilities, an advantage the 
Department said was worth $231 million in fiscal year 1990. Federal 
taxpayers should not be expected to pay the additional subsidy of 
supporting power-related stewardship activities.
  The CBO report also stated that other activities could be 
discontinued, or their costs could be recovered from State and local 
governments and others who more directly benefit from those activities, 
or through TVA's power rates.
  Mr. President, this makes sense, especially at a time of on-going 
Federal budget deficits when we have asked farmers, veterans, retirees, 
and small businesses to sacrifice in order to address those deficits.
  Similarly, the National Environmental Research Center, which costs 
Federal taxpayers $35 million annually, could be more appropriately 
funded by the private sector beneficiaries of its work, or by competing 
for research grants as other research institutions already do.
  In assessing the savings generated by their similar proposal, the CBO 
estimated that eliminating many of the activities supported by 
appropriations and increasing the funding from non-Federal sources 
could save $610 million over 5 years.
  Mr. President, in the middle of the Great Depression there may have 
been good reasons to create a Federal agency charged with broad powers 
over a diverse set of missions for a specific region. Today, with a 
national and regional economy in much better shape than it was 60 years 
ago, and with other Federal, State, and local agencies overseeing these 
same missions, the special reasons that may have justified creation of 
the TVA no longer exist.
  Indeed, some have criticized the structure of TVA, not
   because it duplicates many services that could be provided by other 
public and private entities, but because it is not accountable to local 
residents.

  Mr. President, for some, at least, the price of Federal funding has 
been the lack of local control.
  Beyond the savings that this measure can produce for deficit 
reduction, it can also restore local control for some of the activities 
now overseen by a Board of Directors that is appointed by the 
President.
  Let me add that this is certainly not a criticism of the dedicated 
individuals who have served in the TVA now or in past years. But a 
structure that relies on a distanced appointment process can not be as 
truly responsive to the needs and preferences of local residents as one 
which is more directly beholden to those residents.
  At the same time, given the singular nature of TVA and its special 
history, many residents and State and local governments may feel it is 
appropriate for TVA to continue some activities. And to the extent that 
Federal taxpayers are not asked to subsidize them, this legislation 
would not restrict the ability of TVA to continue operating those 
programs, consistent with the plan that the Office of Management and 
Budget will submit to Congress.
  Mr. President, the Tennessee Valley Authority was born in the New 
Deal and at that time it may well have been the appropriate model to 
address the many problems facing the region it serves.
  But we need to reassess that model, redistribute the burden of some 
activities to those who benefit from them, allocate other activities to 
private or public entities where appropriate, and help reduce the 
Federal deficit.
  Mr. President, I ask unanimous consent that the text of this measure 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 43

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     [[Page S254]] SECTION 1. TENNESSEE VALLEY AUTHORITY.

       (a) Discontinuance of Appropriations.--Section 27 of the 
     Tennessee Valley Authority Act of 1933 (16 U.S.C. 831z) is 
     amended--
       (1) by inserting ``for fiscal years ending with (and 
     including) fiscal year 1996'' before the period; and
       (2) by adding at the end the following: ``No appropriations 
     may be made available for the National Fertilizer and 
     Environmental Research Center for fiscal year 1996.''.
       (b) Report.--Not later than January 1, 1996, the Director 
     of the Office of Management and Budget shall submit a plan to 
     Congress that--
       (1) describes the programs that should continue to be 
     operated by the Tennessee Valley Authority after fiscal year 
     1996 and describes how those programs should be funded;
       (2) describes the programs that the Tennessee Valley 
     Authority should discontinue or should transfer to other 
     entities after fiscal year 1996; and
       (3) recommends any legislation that may be necessary or 
     appropriate to carry out the purposes of this Act.
                                 ______

      By Mr. REID (for himself and Mr. Bryan):
  S. 44. A bill to amend title 4 of the United States Code of limit 
State taxation of certain pension income; to the Committee on Finance.


