[Congressional Record Volume 142, Number 117 (Friday, August 2, 1996)]
[Senate]
[Pages S9555-S9607]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. GORTON:
S. 2017. A bill to authorize the Secretary of Agriculture to exchange
certain lands in the Wenatchee National Forest, Washington, for certain
lands owned by Public District No. 1 of Chelan County, Washington, and
for other purposes; to the Committee on Energy and Natural Resources.
Land Exchange Legislation
Mr. GORTON. Mr. President, today I introduce legislation to authorize
a land exchange between the Chelan County PUD, in Washington State and
the U.S. Forest Service. The land exchange legislation will consolidate
land for a wastewater treatment facility onto Chelan County PUD land.
Chelan PUD would in turn own and operate the wastewater treatment
facility, which serves both the Forest Service and some of the local
community.
The legislation was carefully negotiated between the Forest Service
and the Chelan County PUD. The Forest Service supports the legislation,
and I hope that the legislation can be enacted this year.
______
By Mr. GORTON:
S. 2018. A bill to approve a settlement agreement between the Bureau
of Reclamation and the Oroville-Tonasket Irrigation District; to the
Committee on Energy and Natural Resources.
settlement legislation
Mr. GORTON. Mr. President, today I introduce legislation that will
authorize settlement between the Bureau of Reclamation and the
Oroville-Tonasket Irrigation District in Washington state. Congressman
Doc Hastings has introduced identical legislation on this subject in
the House of Representatives.
This legislation will authorize a carefully negotiated settlement
between the BOR and the Oroville-Tonasketi Irrigation District. If
enacted, this legislation will save the BOR, and therefore the Nation's
taxpayers, money that would otherwise be spent fighting with the
irrigation district in court. Briefly, the legislation directs the
irrigation district to release and discharge all past and future claims
against the United States associated with the project--such claims are
estimated at $4.5 million. The irrigation district will assume full
responsibility to indemnify and defend the United States against any
third-party claims associated with the project. The irrigation district
will make a cash payment of $350,000 to the United States--a condition
that has already been met. The irrigation district will release the
United States from its obligation to remove existing dilapidated
facilities--cost estimated at $150,000 in 1978. The district will also
be solely responsible for the operations and maintenance of the
project, and will agree to continue to deliver water to and provide for
O&M of the wildlife Mitigation facilities at its own expense.
The legislation directs the BOR to release and discharge the
irrigation district's construction charge obligation under the 1979
repayment contract--present value estimated at $4.2 million. Within 180
days of the date of enactment, the BOR will transfer the title of the
irrigation works to district at no additional cost to the district. The
BOR will continue to provide power and energy for water pumping for the
project for a period of 50 years--starting October 1990--as provided
for in the irrigation discount provision in the Northwest Power Act. At
the end of that 50 year period, the irrigation district will have to
purchase its power at nonirrigation discount rates.
Mr. President, this legislation will resolve a long standing dispute
between the irrigation district and the Bureau of Reclamation that will
save the taxpayers the expense of financing a long, drawn out court
fight. I will work with my colleagues on the Energy and Natural
Resources Committee to see that this legislation is enacted this year.
______
By Mr. CRAIG (for himself, Mr. Simon, Mr. Thomas, Mr. Reid, Mr.
Graham, Mr. Akaka, and Mr. Cohen):
S. 2019. A bill to provide for referenda to resolve the political
status of Puerto Rico, and for other purposes; to the Committee on
Energy and Natural Resources.
puerto rico legislation
Mr. CRAIG. Mr. President, today I am introducing legislation which
would establish a congressionally recognized self-determination process
to resolve the political status of Puerto Rico. This proposal is made
in light of the formal request of the Legislature of Puerto Rico,
expressly directed to the 104th Congress, for a response to the 1993
plebiscite on Puerto Rico's future political status conducted under
local law.
Puerto Rico Legislature Resolution 62, adopted by the elected
representatives of the residents of Puerto Rico on November 14, 1994,
specifically calls upon this Congress to state the ``specific
alternatives that it is willing to consider, and the measures it
recommends the people of Puerto Rico should take as part of the process
to solve the problem of their political status.'' Even though time is
running out on the 104th Congress, this Senator believes it would be
wrong to adjourn
[[Page S9556]]
later this year without introducing in the Senate a proposal which
addresses the manner in which Puerto Rico's status can be resolved
consistent with both self-determination and the national interest.
The solution to Puerto Rico's status cannot be one which imposes a
result on the residents of Puerto Rico or on the United States. The
process we are proposing recognizes the right of self-determination on
both sides of the relationship. Let me explain why my colleagues should
support the bill I am offering.
Puerto Rico has been an unincorporated territory of the United States
for almost 100 years, subject to the plenary powers of Congress under
the territorial clause of the U.S. Constitution, article IV, section 3,
clause 2. Congressional authorization for the adoption of a local
constitution and delegation of authority for internal self-government
in 1952 represented progress in the evolution of the territory's
status, but the 3.8 million U.S. citizens residing in Puerto Rico do
not yet have equal legal and political rights with their fellow
citizens living in the States, or a guaranteed permanent status
protected by the U.S. Constitution.
Puerto Ricans have a statutory citizenship status prescribed by
Congress in 1917, with less than equal legal standing and political
rights while residing in Puerto Rico because it is not a State. In 1980
the U.S. Supreme Court ruled in Harris v. Rosario (446 U.S. 651) that
as long as Puerto Rico is an unincorporated territory subject to the
territorial clause it does not violate the fundamental rights which all
U.S. citizens have under the Constitution for Congress to treat the
U.S. citizens residing in Puerto Rico differently than their fellow
citizens in the 50 States as long as there is a rational basis for such
unequal treatment.
While any self-determination process we establish should allow the
people in Puerto Rico to express approval of this present status, the
idea that perpetual territorial status for such a large and populous
area is desirable for either Puerto Rico or the nation as a whole needs
to be examined closely. To begin with we need to recognize that
Americans from Puerto Rico have served with valor along side their
fellow citizens in every war this century, but Congress never has
afforded the people an opportunity to express their wishes as to the
options for full self-government and a permanent status outside the
territorial clause--either as a state or through separate nationhood.
In 1953 the U.N. recognized the Resolution 748 (VIII) that
establishment of internal constitutional self-government with the
consent of the residents was consistent with self-determination
principles of the U.N. Charter, and on that basis the United States
stopped reporting to the United Nations on the status of Puerto Rico.
While Puerto Rico is no longer a non-self-governing for purposes of
Article 73(e) of the U.N. Charter, Puerto Rico remains an
unincorporated territory under the U.S. constitutional process. In
1956, 4 years after the commonwealth structure for local self-
government was established, the U.S. Supreme Court recognized in Reid
v. Covert (354 U.S. 1), that the status of all such unincorporated
territories, results from the exercise of the territorial clause
authority and ``. . . the power of Congress to provide rules and
regulations to govern temporarily territories with wholly dissimilar
traditions and institutions . . . '' (emphasis added).
The traditions and institutions in Puerto Rico most relevant to the
political status of the people there are no longer wholly dissimilar to
those of the United States. Puerto Ricans have been U.S. nationals
since 1899, with U.S. citizenship for 80 years. Puerto Rico has been
within the U.S. legal and political system and customs territory for
nearly a century. A republican form of constitutional internal self-
government was instituted through a democratic process 45 years ago.
Clearly, the time has come to establish a process through which the
current territorial status can be ended in favor of a constitutionally
guaranteed permanent status consistent with full self-government, full
political participation and equal citizenship rights. That means full
integration into the United States on the basis of equality, or full
citizenship and a constitutionally protected political status through
separate nationhood.
Again, if the residents of Puerto Rico prefer to remain in an
unincorporated status and continue the present commonwealth structure
for local government, any congressionally recognized self-determination
process should enable them freely to express their wishes in this
regard. But they will not be able to make a free and informed choice
unless the legal and political nature of the current status is defined
in a constitutionally valid and intellectually honest manner.
Therein lies the problem with the 1993 plebiscite, in which the
status options were formulated by the local political parties. The
commonwealth option on the 1993 ballot included elements which were
simply unconstitutional, and policy proposals that were so implausible
and misleading as to make the voting results highly ambiguous. For
example, commonwealth received the lowest voter approval ever at 48
percent, while statehood received the highest vote ever at 46 percent.
But the commonwealth ballot definition include permanent union, the
same citizenship rights as persons born in the States, increased
Federal programs, and parity with the States in Federal budget outlay--
features which are constitutional guaranteed and/or politically
possible only with statehood.
At the same time, the commonwealth option also called for Federal tax
exemptions, fiscal autonomy, a local veto over Federal laws passed by
Congress under a so-called bilateral pact, and other features more
consistent with independence than territorial status. Independence
received 4 percent voter approval. The combined vote for the have it
both ways definition of commonwealth and independence was 52 percent,
but the combined vote for statehood and commonwealth as options which
involved guaranteed permanent union and U.S. citizenship was over 95
percent.
I doubt that the 103d Congress would have adjourned more than a year
after the 1993 vote without breaking a deafening silence regarding the
results of the plebiscite if the ballot definitions had not rendered
those results both ambiguous and confusing.
Apparently due in large part to Resolution 62, in this Congress the
House committees with primary jurisdiction with respect to Puerto
Rico's status conducted hearings on the 1993 voting results on October
17, 1995. Each of Puerto Rico's political parties were given a full and
fair hearing regarding their views on the 1993 vote.
Based on the record of that hearing, the leadership of the concerned
House committees transmitted a comprehensive statement to the leaders
of the Puerto Rico Legislature on February 29, 1996, setting forth
authoritative policy statements and points of law regarding the 1993
voting results. On March 6, 1996, legislation consistent with the
principles set forth in the February 29 policy statement was introduced
in the House. After hearings in San Juan Puerto Rico in which all
parties were heard once again regarding H.R. 3024--United States-Puerto
Rico Political Status Act--the bill was amended to meet certain
concerns that had been raised and unanimously approved by the Committee
on Resources on June 26, 1996.
On June 28, 1996, senior minority members on the two House committees
which had conducted the hearings on the 1993 vote also transmitted
views to leaders in the Puerto Rico Legislature regarding the results
thereof. In addition, on July 18, 1996, 11 members of the minority in
the House, including some of the most knowledgeable and experienced
Members of Congress where the issue of Puerto Rico's status is
concerned, wrote to that body's minority leader expressing their
support for the Puerto Rico status bill reported unanimously by the
Resources Committee on June 26, 1996.
What the measures taken by House committees and members to date
demonstrate is that there is some important new thinking in Congress
about the Puerto Rico status issue. There is an emerging bipartisan
consensus that the time has come for Congress to recognize that a
process which makes definitive self-determination and permanent full
self-government available to Puerto Rico is in the U.S. national
interest, as well as that of the residents of Puerto Rico.
[[Page S9557]]
In particular, I want to point out that the July 18, 1996 letter from
concerned members of the minority to House Minority Leader Gephardt
defends the specific approach to legitimate self-determination for
Puerto Rico set forth in H.R. 3024 against criticism generated by
supporters of the fatally-flawed and discredited definition of
commonwealth presented on the 1993 plebiscite ballot. Specifically, the
July 18 letter notes that:
Some have tried to revive discussion over the language and
citizenship provisions of the bill, even though these issues
were dealt with in the reported text of H.R. 3024. Others
claim that the ballot process is unfairly skewed toward one
option or another, hoping to revert back to the three-way
ballot in 1993 which yielded no clear majority. More than
just attempts to amend the legislation, these efforts are
aimed at delaying its consideration or tainting its language
so that it will never see the light of day.
I have described the response in the House to Resolution 62 of the
Puerto Rico Legislature in some detail so that my Senate colleagues can
better appreciate the need for some demonstration that Members of this
body have an interest in the issues raised by the formal request
directed by the local constitutional authorities to the 104th Congress.
The bill we are introducing today is not a definitive or final formal
response to that request, but it sends an important message to the
House and to Puerto Rico that the Senate also will address this matter
consistent with the principles of self-determination and the national
interest.
Accordingly, the legislation we are proposing, like the House
version, recognizes that the commonwealth option can and should be
presented accurately and fairly on a status referendum ballot. The
voters must be able to evaluate the current status and the commonwealth
structure for local government on the merits. But those who think that
Congress is required to adopt the same 3-option ballot format employed
in the 1993 local plebiscite format need to think again. While we need
to respect, study, and consider the 1993 vote despite obvious flaws in
the ballot, Congress cannot restrict itself to considering only past
practices in Puerto Rico or the approach previously considered by
Congress.
We need to keep an open mind, and this bill proposes a new approach
consistent with that being developed in the House. It recognizes that
Congress may determine that it could be misleading to present the
status quo option without distinguishing it in any way from the options
for ending territorial status and instituting fundamental changes that
would be required to establish permanent full self-government and a
constitutionally guaranteed status.
Only when the people who live in Puerto Rico are allowed to vote in a
referendum process which defines the choices in a way that is valid and
accurate will Congress be able to understand the meaning of the
results. Then Congress can respond to those results by proposing the
terms under which the preferred option would be possible, after which
an additional informed stage of self-determination can take place. If
the terms for change are not approved by the people, or the people vote
for the option of continued commonwealth, then Congress will have to
consider its response to that result as well.
Before my colleagues, or those responsible for these issues in the
administration, attempt to defend the approach of the 1993 plebiscite
ballot, I suggest they review all of the congressional documents
responding to Puerto Rico Legislature Resolution 62 referred to above.
To facilitate an openminded consideration of what we are proposing,
those documents are included here in the order mentioned above.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
House of Representatives,
Committee on Resources,
Washington, DC, February 29, 1996.
Hon. Roberto Rexach-Benitez,
President of the Senate.
Hon. Zaida Hernandez-Torres,
Speaker of the House, of the Commonwealth of Puerto Rico, San
Juan, PR.
Dear Mr. Rexach-Benitez and Ms. Hernandez-Torres: The
Committee on Resources and the Committee on International
Relations are working cooperatively to establish an official
record which we believe will enable the House to address the
subject-matter of Concurrent Resolution 62, adopted by the
Legislature of Puerto Rico on December 14, 1994. While the
specific measures addressing Puerto Rico's status which the
104th Congress will consider are still being developed, we
believe the history of the self-determination process in
Puerto Rico, as well as the record of the Joint Hearing
conducted on October 17, 1995 by the Subcommittee on Native
American and Insular Affairs and the Subcommittee on Western
Hemisphere, lead to the following conclusions with respect to
the plebiscite conducted in Puerto Rico on November 14, 1993:
1. The plebiscite was conducted under local law by local
authorities, and the voting process appears to have been
orderly and consistent with recognized standards for lawful
and democratic elections. This locally organized self-
determination process was undertaken within the authority of
the constitutional government of Puerto Rico, and is
consistent with the right of the people of Puerto Rico freely
to express their wishes regarding their political status and
the form of government under which they live. The United
States recognizes the right of the people of Puerto Rico to
self-determination, including the right to approve any
permanent political status which will be established upon
termination of the current unincorporated territory status.
Congress will take cognizance of the 1993 plebiscite results
in determining future Federal policy toward Puerto Rico.
2. The content of each of the three status options on the
ballot was determined by the three major political parties in
Puerto Rico identified with those options, respectively. The
U.S. Congress did not adopt a formal position as to the
feasibility of any of the options prior to presentation to
the voters. Consequently, the results of the vote necessarily
must be viewed as an expression of the preferences of those
who voted as between the proposals and advocacy of the three
major political parties for the status option espoused by
each such party.
3. None of the status options presented on the ballot
received a majority of the votes cast. While the commonwealth
option on the ballot received a plurality of votes, this
result is difficult to interpret because that option
contained proposals to profoundly change rather than continue
the current Commonwealth of Puerto Rico government structure.
Certain elements of the commonwealth option, including
permanent union with the United States and guaranteed U.S.
citizenship, can only be achieved through full integration
into the U.S. leading to statehood. Other elements of the
commonwealth option on the ballot, including a government-to-
government bilateral pact which cannot be altered, either are
not possible or could only be partially accomplished through
treaty arrangements based on separate sovereignty. While the
statehood and independence options are more clearly defined,
neither of these options can be fully understood on the
merits, unless viewed in the context of clear Congressional
policy regarding the terms under which either option could be
implemented if approved in a future plebiscite recognized by
the federal government. Thus, there is a need for Congress to
define the real options for change and the true legal and
political nature of the status quo, so that the people can
know what the actual choices will be in the future.
4. Although there is a history of confusion and ambiguity
on the part of some in the U.S. and Puerto Rico regarding the
legal and political nature of the current ``commonwealth''
local government structure and territorial status, it is
incontrovertible that Puerto Rico's present status is that of
an unincorporated territory subject in all respects to the
authority of the United States Congress under the Territorial
Clause of the U.S. Constitution. As such, the current status
does not provide guaranteed permanent union or guaranteed
citizenship to the inhabitants of the territory of Puerto
Rico, nor does the current status provide the basis for
recognition of a separate Puerto Rican sovereignty or a
binding government-to-government status pact.
5. In light of the foregoing, the results the November 14,
1993 vote indicates that it is the preference of those who
cast ballots to change the present impermanent status in
favor of a permanent political status based on full self-
government. The only options for a permanent and fully self-
governing status are: 1) separate sovereignty and full
national independence, 2) separate sovereignty in free
association with the United States; 3) full integration into
the United States political system ending unincorporated
territory status and leading to statehood.
6. Because each ballot option in the 1993 plebiscite
addressed citizenship, we want to clarify this issue. First,
under separate sovereignty Puerto Ricans will have their own
nationality and citizenship. The U.S. political status,
nationality, and citizenship provided by Congress under
statues implementing the Treaty of Paris during the
unincorporated territory period will be replaced by the new
Puerto Rican nationhood and citizenship status that comes
with separate sovereignty. To prevent hardship or unfairness
in individual cases, the U.S. Congress may determine the
requirements for eligible persons to continue U.S.
nationality and citizenship, or be naturalized, and this will
be governed by U.S. law, not Puerto Rican law. If the voters
freely choose separate sovereignty, only those born in Puerto
Rico who have acquired U.S. citizenship on some other
[[Page S9558]]
legal basis outside the scope of the Treaty of Paris
citizenship statutes enacted by Congress during the
territorial period will not be affected. Thus, the automatic
combined Puerto Rican and U.S. citizenship described under
the definition of independence on the 1993 plebiscite ballot
was a proposal which is misleading and inconsistent with the
fundamental principles of separate nationality and non-
interference by two sovereign countries in each other's
internal affairs, which includes regulation of citizenship.
Under statehood, guaranteed equal U.S. citizenship status
will become a permanent right. Under the present Commonwealth
of Puerto Rico government structure, the current limited U.S.
citizenship status and rights will be continued under Federal
law enacted under the Territorial Clause and the Treaty of
Paris, protected to the extent of partial application of the
U.S. Constitution during the period in which Puerto Rico
remains an unincorporated territory.
7. The alternative to full integration into the United
States or a status based on separate sovereignty is
continuation of the current unincorporated territory status.
In that event, the present status quo, including the
Commonwealth of Puerto Rico structure for local self-
government, presumably could continue for some period of
time, until Congress in its discretion otherwise determines
the permanent disposition of the territory of Puerto Rico and
the status of its inhabitants through the exercise of its
authority under the Territorial Clause and the provisions of
the Treaty of Paris. Congress may consider proposals
regarding changes in the current local government structure,
including those set forth in the ``Definition of
Commonwealth'' on the 1993 plebiscite ballot. However, in our
view serious consideration of proposals for equal treatment
for residents of Puerto Rico under Federal programs will not
be provided unless there is an end to certain exemptions from
federal tax laws and other non-taxation in Puerto Rico, so
that individuals and corporations in Puerto Rico have the
same responsibilities and obligations in this regard as the
states. Since the ``commonwealth'' option on the 1993
plebiscite ballot called for ``fiscal autonomy,'' which is
understood to mean, among other things, continuation of the
current exemptions from federal taxation for the territory,
this constitutes another major political, legal and economic
obstacle to implementing the changes in Federal law and
policy required to fulfill the terms of the ``Definition of
Commonwealth.''
8. In addition, it is important to recognize that the
existing Commonwealth of Puerto Rico structure for local
self-government, and any other measures which Congress may
approve while Puerto Rico remains an unincorporated
territory, are not unalterable in a sense that is
constitutionally binding upon a future Congress. Any
provision, agreement or pact to the contrary is legally
unenforceable. Thus, the current Federal laws and policies
applicable to Puerto Rico are not unalterable, nor can they
be made unalterable, and the current status of the
inhabitants is not irrevocable, as proposed under the
``commonwealth'' option on the 1993 plebiscite ballot.
Congress will continue to respect the principle of self-
determination in its exercise of Territorial Clause powers,
but that authority must be exercised within the framework of
the U.S. Constitution and in a manner deemed by Congress to
best serve the U.S. national interest. In our view, promoting
the goal of full self-government for the people of Puerto
Rico, rather than remaining in a separate and unequal status,
is in the best interests of the United States. This is
particularly true due to the large population of Puerto Rico,
the approach of a new century in which a protracted status
debate will interfere with Puerto Rico's economic and social
development, and the domestic and international interest in
determining a path to full self-government for all
territories with a colonial history before the end of this
century.
9. The record of the October 17, 1995 hearing referred to
above makes it clear that the realities regarding
constitutional, legal and political obstacles to implementing
the changes required to fulfill the core elements of the
``commonwealth'' option on the ballot were not made clear and
understandable in the public discussion and political debate
leading up to the vote. Consequently, Congress must determine
what steps the Federal government should take in order to
help move the self-determination process to the next stage,
so that the political status aspirations of the people can be
ascertained through a truly informed vote in which the wishes
of the people are freely expressed within a framework
approved by Congress. Only through such a process will
Congress then have a clear basis for determining and
resolving the question of Puerto Rico's future political
status in a manner consistent with the national interest.
Ultimately, Congress alone can determine Federal policy
with respect to self-government and self-determination for
the residents of Puerto Rico. It will not be possible for the
local government or the people to advance further in the
self-determination process until the U.S. Congress meets its
moral and governmental responsibility to clarify Federal
requirements regarding termination of the present
unincorporated territory status of Puerto Rico in favor of
one of the options for full self-government.
The results of the locally administered 1993 vote are
useful in this regard, but in our view are not definitive
beyond what has been stated above. The question of Puerto
Rico's political status remains open and unresolved.
Sincerely,
Don Young,
Chairman, Committee on Resources.
Elton Gallegly,
Chairman, Subcommittee on Native American and Insular
Affairs.
Ben Gilman,
Chairman, Committee on International Relations.
Dan Burton,
Chairman, Subcommittee on the Western Hemisphere.
Congress of the United States,
Washington, DC, June 28, 1996.
Senator Charlie Rodriguez,
Majority Leader, Puerto Rico Senate, the Capitol, San Juan,
PR.
Dear Senator Rodriguez: As the senior democrats on the
House Resources and International Relations Committees we
have always been concerned about the economic and political
future of Puerto Rico. As the 104th Congress considers
proposed legislation regarding the process of self-
determination for Puerto Rico, we believe that it is time to
reexamine the status issue in light of the 1993 plebiscite.
On December 14, 1994 the Legislature of Puerto Rico adopted
Concurrent Resolution 62 which sought congressional guidance
regarding the results of the 1993 status plebiscite.
Recently, the Chairman of the relevant committees and
subcommittees that deal with Puerto Rico's political status
responded to this important resolution. Although we agree
with many portions of the letter, we would like to outline
some of our views on the issue as well.
We believe that the definition of Commonwealth on the 1993
plebiscite ballot was difficult given Constitutional, and
current fiscal and political limitations. Through numerous
Supreme Court and other Federal Court decisions, it is clear
that Puerto Rico remains an unincorporated territory and is
subject to the authority of Congress under the territorial
clause. Another aspect of this definition called for the
granting of additional tax breaks to Section 936 companies
and an increase in federal benefits in order to achieve
parity with all the states without having to pay federal
taxes. It is important that any judgment on the future of
Puerto Rico be based on sound options that reflect the
current budgetary context in the United States. This context
should also reflect the bi-partisan agreement being worked on
by Congress which reduces Section 936 benefits.
Since Congress has neither approved nor resolved the 1993
plebiscite results, we are in favor of legislation that will
establish a future process of self-determination for the
people of Puerto Rico. This legislation should include a
requirement for status plebiscites to take place within a
certain number of years and define various status options in
a realistic manner.
In two years, Puerto Rico will celebrate its 100th year as
part of the United States. Congress has both a political and
moral responsibility to ensure that the 3.5 million Americans
living in Puerto Rico have a right to express their views on
the important issue of political status on a regular basis.
We hope this additional response to Concurrent Resolution
62 is helpful.
Sincerely,
Robert Torricelli,
Bill Richardson,
Lee Hamilton,
Dale Kildee,
____
Congress of the United States,
House of Representatives,
Washington, DC, July 18, 1996.
Hon. Richard Gephardt,
Minority Leader, the Capitol, Washington, DC.
Dear Minority Leader Gephardt: Given the short time before
the adjournment of the 104th Congress, we are eagerly trying
to secure floor time for a bill that is of great importance
to us, H.R. 3024, the United States-Puerto Rico Political
Status Act. Unfortunately, we understand that certain
Representatives have approached you in recent days in hopes
of derailing this legislative effort.
After nearly 100 years as a territory of the United States,
Puerto Rico must be provided with the opportunity to
determine its future. While some would have you believe that
there is no need for a self-determination process, it must be
clear that the existing ``Commonwealth'' structure was never
meant to be a permanent solution for Puerto Rico,
particularly since the 3.8 million U.S. citizens in Puerto
Rico are disenfranchised under the current arrangement. Just
as the United Nations has called for an end to colonialism by
the year 2000, the United States must lead by example by
putting an end to the disenfranchisement of its own citizens
and allowing Puerto Rico to resolve, once and for all, its
status dilemma.
As you know, H.R. 3024 establishes a process whereby the
U.S. citizens of Puerto Rico would be allowed to vote on
self-determination by the end of 1998. On the first ballot,
the voters would choose to either change their status or
maintain the status quo. Then, assuming the majority votes to
change their status, they would then again vote to choose
between a path toward separation (independence or free
association) or a path
[[Page S9559]]
toward integration (statehood). In each instance, the results
would be definitive and would produce a majority.
With over sixty cosponsors in the House, H.R. 3024 has
strong bipartisan support. During the full Resources
Committee markup last month, the bill was reported
unanimously after adopting only minor perfecting amendments.
It is now before the Rules Committee and we are hopeful that
it will soon proceed to the House floor. Opponents of H.R.
3024, however, are using a number of tactics to try to delay
this process and confuse the issue.
Some have tried to revive discussions over the language and
citizenship provisions of the bill, even though these issues
were dealt with in the reported text of H.R. 3024. Others
claim that the ballot process is unfairly skewed toward one
option or another, hoping to revert back to the three-way
ballot in 1993 which yielded no clear majority. More than
just attempts to amend the legislation, these efforts are
aimed at delaying its consideration or tainting its language
so that it will never see the light of day this year on the
House floor.
All told, these efforts should not obscure the original
intent of the legislation: to provide Puerto Rico with a fair
process of self-determination for the first time in the
Island's history. Your support for this effort is needed and
would help Congress give the U.S. citizens of Puerto Rico the
voice and participation in the democratic process which they
are entitled to and deserve.
Thank you for your interest in the affairs of Puerto Rico.
If you would like to discuss this matter further, please do
not hesitate to contact us.
Sincerely,
Carlos A. Romero-Barcelo, Robert A. Underwood, Nick
Rahall, Sam Farr, Esteban E. Torres, Bill Richardson,
Patrick J. Kennedy, Jose E. Serrano, Dale E. Kildee,
Pat Williams, Neil Abercrombie.
Mr. CRAIG. Mr. President, I am proud to be an original cosponsor of
the legislation introduced by my colleague from Idaho, Senator Craig,
with whom I have worked closely on many issues over the years.
This important bill establishes a process whereby the people of
Puerto Rico can vote for a retention or a change of their current
Commonwealth status, a status preserved as a result of the November 14,
1993 plebiscite. If Puerto Ricans choose change, they can select a path
toward separation--independence or free association--or a path toward
incorporation--statehood. In short, the bill establishes an orderly
path toward true self-determination in the true democratic spirit of
our Nation.
One might ask why such legislation is necessary given that less than
3 years ago, a plurality of U.S. citizens in Puerto Rico chose the
Commonwealth option on the November 14 ballot. This option--drafted by
the Commonwealth party itself, under the agreed-upon terms of the
plebiscite--presented the people of Puerto Rico with utterly inflated
and unrealistic expectations regarding the island's future relationship
with the United States. In effect, the Commonwealth option guaranteed
United States citizens of Puerto Rico many of the benefits of statehood
and many of the benefits of separation without any of the accompanying
responsibilities of either. Given these pie-in-the-sky promises, it is
no wonder that a plurality of Puerto Ricans--though, important, not a
majority--chose the Commonwealth option. However, the future of Puerto
Rico's relationship with the United States remains unclear, and
congressional action providing Puerto Ricans with the power to
determine their fate through a fair and orderly process is long
overdue.
It is time that Congress' silence on the results of the November 14,
1993 Puerto Rican plebiscite end, and that we afford United States
citizens in Puerto Rico realistic and just options for determining
Puerto Rico's future relationship with the United States of America.
The Puerto Rican Government has asked that we do as much. On December
14, 1994, the legislature of Puerto Rico adopted Concurrent Resolution
62 which formally requested congressional guidance regarding the
results of the 1993 status plebiscite. This legislation provides this
guidance.
The process established by this legislation would be unprecedented
and long overdue, affording Puerto Ricans for the first time a fair
process of self-determination that is consistent with everything
America stands for. We owe Puerto Rico--which in 2 years will have been
part of the United States for 100 years--at least this much.
For decades, we have treated the right to self-determination as a
cornerstone of our foreign policy. It is time that we practice what we
preach.
______
By Mr. GRASSLEY (for himself and Mr. Harkin):
S. 2020. A bill to establish America's Agricultural Heritage
Partnership in Iowa, and for other purposes; to the Committee on Energy
and Natural Resources.
the agricultural heritage partnership act of 1996
Mr. GRASSLEY. Mr. President, today I am introducing the America's
Agricultural Heritage Partnership Act of 1996. This legislation would
authorize the designation of several counties in northeast Iowa as
America's Agricultural Heritage Partnership. This project is more
commonly known as Silos and Smokestacks.
The story of agriculture in the United States is not only one of
national progress and bounty, but is also a story of world progress and
bounty. American agriculture is a national and a world treasure. It is
a story that needs to be told. That is the silos part of Silos and
Smokestacks. The smokestacks are the industrial base that supports our
country's agriculture. The mission of America's Agricultural Heritage
Partnership--Silos and Smokestacks--is to tell their combined story,
through traditional exhibits and by designed routes through the
countryside highlighting areas of importance and interest.
Community leaders in Waterloo, IA, the surrounding communities, and
the rural area began meeting several years ago to determine how best to
tell the agricultural story, especially how it relates to our country's
great industrial history. Because of their interest, the National Park
Service was then requested to conduct a study to develop
recommendations as to the location of a heritage area and how to
present the history.
That study recommended that northeast Iowa be the location for an
agricultural heritage partnership area. Since that time, the
communities have continued their work to lay a proper foundation for
the project pending congressional authorization for Silos and
Smokestacks.
Waterloo is located in the center of some of the richest, most
productive agricultural land in the world. It is also home to John
Deere and other farm equipment manufacturers and other related
agricultural industries. Waterloo is an ideal location to tell the
combined story of American agriculture and the industry associated with
it.
This legislation would authorize the Secretary of Agriculture to make
grants or enter into cooperative agreements to further this project. He
may also provide necessary technical assistance.
This is a worthwhile endeavor to tell an important American story to
our citizens and the World. I strongly encourage enactment of this
legislation.
Mr. HARKIN. Mr. President, I rise as cosponsor of America's
Agricultural Heritage Partnership Act of 1996. This bill would
establish America's Agricultural Heritage Partnership in northeast Iowa
in order to promote the story of agriculture in our Nation's rich
history.
A few years ago, leaders from Waterloo and other communities in
northeast Iowa developed an initiative called Silos and Smokestacks.
Silos and Smokestacks is a private organization that has worked to
remodel and renovate old, and often abandoned, buildings in Waterloo.
This effort is a wonderful example of communities and concerned
citizens working together to preserve a unique part of American
history.
The hard work by Silos and Smokestacks has provided the foundation
for a unique heritage park that would combine the stories of our
Nation's agricultural and industrial development. In the past, the
focus of the National Park Service has been to create and administer
the so-called natural areas, commonly known as our National Park
System. A heritage park involves local, State, Federal, and private
interests in recognizing and preserving sites of cultural and
historical significance. Heritage areas are something like a large
interactive museum in which people have the opportunity to gain
firsthand knowledge of an important facet of our Nation's history.
The National Park Service has determined that northeast Iowa is an
ideal
[[Page S9560]]
location for a heritage park. This park would tell the nationally
significant, but often overlooked, story of American agriculture.
Northeast Iowa combines the rich histories of our Nation's farming and
industrial sectors. In the area surrounding Waterloo one will find some
of the most productive and fertile land in the Nation. Boasting the
production lines of John Deere and other farm equipment manufacturers
and some of the largest meatpacking operations in the Midwest, the city
of Waterloo represents our Nation's industrial strength. Taken
together, this area represents nearly every aspect of agricultural and
food production.
The National Park Service has suggested that four principal topics of
the heritage area could include: the amazing science of agriculture,
agriculture as a way of life, organizing for survival, and crops from
the field to the table.
The legislation introduced today would authorize the Secretary of
Agriculture to make grants and provide technical and management
assistance to those entities developing the introductory heritage park.
This assistance would be the critical impetus to see this unique
project through to completion. A heritage project in northeast Iowa
would provide countless Americans with a valuable insight into one of
the most fascinating, and important, aspects of American society.
______
By Mrs. FEINSTEIN (for herself and Mrs. Boxer):
S. 2021. A bill to suspend temporarily the duty on certain chemicals
used in the formulation of an HIV protease inhibitor; to the Committee
on Finance.
drug development acceleration legislation
Mrs. FEINSTEIN. Mr. President, as a nation, we must do everything we
can to find a cure for HIV/AIDS. However, until we have a cure for this
urgent health priority, we need to find effective treatments and put
them in the hands of people with needs.
I rise today to introduce legislation, joined by my colleague Senator
Boxer, to eliminate the tariff for several chemical compounds. These
compounds are required for the manufacture of an AIDS drug, nelfinavir
mesylate, which has produced promising test results.
protease inhibitors
Nelfinavir is one of a new class of AIDS drugs called protease
inhibitors. The drugs are designed to block an enzyme, called protease,
that appears to play a crucial role in the replication of HIV.
As the Wall Street Journal reported in its coverage of the recently
concluded 11th International Conference on AIDS in Vancouver, BC,
researchers have evidence that protease inhibitor drugs, when taken in
combination with existing therapies, can reduce levels of the AIDS-
causing virus in blood to levels so low that the virus is undetectable
by even the most sensitive tests. AIDS researchers at the conference
describe this new drug therapy as a major and unprecedented step in
combating AIDS, one that may represent a treatment approach that may
delay the onset of AIDS, extend patients' lives, and transform AIDS
into a long-term, manageable disease.
Mr. President, HIV/A is a critical public health issue, requiring the
Nation's full attention. In America today, AIDS is the leading cause of
death for young Americans between the ages of 25 and 44.
More than 220,700 American men, women and children have died of AIDS
by the end of 1993. While the number of deaths trails other urgent
health priorities such as cancer or heart disease, AIDS is nearly
equally debilitating to the Nation when measured by the years of
potential and productive life lost due to the disease.
In my State of California, 1 of every 200 Californians is HIV
positive, while 1 of every 25 is HIV positive in my home of San
Francisco.
AIDS is a paramount public health concern and every effort should be
made to ensure that drugs are made available as swiftly and at as low a
cost as possible. We simply cannot delay or waste time in providing
drugs, treatments or materials. This tariff legislation represents a
modest, but important step.
zero tariff for pharmaceuticals
Under the 1994 GATT agreement, most pharmaceutical products are
entitled to enter the country without a tariff. However, the zero
tariff does not apply to many new pharmaceutical products or their
chemical ingredients. As a result, the chemicals needed to make
nelfinavir mesylate, an AIDS protease inhibitor currently undergoing
research testing, but not yet a recognized pharmaceutical product under
GATT, would be ineligible for the pharmaceutical zero tariff.
During negotiations with World Trade Organization nations to
implement the pharmaceutical zero tariff, the administration
successfully added the chemical compounds needed to manufacture the
AIDS drug. As a result, the tariff will drop to zero on April 1, 1997.
Nelfinavir is on the Food and Drug Administration's fast-track
approval process for AIDS drugs. Commercial production of the drug will
begin well before April 1, in order that the drug can be immediately
available to AIDS patients upon FDA approval. Although currently
imported duty-free for use in clinical research trials, the imported
chemicals will soon be used for commercial production. During the
period of commercial production prior to April 1, the chemical
compounds will face a 12 percent tariff, which will only add to the
cost and delay the drug's production and distribution to individuals in
need.
This proposed legislation would eliminate the tariff for two of the
essential and unique chemical inputs, as well as for the active
ingredient nelfinavir (Acid Chloride, Chloroalcohol and AG 1346), from
August 1 when the drug production increases, until April 1, 1997 when
the tariff drops to zero under the WTO pharmaceutical agreement.
Without this legislation, the manufacturer would face a 12 percent
tariff for its chemicals, which are not available in the United States,
as the drug proceeds into production. This tariff reduction will allow
for the acceleration of drug production, providing more timely relief
for the public.
The Federal Government needs to do everything it can to expedite the
development and distribution of AIDS drugs. Without this legislation to
remove the tariff, we will be tolerating needless hurdles and delay,
rather than needed relief.
The Congressional Budget Office is reviewing the cost of the proposed
legislation. However, because the WTO negotiations will already provide
a zero tariff for the chemical compounds on April 1, the legislation
may have a de minimis impact on tariff revenue. For AIDS patients,
their families and those at risk, it's a step Congress should take.
I have also requested various Federal agencies and other
organizations to review the legislation and ensure that other important
Federal policies, like narcotics enforcement or maintaining a strong,
domestic chemical industry, are not undermined. The Drug Enforcement
Agency and U.S. Customs Service indicate the chemicals present no risk
for law enforcement or anti-narcotics enforcement priorities.
Similarly, the U.S. Trade Representative's Industry Sector Advisory
Committee for chemicals and the International Trade Commission also
reviewed and approved the administration's efforts to include the
chemicals in the pharmaceutical appendix negotiations. PhRMA, the
Pharmaceutical Research and Manufacturers of America, also has reviewed
the proposal and does not oppose the legislation.
The administration deserves tremendous credit for extending a zero
tariff for these chemical components. It is my hope that miscellaneous
tariff legislation, which is currently pending before the Finance
Committee, could accommodate this noncontroversial tariff issue, which
can accelerate the development and production of an AIDS drug, with the
potential to provide meaningful relief.
As a matter of public policy, we should do everything we can to
develop AIDS drugs and treatments. Patients and their families cannot
wait for the next round of drugs to be approved and added to the zero-
tariff list, scheduled for review in 1999. By importing the chemical
compounds without a tariff, we can accelerate the drug development
process.
I am pleased to introduce this tariff legislation, along with my
colleague Senator Boxer, and will work with the chairman and ranking
members of the Finance Committee to pursue the legislation.
[[Page S9561]]
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. 2021
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. TEMPORARY DUTY SUSPENSION.
(a) In General.--Subchapter II of chapter 99 of the
Harmonized Tariff Schedule of the United States is amended by
inserting in numerical sequence the following new headings:
``9902.30.6 3-acetoxy-2-
3. methylbenzoyl
chloride (CAS No.
167678-46-8)
(provided for in
subheading
2918.29.65)......... Free No change On or before
3/30/97
9902.30.64. 2S, 3R-N-Cbz-3-amino-
1-chloro-4-
phenylsulfanyl-butan-
2-ol (CAS No. 159878-
02-1) (provided for
in subheading
2922.19.60)......... Free No change On or before
3/30/97
9902.30.65. N-(1,1-
dimethylethyl)deca-
hydro-2-[2-hydroxy-
3[(3-hydroxy-2-
methylbenzoyl)
amino]-4-
(phenylthio)butyl]-3-
isoquinolinecarboxam
ide, [3S-
[2(2S*,3S*),
3.a.,4a.b.,8a.b.]]
(CAS No. 159989-64-
7) (provided for in
subheading
2933.40.60)......... Free No change On or before
3/30/97''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a)
applies with respect to goods entered, or withdrawn from
warehouse for consumption, on or after the date that is 15
days after the date of the enactment of this Act.
(2) Retroactive application.--Notwithstanding section 514
of the Tariff Act of 1930 (19 U.S.C. 1514) or any other
provision of law, upon proper request filed with the Customs
Service, before the 90th day after the date of the enactment
of this Act, any entry, or withdrawal from warehouse for
consumption, of an article described in heading 9902.30.63,
9902.30.64, or 9902.30.65 of the Harmonized Tariff Schedule
of the United States (as added by subsection (a)), that was
made--
(A) on or after August 1, 1996, and
(B) before the date that is 15 days after the date of the
enactment of this Act,
shall be liquidated or reliquidated as though such entry or
withdrawal was made on the 15th day after such date of
enactment.
______
By Mr. THURMOND (for himself, Mr. Faircloth, Mr. Hollings, Mr.
Coats, and Mr. Helms):
S. 2022. A bill to amend title 23, United States Code, to modify the
minimum allocation formula under the Federal-aid highway program, to
provide reimbursement to each State with respect to which the highway
users in the State paid into the highway trust fund an amount in excess
of the amount received by the State from the highway trust fund, and
for other purposes; to the Committee on Environment and Public Works.
The Surface Transportation Equity Act
Mr. THURMOND. Mr. President, I rise today to introduce legislation,
on behalf of myself and Senators Faircloth, Hollings, Coats, and Helms,
to correct one of the most inequitable and unfair policies of our
Government--the Federal aid to highways distribution formulas.
Currently, our Federal Aid to Highways Program collects 18.3 cents tax
on each gallon of gasoline. That money is then sent to the Federal
Treasury where deductions are made for deficit reduction and other
Department of Transportation programs. The remainder is then
apportioned among the States by statutory formulas which is used for
infrastructure projects. In 1995, South Carolina received 52 cents for
each dollar its citizens contributed to the fund. Other States were
allocated $2 or more for each dollar contributed. This disparity is
inexcusable.
This donor State system was originally devised to build the
Interstate Highway System. In order to build highways across the vast
expanses of the less populated Western States, it was necessary to
incorporate a system in which some States contribute more than they
receive. Next year, the last segment of the Interstate System will be
completed. Subsequently, all our surface transportation priorities will
then be local, but the donor/donee system with its unfair formulas will
still be in place.
The statutory formulas are largely based on 1950's population data.
Needless to say, there have been great population shifts in this
country since that time. As a result, high-growth States have become
desperate to find money to cope with the growing demand for highway
construction and maintenance. Other States, however, are allocated such
an excess amount that some of their funds go unused. In some cases they
seek legislation to use the money for more exotic transportation
purposes. We should not be building roads where people have been--we
shoud build them where they are or where they are going. The present
situation is equivalent to laying railroad tracks behind the train. It
is inefficient, wasteful, and does not address the transportation needs
of our Nation.
Unlike other programs, our Federal aid highway system was intended to
be a user fee system where the gas taxes motorists pay go to maintain
and improve the roads on which they drive. Unfortunately, the current
system does not work in that manner. For example, when a school teacher
in Mt. Pleasant, SC, buys gas to commute to her job in Charleston, she
should expect that the tax she has paid is going to pay part of the
cost of replacing the Cooper River Bridge which is in danger of
collapse. Instead, 48 cents of each dollar she pays in gas tax goes to
finance projects in other States. On the other hand, when a school
teacher in one of the donee States does the same thing, she receives
more than double her money back in road improvements. This is simply
unfair.
The donor States have made tremendous sacrifices to build the
Interstate System from which we all benefit. They have for years
postponed addressing critical highway needs at home. The time has come
for our national policy to recognize this contribution and address this
issue fairly.
Mr. President, the bill we are introducing is simple. It stipulates
that the portion of the Federal highway distribution to a State in each
year shall be equal to its percentage of all contributions to the fund.
In other words, if South Carolina contributes 1.8 percent of the trust
fund in a year, it would get back 1.8 percent of whatever amount is
appropriated out of the fund that year. Further, my bill would
establish a 5-year program to bring the historic donor States into
parity with the rest of the country. After implementation of this bill
then we will have a Federal Highway Program that is fair to all.
Mr. President, if we are to reauthorize a Federal Highway Program, it
must be a fair one. My bill presents a fair and equitable formula for
doing this. I urge my colleagues to join us in support of this
legislation.
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. 2022
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 ``Surface Transportation
Equity Act of 1996''.
SEC. 2. MINIMUM ALLOCATION.
(a) Fiscal Year 1998 and Thereafter.--Section 157(a) of
title 23, United States Code, is amended by adding at the end
the following:
``(5) Fiscal year 1998 and thereafter.--In fiscal year 1998
and each fiscal year thereafter, the Secretary, after making
the allocations described in section 3 of the Surface
Transportation Equity Act of 1996, shall allocate among the
States amounts sufficient to ensure that a State's percentage
of the total apportionments in each fiscal year and
allocations for the prior fiscal year from funds made
available out of the Highway Trust Fund is not less than 100
percent of the percentage of estimated tax payments
attributable to highway users in the State paid into the
Highway Trust Fund in the latest fiscal year for which data
are available.''.
(b) Conforming Amendment.--Section 157(a)(4) of title 23,
United States Code, is amended by striking the paragraph
designation and all that follows before ``on October 1'' and
inserting the following:
``(4) Fiscal years 1992-1997.--In each of fiscal years 1992
through 1997,''.
SEC. 3. DONOR STATE REIMBURSEMENT.
(a) Allocation.--Over the period consisting of fiscal years
1998 through 2002, the Secretary of Transportation shall
proportionally allocate to each eligible State described in
subsection (b) the total amount of the excess described in
subsection (b).
(b) Eligible States.--For the purpose of this section, an
eligible State is a State with respect to which the highway
users in the State paid into the Highway Trust Fund, during
the period consisting of July 1, 1957, through the end of the
latest fiscal year for which data are available, an amount in
excess of the amount received by the State from the Highway
Trust Fund during that period.
(c) Formula.--For each fiscal year, the Secretary of
Transportation shall allocate the amounts made available
under subsection (a) for the fiscal year in such a way
[[Page S9562]]
as to bring each successive eligible State, or eligible
States, with the lowest dollar return on dollar paid into the
Highway Trust Funding during the period described in
subsection (b) up to the highest common return on dollar paid
that can be funded with the amounts made available under
subsection (a).
(d) Applicability of Chapter 1 of Title 23.--Funds
allocated under this section shall be available for
obligation in the same manner and for the same purposes as if
the funds were apportioned for the surface transportation
program under chapter 1 of title 23, United States Code,
except that the funds shall remain available until expended.
(e) Administrative Expenses.--
(1) Deduction.--For each fiscal year, prior to making
allocations under this section, the Secretary of
Transportation shall deduct such amount, not to exceed 3\3/4\
percent of the amount made available under subsection (f) for
the fiscal year, as the Secretary determines is necessary to
pay the administrative expenses of carrying out this section.
Amounts so deducted shall remain available until expended.
(2) Consideration of prior deductions.--In determining each
amount to be deducted under paragraph (1), the Secretary of
Transportation shall take into consideration the unexpended
balance of any amounts deducted for prior fiscal years under
paragraph (1).
(f) Authorization of Appropriations.--There are authorized
to be appropriated out of the Highway Trust Fund such sums as
are necessary to carry out this section.
Mr. HOLLINGS. Mr. President, 5 years ago I opposed legislation
extending our Nation's Highway Program. I did that, not because we do
not need highways--they have been a fine investment--but because the
funding distribution to States had become so egregiously unfair that it
threatened support for any highway program at all. It is interesting to
note that today we have proposals in the Congress essentially to follow
that logic by repealing most of the program to the States on the basis
that the Federal funding pattern is so incredibly wrong. As such, I
make the case again today for a fair and rational distribution of
highway funds and put the Senate on notice that the distribution must
change when the Congress considers highway program revisions next year.
The U.S. General Accounting Office has studied highway spending again
since the 1991 ISTEA legislation, and reported in November 1995 what
Senators have long known--a formula that provided South Carolina 52
cents this year for a dollar of taxes contributed is unfair and
untenable.
This is not just a matter of my State receiving less. It is a matter
of how best to distribute funds for our Nation's highway needs.
Objective studies have found that our current funding pattern is wrong,
outdated, and unconnected to highway needs. As the GAO put it, ``the
States' funding shares for the four major programs are divorced from
current conditions,'' and the underlying factors for the two largest
programs are ``irrelevant to the highway system's needs.''
Particularly, the current distribution to States includes
significant, indirect influences from earlier, unfair funding patterns.
It includes postal road factors from the 1921 formula, population data
from the 1980 census, and bridge costs reported from States nearly a
decade ago which were wildly disparate. Why should South Carolina have
gotten $38 per square foot to replace bridges while the District of
Columbia received $223 per square foot? Why should these amounts be
grandfathered into today's allocations?
Not only did the GAO declare last year that these formula factors are
``irrelevant,'' it suggested better factors more than 10 years ago. At
that time, the GAO recommended making a transition to a more fair
formula in a way that did not hurt states that had been receiving a
greater than equitable share of highway formulas. But as the GAO
reported last year, ``However, the Congress elected not to change the
basic formula structure.''
Mr. President, I voted against ISTEA because of the objective, well-
documented unfairness of the highway formula, and will vigorously
oppose any highway bill next year that does not provide fairness. The
legislation we are introducing here today is a good starting point to
better address our Nation's highway needs.
______
By Mr. REID:
S. 2023. A bill to provide for travelers' rights in air commerce, and
for other purposes; to the Committee on Commerce, Science, and
Transportation.
The Travelers' Rights Act of 1996
Mr. REID. Mr. President, as our open society has evolved, the
Government has consistently, though in varying degrees, had to define
the rights of consumers and citizens. In this regard, I introduce today
the Travelers' Rights Act. This bill is to expedite access to
information to airline customers and broaden the choices that air
travelers have through greater information. Additionally, through the
Victims Rights Program we call for greater coordination of governmental
agencies and American Red Cross in providing facts to victims and
survivors of victims.
Mr. President, air travel in America is a fundamental of American
transportation. I cannot imagine spanning the distances of Nevada, much
less the Western United States to come back here and represent my State
without the convenience of air travel. Perhaps we take many things
about travel for granted; for instance, I do not know nor can I fathom
the many details involved in getting a 747, the size of 12 city busses,
into the sky. But, Mr. President, I believe that there are some basic
rights of the half-billion passengers of airlines that need to be
protected. I have searched the current statutes and regulations and am
confident that the Federal Aviation Administration has many of the
tools necessary to continue to make our skies safe. I am not convinced,
however, that passengers, are receiving sufficient information about
the aircraft and the many involved personnel and accessibility to the
aircraft. Daily, pilots, mechanics, air tower controllers, and others
dedicate themselves to meeting the needs of air travelers, but still
the trust relationship requires some understanding that the FAA
certificate requirements are being met by the personnel who serve the
airline customers.
While some may argue that requires a lot of information. I consider
it to be the nature of the information not the quantity to be
significant, because the traveler on the airlines are putting their
lives in the airlines' hands and should be allowed the knowledge that
bestows security, understanding and choice. There is information that
ought to be available and if the customer seeks the information the
airlines should expeditiously provide it. This bill is not to scare
travelers about the safety and security of air travel, rather on the
contrary, I believe this bill will inspire confidence through openness
and knowledge. Additionally, if customers of air travel exercise their
right to know about certain elements about the airlines, aircraft and
crew then that too will enhance the trust between customers and the
airlines.
The second principle element of the bill is the Victims Rights
Program, which is essential in alleviating some of the criticism of the
airlines and restoring the confidence of airline customers. Increased
coordination of the agencies and the American Red Cross in opening up
communication between the investigating parties and the victims,
appears to me, to be the least that we can do and an essential right of
those who place their trust in air travel.
This legislation is vital in making sure that these fundamental
rights of information and knowledge are preserved. As airplane
accidents occur and the airplanes are sabotaged, the sense of security
that airplane passengers have paid for is undermined. This bill does
not try to second guess the Federal Aviation Administration and the
inspector general in safety investigations and security methods,
because they have been given both the mission and the means of working
with the airlines.
Mr. President, last May a ValuJet DC-9 crashed into a Florida swamp,
and before that in December an American Airlines aircraft flew into a
South American mountainside. Then over 200 individuals died off the
coast of New York and the Federal authorities have still not identified
all the victims. Indeed, I have heard repeatedly that the survivors of
victims cannot get information from the airlines and the National
Transportation Safety Board and FBI. I believe that in the past couple
of years, air travel have suffered terrible accidents and the American
public who travel by air do not seem to get any more consideration, as
far as information and education are concerned.
We do hear, Mr. President, that security might be enhanced at the
airports,
[[Page S9563]]
and that more screening of passengers might take place at airplane
boarding and other draconian measures are being considered. Those
issues need tremendous study and intensive deliberation of classified
information among those who have the expertise. This bill focuses on
the prerogatives of the traveler and through access of information the
choices of the traveler expand and trust is preserved.
I urge my colleagues to act quickly on this legislation so that this
fundamental way of travel is not undermined by the airline industry's
own protective silence and guarded communication. When unfortunate
accidents or harm occurs, trust is best established by allowing the
victims open access. Through this legislation the rights of travelers
will be firmly preserved.
______
By Ms. SNOWE (for herself and Mrs. Feinstein):
S. 2024. A bill to amend the Public Health Service Act to provide a
one-stop shopping information service for individuals with serious or
life-threatening diseases; to the Committee on Labor and Human
Resources.
The one-stop shopping information service act of 1996
Ms. SNOWE. Mr. President, today, I rise to introduce a vital piece of
legislation which will help people with serious or life-threatening
diseases obtain the information they desperately need about clinical
trials. Easy access to this information is critical, because clinical
trials provide cancer patients with potentially promising treatments
which are otherwise unavailable and which may be on the cutting edge of
medical research.
In June of this year, I convened an important hearing with my
colleagues, Senators Connie Mack and Dianne Feinstein, Cochairs of the
Senate Cancer Coalition, to address recent developments in breast
cancer treatments and research. We convened our hearing on the eve of
the Seventh Annual National Race for the Cure, a race that raises
millions of dollars each year for breast cancer research and education
efforts.
During the hearing, we heard testimony from breast cancer advocates
on the difficulty patients and physicians face in learning about
ongoing clinical trials. One witness, representing Breast Cancer Action
in California, testified about the need for ``One Stop Shopping'' to
find out what is available in terms of clinical trials for cancer
treatments. She testified that the existing Cancer Information Service
at the National Cancer Institute is helpful but underfunded, and
provides only partial information because it lists only publicly funded
trials. It does not list, however, the 300-plus clinical trials of
private pharmaceutical companies, producing a major knowledge gap.
This witness contrasted this difficulty faced by cancer patients with
the ease with which AIDS patients obtain information about clinical
trials. As the result of a 1988 amendment to the Public Health Service
Act, AIDS patients need only dial a 1-800 number in order to obtain
information about all clinical trials--both Government financed and
private pharmaceutical trials. If you have cancer or some other life-
threatening illness, however, you must rely upon your doctor's
knowledge about clinical trials, which is likely to be limited.
Moreover, information contained on commercial databases are costly to
access, difficult to use or understand, and often incomplete.
Since this hearing, I have heard similar complaints not only from
cancer patients, but from patients suffering from a wide range of
severe or life-threatening illnesses. Today, I rise to introduce
legislation to rectify this knowledge gap.
My bill is based closely on the existing language in the Public
Health Service Act which created the AIDS database and which has been
so successful in making information about AIDS clinical trials
available to those who need it. Modeled on that language, my bill
establishes a data bank of information on clinical trials and
experimental treatments for all serious or life-threatening illnesses.
The one stop shopping information service will include a registry of
all private and public clinical trials, and will contain information
describing the purpose of the trial, eligibility criteria for
participating in the trial, as well as the location of the trial. The
bill also requires HHS to set up information systems, including a toll-
free number, for patients, doctors, and others to access this critical
information. The database will also include information on the results
of experimental trials, enabling patients to make fully informed
decisions about medical treatment.
Imagine facing a deadly disease and not having access to information
about the latest treatment options. Imagine enduring great pain and not
having access to a centralized source of information about existing
clinical trials which may relieve your suffering or extend your life.
Imagine the arduous effort needed to gather information about these
clinical trials in order to potentially benefit from cutting-edge
treatments.
Then consider what this legislation will do for Americans. People
with cancer, Alzheimers' disease, Parkinsons, cystic fibrosis, advanced
heart disease, multiple sclerosis, or any other serious disease will be
able to dial a 1-800 number from their home phone and access the
information they need about clinical trials underway across the Nation.
They will also be able to obtain information about the results of
experimental trials, helping them to make treatment decisions.
All parties will benefit from this legislation. First and foremost,
it encourages patient choice and informed decisions. But pharmaceutical
companies will also benefit, because this legislation will allow for
easier and quicker recruitment of individuals willing to participate in
experimental trials, expediting the approval process for
investigational new drugs. And the National Institutes of Health and
the Food and Drug Administration will be better able to serve the
public.
This one-stop shopping service will provide hope to countless
Americans. But most importantly, it will help to save lives and reduce
the suffering of Americans who are stricken by serious or life-
threatening illnesses. We know from experience that this language
works. I call for the speedy enactment of this legislation which will
be of enormous benefit to countless Americans in times of extraordinary
need, and I urge my colleagues to support this important bill.
Mrs. FEINSTEIN. Mr. President, today, with Senator Snowe, I am
introducing a bill to set up a toll-free service so that people with
life-threatening diseases can find out about research projects that
might help them.
Today there are thousands of serious and life-threatening diseases,
diseases for which we have no cure. For genetic diseases alone, there
are 3,000 to 4,000. Some of these are familiar, like cancer,
Parkinson's disease, and multiple sclerosis. Others are not so common,
like cystinosis, Tay-Sachs disease, Wilson's disease, and Sjogren's
syndrome. Indeed, there are over 5,000 rare diseases, diseases most of
us have never heard of, affecting between 10 and 20 million Americans.
Cancer kills half a million Americans per year. Diabetes afflicts 15
million Americans per year, half of whom do not know they have it.
Arthritis affects 40 million Americans every year. 15,000 American
children die every year. Among children, the rates of chronic
respiratory diseases--asthma, bronchitis, and sinusitis--heart murmurs,
migraine headaches, anemia, epilepsy, and diabetes are increasing. Few
families escape illness today.
The Bill
The bill we introduce requires the Secretary of Health and Human
Services to establish a ``one-stop shopping'' database, including a
toll-free telephone number, so that patients and physicians can find
out what clinical research trials are underway on experimental
treatments for various diseases. Callers would be able to learn the
purpose of the study, eligibility requirements, research sites, and a
contact person for the research project. Information would have to be
presented in plain English, not medicalese, so that the average person
could understand it.
A Constituent Suggestion
The suggestion for this information center came from Nancy Evans, of
San Francisco's Breast Cancer Action, in a June 13 hearing of the
Senate Cancer Coalition, which I cochair with Senator Mack. She
described the difficulty that patients have in trying to find out
[[Page S9564]]
what experimental treatments might be available, research trials
sponsored by the Federal Government, and by private companies. Most of
them are desperate; most have tried everything. She testified that the
National Cancer Institute has established 1-800-4-CANCER, but their
information is incomplete. It does not include all trials and the
information is often difficult for the lay person to understand.
In addition, the National Kidney Cancer Association has called for a
central database.
People in Serious Need
To understand the importance of this bill, we have to stop and think
about the plight of the individuals it is intended to help. These are
people who have a terminal illness, whose physicians have tried every
treatment they can find. Cancer patients, for example, have probably
had several rounds of chemotherapy, which has left them debilitated,
virtually lifeless. These patients cling to slim hopes. They are
desperate to try anything. But step one is finding out what is
available.
One survey found that a majority of patients and families are willing
to use investigational drugs--drugs being researched but not approved--
but find it difficult to locate information on research projects. A
similar survey of physicians found that 42 percent of physicians are
unable to find printed information about rare illnesses.
Help for Physicians
Physicians, no matter how competent and well trained, also do not
necessarily know about experimental treatments currently being
researched. And most Americans do not have sophisticated computer
hookups that provide them instant access to the latest information
through commercial, government, or medical databases. Our witness,
Nancy Evans, testified that she can find out more about a company's
clinical trials by calling her stockbroker than by calling existing
services.
I have had many desperate families call me, their U.S. Senator,
seeking help. Others have lodged their pleas at the White House. Others
call lawyers, 911, the local medical society, the local chamber of
commerce, anything they can think of. Getting information on health
research projects should not require a fishing expedition of futile
calls, good connections, or the involvement of elected officials.
In 1988, Congress directed HHS to establish an AIDS Clinical Trials
Information Service. It is now operational, 1-800-TRIALS-A, so that
patients, providers, and their families can find out more about AIDS
clinical trials. All calls are confidential and experienced
professionals at the service can tell people about research trials
underway which are evaluating experimental drugs and other therapies at
all stages of HIV infection.
Improving Health, Research
Facilitating access to information can also strengthen our health
research effort. With a national database enabling people to find
research trials, more people could be available to participate in
research. This can help researchers broaden their pool of research
participants.
Modest Help for the Ill
The bill we introduce does not guarantee that anyone can participate
in a clinical research trial. Researchers would still control who
participates and set the requirements for the research. But for people
who cling to hopes for a cure, for people who want to live longer, for
people who want to feel better, this database can offer a little help.
It should not take political or other connections, computer
sophistication or access to top-flight university medical schools to
find out about research on treatments of disease when you have a life-
threatening illness.
Mr. President, I hope this bill will offer some hope to the millions
who are suffering today and I hope Congress will act on the bill
promptly.
______
By Mr. FEINGOLD:
S. 2025. A bill to amend the Communications Act of 1934 to authorize
the States to regulate interference with radio frequencies; to the
Committee on Commerce, Science, and Transportation.
cb radio frequency interference legislation
Mr. FEINGOLD. Mr. President, I rise today to introduce legislation
which creates a commonsense solution to a growing problem in U.S.
cities and towns--the Federal preemption of State and municipal
regulation of citizens band [CB] radio frequency interference with
residential home electronic or telephone equipment. This problem can be
extremely distressing for residents who cannot have a telephone
conversation or watch television without being interrupted by a
neighbor's citizen band radio [CB] conversation. Under the current law,
those residents have little recourse.
Interference of CB radio signals with household electronic equipment
such as telephones, radios, and televisions has been regulated by the
Federal Communications Commission [FCC] for nearly 30 years. Up until
recently, the FCC has enforced rules outlining what equipment may or
may not be used for CB radio transmissions, what content may or may not
be transmitted, how long transmissions may be broadcast, what channels
may be used, as well as many other technical details. FCC also
investigated complaints that a personal radio enthusiast's
transmissions interfered with a neighbor's use of home electronic and
telephone equipment. FCC receives nearly 45,000 such complaints
annually.
Mr. President, for the past 3 years I have worked with constituents
who have been bothered by persistent interference of nearby CB radio
transmissions. In each case, the constituents have sought my help in
securing an FCC investigation of the complaint. In each case, Mr.
President, the FCC indicated that due to a lack of resources, the
Commission no longer investigates radio frequency interference
complaints. Instead of investigation and enforcement, the FCC is able
to provide only a packet of self-help information for the consumer to
limit the interference on their own.
Municipal residents, after being denied investigative or enforcement
assistance from the FCC, frequently contact their city or town
government and ask them to police the interference. However, the
Communications Act of 1934 provides exclusive authority to the Federal
Government for the regulation of radio, preempting municipal ordinances
or State laws regulating radio frequency interference. This has created
an interesting dilemma for municipal governments. They can neither pass
their own ordinances to control CB radio interference, nor can they
rely on the agency with exclusive jurisdiction over interference to
enforce the very Federal law which preempts them.
In Beloit, WI, as in many Wisconsin communities, this dilemma has
been extremely frustrating for local residents who have been powerless
to prevent the transmissions of a neighboring CB enthusiast from
interfering with their home electronic equipment. One Beloit resident,
after having adopted every form of filtering technology for her
telephone and other electronic equipment, still experienced persistent
interference. Her answering machine picks up calls for which there is
no audible ring, and at times records ghost messages. Often, she cannot
get a dial tone when she or her family members wish to place an
outgoing call. During telephone conversations, the content of the
nearby CB transmission can frequently be heard and on occasion, her
phone conversations are inexplicably cur off. Her neighbors have
experienced similar problems and have complained to the Beloit City
Council.
Last month, the Beloit City Council, exasperated by FCC inaction on
this matter, passed an ordinance allowing the city to enforce FCC
regulations on this type of inference. While the council knew that, if
challenged under current law, their ordinance would likely not be
upheld by the courts, they felt they had little choice if they wished
to address their constituents concerns.
Mr. President, it is not fair that municipalities and their residents
should be hamstrung by an outdated Federal preemption of laws the
Federal Government no longer has the resources to enforce.
The legislation I am introducing today will help the city of Beloit,
and many other municipalities like it, to regulate CB radio
transmissions and to enforce those regulations. My bill provides a
limited exception to the Federal preemption of State or local laws on
radio frequency interference. It simply allows State and local
governments
[[Page S9565]]
to regulate CB radio interference when that interference results from a
violation of FCC rules. Thus, States and municipalities can use their
enforcement resources to investigate and enforce Federal law thereby
protecting the rights of their residents. Even the FCC recognizes that
States and localities need to be able to protect their citizens.
Mr. President, this bill simply allows common sense to prevail. If
Federal regulators cannot enforce the rules over which they have
exclusive jurisdiction, States and localities should be given the
authority to investigate and enforce those regulations for them. I hope
my colleagues will support this important legislation.
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. 2025
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. AUTHORITY OF STATES TO REGULATE RADIO FREQUENCY
INTERFERENCE.
Section 302 of the Communications Act of 1934 (47 U.S.C.
302) is amended by adding at the end the following:
(e) Where radio frequency interference to home electronic
equipment is caused by a CB Radio Station through the use of
a transmitter or amplifier that is not authorized for use by
a CB Radio Station pursuant to Commission rules, the state,
county, municipal, or other local government shall not be
preempted from exercising its police powers to resolve the
interference by prohibiting the use of such unauthorized
equipment or by imposing fines or other monetary sanctions.
For purposes of this subsection, home electronic equipment
includes, but is not limited to, television receivers, radio
receivers, stereo components or systems, video cassette
recorders, audio recorders, loud speakers, telephone
equipment, and other electronic devices normally used in the
home. Any action taken by the state, county, municipal, or
local government shall not preclude concurrent action by the
Commission. Nothing in this subsection shall be construed to
diminish the Commission's exclusive jurisdiction over radio
frequency interference in any matter outside the scope of
this subsection.
______
By Mr. FAIRCLOTH (for himself, Mrs. Kassebaum, Mr. Coats, Mr.
Ashcroft, Mr. DeWine, Mr. Frist, and Mr. Gorton):
S. 2026. A bill to amend the Fair Labor Standards Act of 1938 to make
uniform the application of the overtime exemption for inside sales
personnel, and for other purposes; to the Committee on Labor and Human
Resources.
overtime exemption legislation
Mr. FAIRCLOTH. Mr. President, in 1961, Congress amended the Fair
Labor Standards Act to provide a narrow overtime exemption for
commissioned employees in retail and service establishments. Under
section 207(i) of the FLSA, outside commissioned sales employees are
treated as professional employees and are thus exempt from the act. In
contrast, most commissioned inside sales employees are not treated as
professionals regardless of the similarly of their duties with regard
to outside sales employees.
Despite dramatic changes in the workplace since 1961, the FLSA
continues to subject professional commissioned sales employees to an
outdated, static view of the economy. Therefore, today I am introducing
legislation to extend the limited FLSA exemption to all commissioned
inside sales personnel. This bill is identical to H.R. 1226 which was
introduced by Representative Harris Fawell.
______
By Mr. LAUTENBERG:
S. 2027. A bill to provide for a 5-year extension of Hazardous
Substance Superfund, and for other purposes; to the Committee on
Finance.
the superfund taxes extension act of 1996
Mr. LAUTENBERG. Mr. President, I rise today to introduce legislation
to extend the Superfund taxes, which have been in place since 1980.
Mr. President, the Superfund program provides for cleaning-up those
toxic waste sites that pose the most serious threats to our environment
and to our health. The program is largely funded by a chemical and oil
feedstock tax and by taxes on corporate environmental entities, such as
petrochemical companies.
Mr. President, few of us may be aware of the fact that these taxes
expired in December of 1995. Since that time, not one single penny has
been assessed to replenish the Superfund, and so protect our ability to
cleanup toxic sites in the future.
The failure to extend the Superfund tax is causing us to lose $4
million dollars a day. That is $4 million a day which could be used to
expedite the cleanup at existing Superfund sites, or fund the
revitalization of additional sites.
It has been argued that we have sufficient monies in the Superfund
trust fund to carry us for the next few years, although there is
disagreement concerning how long the money will last. However,
Superfund monies are used for long-term construction projects. By
utilizing these funds for other purposes, we squander our ability to do
long range planning and to continue cleanups without interruption.
Mr. President, as someone who spent most of my life as a businessman,
I recognize the importance of long term planning. And I understand the
real costs associated with stopping and restarting a project; it is
never efficient or cost effective.
Mr. President, I and the citizens of New Jersey, lived through the
funding crisis of 1984-1985. The subsequent disruption of cleanups
caused unnecessary hardships for the citizens of my state. I don't want
to go through that again.
We need to ensure that we have sufficient financial resources to plan
for, contract and continue Superfund cleanups without interruption.
After all, we owe it to our children to do whatever is possible to
preserve the environment, to protect the public health and to provide
for the future.
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. 2027
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. 5-YEAR EXTENSION OF HAZARDOUS SUBSTANCE SUPERFUND.
(a) Extension of Taxes.--
(1) The following provisions of the Internal Revenue Code
of 1986 are each amended by striking ``January 1, 1996'' each
place it appears and inserting ``January 1, 2001'':
(A) Section 59A(e)(1) (relating to application of
environmental tax).
(B) Paragraphs (1) and (3) of section 4611(e) (relating to
application of Hazardous Substance Superfund financing rate).
(2) Paragraph (2) of section 4611(e) of such Code is
amended--
(A) by striking ``1993'' and inserting ``1998'',
(B) by striking ``1994'' each place it appears and
inserting ``1999'', and
(C) by striking ``1995'' each place it appears and
inserting ``2000''.
(b) Increase in Aggregate Tax Which May Be Collected.--
Paragraph (3) of section 4611(e) of such Code is amended by
striking ``$11,970,000,000'' each place it appears and
inserting ``$22,000,000,000'' and by striking ``December 31,
1995'' and inserting ``December 31, 2000''.
(c) Extension of Repayment Deadline for Superfund
Borrowing.--Subparagraph (B) of section 9507(d)(3) of such
Code is amended by striking ``December 31, 1995'' and
inserting ``December 31, 2000''.
(d) Extension of Trust Fund Purposes.--Subparagraph (A) of
section 9507(c)(1) of such Code is amended--
(1) by striking clause (i) and inserting the following:
``(i) paragraphs (1), (2), (5), (6), (7), (8), (9), and
(10) of section 111(a) of CERCLA as in effect on the date of
the enactment of the Superfund Reform Act of 1995,'', and
(2) by striking clause (iii) and inserting the following:
``(iii) subsections (m), (n), (q), (r), (s), and (t) of
section 111 of CERCLA (as so in effect), or''.
(e) Extension of Authorization of Appropriations to Trust
Fund.--Subsection (b) of section 517 of the Superfund Revenue
Act of 1986 (26 U.S.C. 9507 note) is amended by striking
``and'' at the end of paragraph (8), by striking the period
at the end of paragraph (9) and inserting a comma, and by
adding at the end the following new paragraphs:
``(10) 1996, $250,000,000,
``(11) 1997, $250,000,000,
``(12) 1998, $250,000,000, and
``(13) 1999, $250,000,000,''.
(f) Coordination With Other Provisions.--Paragraph (2) of
section 9507(e) of the Internal Revenue
______
By Mr. LAUTENBERG (for himself, Mr. Baucus, Mr. Reid, Mr.
Moynihan, and Mr. Graham):
S. 2028. A bill to assist the States and local governments in
assessing and remediating brownfields and encouraging environmental
cleanup programs, and for other purposes; to the Committee on
Environment and Public Works.
[[Page S9566]]
the brownfields and environmental cleanup act of 1996
Mr. LAUTENBERG. Mr. President, today, along with Senators Baucus and
Reid, I am introducing the Brownfields and Environmental Cleanup Act of
1996. This legislation is designed to foster the cleanup and reuse of
thousands of lightly contaminated and abandoned properties across the
country.
Mr. President, I have long been interested in the issue of abandoned,
underutilized and contaminated industrial properties, commonly known as
brownfields.
For years, decaying industrial plants have defined the skyline and
contaminated the land in many of our urban, suburban, and rural areas.
Their rusting frames, like aging skyscrapers, are a silent reminder
of the manufacturers that left, taking jobs--and often hope--with them.
Yet, in these fallow fields may lie the seeds of economic
revitalization. I continue to feel, as I did when I introduced similar
legislation in 1993, that a brownfields' cleanup program can spur
significant economic development and create jobs. Such a cleanup
initiative makes good environmental sense, and good business sense.
In fact, if one picture is worth a thousand words, then we need only
look at a few of the brownfields' success stories in my State of New
Jersey.
In Hackensack, the city's department of public works yard, and an
adjacent oil tank farm, have been redeveloped as a Price Club discount
store, complete with riverwalk and park area. The site is now estimated
to be worth about $15 million dollars, and the project has created 350
jobs.
Near Elizabeth, NJ, a withering brownfield has been converted into a
thriving IKEA furniture store.
The story is the same across the country, where unused, unattractive
land is being transformed into valuable community assets.
A pilot project in Cleveland resulted in $3.2 million in private
investment, a $1 million increase in the local tax base, and more than
170 new jobs. And in Buffalo, NY, a hydroponic tomato farm was built on
a former Republic Steel site, bringing 300 new jobs to the area.
In fact, the potential for job creation is enormous. And every
revitalized brownfield may represent a field of dreams to an unemployed
worker.
Mr. President, while fostering jobs, brownfields' cleanup also means
that dangerous contaminants are removed from our environment. The
subsequent benefit to our--and our children's--health could be
enormous. Furthermore, the scars of decades of neglected industrial
waste, which disfigure our cities and suburbs, may finally be allowed
to heal.
Brownfield initiatives are important, because the Superfund Program
only provides for cleaning-up those abandoned waste sites that pose the
most serious threats. However, there are over 100,000 brownfields that
don't fall under Superfund, because of lower levels of contamination.
The risks posed by many of these sites may be relatively low. But
their full economic use is being stymied, because there's no ready
mechanism for fostering and financing cleanups--even when the property
owner is ready, willing and eager to do so. In addition, prospective
purchasers, developers and bankers are reluctant to invest in
brownfields because they could be held liable for cleaning up the
contamination.
This is unfortunate because, as I noted these abandoned or
underutilized sites have enormous potential for economic development.
To unleash this potential, several States--including New Jersey--have
developed expedited procedures to clean-up sites that do not pose a
significant threat to public health or the environment.
Under these cleanup programs, owners can volunteer to pay for the
costs of remediation and State oversight. In return, they get a letter
from the State which assures prospective buyers and lenders that the
property has been cleaned up to the Government's satisfaction, and that
other parties need not worry about potential liability. This so-called
clean bill of health removes a major impediment to economic
development, and it can help revitalize stagnant local economies.
In New Jersey, 550 parties signed up for the State's voluntary
cleanup program in just the first 18 months of its existence. The
economic benefits, in terms of jobs and economic development, are
undeniable.
But if we are to move forward, if we are to foster economic
revitalization and economic renewal, if we are to continue this public-
private partnership for progress, then we must remove all major
roadblocks to brownfields' cleanup and reuse.
My legislation addresses the major barriers preventing redevelopment
of brownfields sites.
This bill would provide financial assistance, in the form of grants,
to local and State governments to evaluate brownfields sites.
Consequently, interested parties would know what is required to clean
the site, and what reuse would best suit the property.
My bill would also provide grants to State and local governments to
establish and capitalize low-interest loan programs for cleanups. These
funds could be lent to current owners, prospective purchasers, and
municipalities.
The minimal seed money envisioned by this program would leverage
substantial economic payoffs, and turn lands which may be of negative
worth into assets for the future.
This legislation would also place limits on the potential liability
of innocent property buyers. So long as purchasers or landowners made
reasonable inquires, they would be exempt from Superfund liability.
The bill also limits the liability of banks and other lending
institutions, which hold title merely as a result of their security
interest in the property. As long as they did not participate in the
management of the site, the institutions could not be held liable.
My bill would make similar reforms in the area of fiduciary
liability, and would limit the liability for those who merely act as
trustees or executors.
Cleaning up brownfields means a safer environment in the future, and
more jobs for places that need them in the present.
Mr. President, the introduction of this bill is not a substitute for
a Superfund bill. Throughout this session of Congress, Senators Baucus,
Smith, Chafee, and I have worked long and hard to try and craft a
Superfund bill which we could all agree on and the President could sign
into law.
However, I am forced to acknowledge that the calendar is against us
at this point. Consequently, I think it is important to use the time
remaining to focus on one of the areas where there is general
consensus--the desire to facilitate the cleanup and development of
blighted areas, and to provide the legislative framework to make this
possible.
Interest in fostering the cleanup of brownfields has been bipartisan,
and it exists in both in our own body and among our colleagues on the
other side of the Capitol. It also has the strong backing of the EPA,
and I want to thank Director Carol Browner for her support.
Moreover, this bill is largely based on S. 773, which was unanimously
reported by the Environment and Public Works Committee in the 103d
Congress, and on the lender, prospective purchaser and innocent
landowner provisions in S. 1285 and S. 1834, that was reported by the
Environment and Public Works Committee last Congress.
Mr. President, as ranking Democratic member of the Superfund
Subcommittee of the Environment and Public Works Committee, I am
committed to continuing the quest to reform the Superfund program. But
I believe that we should move ahead, now, to cleanup thousands of
priority sites not governed by the Superfund.
This is an area where we can--and should--put aside our differences
and work for a goal which we all embrace.
Mr. President, our citizens want progress on both the environmental
and economic fronts. The Brownfields legislation that I introduce today
supports both goals. It creates a vehicle for cleanups which can help
keep us on-board for environmental improvement and on-track for
economic growth.
Mr. President, I ask unanimous consent to print a copy of the bill in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
[[Page S9567]]
S. 2028
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 ``Brownfields and
Environmental Cleanup Act of 1996''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds that--
(1) past uses of land in the United States for industrial
and commercial purposes have created many sites throughout
the United States that have environmental contamination;
(2) Congress and the governments of States and political
subdivisions of States have enacted laws to--
(A) prevent environmental contamination; and
(B) carry out response actions to correct past instances of
environmental contamination;
(3) many sites are minimally contaminated, do not pose
serious threats to human health or the environment, and can
be satisfactorily remediated expeditiously with little
government oversight;
(4) promoting the assessment, cleanup and redevelopment of
contaminated sites could lead to significant environmental
and economic benefits, particularly in any case in which a
cleanup can be completed quickly and during a period of time
that meets short-term business needs;
(5) the private market demand for sites affected by
environmental contamination frequently is reduced, often due
to uncertainties regarding liability or potential cleanup
costs of innocent landowners, lenders, fiduciaries, and
prospective purchasers under Federal law:
(6) the abandonment or underutilization of affected sites
impairs the ability of the Federal Government and the
governments of States and political subdivisions of States to
provide economic opportunities for the people of the United
States, particularly the unemployed and economically
disadvantaged;
(7) the abandonment or underuse of affected sites also
results in the inefficient use of public facilities and
services, as well as land and other natural resources, and
extends conditions of blight in local communities;
(8) cooperation among Federal agencies, departments and
agencies of State and political subdivisions of States, local
community development organizations, and current owners and
prospective purchasers of affected sites is required to
accomplish timely response actions and the redevelopment or
reuse of affected sites;
(9) there is a need for a program to--
(A) encourage cleanups of affected sites; and
(B) facilitate the establishment and enhancement of
programs by States and local governments to foster cleanups
of affected site though capitalization of loan programs; and
(10) there is a need to provide financial incentives and
assistance to characterize certain affected sites and
facilitate the cleanup of the sites so that the sites may be
redeveloped for beneficial uses.
(b) Purpose.--The purpose of this Act is to create new
business and employment opportunities through the economic
redevelopment of affected sites that generally do not pose a
serious threat to human health or the environment and to
stimulate the assessment and cleanup of affected sites by--
(1) encouraging States and local governments to provide for
characterization and cleanup of sites that may not be
remediated under other environmental laws (including
regulations) in effect on the date of enactment of this Act;
(2) encouraging local governments and private parties,
including local community development organizations, to
participate in programs, such as State cleanup programs, that
facilitate expedited response actions that are consistent
with business needs at affected sites;
(3) directing the Administrator to establish programs that
provide financial assistance to--
(A) facilitate site assessments of certain affected sites;
(B) encourage cleanup of appropriate sites through
capitalization of loan programs; and
(C) encouraging workforce development in areas adversely
affected by contaminated properties; and
(4) reducing transaction costs and paperwork, and
preventing needless duplication of effort and delay at all
levels of government.
SEC. 3. DEFINITIONS.
As used in this Act (unless the context clearly requires
otherwise):
(1) Administrative costs.--The term ``administrative
costs'' means eligible costs that are not nonadministrative
costs.
(2) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(3) Affected site.--
(A) In general.--Except as provided in subparagraph (B),
the term ``affected site'' means a facility that has or is
suspected of having environmental contamination that--
(i) could prevent the timely use, reuse, or redevelopment
of the facility; and
(ii) is relatively limited in scope or severity and can be
comprehensively characterized and readily analyzed.
(B) Exceptions.--The term does not include--
(i) any facility that is the subject of a planned or an
ongoing response action under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9601 et seq.), except that the term includes a facility for
which a preliminary assessment, site investigation or removal
action has been completed and with respect to which the
Administrator has decided not to take further response
action, including cost recovery action;
(ii) any facility included, or proposed for inclusion, on
the National Priorities List maintained by the Administrator
under such Act;
(iii) any facility with respect to which a record of
decision, other than a no-action record of decision, has been
issued by the President under section 104 of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9604) with respect to the
facility;
(iv) any facility that is subject to corrective action
under section 3004(u) or 3008(h) of the Solid Waste Disposal
Act (42 U.S.C. 6924(u) or 6928(h)) at the time that an
application for loan assistance with respect to the facility
is submitted under this title, including any facility with
respect to which a corrective action permit or order has been
issued or modified to require the implementation of
corrective measures;
(v) any land disposal unit with respect to which a closure
notification under subtitle C of the Solid Waste Disposal Act
(42 U.S.C. 6921 et seq.) has been submitted and closure
requirements have been specified in a closure plan or permit;
(vi) any facility at which there has been a release of
polychlorinated biphenyls and that is subject to the
requirements of the Toxic Substances Control Act (15 U.S.C.
2601 et seq.);
(vii) any facility with respect to which an administrative
order on consent or a judicial consent decree requiring
cleanup has been entered into by the President and is still
in effect under-
(I) the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C. 9601 et seq.);
(II) the Solid Waste Disposal Act (42 U.S.C. 6901, et
seq.);
(III) the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.);
(IV) the Toxic Substances Control Act (15 U.S.C. 2601 et
seq.); or
(V) title XIV of the Public Health Service Act (commonly
known as the ``Safe Drinking Water Act'') (42 U.S.C. 300f et
seq.);
(viii) any facility at which assistance for response
activities may be obtained pursuant to subtitle I of the
Solid Waste Disposal Act (42 U.S.C. 6991 et seq.) from the
Leaking Underground Storage Tank Trust Fund established by
section 9508 of the Internal Revenue Code of 1986; and
(ix) a facility owned or operated by a department, agency
or instrumentality of the United States, except for lands
held in trust by the United States for Indian tribes.
(4) Contaminant.--The term ``contaminant'' includes any
hazardous substance (as defined in section 101(14) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601(14)).
(5) Current owner.--The term ``current owner'' means, with
respect to a voluntary cleanup, an owner of an affected site
or facility at the time of the cleanup.
(6) Disposal.--The term ``disposal'' has the meaning
provided the term in section 1004(3) of the Solid Waste
Disposal Act (42 U.S.C. 6903(3)).
(7) Environment.--The term ``environment'' has the meaning
provided the term in section 101(8) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601(8)).
(8) Environmental contamination.--The term ``environmental
contamination'' means the existence at a facility of 1 or
more contaminants that may pose a threat to human health or
the environment.
(9) Facility.--The term ``facility'' has the meaning
provided the term in section 101(9) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601(9)).
(10) Grant.--The term ``grant'' includes a cooperative
agreement.
(11) Ground water.--The term ``ground water'' has the
meaning provided the term in section 101(12) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601(12)).
(12) Indian tribe.--The term ``Indian tribe'' has the
meaning provided the term in section 101(36) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601(36)).
(13) Local government.--The term ``local government'' has
the meaning provided the term ``unit of general local
government'' in the first sentence of section 102(a)(1) of
the Housing and Community Development Act of 1974 (42
U.S.C. 5302(a)(1)), except that the term includes Indian
tribe.
(14) Natural resources.--The term ``natural resources'' has
the meaning provided the term in section 101(16) of the
Comprehensive Environmental Response, Compensation, Liability
Act of 1980 (42 U.S.C. 9601(16)).
(15) Nonadministrative costs.--The term ``nonadministrative
costs'' includes the cost of--
(A) inventorying and classifying properties with probable
contamination;
(B) oversight for a cleanup at an affected site by a
contractor, current owner, or prospective purchaser;
(C) identifying the probable extent and nature of
environmental contamination at the
[[Page S9568]]
affected site, and the preferred manner of carrying out a
cleanup at the affected site;
(D) the cleanup, including onsite and off-site treatment of
contaminants; and
(E) monitoring ground water or other natural resources at
the affected site.
(16) Owner.--The term ``owner'' has the meaning provided
the term in section 101(20) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601(20)).
(17) Person.--The term ``person'' has the meaning provided
the term in section 101(21) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601(21)).
(18) Prospective purchaser.--The term ``prospective
purchaser'' means a prospective purchaser of an affected
site.
(19) Release--The term ``release'' has the meaning provided
the term in section 101(22) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601(22)).
(20) Response action.--The term ``response action'' has the
meaning provided the term ``response'' in section 102(25) of
such Act (42 U.S.C. 9601(25)).
(21) Site characterization.--
(A) In general.--The term ``site characterization'' means
an investigation that determines the nature and extent of a
release or potential release of a hazardous substance at a
site and meets the requirements referred to in
subparagraph (B).
(B) Investigation.--For the purposes of this paragraph, an
investigation that meets the requirements of this
subparagraph--
(i) shall include--
(I) an onsite evaluation; and
(II) sufficient testing, sampling, and other field data
gathering activities to accurately determine whether the site
is contaminated and the threats to human health and the
environment posed by the release of contaminants at the site;
and
(ii) may also include--
(I) review of existing information regarding the site and
previous uses (available at the time of the review); and
(II) an offsite evaluation, if appropriate.
(22) State.--The term ``State'' has the meaning provided
the term under section 101(27) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601(27)).
TITLE I--BROWNFIELD REMEDIATION AND ENVIRONMENTAL CLEANUP
SEC. 101. SITE CHARACTERIZATION GRANT PROGRAM.
(a) In General.--The Administrator shall establish a
program to provide grants to local governments to inventory
brownfield sites and to conduct site characterizations of
affected sites at which cleanups are being conducted or are
proposed to be conducted under a State voluntary cleanup
program, State superfund program, or other State cleanup
program.
(b) Scope of Program.--
(1) Grant awards.--In carrying out the program establish
under subsection (a), the Administrator may award a grant to
the head of each local government that submits to the
Administrator an application (that is approved by the
Administrator) to conduct an inventory of sites and a site
characterization at an affected site or sites within the
jurisdiction of the local government.
(2) Grant application.--An application for a grant under
this section shall include, at a minimum, each of the
following:
(A) An identification of the brownfield areas for which
assistance is sought and a description of the effect of the
brownfields on the community, including a description of the
nature and extent of any known or suspected environmental
contamination within the areas.
(B) The need for Federal support.
(C) A demonstration of the potential of the assistance to
stimulate economic development, including the extent to which
the assistance will stimulate the availability of other funds
for site characterization, site identification, or
environmental remediation and subsequent redevelopment of the
areas in which eligible brownfields sites are situated.
(D) The existing local commitment, which shall include a
community involvement plan that demonstrates meaningful
community involvement.
(E) A plan that shows how the site characterization, site
identification, or environmental remediation and subsequent
development shall be implemented, including an environmental
plan that ensures the use of sound environmental procedures,
an explanation of the existing appropriate government
authority and support for the project, proposed funding
mechanisms for any additional work, and the proposed land
ownership plan.
(F) A statement on the long-term benefits and the
sustainability of the proposed project that includes the
national replicability and measures of success of the project
and, to the extent known, the potential of the plan for the
areas in which eligible brownfields sites are situated to
stimulate economic development of the area on completion of
the environmental remediation.
(G) A statement that describes how the proposed site
inventory and characterization program will analyze the
extent to which the project or projects will reduce potential
health and environmental threats caused by the presence of or
potential releases of contaminants at or from the site or
sites.
(H) A plan for the distribution of the grant monies among
sites within the jurisdiction of the State or local
government, including mechanisms to ensure a fair
distribution of the grant monies.
(I) Such other factors as the Administrator considers
relevant to carry out the purposes of this title.
(3) Approval of application.--
(A) In general.--In making a decision whether to approve an
application submitted under paragraph (1) the Administrator
shall consider the criteria in the application, and--
(i) the financial need of the State or local government for
funds to conduct a characterization of the site or sites;
(ii) the demonstrable potential of the affected site or
sites for stimulating economic development on completion of
the cleanup of the affected site if the cleanup is necessary;
(iii) to the extent information is available, the estimated
fair market value of the site or sites (4) after cleanup;
(iv) to the extent information is available, other
economically viable, commercial activity on real property--
(I) located within the immediate vicinity of the affected
site at the time of consideration of the application; or
(II) projected to be located within the immediate vicinity
of the affected site by the date that is 5 years after the
date of the consideration of the application;
(v) the potential of the affected site for creating new
business and employment opportunities on completion of the
cleanup of the site;
(vi) whether the affected site is located in an
economically distressed community; and
(vii) such other factors as the Administrator considers
relevant to carry out the purposes of the grant program under
this section.
(B) Grant conditions.--As a condition for awarding a grant
under this section, the Administrator may, on the basis of
the criteria considered under subparagraph (A), attach such
conditions to the grant award as the Administrator determines
appropriate.
(4) Grant amount.--The amount of a grant awarded to any
local government under subsection (a) for characterization of
an affected site or sites shall not exceed $200,000.
(5) Termination of grants.--If the Administrator determines
that a local government that receives a grant under this
subsection is in violation of a condition of a grant award
referred to in paragraph (3), the Administrator may terminate
the grant made to the local government and require full or
partial repayment of the grant award.
SEC. 102. ECONOMIC REDEVELOPMENT ASSISTANCE GRANTS FOR LOAN
PROGRAMS.
(a) Establishment of Program.--The Administrator shall
establish a program to provide grants to be used by State or
local governments to capitalize loan programs for the cleanup
of affected sites. These loans may be provided by the State
or local government to finance cleanups of affected sites by
the State or local government, or by an owner or a
prospective purchaser of an affected site (including a local
government) at which a cleanup is being conducted or is
proposed to be conducted under Federal or State authority,
including a State voluntary clean-up program.
(b) Scope of Program.--
(1) In general.--
(A) Grants.--The Administrator may award a grant to a local
or State government that is an eligible applicant described
in subsection (a)(1) that submits an application to the
Administrator that is approved by the Administrator. The
grant monies shall be used by the local or State government
to capitalize a loan fund to be used for cleanup of an
affected site or affected sites.
(B) Grant application.--An application for a grant under
this section shall be in such form as the Administrator
determines appropriate. At a minimum, the application
submitted by the State or local government to establish a
revolving loan program shall include the following:
(i) Insofar as the sites within their jurisdiction have
been identified and information as to the contaminated sites
is known, a description of the affected site or sites,
including the nature and extent of any known or suspected
environmental contamination at the affected site or sites.
(ii) Identification of the criteria to be used by the local
or State government in providing for loans under the program.
This criteria shall include the financial standing of the
applicants for the loans, the use to which the loans will be
put, and the provisions to be used to ensure repayment of the
funds. These criteria shall also include:
(I) A complete description of the financial standing of the
applicant that includes a description of the assets, cash
flow, and liabilities of the applicant.
(II) A written certification that attests that the
applicant has attempted, and has been unable, to secure
financing from a private lending institution for the cleanup
action that is the subject of the loan application.
(III) The proposed method, and anticipated period of time
required, to clean up the environmental contamination at the
affected site.
(IV) An estimate of the proposed total cost of the cleanup
to be conducted at the site.
(V) An analysis that demonstrates the potential of the
affected site for stimulating economic development on
completion of the cleanup of the site.
[[Page S9569]]
(2) Grant approval.--In determining whether to award a
grant under this section, the administrator shall consider--
(A) the need of the local or State government for financial
assistance to clean up the affected site or sites that are
the subject of the application, taking into consideration the
financial resources available to the local or State
government;
(B) the ability of the local or State government to ensure
that the applicants repay the loans in a timely manner;
(C) the extent to which the cleanup of the affected site or
sites would reduce health and environmental risks caused by
the release of contaminants at, or from, the affected site or
sites;
(D) the demonstrable potential of the affected site or
sites for stimulating economic development on completion of
the cleanup;
(E) the demonstrated ability of the local or State.
Government to administer such a loan program;
(F) the demonstrated experience of the local or State
government regarding brownfields and the reuse of
contaminated land, including whether or not the government
has received grant monies under the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601 et seq.) to characterize brownfields
sites provided however that applicants who have not
previously received such grant monies may also be considered
for awards under this section;
(G) the efficiency of having the loan administered by the
applicant entity level of government;
(H) the experience of administering any loan programs by
the entity, including the loan repayment rates;
(I) the demonstrations made regarding the ability of the
local or State government to ensure a fair distribution of
grant monies among sites within their jurisdiction; and
(J) such other factors as the Administrator considers
relevant to carry out the purposes of the loan program
established under this section.