                         SOURCE TAX LEGISLATION

  Mr. REID. Mr. President, today I rise to reintroduce legislation that 
passed the House and Senate in the 103d Congress and passed this body 
twice in the 102d. It is legislation in which all Members of Congress 
have a stake.
  The bill which I introduce will eliminate a State's ability to tax a 
nonresidents pension income. As the situation exists today, retirees in 
every State may be forced to pay taxes to States where they do not 
reside. The retirees pay taxes on pensions drawn in the States where 
they spent their working years, despite the fact that they are no 
longer present to participate in medical assistance programs or senior 
centers, nor do they use the roads or public parks that these taxes are 
helping to fund. Most important of all, they don't even get to vote in 
their former State of residence--yet they still pay taxes to these 
States. It has been said many times, and I would agree, this is a clear 
case of taxation without representation.
  I would like to relate to my colleagues an example illustrating the 
inequity of the practice of source taxing pension incomes on 
nonresidents. The story I tell is what happened to a Nevada citizen, 
but it could be happening in any State.
  An older woman who lives in Fallon, NV has an annual income of 
between $12,000 and $13,000 a year. She is not rich, but she is 
surviving. One day the mail carrier delivers a notice from California 
that says she owes taxes on her pension income from California, plus 
the penalties and interest on those taxes. She cannot believe it but, 
being an honest person, she tells California that she has never paid 
these taxes in the past and asks why she is being assessed at this 
time. Mr. President, to make a long story short, the California 
Franchise Tax Board went back to 1978 and calculated her tax debt to be 
about $6,000. Mr. President, this woman's income is only $12,000 a 
year.
  Most citizens pay their taxes honestly and without too much 
complaining, but when they are taxed by a State where they do not 
reside, they begin to get upset with the system. I would like to pass 
on another case that illustrates the problem.
  In 1971 a Washington State resident went to work at a Federal 
penitentiary on McNeil Island, WA. In the late 1970's the Bureau of 
Prisons began closing the facility and reducing the staff. This man was 
left with two choices. He could resign and give up 9 years toward 
retirement or he could transfer to a Federal center in San Diego. He 
close the latter and went to work for the Bureau of Prisons.
  When this gentleman retires he plans on returning to the State of 
Washington where he still owns a home. He wants to be near his children 
and grandchildren, as they still reside in Washington.
  Although the State of Washington has no State income tax, this man 
learned that he will be subject to California's source tax on his 
pension income when he returns to Washington. This man was prodded by 
the system to move to California because the Federal Government closed 
down the prison where he worked. In order to maintain his income and 
continue building his pension he moved. Nevertheless he always intended 
to move back to Washington. Needless to say, he is justifiably angry. 
Let me read to you an excerpt from his letter to me. I quote:

       The so called source tax appears to be grossly illegal and 
     contrary to the rights guaranteed by our Constitution. That 
     being the case, I am amazed that our Congress does not take 
     immediate action to abolish such totally illegal state 
     levies. I am sure you understand that people employed by the 
     federal government could serve in numerous states throughout 
     their careers before retiring to their home states. It is 
     absolutely ridiculous, insidious and downright illegal for 
     those states to levy an income tax against a nonresident. It 
     is mind-boggling that a federal retiree, or any other retiree 
     living in a state that has no income tax could be paying 
     income tax to as many as 13 states.

  He continues his letter,

       Couple this tax with the ridiculously high cost of medical 
     care, hospitalization and other fast rising consumer costs, 
     and it should be quite evident that people will not be able 
     to survive on retirement incomes.