(3) Grant amount--The amount of a grant made to a local or
State applicant under this section shall not exceed $500,000.
(4) State approval.--Each application for a grant under
this section shall, as a condition for approval by the
Administrator, include a written statement by the local or
State government that cleanups to be funded under their loan
programs shall be conducted under the auspices of and
compliant with the State voluntary cleanup program or State
Superfund program or Federal authority, and that--
(A) the cleanup or proposed voluntary cleanup is cost-
effective; and
(B) the estimated total cost of the cleanup is reasonable.
(c) Grant Agreements.--Each grant under this section shall
be made pursuant to a grant agreement. At a minimum, the
grant agreement shall include provisions that ensure the
following:
(1) The grant recipient shall include in all loan
agreements a requirement that the loan recipient shall comply
with all applicable Federal and State laws applicable to the
cleanup and shall ensure that the cleanup is protective of
human health and the environment.
(2) The local or State government shall require and ensure
repayment of the loan consistent with this title.
(3) The State or local government shall use the funds
solely for the purposes of establishing and capitalizing a
loan program pursuant to the provisions of this title and of
cleaning up the environmental contamination at the affected
site or sites.
(4) The State or local government shall require in each
loan agreement, and take necessary steps to ensure, that the
loan recipient shall use the loan funds solely for the
purposes stated in paragraph (3), and shall require the
return any excess funds immediately on a determination by the
appropriate State or local official that the cleanup has been
completed.
(5) The funds shall not be transferable, unless the
Administrator agrees to the transfer in writing.
(6) Lien.--
(A) In general.--A lien in favor of the State shall arise
on the contaminated property subject to a loan under this
section. The lien shall cover all real property included in
the legal description of the property at the time the loan
agreement provided for in this section is signed, and all
rights to the property, and shall continue until the terms
and conditions of the loan agreement have been fully
satisfied. The lien shall arise at the time a security
interest is appropriately recorded in the real property
records of the appropriate office of the State, county, or
other governmental subdivision, as designated by State law,
in which the real property subject to the lien is located,
and shall be subject to the rights of any purchaser, holder
of a security interest, or judgment lien creditor whose
interest is or has been perfected under applicable State law
before the notice has been filed in the appropriate office
within the State, county, or other governmental subdivision,
as designated by State law, in which the real property
subject to the lien is located.
(B) Definitions.--In this paragraph, the terms ``security
interest'' and ``purchaser'' have the meanings provided in
section 6323(h) of the Internal Revenue Code of 1986.
(7) Such other terms and conditions that the Administrator
determines to be necessary to protect the financial interests
of the United States or to protect human health and the
environment.
(e) Audits.--The Inspector General of the Environmental
Protection Agency shall audit a portion of the grants awarded
under this section to ensure that all funds are used for the
purposes set forth in this section. The result of the audit
shall be taken into account in awarding any future grant
monies to the entity of State or local government.
SEC. 103. REGULATIONS.
The Administrator may promulgate such regulations as are
necessary to carry out this Act. The regulations shall
include the procedures and standards that the Administrator
considers necessary, including procedures and standards for
evaluating an application for a grant or loan submitted under
this Act.
SEC. 104. ECONOMIC REDEVELOPMENT GRANTS.
(a) Expenditures From the Superfund.--Amounts in the
Superfund shall be made available, consistent with and for
the purposes of carrying out the grant program established
under sections 101 and 102.
(b) Authority To Award Grants.--There are authorized to be
appropriated from the Superfund, as grants to local and State
governments as provided for in sections 101 and 102, an
amount equal to $25,000,000 for each of fiscal years 1997,
1998, 1999, 2000, and 2001.
SEC. 105. AUTHORIZATION OF APPROPRIATIONS
(a) Site Characterization Program.--There are authorized to
be appropriated to the Environmental Protection Agency to
carry out section 101, an amount not to exceed $10,000,000
for each of fiscal years 1997 through 2001.
(b) Economic Redevelopment Assistance Program.--There are
authorized to be appropriated to the Environmental Protection
Agency to carry out section 102 an amount not to exceed
$15,000,000 for each of fiscal years 1997 through 2001.
(c) Availability of Funds.--The amounts appropriated
pursuant to this section shall remain available until
expended.
SEC. 106. REPORTS.
(a) In General.--Not later than 1 year after the date of
enactment of this Act, and not later than January 31 of each
of the 3 calendar years thereafter, the Administrator shall
prepare and submit a report describing the achievements of
each program established under this title to--
(1) the Committee on Environment and Public Works of the
Senate; and
(2) the Committee on Energy and Commerce of the House of
Representatives.
(b) Contents of Report.--Each report shall, with respect to
each of the programs established under this title, include a
description of--
(1) the number of applications received by the
Administrator during the preceding calendar year;
(2) the number of applications approved by the
Administrator during the preceding calendar year; and
(3) the allocation of assistance under sections 101 and 102
among the States and local governments for assistance under
this title.
SEC. 107. FUNDING.
(a) Administrative Cost Limitation.--Not more than 15
percent of the amount of a grant made pursuant to this title
may be used for administrative costs. No grant made pursuant
to this title may be used to pay for fines or penalties owed
to a State or the Federal Government, or for Federal cost-
sharing requirements.
(b) Other Limitations.--Funds made available to a State or
local government pursuant to the grant programs established
under sections 101 and 102 shall be used only for
inventorying, assessing, and characterizing sites as
authorized by this Act, and for capitalizing a loan program
as authorized by this Act. Funds made available under this
title may not be used to relieve a local government or State
of the commitment or responsibilities of the local government
or State under State law to assist or carry out cleanup
actions at affected sites.
SEC. 108. STATUTORY CONSTRUCTION.
Nothing in this title is intended to affect the liability
or response authorities for environmental contamination of
any other law (including any regulation), including--
(1) the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C. 9601 et seq.);
(2) the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.);
(3) the Federal Water Pollution Control Act (33 U.S.C. 1251
et seq.);
(4) the Toxic Substances Control Act (15 U.S.C. 2601 et
seq.); and
(5) title XIV of the Public Health Service Act (commonly
known as the ``Safe Drinking Water Act'') (42 U.S.C. 300f et
seq.).
TITLE II--PROSPECTIVE PURCHASERS
SEC. 201. LIMITATIONS ON LIABILITY FOR RESPONSE COSTS FOR
PROSPECTIVE PURCHASERS.
(a) Limitations on Liability.--Section 107 of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9607) is amended by adding
at the end the following new subsection:
``(n) Limitations on Liability for Prospective
Purchasers.--Notwithstanding paragraphs (1) through (4) of
subsection (a), a person who does not impede the performance
of response actions or natural resource restoration at a
facility shall not be liable under this Act, to the extent
liability is based solely on subsection (a)(1) for a release
or threat of release from a facility, and the person is a
bona fide prospective purchaser of the facility.
[[Page S9570]]
(b) Prospective Purchaser and Windfall Lien.--Section 107
of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (as amended by subsection (a)) is
further amended by inserting after subsection (n) the
following new subsection:
``(o) Prospective Purchaser and Windfall Lien.--
``(1) Lien.--In any case in which there are unrecovered
response costs at a facility for which an owner of the
facility is not liable by reason of subsection (n), and the
conditions described in paragraph (2) are met, the United
States shall have a lien upon such facility, or may obtain
from the appropriate responsible party or parties, a lien on
other property or other assurances of payment satisfactory to
the Administrator, for such unrecovered costs. Such lien--
``(A) shall not exceed the increase in fair market value of
the property attributable to the response action at the time
of a subsequent sale or other disposition of the property;
``(B) shall arise at the time costs are first incurred by
the United States with respect to a response action at the
facility;
``(C) shall be subject to the requirements for notice and
validity established in paragraph (3) of subsection (l); and
``(D) shall continue until the earlier of satisfaction of
the lien or recovery of all response costs incurred at the
facility.
``(2) Conditions.--The conditions referred to in paragraph
(1) are the following:
``(A) Response action.--A response action for which there
are unrecovered costs is carried out at the facility.
``(B) Fair market value.--Such response action increases
the fair market value of the facility above the fair market
value of the facility that existed 180 days before the
response action was taken.''.
(c) Section 101 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9601) is amended by adding at the end the following new
paragraph:
``(39) Bona fide prospective purchaser.--The term `bona
fide prospective purchaser' means a person who acquires
ownership of a facility after the date of enactment of the
Brownfields and Environmental Cleanup Act of 1996, or a
tenant of such a person, who can establish each of the
following by a preponderance of the evidence:
``(A) Disposal prior to acquisition.--All active disposal
of hazardous substances at the facility occurred before that
person acquired the facility.
``(B) Inquiry.--The person made all appropriate inquiry
into the previous ownership and uses of the facility and its
real property in accordance with generally accepted good
commercial and customary standards and practices. The
standards and practices issued by the Administrator pursuant
to paragraph (35)(B)(ii) shall satisfy the requirements of
this subparagraph. In the case of property for residential or
other similar use purchased by a nongovernmental or
noncommercial entity, a site inspection and title search that
reveal no basis for further investigation satisfy the
requirements of this subparagraph.
``(C) Notices.--The person provided all legally required
notices with respect to the discovery or release of any
hazardous substances at the facility.
``(D) Care.--The person exercised appropriate care with
respect to hazardous substances found at the facility by
taking reasonable steps to stop on-going releases, prevent
threatened future releases of hazardous substances, and
prevent or limit human or natural resource exposure to
hazardous substances previously released into the
environment.
``(E) Cooperation, assistance, and access.--The person
provides full cooperation, assistance, and facility access to
those persons that are responsible for response actions at
the facility, including the cooperation and access necessary
for the installation, integrity, operation, and maintenance
of any complete or partial response action at the facility.
``(F) Relationship.--The person is not liable, or is not
affiliated with any other person that is potentially liable,
for response costs at the facility, through any direct or
indirect familial relationship, or any contractual,
corporate, or financial relationship other than that created
by the instruments by which title to the facility is conveyed
or financed.''.
TITLE III--FIDUCIARY AND LENDER LIABILITY
SEC. 301. FIDUCIARY LIABILITY.
(a) Definitions.--Section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601) (as amended by section 201(c)) is
amended by adding at the end the following:
``(40) Fiduciary.--The term `fiduciary'--
``(A) means a person acting for the benefit of another
party as a bona fide--
``(i) trustee;
``(ii) executor;
``(iii) administrator of an estate;
``(iv) custodian;
``(v) guardian of estates or guardian ad litem;
``(vi) court-appointed receiver;
``(vii) conservator;
``(viii) committee of estates of incapacitated persons or
other incapacitated persons;
``(ix) personal representative; or
``(x) representative in any other capacity that the
Administrator, pursuant to public notice, determines to be
similar to those listed in clauses (i) through (ix); and
``(B) does not include any person who--
``(i) had a role in establishing a trust, estate, or
fiduciary relationship if such trust, estate, or fiduciary
relationship has no objectively reasonable or
substantial purpose apart from the avoidance or limitation
of liability under this Act; or
``(ii) is acting as a fiduciary with respect to a trust or
other fiduciary estate that--
``(I) was not created as part of, or to facilitate, 1 or
more estate plans or pursuant to the incapacity of a natural
person; and
``(II) was organized for the primary purpose of, or is
engaged in, activity carrying on a trade or business for
profit.
``(41) Fiduciary capacity.--The term ``fiduciary
capacity'', in reference to an act of a person with respect
to a vessel or facility, means a capacity in which the person
holds title to a vessel or facility, or otherwise has control
of or an interest in a vessel or facility, pursuant to the
exercise of the responsibilities of the person as a
fiduciary.''.
(b) Liability of Fiduciaries.--Title I of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601 et seq.) is amended by adding at the end
the following new section:
``SEC. 127. LIABILITY OF FIDUCIARIES.
``(a) In General--The liability of a fiduciary that is
liable under any other provision of this Act for the release
or threatened release of a hazardous substance at, from, or
in connection with a vessel or facility held in a fiduciary
capacity, may not exceed the assets held in such fiduciary
capacity that are available to indemnify the fiduciary.
``(b) Exclusion.--Subsection (a) does not apply to the
extent that a person is liable under this Act independent of
such person's ownership or actions taken in a fiduciary
capacity.
``(c) Limitation--Subsections (a) and (d) shall not limit
the liability of a fiduciary whose failure to exercise due
care caused or contributed to the release of a hazardous
substance.
``(d) Safe Harbor.--A fiduciary shall not be liable in its
personal capacity under this Act for--
``(1) undertaking or directing another to undertake a
response action under section 107(d)(1) or under the
direction of an on-scene coordinator;
``(2) undertaking or directing another to undertake any
other lawful means of addressing hazardous substances in
connection with the vessel or facility;
``(3) terminating the fiduciary relationship;
``(4) including in the terms of a fiduciary agreement
covenant, warranty, or other terms of conditions that relate
to compliance with environmental laws, or monitoring or
enforcing such terms;
``(5) monitoring or undertaking 1 or more inspections of
the vessel or facility;
``(6) providing financial or other advice or counseling to
any other party to the fiduciary relationship, including the
settler or beneficiary;
``(7) restructuring, renegotiating, or otherwise altering a
term or condition of the fiduciary relationship;
``(8) acting in a fiduciary capacity with respect to a
vessel or facility that was contaminated before the
fiduciary's period of service; or
``(9) declining to take any of the actions described in
paragraphs (2) through (8).
``(e) Savings Clause.--Nothing in this section shall affect
the rights or immunities or other defenses that are available
under this Act or other applicable law to any person subject
to the provisions of this section. Nothing in this section
shall create any liability for any party. Nothing in this
section shall create a private right of action against a
fiduciary or any other party.
``(f) No Effect on Certain Persons.--Nothing in this
section shall be construed to affect the liability, if any,
of a person who--
``(1)(A) acts in a capacity other than a fiduciary
capacity; and
``(B) directly or indirectly benefits from a trust or
fiduciary relationship; or
``(2) who--
``(A) is a beneficiary and a fiduciary with respect to the
same fiduciary estate; and
``(B) as a fiduciary, receives benefits that exceed
customary or reasonable compensation, and incidental
benefits, permitted under other applicable law.
``(g) Regulatory Authority.--
``(1) In general.--The Administrator may--
``(A) issue such regulations as the Administrator deems
necessary to carry out this section; and
``(B) delegate and assign any duties or powers imposed upon
or assigned to the Administrator by this section, including
the authority to issue regulations.
``(2) Authority to clarify.--The authority under paragraph
(1) includes authority to clarify or interpret all terms,
including those used in this section, and to implement any
provision of this section.''.
(c) Effective Date.--The amendments made by this section
shall apply to any claim that has not been fully adjudicated
as of the date of enactment of this Act.
SEC. 302. LIABILITY OF LENDERS.
(a) Definition of Participation in Management.--Section
101(20) of the Comprehensive Environmental Response,
Liability, and Compensation Act of 1980 (42 U.S.C. 9601(20))
is amended--
(1) in subparagraph (A), by striking the second sentence;
(2) by amending paragraph (A)(iii) to read as follows:
[[Page S9571]]
``(iii) any person who owned, operated or otherwise
controlled activities at a vessel or facility immediately
before the United States (including any department, agency or
instrumentality), a unit of State or local government, or
their agents or appointees, acquired title or control of such
vessel or facility in any of the following ways:
``(I) through bankruptcy, tax delinquency, abandonment, or
escheat;
``(II) through foreclosure that is connected with the
provision of loans, discounts, advances, guarantees,
insurance, or other financial assistance, if the United
States or unit of State or local government meets the
requirements of paragraph (F)(ii) (I) and (II) of this
section;
``(III) through the exercise of statutory receivership or
conservatorship authority, including any liquidating or
winding up the affairs of any person or any subsidiary
thereof, if the governmental entity did not participate in
management of the vessel or facility prior to acquiring title
or control and meets the requirements of paragraph
(F)(ii)(II) of this section;
``(IV) through the exercise of any seizure or forfeiture
authority;
``(V) in any civil, criminal, or administrative enforcement
proceeding, whether by order or settlement, in which an
interest in a vessel or facility is conveyed to satisfy a
claim of the governmental entity, and the governmental entity
meets the requirements of this section; and
``(VI) temporarily in connection with a law enforcement
operation.'';
(3) by amending paragraph (D) to read as follows:
``(D)(i) The term `owner or operator' does not include the
United States (including any department, agency, or
instrumentality) or a unit of State or local government that
acquires title or control of a vessel or facility in a manner
described in paragraph (A)(iii), or in any other
circumstances in which the government involuntary acquires
title by virtue of its function as sovereign.
``(ii) Notwithstanding subparagraph (i), if the United
States or a unit of State or a unit of State or local
government caused or contributed to the release or threatened
release of a hazardous substance from the facility, this Act
(including section 107) shall apply in the same manner and to
the same extent, procedurally and substantively, as the Act
does to any non-governmental entity.''; and
(4) by adding at the end the following:
``(E) Exclusion of persons not participants in
management.--
``(i) Indicia of ownership to protect security interest.--
The term `owner or operator' does not include--
``(I) a person, including a successor or assign of such
person, who, without participating in the management of a
vessel or facility, holds indicia of ownership primarily to
protect such person's security interest in the vessel or
facility; or
``(II) a successor or assign of a person described in
subclause (I).
``(ii) Nonparticipation in management prior to
foreclosure.--The term `owner or operator' does not include a
person that forecloses on a vessel or a facility even if such
person forecloses on such vessel or facility, sells, re-
leases (in the case of a lease finance transaction), or
liquidates the vessel or facility, maintains business
activities, winds up operations, or undertakes any response
action under section 107(d)(1) or under the direction of an
on-scene coordinator, with respect to the vessel or facility,
or takes other measures to preserve, protect, or prepare the
vessel or facility prior to sale or disposition, if--
``(I) the person did not participate in management prior to
foreclosure; and
``(II) such person seeks to sell, re-lease (in the case of
a lease finance transaction), or otherwise divest such vessel
or facility at the earliest practical, commercially
reasonable time, on commercially reasonable terms, taking
into account market conditions and legal and regulatory
requirements.
``(F) Participation in management.--For purposes of
subparagraph (E)--
``(i) the term `participate in management' means actually
participating in the management or operational affairs of the
vessel or facility, and does not include merely having the
capacity to influence, or the unexercised right to control,
vessel or facility operations;
(ii) a person shall be considered to `participate in
management' only if, while the borrower is still in
possession of the vessel or facility encumbered by the
security interest, such person--
``(I) exercises decisionmaking control over the
environmental compliance of a borrower, such that the person
has undertaken responsibility for the hazardous substance
handling or disposal practices of the borrower; or
``(II) exercises control at a level comparable to that of a
manager of the enterprise of the borrower, such that the
person has assumed or manifested responsibility for the
overall management of the enterprise encompassing day-to-day
decisionmaking with respect to environmental compliance, or
with respect to all or substantially all of the operational
aspects (as distinguished from financial or administrative
aspects) of the enterprise, other than environmental
compliance;
``(iii) the term `participate in management' does not
include conducting an act or failing to act prior to the time
that a security interest is created in a vessel or facility;
and
``(iv) the term `participate in management' does not
include-
``(I) holding such a security interest or, prior to
foreclosure, abandoning or releasing such a security
interest;
``(II) including in the terms of an extension of credit, or
in a contract or security agreement relating to such an
extension, covenant, warranty, or any other term or condition
that relates to environmental compliance;
``(III) monitoring or enforcing the term or condition of
the extension of credit or security interest;
``(IV) monitoring or undertaking 1 or more inspections of
the vessel or facility;
``(V) requiring the borrower to undertake response action
or other lawful means of addressing the release or threatened
release of a hazardous substance in connection with the
vessel or facility prior to, during, or upon the expiration
of the term of the extension of credit;
``(VI) providing financial or other advice or counseling in
an effort to mitigate, prevent, or cure default or diminution
in the value of the vessel or facility;
``(VII) restructuring, renegotiating, or otherwise agreeing
to alter a term or condition of the extension of credit or
security interest;
``(VIII) exercising other remedies that may be available
under applicable law for the breach of any term or condition
of the extension of credit or security agreement; or
``(IX) conducting a response action under section 107(d)(1)
or under the direction of an on-scene coordinator,
if such actions do not rise to the level of participation in
management, as defined in clauses (i) and (ii).
``(G) Other terms.--As used in subparagraph (E),
subparagraph (F), and this subparagraph, the following
definitions shall apply:
``(i) Borrower.--The term ``borrower'' means a person whose
vessel or facility is encumbered by a security interest.
``(ii) Extension of credit.--The term `extension of credit'
includes a lease finance transaction--
``(I) in which the lessor does not initially select the
leased vessel or facility and does not during the lease term
control the daily operation or maintenance of the vessel or
facility; or
``(II) that conforms with regulations issued by the
appropriate Federal banking agency or the appropriate State
bank supervisor (as those terms are defined in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813)) or with
regulations issued by the National Credit Union
Administration Board, as appropriate.
``(iii) Financial or administrative aspect.--The term
`financial or administrative aspect' includes a function such
as a function of a credit manager, accounts payable officer,
accounts receivable officer, personnel manager, comptroller,
or chief financial officer, or any similar function.
``(iv) Foreclosure; foreclose.--The term `foreclosure' and
`foreclose' mean, respectively, acquiring, and to acquire
from a nonaffiliated party for subsequent disposition, a
vessel or facility through--
``(I) purchase at sale under a judgment or decree, a power
of sale, a nonjudicial foreclosure sale, or from a trustee,
deed in lieu of foreclosure, or similar conveyance, or
through repossession, if such vessel or facility was security
for an extension of credit previously contracted;
``(II) conveyance pursuant to an extension of credit
previously contracted, including the termination of a lease
agreement; or
``(III) any other formal or informal manner by which the
person acquires, for subsequent disposition, possession of
collateral in order to protect the security interest of the
person.
``(v) Operational aspect.--The term `operational aspect'
includes a function such as a function of a facility or plant
manager, operations manager, chief operating officer, or
chief executive officer.
``(vi) Security interest.--The term `security interest'
includes a right under a mortgage, deed of trust, assignment,
judgment lien, pledge, security agreement, factoring
agreement, or lease, or any other right accruing to a person
to secure the repayment of money, the performance of a duty,
or some other obligation.''.
(b) Effective Date.--The amendments made by this section
shall be applicable with respect to any claim that has not
been finally adjudicated as of the date of enactment of this
Act.
(c) Lender Liability Rule.--(1) Effective on the date of
enactment of this section, the final rule issued by the
Administrator of the Environmental Protection Agency on April
29, 1992 (57 Stat. Fed. Reg. 18344), shall be deemed to have
been validly issued pursuant to the authority of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, and to have been effective according
to the final rule's terms. No additional administrative or
judicial proceedings shall be necessary with respect to such
final rule.
(2) Notwithstanding section 113(a) of the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, no court shall have jurisdiction to review the final
rule issued by the Administrator of the Environmental
Protection Agency on April 29, 1992 (57 Fed. Reg. 18344).
(3) Nothing in this subsection shall be construed to limit
the authority of the President or his delegate to amend the
final rule issued by the Administrator of the Environmental
Protection Agency on April 29, 1992
[[Page S9572]]
(57 Fed. Reg. 18344), in accordance with applicable
provisions of law.
(d) Regulatory Authority.--
(1) In general.--The Administrator may--
(A) issue such regulations as the Administrator deems
necessary to carry out the amendments made by this section;
and
(B) delegate and assign any duties or powers imposed upon
or assigned to the Administrator by the amendments made by
this section, including the authority to issue regulations.
(2) Authority to clarify.--The authority under paragraph
(1) includes authority to clarify or interpret all terms,
including those used in this section, and to implement any
provision of the amendments made by this section.
TITLE IV--INNOCENT LANDOWNERS
SEC. 401. INNOCENT LANDOWNERS.
(a) Environmental Site Assessment.--Section 107 (as amended
by section 201(b)) is amended by adding at the end the
following new subsection:
``(p) Innocent Landowners.--
``(1) Conduct of environmental assessment.--A person who
has acquired real property shall have made all appropriate
inquiry within the meaning of subparagraph (B) of section
101(35) if the person establishes that, within 180 days prior
to the time of acquisition, an environmental site assessment
of the real property was conducted which meets the
requirements of paragraph (2).
``(2) Definition of environmental site assessment.--For
purposes of this subsection, the term `environmental site
assessment' means an assessment conducted in accordance with
the standards set forth in the American Society for Testing
and Materials (ASTM) Standard E1527-94, titled `Standard
Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process' or with alternative
standards issued by rule by the President or promulgated or
developed by others and designated by rule by the President.
Before issuing or designating alternative standards, the
President shall first conduct a study of commercial and
industrial practices concerning environmental site
assessments in the transfer of real property in the United
States. Any such standards issued or designated by the
President shall also be deemed to constitute commercially
reasonable and generally accepted standards and practices for
purposes of this paragraph. In issuing or designating any
such standards, the President shall consider requirements
governing each of the following:
``(A) Interviews or owners, operators, and occupants of the
property to determine information regarding the potential for
contamination.
``(B) Review of historical sources as necessary to
determine previous uses and occupancies of the property since
the property was first developed. For purposes of this
subclause, the term `historical sources' means any of the
following, if they are reasonably ascertainable: recorded
chain of title documents regarding the real property,
including all deeds, easements, leases, restrictions, and
covenants, aerial photographs, fire insurance maps, property
tax files, USGS 7.5 minutes topographic maps, local street
directories, building department records, zoning/land use
records, and any other sources that identify past uses and
occupancies of the property.
``(C) Determination of the existence of recorded
environmental cleanup liens against the real property which
have arisen pursuant to Federal, State, or local statutes.
``(D) Review of reasonably ascertainable Federal, State,
and local government records of sites or facilities that are
likely to cause or contribute to contamination at the real
property, including, as appropriate, investigation reports
for such sites or facilities; records of activities likely to
cause or contribute to contamination at the real property,
including landfill and other disposal location records,
underground storage tank records, hazardous waste handler and
generator records and spill reporting records; and such other
reasonably ascertainable Federal, State, and local government
environmental records which could reflect incidents or
activities which are likely to cause or contribute to
contamination at the real property.
``(E) A visual site inspection of the real property and all
facilities and improvements on the real property and a visual
inspection of immediately adjacent properties, including an
investigation of any hazardous substance use, storage,
treatment, and disposal practices on the property.
``(F) Any specialized knowledge or experience on the part
of the defendant.
``(G) The relationship of the purchase price to the value
of the property if uncontaminated.
``(H) Commonly known or reasonably ascertainable
information about the property.
``(I) The obviousness of the presence or likely presence of
contamination at the property, and the ability to detect such
contamination by appropriate investigation.
A record shall be considered to be `reasonably ascertainable'
for purposes of this paragraph if a copy or reasonable
facsimile of the record is publicly available by request
(within reasonable time and cost constraints) and the record
is practically reviewable.
``(3) Appropriate inquiry.--A person shall not be treated
as having made all appropriate inquiry under paragraph (1)
unless--
``(A) the person has maintained a compilation of the
information reviewed and gathered in the course of the
environmental site assessment;
``(B) the person exercised appropriate care with respect to
hazardous substances found at the facility by taking
reasonable steps to stop on-going releases, prevent
threatened future releases of hazardous substances, and
prevent or limit human or natural resource exposure to
hazardous substances previously released into the
environment; and
``(C) the person provides full cooperation, assistance, and
facility access to persons authorized to conduct response
actions at the facility, including the cooperation and access
necessary for the installation, integrity, operation, and
maintenance of any complete or partial response action at the
facility.
``(4) Definition of contamination.--For the purposes of
this subsection and section 101(35), the term `contamination'
means an existing release, a past release, or the threat of a
release of a hazardous substance.''.
(b) Section 101(35) of the Comprehensive Environmental
Response, Compensation, and Liability act of 1980 (42 U.S.C.
9601(35)) is by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) Knowledge of inquiry requirement.--
``(i) In general.--To establish that the defendant had no
reason to know, as provided in subparagraph (A)(i),
the defendant must have undertaken, at the time of the
acquisition, all appropriate inquiry (in accordance with
section 107(p)) into the previous ownership and uses of
the facility and its real property in accordance with
generally accepted good commercial and customary standards
and practices. For the purposes of the preceding sentence
and until the Administrator issues or designates standards
and practices as provided in clause (ii), the court shall
take into account any specialized knowledge or experience
on the part of the defendant, the relationship of the
purchase price to the value of the property if
uncontaminated, commonly known or reasonably ascertainable
information about the property, the obviousness of the
presence or likely presence of contamination at the
property, and the ability to detect such contamination by
appropriate investigation.
``(ii) Rule.--Within 1 year after the date of enactment of
this Act, the Administrator shall, by rule, issue standards
and practices or designate standards and practices
promulgated or developed by others, that satisfy the
requirements of this subparagraph. In issuing or designating
such standards and practices, the Administrator shall
consider each of the following:
``(I) Conduct of an inquiry by an environmental
professional.
``(II) Inclusion of interviews with past and present
owners, operators, and occupants of the facility and its real
property for the purpose of gathering information regarding
the potential for contamination at the facility and its real
property.
``(III) Inclusion of a review of historical sources, such
as chain of title documents, aerial photographs, building
department records, and land use records, to determine
previous uses and occupancies of the real property since it
was first developed.
``(IV) Inclusion of a search for recorded environmental
cleanup liens, filed under Federal, State, or local law,
against the facility or its real property.
``(V) Inclusion of a review of Federal, State, and local
government records (such as waste disposal records),
underground storage tank records, and hazardous waste
handling, generation, treatment, disposal, and spill records,
concerning contamination at or near the facility or its real
property.
``(VI) Inclusion of a visual inspection of the facility and
its real property and of adjoining properties.
``(VII) Any specialized knowledge or experience on the part
of the defendant.
``(VIII) The relationship of the purchase price to the
value of the property if uncontaminated.
``(IX) Commonly known or reasonably ascertainable
information about the property.
``(X) The obviousness of the presence or likely presence of
contamination at the property, and the ability to detect such
contamination by appropriate investigation.
``(iii) Site inspection and title search.--In the case of
property for residential use or other similar use purchased
by a nongovernmental or noncommercial entity, a site
inspection and title search that reveal no basis for further
investigation satisfy the requirements of this
subparagraph.''; and
(c) Regulatory Authority.--
(1) In general.--The Administrator may--
(A) issue such regulations as the Administrator deems
necessary to carry out the amendments made by this section;
and
(B) delegate and assign any duties or powers imposed upon
or assigned to the Administrator by the amendments made by
this section, including the authority to issue regulations.
(2) Authority to clarify.--The authority under paragraph
(1) includes authority to clarify or interpret all terms,
including those used in this section, and to implement any
provision of the amendments made by this section.
______
By Mr. WYDEN (for himself and Mr. D'Amato):
S. 2029. A bill to make permanent certain authority relating to self-
employment assistance programs; to the Committee on Finance.
the self-employment reauthorization act
Mr. WYDEN. Mr. President, I rise today to introduce legislation with
[[Page S9573]]
Senator D'Amato to reauthorize the Self-Employment Act. As waves of
economic change turn our economy into a high-wire act, the Self-
Employment Act has helped turn the unemployment safety net into a
trampoline of opportunity for the unemployed. The Self-Employment
Assistance Program takes an innovative and cost-effective approach to
helping eligible dislocated workers become self-sufficient; it enables
them to use their weekly unemployment checks to start their own
businesses.
Harvard Business School reported earlier this year that from 1978 to
the present, 22 percent of the work force, or 3 million workers, at the
country's top 100 companies had been laid off, and that 77 percent of
all the layoffs involved white-collar workers. Many of these highly
skilled workers will never be able to return to their former positions,
but some are highly motivated to start their own firms. In 40 out of 50
States, however, those who start their own businesses are forced to
give up their weekly unemployment compensation checks as soon as the
company starts generating revenue--but before it provides enough income
to support the worker. It is exactly this problem the Self-Employment
Assistance Program is designed to correct.
In a few short years, the Self-Employment Act (Public Law 103-182;
title V) has already enabled thousands of unemployed Americans to use
their unemployment compensation to establish new businesses. Two
experimental programs, in Massachusetts and Washington, have already
shown that self-employment programs can create jobs at no cost to the
taxpayer. Using existing funds, the Massachusetts program created
dozens of new businesses but actually paid $1,400 less unemployment per
worker than the State average. The Washington program created more than
600 new jobs and the firms were paying an average of $10.50 an hour to
workers they had hired.
The legislation we introduce today reauthorize a program that
allows--but does not require--State to establish self-employment
assistance [SEA] programs as part of their unemployment insurance [UI]
programs. It permits States to provide income support payments to the
unemployed in the same weekly amount as the worker's regular
unemployment insurance [UI] benefits would otherwise be, so that they
may work full time on starting their own business instead of searching
for traditional wage and salary jobs. In effect, this legislation
removes a high hurdle facing those who have the ingenuity, motivation,
and energy to start their own businesses. It eliminates a barrier in
the law that has forced workers interested in self-employment to
choose between receiving UI benefits and starting a new business.
Self-employment assistance has not only proved to be a viable
reemployment option for unemployed workers; its benefits have exceeded
its costs as well. While the law is not a panacea for all of our
Nation's unemployed, it's an opportunity for many skilled workers to
get back to work faster and helps create new jobs as well.
In a recent tour around Oregon, my State SEA officials found
tremendous enthusiasm for this program. They reported to me: ``* * *
the SEA Program in Oregon is meeting the goal of providing Oregon
dislocated workers--as identified through worker profiling--with access
to entrepreneurial training and financial assistance while pursuing
self-employment and the establishment of a business.'' Among the
examples of businesses developed under the Oregon SEA Program this year
are a marine maintenance and repair company, drop-in day care centers
at shopping malls and a handmade hats, quilts, and bags business
working to develop a mail-order firm.
The 1993 SEA law is based upon self-employment programs that have
worked well in 17 other industrialized nations. As the author of two
laws, in 1987 and 1993, that have promoted self-employment, I can
attest to the dramatic success of the self-employment concept.
According to a June 1995 Department of Labor [DOL] evaluation of the
Washington State and Massachusetts pilot programs, the two projects
``clearly demonstrate that self-employment is a viable reemployment
option for some unemployed workers . . . about one-half of those
interested actually do start a business and an average of two-thirds
were still in business 3 years later.'' In addition, the DOL report
found that self-employment assistance programs increased business
starts among project participants, reduced the length of their
unemployment periods and increased their total time in employment. Both
the Washington and Massachusetts models proved to be cost effective for
the participants as well as for taxpayers.
Over the past 2\1/2\ years, 10 States used the 1993 legislation to
create self-employment programs: California, Connecticut, Delaware,
Maine, Maryland, Minnesota, New Jersey, New York, Oregon, and Rhode
Island. To date, DOL has approved six State plans--California,
Delaware, Maine, New Jersey, New York, and Oregon--and four of these--
Delaware, Maine, New York and Oregon--have actually implemented their
SEA programs.
Let me briefly describe how the program works. The law directs the
DOL to review and approve State SEA Program plans. In States that
operate SEA programs, new UI claimants identified through worker
profiling--automated systems that use a set of criteria to identify
those claimants who are likely to exhaust their UI benefits and need
reemployment assistance--will be eligible for self-employment
assistance. State SEA programs provide participants with periodic--
weekly or biweekly--self-employment allowances while they are getting
their businesses off the ground. These support payments are the same
weekly amount as the worker's regular UI benefits. The SEA participants
are required to participate in technical assistance programs--
entrepreneurial training--accounting, cash flow, finances, taxes,
etc.--business counseling--business plans, marketing, legal
requirements, insurance, etc.--and finance--to ensure they have the
skills necessary to operate a business. Finally, SEA programs are
required to operate at no additional cost to the unemployment trust
fund: The law stipulates that the payment of SEA allowances may not
result in any additional benefits charges to the unemployment trust
fund. Individuals may choose at any time to opt out of the SEA Program;
they may resume collection of regular unemployment compensation until
the total amount of regular unemployment compensation paid and the SEA
paid equals the maximum benefit amount. States are responsible for the
costs of providing basic SEA Program services, like business counseling
and technical assistance, but may allow participants to pay for more
intensive counseling and technical assistance.
Mr. President, as we move into the global economy of the 21st
century, it is imperative that the Government adopt fresh strategies so
that our many skilled buy unemployed workers can start anew in the
private sector. Congress should extend the Self-Employment Assistance
Program so that States will have the continued flexibility to help
unemployed workers create their own businesses. Our bipartisan bill
promotes the spirit of entrepreneurship. It carries forward a
reasonable, and sensible reform of the unemployment insurance system
that bears no cost to the taxpayer.
I would like to thank Senator D'Amato for joining me as an original
cosponsor of this bill. New York has a very active and successful Self
Employment Assistance Program, and I look forward to working closely
with him to see this important program reauthorized.
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. 2029
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SELF-EMPLOYMENT ASSISTANCE PROGRAMS.
(a) In General.--Paragraph (2) of section 507(e) of the
North American Free Trade Agreement Implementation Act (26
U.S.C. 3306 note) is hereby repealed.
(b) Conforming Amendments.--Subsection (e) of section 507
of such Act is further amended--
(1) by amending the heading after the subsection
designation to read ``Effective Date.--''; and
(2) by striking ``(1) Effective Date.--'' and by running in
the remaining text of subsection (e) immediately after the
heading therefor, as amended by paragraph (1).
______
[[Page S9574]]
By Mr. LOTT (for himself and Mr. Exon):
S. 2030. A bill to establish nationally uniform requirements
regarding the titling and registration of salvage, nonrepairable, and
rebuilt vehicles, and for other purposes; to the Committee on Commerce,
Science, and Transportation.
the national motor vehicle safety, antitheft, title reform, and
consumer protection act of 1996
Mr. LOTT. Mr. President, I rise today to introduce legislation to
establish national requirements regarding the titling and registration
of salvage, nonrepairable and rebuilt vehicles. I am proud to have
Senator Exon as my principle cosponsor on this bipartisan bill. Senator
Exon has done yeoman's work in previous Congresses to address this
issue.
Several years ago, Congress formed a group to study this issue. My
bill responds to the recommendations made by that Federal task force
regarding the disclosure of vehicle conditions. This consumer safety
bill will protect used car consumers from unknowingly purchasing
rebuilt automobiles that have not been restored to safe operating
conditions. The legislation requires the vehicle title to be branded to
show that it has been totaled.
This legislation would create a uniform national policy concerning
the disclosure of vehicle conditions. Forty-eight States require some
sort of disclosure on the vehicle title. Insistency among these States,
however, permits those unscrupulous few to take advantage of
unsuspecting consumers.
I hope my colleagues in the Senate will join me as cosponsors of this
legislation, which addresses this consumer safety issue in a direct and
straightforward manner.
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. 2030
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 Motor Vehicle
Safety, Antitheft, Title Reform, and Consumer Protection Act
of 1996''.
SEC. 2. FINDINGS.
The Congress finds that--
(1) many States do not have specific requirements regarding
the disclosure of the salvage history of a motor vehicle and
some States never require that the title to a motor vehicle
be stamped or branded to indicate that the motor vehicle is,
or has been, a salvage vehicle;
(2) as of the date of enactment of this Act, State
disclosure requirements regarding the salvage history of a
motor vehicle--
(A) are inconsistent in scope and content;
(B) require the use of different forms and administrative
procedures;
(C) will undercut the effectiveness of the National
Automobile Title Information System created by the Anti Car
Theft Act of 1992;
(D) are burdensome on interstate commerce; and
(E) do not provide a significant deterrent to unscrupulous
sellers of rebuilt vehicles who mislead potential wholesale
and retail buyers concerning the condition and value of such
vehicles;
(3) the fact that a motor vehicle is salvage,
nonrepairable, water damaged, or rebuilt after incurring
substantial damage is material in any subsequent purchase or
sale of that motor vehicle;
(4) some salvage and nonrepairable vehicles become involved
in illegal commerce in stolen vehicles and parts;
(5) in some jurisdictions, the lack of theft inspections
prior to allowing a rebuilt motor vehicle back on the road
provides an opportunity for an unscrupulous person to use
stolen parts in the rebuilding of motor vehicles;
(6) according to the National Highway Traffic Safety
Administration, rebuilt motor vehicles--
(A) may not have passed any safety inspection; and
(B) may pose a public safety risk and consumers who
unknowingly buy rebuilt motor vehicles face an increased risk
of death or serious injury;
(7) statistics prepared by the American Association of
Motor Vehicle Administrators indicate that 71 percent of the
States require some form of safety inspection before a
rebuilt salvage vehicle may be registered for use on the
road;
(8) the promulgation of a safety inspection program by the
Secretary of Transportation may assist the States in
expanding and standardizing their inspection programs for
rebuilt vehicles;
(9) duplicate or replacement titles play an important role
in many vehicle thefts and various types of vehicle fraud;
(10) State controls on the issuance of such titles must
therefore be strengthened and made uniform across the United
States;
(11) large quantities of motor vehicles are exported from
United States ports to foreign countries without proper
documentation of ownership in violation of applicable law;
and
(12) in view of the threats to public safety and consumer
interests described in paragraphs (1) through (10), the Motor
Vehicle Titling, Registration and Salvage Advisory Committee,
which was convened by the Secretary of Transportation under
section 140(a) of the Anti Car Theft Act of 1992 (15 U.S.C.
2041 note), recommended that--
(A) Federal laws be enacted to require certain definitions
to be used nationwide to describe seriously damaged vehicles;
and
(B) all States be required to--
(i) use the definitions referred to in subparagraph (A) in
determining appropriate title designations;
(ii) use certain motor vehicle titling and control methods;
and
(iii) take certain other measures to protect the integrity
of the titling process.
SEC. 3. MOTOR VEHICLE TITLING AND DISCLOSURE REQUIREMENTS.
(a) In General.--Subtitle VI of title 49, United States
Code, is amended by adding at the end the following new
chapter:
``CHAPTER 333--AUTOMOBILE SAFETY, ANTITHEFT, AND TITLE DISCLOSURE
REQUIREMENTS
``Sec.
``33301. Definitions.
``33302. Passenger motor vehicle titling.
``33303. Petitions for extensions of time.
``33304. Effect on State law.
``33305. Civil and criminal penalties.
``Sec. 33301. Definitions
``For the purposes of this chapter the following
definitions and requirements shall apply:
``(1) Passenger motor vehicle.--
``(A) In general.--The term `passenger motor vehicle' means
any vehicle driven or drawn by mechanical power manufactured
primarily for use on the public streets, roads, and highways.
``(B) Passenger motor vehicles and light trucks included.--
Such term includes a multipurpose passenger vehicle or light
duty truck if the vehicle or truck is rated at not more than
7,500 pounds gross vehicle weight.
``(C) Motorcycles not included.--Such term does not include
a motorcycle.
``(2) Salvage vehicle.--
``(A) In general.--Subject to subparagraph (E), the term
`salvage vehicle' means any passenger motor vehicle that has
been wrecked, destroyed, or damaged to the extent that the
total estimated or actual cost of parts and labor to rebuild
or reconstruct the passenger motor vehicle to its preaccident
condition for legal operation on the roads or highways
exceeds 75 percent of the retail value of the passenger motor
vehicle, as set forth in the most recent edition of any
nationally recognized compilation (including automated
databases) of current retail values that is approved by the
Secretary.
``(B) Vehicles excluded.--Such term does not include any
passenger motor vehicle that has a model year designation of
a calendar year that precedes that calendar year in which the
vehicle was wrecked, destroyed, or damaged by 5 or more
years.
``(C) Determination of value of repair parts.--For purposes
of subparagraph (B), the value of repair parts shall be
determined by using--
``(i) the published retail cost of the original equipment
manufacturer parts; or
``(ii) the actual retail cost of the repair parts to be
used in the repair.
``(D) Determination of labor costs.--For purposes of
subparagraph (B), the labor cost of repairs shall be computed
by using the hourly labor rate and time allocations that are
reasonable and customary in the automobile repair industry in
the community in which the repairs are performed.
``(E) Certain vehicles included.--The term `passenger
vehicle' includes, without regard to whether the passenger
motor vehicle meets the 75 percent threshold specified in
subparagraph (B)--
``(i) any passenger motor vehicle with respect to which an
insurance company acquires ownership under a damage
settlement (except for a settlement in connection with a
recovered theft vehicle that did not sustain a sufficient
degree of damage to meet the 75 percent threshold specified
in subparagraph (B)); or
``(ii) any passenger motor vehicle that an owner may wish
to designate as a salvage vehicle by obtaining a salvage
title, without regard to the extent of the damage and
repairs.
``(F) Special rule.--A designation of a passenger motor
vehicle by an owner under subparagraph (E)(ii) shall not
impose any obligation on--
``(i) the insurer of the passenger motor vehicle; or
``(ii) an insurer processing a claim made by or on behalf
of the owner of the passenger motor vehicle.
``(3) Salvage title.--
``(A) In general.--The term `salvage title' means a
passenger motor vehicle ownership document issued by a State
to the owner of a salvage vehicle.
``(B) Transfer of ownership.--Ownership of a salvage
vehicle may be transferred on a salvage title.
``(C) Prohibition.--The salvage vehicle may not be
registered for use on the roads or
[[Page S9575]]
highways unless the salvage vehicle has been issued a rebuilt
salvage title.
``(D) Requirement for a rebuilt salvage title.--A salvage
title shall be conspicuously labeled with the word `salvage'
across the front of the document.
``(4) Rebuilt salvage vehicle.--The term `rebuilt salvage
vehicle' means--
``(A) for passenger motor vehicles subject to a safety
inspection in a State that requires such an inspection under
section 33302(b)(2)(H), any passenger motor vehicle that
has--
``(i) been issued previously a salvage title;
``(ii) passed applicable State antitheft inspection;
``(iii) been issued a certificate indicating that the
passenger motor vehicle has--
``(I) passed the antitheft inspection referred to in clause
(ii); and
``(II) been issued a certificate indicating that the
passenger motor vehicle has passed a required safety
inspection under section 33302(b)(2)(H); and
``(iv) affixed to the door jamb adjacent to the driver's
seat a decal stating `Rebuilt Salvage Vehicle--Antitheft and
Safety Inspections Passed'; or
``(B) for passenger motor vehicles in a State other than a
State referred to in subparagraph (A), any passenger motor
vehicle that has--
``(i) been issued previously a salvage title;
``(ii) passed an applicable State antitheft inspection;
``(iii) been issued a certificate indicating that the
passenger motor vehicle has passed the required antitheft
inspection referred to in clause (ii); and
``(iv) affixed to the door jamb adjacent to the driver's
seat, a decal stating `Rebuilt Salvage Vehicle--Antitheft
Inspection Passed/No Safety Inspection Pursuant to National
Criteria'.
``(5) Rebuilt salvage title.--
``(A) In general.--The term `rebuilt salvage title' means
the passenger motor vehicle ownership document issued by a
State to the owner of a rebuilt salvage vehicle.
``(B) Transfer of ownership.--Ownership of a rebuilt
salvage vehicle may be transferred on a rebuilt salvage
title.
``(C) Registration for use.--A passenger motor vehicle for
which a rebuilt salvage title has been issued may be
registered for use on the roads and highways.
``(D) Requirement for salvage title.--A rebuilt salvage
title shall be conspicuously labeled, either with `Rebuilt
Salvage Vehicle--Antitheft and Safety Inspections Passed' or
`Rebuilt Salvage Vehicle--Antitheft Inspection Passed/No
Safety Inspection Pursuant to National Criteria', as
appropriate, across the front of the document.
``(6) Nonrepairable vehicle.--
``(A) In general.--The term `nonrepairable vehicle' means
any passenger motor vehicle that--
``(i)(I) is incapable of safe operation for use on roads or
highways; and
``(II) has no resale value, except as a source of parts or
scrap only; or
``(ii) the owner irreversibly designates as a source of
parts or scrap.
``(B) Certificate.--Each nonrepairable vehicle shall be
issued a nonrepairable vehicle certificate.
``(7) Nonrepairable vehicle certificate.--
``(A) In general.--The term `nonrepairable vehicle
certificate' means a passenger motor vehicle ownership
document issued by the State to the owner of a nonrepairable
vehicle.
``(B) Transfer of ownership.--Ownership of the passenger
motor vehicle may be transferred not more than 2 times on a
nonrepairable vehicle certificate.
``(C) Prohibition.--A nonrepairable vehicle that is issued
a nonrepairable vehicle certificate may not be titled or
registered for use on roads or highways at any time after the
issuance of the certificate.
``(D) Requirement for nonrepairable vehicle certificate.--A
nonrepairable vehicle certificate shall be conspicuously
labeled with the term `Nonrepairable' across the front of the
document.
``(8) Flood vehicle.--
``(A) In general.--The term `flood vehicle' means any
passenger motor vehicle that has been submerged in water to
the point that rising water has reached over the door sill of
the motor vehicle and has entered the passenger or trunk
compartment.
``(B) Requirement for disclosure.--Disclosure that a
passenger motor vehicle has become a flood vehicle shall be
made by the person transferring ownership at the time of
transfer of ownership. After such transfer is completed, the
certificate of title shall be conspicuously labeled with the
term `flood' across the front of the document.
``(9) Secretary.--The term `Secretary' means the Secretary
of Transportation.
``Sec. 33302. Passenger motor vehicle titling
``(a) Carryforward of Certain Title Information if a
Previous Title Was Not Issued in Accordance With Certain
Nationally Uniform Standards.--
``(1) In general.--If--
``(A) records that are readily accessible to a State
indicate that a passenger motor vehicle with respect to which
the ownership is transferred on or after the date that is 1
year after the date of enactment of the National Motor
Vehicle Safety, Antitheft, Title Reform, and Consumer
Protection Act of 1996, has been issued previously a title
that bore a term or symbol described in paragraph (2); and
``(B) the State licenses that vehicle for use,
the State shall disclose that fact on a certificate of title
issued by the State.
``(2) Terms and symbols.--
``(A) In general.--A State shall be subject to the
requirements of paragraph (1) with respect to the following
terms on a title that has been issued previously to a
passenger motor vehicle (or symbols indicating the meanings
of those terms):
``(i) `Salvage'.
``(ii) `Unrebuildable'.
``(iii) `Parts only'.
``(iv) `Scrap'.
``(v) `Junk'.
``(vi) `Nonrepairable'.
``(vii) `Reconstructed'.
``(viii) `Rebuilt'.
``(ix) Any other similar term, as determined by the
Secretary.
``(B) Flood damage.--A State shall be subject to the
requirements of paragraph (1) if a term or symbol on a title
issued previously for a passenger vehicle indicates that the
vehicle has been damaged by flood.
``(b) Nationally Uniform Title Standards and Control
Methods.--
``(1) In general.--Not later than 18 months after the date
of the enactment of the National Motor Vehicle Safety,
Antitheft, Title Reform, and Consumer Protection Act of 1996,
the Secretary shall issue regulations that require each State
that licenses passenger motor vehicles with respect to which
the ownership is transferred on or after the date that is 2
years after the issuance of final regulations, to apply with
respect to the issuance of the title for any such motor
vehicle uniform standards, procedures, and methods for--
``(A) the issuance and control of that title; and
``(B) information to be contained on such title.
``(2) Contents of regulations.--The titling standards,
control procedures, methods, and information covered under
the regulations issued under this subsection shall include
the following:
``(A) Indication of status.--Each State shall indicate on
the face of a title or certificate for a passenger motor
vehicle, as applicable, if the passenger motor vehicle is a
salvage vehicle, a nonrepairable vehicle, a rebuilt salvage
vehicle, or a flood vehicle.
``(B) Subsequent titles.--The information referred to in
subparagraph (A) concerning the status of the passenger
vehicle shall be conveyed on any subsequent title, including
a duplicate or replacement title, for the passenger motor
vehicle issued by the original titling State or any other
State.
``(C) Security standards.--The title documents, the
certificates and decals required by section 33301(4), and the
system for issuing those documents, certificates, and decals
shall meet security standards that minimize opportunities for
fraud.
``(D) Identifying information.--Each certificate of title
referred to in subparagraph (A) shall include the passenger
motor vehicle make, model, body type, year, odometer
disclosure, and vehicle identification number.
``(E) Uniform layout.--The title documents covered under
the regulations shall maintain a uniform layout, that shall
be established by the Secretary, in consultation with each
State or an organization that represents States.
``(F) Nonrepairable vehicles.--A passenger motor vehicle
designated as nonrepairable--
``(i) shall be issued a nonrepairable vehicle certificate;
and
``(ii) may not be retitled.
``(G) Rebuilt salvage title.--No rebuilt salvage title may
be issued to a salvage vehicle unless, after the salvage
vehicle is repaired or rebuilt, the salvage vehicle complies
with the requirements for a rebuilt salvage vehicle under
section 33301(4).
``(H) Inspection programs.--Each State inspection program
shall be designed to comply with the requirements of this
subparagraph and shall be subject to approval and periodic
review by the Secretary. Each such inspection program shall
include the following:
``(i) Each owner of a passenger motor vehicle that submits
a vehicle for an antitheft inspection shall be required to
provide--
``(I) a completed document identifying the damage that
occurred to the vehicle before being repaired;
``(II) a list of replacement parts used to repair the
vehicle;
``(III) proof of ownership of the replacement parts
referred to in subclause (II) (as evidenced by bills of sale,
invoices or, if such documents are not available, other proof
of ownership for the replacement parts); and
``(IV) an affirmation by the owner that--
``(aa) the information required to be submitted under this
subparagraph is complete and accurate; and
``(bb) to the knowledge of the declarant, no stolen parts
were used during the rebuilding of the repaired vehicle.
``(ii) Any passenger motor vehicle or any major part or
major replacement part required to be marked under this
section or the regulations issued under this section that--
``(I) has a mark or vehicle identification number that has
been illegally altered, defaced, or falsified; or
``(II) cannot be identified as having been legally obtained
(through evidence described in clause (i)(III)),
shall be contraband and subject to seizure.
[[Page S9576]]
``(iii) To avoid confiscation of parts that have been
legally rebuilt or manufactured, the regulations issued under
this subsection shall include procedures that the Secretary,
in consultation with the Attorney General of the United
States, shall establish--
``(I) for dealing with parts with a mark or vehicle
identification number that is normally removed during
remanufacturing or rebuilding practices that are considered
acceptable by the automotive industry; and
``(II) deeming any part referred to in clause (i) to meet
the identification requirements under the regulations if the
part bears a conspicuous mark of such type, and is applied in
such manner, as may be determined by the Secretary to
indicate that the part has been rebuilt or remanufactured.
``(iv) With respect to any vehicle part, the regulations
issued under this subsection shall--
``(I) acknowledge that a mark or vehicle identification
number on such part may be legally removed or altered, as
provided under section 511 of title 18, United States Code;
and
``(II) direct inspectors to adopt such procedures as may be
necessary to prevent the seizure of a part from which the
mark or vehicle identification number has been legally
removed or altered.
``(v) The Secretary shall establish nationally uniform
safety inspection criteria to be used in States that require
such a safety inspection. A State may determine whether to
conduct such safety inspection, contract with a third party,
or permit self-inspection. Any inspection conducted under
this clause shall be subject to criteria established by the
Secretary. A State that requires a safety inspection under
this clause may require the payment of a fee for such
inspection or the processing of such inspection.
``(I) Duplicate titles.--No duplicate or replacement title
may be issued by a State unless--
``(i) the term `duplicate' is clearly marked on the face of
the duplicate or replacement title; and
``(ii) the procedures issued are substantially consistent
with the recommendation designated as recommendation 3 in the
report issued on February 10, 1994, under section 140 of the
Anti Car Theft Act of 1992 (15 U.S.C. 2041 note) by the task
force established under such section.
``(J) Titling and control methods.--Each State shall employ
the following titling and control methods:
``(i) If an insurance company is not involved in a damage
settlement involving a salvage vehicle or a nonrepairable
vehicle, the passenger motor vehicle owner shall be required
to apply for a salvage title or nonrepairable vehicle
certificate, whichever is applicable, before the earlier of
the date--
``(I) on which the passenger motor vehicle is repaired or
the ownership of the passenger motor vehicle is transferred;
or
``(II) that is 30 days after the passenger motor vehicle is
damaged.
``(ii) If an insurance company, under a damage settlement,
acquires ownership of a passenger motor vehicle that has
incurred damage requiring the vehicle to be titled as a
salvage vehicle or nonrepairable vehicle, the insurance
company shall be required to apply for a salvage title or
nonrepairable vehicle certificate not later than 15 days
after the title to the motor vehicle is--
``(I) properly assigned by the owner to the insurance
company; and
``(II) delivered to the insurance company with all liens
released.
``(iii) If an insurance company does not assume ownership
of a passenger motor vehicle of an insured person or claimant
that has incurred damage requiring the vehicle to be titled
as a salvage vehicle or nonrepairable vehicle, the insurance
company shall, as required by the applicable State--
``(I) notify--
``(aa) the owner of the owner's obligation to apply for a
salvage title or nonrepairable vehicle certificate for the
passenger motor vehicle; and
``(bb) the State passenger motor vehicle titling office
that a salvage title or nonrepairable vehicle certificate
should be issued for the vehicle; or
``(II) withhold payment of the claim until the owner
applies for a salvage title or nonrepairable vehicle
certificate.
``(iv) If a leased passenger motor vehicle incurs damage
requiring the vehicle to be titled as a salvage vehicle or
nonrepairable vehicle, the lessor shall be required to apply
for a salvage title or nonrepairable vehicle certificate not
later than 21 days after being notified by the lessee that
the vehicle has been so damaged, except in any case in which
an insurance company, under a damage settlement, acquires
ownership of the vehicle. The lessee of such vehicle shall be
required to inform the lessor that the leased vehicle has
been so damaged not later than 30 days after the occurrence
of the damage.
``(v)(I) Any person who acquires ownership of a damaged
passenger motor vehicle that meets the definition of a
salvage or nonrepairable vehicle for which a salvage title or
nonrepairable vehicle certificate has not been issued, shall
be required to apply for a salvage title or nonrepairable
vehicle certificate, whichever is applicable.
``(II) An application under subclause (I) shall be made the
earlier of--
``(aa) the date on which the vehicle is further
transferred; or
``(bb) 30 days after ownership is acquired.
``(III) The requirements of this clause shall not apply to
any scrap metal processor that--
``(aa) acquires a passenger motor vehicle for the sole
purpose of processing the motor vehicle into prepared grades
of scrap; and
``(bb) carries out that processing.
``(vi) State records shall note when a nonrepairable
vehicle certificate is issued. No State shall issue a
nonrepairable vehicle certificate after 2 transfers of
ownership in violation of section 33301(b)(7)(B).
``(vii)(I) In any case in which a passenger motor vehicle
has been flattened, baled, or shredded, whichever occurs
first, the title or nonrepairable vehicle certificate for the
vehicle shall be surrendered to the State not later than 30
days after that occurrence.
``(II) If the second transferee on a nonrepairable vehicle
certificate is unequipped to flatten, bale, or shred the
vehicle, such transferee shall be required, at the time of
final disposal of the vehicle, to use the services of a
professional automotive recycler or professional scrap
processor. That recycler or reprocessor shall have the
authority to--
``(aa) flatten, bale, or shred the vehicle; and
``(bb) effect the surrender of the nonrepairable vehicle
certificate to the State on behalf of the second transferee.
``(III) State records shall be updated to indicate the
destruction of a vehicle under this clause and no further
ownership transactions for the vehicle shall be permitted
after the vehicle is so destroyed.
``(IV) If different from the State of origin of the title
or nonrepairable vehicle certificate, the State of surrender
shall notify the State of origin of the surrender of the
title or nonrepairable vehicle certificate and of the
destruction of such vehicle.
``(viii)(I) In any case in which a salvage title is issued,
the State records shall note that issuance. No State may
permit the retitling for registration purposes or issuance of
a rebuilt salvage title for a passenger motor vehicle with a
salvage title without a certificate of inspection that--
``(aa) complies with the security and guideline standards
established by the Secretary under subparagraphs (C) and (G),
as applicable; and
``(bb) indicates that the vehicle has passed the
inspections required by the State under subparagraph (H).
``(II) Nothing in this clause shall preclude the issuance
of a new salvage title for a salvage vehicle after a transfer
of ownership.
``(ix) After a passenger motor vehicle titled with a
salvage title has passed the inspections required by the
State, the inspection official shall--
``(I) affix a secure decal required under section 33301(4)
(that meets permanency requirements that the Secretary shall
establish by regulation) to the door jamb on the driver's
side of the vehicle; and
``(II) issue to the owner of the vehicle a certificate
indicating that the passenger motor vehicle has passed the
inspections required by the State.
``(x)(I) The owner of a passenger motor vehicle titled with
a salvage title may obtain a rebuilt salvage title and
vehicle registration by presenting to the State the salvage
title, properly assigned, if applicable, along with the
certificate that the vehicle has passed the inspections
required by the State.
``(II) If the owner of a rebuilt salvage vehicle submits
the documentation referred to in subclause (I), the State
shall issue upon the request of the owner a rebuilt salvage
title and registration to the owner. When a rebuilt salvage
title is issued, the State records shall so note.
``(K) Flood vehicles.--
``(i) In general.--A seller of a passenger motor vehicle
that becomes a flood vehicle shall, at or before the time of
transfer of ownership, provide a written notice to the
purchaser that the vehicle is a flood vehicle. At the time of
the next title application for the vehicle--
``(I) the applicant shall disclose the flood status to the
applicable State with the properly assigned title; and
``(II) the term `Flood' shall be conspicuously labeled
across the front of the new title document.
``(ii) Leased vehicles.--In the case of a leased passenger
motor vehicle, the lessee, within 15 days after the
occurrence of the event that caused the vehicle to become a
flood vehicle, shall give the lessor written disclosure that
the vehicle is a flood vehicle.
``(c) Electronic Procedures.--A State may employ electronic
procedures in lieu of paper documents in any case in which
such electronic procedures provide levels of information,
function, and security required by this section that are at
least equivalent to the levels otherwise provided by paper
documents.
``Sec. 33303. Petitions for extensions of time
``(a) In General.--Subject to subsection (b), if a State
demonstrates to the satisfaction of the Secretary, a valid
reason for needing an extension of a deadline for compliance
with requirements under section 33302(a), the Secretary may
extend, for a period determined by the Secretary, an
otherwise applicable deadline with respect to that State.
``(b) Limitation.--No extension made under subsection (a)
shall remain in effect on or after the applicable compliance
date established under section 33302(b).
``Sec. 33304. Effect on State law
``(a) In General.--Beginning on the effective date of the
regulations issued under section 33302, this chapter shall
preempt any
[[Page S9577]]
State law, to the extent that State law is inconsistent with
this chapter or the regulations issued under this chapter
(including the regulations issued under section 33302),
that--
``(1) establish the form of the passenger motor vehicle
title;
``(2)(A) define, in connection with a passenger motor
vehicle (but not in connection with a passenger motor vehicle
part or part assembly separate from a passenger motor
vehicle)--
``(i) any term defined in section 33301;
``(ii) the term `salvage', `junk', `reconstructed',
`nonrepairable', `unrebuildable', `scrap', `parts only',
`rebuilt', `flood', or any other similar symbol or term; or
``(B) apply any of the terms referred to in subparagraph
(A) to any passenger motor vehicle (but not in connection
with a passenger motor vehicle part or part assembly separate
from a passenger motor vehicle); and
``(3) establish titling, recordkeeping, antitheft
inspection, or control procedures in connection with any
salvage vehicle, rebuilt salvage vehicle, nonrepairable
vehicle, or flood vehicle.
``(b) Rule of Construction.--
``(1) Additional disclosures.--Additional disclosures of
the title status or history of a motor vehicle, in addition
to disclosures made concerning the applicability of terms
defined in section 33301, may not be considered to be
inconsistent with this chapter.
``(2) Inconsistent terms.--When used in connection with a
passenger motor vehicle (but not in connection with a
passenger motor vehicle part or part assembly separate from a
passenger motor vehicle), any definition under Federal or
State law of a term defined in section 33301 that is
different from the definition provided for in that section or
any use of any other term listed in subsection (a), shall be
considered to be inconsistent with this chapter.
``(3) Rule of construction.--Nothing in this chapter shall
preclude a State from disclosing on a rebuilt salvage title
that a rebuilt salvage vehicle has passed a State safety
inspection that differed from the nationally uniform criteria
promulgated under section 33302(b)(2)(H)(v).
``Sec. 33305. Civil and criminal penalties
``(a) Prohibited Acts.--It shall be unlawful for any person
knowingly and willfully to--
``(1) make or cause to be made any false statement on an
application for a title (or duplicate title) for a passenger
motor vehicle;
``(2) fail to apply for a salvage title in any case in
which such an application is required;
``(3) alter, forge, or counterfeit--
``(A) a certificate of title (or an assignment thereof);
``(B) a nonrepairable vehicle certificate;
``(C) a certificate verifying an antitheft inspection or an
antitheft and safety inspection; or
``(D) a decal affixed to a passenger motor vehicle under
section 33302(b)(2)(J)(ix);
``(4) falsify the results of, or provide false information
in the course of, an inspection conducted under section
33302(b)(2)(H);
``(5) offer to sell any salvage vehicle or nonrepairable
vehicle as a rebuilt salvage vehicle; or
``(6) conspire to commit any act under paragraph (1), (2),
(3), (4), or (5).
``(b) Civil Penalty.--Any person who commits an unlawful
act under subsection (a) shall be subject to a civil penalty
in an amount not to exceed $2,000.
``(c) Criminal Penalty.--Any person who knowingly commits
an unlawful act under subsection (a) shall, upon conviction,
be--
``(1) subject to a fine in an amount not to exceed $50,000;
``(2) imprisoned for a term not to exceed 3 years; or
``(3) subject to both fine under paragraph (1) and
imprisonment under paragraph (2).''.
(b) Conforming Amendment.--The analysis for subtitle VI of
title 49, United States Code, is amended by adding at the end
the following new item:
``333. Automobile Safety, Antitheft, and Title Disclosure R33301''.nts.
______
By Mr. KERRY (for himself and Mr. KENNEDY):
S. 2032. A bill to designate a portion of the Sudbury, Assabet, and
Concord Rivers as a component of the National Wild And Scenic Rivers
System; to the Committee on Energy and Natural Resources.
THE SUDBURY, ASSABET, AND CONCORD WILD AND SCENIC RIVERS ACT
Mr. KERRY.
Mr. President, I am pleased to join my distinguished colleague from
Massachusetts, Senator Kennedy, in introducing the Sudbury, Assabet,
and Concord [SuAsCo] Wild and Scenic Rivers Act. This is the companion
bill to H.R. 3405, sponsored by Representatives Meehan, Markey, and
Torkildsen.
The Sudbury, Assabet, and Concord river area is rich in history and
literary significance. It has been the location of many historical
events, most notably the Battle of Concord in the Revolutionary War,
that gave our great Nation its independence. The Concord River flows
under the North Bridge in Concord, MA, where, on April 18, 1775,
colonial farmers fired the legendary ``shot heard around the world''
which signaled the start of the Revolutionary War.
In later years, this scenic area was also home to many of our
literary heroes including, Ralph Waldo Emerson, Henry David Thoreau,
and Louisa May Alcott. Their writing often focused on the bucolic
rivers. Thoreau spent most of his life in Concord, MA, where he passed
his days immersed in his writing and enjoying the natural surroundings.
He spoke of the Concord River when he wrote ``the wild river valley and
the woods were bathed in so pure and bright a light as would have waked
the dead, if they had been slumbering in their graves, as some suppose.
There needs no strong proof of immortality.'' This area was held close
to many an author's heart. It was a place of relaxation and inspiration
for many.
The Sudbury, Assabet, and Concord Wild Rivers Act would amend the
Wild and Scenic Rivers Act to include a 29 mile segment of the Assabet,
Concord, and Sudbury Rivers. Based on a report authorized by Congress
in 1990 and issued by the National Park Service in 1995, these river
segments were determined worthy of inclusion in the Wild and Scenic
Rivers Program. In its report, the SuAsCo Wild and Scenic Study
Committee showed that this area has not only the necessary scenic,
recreational, and ecological value, but also the historical and
literary value to merit the Wild and Scenic River designation. All
eight communities in the area traversed by these river segments are
supporting his important legislation.
Our legislation is of minimal cost to the Federal Government but by
using limited Federal resources we can leverage significant local and
State effort. Provisions in the bill limit the Federal Government's
contribution to just $100,000 annually, with no more than a 50 percent
share of any given activity. This is a concept that merits the support
of Congress. Should our bill become law, the SuAsCo River stewardship
council, in cooperation with Federal, State, and local governments
would manage the land.
We now have the opportunity to protect the precious 29-mile section
of the Assabet, Sudbury, and Concord Rivers. This area is not only rich
in ecological value but also in historical and literary value. I urge
my colleagues to support this bill and through it to preserve this wild
river valley for the enjoyment and instruction of all who live and work
there, for visitors from throughout the nation and, perhaps most
importantly, for generations yet to come.
I ask unanimous consent that a copy 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. 2032
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 ``Sudbury, Assabet and Concord
Wild and Scenic Rivers Act''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Title VII of Public Law 101-628--
(A) designated segments of the Sudbury, Assabet, and
Concord Rivers in the Commonwealth of Massachusetts, totaling
29 river miles, for study of potential addition to the
National Wild and Scenic Rivers System, and
(B) directed the Secretary of the Interior to establish the
Sudbury, Assabet, and Concord River Study Committee (in this
Act referred to as the ``Study Committee'') to advise the
Secretary of the Interior in conducting the study and
concerning management alternatives should the river be
included in the National Wild and Scenic Rivers System.
(2) The study determined that:
--the 16.6 mile segment of the Sudbury River beginning at
the Danforth Street Bridge in the Town of Framingham, to its
confluence with the Assabet River
--the 4.4 mile segment of the Assabet River from 1000 feet
downstream from the Damon Mill Dam in the Town of Concord to
the confluence with the Sudbury River at Egg Rock in Concord,
and
--the 8 mile segment of the Concord River from Egg Rock at
the confluence of the Sudbury and Assabet Rivers to the Route
3 Bridge in the Town of Billerica
are eligible for inclusion in the National Wild and Scenic
Rivers System based upon their free-flowing condition and
outstanding scenic, recreation, wildlife, literary, and
historic values.
(3) The towns that directly abut the segments, including
Framingham, Sudbury, Wayland, Lincoln, Concord, Bedford,
Carlisle, and Billerica, Massachusetts, have each
[[Page S9578]]
demonstrated their desire for National Wild and Scenic River
Designation through town meeting votes endorsing designation.
(4) During the study, the Study Committee and the National
Park Service prepared a comprehensive management plan for the
segments, entitled ``Sudbury, Assabet and Concord wild and
Scenic River Study, River Management Plan'', dated March 16,
1995, which establishes objectives, standards, and action
programs that will ensure long-term protection of the rivers'
outstanding values and compatible management of their land
and water resources.
(5) The river management plan does not call for federal
land acquisition for Wild and Scenic River purposes and
relies upon state, local and private entities to have the
primary responsibility for ownership and management of the
Sudbury, Assabet and Concord Wild and Scenic River resources.
(6) The Study Committee voted unanimously on February 23,
1995, to recommend that the Congress include these segments
in the National Wild and Scenic Rivers System for management
in accordance with the River Conservation Plan.
SEC. 3. WILD, SCENIC, AND RECREATIONAL RIVER DESIGNATION.
Section 3(a) of the *Wild and Scenic Rivers Act (16 U.S.C.
1274(a)) is amended by adding at the end the following new
paragraph:
``( ) Sudbury, Assabet and Concord Rivers,
Massachusetts.--
``(A) In general.--The 29 miles of river segments in
Massachusetts consisting of the Sudbury River from the
Danforth Street Bridge in Framingham downstream to its
confluence with the Assabet River at Egg Rock; the Assabet
River from a point 1,000 feet downstream of the Damondale Dam
in Concord to its confluence with the Sudbury River at Egg
Rock; and the Concord River from its origin at Egg Rock in
Concord downstream to the route 3 bridge in Billerica (in
this paragraph referred to as `segments'), as scenic and
recreational river segments. The segments shall be
administered by the Secretary of the Interior through
cooperative agreements between the Secretary of the Interior
and the Commonwealth of Massachusetts and its relevant
political subdivisions (including the Towns of Framingham,
Wayland, Sudbury, Lincoln, Concord Carlisle, Bedford, and
Billerica) pursuant to Section 10(e) of this Act. The
segments shall be managed in accordance with the plan
entitled ``Sudbury, Assabet and Concord Wild and Scenic
River Study, River Conservation Plan'' dated March 16,
1995 (in this paragraph referred to as the `Plan'). The
Plan is deemed to satisfy the requirement for a
comprehensive management plan under section 3(d) of this
Act.''
SEC. 4. MANAGEMENT.
(a) Committee.--The Director of the National Park Service
(in this paragraph referred to as the `Director'), or his or
her designee, shall represent the Secretary of the Interior
on the SUASCO River Stewardship Council provided for in the
``Sudbury, Assabet and Concord Wild and Scenic River Study,
River Management Plan'' (the `Plan').
(b) Federal Role.--(i) The Director represent the Secretary
of the Interior in the implementation of the Plan and the
provisions of the Wild and Scenic Rivers Act with respect to
the segments, including the review of proposed federally
assisted water resources projects which could have a direct
and adverse effect on the values for which the segments are
established, as authorized under section 7(a) of the Wild and
Scenic Rivers Act.
(ii) Pursuant to section 10(e) and section 11(b)(1), the
Director shall offer to enter into cooperative agreements
with the Commonwealth of Massachusetts, its relevant
political subdivisions, the Sudbury Valley Trustees, and the
Organizations for the Assabet River. Such cooperative
agreements shall be consistent with the Plan and may include
provisions for financial or other assistance from the United
States to facilitate the long-term protection, conservation
and enhancement of the segments.
(iii) The Director may provide technical assistance, staff
support, and funding to assist in the implementation of the
Plan, except that the total cost to the Federal Government of
activities to implement the Plan may not exceed $100,000 each
fiscal year.
(iv) Notwithstanding the provisions of 19(c) of the Wild
and Scenic Rivers Act, any portion of the segments not
already within the National Park System shall not under this
Act)
(I) become a part of the National Park System;
(II) be managed by the National Park Service; or
(III) be subject to regulations which govern the National
Park System.
(c) Water Resources Projects.--(i) In determining whether a
proposed water resources project would have a direct and
adverse effect on the values for which the segments were
included in the National Wild and Scenic Rivers System, the
Secretary shall specifically consider the extent to which the
project is consistent with the Plan.
(ii) The Plan, including the detailed Water Resources Study
incorporated by reference therein and such additional
analysis as may be incorporated in the future, shall serve as
the primary source of information regarding the flows needed
to maintain instream resources and potential compatibility
between resource protection and possible additional water
withdrawals.
(d) Land Management.--(i) The zoning bylaws of the towns of
Framingham, Sudbury, Wayland, Lincoln, Concord, Carlisle,
Bedford, and Billerica, Massachusetts, as in effect on the
date of enactment of this paragraph, are deemed to satisfy
the standards and requirements under section 6(c) of the Wild
and Scenic Rivers Act. For the purpose of section 6(c) of the
Wild and Scenic Rivers Act, the towns are deemed to be
`villages' and the provisions of that section which prohibit
Federal acquisition of lands shall apply.
(ii) the United States Government shall not acquire by any
means title to land, easements, or other interests in land
along the segments for the purposes of designation of the
segments under this Act or the Wild and Scenic Rivers Act.
Nothing in this Act or the Wild and Scenic Rivers Act shall
prohibit federal acquisition of interests in land along the
segments under other laws for other purposes.
SEC. 5. FUNDING AUTHORIZATION.
There are authorized to be appropriated to the Secretary of
the Interior to carry out the purposes of this Act no more
than $100,000 for each fiscal year.
Mr. KENNEDY. Mr. President, it is a privilege to join Senator Kerry
today in sponsoring legislation to designate a 29-mile segment of the
Sudbury, Assabet, and Concord Rivers in Massachusetts as a component of
the National Wild and Scenic Rivers system. Our proposal has the
bipartisan support of Congressmen Martin T. Meehan, Peter G.
Torkildsen, and Edward J. Markey, who introduced an identical bill in
the House of Representatives on May 7, 1996.
The Sudbury, Assabet, and Concord Rivers have witnessed many
important events in the Nation's history. Stone's Bridge and Four
Arched Bridge over the Sudbury River date from the pre-Revolutionary
War days. On Old North Bridge over the Concord River, the ``shot heard
'round the world'' was fired on April 19, 1775, to begin the
Revolutionary War. At Lexington and Concord, the Colonists began their
armed resistance against British rule, and the first American
Revolutionary War soldiers fell in battle.
In the 19 century, the Sudbury, Assabet, and Concord Rivers earned
their lasting fame in the works of Ralph Waldo Emerson, Nathaniel
Hawthorne, and Henry David Thoreau, all of whom lived in this area and
spent a great deal of time on the rivers. Emerson cherished the Concord
River as a place to leave ``the world of villages and personalities
behind, and pass into a delicate realm of sunset and moonlight.''
Hawthorne wrote ``The Scarlet Letter'' and ``Mosses from an Old
Manse'' in an upstairs study overlooking the Concord River. He also
enjoyed boating on the Assabet River, of which he said that ``a more
lovely stream than this, for a mile above its junction with the
Concord, has never flowed on earth.''
Thoreau delighted in long, solitary walks along the banks of the
rivers amidst the ``straggling pines, shrub oaks, grape vines, ivy,
bats, fireflies, and alders,'' contemplating humanity's relationship to
nature. His journals describing his detailed observations of the flora
and fauna in the area have inspired poets and naturalists to the
present day, and helped to give birth to the modern environmental
movement. By protecting the rivers, a future Thoreau, Emerson, or
Hawthorne may one day walk along their shores and gain new inspiration
from these priceless natural resources.
In 1990, Congress authorized the National Park Service to issue a
report to determine whether the three rivers are eligible for
designation as Wild and Scenic Rivers. Under the National Park
Service's guidelines, a river is considered eligible for the
designation if it possesses at least one ``outstandingly remarkable
resource value.'' In fact, the three rivers were found to possess five
outstanding resource values--scenic, recreational, ecological,
historical, and literary. The report also concluded that the rivers are
suitable for designation based upon the existing local protection of
their resources and the strong local support for their preservation.
Our bill will protect a 29-mile segment of the Sudbury, Assabet, and
Concord Rivers that runs through or along the borders of eight
Massachusetts towns--Framingham, Sudbury, Wayland, Concord, Lincoln,
Bedford, Carlisle, and Billerica. A River Stewardship Council will be
established to coordinate the efforts of all levels of government to
strengthen protections for the river and address future threats to the
environment. The legislation
[[Page S9579]]
also requires at least a one-to-one non-Federal match for any Federal
expenditures, and contains provisions which preclude federal takings of
private lands.
Thoreau wrote in 1847 that rivers ``are the constant lure, when they
flow by our doors, to distant enterprise and adventure. . . . They are
the natural highways of all nations, not only leveling the ground and
removing obstacles, from the path of the traveler, but conducting him
through the most interesting scenery.'' Standing on the banks of the
Sudbury, Assabet, and Concord Rivers, as Thoreau often did, citizens
today gain a greater sense of the ebb and flow of the nation's history
and enjoy the benefit of some of the most beautiful scenery in all of
America. I urge my colleagues to support this legislation, so that
these three proud rivers will be protected for the enjoyment and
contemplation of future generations.
______
By Mr. DOMENICI (for himself, Mr. Wellstone, Mr. Simpson, Mr.
Conrad, Mr. Warner, Mr. Specter, Mr. Reid, Mr. Dodd, Mr.
Grassley, Mrs. Kassebaum, Mr. Kennedy, Mr. Burns, Mr. Harkin,
Mr. Chafee, and Mr. Moynihan):
S. 2031. A bill to provide health plan protections for individuals
with a mental illness; to the Committee on Labor and Human Resources.
THE MENTAL HEALTH PARITY ACT OF 1996
Mr. DOMENICI. Mr. President, I regret that it was not possible to
retain this eminently fair and simple compromise in the conference
agreement on health insurance reform.
Though this attempt to create fundamental fairness for the mentally
ill was not completed, this issue will not go away.
The Americans who would have been helped by our compromise will not
go away.
Nor will I.
As long as I am in this body, I will continue to fight to end
discrimination against Americans with a mental illness.
I am therefore introducing the compromise I offered the conference
committee as a free-standing bill.
The measure I am introducing today with the support and cosponsorship
of Senators Wellstone, Warner, Specter, Reid, Simpson, and Conrad, is a
vast departure from what the Senate originally passed during
consideration of health insurance reform legislation.
The Senate passed full parity for mental illness--full parity means
that mental illnesses are treated as equals to physical illnesses in
all respects of health coverage--copays, deductibles, inpatient
hospital days, outpatient visits, out-of-pocket protections, and
overall lifetime and annual expenditure limits.
The measure I present today, however, covers parity only for lifetime
and annual caps.
I would very much like to introduce the Senate-passed measure
providing full parity, or perhaps even something more than I am now.
But in the interests of time, simplicity, and underlying, basic
fairness, I believe this measure is a necessary step toward making
health coverage equitable for all Americans, regardless of the nature
of their illness.
I believe this measure provides the fundamentals upon which better
understanding and treatment can be built, and I believe the Senate
should not miss this opportunity to do the right thing and end
discrimination against Americans suffering from a mental illness.
What it is
Let me again tell you what this bill will and will not do.
This bill simply states that health plans wishing to offer a mental
health benefit--this is their option, there is nothing in this
provisions saying that they must offer any mental health benefits at
all--if they choose to offer a mental health benefit, they must provide
the same overall financial protection to people with a mental illness
that they provide to people with a physical illness.
If they have a $1 million lifetime limit for someone with cancer, or
diabetes, or heart disease, they cannot have a lifetime limit of
$50,000 for someone with schizophrenia or manic depression--they must
provide $1 million for the person with a mental illness.
They do not have to create another, separate $1 million for mental
illness--they can include these treatments in their overall cap if they
like.
But they cannot impost a separate, lower overall limit for mental
illness.
This same arrangement applies to annual financial caps, as well.
Since this compromise provides equal catastrophic protections, it
protects Americans with the most severe and debilitating forms of
mental illness.
It does not apply to the constellation of disorders and problems that
concern some of my colleagues such as marital problems, or behavioral
problems, or maladjustments.
WHAT IT IS NOT
It should be made clear what this bill does not do.
This bill does not mandate mental health benefits;
It does not include substance abuse or chemical dependency;
It does not dictate what a plan can or must charge for services--
whether they be copays, deductibles, out-of-pocket limits, and so
forth;
It does not set or dictate how many inpatient hospital days or
outpatient visits must be provided or covered.
It does not, in any way, restrict a health plan's ability to manage
care, such as preadmission screening, preauthorization of services,
limiting coverage based on medical necessity, and so forth.
It does not apply to employers of 25 or less.
WHAT IT WILL COST
According to the CBO, this bill will not cost much. Frankly, I
believe that even their cost estimates, even though practically
inconsequential, are too high.
CBO says this bill will cause a 0.4-percent increase in overall
premiums, ultimately resulting in a 0.16-percent increase in employer
contributions to employee health plans.
Even though these costs are small--in a typical plan, a $0.60 to
$0.67 increase per member per month--these projections are based on an
assumption of increased utilization.
This estimate does not even factor in the effects of managed care.
We all know how managed care arrangements affect utilization and
overall health care spending.
Of the 99 percent of ERISA plans offering mental health benefits, 75
percent already provide this care through a managed care arrangement--
this number is growing each day.
If managed care were included in these assumptions, this provision
would not likely cost anything at all.
And the percentage of Americans ever reaching these new limits will
be incredibly small--less than 5 percent of beneficiaries.
So you can see why I do not believe this bill will cost even the
small amount predicted by CBO.
experiences of states that have already implemented parity
Some of my colleagues might be skeptical of these claims
Let me just outline the experiences of a few States that have already
implemented parity.
Texas--Full parity and chemical dependency benefits for State and
local government employees, including all school districts and
university employees (over 230,000 lives)--a 47.9-percent reduction in
overall yearly mental health expenditures.
Maryland--Full parity for all State-regulated plans--(over 400,000
covered lives)--an increase in cost of 0.6 percent per member per month
[PMPM].
Rhode Island--Full parity for severe illnesses and chemical
dependency--an increase in cost of 0.33 percent PMPM.
Massachusetts--Full parity for severe illnesses--a 5-percent increase
in utilization, but a 22-percent reduction in mental health
expenditures.
These numbers are for parity in the general sense, not the very
limited balance included in the measure I am introducing today.
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. 2031
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 ``Mental Health Parity Act of
1996''.
[[Page S9580]]
SEC. 2. PLAN PROTECTIONS FOR INDIVIDUALS WITH A MENTAL
ILLNESS.
(a) Permissible Coverage Limits Under a Group Health
Plan.--
(1) Aggregate lifetime limits.--
(A) In general.--With respect to a group health plan
offered by a health insurance issuer, that applies an
aggregate lifetime limit to plan payments for medical or
surgical services covered under the plan, if such plan also
provides a mental health benefit such plan shall--
(i) include plan payments made for mental health services
under the plan in such aggregate lifetime limit; or
(ii) establish a separate aggregate lifetime limit
applicable to plan payments for mental health services under
which the dollar amount of such limit (with respect to mental
health services) is equal to or greater than the dollar
amount of the aggregate lifetime limit on plan payments for
medical or surgical services.
(B) No lifetime limit.--With respect to a group health plan
offered by a health insurance issuer, that does not apply an
aggregate lifetime limit to plan payments for medical or
surgical services covered under the plan, such plan may not
apply an aggregate lifetime limit to plan payments for mental
health services covered under the plan.
(2) Annual limits.--
(A) In general.--With respect to a group health plan
offered by a health insurance issuer, that applies an annual
limit to plan payments for medical or surgical services
covered under the plan, if such plan also provides a mental
health benefit such plan shall--
(i) include plan payments made for mental health services
under the plan in such annual limit; or
(ii) establish a separate annual limit applicable to plan
payments for mental health services under which the dollar
amount of such limit (with respect to mental health services)
is equal to or greater than the dollar amount of the annual
limit on plan payments for medical or surgical services.
(B) No annual limit.--With respect to a group health plan
offered by a health insurance issuer, that does not apply an
annual limit to plan payments for medical or surgical
services covered under the plan, such plan may not apply an
annual limit to plan payments for mental health services
covered under the plan.
(b) Rule of Construction.--
(1) In general.--Nothing in this section shall be construed
as prohibiting a group health plan offered by a health
insurance issuer, from--
(A) utilizing other forms of cost containment not
prohibited under subsection (a); or
(B) applying requirements that make distinctions between
acute care and chronic care.
(2) Nonapplicability.--This section shall not apply to--
(A) substance abuse or chemical dependency benefits; or
(B) health benefits or health plans paid for under title
XVIII or XIX of the Social Security Act.
(c) Small Employer Exemption.--
(1) In general.--This section shall not apply to plans
maintained by employers that employ less than 26 employees.
(2) Application of certain rules in determination of
employer size.--For purposes of this subsection--
(A) Application of aggregation rule for employers.--all
persons treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the Internal Revenue Code
of 1986 shall be treated as 1 employer.
(B) Employers not in existence in preceding year.--In the
case of an employer which was not in existence throughout the
preceding calendar year, the determination of whether such
employer is a small employer shall be based on the average
number of employees that it is reasonably expected such
employer will employ on business days in the current calendar
year.
(C) Predecessors.--Any reference in this subsection to an
employer shall include a reference to any predecessor of such
employer.
SEC. 3. DEFINITIONS.
For purposes of this Act:
(1) Group health plan.--
(A) In general.--The term ``group health plan'' means an
employee welfare benefit plan (as defined in section 3(1) of
the Employee Retirement Income Security Act of 1974) to the
extent that the plan provides medical care (as defined in
paragraph (2)) and including items and services paid for as
medical care) to employees or their dependents (as defined
under the terms of the plan) directly or through insurance,
reimbursement, or otherwise.
(B) Medical care.--The term ``medical care'' means amounts
paid for--
(i) the diagnosis, cure, mitigation, treatment, or
prevention of disease, or amounts paid for the purpose of
affecting any structure or function of the body,
(ii) amounts paid for transportation primarily for and
essential to medical care referred to in clause (i), and
(iii) amounts paid for insurance covering medical care
referred to in clauses (i) and (ii).
(2) Health insurance coverage.--The term ``health insurance
coverage'' means benefits consisting of medical care
(provided directly, through insurance or reimbursement, or
otherwise and including items and services paid for as
medical care) under any hospital or medical service policy or
certificate, hospital or medical service plan contract, or
health maintenance organization contract offered by a health
insurance issuer.
(3) Health insurance issuer.--The term ``health insurance
issuer'' means an insurance company, insurance service, or
insurance organization (including a health maintenance
organization, as defined in paragraph (4)) which is licensed
to engage in the business of insurance in a State and which
is subject to State law which regulates insurance (within the
meaning of section 514(b)(2) of the Employee Retirement
Income Security Act of 1974). Such term does not include a
group health plan.
(4) Health maintenance organization.--The term ``health
maintenance organization'' means--
(A) a Federally qualified health maintenance organization
(as defined in section 1301(a) of the Public Health Service
Act),
(B) an organization recognized under State law as a health
maintenance organization, or
(C) a similar organization regulated under State law for
solvency in the same manner and to the same extent as such a
health maintenance organization.
(5) State.--The term ``State'' means each of the several
States, the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Northern Mariana
Islands.
______
By Mr. JOHNSTON:
S. 2033. A bill to repeal requirements for unnecessary or obsolete
reports from the Department of Energy, and for other purposes; to the
Committee on Energy and Natural Resources.
the doe reports elimination and streamlining act of 1996
Mr. JOHNSTON. Mr. President, today I am introducing the DOE Reports
Elimination and Streamlining Act of 1996, to implement a number of
recommendations that have been received from the administration for the
repeal of requirements for unnecessary or obsolete reports to Congress
from the Department of Energy. A number of my colleagues, particularly
Senators Levin, McCain, and Cohen, have devoted considerable effort
over the past few years to relieving executive branch agencies from the
unnecessary burden of reporting requirements that have outlived their
usefulness. It has been a difficult task, and these colleagues and
their staff deserve our thanks for what they have been able to
accomplish in terms of crafting a long-term solution to the problem. I
believe that it remains incumbent, though, on authorizing committees to
review statutory reports required of agencies within their jurisdiction
and to act to modify or repeal such requirements, where needed. That is
what the present bill does. This bill also repeals legislative
authorization for two now-defunct offices in the Department of Energy.
Mr. President, I would now like to briefly describe the rationale
behind the specific provisions of the bill. Section 1 is the short
title. Section 2 is composed of 12 subsections relating to reports and
one subsection relating to two obsolete offices in the Department.
Subsection (a) eliminates the need for ongoing reports on the topics
of process-oriented industrial energy efficiency and industrial
insulation and audit guidelines. The DOE Office of Industrial
Technology has worked with seven process-oriented industries to develop
industry visions, which include identification of technology needs for
industrial energy efficiency and technology barriers. The resulting
individual technology road maps, with their associated implementation
plans, make these ongoing reports redundant.
Subsection (b) repeals a requirement for a study and report on
vibration reduction technologies. Vibration reduction is only tenuously
related to energy conservation. It is not a prime DOE mission, and work
in this area has not been funded by any appropriations bill. Given the
many constraints on the DOE energy conservation budget, initiating work
in this area is a low priority.
Subsection (c) repeals a requirement for a study to determine the
means by which electric utilities may invest in, own, lease, service,
or recharge batteries used to power electric vehicles. The electric
utility companies have been working cooperatively with the automobile
manufacturers, component industry, and standards setting organizations
for several years to determine the infrastructure requirements
necessary for recharging and servicing electric vehicle batteries.
Another
[[Page S9581]]
study would not add meaningful information to the body of knowledge
that already exists.
Subsection (d) eliminates biennial reports on the status of actions
identified under the initial one-time reporting requirements of section
1301 of the Energy Policy Act of 1992. Development of these
technologies is not fast paced. Significant reportable change is not
likely to occur in 2-year increments. In addition, the program has
sustained a significant decrease in funding, and will likely receive
less in the future. Under these circumstances it is appropriate to
change this requirement to a one-time report, to be submitted upon
completion of the entire project.
Subsection (e) changes the frequency with which a comprehensive 5-
year program plan for electric motor vehicles must be updated.
Currently, this comprehensive plan must be updated annually for a
period of not less than 10 years after the date of enactment of the
Energy Policy Act of 1992. The first plan was prepared and submitted to
the Congress in March 1994. Because programs do not change
significantly on an annual basis, and because the cost of preparing and
approving new plans for congressional submittal is extensive, annual
updates are not justified. Changing the frequency of updates to every 2
years is a cost-savings measure.
Subsection (f) strikes the requirement for biennial updates to a 5-
year program plan for a National Advanced Materials Initiative. This
program plan was prepared and submitted to Congress as required, but
the program was never funded. With no funding, there are no Department-
supported programs or projects, and, thus, no need to update the
initial program plan.
Subsection (g) eliminates a biennial report on the implementation of
the Alaska SWAP Act. The purpose of the act was to take advantage of
oil conservation opportunities by expanding the use of coal-fired
plants and realizing economies of scale in several remote communities.
These opportunities were not numerous and all have been taken advantage
of for some time. No need exists for further reports.
Subsection (h) repeals a report that triggered a legislative veto
provision governing DOE shipments of special nuclear materials to
foreign countries. This legislative veto was exercised by a concurrent
resolution and thus would be unconstitutional under the Supreme Court's
ruling in INS v. Chadha, 1983, 103 S. Ct. 2764, 462 U.S. 919. The
report requirement and the related legislative veto should be repealed.
Subsection (i) converts an annual report requirement in the
Continental Scientific Drilling and Exploration Act to a periodic
report. DOE's role in this multiagency program has become less
prominent, and there is no longer a need for a separate DOE report.
Subsection (j) converts a free-standing report requirement on steel
and aluminum research and development activities into a requirement
that such activities be described in the annual budget submission of
the Department.
Subsection (k) converts a free-standing report requirement on metal
casting research and development activities into a requirement that
such activities be described in the annual budget submission of the
Department.
Subsection (l) converts the National Energy Policy Plan from a
biennial report to a quadrennial report. The timing called for this
report in the DOE Act requires that a new Presidential Administration
submit a National Energy Policy Plan less than 3 months after taking
office. This is unrealistic. In recent years, an Assistant Secretary of
Energy for Policy has often not even been confirmed by that point in
time. The biennial requirement also does not make sense from the point
of view of requiring any given administration to generate such a report
twice during each term of office. It would be more sensible to make
this requirement a quadrennial one, in which case each new
administration would have two full years to conduct its analysis and
policy development process. The resulting energy policy plan would be
released in April of the third year of its term.