  Mr. President, this issue was brought to my attention several years 
ago by a Nevadan named Bill Hoffman. He told me about the cases I have 
related to you and many others. Bill informed me that retirees were 
being harassed by their former States because of this tax, commonly 
called a source tax. In fact, he had heard so many complaints that 
eventually he and his wife, Joanne, began organizing the people that 
were affected. Eventually they formed a group known as Retirees to 
Eliminate State Income Source Tax [RESIST].
  RESIST was founded in July of 1988 in Carson City, NV. In the less 
than 4 years since its beginning, RESIST membership has grown to tens 
of thousands of members. It includes members of every State of the 
Union. It is truly a nonprofit, grass roots organization. It operates 
entirely on the work of volunteers. No members are salaried.
  The credibility of this group has convinced other long-established 
organizations, such as the National Association of Retired Federal 
Employees [NARFE], the National Association for Uniformed Services, 
with 60,000 members, and the Fund for Assuring an Independent 
Retirement [FAIR] to make a commitment to the prohibition of the source 
tax on pension income.
  In the beginning, this issue affected mostly retired Government 
employees because of easy access to their records. However, as economic 
times become tougher, and State budgets are straining for additional 
revenues, the source tax is becoming an ever more popular revenue 
source. As an example, I have copies of letters from Ford and Rockwell 
that were sent to their retired employees telling them that they must 
report tax liabilities in those states that collect the source tax. 
Other companies have followed suit. As a result, the American Payroll 
Association has joined the coalition that wants to prohibit this tax.
  We are all aware of the increased mobility that Americans have come 
to know. Many people today plan to retire in places other than the area 
they work. The recent growth of Nevada is ample evidence of this. There 
are many reasons for it. People might want to live in a warmer climate. 
Or, possibly their families have moved and they want to join them. 
Whatever the reason, they spend their working years saving enough to be 
able to move to their chosen area. You can imagine the shock and then 
dismay when they receive a notification that back taxes, along with 
penalties and interest are owed to their old State of residence. The 
shock is from a tax for which they receive no services and no 
representation. The dismay comes from the often inability to pay a 
sometimes enormous tax debt when one lives on a fixed income.
  To prohibit this unethical practice, I am reintroducing this 
legislation which prohibits States from taxing pensions or retirement 
income of nonresidents, taking into consideration the way the State 
defines a resident.
  State budgets are experiencing economic hard times. It won't take 
long for States to realize that taxing someone from another State is an 
easy way to increase revenues without paying the political price. In 
other words, unless this legislation is passed, you can be sure that 
more and more States will begin to impose this unfair tax for which no 
one is accountable.
  In conclusion, there is no cost to the Federal Government to prohibit 
the practice of source taxing the pension 
[[Page S255]] income of nonresidents, and I urge my colleagues to 
cosponsor this bill.
                                 ______

      By Mr. FEINGOLD:
  S. 45. A bill to amend the Helium Act to require the Secretary of the 
Interior to sell Federal real and personal property held in connection 
with activities carried out under the Helium Act, and for other 
purposes; to the Committee on Energy and Natural Resources.