Subsection (m) repeals the authorization for two offices that no
longer exist in the Department of Energy.
The Office of Subseabed Disposal Research was established in 1982 to
conduct research on subseabed disposal of nuclear waste. Such disposal
is not ever likely to occur, and no such research has ever been
proposed by the Department or funded through appropriations acts.
The Office of Alcohol Fuels was established by subtitle A of title II
of the Energy Security Act (P.L. 96-294), and during the early 1980's
it played a vital role in support of the emerging alcohol fuels
industry. In 1985, the last of three loans made to subsidize the
construction of grain-based ethanol plants was guaranteed by the
Department of Energy, and on June 30, 1987, the Department's loan
guarantee authority expired. Only one of the loan guarantee recipients,
the New Energy Co. of Indiana, continues to produce alcohol fuels.
Other than this plant, all other commercial ethanol plants in operation
were built without government financial assistance. A statutory office
within the DOE, headed by an Executive Level IV Presidential appointee,
is no longer needed simply to manage one loan guarantee. Indeed, the
functions of the Office of Alcohol Fuels have already been transferred
within the Department to the Assistant Secretary for Energy Efficiency
and Renewable Energy, and the Office itself has been closed. Under this
proposed amendment to the Energy Security Act, which is essentially
technical in nature, the DOE would continue to manage the New Energy
Company loan guarantee until the loan is repaid.
Mr. President, there is nothing controversial about this bill. It is
simply good government. I look forward to receiving comments on the
bill from the Department of Energy and to its speedy passage.
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. 2033
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 ``DOE Reports Elimination and
Streamlining Act of 1996''.
SEC. 2. REPEALS AND MODIFICATIONS.
(a) Reports on Industrial Energy Efficiency Programs.--
(1) Section 132(d) of the Energy Policy Act of 1992 (42
U.S.C. 6349(d)) is amended by striking ``and annually
thereafter,''.
(2) Section 133(c) of the Energy Policy Act of 1992 (42
U.S.C. 6350(c)) is amended by striking ``and biennially
thereafter,''.
(b) Study and Report on Vibration Reduction Technologies.--
Section 173 of the Energy Policy Act of 1992 (42 U.S.C. 13451
note) is repealed.
(c) Report on Potential Financial Investments by Electric
Utilities in Electric Batteries for Motor Vehicles.--Section
825 of the Energy Policy Act of 1992 (42 U.S.C. 13295) is
repealed.
(d) Biennial Reports on Coal Research, Development, and
Demonstration Projects.--Section 1301(d) of the Energy Policy
Act of 1992 (42 U.S.C. 13331(d)) is amended by striking
``every two years thereafter for a period of 6 years'' and
inserting ``not later than 6 years thereafter''.
(e) Change of Updates to Five-Year Program Plan for
Electric Motor Vehicles to a Biennial Basis.--Section
2025(b)(4) of the Energy Policy Act of 1992 (42
U.S.C. 13435(b)(4)) is amended by striking ``Annual'' and
inserting ``Biennial''.
(f) Biennial Update to National Advanced Materials
Initiative Five-Year Program Plan.--Section 2201(b) of the
Energy Policy Act of 1992 (42 U.S.C. 13501(b)) is amended by
striking the last sentence.
(g) Biennial Report on Implantation of the Alaska SWAP
Act.--Section 6(a) of the Alaska Federal-Civilian Energy
Efficiency Swap Act of 1980 (40 U.S.C. 795d) is repealed.
(h) Repeal of Unconstitutional Legislative Veto and Related
Report.--Section 54(a) of the Atomic Energy Act of 1954 (42
U.S.C. 2074(a)) is amended--
(1) by striking the colon at the end of the first proviso
and inserting a period; and
(2) by striking the second, third, and fourth provisos.
(i) Conversion of Annual Report on Scientific Drilling
Program to Periodic Joint Report.--Section 4(6) of the
Continental Scientific Drilling and Exploration Act (P.L.
100-441; 102 Stat. 1762) is amended to read as follows:
``(6) submitting to the Congress periodic joint reports on
significant accomplishments of, and plans for, the drilling
program.''
(j) Incorporation of Annual Report on Steel and Aluminum
Research and Development Activities Into the President's
Budget.--Section 8 of the Steel and Aluminum Conservation and
Technology Competitiveness Act of 1988 (15 U.S.C. 5107) is
amended to read as follows:
``SEC. 8. REPORTS.
``As part of the annual budget submission of the President
under section 1105 of title 31, United States Code, the
Secretary shall provide to Congress a description of research
[[Page S9582]]
and development activities to be carried out under this Act
during the fiscal year involved, together with such
legislative recommendations as the Secretary may consider
appropriate.''
(k) Incorporation of Annual Report on Metal Casting
Research and Development Activities, Into the President's
Budget.--Section 10 of the DOE Metal Casting Competitiveness
Research Act of 1990 (15 U.S.C. 5309) is amended to read as
follows:
``SEC. 10. REPORTS.
``As part of the annual budget submission of the President
under section 1105 of title 31, United States Code, the
Secretary shall provide to Congress a description of research
and development activities to be carried out under this Act
during the fiscal year involved, together with such
legislative recommendations as the Secretary may consider
appropriate.''
(l) Conversion of National Energy Policy Plan From Biennial
Report to Quadrennial Report.--Section 801(b) of the
Department of Energy Organization Act (42 U.S.C. 7321(b)) is
amended by striking ``biennially'' and inserting ``every 4
years''.
(m) Repeal of Authorizations for DOE Offices No Longer in
Existence.--
(1) Office of Subseabed Disposal Research.--Section 224 of
the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10204 is
repealed.
(2) Office of Alcohol Fuels.--(A) Subtitle A of title II of
the Energy Security Act (42 U.S.C. 8811 through 8821) is
repealed.
(B) Any existing loan guarantee under section 214 of the
Energy Security Act shall remain in effect until the loan is
repaid; and the Department of Energy shall continue to
administer an existing loan guarantee under section 214 as if
subtitle A had not been repealed.
(C) The table of contents for the Energy Security Act is
amended by striking the item relating to subtitle A of title
II and the matters relating to sections 211 through 221.
______
By Mr. BREAUX (for himself, Mr. Mack, Mr. Graham, and Mr. Cohen):
S. 2034. A bill to amend title XVIII of the Social Security Act to
make certain changes to hospice care under the Medicare program; to the
Committee on Finance.
the medicare hospice benefit amendments of 1996
Mr. BREAUX. Mr. President, I rise today to introduce legislation to
make technical changes to the Medicare hospice benefit which will
ensure that high quality hospice services will be available to all
terminally ill Medicare beneficiaries. Senators Mack, Graham, and Cohen
join me in sponsoring this legislation, which is identical to H.R. 3714
introduced last month. This legislation is endorsed by both the
National Hospice Organization and the National Association for Home
Care, and I urge my colleagues to support it.
Hospices help care for and comfort terminally ill patients at home or
in home-like settings. There are more than 2,450 operational or planned
hospice programs in all 50 States. In 1994, approximately 1 out of
every 10 people in America who died were tended to by a hospice
program, and 1 out of every 3 people who died from cancer or AIDS were
cared for by hospice. Services provided under the Medicare hospice
benefit include physician services, nursing care, drugs for symptom
management and pain relief, short term inpatient and respite care, and
counseling both for the terminally ill and their families. Terminally
ill patients who elect hospice opt-out of most other Medicare services
related to their terminal illness.
Hospice services permit terminally ill people to die with dignity,
usually in the comforting surroundings of their own homes with their
loved ones nearby. Hospice is also a cost-effective form of care. At a
time when Medicare is pushing to enroll more beneficiaries in managed
care plans, hospice is already managed care. Hospices provide patients
with whatever palliative services are needed to manage their terminal
illness, and they are reimbursed a standard per diem rate, based on the
intensity of care needed and whether the patient is an inpatient or at
home.
With 28 percent of all Medicare costs now going toward the care of
people in their last year of life, and almost 50 percent of those costs
spent during the last 2 months of life, cost-effective alternatives are
needed. Studies show hospices do reduce Medicare spending. A study
released last year by Lewin-VHI showed that for every dollar Medicare
spent on hospice, it saved $1.52 in Medicare part A and part B
expenditures. Similarly, a 1989 study commissioned by the Health Care
Financing Administration showed savings of $1.26 for every Medicare
dollar spent on hospice. I would ask unanimous consent that a summary
of these studies be inserted in the Record at the conclusion of my
remarks.
Since 1982, when the hospice benefit was added to the Medicare
statute, more and more Americans have chosen to spend their final
months of life in this humane and cost-effective setting. Yet in recent
years it has become clear that certain technical changes are needed in
the Medicare hospice benefit both to protect beneficiaries and to
ensure that a full range of cost-effective hospice services continues
to be available. The bill I am introducing today makes six necessary
technical changes.
First, the Medicare Hospice Benefits Amendments of 1996 restructures
the hospice benefit periods. The basic eligibility criteria do not
change. Under this bill, as in current law, a person is eligible for
the Medicare hospice benefit only if two physicians have certified that
he is terminally ill with a life expectancy of 6 months or less.
Patients who elect to receive hospice benefits give up most other
Medicare benefits unless and until they withdraw from the hospice
program.
While this bill does not change hospice eligibility criteria, it does
change how the benefit periods are structured. Currently, the Medicare
benefit consists of four benefit periods. At the end of each of the
first three periods, the patient must be recertified as being
terminally ill. The fourth benefit period is of unlimited duration.
However, a patient who withdraws from hospice during the fourth hospice
period forfeits his ability to elect hospice services in the future.
Thus, a patient who goes into remission, and is thus no longer eligible
for hospice because his life expectancy exceeds 6 months, is not be
able to return to hospice when his condition worsens.
This bill restructures the hospice benefit periods to eliminate the
existing open-ended fourth benefit period and to provide that after the
first two 90 day periods, patients are reevaluated every 60 days to
ensure that they still qualify for hospice services. This restructuring
ensures that those receiving Medicare benefits are able to receive
hospice services at the time they need them and can be discharged from
hospice care with no penalty if their prognosis changes.
Second, the bill clarifies that ambulance services, diagnostic tests,
radiation, and chemotherapy are covered under the hospice benefit when
they are included in the patient s plan of care. No separate payment
will be made for these services, but hospices will have to provide them
when they are found to be necessary as a palliative measure. This
change conforms the statute to current Medicare regulatory policy.
Third, the bill also permits hospices to have independent contractor
relationships with physicians. Under current law, hospices must
directly employ their medical directors and other staff physicians.
This creates a legal problem in some States which prohibit the
corporate practice of medicine, and the requirement has made it
increasingly difficult to recruit part-time hospice physicians.
Fourth, the bill creates a mechanism to allow waiver of certain
staffing requirements for rural hospices, which often have difficulty
becoming Medicare-certified because of shortages of certain health
professionals. Currently, about 80 percent of hospices are Medicare-
certified or pending certification.
Fifth, the bill reinstates an expired provision regarding liability
for certain denials. As made clear by an article published on July 18
of last month in the prestigious New England Journal of Medicine, most
patients are referred to hospice very late in the course of their
terminal illnesses, but some live longer than 6 months. Predicting when
an individual will die will never be an exact science, and we should
not expect it to be. Therefore, the bill reinstates the expired
statutory presumption that hospices with very low error rates on their
Medicare claims did not know that denied benefits were not covered, and
it expands the bases for waiver of liability to include cases where a
prognosis of 6 months life expectancy is found to have been in error.
Finally, this bill provides some administrative flexibility regarding
certification of terminal illness. Currently, the statute requires that
paperwork documenting physician certification of a patient s terminal
illness be
[[Page S9583]]
completed within a certain number of days of the patient s admission to
hospice. This bill will eliminate the strict statutory requirements and
give the Health Care Financing Administration the discretion, as it
currently has with home health certifications, to require hospice
certifications to be on file before a Medicare claim is submitted.
The Medicare Hospice Benefit Amendments of 1996 are noncontroversial
and should not affect Medicare spending, but they will make important
and necessary changes to the Medicare hospice benefit, to enable
hospices to provide high quality, cost effective care to the terminally
ill, and to protect beneficiaries who depend on these services. I urge
my colleagues to support this bill.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 2034
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 ``Medicare Hospice Benefit
Amendments of 1996''.
SEC. 2. HOSPICE CARE BENEFIT PERIODS.
(a) Restructuring of Benefit Period.--Section 1812 of the
Social Security Act (42 U.S.C. 1395d) is amended in
subsections (a)(4) and (d)(1), by striking ``, a subsequent
period of 30 days, and a subsequent extension period'' and
inserting ``and an unlimited number of subsequent periods of
60 days each''.
(b) Conforming Amendments.--(1) Section 1812(d)(2)(B) of
such Act (42 U.S.C. 1395d(d)(2)(B)) is amended by striking
``90- or 30-day period or a subsequent extension period'' and
inserting ``90-day period or a subsequent 60-day period''.
(2) Section 1814(a)(7)(A) of such Act (42 U.S.C.
1395f(a)(7)(A)) is amended--
(A) in clause (i), by inserting ``and'' at the end;
(B) in clause (ii)--
(i) by striking ``30-day'' and inserting ``60-day''; and
(ii) by striking ``and'' at the end and inserting a period;
and
(C) by striking clause (iii).
SEC. 3. AMBULANCE SERVICES, DIAGNOSTIC TESTS, CHEMOTHERAPY
SERVICES, AND RADIATION THERAPY SERVICES
INCLUDED IN HOSPICE CARE.
Section 1861(dd)(1) of the Social Security Act (42 U.S.C.
1395x(dd)(1)) is amended--
(1) in subparagraph (E), by inserting ``anticancer
chemotherapeutic agents and other'' before ``drugs'';
(2) in subparagraph (G), by striking ``and'' at the end;
(3) in subparagraph (H), by striking the period at the end
and inserting a comma; and
(4) by inserting after subparagraph (H) the following:
``(I) ambulance services,
``(J) diagnostic tests, and
``(K) radiation therapy services.''.
SEC. 4. CONTRACTING WITH INDEPENDENT PHYSICIANS OR PHYSICIAN
GROUPS FOR HOSPICE CARE SERVICES PERMITTED.
Section 1861(dd)(2) of the Social Security Act (42 U.S.C.
1395x(dd)(2)) is amended--
(1) in subparagraph (A)(ii)(I), by striking ``(F),''; and
(2) in subparagraph (B)(i), by inserting ``or under
contract with'' after ``employed by''.
SEC. 5. WAIVER OF CERTAIN STAFFING REQUIREMENTS FOR HOSPICE
CARE PROGRAMS IN NON-URBANIZED AREAS.
Section 1861(dd)(5) of the Social Security Act (42 U.S.C.
1395x(dd)(5)) is amended--
(1) in subparagraph (B), by inserting ``or (C)'' after
``subparagraph (A)'' each place it appears; and
(2) by adding at the end the following:
``(C) The Secretary may waive the requirements of
paragraphs (2)(A)(i) and (2)(A)(ii) for an agency or
organization with respect to the services described in
paragraph (1)(B) and, with respect to dietary counseling,
paragraph (1)(H), if such agency or organization--
``(i) is located in an area which is not an urbanized area
(as defined by the Bureau of Census), and
``(ii) demonstrates to the satisfaction of the Secretary
that the agency or organization has been unable, despite
diligent efforts, to recruit appropriate personnel.''.
SEC. 6. LIMITATION ON LIABILITY OF BENEFICIARIES AND
PROVIDERS FOR CERTAIN HOSPICE COVERAGE DENIALS.
(a) In General.--Section 1879(g) of the Social Security Act
(42 U.S.C. 1395pp(g)) is amended--
(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and moving such
subparagraphs 2 ems to the right;
(2) by striking ``is,'' and inserting ``is--'';
(3) by making the remaining text of subsection (g), as
amended, that follows ``is--'' a new paragraph (1) and
indenting such paragraph 2 ems to the right;
(4) by striking the period at the end and inserting ``;
and''; and
(5) by adding at the end the following new paragraph:
``(2) with respect to the provision of hospice care to an
individual, a determination that the individual is not
terminally ill.''.
(b) Waiver Period Extended.--Section 9305(f)(2) of the
Omnibus Budget Reconciliation Act of 1986 is amended by
striking ``and before December 31, 1995.''.
(c) Effective Date.--The amendments made by this section
shall take effect on December 31, 1995.
SEC. 7. EXTENDING THE PERIOD FOR PHYSICIAN CERTIFICATION OF
AN INDIVIDUAL'S TERMINAL ILLNESS.
Section 1814(a)(7)(A)(i)(II) of the Social Security Act (42
U.S.C. 1395f(a)(7)(A)(i)(II)) is amended by striking ``, not
later than 2 days after hospice care is initiated (or, if
each certify verbally not later than 2 days after hospice
care is initiated, not later than 8 days after such care is
initiated),'' and inserting ``at the beginning of the
period''.
SEC. 8. EFFECTIVE DATE.
Except as provided in section 6(c), the amendments made by
this Act shall apply to benefits provided on or after the
date of the enactment of this Act, regardless of whether or
not an individual has made an election under section 1812(d)
of the Social Security Act before such date.
____
Summary of Studies Regarding Cost-Effectiveness of Hospice
Lewin-VHI's 1995 report, An Analysis of the Cost Savings of
the Medicare Hospice Benefit, prepared for The National
Hospice Organization, updates a previous study prepared in
1989 by Abt Associates for the Health Care Financing
Administration entitled Medicare Hospice Benefit Program
Evaluation.
The 1989 Abt study found that:
(1) Medicare saved $1.26 for every $1.00 spent on hospice
care.
(2) Much of these savings were realized during the last
month of life of the patient and were largely a result of the
substitution of home hospice care for in-hospital care.
The 1995 Lewin-VHI study was based on data generated from a
group of Medicare recipients who died of cancer during the
period between July 1 and December 31, 1992. This group was
further divided into those who had one or more hospices claim
during the aforementioned period and those who had none.
(Additional analysis was done to ensure no selection bias.)
The Lewin-VHI report concluded:
(1) Medicare saved $1.52 for every $1.00 spent on hospice.
(2) While savings were highest for the last month of life,
there were also net savings over the last year of life for
those who enrolled in hospice.
(3) While the greatest savings were found in Part A
Medicare expenditures, savings were also found in Part B
expenditures.
Mr. GRAHAM. Mr. President, I rise today to join in support of the
``Medicare Hospice Benefit Amendments of 1996'' to be introduced by
Senator Breaux.
The number of terminally ill patients choosing hospice care over
conventional Medicare has increased from 11,000 Medicare admission in
1985 to more than 220,000 Medicare beneficiaries last year.
During the current session of Congress, much has been made about the
problems with the Medicare Trust Fund. Congress should act as soon as
possible to reduce Medicare costs and protect the Medicare Trust Fund.
However, radical cuts to the program are not the solution.
Instead, we should emphasize prevention, fraud reduction, and
successful programs such as hospice care--all proven efforts at
reducing spending while maintaining current Medicare quality and
beneficiary protections.
The goal of hospice is to provide comprehensive health care at home
to terminally ill patients in a manner that improves the quality of
life for the patients and their families. This approach places a high
value of personal choice, family support, and community involvement.
Patients covered by Medicare and Medicaid waiver their eligibility
for all other public program benefits when choosing hospice care. By
doing so, hospice patients are cared for at home with their families
and avoid costly hospitalizations. Hospice makes sense from a health
care, quality of life, and economic perspective.
The number of terminally ill patients choosing hospice care over
conventional Medicare has increased from 11,000 Medicare admission in
1985 to more than 220,000 Medicare beneficiaries last year.
Clearly, hospice is an idea that is rapidly gaining acceptance and
acclaim in modern times. Florida has been a pioneer in the modern
hospice movement. In 1979, while I was the Governor in Florida, my
State became the first to set standards for hospices and recognize
hospice as an option for the terminally ill. The Florida law served as
a model for national legislation. As a result, inpatient and at-home
hospice care has been covered by Medicare since 1982.
[[Page S9584]]
The goal of hospice is to make the last months of a person's life as
comfortable and meaningful as possible. Hospice does not use artificial
life-support systems or surgery when there is no reasonable hope of
remission. Hospice offers dignity for the dying and avoids costly--
often traumatic--acute-care hospitalization.
For example, according to Lewin-VHI in their 1994 study entitled
Hospice Care: An Introduction and Review of the Evidence, Medicare
beneficiaries in their last year of life constituted 5 percent of
beneficiaries in 1988 but more than 27 percent of Medicare payments.
Lewin-VHI adds that ``during the last month of life, hospice users
cost, on average, $3,069, while those using conventional care cost
$4,071.'' Overall, that study indicates the use of the hospice benefit
saved Medicare $1.26 for every $1.00 spent.
However, an updated 1995 Lewin-VHI study shows even better results
through the use of hospice. The study, entitled An Analysis of the Cost
Savings of the Medicare Hospice Benefit, found that Medicare saves
$1.52 for every $1.00 spent on hospice.
According to Lewin-VHI, ``First, hospices effectively substitute
relatively inexpensive care at home for costly inpatient hospital days
during the period in which expenditures are typically the greatest and
in which most hospice users enroll in the benefit, in the last month of
life. Second, the financial incentives of the current Medicare Hospice
Benefit reinforce the organizational incentives of most hospice
programs to provide quality care at a lower cost.''
In another study entitled ``Survival of Medicare Patients After
Enrollment in Hospice Programs'' in the New England Journal of Medicine
on July 18, 1996, authors Nicholas Christakis and Jose Escarce
establish that the benefits of hospice should be expanded. They write,
``Enrolling patients [in hospice] earlier . . . might enhance the
quality of end-of-life care and also prove cost effective.''
Again, hospice has been a Medicare benefit since passage of the 1982
law and its implementation in 1983. Hospice care has grown dramatically
since the benefit's inception, but few changes have been made to the
1982 law. As the bill's House sponsors--Congressmen Ben Cardin and Rob
Portman--have said, ``As more and more patients choose the hospice
benefit, it has become clear that certain provisions of the law need to
be clarified in order to protect Medicare beneficiaries and to ensure
that Medicare hospice patients can continue to receive excellent, cost-
effective hospice care.''
We should do what we can to encourage hospice care in the Medicare
program and through the health care system generally. This bill makes
technical amendments to Medicare's hospice program. Specifically, the
bill would:
Restructure the benefit periods to require more frequent
certifications after 180 days to facilitate appropriate discharge with
no penalty to the patient; clarify that ambulances, diagnostic tests,
radiation and chemotherapy are covered hospice services when included
in the plan of care; amend the ``core services'' requirement to allow
hospices to contract for physician services with independent contractor
physicians or physician groups; allow waiver of certain staffing
requirements of rural hospices; extend the expired favorable
presumption of waiver of liability provisions and include waiver
protection where prognosis of terminal illness is found to have been in
error; and, allow the Health Care Financing Administration to set
documentation requirements of physician certifications.
Finally, I would like to commend Congressman Cardin from Maryland for
his hard work on this legislation on the House side. The Congressman is
a great thinker on the topic of how to improve Medicare and his
legislation--H.R. 3714--once again serves that purpose.
______
By Mr. BIDEN:
S. 2035. A bill to invest in the future American work force and to
ensure that all Americans have access to higher education by providing
tax relief for investment in a college education and by encouraging
savings for college costs, and for other purposes; to the Committee on
Finance.
the get ahead act
Mr. BIDEN. Mr. President, I have spoken in the Senate before about
how the rising cost of a college education is putting a higher
education--the American dream--out of reach for many middle-class
American families.
When I went to college, middle-class families could pay for the
public college tuition and fees of their children for less than 5
percent of their income. It stayed that way until 1980. Since then,
however, college costs have skyrocketed and middle-class incomes have
stagnated. The result is that today it takes almost 9 percent of the
average family's income to send one--just one--child to a public
college. And, if you go to a private college or university, tuition and
fees will eat up 35 percent of your income.
Who can afford that? Not many middle-class families that I know. Many
young people today must choose between going heavily into debt or not
going to college at all. And, as the debt burden gets heavier and
heavier, more and more middle-class kids will not even have that
choice. They simply will not be able to go to college.
And, this is happening at a time when we as a Nation can least afford
it.
Educating our work force is one of the best investments we as a
society can make, and it is one of the best measurements of future
economic well-being. According to one study, a more educated population
has been responsible for nearly one-third of America's economic growth
since the Great Depression. As we prepare to enter the 21st century and
as the world economy is increasingly internationally competitive, we
must ensure that no American is denied a higher education solely
because of the cost.
In fact, this has been a goal of the Federal Government for over a
century. From the establishment of the land-grant university system in
the late 1800's to the GI bill at the end of World War II to the
creation of the Pell Grant and Guaranteed Student Loan Programs in the
1960's, the Federal Government has been committed to seeing a college
education within reach of every American. It is time to renew that
commitment.
So, today, Mr. President, I am introducing comprehensive legislation
to make college more affordable for American families, so that middle-
class parents can afford to send their kids to college and middle-class
kids can afford to go.
My bill, titled ``Growing the Economy for Tomorrow: Assuring Higher
Education is Affordable and Dependable''--Get Ahead, for short--
combines numerous proposals to give tax cuts for the cost of college,
to encourage families to save for a college education, and to award
college scholarships to high school students in the top of their class
academically.
For the sake of time, Mr. President, I will not go through all of
specific proposals now. Instead, I refer my colleagues to a summary of
the legislation.
Mr. President, a college education is the dream of every American
family. When I travel around my State of Delaware, I meet with wealthy
businessmen, poor welfare mothers, and hundreds of middle-class
families. And, they all want the same thing for their kids: a chance to
go to college.
They do not need us in Washington to tell them it is becoming harder
and harder to get there. They know that. They need us to make it easier
for them. I urge my colleagues to cosponsor this important legislation
to make sure that the American dream of a college education remains
within reach of every American.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
The GET AHEAD Act--Summary
title i--tax incentives for higher education
Subtitle A--Tax Relief for Higher Education Costs
Section 101--Deduction for Higher Education Expenses
An above-the-line tax deduction (available even to those
who do not itemize deductions) would be allowed for the costs
of college tuition and fees as well as interest on college
loans.
In the case of tuition costs, beginning in tax year 1999,
the maximum annual deduction would be $10,000 per year; a
maximum deduction of $5,000 would be available in tax years
1996, 1997, and 1998. The full deduction
[[Page S9585]]
would be available to single taxpayers with incomes under
$70,000 and married couples with incomes under $100,000; a
reduced (phased-out) deduction would be available to those
with incomes up to $90,000 (singles) and $120,000 (couples).
The income thresholds would be indexed annually for
inflation.
Interest on student loans would be deductible beginning
with interest payments made in tax year 1996. Interest
payments could be deducted on top of the $10,000 deduction
for payment of college tuition and fees. There would be no
annual maximum and no income limits with regard to the
deductibility of interest on student loans.
Language is included to coordinate this tax deduction with
other education provisions of the tax code--to ensure that
individuals do not receive a double benefit for the same
payments. Specifically, qualified higher education expenses
that could be tax deductible would be reduced by any payments
made from Series EE savings bonds (and excluded from taxable
income), any veterans educational assistance provided by the
federal government, and any other payments from tax-exempt
sources (e.g. employer-provided educational assistance).
Also, tax-free scholarships and tax-excluded funds from
Education Savings Accounts (see section 112) would first be
attributed to room and board costs; the remainder, if any,
would count against tuition and fees and would reduce the
amount that would be tax deductible. However, if tuition and
fees still exceeded $10,000 even after the reductions, the
full tax deduction would be available.
Section 102--Exclusion for Scholarships and Fellowships
College scholarships and fellowship grants would not be
considered income for the purposes of federal income taxes.
This returns the tax treatment of scholarships and
fellowships to their treatment prior to the 1986 Tax Reform
Act (which limited the exclusion of scholarships and
fellowships to that used for tuition and fees).
Scholarships and fellowship grants would be fully
excludable for degree candidates. In the case of non-degree
candidates, individuals would be eligible for a lifetime
exclusion of $10,800--$300 per month for a maximum 36 months.
Language is included to clarify that federal grants for
higher education that are conditioned on future service (such
as National Health Service Corps grants for medical students)
would still be eligible for tax exclusion.
This section would be effective beginning with scholarships
and fellowship grants used in tax year 1996.
Section 103--Permanent Exclusion for Educational Assistance
The tax exclusion for employer-provided educational
assistance would be reinstated retroactively to January 1,
1995. And, the tax exclusion would be made a permanent part
of the tax code.
Subtitle B--Encouraging Savings for Higher Education Costs
Section 111--IRA Distributions Used Without Penalty for
Higher Education Expenses
Funds could be withdrawn from Individual Retirement
Accounts (IRAs) before age 59\1/2\ without being subject to
the 10 percent penalty tax if the funds were used for higher
education tuition and fees. (However, withdrawn funds, if
deductible when contributed to the IRA, would be considered
gross income for the purposes of federal income taxes.)
This section would be effective upon enactment.
Section 112--Education Savings Accounts
This section would create IRA-like accounts--known as
Education Savings Accounts (ESA's)--for the purpose of
encouraging savings for a college education.
Each year, a family could invest up to $2000 per child
under the age of 19 in an ESA. For single taxpayers with
incomes under $70,000 (phased out up to $90,000) and married
couples with incomes under $100,000 (phased out up to
$120,000), the contributions would be tax deductible. (These
income thresholds would be indexed annually for inflation.)
For all taxpayers, the interest in an ESA would accumulate
tax free; the contributions would not be subject to the
federal gift tax; and, the balance in an ESA would not be
treated as an asset or income for the purposes of determining
eligibility for federal means-tested programs.
ESA funds could be withdrawn to meet the higher education
expenses--tuition, fees, books, supplies, equipment, and room
and board--of the beneficiary. Funds withdrawn for other
purposes would be subject to a 10 percent penalty tax and
would be considered income for the purposes of federal income
taxes (to the extent that the funds were tax deductible when
contributed). The penalty tax would not apply in cases of
death or disability of the beneficiary of the ESA and in
cases of unemployment of the contributors.
In addition, when the beneficiary of the account turns age
30 and is not enrolled in college at least half time, any
funds remaining in the ESA would be (1) transferred to
another ESA; (2) donated to an educational institution; or
(3) refunded to the contributors. In the first two cases,
there would be no penalty tax and the money would not be
considered taxable income. In the third case, the penalty tax
would not apply, but the funds would be counted as income to
the extent that the funds were tax deductible when
contributed.
Finally, parents could roll over funds from one child's ESA
to another child's ESA without regard to any taxes, without
regard to the $2000 annual maximum contribution to an ESA,
and without regard to the age 30 requirement noted above.
Funds rolled over would also not be subject to the federal
gift tax.
Language is also included to allow individuals to designate
contributions to an ESA as nondeductible even if such
contributions could be tax deductible. This gives families
the option to build up the principal in an ESA while at a
lower tax rate, rather than having to pay taxes on unspent
ESA funds when the contributors are older and likely in a
higher tax bracket.
Tax deductible contributions to ESAs would be allowed
beginning in tax year 1996.
Section 113--Increase in Income Limits for Savings Bond
Exclusion
For taxpayers with incomes below certain thresholds, the
interest earned on Series EE U.S. Savings Bonds are not
considered taxable income if the withdrawn funds are used to
pay for higher education tuition and fees. This section
increases the income thresholds to allow more Americans to
use the Series EE Savings Bonds for education expenses.
Effective with tax year 1996, the income thresholds would
be the same as the income thresholds for the higher education
tax deduction (see section 101): $70,000 for single taxpayers
(phased out up to $90,000), and $100,000 for couples (phased
out up to $120,000). As with the higher education tax
deduction, these income thresholds would be indexed annually
for inflation.
Section 114--Tax Treatment of State Prepaid Tuition Plans
Several states have established prepaid tuition plans,
where individuals can make advance payments for college
tuition. However, because of the uncertainty of federal tax
law, some states have put their plans on hold and other
states have not gone forward at all. This section clarifies
federal tax law in two respects.
First, state-established trusts or corporations created
exclusively for managing tuition prepayment plans would be
exempt from federal taxes on investment earnings. Second,
the letter-ruling issued by the IRS to Michigan would be
codified: purchasers and beneficiaries of prepaid tuition
plans would be liable for federal income taxes on the
increased value of the investment only at the time the
funds were redeemed, not each year as the ``interest''
accrued.
To be eligible for the tax clarification, a state prepaid
tuition plan must guarantee at the time of purchase that a
certain percentage of costs would be covered at a
participating educational institution, regardless of the
performance of the investment fund. And, it must guarantee
that funds would be refunded in the event of the death or
disability of the beneficiary or in the event the beneficiary
failed to enroll in a participating institution.
title ii--scholarships for academic achievement
Beginning with the high school graduating class of 1997,
the top 5 percent of graduating seniors at each high school
in the United States would be eligible for a $1000 merit
scholarship. If an individual receiving such a scholarship
achieved a 3.0 (``B'') average during his or her first year
of college, a second $1000 scholarship would be awarded.
However, the merit scholarships would be available only to
those students in families with income under $70,000 (single)
and $100,000 (couples). These income thresholds would be
increased annually for inflation.
Funds are authorized (and subject to annual appropriations)
for five years. The first year authorization (fiscal year
1997) is $130 million. In each of the next four years (FY
1998-FY 2001), because the scholarships could be renewed for
a second year, the authorization is $260 million per year.
Total five-year authorization: $1.17 billion.
title iii--deficit neutrality
To ensure that the ``GET AHEAD'' Act does not increase the
deficit, this title declares it the sense of the Senate that
the costs of the bill should be paid by closing corporate tax
loopholes.
______
By Mr. DORGAN (for himself, Mr. Baucus, Mrs. Murray, Mr.
Wellstone, Mr. Conrad, Mr. Wyden, and Mr. Daschle):
S. 2036. A bill to amend the Agricultural Market Transition Act to
provide equitable treatment for barley producers so that 1996 contract
payments to the producers are not reduced to a greater extent than the
average percentage reduction in contract payments for other
commodities, while maintaining the level of contract payments for other
commodities, and for other purposes; to the Committee on Agriculture,
Nutrition, and Forestry.
barley growers legislation
Mr. DORGAN. Mr. President, last week, I was among a group of Senators
who tried to correct an inequitable payment reduction in farm program
contract payments faced by barley growers. After considerable time and
effort we reluctantly came to an agreement on an amendment to address
this problem.
At the time, I said it was not the answer to the problem, but rather
a small
[[Page S9586]]
step in the journey. Unfortunately that journey ended up being a very
short one that quickly got sidetracked.
Despite the fact that the Senate agreed to the amendment to provide
some relief to barley growers, the conference report came back this
week with no additional funds to deal with this problem. The Senate
amendment was deleted.
Instead the conferees referred the issue back to the authorizing
committee and then provided an unfunded directive to the Secretary of
Agriculture to deal with the problem. At the time we agreed to the
Senate amendment, I was concerned that this would be the outcome.
Another referral and no real action.
Barley growers deserve more than that. The freedom to farm fixed
contract payment system has been violated, and the Government is once
again being viewed as not keeping its word. While the freedom to farm
bill was not my choice for farm legislation, I believe the promises it
made to producers constitutes a public commitment that should be kept.
It appears that the only way that commitment can be met is if
legislation is introduced to require that such action be taken. That is
why I am introducing legislation today.
My bill will give the authorizing committee, the Senate Agriculture
Committee, a clear opportunity to move forward to resolve this issue.
It will establish the goal that we had in mind when we sought to solve
this problem by amending the appropriations bill.
It would seem to me that the majority leadership of the authorizing
committees would be the first ones in line to correct this problem.
They were the ones who developed the freedom to farm proposal, and they
were the ones who used their projected schedule of fixed payments to
sell their farm policy approach to American farmers.
A news release issued November 21, 1995, by House Agriculture
Committee Chairman Pat Roberts clearly states that the expected market
transition payments under the Freedom to Farm Program would be 46 cents
per bushel for barley, 27 cents per bushel for corn, and 92 cents per
bushel for wheat.
This news release lists the source of these estimates as the
Republican staff of the Senate Committee on Agriculture, Nutrition, and
Forestry. These payment projections went unchanged throughout the farm
bill debate right through the final farm bill conference committee.
How or why these miscalculations occurred is a moot point. My purpose
is not to blame anybody. My purpose is to point out that the freedom to
farm bill sponsors developed these projections and used them to advance
their farm program proposal. These estimates were the basis of the
decisions of many farmers and farm organizations in deciding what they
would support as the farm bill moved through Congress.
Throughout the farm bill debate, it was clear that these estimated
amounts might be a few cents off, but nobody expected any substantial
difference between these estimates and the contract payments.
miscalculation results in 30-percent cut
Unfortunately, there was a $39 million miscalculation in the payments
projected for barley producers. Rather than the original payment rate
of 46 cents per bushel in 1996, barley producers found out later that
their payments will be only 32 cents per bushel. That is a full 30
percent less than the original congressional estimates.
Our barley producers based their farm plans and cash flow for this
crop year on the projections that were made last fall. They went to
their bankers and creditors who made loans based on these projections.
Frankly, I shouldn't be the one that is trying to correct this
problem. This problem should have been corrected by those that
developed the freedom to farm bill and its payment projections.
However, since North Dakota is the largest barley producing State in
the Nation, this is of considerable concern to our barley producers.
My amendment would restore $35 of the $39 million to barley
producers. This would be about a 10-percent cut from what was
originally projected. A 10-percent cut is in line with the reductions
that are expected in other payments for the other commodities.
The purpose of this amendment is to provide equitable treatment to
barley producers so that contract payments are not reduced to any
greater degree than they are for other commodities. No other commodity
has been asked to take as deep a reduction as barley.
Wheat producers will be getting 87 cents, rather than 92 cents. That
is a 5-percent reduction. Corn producers will be getting 24 cents,
rather than 27 cents. That is an 11-percent reduction. Barley producers
should not be expected to take a 30-percent cut in their payments.
This is a matter of keeping faith with those family farmers that made
their plans on the basis of a farm bill that was very late in getting
passed. It is a matter of fairness to our Nation's barley producers.
I am pleased that Senators Baucus, Murray, Wellstone, Conrad, Wyden,
and Daschle have joined me in this effort and will be original
cosponsors of this legislation.
Mr. CONRAD. Mr. President, I rise as an original cosponsor of
legislation to correct the provisions of the Federal Agriculture
Improvement and Reform Act of 1996 which unfairly penalizes barley
producers. In one of the most egregious examples of misinformation I've
ever seen, actual payments to barley producers under the act are
dramatically lower than the original promises made by proponents of the
bill. The bill we are introducing today corrects that error and gives
barley producers the equal treatment they deserve.
On November 21, 1995, House Agriculture Committee Chairman Pat
Roberts released a press statement announcing the estimated market
transition payments under freedom to farm. The announcement clearly
stated that barley payments for 1996 would be 46 cents per bushel.
While the press release does state the figures were estimates, it is
undeniable that the figures became the basis on which farm group after
farm group made farm policy decisions. Producers were told they would
receive this level of payment, or something very close to it, and that
the payment would be guaranteed. I know this is true in North Dakota
because in meeting after meeting I heard producers tell me it was their
belief they would receive 46 cents in 1996 if freedom to farm became
law.
Later we find out this is not the case, that the payments to barley
producers would not be 46 cents, they would be only 32 cents. I
understand other commodities received some reductions--approximately 5-
10 percent--but none received the 30 percent reduction barley producers
have little choice but to accept. Opponents of this bill will argue all
producers were treated the same and that barley producers should have
been aware the initial figures were subject to change. Well, barley
producers did know there might be some change, maybe 1 or 2 cents, but
did not know there might be a 30 percent change.
It's time we set the record straight and admit that barley producers
were not treated fairly by the 1996 farm bill. I hope my colleagues
will join me in correcting this extremely unfair situation.
______
By Mr. LAUTENBERG:
S. 2037. A bill to provide for aviation security, and for other
purposes; to the Committee on Commerce, Science, and Transportation.
The Aviation Security Act of 1996
Mr. LAUTENBERG. Mr. President, I rise today to introduce the Aviation
Security Act [ASA]. This legislation is designed to significantly
enhance security measures at U.S. airports, to better protect those who
fly.
Mr. President, I join with all Americans in expressing my sorrow at
the loss of 230 innocent lives in the crash of TWA flight 800. My
sympathy and prayers are with the victims' families and friends as they
struggle to cope with this tragedy.
At this time, the sea has not yielded its secrets, and we do not have
conclusive evidence of why the jet crashed. However, terrorism appears
to be the likely cause of the disaster.
Whether or not the cause of the crash was a bomb, this disaster has
focused national attention on the fact that America's shores are not
immune from terrorism. And this is a threat which I fear will only
increase in scope and sophistication over the next few years.
Terrorism is an act of war, not against any specific individual, but
against our entire nation. Consequently, protecting ourselves from
[[Page S9587]]
this scourge is a matter of national security, and we must act
accordingly. We must treat this threat as seriously as any declared
war. And we need to adopt measures--and attitudes--to aggressively
combat this twentieth century plague.
Mr. President, living in a free society, there is only so much we can
do to protect every public building, park and gathering place. However,
terrorists usually target a nation where it's most vulnerable. And
perhaps nowhere are we more vulnerable than in our air security system.
Mr. President, after the past few agonizing days, it's all too
apparent that we must significantly upgrade security measures at U.S.
airports. Although it may be impossible to stop every terrorist who is
determined to bomb an airline, security can be significantly enhanced
to better protect those who fly. And it must be continually improved as
threats and technology change.
The 1.5 million people who daily board flights at American airports
undergo security measures which were designed decades ago to stop
highjackers with metal guns and knives. These measures are inadequate
when dealing with terrorists with Semtex and other plastic explosives.
Such explosives are so dangerous that less than 2 pounds can shred a
jumbo jet into a pile of scrap metal.
The problem of inadequate protection stems from many causes. In most
other countries, government is responsible for air security. In the
United States, the Government, the airlines and the airports share
responsibility. The highly competitive airlines, many of which are
experiencing financial difficulties, face an inevitable and difficult
conflict of interest. Although the Federal Aviation Administration
issues minimum security standards, individual airlines and airports are
responsible for implementing them.
There are also multiple loopholes in the present security system. On
U.S. domestic flights, bags and passengers are not even required to
travel together. And there are many other points of vulnerability,
including cargo and mail.
It is true that our safety procedures were upgraded after the
Lockerbie disaster. As a member of the President's Commission on
Aviation Security and Terrorism, I helped draft the Aviation Security
Improvement Act of 1990. Among its 38 provisions were requirements that
the FAA accelerate explosives detection research and heighten security
checks on airport personnel.
Additionally, on July 25, the President announced new air travel
security measures. These improvements, which include increased searches
of carry-on luggage and required pre-flight cargo and cabin
inspections, will certainly enhance security. However, they do not go
far enough.
Over the past few weeks, I have been briefed by some of our nation's
best experts in the field of aviation safety. They are concerned that
terrorists are outstripping our current procedures, and are breaking
through America's cordon of safety. We can do better; we must do
better. It will require leadership and decisiveness.
This Senator believes that we must institute a truly comprehensive
security system. In order to achieve this, we must do at least three
things. We must adequately invest in security technology in proportion
to the increasing threat of terrorism. We must ensure that the airlines
enforce necessary security measures at the gate. And we must make sure
that our security personnel are adequately trained and perform well.
To begin the debate on these matters, I am introducing the Aviation
Security Act (ASA). This legislation effectively addresses the problems
which have become apparent recently, by charging the Department of
Transportation with implementing a comprehensive aviation security
system.
To enhance security before travelers reach the airport, and once they
are at the gate, my bill mandates increased screening of passengers,
luggage, and cargo. It also requires that the Department of
Transportation review and upgrade the current procedures for examining
cargo on passenger flight.
To identify passengers and cargo that pose a heightened risk--in
other words, to stop the bad guys before they board or get a package on
board--this legislation requries the Department of Transportation to
develop a methodology to profile passengers and cargo. It also requires
that air carriers implement this methodology and institute contingency
plans for dealing with individuals identified as potential threats. For
those individuals and cargo that pose the greatest threat, airports and
airlines would be required to develop and utilize additional measures,
including bag-match, personal interview, and enhanced bag search.
To complement the additional profiling and security measures, my
legislation also mandates expedited installation of explosive detection
devices at those airports which the Department of Transportation
identifies as facing the greatest risk. These devices will include
density evaluators, scanners, trace and vapor detectors.
Mr. President, the importance of installing these detection systems,
as soon as possible, cannot be overemphasized. The latest luggage
scanners, which can detect the most elusive plastic explosives, are now
not generally used in U.S. airports. The most advanced scanning
machine, the CTX-5000, works like a CAT Scan, providing a three
dimensional image. There are 14 in use in Europe and Israel, and two
are being installed in Manila. In our country, they are currently being
tested in only Atlanta, which has two, and San Francisco. Another
device, the EGIS machine, uses air samples from passengers' luggage to
check for vapors emitted by explosives. Various overseas airports
utilize the machine, but it's being used on only a limited basis in the
United States. This, and other technologies, which can detect liquid
explosives and trace chemicals, need to be further developed and
deployed.
Just as important as any new machine or measure is hiring well
trained security people. Most airlines, to save money, contract with
security companies for low-wage workers with minimal education and
little experience. Training is cursory and turnover is high. Yet, this
person may be the last line of defense between a plane full of innocent
people and a suicide bomber. By contrast, European security personnel
are usually highly trained, educated, speak several languages and have
taken courses in psychology.
This legislation requires that airport personnel who have security
duties or who have access to any secure area must meet stringent
requirements for training, job performance and security checks.
In conjunction with training, performance measures will be developed
to assess how well security personnel are doing their jobs. Also,
comprehensive investigations, including criminal history checks, will
be required of all personnel in this category.
The importance of the human factor in improving security is probably
best evidenced by the case of Ramzi Ahmed Yousef. Yousef is currently
on trial in New York for his alleged role in the 1994 bombing of the
World Trade Center. Less well known are the details of a plot to join
two other men in blowing up a dozen U.S. jumbo jets in 1995.
In a 2-day reign of terror, Yousef and his compatriots planned to
bomb 12 planes, with over 4,000 people on board. The motive was to
provoke an end to United States support of Israel.
The heart of each bomb was a timer built by rewiring a common Casio
digital watch. The timer would then be connected to a liquid
nitroglycerin, disguised as contact lens solution. Even the newest
screening devices would have extreme difficulty detecting the
substance. Only human vigilance may have been able to stop these
murderers if they had reached the airport gate. Luckily, the plot was
discovered by police in the Philippines before the night's sky was set
ablaze.
In addition to security, what became painfully obvious this week is
that procedures to notify and counsel the families of airline disaster
victims are totally inadequate. Compassion dictates that we need to
adopt more efficient and humane procedures.
This legislation establishes, perhaps within the National
Transportation Safety Board, the Office of Family Advocate. In
consultation with the Department of State, the Department of
Transportation, experts in psychology and representatives of victims'
families, this Office will develop standards for informing, counseling
and supporting grieving families. Providing this assistance is not just
common sense, it's common decency.
[[Page S9588]]
Additionally, this legislation requires that information, such as
full name, phone numbers and contact person, be collected when a
passenger purchases a ticket. This information would be provided to the
Office of Family Advocate within a specified time period after an air
disaster.