               termination of the federal helium program

 Mr. FEINGOLD. Mr. President, I am pleased to introduce S. 45, the 
Helium Reform and Deficit Reduction Act of 1995, legislation to phase 
out the Federal Helium Program. The measure is based on the excellent 
legislation introduced in the other body during the 103d Congress by 
Representatives Cox and Frank, and a similar bill introduced by 
Representatives Lehman, Vucanovich, and Miller.
  The legislation will produce real savings both in the near term, as 
operations are phased out, and over the long run, as the stockpile of 
helium is sold off.
  Analysis by the Congressional Budget Office [CBO] of similar 
legislation last year estimated that, under that bill, income to the 
Federal Treasury from the helium program would eventually double to $16 
million annually over the estimated CBO baseline of $8 million. These 
savings do not include revenues that will go to the Treasury from the 
sale of facilities and equipment of the helium program, nor do they 
include the value to the Treasury of the bulk of the helium stockpile 
that will remain well after the 5-year budget window--valued at a 
reported $1.6 billion at today's helium prices.
  Mr. President, the Helium Act of 1925 was initiated in large part 
because of the potential military importance of blimps. It authorized 
the Bureau of Mines to build and operate a helium extraction and 
purification plant, which went into operation in Amarillo, TX in 1929.
  According to the General Accounting Office, a nominal private helium 
industry existed in the United States before 1937, but between 1937 and 
1960, the Bureau of Mines was the only domestic helium producer, 
selling most of what it produced to other Federal agencies, but also 
supplying some to private firms.
  With the advent of space exploration and the growth of defense 
programs, the Federal Government's demand for helium was expected to 
grow dramatically, and in 1960, Congress amended the Helium Act to 
provide incentives for stripping natural gas of its helium, for 
purchase of the separated helium by the Government, and for its long-
term storage in the Cliffside Reservoir near Amarillo.
  Today, helium is used in large quantities in space, defense, an 
advanced energy systems. Its major uses include cryogenics in medical 
and superconductivity applications, cover gas in welding, and for 
pressurizing and purging fuel tanks and vessels in the space program. 
It is also used in breathing gas mixtures for deep sea diving, 
controlled atmospheres for growing crystals for transistors, heat 
transfer mediums for nuclear power generators, leak detection, 
chromatography, and as a lifting gas for blimps.
  As a result of the 1960 Act, four private natural gas producing 
companies built five helium extraction facilities and entered into 22-
year contracts with the Bureau of Mines.
  However, instead of appropriating funds for the helium program, the 
1960 act authorized the Secretary of the Interior to borrow from the 
Treasury up to $47.5 million per year, at compound interest, to 
purchase helium.
  The act stipulated that the Bureau of Mines set prices that would 
cover all of the program's costs, including debt and interest, and 
provided a period of 25 years to pay back the debt, subsequently 
extended to 1995. In addition, Federal agencies and contractors were 
required to buy helium from the Bureau of Mines.
  Mr. President, to a certain extent, the 1960 changes to program have 
succeeded, in so far as they helped create private helium operations. 
Prior to the 1960 act, the Federal Government owned the only helium 
extraction plants in the world. Today, 90 percent of the helium 
produced in this country comes from private operations.
  Unfortunately, the 1960 act also led to a growing Government-run 
operation. The borrowing done to pay for helium purchases has not been 
paid back, with the program now having accumulated a debt of 
approximately $1.4 billion to the treasury, and a stockpile of helium 
that some have suggested could supply the Government's needs for the 
next 80 to 100 years.
  Mr. President, the measure I have introduced directs the Secretary of 
the Interior to cease producing, refining, and marketing refined helium 
1 year after the effective date. It also directs the Secretary to 
dispose of all facilities and equipment used for the purpose of 
producing, refining, and marketing refined helium, consistent with 
Federal laws governing the disposal of surplus properties.
  The measure directs the Secretary to begin selling off the helium 
reserves owned by the Government. The sale of the helium reserves would 
be done over time to ensure that taxpayers will receive a fair price 
for the helium they have financed, and to minimize disruption of the 
private helium market.
  This legislation freezes the current debt owned by the helium program 
to the treasury, and dedicates the revenues from the sale of the 
facilities, equipment, and helium reserves to the repayment of that 
debt.
  Finally, the measure that annual financial statements be prepared 
describing the financial position of the helium operations, including a 
statement of what the interest payments on the outstanding repayable 
amounts would have been under the arrangements initiated in the 1960 
act.
  Mr. President, as I noted earlier, the CBO analyzed similar 
legislation last year, and estimated that under that measure income to 
the Federal treasury from the helium program would roughly double as 
the changes are phased in, with income exceeding expenses by about $16 
million annually in fiscal year 1999 under the legislation, compared 
with $8 million annually estimated for CBO baseline calculations.
  Though these are very real savings, there will be additional savings 
for the treasury as well under this legislation, including additional 
revenues that would accrue to the treasury from the sale of facilities 
and equipment, and the value to the treasury of the bulk of the helium 
stockpile that will remain well after the 5-year budget window.
  Though the helium stockpile is valued at $373 million in the Helium 
Fund Budget, the Congressional Research Service reports that the value 
of the crude helium in the Government's Cliffside Reservoir could be 
worth about $1 billion if it were sold at rates ranging from $25 to $35 
per thousand cubic feet, and a reported $1.6 billion if it were sold at 
today's prices.
  Mr. President, supporters of the helium program argue that the
   roughly $1.4 billion in debt it has accumulated should be 
disregarded. They maintain that since the debt is owed by one agency of 
the Government to another, it is only a bookkeeping dispute.