Mr. President, a comprehensive security system will be expensive. The
FAA has estimated that it could cost up to $6 billion over the next 10
years, to pay for security improvements. We need to decide how to pay
the bill--and we need to remember that this legislation is not about
spending dollars, it is about saving lives.
ASA proposes that an aviation security fee, or small surcharge of no
more than $2 per one way ticket or $4 per round trip ticket, be
instituted to pay for needed improvements. I would note that recent
polls suggest that Americans are willing to pay as much as an extra $50
per ticket to upgrade security.
An alternative financing mechanism would be to authorize the
Department of Defense to transfer such funds as may be necessary to
implement the provisions of the Act. In drawing on defense funds, we
would recognize that terrorism is a threat to our national security.
Mr. President, a truly comprehensive system should be put in place as
soon as possible. Although not a panacea for every airport security
problem, it can provide significant protection for travelers.
Of course, to truly enhance security, there is another price we all
must pay. We must be willing to submit to some delay, inconvenience and
intrusion when traveling by air. In London, travelers are patted down.
And in many Arab airports, passengers must negotiate fourteen
checkpoints before boarding. Anyone who flies coach on El Al, the
Israeli national airline, is required to report to the airport 3 hours
ahead of a scheduled flight. The FAA is working on how to minimize
disruption while enhancing security. But we must be willing to make
some trade-offs, giving up easy and quick experiences on the ground,
for added security in the air.
Finally, it would be inappropriate for me to close without discussing
the issue of terrorism. As a Nation, we need to better address the
overall problem. We need to clamp down on domestic fundraising for
Middle East Terrorist organizations. Press reports indicate that
approximately $10 million is being sent annually by Americans to the
terrorist group Hamas. We also need to encourage our allies in the
Middle East to fight terrorist organizations in the region. And we must
work with the international community to target the economies of
countries that sponsor terrorism. We also cannot rule out the use of
force, where necessary.
If the crash of TWA flight 800 was the work of terrorists, then they
may think that they have won the battle--but they certainly haven't won
the war. We can fight back.
But even if this tragedy was not the result of an evil act, but an
unfortunate accident, we should not delay upgrading our security
systems. We need to change the way this country approaches security. We
need to be more proactive, anticipating and pre-empting changes in
terrorist methods, rather than being reactive--always waiting for
something to happen before we act.
To those who would try to deny the seriousness of the threat, and the
intensity of anti-American feelings in many parts of the world, I want
to again recall Ramzi Yousef's legacy of hatred. When questioned by a
Pakistani interrogator as to his real motive, Yousef remarked, ``This
is * * * the best thing, I enjoy it.'' He went on to explain that the
United States is the first country in the world making trouble for the
Muslim people. Consequently, he was willing to send 4,000 innocent
people to their deaths.
Many of the scenes which have flickered across our T.V. screens over
the past 2 weeks can never be forgotten. But there is one moment, in
particular, which will always remain with me. A husband and father, who
had lost his wife and two daughters in the disaster, hired a helicopter
to fly over the crash site, which I had visited last weekend. Once
there, he tossed two red roses on the water for his wife, and three
white rosebuds for his little girls. And as I watched the news footage
which showed the flowers slowly drifting in all directions, I thought
of everything which the sea now held--the future lives of those taken
too soon, and the past memories of those left behind.
I can think of no better memorial to those who died, and to those who
were left behind to carry on, than to work to ensure that such a
tragedy does not happen again. For the living, and in memory of the
deceased, we must act now.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2037
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 ``Aviation Security Act of
1996''.
SEC. 2. ENHANCED SECURITY PROGRAMS.
(a) In General.--Chapter 449 of title 49, United States
Code, is amended by adding at the end of subchapter I the
following new sections:
``Sec. 44916. Enhancement of aviation security
``(a) In General.--The Secretary of Transportation
(hereafter in this section referred to as the `Secretary'),
in consultation with the Administrator of the Federal
Aviation Administration (hereafter in this section referred
to as the `Administrator') and other appropriate officials of
the Federal Aviation Administration, shall provide for the
enhancement of aviation security programs under the
jurisdiction of the Federal Aviation Administration in
accordance with this section.
``(b) Improvements in the Examination of Cargo and Checked
Baggage.--The Secretary, in consultation with the
Administrator, shall--
``(1) review applicable procedures and requirements
relating to the security issues concerning screening and
examination of cargo and checked baggage to be placed on
flights involving intrastate, interstate, or foreign air
transportation that are in effect at the time of the review;
and
``(2) on the basis of that review, develop and implement
procedures and requirements that are more stringent than
those referred to in paragraph (1) for the screening and
examination of cargo and checked baggage to be placed on
flights referred to in that subparagraph, including
procedures that ensure that only personnel with unescorted
access privileges have unescorted access at the airport to--
``(A) an aircraft;
``(B) cargo or checked baggage that is loaded onto an
aircraft;
``(C) a cargo hold on an aircraft before passengers are
loaded and after passengers debark;
``(D) an aircraft servicing area; or
``(E) a secured area of an airport.
``(c) Profiles for Risk Assessment and Risk Reduction
Measures.--
``(1) In general.--The Secretary, in consultation with the
Administrator and appropriate officials of other Federal
agencies, shall develop and implement, a methodology to
profile the types of passengers, cargo, and air
transportation that present, or are most susceptible to, a
significant degree of risk with respect to aviation security.
``(2) Risk reduction measures.--In addition to developing
the methodology for profiles under paragraph (1), the
Secretary, in consultation with the Administrator, shall
develop and implement measures to address sources that
contribute to a significant degree of risk with respect to
aviation security, including improved methods for matching
and searching luggage or other cargo.
``(d) Explosive Detection.--
``(1) In general.--The Secretary and the Administrator, in
accordance with this section, and section 44913, shall ensure
the deployment, by not later than the date specified in
subsection (j), of explosive detection equipment that
incorporates the best available technology for explosive
detection in airports--
``(A) selected by the Secretary on the basis of risk
assessments; and
``(B) covered under the plan under paragraph (2).
``(2) Plan.--The deployment of explosive detection
equipment under paragraph (1) shall be carried out in
accordance with a plan prepared by the Secretary, in
consultation with the Administrator and other appropriate
officials of the Federal Government, to expedite the
installation and deployment of that equipment.
``(3) Report.--
``(A) In general.--Not later than 1 year after the date of
enactment of this section, and annually thereafter, the
Secretary shall submit to the Speaker of the House of
Representatives and the President pro tempore of the Senate a
report on the deployment of explosive detection devices
pursuant to the plan developed under paragraph (2).
``(B) Treatment of classified information.--No officer or
employee of the Federal Government (including any Member of
Congress) may disclose to any person other than another
official of the Federal Government in accordance with
applicable Federal law,
[[Page S9589]]
any information in the report under subparagraph (A) that is
classified.
``(e) Enhanced Screening of Personnel.--
``(1) In general.--The Secretary, in consultation with the
Administrator, shall establish a program for enhancing the
screening of personnel of air carriers or contractors of air
carriers (or subcontractors thereof) who--
``(A) in the course of their employment have--
``(i) unescorted access privileges to--
``(I) an aircraft;
``(II) cargo or checked baggage that is loaded onto an
aircraft;
``(III) a cargo hold on an aircraft; or
``(IV) an aircraft servicing area; or
``(ii) security responsibilities that affect the access and
passage of passengers or cargo in aircraft referred to in
subparagraph (A); and
``(B) any immediate supervisor of an individual referred to
in subparagraph (A).
``(2) Training.--
``(A) In general.--The Secretary, in consultation with the
Administrator, shall--
``(i) review regulations and standards relating to the
training of personnel referred to in paragraph (1) that are
in effect at the time of the review; and
``(ii) on the basis of that review, prescribe such
regulations and standards relating to minimum standards for
training and certification as the Secretary determines to be
appropriate.
``(B) Prohibition.--The fact that an individual received
training in accordance with this paragraph may not be used as
a defense in any action involving the negligence or
intentional wrongdoing of that individual in carrying out
airline security or in the conduct of intrastate, interstate,
or foreign air transportation.
``(f) Performance-Based Measures.--The Secretary, in
consultation with the Administrator, shall--
``(1) develop and implement, by the date specified in
subsection (j), performance-based measures for all security
functions covered under this section that are carried out by
personnel referred to in subsection (e)(1); and
``(2) require that air carriers and owners or operators of
airports that provide intrastate, interstate, or foreign air
transportation ensure that those measures are carried out.
``(g) Security Checks.--
``(1) In general.--The Secretary, in consultation with the
Administrator and other appropriate officers and employees of
the Federal Government, shall, require comprehensive
employment investigations to be conducted for any individual
that is employed, or commences employment, in a position
described in subsection (e)(1).
``(2) Criminal history check.--The employment
investigations referred to in paragraph (1) shall include
criminal history checks. Notwithstanding any other provision
of law, a criminal history check may cover a period longer
than the 10-year period immediately preceding--
``(A) the initial date of employment of an individual by an
employer; or
``(B) the date on which a criminal history check is
conducted for an applicant for employment.
``(h) Administrative Actions.--
``(1) In general.--The Secretary, in consultation with the
Administrator, shall, as appropriate, specify appropriate
administrative actions or violations of this section or the
regulations prescribed under this section.
``(2) Orders.--The administrative actions referred to in
paragraph (1) may include an order by the Secretary
requiring, in accordance with applicable requirements of this
subtitle and any other applicable law--
``(A) the closure of an airport gate or area that the
Secretary determines, on the basis of a risk assessment or
inspection conducted under this section, should be secured in
accordance with applicable requirements of this subtitle; or
``(B) the cancellation of a flight in intrastate,
interstate, or foreign air transportation.
``(3) Notification.--If the Secretary carries out an
administrative action under this subsection, the Secretary
shall provide public notice of that action, except in any
case in which the President determines that the disclosure of
that information would not be in the national security or
foreign policy interest of the United States.
``(i) Audits and Evaluations.--
``(1) In general.--The Secretary shall require each air
carrier and airport that provides for intrastate, interstate,
or foreign air transportation to conduct periodic audits and
evaluations of the security systems of that air carrier or
airport.
``(2) Reports.--Not later than 1 year after the date of
enactment of this section, and annually thereafter, each air
carrier and airport referred to in paragraph (1) shall submit
to the Secretary a report on the audits and evaluations
conducted by the air carrier or airport under this
subsection.
``(3) Investigations.--The Secretary, in consultation with
the Administrator, shall conduct periodic and unannounced
inspections of security systems of airports and air carriers
to determine whether the air carriers and airports are in
compliance with the performance-based measures developed
under subsection (f). To the extent allowable by law, the
Secretary may provide for anonymous tests of the security
systems referred to in the preceding sentence.
``(j) Regulations.--Not later than 180 days after the date
of enactment of this section, the Secretary, in consultation
with the Administrator and appropriate officers and employees
of other Federal agencies, shall prescribe and implement such
regulations as are necessary to carry out this section.
``(k) Modification of Existing Programs.--If the Secretary
or the Administrator determines that a modification of a
program in existence on the date specified in subsection (j)
could be accomplished without prescribing regulations to meet
the requirements of this section, the Secretary or the
Administrator may make that modification in lieu of
prescribing a regulation.
``Sec. 44917. Support for families of victims of
transportation disasters
``(a) In General.--
``(1) Establishment.--The President shall establish, within
an appropriate Federal agency, an office to be known as the
Office of Family Advocate.
``(2) Standards of conduct.--
``(A) In general.--The head of the Federal agency specified
in paragraph (1) (hereafter in this section referred to as
the ``agency head''), acting through the Office of Family
Advocate, shall develop standards of conduct for informing
and supporting families of victims of accidents in air
commerce and other transportation accidents involving any
other form of transportation that is subject to the
jurisdiction of the Department of Transportation.
``(B) Consultation.--In developing the standards under this
paragraph, the agency head shall consult with--
``(i) appropriate officers and employees of other Federal
agencies;
``(ii) representatives of families of victims of accidents
in air commerce and other transportation accidents referred
to in subparagraph (A);
``(iii) individuals who are experts in psychology and
trauma counseling; and
``(iv) representatives of air carriers.
``(3) Third party involvement.--
``(A) In general.--The agency head, acting through the
Office of Family Advocate, shall provide for counseling,
support, and protection for the families of victims of
transportation accidents referred to in paragraph (2)(A) by--
``(i) consulting with a nongovernmental organization that
the agency head determines to have appropriate experience and
expertise; and
``(ii) if appropriate, entering into an agreement with a
nongovernmental organization or the head of another
appropriate Federal agency (including the Director of the
Federal Emergency Management Agency) to provide those
services.
``(b) Passenger Information.--
``(1) In general.--The Secretary of Transportation
(hereafter in this section referred to as the `Secretary')
shall require each air carrier that provides intrastate,
interstate, or foreign air transportation to obtain, at the
time of purchase of passage, from each passenger that
purchases passage on a flight--
``(A) the full name, address, and daytime and evening
telephone numbers of the passenger; and
``(B) the full name and daytime and evening telephone
numbers of a contact person designated by the passenger.
``(2) Requirement for air carriers.--
``(A) In general.--The Secretary shall require each air
carrier that provides intrastate, interstate, or foreign air
transportation to provide the information obtained for a
flight under paragraph (1) only--
``(i) in the event of an accident in air commerce in which
a serious injury or crime (as determined by the Secretary) or
death occurs; and
``(ii) in accordance with section 552a of title 5, United
States Code.
``(B) Provision of information.--In the event of an
accident in air commerce described in subparagraph (A), if
the flight involves--
``(i) intrastate or interstate air transportation, the air
carrier shall provide the information required to be
submitted under subparagraph (A) not later than 3 hours after
the accident occurs; or
``(ii) foreign air transportation, the air carrier shall
provide such information not later than 4 hours after the
accident occurs.
``Sec. 44918 Exemption; fees
``(a) Exemption.--The regulations issued under sections
44916 and 44917 shall be exempt from any requirement for a
cost-benefit analysis under chapter 8 of title 5, United
States Code, or any other provision of Federal law.
``(b) Fees.--
``(1) In general.--Subject to paragraph (2), the Secretary
shall determine, and adjust on an annual basis, a fee that
shall be assessed against each individual who purchases
passage on a flight in intrastate, interstate, or foreign air
transportation that is based on the estimated cost of
carrying out sections 44916 and 44917.
``(2) Limitation on amount.--The amount of a fee assessed
under this subsection shall not exceed $2 per flight, per
passenger.
``(3) Aviation security account.--
``(A) In general.--There shall be established within the
Treasury of the United States, an Aviation Security Account.
The fees collected under this subsection shall be deposited
into that account.
``(B) Use of funds in account.--The Secretary of the
Treasury shall make the funds in the account available only
to--
``(i) the Secretary of Transportation for use by the
Secretary in accordance with section 44916; and
[[Page S9590]]
``(ii) the agency head specified by the President under
section 44917, for use by that agency head in accordance with
that section.''.
(b) Employment Investigations and Restrictions.--Section
44936(b)(1)(B) of title 49, United States Code, is amended by
striking ``, in the 10-year period ending on the date of the
investigation,''.
(c) Conforming Amendment.--The analysis for subchapter I of
chapter 449 of title 49, United States Code, is amended by
adding at the end the following new items:
``44916. Enhancement of aviation security.
``44917. Support for families of victims of transportation
disasters.
``44918. Exemption; fees.''.
____
Aviation Security Proposal
(1) DOT to implement an enhanced aviation security system
Cargo and checked baggage--The Secretary shall review
current procedures for examining cargo and checked baggage on
passenger flights and implement a program to reduce all
significant security risks. That program shall include, but
not be limited to, procedures that restrict access to
passenger, cargo, cargo hold and aircraft servicing areas.
Profiling risk assessment--the Secretary shall develop, in
consultation with appropriate federal authorities, a
methodology to profile passengers, cargo and flights for both
pre-airport and airport arrival to identify those passengers
and cargo that present a possible risk to aviation security.
The Secretary will require that air carriers implement this
methodology and develop contingency actions described below
with respect to those persons and cargo identified by the
methodology. Those measures may include, but not be limited
to, bag-match and enhanced bag search.
Explosive Detection Systems--the Secretary shall identify,
based on profiles and other information and measures
developed in consultation with appropriate federal agencies,
all flights that pose the greatest risk to security, and
ensure that enhanced, state-of-the-art, explosive detection
devices are installed in the appropriate airports to protect
against those risks. The Secretary shall, within six months
from the enactment of this Act, develop and implement a plan
to phase in expedited installation of the devices at priority
airports. The Secretary shall submit an annual report to the
Speaker of the House of Representatives and the President of
the Senate on the progress of the plan. The report may be
classified or unclassified at the Secretary's discretion.
(2) Increased screening for certain airport personnel
Classification of Airport Personnel--the provisions of this
section shall apply to those personnel employed by air
carriers or their contractors or subcontractors who, through
duties and work location, either (a) have unescorted access
to all or portions of aircraft that are engaged in the
transportation of passengers for hire, or (b) have security
responsibilities that affect the access and passage of
passengers and/or cargo into the proximity of passenger
carrying aircraft.
Training--the Secretary shall review existing standards
and, where necessary, impose additional minimum standards for
training and certification of security personnel. The fact
that the employee passed the minimum standards shall not
relieve the air carrier of responsibility if he later is
responsible for, or contributes to, an incident or an
accident.
Performance Based Measures--the Secretary shall develop
performance based measures for all personnel security
functions and implement actions to require the air carriers
or airports, as appropriate, to accomplish those measures.
Security Checks--the Secretary shall require comprehensive
employment investigations on new hires and existing
employees, including but not limited to criminal history
checks. This provision also lifts the current restriction of
ten years on the employee's history.
Penalties--the Secretary shall, within six months from
enactment, promulgate regulations that impose penalties for
violations that are commensurate with the seriousness of the
offense. Such penalties may include temporary suspension of
the operating certificate, immediate closure of a gate or
secure area, cancellation of flights, public notification of
violations or actual revocation of the operating certificate.
(3) Mandated Operational Checks of the System
Self-audits and evaluations--the Secretary shall require
air carriers and airports to conduct audits and evaluations
on the efficacy of the security systems, and issue annual
reports of their results to the Secretary.
The Secretary shall conduct regular, unannounced and/or
anonymous tests of the airport and air carrier's security
systems to determine whether the systems are in compliance
with the performance based measures as determined by the
Secretary.
(4) Support for Families of Victims of Transportation Disasters
Family Advocate--there shall be established an Office of
Family Advocate in the appropriate federal agency to be
determined by the President. The Office shall develop
standards of conduct for informing and supporting families of
victims. The standards shall be developed in consultation
with any federal agency, representatives of families of
victims of airline or other transportation disasters,
psychological experts and air carriers.
Third party involvement--the Office shall consult with a
third party organization that has the appropriate experience,
in offering counseling, support and protection for the
families of victims. the Office is authorized to task an
organization or other government agency, to carry out the
necessary tasks, if appropriate, including the Federal
Emergency Management Agency.
Passenger information--the Secretary shall require air
carriers, both domestic and foreign flag carriers, to collect
the following information at the time of passenger's ticket
purchase: full name, address, telephone number (daytime and
nighttime) and contact person. The Secretary shall require
air carriers to provide, within three hours for domestic
flights and four hours for international flights, such
information to the Office of Family Advocate only in the
event of a transportation disaster where serious injury or
death occurred.
(5) Funding
Fee per ticket--the Secretary shall determine a fee to be
assessed on each airline ticket, the amount of which is based
on the cost to implement the provisions of this Act, but not
to exceed $4 per ticket. The Secretary shall begin assessing
the fee within 30 days from the enactment of this Act.
Aviation Security Account--there shall be established
within the Department, an Aviation Security Account. The fees
shall be collected and credited to relevant appropriations
within the FAA.
______
By Mr. DASCHLE (for himself and Mr. Pressler);
S. 2038. A bill to authorize the construction of the Fall River Water
Users District Rural Water System and authorize the appropriation of
Federal dollars to assist the Fall River Water Users District, a
nonprofit corporation, in the planning and construction of the water
supply system, and for other purposes; to the Committee on Energy and
Natural Resources.
THE FALL RIVER WATER USERS DISTRICT RURAL WATER SYSTEM ACT OF 1996
S. 2039. A bill to authorize the construction of the Perkins County
Rural Water System and authorize the appropriation of Federal dollars
to assist the Perkins County Rural Water System, Inc., a nonprofit
corporation, in the planning and construction of the water supply
system, and for other purposes; to the Committee on Energy and Natural
Resources.
THE PERKINS COUNTY RURAL WATER SYSTEM ACT OF 1996
Mr. DASCHLE. Mr. President, the need for water development throughout
South Dakota is great. As we prepare to enter the 21st century, all
South Dakotans should be able to consider a high quality water supply
to be a basic human right, and we should do whatever we can to meet
this goal.
While considerable progress has been made in providing clean and safe
drinking water to residents of my State, much work remains to be done.
Fall River County and Perkins County are examples of areas that
urgently need to develop new sources of potable water. That is why I am
introducing bills today to authorize the construction of the Fall River
Water Users District Rural Water System and the Perkins County Rural
Water System.
The communities that would be served by both systems are comprised of
farmers and ranchers who for too long have had to endure substandard,
and at times remote, sources of drinking water. The drinking water
available in Fall River County, SD, like the water in much of the rest
of the State, is contaminated with high levels of nitrates, sulfates,
and dissolved solids. Wells have been known to run dry, due to the high
frequency of droughts in the region. Many people currently must haul
water, sometimes as much as 60 miles round-trip. Similar problems exist
in Perkins County, where much of the drinking water fails to meet
minimum public health standards, thereby posing a long-term health risk
to the citizens of that region.
Simply put, this situation is unacceptable and must be remedied.
In Fall River County, the Fall River Water Users District was formed
to plan and develop a rural water system capable of supplying the water
to sustain this community. I and my congressional colleagues have
worked hard over the past year with the district to identify a solution
that was affordable and could provide adequate amounts of clean water
to satisfy the needs of the community. It became apparent that the only
feasible option was the authorization of a rural water system
[[Page S9591]]
that involved the financial and technical participation of the Federal,
State, and local governments.
My first bill would authorize the construction of a system to bring
clean water to the residents of Fall River County. I am absolutely
committed to continuing to work with the Fall River County Water Users
District, the State and the Federal Government to bring a high quality
water supply to Fall River County.
Under the second bill I am introducing today, the Perkins County
Rural Water System will obtain Missouri River water through the
Southwest Pipeline, which is part of the Garrison Diversion Unit in
North Dakota. This is an efficient and cost-effective approach that
takes advantage of existing water management infrastructure. Clean,
safe drinking water will be provided to about 2,500 people who reside
in the towns of Lemmon and Bison, and the surrounding areas.
It is my hope that my colleagues will join with me in supporting
these two pieces of legislation, which will provide safe, clean
drinking water to deserving South Dakota families.
Mr. President, I ask unanimous consent that the text of the bills be
printed in the Record.
There being no objection, the bills were ordered to be printed in the
Record, as follows:
S. 2038
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 ``Fall River Water Users
District Rural Water System Act of 1996''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) there are insufficient water supplies of reasonable
quality available to the members of the Fall River Water
Users District Rural Water System located in Fall River
County, South Dakota, and the water supplies that are
available are of poor quality and do not meet the minimum
health and safety standards, thereby posing a threat to
public health and safety;
(2) past cycles of severe drought in the southeastern area
of Fall River county have left local residents without a
satisfactory water supply and during 1990, many home owners
and ranchers were forced to haul water to sustain their water
needs;
(3) most members of the Fall River Water Users District are
forced to either haul bottled water for human consumption or
use distillers due to the poor quality of water supplies
available;
(4) the Fall River Water Users District Rural Water System
has been recognized by the State of South Dakota; and
(5) the best available, reliable, and safe rural and
municipal water supply to serve the needs of the Fall River
Water Users District Rural Water System members consists of a
Madison Aquifer well, 3 separate water storage reservoirs, 3
pumping stations, and approximately 200 miles of pipeline.
(b) Purposes.--The Congress declares that the purposes of
sections 1 through 13 are to--
(1) ensure a safe and adequate municipal, rural, and
industrial water supply for the members of the Fall River
Water Users District Rural Water System in Fall River County,
South Dakota;
(2) assist the citizens of the Fall River Water Users
District to develop safe and adequate municipal, rural, and
industrial water supplies; and
(3) promote the implementation of water conservation
programs by the Fall River Water Users District Rural Water
System.
SEC. 3. DEFINITIONS.
As used in this Act (unless the context clearly requires
otherwise):
(1) Engineering report.--The term ``engineering report''
means the study entitled ``Supplemental Preliminary
Engineering Report for Fall River Water Users District'' in
August 1995.
(2) Project construction budget.--The term ``project
construction budget'' means the description of the total
amount of funds that are needed for the construction of the
water supply system, as contained in the feasibility study.
(3) Pumping and incidental operational requirements.--The
term ``pumping and incidental operational requirements''
means all power requirements that are incidental to the
operation of intake facilities, pumping stations, water
treatment facilities, cooling facilities, reservoirs, and
pipelines up to the point of delivery of water by the Fall
River Water Users District Rural Water System to each entity
that distributes water at retail to individual users.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(5) Water supply system.--The term ``water supply system''
means the Fall River Water Users District Rural Water System
that is established and operated substantially in accordance
with the feasibility study.
SEC. 4. FEDERAL ASSISTANCE FOR THE WATER SUPPLY SYSTEM.
(a) In General.--The Secretary is authorized to make grants
to the Fall River Water Users District Rural Water System, a
nonprofit corporation, for the planning and construction of
the water supply system.
(b) Service Area.--The water supply system shall provide
for safe and adequate municipal, rural, and industrial water
supplies, mitigation of wetlands areas; and water
conservation within the boundaries of the Fall River Water
Users District, described as follows: bounded on the north by
the Angostura Reservoir, the Cheyenne River, and the Fall
River/Custer County line, bounded on the east by the Fall
River/Shannon County line, bounded on the south by the South
Dakota/Nebraska State line, and bounded on the west by the
previously established Igloo-Provo Water Project District.
(c) Amount of Grants.--Grants made available under
subsection (a) to the Fall River Water Users District Rural
Water System shall not exceed the amount authorized under
section 10.
(d) Limitation on Availability of Construction Funds.--The
Secretary shall not obligate funds for the construction of
the water supply system until--
(1) the requirements of the National Environmental Policy
Act of 1969 (42 U.S.C. 4321 et seq.) have been met;
(2) a final engineering report has been prepared and
submitted to the Congress for a period of not less than 90
days before the commencement of construction of the system;
and
(3) a water conservation program has been developed and
implemented.
SEC. 5. WATER CONSERVATION.
(a) Purpose.--The water conservation program required under
this section shall be designed to ensure that users of water
from the water supply system will use the best practicable
technology and management techniques to conserve water use.
(b) Description.--The water conservation programs shall
include--
(1) low consumption performance standards for all newly
installed plumbing fixtures;
(2) leak detection and repair programs;
(3) rate structures that do not include declining block
rate schedules for municipal households and special water
users (as defined in the feasibility study);
(4) public education programs; and
(5) coordinated operation between the Fall River Water
Users District Rural Water System and any preexisting water
supply facilities within its service area.
(c) Review and Revision.--The programs described in
subsection (b) shall contain provisions for periodic review
and revision, in cooperation with the Secretary.
SEC. 6. MITIGATION OF FISH AND WILDLIFE LOSSES.
Mitigation of fish and wildlife losses incurred as a result
of the construction and operation of the Fall River Water
Users District Rural Water System shall be on an acre-for-
acre basis, based on ecological equivalency, concurrent with
project construction, as provided in the feasibility study.
SEC. 7. USE OF PICK-SLOAN POWER.
(a) In General.--From power designated for future
irrigation and drainage pumping for the Pick-Sloan Missouri
River Basin Program, the Western Area Power Administration
shall make available the capacity and energy required to meet
the pumping and incidental operational requirements of the
water supply system during the period beginning May 1, and
ending October 31, of each year.
(b) Conditions.--The capacity and energy described in
subsection (a) shall be made available on the following
conditions:
(1) The water supply system shall be operated on a not-for-
profit basis.
(2) The water supply system shall contract to purchase its
entire electric service requirements, including the capacity
and energy made available under subsection (a), from a
qualified preference power supplier that itself purchases
power from the Western Area Power Administration.
(3) The rate schedule applicable to the capacity and energy
made available under subsection (a) shall be the firm power
rate schedule of the Pick-Sloan Eastern Division of the
Western Area Power Administration in effect when the power is
delivered by the Administration.
(4) It shall be agreed by contract among--
(A) the Western Area Power Administration;
(B) the power supplier with which the water supply system
contracts under paragraph (2);
(C) the power supplier of the entity described in
subparagraph (B); and
(D) the Fall River Water Users District,
that in the case of the capacity and energy made available
under subsection (a), the benefit of the rate schedule
described in paragraph (3) shall be passed through to the
water supply system, except that the power supplier of the
water supply system shall not be precluded from including, in
the charges of the supplier to the water system for the
electric service, the other usual and customary charges of
the supplier.
SEC. 8. NO LIMITATION ON WATER PROJECTS IN STATE.
This Act shall not limit the authorization for water
projects in South Dakota and under law in effect on or after
the date of enactment of this Act.
SEC. 9. WATER RIGHTS.
Nothing in this Act--
(1) invalidates or preempts State water law or an
interstate compact governing water;
[[Page S9592]]
(2) alters the rights of any State to any appropriated
share of the waters of any body of surface or ground water,
whether determined by past or future interstate compacts or
by past or future legislative or final judicial allocations;
(3) preempts or modifies any Federal or State law, or
interstate compact, dealing with water quality or disposal;
or
(4) confers on any non-Federal entity the ability to
exercise any Federal right to the waters of any stream or to
any ground water resource.
SEC. 10. FEDERAL COST SHARE.
The Secretary is authorized to provide funds equal to 80
percent of--
(1) the amount allocated in the total project construction
budget for the planning and construction of the water supply
system under section 4; and
(2) such sums as are necessary to defray increases in
development costs reflected in appropriate engineering cost
indices after August 1, 1995.
SEC. 11. NON-FEDERAL COST SHARE.
The non-Federal share of the costs allocated to the water
supply system shall be 20 percent of--
(1) the amount allocated in the total project construction
budget for the planning and construction of the water supply
system under section 4; and
(2) such sums as are necessary to defray increases in
development costs reflected in appropriate engineering cost
indices after August 1, 1995.
SEC. 12. BUREAU OF RECLAMATION AUTHORIZATION.
(a) Authorization.--The Secretary is authorized to allow
the Bureau of Reclamation to provide construction oversight
to the water supply system for those areas of the water
supply system that are described in section 4(b).
(b) Project Oversight Administration.--The amount of funds
used by the Bureau of Reclamation for planning and
construction of the water supply system may not exceed an
amount equal to 3 percent of the amount provided in the total
project construction budget for the portion of the projects
to be constructed in Fall River County, South Dakota.
SEC. 13. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated $3,600,000 for the
planning and construction of the water system under section
4, plus such sums as are necessary to defray increases in
development costs reflected in appropriate engineering cost
indices after August 1, 1995.
____
S. 2039
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 ``Perkins County Rural Water
System Act of 1996''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) there are insufficient water supplies of reasonable
quality available to the members of the Perkins County Rural
Water System located in Perkins County, South Dakota, and the
water supplies that are available do not meet the minimum
health and safety standards, thereby posing a threat to
public health and safety;
(2) in 1977 the North Dakota State Legislature authorized
and directed the State Water Commission to conduct the
Southwest Area Water Supply Study, which included water
service to a portion of Perkins County, South Dakota;
(3) the Garrison Diversion Unit Reformulation Act of 1986
authorized the Southwest Pipeline project as an eligible
project for Federal cost share participation;
(4) the Perkins County Rural Water System has continued to
be recognized by the State of North Dakota, the Southwest
Water Authority, the North Dakota Water Commission, the
Department of the Interior, and the Congress of the United
States as a component of the Southwest Pipeline Project; and
(5) the best available, reliable, and safe rural and
municipal water supply to serve the needs of the Perkins
County Rural Water System, Inc., members is the Missouri
River as delivered by the Southwest Pipeline Project in North
Dakota.
(b) Purposes.--The Congress declares that the purposes of
sections 1 through 13 are to--
(1) ensure a safe and adequate municipal, rural, and
industrial water supply for the members of the Perkins County
Rural Water Supply System, Inc., in Perkins County, South
Dakota;
(2) assist the citizens of the Perkins County Rural Water
Supply System, Inc., to develop safe and adequate municipal,
rural, and industrial water supplies; and
(3) promote the implementation of water conservation
programs by the Perkins County Rural Water System, Inc.
SEC. 3. DEFINITIONS.
As used in this Act (unless the context clearly requires
otherwise):
(1) Feasibility study.--The term ``feasibility study''
means the study entitled ``Feasibility Study for Rural Water
System for Perkins County Rural Water System, Inc.'', as
amended in March 1995.
(2) Project construction budget.--The term ``project
construction budget'' means the description of the total
amount of funds that are needed for the construction of the
water supply system, as contained in the feasibility study.
(3) Pumping and incidental operational requirements.--The
term ``pumping and incidental operational requirements''
means all power requirements that are incidental to the
operation of intake facilities, pumping stations, water
treatment facilities, reservoirs, and pipelines up to the
point of delivery of water by the Perkins County Rural Water
System to each entity that distributes water at retail to
individual users.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(5) Water supply system.--The term ``water supply system''
means the Perkins County Rural Water System, Inc., that is
established and operated substantially in accordance with the
feasibility study.
SEC. 4. FEDERAL ASSISTANCE FOR THE WATER SUPPLY SYSTEM.
(a) In General.--The Secretary is authorized to make grants
to the Perkins County Rural Water System, Inc., a nonprofit
corporation, for the planning and construction of the water
supply system.
(b) Service Area.--The water supply system shall provide
for safe and adequate municipal, rural, and industrial water
supplies, mitigation of wetlands areas, and water
conservation in Perkins County, South Dakota.
(c) Amount of Grants.--Grants made available under
subsection (a) to the Perkins County Water System, Inc.,
shall not exceed the amount authorized under section 10.
(d) Limitation on Availability of Construction Funds.--The
Secretary shall not obligate funds for the construction of
the water supply system until--
(1) the requirements of the National Environmental Policy
Act of 1969 (42 U.S.C. 4321 et seq.) have been met;
(2) a final engineering report has been prepared and
submitted to the Congress for a period of not less than 90
days before the commencement of construction of the system;
and
(3) a water conservation program has been developed and
implemented.
SEC. 5. WATER CONSERVATION.
(a) Purpose.--The water conservation program required under
this section shall be designed to ensure that users of water
from the water supply system will use the best practicable
technology and management techniques to conserve water use.
(b) Description.--The water conservation programs shall
include--
(1) low consumption performance standards for all newly
installed plumbing fixtures;
(2) leak detection and repair programs;
(3) rate structures that do not include declining block
rate schedules for municipal households and special water
users (as defined in the feasibility study);
(4) public education programs;
(5) coordinated operation between the Perkins County Rural
Water System and any preexisting water supply facilities
within its service area; and
(6) coordinated operation between the Southwest Pipeline
Project of North Dakota and the Perkins County Rural Water
System, Inc., of South Dakota.
(c) Review and Revision.--The programs described in
subsection (b) shall contain provisions for periodic review
and revision, in cooperation with the Secretary.
SEC. 6. MITIGATION OF FISH AND WILDLIFE LOSSES.
Mitigation of fish and wildlife losses incurred as a result
of the construction and operation of the Perkins County Rural
Water Supply System shall be on an acre-for-acre basis, based
on ecological equivalency, concurrent with project
construction, as provided in the feasibility study.
SEC. 7. USE OF PICK-SLOAN POWER.
(a) In General.--From power designated for future
irrigation and drainage pumping for the Pick-Sloan Missouri
River Basin Program, the Western Area Power Administration
shall make available the capacity and energy required to meet
the pumping and incidental operational requirements of the
water supply system during the period beginning May 1, and
ending October 31, of each year.
(b) Conditions.--The capacity and energy described in
subsection (a) shall be made available on the following
conditions:
(1) The water supply system shall be operated on a not-for-
profit basis.
(2) The water supply system shall contract to purchase its
entire electric service requirements, including the capacity
and energy made available under subsection (a), from a
qualified preference power supplier that itself purchases
power from the Western Area Power Administration.
(3) The rate schedule applicable to the capacity and energy
made available under subsection (a) shall be the firm power
rate schedule of the Pick-Sloan Eastern Division of the
Western Area Power Administration in effect when the power is
delivered by the Administration.
(4) It shall be agreed by contract among--
(A) the Western Area Power Administration;
(B) the power supplier with which the water supply system
contracts under paragraph (2);
(C) the power supplier of the entity described in
subparagraph (B); and
(D) the Perkins County Rural Water System, Inc.,
that in the case of the capacity and energy made available
under subsection (a), the benefit of the rate schedule
described in paragraph (3) shall be passed through to the
water supply system, except that the power supplier of the
water supply system shall not be precluded from including, in
the charges
[[Page S9593]]
of the supplier to the water system for the electric service,
the other usual and customary charges of the supplier.
SEC. 8. NO LIMITATION ON WATER PROJECTS IN STATES.
This Act shall not limit the authorization for water
projects in South Dakota and North Dakota under law in effect
on or after the date of enactment of this Act.
SEC. 9. WATER RIGHTS.
Nothing in this Act--
(1) invalidates or preempts State water law or an
interstate compact governing water;
(2) alters the rights of any State to any appropriated
share of the waters of any body of surface or ground water,
whether determined by past or future interstate compacts or
by past or future legislative or final judicial allocations;
(3) preempts or modifies any Federal or State law, or
interstate compact, dealing with water quality or disposal;
or
(4) confers on any non-Federal entity the ability to
exercise any Federal right to the waters of any stream or to
any ground water resource.
SEC. 10. FEDERAL COST SHARE.
The Secretary is authorized to provide funds equal to 75
percent of--
(1) the amount allocated in the total project construction
budget for the planning and construction of the water supply
system under section 4; and
(2) such sums as are necessary to defray increases in
development costs reflected in appropriate engineering cost
indices after May 1, 1994.
SEC. 11. NON-FEDERAL COST SHARE.
The non-Federal share of the costs allocated to the water
supply system shall be 25 percent of--
(1) the amount allocated in the total project construction
budget for the planning and construction of the water supply
system under section 4; and
(2) such sums as are necessary to defray increases in
development costs reflected in appropriate engineering cost
indices after May 1, 1994.
SEC. 12. BUREAU OF RECLAMATION AUTHORIZATION.
(a) Authorization.--The Secretary is authorized to allow
the Bureau of Reclamation to provide construction oversight
to the water supply system for those areas of the water
supply system that are described in section 4(b).
(b) Project Oversight Administration.--The amount of funds
used by the Bureau of Reclamation for planning and
construction of the water supply system may not exceed an
amount equal to 3 percent of the amount provided in the total
project construction budget for the portion of the project to
be constructed in Perkins County, South Dakota.
SEC. 13. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated $15,000,000 for the
planning and construction of the water system under section
4, plus such sums as are necessary to defray increases in
development costs reflected in appropriate engineering cost
indices after May 1, 1994.
______
By Mr. HATCH (for himself and Mrs. Hutchison):
S. 2040. A bill to amend the Controlled Substances Act to provide a
penalty for the use of a controlled substance with the intent to rape,
and for other purposes; to the Committee on the Judiciary.
the drug-induced rape prevention act of 1996
Mr. HATCH. Mr. President, I rise today to introduce S. 2040, a bill
to prevent the use of controlled substances to facilitate rape. This
bill is to strike back at those who would use controlled substances to
engage in the most reprehensible of crimes. Joining me in cosponsorship
of this legislation is Senator Hutchison.
Mr. President, earlier in the year as a member of the congressional
task force on national drug policy, I joined in issuing a report,
``Setting the Course: A National Drug Strategy.'' This report noted
that every survey of teenage drug use in the past two years indicates
not only increasing use of dangerous drugs among teens, but a
disturbing change in the attitudes teens have about the dangers of drug
use.
Two very important surveys have confirmed that teenage drug abuse is
on the rise.
The first study is the national high school report, Monitoring the
Future, which surveys over 50,000 students in some 400 public and
private secondary schools. The second study is the annual survey by the
Parents' Resource Institute for Drug Education, which surveys nearly
200,000 ninth to twelfth graders.
While these studies focused on the use of marijuana, the use of
hallucinogens, stimulants, and other drugs are also on the rise.
According to reports by the Center on Addiction and Substance Abuse,
adolescents who use marijuana are 85 times more likely to move to other
dangerous drugs, such as cocaine.
As a recent report that we issued from the Judiciary Committee,
Losing Ground Against Drugs noted:
The implication for public policy is clear. If such
increases are allowed to continue for just two more years,
America will be at risk of returning to the epidemic drug use
of the 1970's.
While the overwhelming abuse of drugs by teenagers focuses on illicit
drugs, the illegal diversion and misuse of medicines is also a growing
problem in our country.
During the past few years, there has been increasing abuse of a drug
called rohypnol. Rohypnol is not approved for marketing in the United
States but it is a legitimate therapeutic agent that is approved for
use in several countries to treat sleep disorders.
According to a report from the Haight Ashbury Free Clinic, several
abuse patterns of rohypnol have evolved in the United States.
Rohypnol is being abused by heroin addicts as an enhancing agent for
low-quality heroin, as well as in combination with cocaine. In some
areas it is referred to as a ``club drug''--where it is used by so
called ``recreational'' users who intermittently abuse a variety of
substances.
However, the most disturbing use of rohypnol is its use to facilitate
the rape of women. Reports continue to be made that rohypnol has been
illicitly put into the drinks of unsuspecting victims before they are
sexually assaulted.
I believe that the Federal Government must show that it will not
tolerate the use of this drug--or any drug--to facilitate rape. I
believe it is necessary and appropriate to establish a new provision
that establishes tough penalties for the use of any controlled
substance to facilitate rape.
Rohypnol abuse was initially reported in Florida and Texas, but its
use has now become more widespread.
In an effort to stem the illegal flow of rohypnol into the United
States, the U.S. Customs Service developed and implemented a ban on the
importation of rohypnol into the United States.
Unfortunately, the problem continues to grow.
Rohypnol is a member of the widely-used class of prescription
medications known as benzodiazapines. This class of drugs is used to
treat sleep disorders, anxiety disorders and to control seizures, among
other purposes. When used for legitimate medical purposes, this class
of drugs is vital to the physical and mental health of thousands of
Americans.
The Controlled Substances Act establishes five schedules of
controlled substances, based primarily upon a drug's relative potential
for abuse. Drugs listed in schedules I and II are those with the
highest potential for abuse, while drugs listed in schedule V are those
with the lowest potential for abuse.
Rohypnol is currently listed in Schedule IV of the Controlled
Substances Act. In addition to rohypnol, more than twenty other
benzodiazepine substances are listed as a Schedule IV substance.
Rohypnol is not marketed or manufactured in the United States. While
not legally available for legitimate medical uses in the United States,
rohypnol is widely used for legitimate medical purposes in many
countries throughout the world.
In response to reports that the incidence of abuse of rohypnol was
increasing, the Drug Enforcement Administration instituted the formal
rescheduling process for this substance by submitting a formal request
on April 11, 1996 to the Food and Drug Administration to conduct an
evaluation of the scientific and medical evaluation of this substance.
That evaluation is ongoing.
In a letter from Health and Human Services Secretary Donna E. Shalala
to me on July 24, 1996, Secretary Shalala informed me that the goal of
the rescheduling process was to make rohypnol subject to increased
penalties for illicit use and trafficking.
Since this particular drug has become a leading agent of abuse and
the focus of this debate, I agree with Secretary Shalala that it is
appropriate to increase the penalties for illegal trafficking in
rohypnol. This bill does that.
However, I am concerned about the precedent that rescheduling would
have on this very useful class of medicines. I fee a more appropriate--
and rapid--method to respond to this crisis is to implement the
increased penalties
[[Page S9594]]
for illegal trafficking in rohypnol without having Congress circumvent
the well-established process for rescheduling a substance.
As I mentioned previously, the rescheduling process requires a
careful scientific and medical evaluation of the substance. This
evaluation is completed by the FDA in consultation with HHS' National
Institute on Drug Abuse. Congress does not have the resources or
expertise to complete such an evaluation, and by considering
rescheduling may establish an unintentional precedent with regard to
scheduling of controlled substances which we may regret later on.
I believe that the Drug-Induced Rape Prevention Act of 1996 provides
for a rapid, measured response to the problem that the abuse of
rohypnol has presented, without establishing an unintended role for
Congress with regard to the scheduling of controlled substances. I urge
that this legislation be considered when we reconvene next month.
Mr. President, I ask unanimous consent that the text of the bill and
a section-by-section analysis be place in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 2040
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 ``Drug-Induced Rape Prevention
Act of 1996''.
SEC. 2. PENALTIES FOR DISTRIBUTION OF A CONTROLLED SUBSTANCE
WITH INTENT TO RAPE.
Section 401(b) of the Controlled Substances Act is amended
by adding at the end the following:
``(7)(A) Whoever, with intent to rape an individual,
violates subsection (a) by distributing a controlled
substance to that individual without that individual's
knowledge, shall be imprisoned not more than 20 years and
fined as provided under title 18, United States Code.
``(B) As used in this paragraph--
``(i) the term `intent to rape' means the intent to
facilitate conducted defined in section 2241(b) or 2242(2) of
title 18, United States Code; and
``(ii) the term `without that individual's knowledge' means
that the individual is unaware that a substance with the
ability to alter that individual's ability to appraise
conduct or to decline participation in or communicate
unwillingness to participate in conduct is administered to
the individual.''.
SEC. 3. ADDITIONAL PENALTIES RELATING TO FLUNITRAZEPAM.
(a) General Penalties.--Section 401 of the Controlled
Substances Act (21 U.S.C. 841) is amended--
(1) in subsection (b)(1)(C), by inserting ``or 1 gram of
flunitrazepam'' after ``I or II''; and
(2) in subsection (b)(1)(D), by inserting ``or 30
milligrams of flunitrazepam,'' after ``schedule III,''.
(b) Import and Export Penalties.--
(1) Section 1009(a) of the Controlled Substances Import and
Export Act (21 U.S.C. 959(a)) is amended by inserting ``or
flunitrazepam'' after ``I or II''.
(2) Section 1010(b)(3) of the Controlled Substances Import
and Export Act (21 U.S.C. 960(b)) is amended by inserting
``or flunitrazepam'' after ``I or II,''.
(3) Section 1010(b)(4) of the Controlled Substances Import
and Export Act is amended by inserting ``(except a violation
involving flunitrazepam)'' after ``III, IV, or V,''.
(c) Sentencing Guidelines.--The United States Sentencing
Commission shall amend the Sentencing Guidelines so that one
dosage unit of flunitrazepam shall be equivalent to one gram
of marihuana for determining the offense level under the Drug
Quantity Table.
____
Section 1. Short Title: Establishes the title of the bill
as the ``Drug-Induced Rape Prevention Act of 1996.''
Section 2. Penalties for Distribution of a Controlled
Substance with Intent to Rape: Creates a specific violation
under the Controlled Substances Act (CSA) for unlawful
distribution, with the intent to rape, of a controlled
substance to a person without that person's knowledge. The
penalty will be up to 20 years without probation, and fines
will be imposed of up to two million dollars for an
individual. The definition of ``intent to rape'' is provided
in section 2241(b) or 2242(2) of Title 18, U.S.C. and is
referenced in this bill.
Section 3. Additional Penalties Relating to Flunitrazepam:
(a) General Penalties.--Provides enhanced penalties for
manufacturing, distributing, dispensing, or possessing with
the intent to manufacture, dispense or distribute large
quantities of the drug flunitrazepam (marketed under the name
``Rohypnol''). One gram or more of flunitrazepam will carry a
penalty of not more than 20 years in prison, and 30
milligrams a penalty of not more than five years in prison.
(b) Import and Export Penalties.--Extends the so-called
``long-arm'' provisions of 21 U.S.C. 959(a) to the unlawful
manufacture and distribution of flunitrazepam outside the
United States with the intent to import it unlawfully into
this country.
(c) Sentencing Guidelines.--Directs the U.S. Sentencing
Commission to amend the Sentencing Guidelines so that
flunitrazepam will be subject to the same base offense level
as schedule I or II depressants.
______
By Mr. D'AMATO (for himself, Mr. Moynihan, and Mr. Faircloth):
S. 2041. A bill to amend the Marine Protection, Research, and
Sanctuaries Act of 1972 with respect to the dumping of dredged material
in Long Island Sound, and for other purposes; to the Committee on
Environment and Public Works.
THE LONG ISLAND SOUND PRESERVATION AND PROTECTION ACT
Mr. D'AMATO. Mr. President, I rise today to introduce legislation
along with Senator Moynihan and Senator Faircloth that will help
guarantee that one of our Nation's most important estuaries is no
longer used as a dumping ground for polluted dredged material. Long
Island Sound is a spectacular body of water located between Long
Island, NY and the State of Connecticut. Unfortunately, dumping of
dredged material of questionable environmental impact has occurred in
the sound for a number of years. It is high time that Congress put an
end to this practice of willful pollution of the Sound.
The legislation that we are introducing today will prevent any
individual or any Government agency from randomly dumping sediments
into the ecologically sensitive sound. Specifically, the legislation
prevents all sediments that contain any constituents prohibited as
other than trace contaminants, as defined by Federal regulations, from
being dumped into either Long Island Sound or Block Island Sound.
Exceptions to the act can be made only in circumstances where the
Administrator of the Environmental Protection Agency shows that the
material will not cause undesirable effects to the environment or
marine life.
Last fall, the U.S. Navy dumped over 1 million cubic yards of dredged
material from the Thames River into the New London dump site located in
the sound. Independent tests of this sediment indicated that
contaminants were present in that dredged material that now lies at the
bottom of the sound's New London dump site-contaminants such as dioxin,
cadmium, pesticides, polyaromatic hydrocarbons, PCB's, and mercury.
Right now, there is a question as to the long-term impact this material
will have on the aquatic life and the environment in this area. Such
concerns should not have to occur. It has taken years to come as far as
we have in cleaning up Long Island Sound--we should not jeopardize
those gains by routinely allowing the dumping of polluted sediments in
these waters.
Over $1.2 billion in Federal, State, and local funds have been spent
in the State of New York in the last quarter century combating
pollution in the sound. However, over the last 25 years, we have
continued to look the other way when it comes to dumping in the sound.
Such actions are counterproductive in our efforts to restore the Sound
for recreational activities such as swimming and boating as well as the
economic benefits of sport fishing and the shellfish industry all of
which bring more than $5.5 billion to the region each year. We can and
must change our current direction. With the passage of this
legislation, I am confident that we will do so, and the Long Island
Sound will move forward on the road to recovery. I urge my colleagues
to join us in cosponsoring this bill, and I encourage its swift passage
in the Senate.
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. 2041
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 ``Long Island Sound
Preservation and Protection Act of 1996''.
SEC. 2. DUMPING OF DREDGED MATERIALS IN LONG ISLAND SOUND.
Section 106(f) of the Marine Protection, Research, and
Sanctuaries Act of 1972 (33 U.S.C. 1416(f)) is amended to
read as follows:
[[Page S9595]]
``(f) Dumping of Dredged Material in Long Island Sound.--
``(1) In general.--No dredged material from any Federal or
non-Federal project that contains any of the constituents
prohibited as other than trace contaminants (as defined by
the Federal ocean dumping criteria stated in section 227.6 of
title 40, Code of Federal Regulations) may be dumped in Long
Island Sound or Block Island Sound except in a case in which
it is demonstrated to the Administrator, and the
Administrator certifies by publication in the Federal
Register, that the dumping of the dredged material containing
the constituents will not cause significant undesirable
effects, including the threat associated with bioaccumulation
of such constituents in marine organisms.
(2) Federal projects exceeding 25,000 yards.--In addition
to other provisions of law and notwithstanding the specific
exclusion relating to dredged material of the first sentence
in section 102(a), any dumping of dredged material in Long
Island Sound from a Federal project (or pursuant to Federal
authorization) by a non-Federal applicant in a quantity
exceeding 25,000 cubic yards shall comply with the criteria
established under the second sentence of section 102(a)
relating to the effects of dumping.
``(3) Relation to other law.--Subsection (d) shall not
apply to this subsection.''.
______
By Mr. MACK (for himself, Mr. Bond, Mr. D'Amato, and Mr.
Bennett):
S. 2042. A bill to reform the multifamily rental assisted housing
programs of the Federal Government, maintain the affordability and
availability of low-income housing, and for other purposes; to the
Committee on Banking, Housing, and Urban Affairs.
the multifamily assisted housing reform and affordability act of 1996
Mr. MACK. Mr. President, I am pleased to introduce, on behalf of
Senator D'Amato, Bond, and Bennett, the Multifamily Assisted Housing
Reform and Affordability Act of 1996. This bill is a serious effort to
reform the Nation's assisted and insured multifamily housing portfolio
in a responsible manner that balances both fiscal and public policy
goals. This legislation will save scarce Federal subsidy dollars while
maintaining the affordability and availability of decent and safe
rental housing.
About 20 years ago, the Federal Government encouraged private
developers to construct affordable rental housing by providing mortgage
insurance through the Federal Housing Administration [FHA] and rental
assistance through the Department of Housing and Urban Development's
[HUD] project-based Section 8 programs. In addition, tax incentives for
the development of low-income housing were provided through the tax
code until 1986.
The combination of these financial incentives resulted in the
creation of thousands of decent, safe, and affordable housing
properties but, at a great cost to the American taxpayer. Flaws in the
Section 8 rental assistance program allowed owners to receive more
Federal dollars in rental subsidy than was necessary to maintain
properties as decent and affordable rental housing. A recent HUD study
found that almost two-thirds of assisted properties have contract rents
greater than comparable market rents. Like the severely distressed
public housing stock, some of these Section 8 projects have become
targets and havens for crime and drug activities. Thus, in some cases,
taxpayers are paying costly subsidies for inferior housing. We believe
that a policy that pays excessive rental subsidies for housing is not
fair to the American taxpayer, and it cannot be sustained in the
current budget environment.
It is critical that this legislation be enacted this year because in
the next several years, a majority of the Section 8 contracts on the
8,500 FHA-insured properties will expire. If contracts continue to be
renewed at existing levels, the cost of renewing these contracts will
grow from $1.2 billion in fiscal year 1997 to almost $4 billion in
fiscal year 2000 and $8 billion 10 years from now. However, if these
project-based assistance contracts are not renewed most of the FHA-
insured mortgages--with an unpaid principal balance of $18 billion--
will default and result in claims on the FHA insurance funds. This
could lead to more severe actions such as foreclosure, which will
adversely affect residents and communities.
Like public housing, federally assisted and insured housing provides
critical housing to almost 1.6 million American families. There are
other similarities to public housing. For one, the average annual
income of residents that reside in project-based housing is less than
$7,000. A significant percentage of residents are elderly or persons
with disabilities. Many of these developments are located in rural
areas where no other rental housing exists. some of these properties
serve as ``anchors'' of neighborhoods where the economic stability of
the neighborhoods is dependent upon the viability of these properties.
Unfortunately for residents and communities, HUD does not have the
ability to administer and oversee its portfolio of multifamily housing
properties. The General Accounting Office and the HUD Office of
Inspector General [IG] have found that even though HUD has various
enforcement tools to ensure that properties are properly maintained,
poor management information systems and ineffective oversight of
properties have impeded HUD's ability to identify problems and pursue
enforcement actions in a timely fashion. HUD is further hampered by the
lack of adequate staffing and inadequately trained staff. For example,
the IG found that the average workload for a HUD loan servicer ranged
from 28 projects per servicer to 105 projects per servicer. In
comparison, State housing finance agencies averaged 12 to 16 projects
per servicer.
The Multifamily Assisted Housing Reform and Affordability Act
addresses these issues through a new comprehensive structure that
provides a wide variety of tools to address the spiraling costs of
Section 8 assistance without harming residents or communities. The bill
will reduce the long-term ongoing costs of Federal subsidies by
restructuring the underlying debt insured by FHA. This restructuring
process will reduce the subsidy needs and costs of the properties and
minimizes adverse tax consequences to good owners.
In recognition of HUD's inability to manage and service its housing
inventory, this legislation would transfer the functions and
responsibilities to capable State and local housing agencies who would
act as participating administrative entities in managing this program.
Incentives would be provided to these entities to ensure that the
American taxpayer is paying the least amount of money to provide
decent, safe, and affordable housing. Any amount of incentives provided
to State and local entities would only be used for low-income housing
purposes.
Horror stories of owners that have clearly violated housing quality
standards would no longer be tolerated. Our bill screens out bad owners
and managers and nonviable projects from the inventory and provides
tougher and more effective enforcement tools that will minimize fraud
and abuse of FHA insurance and assisted housing programs.
Lastly, our bill provides tools to recapitalize the assisted stock
that suffer from deferred maintenance and empowers residents by
providing for meaningful community and resident input into the process.
Residents would also be empowered through opportunities to purchase
properties.
Mr. President, I would like to reemphasize that it is critical that
we address this issue this year. Delays will only harm the assisted
housing stock, its residents and communities, and the financial
stability of the FHA insurance funds. Further, HUD only has limited
statutory authority to renew these contracts. In most cases, it cannot
and does not have the capability to deal with this housing portfolio
under current law.
This legislation will protect the Federal Government's investment in
assisted housing and ensure that participating administrative entities
are held accountable for their activities. It is also our goal that
this process will ensure the long-term viability of these projects with
minimal Federal involvement. It is a real effort to reduce the costs of
the Federal Government while recognizing the needs of low-income
families and communities throughout the Nation.
Mr. President, I ask unanimous consent that a summary and the 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. 2042
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
[[Page S9596]]
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the
``Multifamily Assisted Housing Reform and Affordability Act
of 1996''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--FHA-INSURED MULTIFAMILY HOUSING MORTGAGE AND HOUSING
ASSISTANCE RESTRUCTURING
Sec. 101. Findings and purposes.
Sec. 102. Definitions.
Sec. 103. Authority of participating administrative entities.
Sec. 104. Mortgage restructuring and rental assistance sufficiency
plan.
Sec. 105. Section 8 renewals and long-term affordability commitment by
owner of project.
Sec. 106. Prohibition on restructuring.
Sec. 107. Restructuring tools.
Sec. 108. Shared savings incentive.
Sec. 109. Management standards.
Sec. 110. Monitoring of compliance.
Sec. 111. Review.
Sec. 112. GAO audit and review.
Sec. 113. Regulations.
Sec. 114. Technical and conforming amendments.
Sec. 115. Termination of authority.
TITLE II--ENFORCEMENT PROVISIONS
Sec. 201. Implementation.
Subtitle A--FHA Single Family and Multifamily Housing
Sec. 211. Authorization to immediately suspend mortgagees.
Sec. 212. Extension of equity skimming to other single family and
multifamily housing programs.
Sec. 213. Civil money penalties against mortgagees, lenders, and other
participants in FHA programs.
Subtitle B--FHA Multifamily
Sec. 220. Civil money penalties against general partners, officers,
directors, and certain managing agents of multifamily
projects.
Sec. 221. Civil money penalties for noncompliance with section 8 HAP
contracts.
Sec. 222. Extension of double damages remedy.
Sec. 223. Obstruction of Federal audits.
TITLE I--FHA-INSURED MULTIFAMILY HOUSING MORTGAGE AND HOUSING
ASSISTANCE RESTRUCTURING
SEC. 101. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) there exists throughout the Nation a need for decent,
safe, and affordable housing;
(2) as of the date of enactment of this Act, it is
estimated that--
(A) the insured multifamily housing portfolio of the
Federal Housing Administration consists of 14,000 rental
properties, with an aggregate unpaid principal mortgage
balance of $38,000,000,000; and
(B) approximately 10,000 of these properties contain
housing units that are assisted with project-based rental
assistance under section 8 of the United States Housing Act
of 1937;
(3) FHA-insured multifamily rental properties are a major
Federal investment, providing affordable rental housing to an
estimated 2,000,000 low- and very low-income families;
(4) approximately 1,600,000 of these families live in
dwelling units that are assisted with project-based rental
assistance under section 8 of the United States Housing Act
of 1937;
(5) a substantial number of housing units receiving
project-based assistance have rents that are higher than the
rents of comparable, unassisted rental units in the same
housing rental market;
(6) many of the contracts for project-based assistance will
expire during the several years following the date of
enactment of this Act;
(7) it is estimated that--
(A) if no changes in the terms and conditions of the
contracts for project-based assistance are made before fiscal
year 2000, the cost of renewing all expiring rental
assistance contracts under section 8 of the United States
Housing Act of 1937 for both project-based and tenant-based
rental assistance will increase from approximately
$4,000,000,000 in fiscal year 1997 to over $17,000,000,000 by
fiscal year 2000 and some $23,000,000,000 in fiscal year
2006;
(B) of those renewal amounts, the cost of renewing project-
based assistance will increase from $1,200,000,000 in fiscal
year 1997 to almost $8,000,000,000 by fiscal year 2006; and
(C) without changes in the manner in which project-based
rental assistance is provided, renewals of expiring contracts
for project-based rental assistance will require an
increasingly larger portion of the discretionary budget
authority of the Department of Housing and Urban Development
in each subsequent fiscal year for the foreseeable future;
(8) absent new budget authority for the renewal of expiring
rental contracts for project-based assistance, many of the
FHA-insured multifamily housing projects that are assisted
with project-based assistance will likely default on their
FHA-insured mortgage payments, resulting in substantial
claims to the FHA General Insurance Fund and Special Risk
Insurance Funds;
(9) more than 15 percent of federally assisted multifamily
housing projects are physically or financially distressed,
including a number which suffer from mismanagement;
(10) due to Federal budget constraints, the downsizing of
the Department of Housing and Urban Development, and
diminished administrative capacity, the Department lacks the
ability to ensure the continued economic and physical well-
being of the stock of federally insured and assisted
multifamily housing projects; and
(11) the economic, physical, and management problems facing
the stock of federally insured and assisted multifamily
housing projects will be best served by reforms that--
(A) reduce the cost of Federal rental assistance, including
project-based assistance, to these projects by reducing the
debt service and operating costs of these projects while
retaining the low-income affordability and availability of
this housing;
(B) address physical and economic distress of this housing
and the failure of some project managers and owners of
projects to comply with management and ownership rules and
requirements; and
(C) transfer and share many of the loan and contract
administration functions and responsibilities of the
Secretary with capable State, local, and other entities.
(b) Purposes.--The purposes of this title are--
(1) to preserve low-income rental housing affordability and
availability while reducing the long-term costs of project-
based assistance;
(2) to reform the design and operation of Federal rental
housing assistance programs, administered by the Secretary,
to promote greater multifamily housing project operating and
cost efficiencies;
(3) to encourage owners of eligible multifamily housing
projects to restructure their FHA-insured mortgages and
project-based assistance contracts in a manner which is
consistent with this title before the year in which the
contract expires;
(4) to streamline and improve federally insured and
assisted multifamily housing project oversight and
administration;
(5) to resolve the problems affecting financially and
physically troubled federally insured and assisted
multifamily housing projects through cooperation with
residents, owners, State and local governments, and other
interested entities and individuals; and
(6) to grant additional enforcement tools to use against
those who violate agreements and program requirements, in
order to ensure that the public interest is safeguarded and
that Federal multifamily housing programs serve their
intended purposes.
SEC. 102. DEFINITIONS.
For purposes of this title, the following definitions shall
apply:
(1) Comparable properties.--The term ``comparable
properties'' means properties that are--
(A) similar to the eligible multifamily housing project in
neighborhood (including risk of crime), location, access,
street appeal, age, property size, apartment mix, physical
configuration, property amenities, inapartment rental
amenities, and utilities;
(B) unregulated by contractual encumbrances or local rent-
control laws; and
(C) occupied predominantly by renters who receive no rent
supplements or rental assistance.
(2) Eligible multifamily housing project.--The term
``eligible multifamily housing project'' means a property
consisting of more than 4 dwelling units--
(A) with rents which, on an average per unit or per room
basis, exceed the fair market rent of the same market area,
as determined by the Secretary;
(B) that is covered in whole or in part by a contract for
project-based assistance under--
(i) the new construction and substantial rehabilitation
program under section 8(b)(2) of the United States Housing
Act of 1937 (as in effect before October 1, 1983);
(ii) the property disposition program under section 8(b) of
the United States Housing Act of 1937;
(iii) the moderate rehabilitation program under section
8(e)(2) of the United States Housing Act of 1937;
(iv) the project-based certificate program under section 8
of the United States Housing Act of 1937;
(v) section 23 of the United States Housing Act of 1937 (as
in effect before January 1, 1975);
(vi) the rent supplement program under section 101 of the
Housing and Urban Development Act of 1965; or
(vii) section 8 of the United States Housing Act of 1937,
following conversion from assistance under section 101 of the
Housing and Urban Development Act of 1965; and
(C) financed by a mortgage insured under the National
Housing Act.
(3) Expiring contract.--The term ``expiring contract''
means a project-based assistance contract attached to an
eligible multifamily housing project which, under the terms
of the contract, will expire.
(4) Expiration date.--The term ``expiration date'' means
the date on which an expiring contract expires.
(5) Fair market rent.--The term ``fair market rent'' means
the fair market rental established under section 8(c) of the
United States Housing Act of 1937.
(6) Knowing or knowingly.--The term ``knowing'' or
``knowingly'' means having actual knowledge of or acting with
deliberate ignorance or reckless disregard.
(7) Low-income families.--The term ``low-income families''
has the same meaning as provided under section 3(b)(2) of the
United States Housing Act of 1937.
[[Page S9597]]
(8) Multifamily housing management agreement.--The term
``multifamily housing management agreement'' means the
agreement entered into between the Secretary and a
participating administrative entity, as provided under
section 103 of the title.
(9) Participating administrative entity.--The term
``participating administrative entity'' means a public
agency, including a State housing finance agency or local
housing agency, which meets the requirements under section
103(b).
(10) Project-based assistance.--The term ``project-based
assistance'' means rental assistance under section 8 of the
United States Housing Act of 1937 that is attached to a
multifamily housing project.
(11) Renewal.--The term ``renewal'' means the replacement
of an expiring Federal rental contract with a new contract
under section 8 of the United States Housing Act of 1937,
consistent with the requirements of this title.
(12) Secretary.--The term ``Secretary'' means the Secretary
of Housing and Urban Development.
(13) State.--The term ``State'' has the same meaning as in
section 104 of the Cranston-Gonzalez National Affordable
Housing Act.
(14) Tenant-based assistance.--The term ``tenant-based
assistance'' has the same meaning as in section 8(f) of the
United States Housing Act of 1937.
(15) Unit of general local government.--The term ``unit of
general local government'' has the same meaning as in section
104 of the Cranston-Gonzalez National Affordable Housing Act.
(16) Very low-income family.--The term ``very low-income
family'' has the same meaning as in section 3(b) of the
United States Housing Act of 1937.
SEC. 103. AUTHORITY OF PARTICIPATING ADMINISTRATIVE ENTITIES.
(a) Participating Administrative Entities.--
(1) In general.--The Secretary shall enter into multifamily
housing management agreements with participating
administrative entities for the implementation of mortgage
restructuring and rental assistance sufficiency plans to
restructure FHA-insured multifamily housing mortgages, in
order to--
(A) reduce the costs of current and expiring contracts for
assistance under section 8 of the United States Housing Act
of 1937;
(B) address financially and physically troubled projects;
and
(C) correct management and ownership deficiencies.
(2) Multifamily housing management agreements.--Each
multifamily housing management agreement entered into under
this subsection shall--
(A) be a cooperative agreement to establish the obligations
and requirements between the Secretary and the participating
administrative entity;
(B) identify the eligible multifamily housing projects or
groups of projects for which the participating administrative
entity is responsible for assisting in developing and
implementing approved mortgage workout and rental assistance
sufficiency plans under section 104;
(C) require the participating administrative entity to
review and certify to the accuracy and completeness of a
comprehensive needs assessment submitted by the owner of an
eligible multifamily housing project, in accordance with the
information and data requirements of section 403 of the
Housing and Community Development Act of 1992, including such
other data, information, and requirements as the Secretary
may require to be included as part of the comprehensive needs
assessment;
(D) identify the responsibilities of both the participating
administrative entity and the Secretary in implementing a
mortgage restructuring and rental assistance sufficiency
plan, including any actions proposed to be taken under
section 106 or 107;
(E) require each mortgage restructuring and rental
assistance sufficiency plan prepared in accordance with the
requirements of section 104 for each eligible multifamily
housing project;
(F) indemnify the participating administrative entity
against lawsuits and penalties for actions taken pursuant to
the agreement, excluding actions involving gross negligence
or willful misconduct; and
(G) include compensation for all reasonable expenses
incurred by the participating administrative entity necessary
to perform its duties under this Act, including such
incentives as may be authorized under section 108.
(b) Selection of Participating Administrative Entity.--
(1) Selection criteria.--The Secretary shall select a
participating administrative entity based on the following
criteria--
(A) is located in the State or local jurisdiction in which
the eligible multifamily housing project or projects are
located;
(B) has demonstrated expertise in the development or
management of low-income affordable rental housing;
(C) has a history of stable, financially sound, and
responsible administrative performance;
(D) has demonstrated financial strength in terms of asset
quality, capital adequacy, and liquidity; and
(E) is otherwise qualified, as determined by the Secretary,
to carry out the requirements of this title.
(2) Selection of mortgage risk-sharing entities.--Any State
housing finance agency or local housing agency which is
designated as a qualified participating entity under section
542 of the Housing and Community Development Act of 1992
shall automatically qualify as a participating administrative
entity under this section.
(3) Alternative administrators.--With respect to any
eligible multifamily housing project that is located in a
State or local jurisdiction in which the Secretary determines
that a participating administrative entity is not located, is
unavailable, or does not qualify, the Secretary shall
either--
(A) carry out the requirements of this title with respect
to that eligible multifamily housing project; or
(B) contract with other qualified entities that meet the
requirements of subsection (b), with the exception of
subsection (b)(1)(A), the authority to carry out all or a
portion of the requirements of this title with respect to
that eligible multifamily housing project.
(4) Preference for state housing finance agencies as
participating administrative entities.--For each State in
which eligible multifamily housing projects are located, the
Secretary shall give preference to the housing finance agency
of that State or, if a State housing finance agency is
unqualified or has declined to participate, a local housing
agency to act as the participating administrative entity for
that State or for the jurisdiction in which the agency
located.
(5) State portfolio requirements.--
(A) In general.--If the housing finance agency of a State
is selected as the participating administrative entity, that
agency shall be responsible for all eligible multifamily
housing projects in that State, except that a local housing
agency selected as a participating administrative entity
shall be responsible for all eligible multifamily housing
projects in the jurisdiction of the agency.
(B) Delegation.--A participating administrative entity may
delegate or transfer responsibilities and functions under
this title to one or more interested and qualified public
entities.
(C) Waiver.--A State housing finance agency or local
housing agency may request a waiver from the Secretary from
the requirements of this paragraph for good cause.
SEC. 104. MORTGAGE RESTRUCTURING AND RENTAL ASSISTANCE
SUFFICIENCY PLAN.
(a) In General.--
(1) Development of procedures and requirements.--The
Secretary shall develop procedures and requirements for the
submission of a mortgage restructuring and rental assistance
sufficiency plan for each eligible multifamily housing
project with an expiring contract.
(2) Terms and conditions.--Each mortgage restructuring and
rental assistance sufficiency plan submitted under this
subsection shall be developed at the initiative of an owner
of an eligible multifamily housing project with a
participating administrative entity, under such terms and
conditions as the Secretary shall require.
(3) Consolidation.--Mortgage restructuring and rental
assistance sufficiency plans submitted under this subsection
may be consolidated as part of an overall strategy for more
than one property.
(b) Notice Requirements.--
(1) Establishment.--
(A) In general.--The Secretary shall establish notice
procedures and hearing requirements for tenants and owners
concerning the dates for the expiration of project-based
assistance contracts for any eligible multifamily housing
project.
(B) 12-month notice.--Under the hearing requirements
established under this paragraph, the owner shall provide 12
months notice in writing before the expiration of the initial
project-based assistance contract to tenants of any eligible
multifamily housing project.
(2) Extension of contract term.--Subject to agreement by a
project owner, the Secretary may extend the term of any
expiring contract or provide a section 8 contract with rent
levels set in accordance with subsection (f)(2) for a period
sufficient to facilitate the implementation of a mortgage
restructuring and rental assistance sufficiency plan, as
determined by the Secretary.
(c) Tenant Rent Protection.--If the owner of a project with
an expiring Federal rental assistance contract does not agree
to extend the contract, the Secretary shall make tenant-based
assistance available to tenants residing in units assisted
under the expiring contract at the time of expiration.
(d) Mortgage Restructuring and Rental Assistance
Sufficiency Plan.--Each mortgage restructuring and rental
assistance sufficiency plan shall--
(1) except as otherwise provided, restructure the project-
based assistance rents for the eligible multifamily housing
property in a manner consistent with subsection (e);
(2) require the owner or purchaser of an eligible
multifamily mortgage housing project with an expiring
contract to submit to the participating administrative entity
a comprehensive housing needs assessment, in accordance with
the information and data requirements of section 403 of the
Housing and Community Development Act of 1992, including such
other data, information, and requirements as the Secretary
may require to be included as part of the comprehensive needs
assessment;
(3) require the owner or purchaser of the project to
provide or contract for competent management of the project;
[[Page S9598]]
(4) require the owner or purchaser of the project to take
such actions as may be necessary to rehabilitate, maintain
adequate reserves, and to maintain the project in decent and
safe condition, based on housing quality standards
established by--
(A) the Secretary; or
(B) local housing codes or codes adopted by public housing
agencies that--
(i) meet or exceed housing quality standards established by
the Secretary; and
(ii) do not severely restrict housing choice;
(5) require the owner or purchaser of the project to
maintain affordability and use restrictions for 20 years, as
the participating administrative entity determines to be
appropriate, which restrictions shall be consistent with the
long-term physical and financial viability character of the
project as affordable housing;
(6) meet subsidy layering requirements under guidelines
established by the Secretary; and
(7) require the owner or purchaser of the project to meet
such other requirements as the Secretary determines to be
appropriate.
(e) Tenant and Community Participation and Capacity
Building.--
(1) Procedures.--
(A) In general.--The Secretary shall establish procedures
to provide an opportunity for tenants of the project and
other affected parties, including local government and the
community in which the project is located, to participate
effectively in the restructuring process established by this
title.
(B) Criteria.--These procedures shall include--
(i) the rights to timely and adequate written notice of the
proposed decisions of the owner or the Secretary or
participating administrative entity;
(ii) timely access to all relevant information (except for
information determined to be proprietary under standards
established by the Secretary);
(iii) an adequate period to analyze this information and
provide comments to the Secretary or participating
administrative entity (which comments shall be taken into
consideration by the Administrator); and
(iv) if requested, a meeting with a representative of the
Administrator and other affected parties.
(2) Procedures required.--The procedures established under
paragraph (1) shall permit tenant, local government, and
community participation in at least the following decisions
or plans specified in this title:
(A) The Multifamily Housing Management Agreement.
(B) Any proposed expiration of the section 8 contract.
(C) The project's eligibility for restructuring pursuant to
section 106 and the mortgage restructuring and rental
assistance sufficiency plan pursuant to section 104.
(D) Physical inspections.
(E) Capital needs and management assessments, whether
before or after restructuring.
(F) Any proposed transfer of the project.
(3) Funding.--
(A) In general.--The Secretary may provide not more than
$10,000,000 annually in funding to tenant groups, nonprofit
organizations, and public entities for building the capacity
of tenant organizations, for technical assistance in
furthering any of the purposes of this title (including
transfer of developments to new owners) and for tenant
services, from those amounts made available under
appropriations Acts for implementing this title.
(B) Allocation.--The Secretary may allocate any funds made
available under subparagraph (A) through existing technical
assistance programs and procedures developed pursuant to any
other Federal law, including the Low-Income Housing
Preservation and Resident Homeownership Act of 1990 and the
Multifamily Property Disposition Reform Act of 1994.
(C) Prohibition.--None of the funds made available under
subparagraph (A) may be used directly or indirectly to pay
for any personal service, advertisement, telegram, telephone,
letter, printed or written matter, or other device, intended
or designed to influence in any manner a Member of Congress,
to favor or oppose, by vote or otherwise, any legislation or
appropriation by the Congress, whether before or after the
introduction of any bill or resolution proposing such
legislation or appropriation.
(f) Rent Levels.--
(1) In general.--Except as provided in paragraph (2), each
mortgage restructuring and rental assistance sufficiency plan
pursuant to the terms, conditions, and requirements of this
title shall establish for units assisted with project-based
assistance in eligible multifamily housing projects adjusted
rent levels that--
(A) are equivalent to rents derived from comparable
properties, if--
(i) the participating administrative entity makes the rent
determination not later than 60 days after the owner submits
a mortgage restructuring and rental assistance sufficiency
plan; and
(ii) the market rent determination is based on not less
than 2 comparable properties; or
(B) if those rents cannot be determined, are equal to 90
percent of the fair market rents for the relevant market
area.
(2) Exceptions.--
(A) In general.--A contract under this section may include
rent levels that exceed the rent level described in paragraph
(1) at rent levels that do not exceed 120 percent of the
local fair market rent if the participating administrative
entity--
(i) determines, that the housing needs of the tenants and
the community cannot be adequately addressed through
implementation of the rent limitation required to be
established through a mortgage restructuring and rental
assistance sufficiency plan under paragraph (1); and
(ii) follows the procedures under paragraph (3).
(B) Exception rents.--In any fiscal year, a participating
administrative entity may approve exception rents on not more
than 20 percent of all units in the geographic jurisdiction
of the entity with expiring contracts in that fiscal year,
except that the Secretary may waive this ceiling upon a
finding of special need in the geographic area served by the
participating administrative entity.
(3) Rent levels for exception projects.--For purposes of
this section, a project eligible for an exception rent shall
receive a rent calculation on the actual and projected costs
of operating the project, at a level that provides income
sufficient to support a budget-based rent that consists of--
(A) the debt service of the project;
(B) the operating expenses of the project, as determined by
the participating administrative entity, including--
(i) contributions to adequate reserves;
(ii) the costs of maintenance and necessary rehabilitation;
and
(iii) other eligible costs permitted under section 8 of the
United States Housing Act of 1937;
(C) an adequate allowance for potential operating losses
due to vacancies and failure to collect rents, as determined
by the participating administrative entity;
(D) an allowance for a reasonable rate of return to the
owner or purchaser of the project, as determined by the
participating administrative entity, which shall not exceed 7
percent of the return on equity; and
(E) other expenses determined by the participating
administrative entity to be necessary for the operation of
the project.
(g) Exemptions From Restructuring.--Subject to section 106,
the Secretary shall renew project-based assistance contracts
at existing rents if--
(1) the project was financed through obligations such that
the implementation of a mortgage restructuring and rental
assistance plan under this section is inconsistent with
applicable law or agreements governing such financing;
(2) in the determination of the Secretary or the
participating administrative entity, the refinancing would
not result in significant savings to the Secretary; or
(3) the project has an expiring contract under section 8 of
the United States Housing Act of 1937 but does not qualify as
an eligible multifamily project pursuant to section 102(6) of
this title.
SEC. 105. SECTION 8 RENEWALS AND LONG-TERM AFFORDABILITY
COMMITMENT BY OWNER OF PROJECT.
(a) Section 8 Renewals of Restructured Projects.--Subject
to the availability of amounts provided in advance in
appropriations Acts, the Secretary shall enter into contracts
with participating administrative entities pursuant to which
the participating administrative entity shall offer to renew
or extend an expiring section 8 contract on an eligible
multifamily project, and the owner of the project shall
accept the offer, provided the initial renewal is in
accordance with the terms and conditions specified in the
mortgage restructuring and rental sufficiency plan.
(b) Required Commitment.--After the initial renewal of a
section 8 contract pursuant to this section, the owner shall
accept each offer made pursuant to subsection (a) to renew
the contract, for a period of 20 years from the date of the
initial renewal, if the offer to renew is on terms and
conditions specified in the mortgage restoration and rental
sufficiency plan.
SEC. 106. PROHIBITION ON RESTRUCTURING.
(a) Prohibition on Restructuring.--The Secretary shall not
consider any mortgage restructuring and rental assistance
sufficiency plan or request for contract renewal if the
participating administrative entity determines that--
(1) the owner or purchaser of the project has engaged in
material adverse financial or managerial actions or omissions
with regard to this project (or with regard to other similar
projects if the Secretary determines that those actions or
omissions constitute a pattern of mismanagement that would
warrant suspension or debarment by the Secretary),
including--
(A) knowingly and materially violating any Federal, State,
or local law or regulation with regard to this project or any
other federally assisted project;
(B) knowingly and materially breaching a contract for
assistance under section 8 of the United States Housing Act
of 1937;
(C) knowingly and materially violating any applicable
regulatory or other agreement with the Secretary or a
participating administrative entity;
(D) repeatedly failing to make mortgage payments at times
when project income was sufficient to maintain and operate
the property;
(E) materially failing to maintain the property according
to housing quality standards after receipt of notice and a
reasonable opportunity to cure; or
(F) committing any actions or omissions that would warrant
suspension or debarment by the Secretary;
(2) the owner or purchaser of the property materially
failed to follow the procedures
[[Page S9599]]
and requirements of this title, after receipt of notice and
an opportunity to cure; or
(3) the poor condition of the project cannot be remedied in
a cost effective manner, as determined by the participating
administrative entity.
(b) Opportunity To Dispute Findings.--
(1) In general.--During the 30-day period beginning on the
date on which the owner or purchaser of an eligible
multifamily housing project receives notice of a rejection
under subsection (a) or of a mortgage restructuring and
rental assistance sufficiency plan under section 104, the
Secretary or participating administrative entity shall
provide that owner or purchaser with an opportunity to
dispute the basis for the rejection and an opportunity to
cure.
(2) Affirmation, modification, or reversal.--
(A) In general.--After providing an opportunity to dispute
under paragraph (1), the Secretary or the participating
administrative entity may affirm, modify, or reverse any
rejection under subsection (a) or rejection of a mortgage
restructuring and rental assistance sufficiency plan under
section 104.
(B) Reasons for decision.--The Secretary or the
participating administrative entity, as applicable, shall
identify the reasons for any final decision under this
paragraph.
(C) Review process.--The Secretary shall establish an
administrative review process to appeal any final decision
under this paragraph.
(c) Final Determination.--Any final determination under
this section shall not be subject to judicial review.
(d) Displaced Tenants.--Subject to the availability of
amounts provided in advance in appropriations Acts, for any
low-income tenant that is residing in a project or receiving
assistance under section 8 of the United States Housing Act
of 1937 at the time of rejection under this section, that
tenant shall be provided with tenant-based assistance and
reasonable moving expenses, as determined by the Secretary.
(e) Transfer of Property.--For properties disqualified from
the consideration of a mortgage restructuring and rental
assistance sufficiency plan under this section because of
actions by an owner or purchaser in accordance with paragraph
(1) or (2) of subsection (a), the Secretary shall establish
procedures to facilitate the voluntary sale or transfer of a
property as part of a mortgage restructuring and rental
assistance sufficiency plan, with a preference for tenant
organizations and tenant-endorsed community-based nonprofit
and public agency purchasers meeting such reasonable
qualifications as may be established by the Secretary.
SEC. 107. RESTRUCTURING TOOLS.
(a) Restructuring Tools.--For purposes of this title, and
to the extent these actions are consistent with this section,
an approved mortgage restructuring and assistance sufficiency
plan may include one or more of the following:
(1) Full or partial payment of claim.--Making a full
payment of claim or partial payment of claim under section
541(b) of the National Housing Act.
(2) Refinancing of debt.--Refinancing of all or part of the
debt on a project, if the refinancing would result in
significant subsidy savings under section 8 of the United
States Housing Act of 1937.
(3) Mortgage insurance.--Providing FHA multifamily mortgage
insurance, reinsurance or other credit enhancement
alternatives, including multifamily risk-sharing mortgage
programs, as provided under section 542 of the Housing and
Community Development Act of 1992. Any limitations on the
number of units available for mortgage insurance under
section 542 shall not apply to eligible multifamily housing
projects. Any credit subsidy costs of providing mortgage
insurance shall be paid from the General Insurance Fund and
the Special Risk Insurance Fund.
(4) Credit enhancement.--Any additional State or local
mortgage credit enhancements and risk-sharing arrangements
may be established with State or local housing finance
agencies, the Federal Housing Finance Board, the Federal
National Mortgage Association, and the Federal Home Loan
Mortgage Corporation, to a modified first mortgage.
(5) Compensation of third parties.--Entering into
agreements, incurring costs, or making payments, as may be
reasonably necessary, to compensate the participation of
participating administrative entities and other parties in
undertaking actions authorized by this title. Upon request,
participating administrative entities shall be considered to
be contract administrators under section 8 of the United
States Housing Act of 1937 for purposes of any contracts
entered into as part of an approved mortgage restructuring
and rental assistance sufficiency plan.
(6) Residual receipts.--Applying any acquired residual
receipts to maintain the long-term affordability and physical
condition of the property. The participating administrative
entity may expedite the acquisition of residual receipts by
entering into agreements with owners of housing covered by an
expiring contract to provide an owner with a share of the
receipts, not to exceed 10 percent.
(7) Rehabilitation needs.--Assisting in addressing the
necessary rehabilitation needs of the project, except that
assistance under this paragraph shall not exceed the
equivalent of $5,000 per unit for those units covered with
project-based assistance. Rehabilitation may be paid from the
provision of grants from residual receipts or, as provided in
appropriations Acts, from budget authority provided for
increases in the budget authority for assistance contracts
under section 8 of the United States Housing Act of 1937, or
through the debt restructuring transaction. Each owner that
receives rehabilitation assistance shall contribute not less
than 25 percent of the amount of rehabilitation assistance
received.
(8) Mortgage restructuring.--Restructuring mortgages to
provide a structured first mortgage to cover rents at levels
that are established in section 104(f) and a second mortgage
equal to the difference between the restructured first
mortgage and the mortgage balance of the eligible multifamily
housing project at the time of restructuring. The second
mortgage shall bear interest at a rate not to exceed the
applicable Federal rate for a term not to exceed 40 years. If
the first mortgage remains outstanding, payments of interest
and principal on the second mortgage shall be made from all
excess project income only after the payment of all
reasonable and necessary operating expenses (including
deposits in a reserve for replacement), debt service on the
first mortgage, and such other expenditures as may be
approved by the Secretary. Except as required by the
preceding sentence, during the period in which the first
mortgage remains outstanding, no payments of interest or
principal shall be required on the second mortgage. The
second mortgage shall be assumable by any subsequent
purchaser of any multifamily housing project, pursuant to
guidelines established by the Secretary. The principal and
accrued interest due under the second mortgage shall be fully
payable upon disposition of the property, unless the mortgage
is assumed under the preceding sentence. The owner shall
begin repayment of the second mortgage upon full payment of
the first mortgage in equal monthly installments in an amount
equal to the monthly principal and interest payments formerly
paid under the first mortgage. The principal and interest of
a second mortgage shall be immediately due and payable upon a
finding by the Secretary that an owner has failed to
materially comply with this title or any requirements of the
United States Housing Act of 1937 as those requirements apply
to the applicable project. Any credit subsidy costs of
providing a second mortgage shall be paid from the General
Insurance Fund and the Special Risk Insurance Fund.
(b) Role of FNMA and FHLMC.--Section 1335 of the Federal
Housing Enterprises Financial Safety and Soundness Act of
1992 (12 U.S.C. 4565) is amended--
(1) in paragraph (3), by striking ``and'' at the end;
(2) paragraph (4), by striking the period at the end and
inserting ``; and'';
(3) by striking ``To meet'' and inserting the following:
``(a) In General.--To meet''; and
(4) by adding at the end the following:
``(5) assist in maintaining the affordability of assisted
units in eligible multifamily housing projects with expiring
contracts, as defined under the Multifamily Assisted Housing
Reform and Affordability Act of 1996.
``(b) Affordable Housing Goals.--Actions taken under
subsection (a)(5) shall constitute part of the contribution
of each entity in meeting their affordable housing goals
under sections 1332, 1333, and 1334 for any fiscal year, as
determined by the Secretary.''.
(c) Prohibition on Equity Sharing by the Secretary.--The
Secretary is prohibited from participating in any equity
agreement or profit-sharing agreement in conjunction with any
eligible multifamily housing project.
SEC. 108. SHARED SAVINGS INCENTIVE.
(a) In General.--At the time a participating administrative
entity is designated, the Secretary shall negotiate an
incentive agreement with the participating administrative
entity, which agreement may provide such entity with a share
of savings from any restructured mortgage and reduced
subsidies resulting from actions under section 107. The
Secretary shall negotiate with participating administrative
entities a savings incentive formula that provides for
periodic payments over a 5-year period, which is allocated as
incentives to participating administrative entities and to
project owners.
(b) Use of savings.--Notwithstanding any other provision of
law, the incentive agreement under subsection (a) shall
require any savings provided to a participating
administrative entity under that agreement to be used only
for providing decent, safe, and affordable housing for very
low-income families and persons with a priority for eligible
multifamily housing projects; and
SEC. 109. MANAGEMENT STANDARDS.
Each participating administrative entity shall establish
and implement management standards, including requirements
governing conflicts of interest between owners, managers,
contractors with an identity of interest, pursuant to
guidelines established by the Secretary and consistent with
industry standards.
SEC. 110. MONITORING OF COMPLIANCE.
(a) Compliance Agreements.--Pursuant to regulations issued
by the Secretary after public notice and comment, each
participating administrative entity, through binding
contractual agreements with owners and
[[Page S9600]]
otherwise, shall ensure long-term compliance with the
provisions of this title. Each agreements shall, at a
minimum, provide for--
(1) enforcement of the provisions of this title; and
(2) remedies for the breach of those provisions.
(b) Periodic Monitoring.--
(1) In general.--Not less than annually, each participating
administrative entity shall review the status of all
multifamily housing projects for which a mortgage
restructuring and rental assistance sufficiency plan has been
implemented.
(2) Inspections.--Each review under this subsection shall
include onsite inspection to determine compliance with
housing codes and other requirements as provided in this
title and the multifamily housing management agreements.
(c) Audit by the Secretary.--The Comptroller General of the
United States, the Secretary, and the Inspector General of
the Department of Housing and Urban Development may conduct
an audit at any time of any multifamily housing project for
which a mortgage restructuring and rental assistance
sufficiency plan has been implemented.
SEC. 111. REVIEW.
(a) Annual Review.--In order to ensure compliance with this
title, the Secretary shall conduct an annual review and
report to the Congress on actions taken under this title and
the status of eligible multifamily housing projects.
(b) Subsidy Layering Review.--The participating
administrative entity shall certify, pursuant to guidelines
issued by the Secretary, that the requirements of section
102(d) of the Department of Housing and Urban Development
Reform Act of 1989 are satisfied so that the combination of
assistance provided in connection with a property for which a
mortgage is to be restructured shall not be any greater than
is necessary to provide affordable housing.
SEC. 112. GAO AUDIT AND REVIEW.
(a) Initial Audit.--Not later than 18 months after the
effective date of interim or final regulations promulgated
under this title, the Comptroller General of the United
States shall conduct an audit to evaluate a representative
sample of all eligible multifamily housing projects and the
implementation of all mortgage restructuring and rental
assistance sufficiency plans.
(b) Report.--
(1) In general.--Not later than 18 months after the audit
conducted under subsection (a), the Comptroller General of
the United States shall submit to the Congress a report on
the status of all eligible multifamily housing projects and
the implementation of all mortgage restructuring and rental
assistance sufficiency plans.
(2) Contents.--The report submitted under paragraph (1)
shall include--
(A) a description of the initial audit conducted under
subsection (a); and
(B) recommendations for any legislative action to increase
the financial savings to the Federal Government of the
restructuring of eligible multifamily housing projects
balanced with the continued availability of the maximum
number of affordable low-income housing units.
SEC. 113. REGULATIONS.
(a) Rulemaking and Implementation.--The Secretary shall
issue interim regulations necessary to implement this title
not later than the expiration of the 6-month period beginning
on the date of enactment of this Act. Not later than 1 year
after the date of enactment of this Act, in accordance with
the negotiated rulemaking procedures set forth in subchapter
III of chapter 5 of title 5, United States Code, the
Secretary shall implement final regulations implementing this
title.
(b) Repeal of FHA Multifamily Housing Demonstration
Authority.--
(1) In general.--Beginning upon the expiration of the 6-
month period beginning on the date of enactment of this Act,
the Secretary may not exercise any authority or take any
action under section 210 of the Balanced Budget Down Payment
Act, II.
(2) Unused budget authority.--Any unused budget authority
under section 210(f) of the Balanced Budget Down Payment Act,
II, shall be available for taking actions under the
requirements established through regulations issued under
subsection (a).
SEC. 114. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Calculation of Limit on Project-Based Assistance.--
Section 8(d) of the United States Housing Act of 1937 (42
U.S.C. 1437f(d)) is amended by adding at the end the
following new paragraph:
``(5) Calculation of limit.--Any contract entered into
under section 104 of the Multifamily Assisted Housing Reform
and Affordability Act of 1996 shall be excluded in computing
the limit on project-based assistance under this
subsection.''.
(b) Partial Payment of Claims on Multifamily Housing
Projects.--Section 541 of the National Housing Act (12 U.S.C.
1735f-19) is amended--
(1) in subsection (a), in the subsection heading, by
striking ``Authority'' and inserting ``Defaulted Mortgages'';
(2) by redesignating subsection (b) as subsection (c); and
(3) by inserting after subsection (a) the following new
subsection:
``(b) Existing Mortgages.--Notwithstanding any other
provision of law, the Secretary, in connection with a
mortgage restructuring under section 104 of the Multifamily
Assisted Housing Reform and Affordability Act of 1996, may
make a one time, nondefault partial payment of the claim
under the mortgage insurance contract, which shall include a
determination by the Secretary or the participating
administrative entity, in accordance with the Multifamily
Assisted Housing Reform and Affordability Act of 1996, of the
market value of the project and a restructuring of the
mortgage, under such terms and conditions as the Secretary
may establish.''.
SEC. 115. TERMINATION OF AUTHORITY.
(a) In General.--Except as provided in subsection (b), this
title is repealed effective October 1, 2001.
(b) Exception.--The repeal under this section does not
apply with respect to projects and programs for which binding
commitments have been entered into before October 1, 2001.
TITLE II--ENFORCEMENT PROVISIONS
SEC. 201. IMPLEMENTATION.