  That is not an acceptable description of the matter. First, though it 
is true that, in a sense, the Government owes the money to itself, 
those who would defend the helium program cannot selectively pick and 
choose those program costs to be included and those that are not to be 
included in assessing the program's efficiency. The growing debt was 
created because of borrowing by the program from the Federal treasury, 
borrowing that was used to fund the significant assets of the program, 
including the massive helium stockpile. It is deceptive to suggest that 
the overall productivity of the program should be measured without 
taking into account the borrowed capital which produced the giant 
stockpile of helium on which the program is drawing.
  Second, and just as important, the funding provided for this 
enterprise came at the cost of other governmental activities and an 
increased Federal deficit. The funds borrowed over the years could have 
been used for education, health care programs, national defense, small 
business programs, lower income taxes, or a lower Federal budget 
deficit. The debt that has been accumulating is a measure of the 
opportunity cost of that decision, and will be a measure of the 
opportunity cost to continue the helium operation should this 
legislation not pass.
  [[Page S256]] Mr. President, supporters of this program also argue 
that the program is as efficient as private sector helium producers and 
that the program produces helium at competitive rates. They maintain 
that their revenues exceed their cost of operation, if one excludes the 
debt payments they owe the Federal treasury.
  But, Mr. President, the facts do not bear this out. In part due to 
outdated plant and equipment, the Federal Helium Program is much less 
efficient than private sector helium refineries, producing one-third as 
much with more than four times the number of employees.
  Further, the Helium Advisory Council suggests that the Federal 
program understates the true costs of its helium production, in part 
because they do not include the cost of the crude helium purchased with 
the very funds borrowed from the taxpayers.
  The Council also notes that royalty payments to the Bureau of Mines 
for helium extracted by private companies from Federal land are used to 
subsidize the costs of the refining operation.
  Mr. President, though I dispute the contention that the Federal 
Helium Program is an efficient and competitive producer of helium, I 
want to stress that even if the Government was doing a competent job of 
producing helium, that is not a sufficient argument for the 
continuation of a program that is no longer needed.
  Though at one time there may have been an appropriate role for a 
Government-run helium program, there is now a sufficiently mature 
private helium industry to which the Government can turn for its helium 
needs.
  Mr. President, the time has come for the Federal Government to get 
out of the helium business. The Federal Helium Program is no longer 
needed, and we should begin to dismantle this operation as soon as 
possible in the most cost effective manner.
  This legislation does precisely that.
  Mr. President, I ask unanimous consent that a copy of the legislation 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 45

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Helium Reform and Deficit 
     Reduction Act of 1995''.

     SEC. 2. AMENDMENT OF HELIUM ACT.

       Except as otherwise expressly provided, whenever in this 
     Act an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Helium Act (50 U.S.C. 167 to 167n).

     SEC. 3. AUTHORITY OF SECRETARY.

       Sections 3, 4, and 5 are amended to read as follows:

     ``SEC. 3. AUTHORITY OF SECRETARY.

       ``(a) Extraction and Disposal of Helium on Federal Lands.--
       ``(1) In general.--The Secretary may enter into agreements 
     with private parties for the recovery and disposal of helium 
     on Federal lands upon such terms and conditi