(a) Issuance of Necessary Regulations.--Notwithstanding
section 7(o) of the Department of Housing and Urban
Development Act or part 10 of title 24, Code of Federal
Regulations (as in existence on the date of enactment of this
Act), the Secretary shall issue such regulations as the
Secretary determines to be necessary to implement this title
and the amendments made by this title in accordance with
section 552 or 553 of title 5, United States Code, as
determined by the Secretary.
(b) Use of Existing Regulations.--In implementing any
provision of this title, the Secretary may, in the discretion
of the Secretary, provide for the use of existing regulations
to the extent appropriate, without rulemaking.
Subtitle A--FHA Single Family and Multifamily Housing
SEC. 211. AUTHORIZATION TO IMMEDIATELY SUSPEND MORTGAGEES.
Section 202(c)(3)(C) of the National Housing Act (12 U.S.C.
1708(c)(3)(C)) is amended by inserting after the first
sentence the following new sentence: ``Notwithstanding
paragraph (4)(A), a suspension shall be effective upon
issuance by the Board if the Board determines that there
exists adequate evidence that immediate action is required to
protect the financial interests of the Department or the
public.''.
SEC. 212. EXTENSION OF EQUITY SKIMMING TO OTHER SINGLE FAMILY
AND MULTIFAMILY HOUSING PROGRAMS.
Section 254 of the National Housing Act (12 U.S.C. 1715z-
19) is amended to read as follows:
``SEC. 254. EQUITY SKIMMING PENALTY.
``(a) In General.--Whoever, as an owner, agent, or manager,
or who is otherwise in custody, control, or possession of a
multifamily project or a 1- to 4-family residence that is
security for a mortgage note that is described in subsection
(b), willfully uses or authorizes the use of any part of the
rents, assets, proceeds, income, or other funds derived from
property covered by that mortgage note for any purpose other
than to meet reasonable and necessary expenses that include
expenses approved by the Secretary if such approval is
required, in a period during which the mortgage note is in
default or the project is in a nonsurplus cash position, as
defined by the regulatory agreement covering the property, or
the mortgagor has failed to comply with the provisions of
such other form of regulatory control imposed by the
Secretary, shall be fined not more than $500,000, imprisoned
not more than 5 years, or both.
``(b) Mortgage Notes Described.--For purposes of subsection
(a), a mortgage note is described in this subsection if it--
``(1) is insured, acquired, or held by the Secretary
pursuant to this Act;
``(2) is made pursuant to section 202 of the Housing Act of
1959 (including property still subject to section 202 program
requirements that existed before the date of enactment of the
Cranston-Gonzalez National Affordable Housing Act); or
``(3) is insured or held pursuant to section 542 of the
Housing and Community Development Act of 1992, but is not
reinsured under section 542 of the Housing and Community
Development Act of 1992.''.
SEC. 213. CIVIL MONEY PENALTIES AGAINST MORTGAGEES, LENDERS,
AND OTHER PARTICIPANTS IN FHA PROGRAMS.
(a) Change to Section Title.--Section 536 of the National
Housing Act (12 U.S.C. 1735f-14) is amended by striking the
section heading and the section designation and inserting the
following:
``SEC. 536. CIVIL MONEY PENALTIES AGAINST MORTGAGEES,
LENDERS, AND OTHER PARTICIPANTS IN FHA
PROGRAMS.''.
(b) Expansion of Persons Eligible for Penalty.--Section
536(a) of the National Housing Act (12 U.S.C. 1735f-14(a)) is
amended--
(1) in paragraph (1), by striking the first sentence and
inserting the following: ``If a mortgagee approved under the
Act, a lender holding a contract of insurance under title I
of this Act, or a principal, officer, or employee of such
mortgagee or lender, or other person or entity participating
in either an insured mortgage or title I loan transaction
under this Act or providing assistance to the borrower in
connection with any such loan, including sellers of the real
estate involved,
[[Page S9601]]
borrowers, closing agents, title companies, real estate
agents, mortgage brokers, appraisers, loan correspondents and
dealers, knowingly and materially violates any applicable
provision of subsection (b), the Secretary may impose a civil
money penalty on the mortgagee or lender, or such other
person or entity, in accordance with this section. The
penalty under this paragraph shall be in addition to any
other available civil remedy or any available criminal
penalty, and may be imposed whether or not the Secretary
imposes other administrative sanctions.''; and
(2) in paragraph (2)--
(A) in the first sentence, by inserting ``or such other
person or entity'' after ``lender''; and
(B) in the second sentence, by striking ``provision'' and
inserting ``the provisions''.
(c) Additional Violations for Mortgagees, Lenders, and
Other Participants in FHA Programs.--Section 536(b) of the
National Housing Act (12 U.S.C. 1735f-14(b)) is amended--
(1) by redesignating paragraph (2) as paragraph (3);
(2) by inserting after paragraph (1) the following new
paragraph:
``(2) The Secretary may impose a civil money penalty under
subsection (a) for any knowing and material violation by a
principal, officer, or employee of a mortgagee or lender, or
other participants in either an insured mortgage or title I
loan transaction under this Act or provision of assistance to
the borrower in connection with any such loan, including
sellers of the real estate involved, borrowers, closing
agents, title companies, real estate agents, mortgage
brokers, appraisers, loan correspondents, and dealers for--
``(A) submission to the Secretary of information that was
false, in connection with any mortgage insured under this
Act, or any loan that is covered by a contract of insurance
under title I of this Act;
``(B) falsely certifying to the Secretary or submitting to
the Secretary a false certification by another person or
entity; or
``(C) failure by a loan correspondent or dealer to submit
to the Secretary information which is required by regulations
or directives in connection with any loan that is covered by
a contract of insurance under title I of this Act.''; and
(3) in paragraph (3), as redesignated, by striking ``or
paragraph (1)(F)'' and inserting ``or (F), or paragraph
(2)(A), (B), or (C)''.
(d) Conforming and Technical Amendments.--Section 536 of
the National Housing Act (12 U.S.C. 1735f-14) is amended--
(1) in subsection (c)(1)(B), by inserting after ``lender''
the following: ``or such other person or entity'';
(2) in subsection (d)(1)--
(A) by inserting ``or such other person or entity'' after
``lender''; and
(B) by striking ``part 25'' and inserting ``parts 24 and
25''; and
(3) in subsection (e), by inserting ``or such other person
or entity'' after ``lender'' each place that term appears.
Subtitle B--FHA Multifamily
SEC. 220. CIVIL MONEY PENALTIES AGAINST GENERAL PARTNERS,
OFFICERS, DIRECTORS, AND CERTAIN MANAGING
AGENTS OF MULTIFAMILY PROJECTS.
(a) Civil Money Penalties Against Multifamily Mortgagors.--
Section 537 of the National Housing Act (12 U.S.C. 1735f-15)
is amended--
(1) in subsection (b)(1), by striking ``on that mortgagor''
and inserting the following: ``on that mortgagor, on a
general partner of a partnership mortgagor, or on any officer
or director of a corporate mortgagor'';
(2) in subsection (c)--
(A) by striking the subsection heading and inserting the
following:
``(c) Other Violations.--''; and
(B) in paragraph (1)--
(i) by striking ``Violations.--The Secretary may'' and all
that follows through the colon and inserting the following:
``(A) Liable parties.--The Secretary may also impose a
civil money penalty under this section on--
``(i) any mortgagor of a property that includes five or
more living units and that has a mortgage insured, coinsured,
or held pursuant to this Act;
``(ii) any general partner of a partnership mortgagor of
such property;
``(iii) any officer or director of a corporate mortgagor;
``(iv) any agent employed to manage the property that has
an identity of interest with the mortgagor, with the general
partner of a partnership mortgagor, or with any officer or
director of a corporate mortgagor of such property; or
``(v) any member of a limited liability company that is the
mortgagor of such property or is the general partner of a
limited partnership mortgagor or is a partner of a general
partnership mortgagor.
``(B) Violations.--A penalty may be imposed under this
section upon any liable party under subparagraph (A) that
knowingly and materially takes any of the following
actions:'';
(ii) in subparagraph (B), as designated by clause (i), by
redesignating the subparagraph designations (A) through (L)
as clauses (i) through (xii), respectively;
(iii) by adding after clause (xii), as redesignated by
clause (ii), the following new clauses:
``(xiii) Failure to maintain the premises, accommodations,
any living unit in the project, and the grounds and equipment
appurtenant thereto in good repair and condition in
accordance with regulations and requirements of the
Secretary, except that nothing in this clause shall have the
effect of altering the provisions of an existing regulatory
agreement or federally insured mortgage on the property.
``(xiv) Failure, by a mortgagor, a general partner of a
partnership mortgagor, or an officer or director of a
corporate mortgagor, to provide management for the project
that is acceptable to the Secretary pursuant to regulations
and requirements of the Secretary.''; and
(iv) in the last sentence, by deleting ``of such
agreement'' and inserting ``of this subsection'';
(3) in subsection (d)--
(A) in paragraph (1)(B), by inserting after ``mortgagor''
the following: ``, general partner of a partnership
mortgagor, officer or director of a corporate mortgagor, or
identity of interest agent employed to manage the property'';
and
(B) by adding at the end the following new paragraph:
``(5) Payment of penalty.--No payment of a civil money
penalty levied under this section shall be payable out of
project income.'';
(4) in subsection (e)(1), by deleting ``a mortgagor'' and
inserting ``an entity or person'';
(5) in subsection (f), by inserting after ``mortgagor''
each place such term appears the following: ``, general
partner of a partnership mortgagor, officer or director of a
corporate mortgagor, or identity of interest agent employed
to manage the property'';
(6) by striking the heading of subsection (f) and inserting
the following: ``Civil Money Penalties Against Multifamily
Mortgagors, General Partners of Partnership Mortgagors,
Officers and Directors of Corporate Mortgagors, and Certain
Managing Agents''; and
(7) by adding at the end the following new subsection:
``(k) Identity of Interest Managing Agent.--For purposes of
this section, the terms `agent employed to manage the
property that has an identity of interest' and `identity of
interest agent' mean an entity--
``(1) that has management responsibility for a project;
``(2) in which the ownership entity, including its general
partner or partners (if applicable) and its officers or
directors (if applicable), has an ownership interest; and
``(3) over which the ownership entity exerts effective
control.''.
(b) Implementation.--
(1) Public comment.--The Secretary shall implement the
amendments made by this section by regulation issued after
notice and opportunity for public comment. The notice shall
seek comments primarily as to the definitions of the terms
`ownership interest in' and `effective control', as those
terms are used in the definition of the terms `agent employed
to manage the property that has an identity of interest' and
`identity of interest agent'.
(2) Timing.--A proposed rule implementing the amendments
made by this section shall be published not later than one
year after the date of enactment of this Act.
(c) Applicability of Amendments.--The amendments made by
subsection (a) shall apply only with respect to--
(1) violations that occur on or after the effective date of
the final regulations implementing the amendments made by
this section; and
(2) in the case of a continuing violation (as determined by
the Secretary of Housing and Urban Development), any portion
of a violation that occurs on or after that date.
SEC. 221. CIVIL MONEY PENALTIES FOR NONCOMPLIANCE WITH
SECTION 8 HAP CONTRACTS.
(a) Basic Authority.--Title I of the United States Housing
Act of 1937 is amended by adding at the end the following new
section:
``SEC. 27. CIVIL MONEY PENALTIES AGAINST SECTION 8 OWNERS.
``(a) In General.--
``(1) Effect on other remedies.--The penalties set forth in
this section shall be in addition to any other available
civil remedy or any available criminal penalty, and may be
imposed regardless of whether the Secretary imposes other
administrative sanctions.
``(2) Failure of secretary.--The Secretary may not impose
penalties under this section for a violation, if a material
cause of the violation is the failure of the Secretary, an
agent of the Secretary, or a public housing agency to comply
with an existing agreement.
``(b) Violations of Housing Assistance Payment Contracts
for Which Penalty May Be Imposed.--
``(1) Liable parties.--The Secretary may impose a civil
money penalty under this section on--
``(A) any owner of a property receiving project-based
assistance under section 8;
``(B) any general partner of a partnership owner of that
property; and
``(C) any agent employed to manage the property that has an
identity of interest with the owner or the general partner of
a partnership owner of the property.
``(2) Violations.--A penalty may be imposed under this
section for a knowing and material breach of a housing
assistance payments contract, including the following--
``(A) failure to provide decent, safe, and sanitary housing
pursuant to section 8; or
``(B) knowing or willful submission of false, fictitious,
or fraudulent statements or requests for housing assistance
payments to
[[Page S9602]]
the Secretary or to any department or agency of the United
States.
``(3) Amount of penalty.--The amount of a penalty imposed
for a violation under this subsection, as determined by the
Secretary, may not exceed $25,000 per violation.
``(c) Agency Procedures.--
``(1) Establishment.--The Secretary shall issue regulations
establishing standards and procedures governing the
imposition of civil money penalties under subsection (b).
These standards and procedures--
``(A) shall provide for the Secretary or other department
official to make the determination to impose the penalty;
``(B) shall provide for the imposition of a penalty only
after the liable party has received notice and the
opportunity for a hearing on the record; and
``(C) may provide for review by the Secretary of any
determination or order, or interlocutory ruling, arising from
a hearing and judicial review, as provided under subsection
(d).
``(2) Final orders.--
``(A) In general.--If a hearing is not requested before the
expiration of the 15-day period beginning on the date on
which the notice of opportunity for hearing is received, the
imposition of a penalty under subsection (b) shall constitute
a final and unappealable determination.
``(B) Effect of review.--If the Secretary reviews the
determination or order, the Secretary may affirm, modify, or
reverse that determination or order.
``(C) Failure to review.--If the Secretary does not review
that determination or order before the expiration of the 90-
day period beginning on the date on which the determination
or order is issued, the determination or order shall be
final.
``(3) Factors in determining amount of penalty.--In
determining the amount of a penalty under subsection (b), the
Secretary shall take into consideration--
``(A) the gravity of the offense;
``(B) any history of prior offenses by the violator
(including offenses occurring before the enactment of this
section);
``(C) the ability of the violator to pay the penalty;
``(D) any injury to tenants;
``(E) any injury to the public;
``(F) any benefits received by the violator as a result of
the violation;
``(G) deterrence of future violations; and
``(H) such other factors as the Secretary may establish by
regulation.
``(4) Payment of penalty.--No payment of a civil money
penalty levied under this section shall be payable out of
project income.
``(d) Judicial Review of Agency Determination.--Judicial
review of determinations made under this section shall be
carried out in accordance with section 537(e) of the National
Housing Act.
``(e) Remedies for Noncompliance.--
``(1) Judicial intervention.--
``(A) In general.--If a person or entity fails to comply
with the determination or order of the Secretary imposing a
civil money penalty under subsection (b), after the
determination or order is no longer subject to review as
provided by subsections (c) and (d), the Secretary may
request the Attorney General of the United States to bring an
action in an appropriate United States district court to
obtain a monetary judgment against that person or entity and
such other relief as may be available.
``(B) Fees and expenses.--Any monetary judgment awarded in
an action brought under this paragraph may, in the discretion
of the court, include the attorney's fees and other expenses
incurred by the United States in connection with the action.
``(2) Nonreviewability of determination or order.--In an
action under this subsection, the validity and
appropriateness of the determination or order of the
Secretary imposing the penalty shall not be subject to
review.
``(f) Settlement by Secretary.--The Secretary may
compromise, modify, or remit any civil money penalty which
may be, or has been, imposed under this section.
``(g) Deposit of Penalties.--
``(1) In general.--Notwithstanding any other provision of
law, if the mortgage covering the property receiving
assistance under section 8 is insured or formerly insured by
the Secretary, the Secretary shall apply all civil money
penalties collected under this section to the appropriate
insurance fund or funds established under this Act, as
determined by the Secretary.
``(2) Exception.--Notwithstanding any other provision of
law, if the mortgage covering the property receiving
assistance under section 8 is neither insured nor formerly
insured by the Secretary, the Secretary shall make all civil
money penalties collected under this section available for
use by the appropriate office within the Department for
administrative costs related to enforcement of the
requirements of the various programs administered by the
Secretary.
``(h) Definitions.--For the purposes of this section--
``(1) the term `agent employed to manage the property that
has an identity of interest' means an entity--
``(A) that has management responsibility for a project;
``(B) in which the ownership entity, including its general
partner or partners (if applicable), has an ownership
interest; and
``(C) over which such ownership entity exerts effective
control; and
``(2) the term `knowing' means having actual knowledge of
or acting with deliberate ignorance of or reckless disregard
for the prohibitions under this section.''.
(b) Applicability.--The amendments made by subsection (a)
shall apply only with respect to--
(1) violations that occur on or after the effective date of
final regulations implementing the amendments made by this
section; and
(2) in the case of a continuing violation (as determined by
the Secretary of Housing and Urban Development), any portion
of a violation that occurs on or after such date.
(c) Implementation.--
(1) Regulations.--
(A) In general.--The Secretary shall implement the
amendments made by this section by regulation issued after
notice and opportunity for public comment.
(B) Comments sought.--The notice under subparagraph (A)
shall seek comments as to the definitions of the terms
``ownership interest in'' and ``effective control'', as such
terms are used in the definition of the term ``agent employed
to manage such property that has an identity of interest''.
(2) Timing.--A proposed rule implementing the amendments
made by this section shall be published not later than one
year after the date of enactment of this Act.
SEC. 222. EXTENSION OF DOUBLE DAMAGES REMEDY.
Section 421 of the Housing and Community Development Act of
1987 (12 U.S.C. 1715z-4a) is amended--
(1) in subsection (a)(1)--
(A) in the first sentence, by striking ``Act; or (B)'' and
inserting the following: ``Act; (B) a regulatory agreement
that applies to a multifamily project whose mortgage is
insured or held by the Secretary under section 202 of the
Housing Act of 1959 (including property subject to section
202 of such Act as it existed before enactment of the
Cranston-Gonzalez National Affordable Housing Act of 1990);
(C) a regulatory agreement or such other form of regulatory
control as may be imposed by the Secretary that applies to
mortgages insured or held by the Secretary under section 542
of the Housing and Community Development Act of 1992, but not
reinsured under section 542 of the Housing and Community
Development Act of 1992; or (D)''; and
(B) in the second sentence, by inserting after
``agreement'' the following: ``, or such other form of
regulatory control as may be imposed by the Secretary,'';
(2) in subsection (a)(2), by inserting after ``Act,'' the
following: ``under section 202 of the Housing Act of 1959
(including section 202 of such Act as it existed before
enactment of the Cranston-Gonzalez National Affordable
Housing Act of 1990) and under section 542 of the Housing and
Community Development Act of 1992,'';
(3) in subsection (b), by inserting after ``agreement'' the
following: ``, or such other form of regulatory control as
may be imposed by the Secretary,'';
(4) in subsection (c)--
(A) in the first sentence, by inserting after ``agreement''
the following: ``, or such other form of regulatory control
as may be imposed by the Secretary,''; and
(B) in the second sentence, by inserting before the period
the following: ``or under the Housing Act of 1959, as
appropriate''; and
(5) in subsection (d), by inserting after ``agreement'' the
following: ``, or such other form of regulatory control as
may be imposed by the Secretary,''.
SEC. 223. OBSTRUCTION OF FEDERAL AUDITS.
Section 1516(a) of title 18, United States Code, is amended
by inserting after ``under a contract or subcontract,'' the
following: ``or relating to any property that is security for
a mortgage note that is insured, guaranteed, acquired, or
held by the Secretary of Housing and Urban Development
pursuant to any Act administered by the Secretary,''.
____
Summary of the Multifamily Assisted Housing Reform and Affordability
Act of 1996
Restructures the oversubsidized portfolio and reduces
Section 8 subsidy costs while maintaining the affordable
housing stock. Projects with subsidy contract rents above the
fair market rent would be restructured in a manner that would
reduce the rents by restructuring the underlying debt. Rents
would be ``marked'' to comparable market rents where
comparable properties exist or at 90 percent of fair market
rents (FMR) if comparable properties do not exist.
In some cases (such as properties that provide special
services to elderly and disabled households or because of the
local market rent conditions), even if debt is restructured,
setting rents at comparable market rent levels of 90 percent
of FMR may be inadequate to cover the costs of operation. In
these cases, a budget-based process would be used to set
rents at the minimum level necessary to support proper
operations and maintenance costs.
Screens out troubled multifamily properties and
noncompliant owners. Nonviable housing projects and bad
owners would be screened out from the renewal and debt
restructuring process. Community and resident involvement
would be used in resolving these problems. Potential outcomes
could include demolition or change of ownership to other
entities including nonprofits. Alternative housing would be
provided to affected residents in cases of demolition.
Stronger FHA and Section 8 enforcement authorities would also
be provided to address troubled
[[Page S9603]]
properties and bad owners. In addition, stronger enforcement
remedies would be an integral part of all restructuring
transactions, to ensure that restructured properties would
continue to provide high quality affordable housing.
Recapitalizes the assisted stock that suffer from deferred
maintenance. In some cases, recapitalization is needed to
address deferred maintenance for properties under portfolio
restructuring. Rehabilitation grants or deeper debt
writedowns would be used.
Utilizes capable public entities to restructure portfolio
and recognizes HUD's limited capacity. Portfolio
restructuring is being undertaken to reform and improve the
programs from a financial and operating perspective, but not
to abandon the long-term commitment to resident protection
and ongoing affordability. As a result, balancing the fiscal
goals of reducing costs with the public policy goals of
maintaining affordable housing requires an intermediary
accountable to the public interest. With HUD's acknowledged
lack of capacity to address these issues, public
intermediaries that have demonstrated expertise in affordable
housing and responsible management would be selected. State
housing finance agencies would be given a priority in acting
as Participating Administrative Entities (PAE). Incentives
would be negotiated with the PAEs to protect the financial
interests of the Federal Government.
Addresses the tax issues facing debt restructuring. Under
current tax law, debt restructuring could result in the
triggering of a large income tax liability on the owners/
investors without generating sufficient cash with which the
owners/investors could pay the tax. As a result, a tax
solution is needed to avoid resistance and delays from owners
and investors. Debt restructuring results in an event that
reduces the outstanding mortgage that is owed by the owners
and investors. This reduction in the mortgage amount will
result in a tax liability--referred to as ``cancellation
of indebtedness'' or COD. COD is generally treated as
ordinary taxable income under the Internal Revenue Code.
The bill addresses this problem by bifurcating the existing
mortgage into two obligations. The first piece would be
determined on the amount the mortgage could be supported by
the rental income stream. Payment on the second piece would
be deferred until the first mortgage is paid off. According
to Treasury officials, this practice would not result in an
immediate tax liability to owners and investors.
Provides for resident and community input into the
restructuring process. To ensure that portfolio restructuring
does not adversely affect the residents or local communities
in which the properties are located, communities, residents,
and local government officials would be provided an
opportunity to comment on the process.
Strengthens HUD and FHA enforcement authority. This bill
contains important provisions that will minimize the
incidence of fraud and abuse of federally assisted programs.
Such key provisions include (1) expanding HUD's ability to
impose sanctions on lenders, (2) expanding equity skimming
prohibitions, and (3) broadening the use of civil money
penalties.
Mr. BOND. Mr. President, I stand in strong support of the Multifamily
Assisted Housing Reform and Affordability Act of 1996. This bill goes a
long way toward developing a constructive and comprehensive section 8
mark-to-market contract renewal program for reducing the costs of
expiring project-based section 8 contracts, limiting the financial
exposure of the FHA multifamily housing insurance fund for FHA-insured
section 8 projects, and preserving, to the maximum extent possible, the
section 8 project-based housing stock for very-low- and low-income
families.
I congratulate Senators D'Amato, Mack, and Bennett for their
contribution and commitment to this comprehensive legislation, as well
as their commitment to finding a bipartisan approach to the many
difficult issues associated with the renewal of over subsidized section
8 project-based contracts. This legislation is a meaningful step in
developing a reasonable policy toward the concerns raised by these
expiring section 8 project-based contracts.
Over the last 25 years, a number of HUD programs were established for
the construction of affordable, low-income housing by providing FHA
mortgage insurance while financing the cost of the housing through
section 8 project-based housing assistance. Currently, there are some
8,500 projects with almost 1 million units that are both FHA-insured
and whose debt service is almost totally dependent on rental assistance
payments made under section 8 project-based contracts. Most of these
projects serve very-low-income families, with approximately 37 percent
of the stock serving elderly families.
The crisis facing this housing stock is that the section 8 project-
based housing assistance was initially budgeted and appropriated
through 15- and 20-year section 8 project-based contracts that are now
expiring and for which contract renewal is prohibitively expensive. For
example, at least 75 percent of this housing stock have rents that
exceed the fair market rent of the local area.
Since current law prohibits HUD from renewing these section 8
contracts at rents above 100 percent of the fair market rent, with some
exceptions not to exceed 120 percent, in many cases, the failure to
renew expiring section 8 project-based contracts at existing rents will
leave owners without the financial ability to pay the mortgage debt on
these projects. This means that owners likely will default on their
FHA-insured mortgage liabilities, resulting in FHA mortgage insurance
claims and foreclosures. HUD would then own and be responsible for
managing these low-income multifamily housing projects. This bill is
intended to avoid this potential crisis through a fiscally responsible
and housing sensitive strategy.
In addition, the cost of the section 8 contracts on these projects
reemphasizes the difficult budget and appropriation issues facing the
Congress. In particular, according to HUD estimates, the cost of all
section 8 contract renewals, both tenant-based and project-based, will
require appropriations of about $4.3 billion in fiscal year 1997, $10
billion in fiscal year 1998, and over $16 billion in fiscal year 2000.
In addition, the cost of renewing the section 8 project-based contracts
will grow from $1.2 billion in fiscal year 1997 to almost $4 billion in
fiscal year 2000, and to some $8 billion in 10 years.
Since the HUD appropriations account cannot sustain these exploding
costs, this legislation is intended to be a comprehensive response
which will reduce the financial cost and exposure to the Federal
Government and preserve this valuable housing resource. The Senate bill
would generally preserve this low-income housing by using various tools
to restructure these multifamily housing mortgages to the market value
of the housing with resulting reductions in section 8 costs.
I also am troubled by some of the other section 8 mark-to-market
proposals being promoted, including the position taken by HUD which, in
general, opposes preserving this housing as FHA-insured or as assisted
through section 8 project-based assistance, including the elderly
assisted housing, in favor of vouchers. This position is very
questionable, and I emphasize that it is widely opposed by the housing
industry and tenant groups and advocates.
I highlight the underlying principles of the bill which would
authorize the establishing of participating administrative entities
[PAE's] which would generally be a public agency, with a first
preference that a PAE be a State housing finance agency or, second, a
local housing agency. These entities would be contracted by HUD to
develop work-out plans in conjunction with owners of FHA-insured
projects with expiring, oversubsidized section 8 contracts. Each PAE
would develop mortgage restructuring and rental assistance sufficiency
plans as workout instruments to reduce the section 8 subsidy needs of
projects through mortgage restructuring.
The basic tool provided in the draft bill, and the likely key to any
successful strategy to preserve this housing, is to authorize the
restructuring of the mortgage debt on these oversubsidized section 8
multifamily housing projects. In particular, the bill would allow the
restructuring of these high cost mortgages with a new first mortgage
reflecting, generally, the market value of a project, and a soft second
mortgage held by HUD, with interest at the applicable Federal rate,
covering the remainder of the original mortgage debt and payable upon
disposition or upon full payment of the first mortgage. This provision
will reduce the cost of section 8 assistance and minimize any loss to
the FHA multifamily insurance fund. In addition, this approach ensures
that there is no taxable event by virtue of the mortgage restructuring.
I also think it would be beneficial to look at some kind of exit tax
relief to encourage owners, especially limited partners, to divest
their interest in these properties, to encourage new investment in and
revitalization of these properties. Nevertheless, I am convinced that
the tax committees are unlikely to take up this issue during this
[[Page S9604]]
Congress and that any discussion on tax relief will have to wait for
another time.
Finally, I emphasize that it is time to act now. I am currently
sponsoring a section 8 mark-to-market demonstration to be included in
the VA-HUD fiscal year 1997 appropriations bill which is similar to the
Multifamily Assisted Housing Reform and Affordability Act and which
represents an interim approach to the section 8 mark-to-market contract
renewal issue. This appropriation language indicates my strong belief
that we can no longer afford, as a matter of housing policy and fiscal
responsibility, to renew expiring section 8 project-based contracts at
the existing, over-market rents. Nevertheless, I strongly prefer that
section 8 reform legislation be acted on by the authorizing committees
before the end of the fiscal year, with the full benefit of hearings
and discussion on these very difficult policy issues.
I look forward to working with my colleagues on the legislation and
hope that the Housing Subcommittee and Banking Committee can act in an
expeditious manner on this measure. I emphasize the need to work
together and I look forward to moving this legislation through Congress
and onto the desk of the President.
Mr. D'AMATO. Mr. President, I rise today to cosponsor the Multifamily
Assisted Housing Reform and Affordability Act of 1996. I wish to thank
my colleagues, Senators Connie Mack and Kit Bond, for their outstanding
efforts in crafting and advancing this vitally important piece of
legislation to restructure the Department of Housing and Urban
Development's [HUD] Federal Housing Administration [FHA] insured and
section 8 assisted multifamily housing portfolio. Also,I would like to
thank Senator Bennett for his diligence in confronting the complex
issues surrounding our federal multifamily housing programs.
Mr. President, this legislation represents a significant step forward
in addressing the complicated and vexing problem of the rising costs of
HUD's section 8 assisted housing program. Over the course of the next
several years, the costs of renewing expiring section 8 contracts at
their current rent levels will skyrocket from $4.3 billion in fiscal
year 1997 to $20 billion in fiscal year 2002--a figure which represents
the entire existing HUD budget. This is the result of the expiration of
long-term housing assistance contracts which were entered into 15 to 20
years ago. In addition, many of these contracts support projects with
rents that are far higher than local market rents. While these rising
costs are clearly significant and represent a formidable challenge, the
expiration of these long-term contracts also presents us with an
opportunity to address the oversubsidized and often inflated costs of
the section 8 program.
During the course of the past year, the Banking Committee has held
hearings and has conducted an ongoing dialogue with residents, lenders,
servicers, public officials and leading professionals within the
housing community to find a consensus solution to the problems
associated with the section 8 program. This legislation represents the
culmination of that important effort.
Mr. President, I would like to emphasize the guiding principles of
this legislation: To contain the growth of the expanding costs of the
section 8 program; to protect existing tenants; to maintain the
existing stock of decent, safe and affordable housing for future needs;
to remove bad owners and managers; to protect the FHA insurance fund
and minimize the liability of the Federal taxpayer; and to provide for
local control and flexibility while reducing HUD's administrative
burden.
This legislation seeks to: Reduce inflated contract rents to market-
rate and budget-based rent levels; screen out bad owners, replace
corrupt managers and encourage transfers to resident-supported
nonprofit corporations; and provide must needed capital and facilitate
private financing to address backlogged maintenance needs.
This comprehensive approach will allow us to reduce the costs of the
section 8 program while protecting the FHA insurance fund and
minimizing the liability of the federal taxpayer. The outstanding debt
on the oversubsidized portfolio would be restructured to reflect market
rent levels. This debt restructuring would include the continuation of
project-based subsidies as well as FHA multifamily insurance. This bill
also addresses the significant tax dilemma which would be caused by
debt restructuring. In order to avoid adverse tax consequences, a
bifurcation of the mortgage into two separate obligations is proposed.
The legislation recognizes the lack of capacity at HUD and seeks to
maximize local control and flexibility in carrying out debt
restructuring in order to reduce inflated rents. A preference would be
provided to State and local housing finance agencies to oversee
mortgage workouts. These public entities are ideally suited for this
role and are already accountable to the public interest in their own
jurisdictions. Also, residents of affected properties would be provided
with input in a communitywide consultation process, and will be
provided adequate notice, access to information, and an adequate time
period for analysis and comment.
In conclusion, let me reiterate my appreciation for my colleagues who
made tremendous contributions to the effort to stem this impending
crisis. As chairman of the Subcommittee on Housing Opportunity and
Community Development, Senator Mack has charted a reasonable and
rational course for us to follow. He has utilized a fair and bipartisan
approach in the development of this legislation, and should be
commended for his efforts. Also, Senator Bond, chairman of the
Subcommittee on VA-HUD Appropriations and my fellow colleague on the
Banking Committee, has been very instrumental in moving the process
forward. Throughout, he has insisted on our continued federal
commitment to providing affordable housing and the protection of the
interests of existing low and moderate income tenants.
I thank all members of the Banking Committee for their tireless
efforts on behalf of affordable housing and look forward to pursuing
our bipartisan commitment to resolving the HUD section 8 crisis as
expeditiously as possible.
______
By Mr. KERRY:
S. 2043. A bill to require the implementation of a corrective action
plan in States in which child poverty has increased; to the Committee
on Finance.
CHILD POVERTY LEGISLATION
Mr. KERRY. Mr. President, the welfare bill we passed this week would
allow States to experiment with various welfare policies. Many States
may implement innovative welfare policies to move parents from welfare
to work. But if we are sending Federal money to States, if we are going
to take this risk and allow States to experiment, we must be sure that
child poverty does not increase.
There is nothing more important than constantly reminding ourselves
that our focus is--or ought to be--this Nation's children. That was the
focus when under Franklin Roosevelt's leadership title IV-A of the
Social Security Act was originally enacted. The objective here is to
help impoverished children.
This bill I am introducing today says that if child poverty increases
in a State after the date of enactment of the welfare bill, then that
State would be required to submit a corrective action plan. Although a
weaker version of my bill passed and was included in the welfare bill,
I am introducing this as a separate bill in the hope that ultimately we
will be able to pass the strongest possible version.
What would this bill do? This bill says that if the most recent State
child poverty rate exceeds the level for the previous year by 5 percent
or more then the State would have to submit to the HHS Secretary within
90 days a corrective action plan describing the actions the state shall
take to reduce child poverty rates.
Mr. President, I want to be clear that this bill in no way intrudes
on a State's ability to design its own welfare program. State
flexibility would not be decreased in any way. This bill simply says
that if a state's welfare system increases child poverty, that state
must take corrective action.
Mr. President, I believe all of us regardless of party can agree on
two things at least: We can all agree that the child poverty rate in
this country is too high. The fact is that 15.3 million U.S. children
live in poverty. This
[[Page S9605]]
means that more than 1 in 5 children--21.8 percent--live in poverty. In
Massachusetts, there are more than 176,000 children who live in
poverty. And despite the stereotypes, Mr. President, the majority of
America's poor children are white (9.3 million) and live in rural or
suburban areas (8.4 million) rather than central cities (6.9 million).
The other thing on which we can all agree, because it is a fact
rather than an opinion, is that the child poverty rate in this country
is dramatically higher than the rate in other major industrialized
countries. According to an excellent, comprehensive recent report by an
international research group called the Luxembourg Income Study, the
child poverty rate in the United Kingdom is less than half our rate
(9.9 percent), the rate in France is less than one-third of our rate
(6.5 percent), and the rate in Denmark (3.3 percent) is about one-sixth
our rate.
Mr. President, we know that poverty is bad for children. This should
be obvious. Nobel prizewinning economist Robert Solow and the
Children's Defense Fund recently conducted the first-ever long-term
impact of child poverty. They found that their lowest estimate was that
the future cost to society of a single year of poverty for the 15
million poor children is $36 billion in lost output per worker. When
they included lost work hours, lower skills, and other labor market
disadvantages related to poverty, they found that the future cost to
society was $177 billion.
With this bill, I want to make sure that, at the very least, if a
State's welfare plan increases child poverty--instead of increasing the
number of parents moving from welfare to work and self-sufficiency--
that State will take immediate steps to refocus its program.
Mr. President, I urge all my colleagues to support this bill to
ensure that welfare reform results in more parents working, not more
child poverty.
______
By Mr. SANTORUM:
S. 2044. A bill to provide for modification of the State agreement
under title II of the Social Security Act with the State of
Pennsylvania with respect to certain students; to the Committee on
Finance.
legislation helping pennsylvania students
Mr. SANTORUM. Mr. President, I wanted to take a few minutes of Senate
business today to introduce legislation of importance to the
Pennsylvania state system of higher education and to the students
enrolled and working at our state-related universities.
The bill is a companion measure to legislation in the House of
Representatives. The House proposal was introduced by my friend and
distinguished colleague from Pennsylvania, Representative Bill Clinger.
Mr. President, this legislation will affect students and graduate
assistants employed by Pennsylvania's public universities and will
allow them to keep more of their pay from campus employment. Currently,
student employees of Pennsylvania's State system of higher education
are covered under FICA and pay taxes unlike working students at schools
in most other states. Only a change in the law would enable
Pennsylvania's colleges and universities to exempt their student
employees from FICA coverage.
This legislation would make Pennsylvania schools more attractive and
competitive with the other states who have opted out of Social Security
coverage. Graduate students are often called upon to perform paid
assistant teaching duties. The current system and application of FICA
coverage does not make Pennsylvania institutions as competitive with
other out of state graduate programs.
If a student or graduate student compares their employment earning
possibilities with other states, Pennsylvania students are at a
distinct disadvantage. At a time in young adults' lives when resources
are usually limited, it makes practical sense to free up more funds for
student employees who are working hard toward their educational goals.
Today, colleges and universities are being called upon to downsize
and make better use of dollars. This legislation is an easy way to
support individuals who are attaining goals while attending
Pennsylvania state-related universities.
______
By Mr. HATFIELD:
S. 2045. A bill to provide regulatory relief for small business
concerns, and for other purposes; to the Committee on Small Business.
the national small business regulatory relief act
Mr. HATFIELD. Mr. President, one of the most common small business
complaints my constituents bring to my attention is the issue of
burdensome government regulations. As we all recognize, small
businesses rarely have the expertise or resources necessary to keep up
to date with changing Federal requirements. Consequently, many small
businesses are not in compliance with Federal regulations and face
potential fines. Fines or costly compliance procedures can be
devastating to small businesses which characteristically operate at a
very narrow profit margin.
All across this Nation conscientious small business owners are
frustrated with Federal regulations simply because they cannot get
concise and specific answers to their compliance questions. How can we
realistically expect to increase environmental protection, work place
safety or tax compliance, if these respective agency's regulations are
so complex that professionals in these fields cannot determine the
meanings and applications of these rules? While our regulatory reform
efforts have done much to change the rulemaking process and the sheer
volume of regulations, very little has been done to translate rules
written by bureaucrats into easy to understand language that the owner
of any small firm can implement.
Mr. President, according to a 1995 study by the Small Business
Administration's Office of Advocacy, 94 percent of small businesses
were unsure of what they needed to do to comply with Federal
regulations. The same study revealed that it is difficult, if not
impossible, for small businesses to obtain concise answers to
compliance questions from a Federal agency. It is no wonder that so
many business owners, who have honestly believed they were in
compliance, have either lost or had their businesses crippled because
they were uninformed or misunderstood Federal regulations which applied
to them.
Congress has considered several proposals which would scale back
intrusive Federal regulations. However, we must realize that Federal
regulations will continue in some capacity. Consequently, it is vital
to establish a mechanism which assists small businesses in complying
with these regulations.
The Small Business Development Centers have established themselves as
a valuable resource for small businesses. They have an existing network
of over 950 centers nationwide which have been providing education and
technical assistance to small business owners for years.
The Oregon Small Business Development Center Network has
distinguished itself as a national model of how SBDC's can play an
integral role in ensuring the success of small businesses. In April
1995 I conducted a field hearing in Portland, OR on a proposal to
expand the responsibilities of the SBDC's to include regulatory
compliance assistance. At that hearing, I heard from several Oregon
small business owners who testified about their experience with the
Oregon Small Business Development Center Network and the positive
benefits these centers have had on small businesses in the State of
Oregon.
The proposal to accomplish a shift in Federal regulatory policy from
enforcement to education was at a conceptual stage at the time of the
Oregon field hearing. However, this idea was extremely intriguing and
the small business owners who discussed this issue were impressive in
conveying their vision for the future of this proposal. Since that
time, I have worked with the National Association of Small Business
Development Center and the Director of the Oregon SBDC Network to
develop this concept into the legislation I am introducing today.
The National Small Business Regulatory Relief Act provides
comprehensive regulatory assistance to small firms by enlisting the
nationwide network of over 950 Small Business Development Centers
(SBDC's). Over 550,000 small businesses each year seek SBDC
[[Page S9606]]
help in drafting business plans and expansion strategies, developing
financing and marketing tactics, improving management and personnel
skills, and addressing many other business needs. The locally
controlled and managed SBDC network's long-standing confidentiality
policy and its proven track record of success make it an ideal, cost-
effective and user-friendly delivery system for meaningful compliance
assistance. Even though SBDC's are funded by all 50 States and the
Federal Government they do not have enough resources to provide the
regulatory help small businesses so desperately need.
Mr. President this legislation provides the resources necessary to
expand SBDC assistance, creating a one-stop shop business resource that
can explain how a company's marketing, finance, personnel,
international trade, procurement and technology strategies comport with
the regulatory requirements of EPA, OSHA, and IRS. The result will be a
holistic delivery system of business assistance that will not only
increase compliance with today's regulations, but will help small
businesses bring about a cleaner environment, safer work place and
better tax compliance. Most importantly, by utilizing the vast SBDC
network, the cost of making comprehensive regulatory assistance
available to all of America's small businesses is minimized for a
program of this magnitude.
This legislation authorizes appropriations to the Occupational Safety
and Health Administration, the Environmental Protection Agency and the
Internal Revenue Service to accomplish the goals I described earlier.
However, I would like to point out that similar legislation has been
introduced in the House of Representatives which directs each of these
three Federal agencies to set-aside a percentage of their overall
budget for SBDC compliance assistance activities. While I sympathize
with the intentions of the House sponsors of this measure to use
existing funds for this program, as Chairman and a longtime member of
the Senate Appropriations Committee I feel the appropriations process
is the proper way to distribute Federal discretionary dollars. I
believe that the goals of this proposal can be accomplished using
existing Federal dollars.
Mr. President, America's small businesses are frustrated by the
current Federal regulatory situation and have been pleading for help.
The National Small Business Regulatory Relief Act is a creative
approach towards balancing economic growth with regulatory compliance.
I urge my colleagues to join me in this important effort to assist our
Nation's small businesses in complying with Federal regulations.
I ask unanimous consent that a letter from the Oregon Small Business
Development Center Network in support of this legislation be included
in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Oregon Small Business
Development Center Network,
Eugene, OR, January 8, 1996.
Hon. Mark O. Hatfield,
Hart Senate Office Building,
Washington, DC.
Dear Senator Hatfield: Thank you for taking time from your
busy schedule to meet with me and John Eskildsen regarding
the Oregon Small Business Development Center Network and the
National Small Business Extension Network proposal. We
appreciate your strong support and advocacy for the OSBDCN
and the NSBEN proposal.
I believe that the NSBEN proposal represents a tremendous
opportunity to reduce the federal regulatory burden on small
business while simultaneously reducing the federal budget.
This legislation, if enacted, will enable small business
owners in Oregon and throughout the United States to meet
federal regulatory standards without fear of reprisal.
Thank you again for your leadership and support for small
business.
Sincerely,
Sandy Cutler,
State Director, Oregon Small Business
Development Center Network.
______
By Mr. ROCKEFELLER:
S. 2046. A bill to amend section 29 of the Internal Revenue Code of
1986 to allow a credit for qualified fuels produced from wells drilled
during 1997, and for other purposes; to the Committee on Finance.
the marginal well drilling incentive act of 1996
Mr. ROCKEFELLER. Mr. President, today I offer a bill that is very
important to my State of West Virginia, and can benefit the entire
Nation. This very small bill will have a very big impact on the ability
of small oil and gas producers in my State and across the Nation to
compete. The bill creates a new tax incentive, modeled on the old
section 29 tax credit, to help small marginal well drillers.
I offer this with a measure of frustration, based on the fact that
while Congress managed to incorporate a great number of narrowly
targeted amendments into the small business tax bill passed today, the
final bill did not include this provision that I propose today. I am
pleased that the tax package includes an extension of the part of
section 29 dealing with facilities that manufacture gas from biomass
and coal. That is helpful to a variety of States, including West
Virginia. But for less than one tenth the cost of that provision, we
could and should have done something to help drillers get gas from
devonian shale and other nonconventional sources.
The original section 29 credit for drilling expired in 1992 after
some of the larger gas companies in this country put emphasis on
getting relief from the alternative minimum tax instead of renewing
section 29. They got that, but it didn't help a lot of the smaller
drillers, which happen to include most of the gas producers in West
Virginia.
Mr. President, I'd like the record to show that since the credit
expired, drilling for margin gas wells in West Virginia has dropped off
by more than 30 percent. In 1992, the last year of the credit, 760
wells were drilled in West Virginia. By 1995, that number had fallen to
530 wells. In that same timeframe, the number of rigs actively drilling
wells in the Appalachian basin declined from 73 to 45--a 48-percent
decline. That translates directly into jobs, as the average rig employs
about 25 people. When you add to that all the jobs associated with a
well (from transportation to bookkeeping), you have a job loss of more
than 1,500 in the Appalachian Basin, which stretches from New York to
Kentucky, and from Ohio to Virginia.
Mr. President, this is about more than jobs. I have spoken in the
past of the great problem our Nation has with oil dependency. Following
the oil shocks of the 1970's, Congress made a concerted effort to help
ease our dependency on foreign energy sources. That effort showed much
success in the 1980's when imports fell by more than 40 percent from
1970's highs. However, the 1990's have seen import totals steadily
rise, to today when more than 50 percent of our oil is imported. In
fact, Mr. President, the biggest 1-year rise in imports since 1986 came
in the year following the expiration of section 29, in 1993.
The Senate knows well the problem raised by energy dependency. The
Gulf war was fought largely to protect our foreign oil sources in the
Middle East, and 19 brave American soldiers died in June for that very
same cause. Our energy dependency, in addition to years of cheap oil
and an exceptionally harsh winter, also led to the outrage earlier this
spring when gas prices at the pump rose steeply.
For all these reasons, Mr. President, it is important that we foster
the development of new sources of domestic energy. Gas in my State, and
many others, is hard to get at. It is locked in rock formations that
yield their fuel much more slowly, and at lower profits, than wells in
the oil patch out West.
This bill is specifically designed to offer a very modest incentive
to those producers, when the price of natural gas gets so low that they
can't make a profit from their wells. Unlike the original section 29,
the credit will be available only for the first 10 million cubic feet
of gas produced each year by each well. Additionally, the credit will
only be available to wells that produce less than 100 million cubic
feet of gas per year.
Mr. President, I have intentionally limited the scope of this bill so
that it is only available to smaller wells, and only there, for a
limited amount of gas. The idea behind this bill is not to have a big
giveaway for big oil and gas producers. But instead, it is designed to
give a little bit of insurance to risk-taking drillers who make their
living tilling nonconventional sources for fuel.
[[Page S9607]]
This is a modest bill, but one that can make a big difference in
certain places that have the potential for more prosperity, more job
growth, and more economic growth like West Virginia. Reviving and
revising section 29 will put an incentive in place to seize more of
this potential while reducing the entire country's dependence in
foreign oil. I urge the Senate to find a way to make this bill a
reality--the sooner, the better.
______
By Mr. HATCH (for himself, Mr. Conrad, Mr. Pressler, Mr. Pryor,
Mr. Nickles, and Mr. Baucus):
S. 2047. A bill to amend the Internal Revenue Code of 1986 to modify
the application of the pension nondiscrimination rules to governmental
plans; to the Committee on Finance.
____________________